A wave of financial prosperity has graced Rush Street Interactive as the company reports a remarkable increase in revenue for the first quarter of the fiscal year, which ended on March 31. The leading online gaming corporation disclosed an unprecedented high, amassing $217.4m in revenue, a towering 33.9% increase compared to the same quarter in the previous year and establishing a new quarterly record.
This substantial financial upsurge has been attributed to robust growth within the company’s online casino and sports betting sectors, according to company officials. Richard Schwartz, the CEO of Rush Street Interactive, reported that this positive trajectory has continued seamlessly from the previous year into the current fiscal period, supported by a rapid rise in user engagement and the increasing value of players.
Schwartz enthusiastically remarked, “The results of our continuous initiatives to differentiate our user experience and offer high-quality engagement have successfully retained players and attracted new ones to our platform. We’re able to bring in players more quickly, and these players on average bring higher value. Moreover, we’ve become more efficient than ever in acquiring new users, driving substantial profitability from this impressive growth.”
Prior to the conclusion of Q1, Rush Street Interactive joined forces with BetRivers, launching Delaware Lottery’s first online sportsbook, which kicked off its operations in late December. Accompanying the sportsbook were three newly revamped online casinos, propelled by Rush Street’s robust gaming platform.
The performance in Delaware has been met with a buoyant reception, with Schwartz highlighting a considerable year-over-year growth in the annual gross gaming revenue run rate, which closely approached $70.0m—a notable $10.0m increment from the preceding quarter.
“This remarkable growth was propelled by a strong finish to the quarter,” Schwartz explained as he delved into the financial details. “Our run rate in March was more than fourfold compared to the turnover of the previous operator, with approximately three-quarters of this gross gaming revenue sourced from our online casino offerings.”
Touching on the potential broadening of Delaware’s online sports betting industry to include more operators, Schwartz hinted at the likelihood that the status quo would persist, bolstering this assertion with references to ongoing discussions and support from key state stakeholders.
In addition to strides taken in Delaware, the company has seen a resurgence in some of its more seasoned markets, including its top three North American online casino terrains: Michigan, New Jersey, and Pennsylvania—all of which reported their highest year-over-year revenue growth rates within the past two years. “Our concentrated efforts on the online casino experience are clearly resonating with both new and existing customers, significantly contributing to the growth in these established markets,” Schwartz added.
Steering the focus towards Latin America, Schwartz expressed extreme satisfaction with the company’s performance in Colombia and Mexico. The company’s RushBet brand has been well-received, as suggested by the uptick in monthly active users and average revenue per user. This translated to a revenue bump of 84.0% in Latin America, highlighting the potential for further economic expansion in these emerging markets.
Schwartz also lauded the company’s marketing strategy, which was recently enhanced by the appointment of Brian Sapp as Rush Street’s first chief marketing officer. “Our unshakeable strategy closely integrated with our evolving execution tactics targets the most lucrative ROI opportunities. Emphasizing the acquisition and retention of high-value players proves to be a driving force for our continued success,” the CEO explained.
The emphasis on marketing efficiency is recorded with the company observing a reduction in advertising and promotions costs by 23.1% to $38.4m. Nonetheless, an increase in other expenses, such as a 34.8% rise in revenue costs, resulted in total operating costs increasing by 17.1% to $215.9m for Q1.
Despite these heightened expenses, the surge in Q1 revenue turned a $22.1m operating loss from the previous year into a $1.5m operating profit. After factoring in $1.6m in interest income, pre-tax profits reached $3.1m, which is a striking reversal from the $21.7m loss a year prior.
Rush Street did face a $5.3m tax obligation, culminating in a net loss of $2.2m, markedly improved from the $24.5m loss from the year before. Accounting for the $1.5m loss attributable to non-controlling interests, the net loss on Rush Street’s ledger stood at just $727,000, a considerable advance from the previous year’s $7.3m loss.
Highlighting the fiscal victory, the company’s adjusted EBITDA for the quarter reached an all-time high of $17.1m, in stark contrast to an $8.7m loss in the previous year.
Rush Street Interactive also shared an optimistic full-year guidance until December 31, 2024. Anticipated revenue is expected to be between $810.0m and $860.0m, with the midpoint likely to be $835.0m, marking a 21.0% year-on-year increase, with this forecast surpassing the original guidance by $35.0m.
Moreover, adjusted EBITDA is projected to range from $50.0m to $60.0m, with the midpoint—$55.0m—representing a year-on-year escalation of an incredible 573.0%. Rush Street subsequently heightened this midpoint figure in their guidance by $15.0m.
The company cautioned that these forecasts are contingent upon specific assumptions, including that performance will only integrate ongoing operations without considering any new market launches. Any modifications to these factors could influence the full-year performance.
Finalizing their optimistic outlook, Schwartz said, “The current momentum, which includes a staggering 38% mid-point increment in our adjusted EBITDA guidance, fills us with excitement for the growth potential and scalability of our business. This growth translates into improved earnings and free cash flow. We are confident in our team’s capabilities to persistently execute our strategic vision and consistently deliver value for our shareholders.”
