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Rush Street Interactive, Inc. (RSI)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered record revenue ($254.2M, +31% y/y) and record Adjusted EBITDA ($30.6M, +166% y/y), with gross profit margin expanding to 36.5%; net income was $6.5M versus a $5.5M loss in Q4 2023 .
  • FY24 revenue reached $924.1M (+34% y/y) and Adjusted EBITDA $92.5M (+1,033% y/y), underscoring scale benefits and disciplined marketing; unrestricted cash ended at $229M with no debt .
  • 2025 outlook initiated: revenue $1.01–$1.08B (midpoint +13% y/y) and Adjusted EBITDA $115–$135M (midpoint +35% y/y); guidance assumes Colombia deposit tax remains in effect, with potential upside if repealed/shortened .
  • Strategic drivers: broad-based growth across iCasino and sportsbook (each >27% y/y), strong MAU growth (US/Canada +28%; LatAm +71%), continued product innovation (e.g., bonusing engine, in-play/same-game parlay, proprietary poker platform), and Delaware outperformance; catalysts include gross margin expansion and potential regulatory progress in iCasino markets .

What Went Well and What Went Wrong

  • What Went Well
    • Broad-based growth: iCasino and sportsbook each grew >27% y/y in Q4; North America online +29% and LatAm +54% despite player-favorable NFL outcomes .
    • Margin expansion and operating leverage: Q4 gross margin rose to 36.5% (FY24 35.0%), with leverage in marketing and G&A; Adjusted EBITDA up >2.5x y/y to $30.6M in Q4 .
    • Customer growth and quality: US/Canada MAUs reached ~205k (+28% y/y), LatAm ~348k (+71% y/y); ARPMAU held at $346 in US/Canada and was $39 in LatAm (sequentially higher in local currency) .
  • What Went Wrong
    • External tax headwinds: Colombia deposit VAT introduced; guidance includes full-year impact but management notes upside if overturned or shortened .
    • Player-friendly outcomes pressure: Q4 NFL and Colombian soccer results were “very, very player-friendly,” creating hold headwinds; despite this, revenue growth guidance remained strong .
    • LatAm ARPMAU pressure y/y: LatAm ARPMAU was $39 vs $42 in prior year (mix from new player acquisition), though sequential/local-currency trends improved .

Financial Results

  • Income statement and margin trends vs prior quarters (chronological left→right):
MetricQ2 2024Q3 2024Q4 2024
Revenue ($MM)$220.4 $232.1 $254.2
Net Income ($MM)$(0.3) $3.2 $6.5
Diluted EPS ($)$0.00 $0.01 $0.02
Adjusted EBITDA ($MM)$21.4 $23.4 $30.6
Gross Profit Margin %34.6% 34.9% 36.5%
Adjusted Advertising & Promotions ($MM)$36.3 $38.6 $43.1
Adjusted A&P as % of Revenue16% 17% 17%
  • KPIs and balance sheet (chronological left→right):
KPIQ2 2024Q3 2024Q4 2024
MAUs – US/Canada (000s)164 168 205
ARPMAU – US/Canada ($)380 388 346
MAUs – Latin America (000s)288 329 348
ARPMAU – Latin America ($)37 39 39
Unrestricted Cash & Equivalents ($MM)$194 $216 $229

  • FY context: FY24 revenue $924.1M; FY24 Adjusted EBITDA $92.5M; unrestricted cash $229M at 12/31/24, no debt .

  • Mix / geography highlights (qualitative disclosures):

    • iCasino and sportsbook each grew >27% y/y in Q4; North America online +29%, LatAm +54% .
    • Delaware: GGR run-rate at >$125M in Q4 and grew again in January; RSI cites substantial further opportunity .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($MM)FY 2025N/A$1,010–$1,080 (midpoint $1,045 = +13% y/y) Initiated
Adjusted EBITDA ($MM)FY 2025N/A$115–$135 (midpoint $125 = +35% y/y) Initiated
Gross Profit Margin %FY 2025N/AExpect continued improvement Positive directional
Marketing as % of RevenueFY 2025N/AExpect leverage (grow slower than revenue) Positive directional
G&A as % of RevenueFY 2025N/A<8.1% of revenue Positive directional
Assumptions (Colombia VAT)FY 2025N/AIncludes full-year Colombia deposit tax; upside if repealed/shortened Risk embedded / upside possible

