ZEAL delivered a strong Q2, ahead of our estimates on both sales and EBITDA, with EBITDA up 33% yoy despite ongoing investments into the proprietary lottery formats.
ZEAL grew more than twice as fast as its underlying market. Q2 lottery billings rose 25% yoy to € 328m, against only 11% yoy growth in the Eurojackpot and Lotto market, which itself enjoyed an unusually strong jackpot environment (13 peak jackpots vs. 2 in Q2 25, Lotto at its € 50m cap for more than ten consecutive draws). Beyond the structural shift of an increasing online penetration, this outperformance is courtesy of deep customer understanding, high marketing expertise and new growth legs such as proprietary raffles.
Q2 group sales rose 34% yoy to € 67.5m, driven by a larger user base (MAU +14% yoy), higher activity per user (ABPU +10% yoy) and a further gross margin improvement (18.5%, +1.1pp yoy).
The proprietary raffles are scaling quickly. In fact, raffle sales were up 52% yoy to € 10.3m in H1, mostly driven by the Dreamhouse Raffle. Here, billings per day are increasing noticeably, driven by improving scale and shortening draw cycles. House #8 was completed in only 63 days (vs. c. 84d for the last two houses) at € 9.3m of billings, i.e. c. € 148k per day, making it the best yielding house to date and well above the c. € 104k average of all previous houses. The cadence is increasing: three houses were drawn in H1 26 vs. four in all of 2025.
Q2 EBITDA grew 33% yoy to € 23.4m. The improvement came despite marketing expenses increasing 63% yoy, spent into the favourable jackpot window and into the diversification push, which brought a record 384k new customers (+52% yoy). With a payback period of two to three years on acquired customers, that spending should be seen as a transfer of earnings into 2027e and beyond. In light of this, a roughly flat margin of 34.7% should be seen as the result of both operating leverage and growth investments.
The confirmed € 70-75m EBITDA guidance now looks de-risked. With € 38.9m booked in H1, the guidance mid-point implies H2 EBITDA of c. € 33.6m, i.e. +0.4% yoy at a margin of 25.2%. As the SevenCanyon contribution and the related one-off acquisition costs broadly offset each other in H2 (eNuW), this is effectively an organic number, meaning guidance assumes no organic growth at all, after +10% in H1 and +33% in Q2.
At the same time, new slot rules allow ZEAL to raise stake limits in the gaming business (c. 6% of total sales). Player protection standards should explain only a gradual step-up. Growth in Games should hence continue to come primarily from new customers rather than higher stakes.
In sum, ZEAL remains historically cheap, despite several well-performing new growth levers. The current 2026e EV/EBITDA multiple sits c. 39% below the 5-year historical avg. (eNuW), even though growth accelerated in Q2, the TAM is expanding thanks to internationalisation via the UK acquisition, and the EBITDA guidance looks de-risked (eNuW). Next to the high-growth outlook, the company also remains an income-producing asset, currently offering a c. 3.4% dividend yield.
BUY, PT € 83, based on DCF.
ISIN: DE000ZEAL241
