Company Reports

Jumbo Interactive's fiscal 2026 underlying EBITDA was AUD 85 million, 25% higher than last year. While lottery performance was subdued in Australia amid lower jackpots, around eight months of earnings from the Dream giveaway acquisitions contributed the bulk of the uplift.

We expect Jumbo's core lottery retailing business will keep ceding market share to Lottery Corp's The Lott platform, though its continued growth is underpinned by a channel mix shift to more lottery ticket sales moving online. Jumbo is principally a digital reseller of Lottery Corp tickets through its Oz Lotteries platform, generating revenue by charging a premium, typically 10%-30%, on tickets sold. Largely a result of its first-mover advantage, Jumbo has accumulated a sizable customer base of more than 4 million, on our estimation, although each year only around 1 million customers make a transaction.

Although we expect Jumbo's core lottery retailing business will keep ceding market share to Lottery Corp.'s The Lott platform, its continued growth is underpinned by a channel mix shift to more lottery ticket sales moving online. Jumbo is principally a digital reseller of Lottery Corp. tickets through its Oz Lotteries platform, generating revenue by charging a premium, typically 10%-30%, on tickets sold. Largely a result of its first-mover advantage, Jumbo has accumulated a sizable customer base of more than 4 million, on our estimation, although each year only around 1 million customers make a transaction.

Jumbo expects to report fiscal 2026 underlying EBITDA of AUD 82 million to AUD 85 million. Performance from the Dream acquisitions made this year was mixed, with Dream US outperforming while Dream UK grew more slowly than the company had previously expected. Shares closed 10% higher.

Jumbo Interactive's first-half fiscal 2026 underlying EBITDA lifted 23% on last year to AUD 37.5 million. Operating earnings were essentially flat after stripping out businesses acquired during the half. Underlying net profit after tax grew 15% to AUD 19.9 million.

Although we expect Jumbo’s core lottery retailing business will keep ceding market share to Lottery Corp.’s The Lott platform, its continued growth is underpinned by a channel mix shift to more lottery ticket sales moving online. Jumbo is principally a digital reseller of Lottery Corp. tickets through its Oz Lotteries platform, generating revenue by charging a premium, typically 10%-30%, on tickets sold. Largely a result of its first-mover advantage, Jumbo has accumulated a sizable customer base of more than 4 million, on our estimation, although each year only around 1 million customers make a transaction.

Jumbo expects to report interim fiscal 2026 underlying EBITDA of AUD 37.5 million, up 23% on last year. Excluding the AUD 6.5 million contribution from businesses acquired during the half, underlying EBITDA was essentially flat.

In the first 24 weeks of fiscal 2026, we estimate ticket sales for Lottery Corp.'s core games are down 4% on last year. Reselling tickets for Lottery Corp. games accounts for most of Jumbo Interactive's earnings.

Although we expect Jumbo’s core lottery retailing business will keep ceding market share to Lottery Corp.’s The Lott platform, its continued growth is underpinned by a channel mix shift to more lottery ticket sales moving online. Jumbo is principally a digital reseller of Lottery Corp. tickets through its Oz Lotteries platform, generating revenue by charging a premium, typically 10%-30%, on tickets sold. Largely a result of its first-mover advantage, Jumbo has accumulated a sizable customer base of more than 4 million, on our estimation, although each year only around 1 million customers make a transaction.

Although we expect Jumbo’s core lottery retailing business will keep ceding market share to Lottery Corp.’s The Lott platform, its continued growth is underpinned by a channel mix shift to more lottery ticket sales moving online. Jumbo is principally a digital reseller of Lottery Corp. tickets through its Oz Lotteries platform, generating revenue by charging a premium, typically 10%-30%, on tickets sold. Largely a result of its first-mover advantage, Jumbo has accumulated a sizable customer base of more than 4 million, on our estimation, although each year only around 1 million customers make a transaction.

Jumbo Interactive has acquired UK-based prize draw platform Dream Car Giveaways for an enterprise value of AUD 110 million. The transaction is mostly debt-funded, with a small AUD 10 million equity issuance.

Although we expect Jumbo’s core lottery retailing business will keep ceding market share to Lottery Corp.’s The Lott platform, its continued growth is underpinned by a channel mix shift to more lottery ticket sales moving online. Jumbo is principally a digital reseller of Lottery Corp. tickets through its Oz Lotteries platform, generating revenue by charging a premium, typically 10%-30%, on tickets sold. Largely a result of its first-mover advantage, Jumbo has accumulated a sizable customer base of more than 4 million, on our estimation, although each year only around 1 million customers make a transaction.

A soft year for jackpot lotteries (Powerball) saw Jumbo’s fiscal 2025 revenue fall 9% on last year. Underlying EBITDA declined 11% to AUD 68 million. Management guidance is for higher marketing costs and lower margins for the core Australian business in fiscal 2026.

Although we expect Jumbo’s core lottery retailing business will keep ceding market share to Lottery Corp.’s The Lott platform, its continued growth is underpinned by a channel mix shift to more lottery ticket sales moving online. Jumbo is principally a digital reseller of Lottery Corp. tickets through its Oz Lotteries platform, generating revenue by charging a premium, typically 10%-30%, on tickets sold. Largely a result of its first-mover advantage, Jumbo has accumulated a sizable customer base of around 4 million, on our estimation, although each year only around 1 million customers make a transaction.

We take a fresh look at Jumbo Interactive's customer acquisition costs amid an apparent decline in fiscal 2025 lottery volumes. Fiscal 2024 was a bumper year. Last year's record AUD 200 million Powerball jackpot was a one-in-seven-year event, alone about 7% of Lottery Corp's lottery turnover.

With tariff rates raised to levels not seen in a century, US President Donald Trump's "liberation day" has rattled global markets. Higher tariffs will likely set in motion a cascade of supply-demand side shocks, all acting to weigh on the rate of economic growth.

Although we expect Jumbo’s core lottery retailing business will keep ceding market share to Lottery Corp.’s The Lott platform, its continued growth is underpinned by a channel mix shift to more lottery ticket sales moving online. Jumbo is principally a digital reseller of Lottery Corp. tickets through its Oz Lotteries platform, generating revenue by charging a premium, typically 10%-30%, on tickets sold. Largely a result of its first-mover advantage, Jumbo has accumulated a sizable customer base of around 4 million, on our estimation, although each year only around 1 million customers make a transaction.

Jumbo Interactive's first-half fiscal 2025 underlying EBITDA fell 13% from last year to AUD 31 million, reflecting a soft six months for lotteries. Jackpots have been weak relative to statistical probabilities, and particularly compared with record jackpots in the first half of fiscal 2024.

Australian lottery prize pools are tracking broadly flat compared with fiscal 2024. In the first 24 weeks of fiscal 2025, aggregate prize pools for The Lottery Corp's four biggest games: Powerball, Oz Lotto, Saturday Lotto, and Weekday Windfall, are broadly flat compared with last year.

Jumbo Interactive’s fiscal 2024 underlying EBITDA lifted 30% to AUD 77 million—about 2% above our forecast on strong lottery volumes. Lotteries are crucial to Jumbo, representing over 80% of earnings. But this is also Jumbo’s Achilles' heel. While Jumbo sells tickets to popular lotteries including Powerball and Oz Lotto, the brand equity of these games ultimately lies with wide-moat Lottery Corp. While digital migration is a tailwind for Jumbo, we think Lottery Corp will progressively take share from Jumbo over time, underpinning our no-moat rating for the firm.