ZEAL reported a superb set of Q3 results, driven by a recovering user activity in lottery and strong developments in Games. in detail:

Lottery revenues increased by 39% yoy to € 55m (eNuW: € 48m) driven by 30% yoy higher billings (€ 307m; eNuW: € 278m) but more importantly from an increasing billings margin of 17.9% (+1.2pp yoy; eNuW: 17.5%) on the back of an improving product mix. Our meaningful underestimation of billings resulted from a higher than expected user activity, as monthly active users (MAUs) increased by 26% yoy to 1.69m (eNuW: 1.56m) with stable monthly average billings per user (ABPU) of € 60.68 (+2.9% yoy). We regard this increase to stem from a mix of the two peak jackpots in Q3 coupled with a recovery in activity cohorts acquired in the past, as they should have grown trust in and loyalty to Lotto24.

Also baked into the strong lottery sales growth is the superb performance of the Dream House raffle. The fourth house draw in Sept.’25 has generated € 11.8m in billings (37% above average of draw #1-3) thanks to a growth in ABPU to € 25.18 (19% above average) coupled with active users being up 14% above average.

Although not being material, Games showed a strong performance, as sales increased by 55% yoy to € 3.6m on the back of a growing user base (+55% yoy) and stable user spending.

In sum, group sales came in up 38% at € 61m (eNuW: € 55m), which ultimately resulted in a strong beat of our bottom-line expectation. EBITDA increased by 26% yoy to € 19m (eNuW: € 14m) on the back of higher sales. The margin came in at 30.7% (-3.1pp yoy) due to a strong marketing push of € 21m (+83% yoy above Q3’24 with no peak jackpots). However, the underlying performance (EBITDA adj. for marketing) marks a 5.2pp yoy increase in margin, showing the strong operating leverage and improving fixed costs coverage at ZEAL.

Against this backdrop, the guidance raised in Sept’25 of € 205-215m in sales with an EBITDA of € 63-68m appears conservative, in our view. It implies Q4 sales of € 42-52m (eNuW: € 54m) with an EBITDA ranging from € 9-14m (eNuW: € 14m). Therefore, we now expect a guidance reach at the upper end or slightly above. Given a strong jackpot environment in Q4 (unpredictable), a second guidance raise should then be no surprise.

All in all, ZEAL operates like a clockwork and continuously beats our expectations. Therefore, we reiterate our BUY recommendation and raise our PT to € 66.