Sign in
RS

Rush Street Interactive, Inc. (RSI)·Q2 2025 Earnings Summary

Executive Summary

  • Record quarter: revenue $269.2M (+22% YoY), net income $28.8M, and adjusted EBITDA $40.2M (+88% YoY); ninth straight quarter of sequential revenue and adjusted EBITDA improvement .
  • Guidance raised: FY25 revenue to $1.05–$1.10B (midpoint +16% YoY vs $924M FY24) and adjusted EBITDA to $133–$147M (midpoint +51% YoY vs $92.5M FY24), despite IL/NJ tax changes and Colombia VAT headwind included in the outlook .
  • Margin and efficiency gains: gross margin ~35.3% (+~80 bps YoY); marketing $36.2M was <14% of revenue while delivering a record quarter for first-time depositors .
  • Key catalysts: strength in iCasino (revenue +25% YoY) and sports betting (+15% YoY), multi-state poker rollout for cross-sell, and potential Colombia VAT sunset; watch H2 cadence as RSI plans higher marketing spend and normalizes sports hold tailwinds .

What Went Well and What Went Wrong

  • What Went Well

    • Broad-based growth: online casino revenue +25% YoY; online sports betting +15% YoY; NA iCasino markets saw MAUs grow >30% .
    • Efficiency and margins: gross margin ~35.3% (+~80 bps YoY); marketing at <14% of revenue with record FTDs; adjusted EBITDA a record $40.2M .
    • Strategic product expansion: launched multi-state BetRivers Poker with shared liquidity across four states to bolster cross-play and engagement; CEO emphasized 9th consecutive quarter of sequential improvement .
    • Quote: “We’ve delivered another exceptional quarter… our 9th consecutive quarter of improving both revenue and adjusted EBITDA from the preceding quarter.” – CEO Richard Schwartz .

  • What Went Wrong

    • Colombia VAT headwind: LATAM ARPMAU fell to $30 from $38 YoY; net revenue there roughly flat despite GGR up >70% YoY due to increased bonusing to offset VAT .
    • Regulatory/tax overhang: Illinois and New Jersey tax changes included in guidance; strategy still evolving (e.g., minimum bet raised to $1 in IL) .
    • Cadence/normalization risks: RSI plans higher marketing in Q3 and Q4 versus Q2; Q2 enjoyed ~$5M revenue tailwind from favorable sports outcomes that may not repeat .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$254.2 $262.4 $269.2
GAAP Diluted EPS ($)$0.02 $0.05 $0.12
Adjusted EPS ($)$0.07 $0.09 $0.11
Net Income ($USD Millions)$6.5 $11.2 $28.8
Adjusted EBITDA ($USD Millions)$30.6 $33.2 $40.2
Gross Margin (%)n/an/a35.3%

Segment/Product growth (current quarter):

  • Online Casino Revenue: +25% YoY .
  • Online Sports Betting Revenue: +15% YoY .

Regional highlights (current quarter):

  • Michigan +42% YoY; West Virginia +47% YoY; Delaware +74% YoY; Ontario +25% YoY .
  • Colombia GGR >+70% YoY (net revenue ~flat due to VAT-related bonusing) .
  • Mexico >+125% YoY and +40% QoQ .

KPIs and efficiency:

KPIQ1 2025Q2 2025
NA MAUs (000s)203 197
LATAM MAUs (000s)354 403
NA ARPMAU ($)368 391
LATAM ARPMAU ($)36 30
Adjusted Sales & Marketing ($M)38.8 36.2

Balance sheet/Capital return:

  • Cash $241M; debt-free; repurchased $2.5M in Q2 and $8M YTD under $50M authorization (≈$42M remaining) .

Non-GAAP adjustments:

  • Q2 contained non-cash tax-related items: recognition of ~$145M deferred tax asset and ~$114M tax receivable agreement liability; excluded from EBITDA and EPS; TRA cash outflows only when tax savings realized .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2025$1.01–$1.08B $1.05–$1.10B Raised
Adjusted EBITDAFY 2025$115–$135M $133–$147M Raised
  • Midpoints imply +16% revenue growth vs FY24’s $924M and +51% adj. EBITDA growth vs FY24’s $92.5M .
  • Assumptions include only currently live jurisdictions and similar tax structures; guidance embeds IL/NJ tax changes and assumes Colombia VAT persists through year-end .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24, Q1’25)Current Period (Q2’25)Trend
iCasino focus/differentiationBroad-based growth; strong MAU trends; iCasino-led markets emphasized iCasino +25% YoY; NA iCasino MAUs +30%+; continued product differentiation Strengthening
Marketing efficiency/FTDsFY24 ad & promo down YoY; Q1 adj S&M $38.8M (+3% YoY) Q2 S&M $36.2M (<14% of revenue) with record FTDs; spend to rise in Q3/Q4 with leverage Efficient, reinvesting
Colombia VAT/macroLATAM ARPMAU pressured; Q1 LATAM ARPMAU $36 vs $44 LATAM ARPMAU $30; GGR >+70% YoY; VAT in guidance; court review pending; low likelihood of extension per local experts Headwind; potential relief ’26
US tax changes (IL/NJ)n/aIncluded in raised FY guide; IL min bet now $1; strategy still evolving Managed within outlook
Poker platformn/aMulti-state BetRivers Poker with shared liquidity; cross-sell into casino/sports Expanding
Live Dealern/aInvestments in UX, aggregation, exclusive tables/content Growing
Margin trajectoryn/aGM ~35.3% (+~80 bps YoY) on mix/scale; some offset from Colombia VAT Expanding

