Rush Street Interactive records record revenue and adjusted EBITDA in first quarter

Business

Rush Street Interactive reported record revenue and adjusted EBITDA for the first quarter of fiscal 2024, and was able to reduce its net loss by 90.0%.

Revenue for the three months to 31 March reached $217.4m (£173.7m/€203m). This beats his 2023 first quarter by 33.9% and is a new quarterly record for Rush Street Interactive.

RSI said the increase was driven by growth in both its online casino and sports betting businesses. CEO Richard Schwartz added that this trend continues into the new fiscal year starting in 2023. He said the rapid increase in player numbers and increasing player value are helping that.

“Our efforts to continually differentiate our user experience and provide a high-quality experience are what attract and retain players to our platform,” Schwartz said.

“Simply put, we are adding players to the platform faster. On average, players are worth more. We are adding players to the platform more efficiently than ever before. This impressive growth is driving meaningful revenue.”

Business Analyzing the impact on Delaware in the first quarter

Just before the first quarter, Rush Street partnered with BetRivers toDelaware Lottery launches first online sportsbook. This went live in late December along with his three new online casinos also powered by Rush Street.

Schwartz spoke positively about his early performance at Delaware State. He said the game’s annual gross revenue run rate has increased and is approaching $70 million. This is an increase of $10 million from last quarter.

“It was a strong end to the quarter,” Schwartz said. “During March, we exceeded our previous operator’s rates by more than four times, with approximately 75% of this GGR coming from online casinos.”

Schwartz also mentioned the possibility of additional online sports betting operators in Delaware. He hinted that the current arrangement is likely to remain in place.

“We are actively participating in discussions on this topic and have support from key stakeholders in the state, so we feel positive that the current structure will remain in place.”

Business What’s happening elsewhere on Rush Street?

Away from Delaware, Rush Street reported a resurgence in some of its more mature markets. This includes his three largest online casino markets in North America: Michigan, New Jersey, and Pennsylvania. Both recorded the largest year-over-year sales growth in the past two years.

“Our focus on the online casino experience is resonating with new and existing customers and is driving very solid growth in these existing markets,” Schwartz said. .

Turning to Latin America, Schwartz said he was “very pleased” with the results in both Colombia and Mexico.

“Our RushBet brand is resonating with our customers, as shown by our growth in monthly active users and average revenue per monthly active user,” he said. “With this, in Latin America he saw an 84.0% revenue increase. There is a lot of room for continued growth by investing in both of these markets.”

Schwartz also took time to praise Rush Street’s marketing strategy and its impact on growth. This was further strengthened by:Brian Sapp appointed as first Chief Marketing Officerlast month.

“Our strategy remains unwavering and our execution continues to improve, with a focus on attracting the most valuable players to our platform and retaining them by delivering a high-quality experience. We’re looking for the best ROI opportunity, and this is working,” Schwartz said. He said.

“In particular, we are very proud of our continued success in driving marketing cost efficiencies. In fact, in the first quarter, we recorded the highest number of first-time depositors in our history. was the highest in North America since our launch in New York in the first quarter of 2022.”

Business Net loss almost eliminated in the first quarter

As part of this approach, advertising expenses were reduced by 23.1% to $38.4 million in the first quarter. However, other expense increases, including a 34.8% increase in cost of revenue, increased total operating expenses in the first quarter. Total costs were $215.9 million, an increase of 17.1%.

That said, the impact of higher revenue in the first quarter helped Rush Street turn an operating loss of $22.1 million into an operating profit of $1.5 million. In addition, interest income of $1.6 million brought pre-tax profit to $3.1 million, compared to last year’s loss of $21.7 million.

Rush Street had to pay $5.3 million in income taxes, resulting in a net loss of $2.2 million, which was significantly better than the $24.5 million loss in 2023.

However, after deducting the $1.5 million loss from non-controlling interests, the net loss attributable to Rush Street was only $727,000. This is a significant improvement from last year’s $7.3 million loss.

Additionally, adjusted EBITDA for the quarter was a record high of $17.1 million, which also contrasts with a loss of $8.7 million in 2023.

What you can expect from Rush Street all year round

Rush Street also took the opportunity to issue guidance for the full year ending December 31, 2024.

Revenues are expected to be between $810 million and $860 million, with a midpoint of $835 million, an increase of 21.0% year over year. By the way, this midpoint is $35 million higher than the original guidance issued previously.

Adjusted EBITDA is set at between $50 million and $60 million, with the midpoint of $55 million representing an increase of approximately 573.0% from the previous year. Again, this midpoint is higher than mentioned above, with Rush Street increasing this by $15 million.

Rush Street noted that the guidance is based on certain assumptions, including that it only includes current business and does not enter into new markets. Changes in any of these could impact full-year results.

“We are very excited about the opportunity to continue to expand and drive growth on the back of our current momentum, including increasing our adjusted EBITDA guidance by 38% at the midpoint,” Schwartz said.

“This growth and scale will improve our earnings and free cash flow. We believe our team is well-positioned to execute on our strategy and continue to deliver value for our shareholders, and we remain energetic.” We are working on this.

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