Rush Street Interactive, Inc. (RSI)·Q3 2025 Earnings Summary

Executive Summary

• Record revenue of $277.9M (+20% YoY) and adjusted EBITDA of $36.0M (+54% YoY); tenth consecutive quarter of sequential revenue growth; North American online casino MAUs accelerated +46% YoY .
• Full-year 2025 guidance raised: revenue to $1.100–$1.120B (midpoint +20% YoY) and adjusted EBITDA to $147–$153M (midpoint +62% YoY); a clear positive catalyst for sentiment and estimate revisions in the absence of Street data .
• Mix shift remains favorable to higher-margin online casino; Colombia headwinds (temporary VAT and elevated bonusing) weighed on LATAM net revenue and sports betting, but management highlighted strong underlying GGR and player growth .
• Balance sheet remains strong with $273M cash and no debt, enabling flexibility for marketing investment and expansion (e.g., planned Alberta launch) .

What Went Well and What Went Wrong

What Went Well

• Online casino momentum: North America MAUs +34% YoY to ~225k, with online casino markets +46% MAU growth; management emphasized “continued acceleration… every single month since March” .
• Broad-based market growth: Delaware net revenue +74%; Michigan +48%; New Jersey +37%; Ontario +24%; Pennsylvania +15%, supporting the product differentiation thesis .
• Efficient growth and profitability: Adjusted EBITDA margin implied strong operating leverage; marketing expense down 1% YoY despite record first-time depositors (>10% above prior record) .

Quote: “Our third quarter results demonstrate continued momentum… led by our continued outperformance in the online casino space.” — Richard Schwartz, CEO .

What Went Wrong

• Colombia VAT-driven bonusing reduced LATAM net revenue (net revenue down 27% in Colombia despite >50% GGR growth); sports betting revenue contracted 16% in Q3 .
• Player-friendly sports outcomes (September) pressured gross margin and LATAM results; New Jersey tax increases also mild headwind .
• Q4 incremental margin at guidance midpoint expected ~20% due to higher marketing and continued Colombia VAT through year-end, implying sequential margin compression vs recent quarters .

Financial Results

Core P&L Comparison (oldest → newest)

Q3 2025 Margin and Operating Metrics

Segment and Regional Mix (Q3 2025)

Market Growth Detail (Q3 2025)

KPIs (oldest → newest)

Balance Sheet Snapshot (Q3 2025): Cash & cash equivalents $273.5M; unrestricted cash cited ~$273M; no debt .

Guidance Changes

Assumptions remain: only live jurisdictions included; similar tax structures assumed .

Earnings Call Themes & Trends

Management Commentary

• “Another quarter of record revenue… driven by record player acquisition and strong player engagement across our higher-value markets.” — Richard Schwartz, CEO .
• “Online casino revenues grew 34%… North America grew 26% while Latin America fell by 11% due to elevated bonusing in Colombia.” — Kyle Sauers, President & CFO .
• “We had a record quarter for first-time depositors… >10% above prior record while reducing marketing spend vs last year.” — Richard Schwartz, CEO .
• “Our sports hold in the U.S. hit its highest point in our history in Q3, even with tougher outcomes.” — Kyle Sauers, President & CFO .
• “We’re excited about planned expansion into Alberta… and monitoring multiple U.S. states for iCasino legalization.” — Richard Schwartz, CEO .

Q&A Highlights

• Q4 incremental margins around ~20% at guidance midpoint: management flagged higher marketing spend and continued Colombia VAT through year-end; sports outcomes remain a swing factor .
• Mexico tax risk: gaming tax likely to increase from ~30% to ~50% with potential mitigants to reduce effective rate; more clarity in 2026 .
• Colombia dynamics: net revenue down due to bonusing; underlying GGR/player growth remains strong; expectation of improvement post-VAT or via reduced bonusing if VAT persists .
• Payments innovation: Sightline integrated debit and crypto partnerships aim to improve experience and reduce costs; early days for adoption metrics .
• Buybacks: none in Q3; approach remains opportunistic with preference to maintain flexibility for new markets/opportunities .

Estimates Context

• Wall Street consensus estimates via S&P Global were unavailable for Q3 and Q4 2025 at the time of analysis; therefore, beat/miss vs consensus cannot be determined. Values retrieved from S&P Global.*
• Internal guidance was raised for both revenue and adjusted EBITDA, which typically prompts upward estimate revisions in the absence of published consensus .

Key Takeaways for Investors

• Strong iCasino-led growth and MAU acceleration underpin durable top-line momentum, with the tenth straight sequential revenue increase and broad-based market performance in key states (DE, MI, NJ, ON, PA) .
• Guidance raise to $1.1–$1.12B revenue and $147–$153M adjusted EBITDA suggests confidence in Q4 seasonality and iCasino trends; watch for continued marketing leverage .
• Near-term LATAM headwind is transitory: Colombia VAT/bonusing pressures net revenue but sets up a 2026 rebound (or improvement if bonusing is reduced even if VAT continues) .
• Regulatory watch items: potential Mexico tax increase; U.S. legalization dynamics influenced by prediction markets and sweepstakes; Alberta launch pipeline in Canada .
• Payments and platform innovation are strategic levers (Sightline Debit, crypto) to reduce friction/costs and enhance retention; CTO hire supports execution velocity .
• Balance sheet strength (no debt; ~$273M cash) provides optionality for marketing investment, market launches, and opportunistic buybacks .
• Trading setup: narrative skewed positive on guidance raise and iCasino momentum; monitor sports outcomes volatility, Colombia VAT run-off, and Q4 marketing spend for margin trajectory .