Management Commentary

  • Strategy and execution: “Record quarter across the board… ninth consecutive quarter of improving both revenue and adjusted EBITDA,” driven by iCasino (+25% YoY) and sportsbook (+15% YoY), with NA iCasino MAUs +30%+ .
  • Outlook/tax: “Positive momentum across our markets is far outweighing any headwinds from increased taxes in the U.S. and Colombia… raising full-year revenue and EBITDA guidance” .
  • Efficiency and liquidity: “Marketing spend… <14% of revenue… largest quarter in history for first-time depositors… Cash $241M; debt-free” .
  • Non-GAAP/one-time items: Recognition of ~$145M DTA and ~$114M TRA liability; both non-cash in Q2 and excluded from EBITDA/EPS; TRA payable only as tax savings realized .

Q&A Highlights

  • Taxes/strategy (IL/NJ): Guidance fully incorporates higher taxes; Illinois strategy still evolving (minimum bet raised to $1), balancing player experience and economics heading into NFL season .
  • Colombia VAT: Market headwind remains; all leaders using similar bonusing to offset VAT; experts see low likelihood of extension beyond year-end; Constitutional Court review timing pending and could shorten duration .
  • H2 cadence/marketing: Expect higher absolute marketing spend in Q3 and Q4 versus Q2, with continued leverage; Q2 sports outcomes aided revenue by ~$5M, not assumed to repeat .
  • Capital allocation: ~$8M of $50M buyback used YTD; opportunistic stance; priority is dry powder for future iCasino-led launches with strong returns .
  • Product: Live Dealer innovation and exclusives to deepen engagement; multi-state poker built to enhance cross-play and community .
  • Regulation/prediction markets: Management sees potential for prediction markets to accelerate iCasino legalization, a net positive given RSI’s casino-first orientation .

Estimates Context

MetricQ2 2025 Consensus (S&P Global)ActualSurprise
Revenue ($USD Millions)n/a*$269.2 n/a*
GAAP Diluted EPS ($)n/a*$0.12 n/a*
Adjusted EBITDA ($USD Millions)n/a*$40.2 n/a*
  • Consensus data from S&P Global was unavailable at the time of query; as a result, we cannot determine formal beat/miss for Q2 2025 relative to Street estimates.
  • Note: Q2 featured a ~$5M favorable sports hold tailwind; H2 marketing to increase; both factors could influence near-term estimate revisions .
  • *Values retrieved from S&P Global.

Key Takeaways for Investors

  • Durable growth with operating leverage: 9th straight sequential revenue and adjusted EBITDA improvement; gross margin expansion and marketing efficiency drove record profitability .
  • Guidance reset higher despite taxes: FY25 revenue and adjusted EBITDA ranges both raised; outlook embeds IL/NJ taxes and assumes Colombia VAT through YE25, de-risking the bar .
  • H2 setup: Expect higher marketing dollars in Q3/Q4 to capture iCasino LTVs; Q2 sports hold tailwind may normalize—watch cadence and flow-through .
  • LATAM optionality: Colombia VAT likely to sunset, offering margin/revenue uplift potential; Mexico scaling rapidly (>125% YoY, +40% QoQ) .
  • Product catalysts: Multi-state poker liquidity pool and Live Dealer enhancements should support cross-sell and ARPMAU momentum, particularly in iCasino states .
  • Capital allocation: Strong cash ($241M) and no debt enable opportunistic buybacks and funding for new iCasino markets with historically attractive returns .
  • Monitor regulatory narrative: US state tax developments and prediction markets could influence the pace of iCasino legalization—potential structural tailwind for RSI’s casino-led strategy .

Appendix: Additional Quantitative Details

  • Selected operational efficiency: Adjusted sales & marketing of $36.2M in Q2, “less than 14% of revenue,” with record FTDs .
  • Cash return: $2.5M repurchased in Q2; ≈$42M capacity remaining under $50M authorization .
  • Non-GAAP reconciliations: Q2 adjusted EPS $0.11 (vs $0.04 in Q2’24); adjusted operating costs down vs GAAP due to share-based comp adjustments .