ZEAL Network SE: Strong Performance and Upgraded Projections

ZEAL Network SE has reported a robust first quarter, with sales growing by 42% year-on-year to €51.1 million, driven by price increases and an expanded user base. The company increased its average revenue per user for lotteries and games, reflecting enhanced user engagement. EBITDA has notably risen by 89% due to operational efficiencies and reduced marketing expenses, amounting to €15.5 million. The company's marketing strategies have successfully attracted 247,000 new users, marking a significant intake without reliance on jackpot surges.

The Dreamhouse Raffle performed well, with sequentially higher billings and user numbers. ZEAL plans to conduct more raffles throughout the fiscal year, aiming for increased frequency. Despite the negative cash flow attributed to working capital fluctuations, ZEAL's outlook remains positive. The Q1 results suggest sales could exceed current projections, potentially prompting guidance upgrades. However, increased marketing investments may temper EBITDA expectations. The company continues to advance towards another record year, maintaining a "BUY" recommendation with an updated price target of €63.00.