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3)Current Period (Q4)Trend
Technology/product innovationEnhanced iRush Rewards; launch of PropPacks; improving parlay/props; in-house bonusing engine; proprietary poker platform in development Continued emphasis on in-house tech and real-time rewards; in-play and same-game parlay engagement; platform differentiation Improving product velocity and differentiation
Marketing efficiencyLower CPAs; marketing down y/y in 1H yet record FTDs; expect higher 2H spend but with leverage Q4 adjusted A&P $43.1M (17% of revenue) with leverage; plan FY25 leverage again Sustained discipline with scalable spend
Gross margin trajectoryQ2 ~34.6%; Q3 34.9%; mix shift to more profitable markets Q4 36.5%; FY24 35.0%; expect further improvement in 2025 Improving
LatAm growth & risksLatAm ~15–16% of revenue; strong MAU growth; Mexico scaling; Peru launch; profitable region Strong Q4 MAU growth; Colombia deposit VAT embedded in ’25 guide; mitigation actions underway Growth with tax headwind risk managed
Delaware performance>$37M GGR 1H; outgrowing predecessor by ~4–5x; strong run-rate outlook GGR run-rate >$125M in Q4; grew again in January; fixed-cost profile offers scaling Strong and still scaling
Regulatory/legalIllinois graduated tax impact managed; iCasino legalization dialogue building momentum Colombia deposit VAT; optimism on possible repeal; broader iCasino legalization push; sweepstakes concerns Mixed (headwinds in taxes, tailwinds in legalization narrative)
Capital allocation$50M buyback authorization announced in Q3; strong cash generation No Q4 repurchases; opportunistic stance; M&A optionality with $229M cash Optionality preserved

Management Commentary

  • “We concluded the year with a record-setting quarter in both revenue and adjusted EBITDA, exceeding the high end of our most recent guidance… We expanded gross margin by over 200 basis points, reduced marketing expense compared to last year and gained leverage over our G&A costs.”
  • “Top line performance was strong… both online casino and online sportsbook each grew over 27%… North America online grew 29%, while LatAm grew 54%… in the face of player favorable NFL outcomes.”
  • “For 2025, we expect our gross margins to continue to improve… we execute on cost improvements… marketing spend that grows at a lower rate than revenue… G&A… less than 8.1% [of revenue].”
  • On Colombia’s deposit VAT: “Both the high and low end of our ranges… include the impact… assuming it’s in place through the end of the year… If the tax were to be repealed or shortened, we would expect to see upside to our guidance ranges.”

Q&A Highlights

  • Colombia VAT impact and mitigation: Guidance brackets “bad outcome” to “pretty well” scenarios; mitigation via promos, reduction in marketing, vendor cost sharing, and nimble proprietary bonusing; confident in competitive positioning .
  • Delaware growth durability: Exceeded $125M GGR run-rate in Q4; margins largely fixed; growth to come from new players and monetization; January grew again .
  • Hold/product mix: Improved sports hold y/y in Q4 despite NFL headwinds; expecting further hold improvements in 2025 from product/mix .
  • Capital returns and M&A: No Q4 buybacks; remain opportunistic; cash should build, with flexibility for repurchases and tuck-in M&A .
  • Regulatory landscape: No other tax increases embedded in guidance (besides Colombia); industry push for iCasino legalization gaining momentum; sweepstakes casinos seen as accelerant for regulation .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 2024 and FY 2025 was unavailable at time of analysis due to SPGI request limits; as a result, we cannot quantify beat/miss vs consensus for revenue/EPS/EBITDA. RSI did not provide explicit comparisons to consensus in its materials [GetEstimates error].
  • Implications: Given record revenue and EBITDA with margin expansion and strong FY25 guide, sell-side models may need to reflect higher gross margin trajectory and sustained marketing leverage, while factoring Colombia VAT headwinds embedded in guidance .

Additional Q4 2024 Press Releases (Context)

  • BetRivers proprietary online poker launch (Pennsylvania first; partnership with Phil Galfond) strengthens product breadth and omnichannel tie-ins with Rivers Casinos; positioned for jurisdictional expansion .
  • Board enhancement: Thomas Winter (ex-GNOG/DraftKings casino) appointed to RSI’s Board, adding deep online casino expertise .

Key Takeaways for Investors

  • Quality growth with margin expansion: Revenue +31% y/y and gross margin 36.5% in Q4 amid unfavorable sports outcomes supports durability of the model and mix shift to higher-margin markets .
  • 2025 guide credible with embedded headwind: Revenue +13% and Adjusted EBITDA +35% at midpoints with Colombia VAT assumed all year; upside exists if repealed .
  • Delaware remains a growth engine: Run-rate >$125M GGR in Q4 and growing; relatively fixed cost base suggests attractive incremental margins as the state scales .
  • LatAm profitable growth but watch policy risk: Strong MAU expansion and higher margins vs most NA markets; manage through Colombia VAT with tactical levers .
  • Marketing leverage intact: Highest spend in 7 quarters in Q4 but still leveraged; FY25 to see spend grow slower than revenue .
  • Product innovation is a differentiator: In-house tech, real-time rewards, in-play/SGP focus, and new poker platform enhance engagement and LTV .
  • Regulatory optionality: Momentum in iCasino discussions and potential enforcement against sweepstakes could catalyze regulated expansion; estimate models should include scenario analysis for new markets .

Appendices

FY24 Summary (for context)

MetricFY 2024
Revenue ($MM)$924.1
Net Income ($MM)$7.2
Adjusted EBITDA ($MM)$92.5
Unrestricted Cash & Equivalents ($MM, 12/31/24)$229

Non-GAAP Notes

  • Adjusted EBITDA reconciliation provided; Q4 Adjusted EBITDA $30.6M; FY24 $92.5M .
  • Adjusted EPS: Q4 $0.07; Q3 $0.05; Q2 $0.04 .
  • Management emphasizes sustained use of non-GAAP metrics for core performance analysis; reconciliations included in releases .