In a remarkable showing of strength in the face of economic pressures, Rush Street Interactive (RSI) has not only beaten its revenue guidance for the year but also shrunk its net loss significantly. The announcement of the company’s financial performance has stirred positive anticipation among investors and industry watchers.
Revenue for RSI surged to $691.2 million, marking a robust 16.7% increase from the previous year’s figure of $592.2 million. This achievement stands particularly commendable as it lands on the higher end of the $630.0 million to $700.1 million guidance issued by the company earlier in 2023.
Despite the company operating at a net loss for the year, the deficit was dramatically reduced to $18.3 million from the $38.6 million reported in 2022. Further boosting investor confidence, adjusted EBITDA turned positive for the year, exceeding the company’s own expectations of profitability, initially forecasted for the second half only.
RSI’s CEO, Richard Schwartz, expressed his pride in the company’s performance, highlighting the successful exceedance of their revenue guidance and achieving EBITDA profitability much earlier than anticipated. Schwartz emphasized, “We initially set out to be profitable for the second half of 2023. As a result of our focused efforts, we delivered better results and were profitable for the full year. We ended the year with a record-setting quarter and have starting 2024 with strong momentum.”
RSI’s strategic focus on creating high-quality user experiences seems to have paid off, meeting growth and profitability targets with increased contributions across the board. Expansion into new markets and solid performance in existing ones, both in iCasino and sports betting, fueled the company’s impressive advance.
As the 2024 legislative session commences in the United States, Schwartz highlighted Rush Street’s keen eye on jurisdictions that may legalize and launch online casinos. Notable prospects include New York, Maryland, and Illinois, along with promising movements in some Canadian provinces such as Alberta.
The company’s Latin American endeavors are also making headway, with established operations in Colombia and Mexico and plans to launch in Peru later in the year. Schwartz noted the emerging recognition of their RushBet brand in Peru, signaling potential triumphs ahead in this new market.
With progress, however, comes increased expenditures. RSI’s total operating costs rose marginally by 3.6% to $742.8 million. Offset by finance-related income, the pre-tax loss clocked in at $48.8 million, a sizeable improvement from $125.4 million the previous year. After accounting for income tax payments and non-controlling interests, the final net loss stood at $60.1 million, far below the previous year’s loss of $134.3 million.
Focusing on the record-breaking fourth quarter, RSI reported revenues of $193.9 million, a 17.2% jump and an all-time high for the group. Pre-tax losses were significantly curtailed, from $31.1 million in Q4 of 2022 to just $5.5 million in the same quarter of 2023, and a reduced net loss from $9.0 million to $1.7 million.
Looking ahead, RSI forecasts continued success and growth into 2024. The company sets its sights on revenues between $770.0 million and $830.0 million, estimating an approximate 16.0% increase from 2023. Additionally, adjusted EBITDA guidance is introduced with an estimated range of $35.0 million to $45.0 million, which would be about 390.0% ahead of the 2023 figure.
Possessing a significant cash balance and operating free of debt, Schwartz confidently stated that RSI’s financial strength allows the company to pursue its long-term strategy and make strategic investments in new markets. Indeed, if recent performances are any indication, the future looks bright for Rush Street Interactive as it navigates the dynamic and ever-expanding field of online gaming and sports betting.
