Jumbo Interactive reported a 29% revenue increase in the first half of FY26, driven by strategic acquisitions in the UK and US prize draw markets. Despite higher revenue, net profit after tax dipped slightly amid acquisition costs and amortisation.
- Revenue rose 29% to $85.3 million in H1 FY26
- EBITDA increased modestly by 3.4% to $32.2 million
- Net profit after tax declined 13.4% due to acquisition-related expenses
- Acquisitions of Dream Giveaways UK and US expanded B2C footprint
- Strong liquidity with $57.9 million cash and undrawn debt facilities
Revenue Growth Fueled by Strategic Acquisitions
Jumbo Interactive Limited has delivered a robust 29% increase in revenue to $85.3 million for the half-year ended 31 December 2025, largely propelled by its recent acquisitions of Dream Giveaways UK and Dream Giveaways US. These moves mark a significant expansion of Jumbo’s business-to-consumer (B2C) presence in the prize draw markets of the United Kingdom and the United States, diversifying its revenue streams beyond its established Australian lottery retailing operations.
Profitability Margins Under Pressure Amid Acquisition Costs
While earnings before interest, tax, depreciation, and amortisation (EBITDA) edged up 3.4% to $32.2 million, the company’s earnings before interest and tax (EBIT) and net profit after tax (NPAT) declined by 3.9% and 13.4% respectively. These decreases reflect the impact of acquisition-related costs, increased amortisation of intangible assets, and integration expenses associated with the newly acquired businesses. The Dream Giveaways UK contributed a profit after tax of $2.9 million, whereas the US counterpart recorded a provisional loss of $681,000, partly due to a non-cash fair value adjustment on deferred revenue.
Segment Performance and Market Conditions
The Lottery Retailing segment, Jumbo’s largest contributor, experienced a subdued jackpot environment, which tempered total transaction value (TTV) growth to a slight decline of 0.2%. However, revenue in this segment increased by 5.5%, supported by growth in charity and proprietary lottery products. The Software-as-a-Service (SaaS) segment saw a 9.9% increase in TTV and a 13.1% rise in external revenue, driven by new partnerships and solid performance outside of Lotterywest. Managed Services in the UK and Canada also posted healthy growth, with TTV and revenue up 19.1% and 17.3% respectively.
Balance Sheet Strength and Dividend Policy
Jumbo maintains a strong financial position with cash reserves of $57.9 million and undrawn debt facilities of $13.1 million, providing ample liquidity to support ongoing operations and strategic initiatives. The company paid a fully franked final dividend of 30.5 cents per share for FY25 and declared a fully franked interim dividend of 12 cents per share for the half-year ended December 2025, reflecting a cautious approach amid integration and market uncertainties.
Outlook and Strategic Focus
Jumbo continues to invest heavily in marketing and employee capabilities, with marketing spend more than doubling compared to the prior period due to the acquisitions and strategic growth initiatives. The company remains focused on its core pillars: Lottery Retailing, SaaS, Managed Services, and the newly established Dream Giveaways segment. While short-term volatility from jackpot cycles and acquisition accounting adjustments may persist, Jumbo’s diversified portfolio and digital platform investments position it well for sustainable growth in the evolving lottery and prize draw markets.
Bottom Line?
Jumbo’s expanded footprint in the UK and US prize draw markets sets the stage for growth, but integration costs and jackpot volatility warrant close investor attention.
Questions in the middle?
- How will Jumbo manage integration risks and costs from its recent acquisitions?
- What is the outlook for jackpot frequency and size impacting Lottery Retailing revenue?
- How sustainable is the increased marketing spend in driving long-term customer growth?