Rush Street Interactive Q2 reports 35% year-on-year growth

Profitability is no longer a long-term goal for many gaming operators, and Rush Street Interactive (RSI) has joined the ranks this month with companies reporting a successful Q2. RSI announced an adjusted EBITDA of US $1.2 million for the quarter, marking a significant step forward in its financial performance.

In addition to the positive adjusted EBITDA figure, Q2 saw RSI achieve US $165 million in revenues, although it also recorded net losses of US $16.7 million. A year earlier, in Q2 2022, the company reported US $143.7 million in revenue, but incurred US $28.2 million in losses and US $18.6 million in adjusted EBITDA losses.

Positive results expected for year-end

CEO Richard Schwartz acknowledged the possibility of RSI achieving full-year profitability, aligning with the broader trend in the industry. However, he indicated that the company is in a state of uncertainty with regards to profitability in Q3, with more optimistic prospects for positive results in Q4.

Schwartz commented on the earnings call, saying, “We are proud that almost two-thirds of our improved profitability was driven by revenue growth and improving operations, with the remaining third from more efficient marketing spend. These results set us up well for the second half of the year, where we continue to expect to be adjusted EBITDA positive.”

Highlights of Q2 2023 for Rush Street Interactive(RSI) include:

• Second-quarter revenue reached $165.1 million, marking a substantial 15% year-over-year increase from $143.7 million in the same period in 2022.
• RSI achieved adjusted EBITDA profitability for the quarter, reporting positive adjusted EBITDA of $1.2 million for Q2 2023, a notable turnaround from an adjusted EBITDA loss of $18.6 million in Q2 2022.
• The company posted a net loss of $16.7 million in Q2 2023, which is an improvement compared to a net loss of $28.3 million in Q2 2022.
• Adjusted advertising and promotions expenses for the quarter were $40.4 million in Q2 2023, down from $44.2 million in Q2 2022.
• The average revenue per monthly active user (ARPMAU) in the United States and Canada was $359 for Q2 2023, reflecting an 11% year-over-year increase.
• As of June 30, 2023, RSI had $128 million in unrestricted cash and cash equivalents.
• The company also raised its full-year 2023 revenue guidance midpoint, revising the range to be between $650 million and $690 million.

Growth in casino and sportsbook

RSI experienced year-over-year growth in both its online casino and sportsbook-only markets, achieving over 35 percent growth in the second quarter when considering US markets launched after 2020 along with international markets. Schwartz said that the company’s ability to expand successfully into new markets was by building its brand and enhancing the player experience.

Focus on Brazil and LatAm

Schwartz reiterated RSI’s long-term commitment to Latin America and expressed enthusiasm about the opportunities presented by Brazil’s emerging market.

Regarding specific states, Schwartz explained the importance of markets like Ohio and Indiana, citing the company’s potential for outsized success in regions offering both online sportsbooks and online casinos. RSI is directing efforts toward retaining high-value players aligned with its long-term financial objectives, giving preference to quality over volume.

Slot tournaments and sports betting

On the technology front, Schwartz highlighted the impact of slot tournaments in boosting the bottom line on the online casino side.

In sports betting, RSI has launched a new feature called Props Central, designed to encourage more prop betting. This dedicated section within the app consolidates all prop betting options, making them easily discoverable. Schwartz noted that innovations like Props Central have driven interest in higher-return props and parlays over straight wagers.

Schwartz concluded by stating, “We continue to add features to encourage more parlay and profit,” mentioning improvements planned for NFL and NCAA football seasons, such as aggregating player props by league and enhancing merchandising. The company remains optimistic about its growth and financial prospects in the rapidly evolving sports betting and online gaming industry.

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