Rush Street Interactive (RSI) had its best quarter ever in terms of revenue and adjusted EBITDA in Q1 2024.
RSI’s quarterly revenue report for the first three months of 2024 posted revenue of $217.4 million, up one-third (33.9%) from the same period last year.
In addition, adjusted EBITDA for the quarter also hit a record of $17.1 million. This time last year, RSI was looking at an $8.7 million adjusted EBITDA loss in Q1 2023.
RSI CEO Richard Schwartz attributed the rise to growth across both online casino and sports betting in recent months, with revenue up for both branches.
“This was accomplished by growing both our iCasino and online sports businesses by over 35% year-over-year, in large part by acquiring new players more efficiently while simultaneously increasing the number and value of our users,” Schwartz told investors.
Rush Street monthly active users totaled 176K
On that acquisition piece, RSI’s monthly active users in North America totaled approximately 176,000. That is a third quarterly record posted in Q1 2024, a rise of 20% year-over-year and the culmination of six straight months of growth in users.
“Said simply, we are adding players to our platform more quickly,” added Schwartz. “Players on average are higher value, we are finding these new players more efficiently than ever and we are driving meaningful profitability from this impressive growth.”
“We continue to find the right ways to efficiently bring new players onto the platform, retain them well and work hard to reactivate those that have been away for a while,” said CFO Kyle Sauers. “We are as convinced as ever that once players find the BetRivers and Rushbet experience, they will dedicate a large share of their entertainment wallets and keep returning for years to come.”
Rush Street’s advertising and promotions costs were slashed in Q1 by 23.1% YOY to $38.4 million. While higher total spend including a 34.8% YOY rise in revenue costs meant that total Q1 operating costs were 17.1% higher than last year, RSI’s revenue growth was enough to see a $22.1 million operating loss transformed into a $1.5 million operating profit. Overall, Rush Street’s net loss of $2.2 million in Q1 2024 was $22 million better than its loss in 2023.
New and old states perform well
One new consideration factored into the Q1 2024 results is Delaware, as RSI launched BetRivers as the first online sportsbook for the Delaware Lottery in the final weeks of 2023. RSI signed a five-year deal last August to replace 888 as the lottery’s sports betting and iGaming provider.
The lottery said at the time that it was looking for more success with BetRivers than it had seen with 888. Estimates suggested the lottery was taking around $1.1 million per month from its previous partnership.
“I would say that we’re having tremendous success,” said Schwartz of RSI’s early operations in the state. “I think the quality of our casino product and the user experience we offer to our customer service is definitely being noticed by the players and we’re seeing the dramatic improvement on performance versus what it was prior to us taking over the business at the end of December. We think the growth has been exciting.”
As well as its new market in the First State, RSI also reported gains in some of its more mature jurisdictions. In each of its three largest online casino markets of New Jersey, Philadelphia and Michigan, Rush Street enjoyed its largest year-over-year rate of revenue growth in the last two years.
Schwartz put those strong footholds down to the fact “our focus on the iCasino experience is resonating with new and existing customers.”
“Certainly, Delaware has been a nice win for us,” added Sauers. “But in the U.S. and Canada, even excluding Delaware, it’s our highest growth rate in many, many quarters. So there’s just a lot of really great things going on.”
RSI expects further gains in 2024, keeps mum on sale reports
In its outlook for the remainder of the year, RSI projected midpoint revenue of $835 million, which would represent a 21% increase from last year. That figure is also $35 million higher than the company’s initial estimate.
The midpoint adjusted EBITDA expectation is $55 million, up 573% year-over-year and again higher than projected in the company’s initial guidance.
“We are very excited about the opportunity to continue to scale the business and drive growth on the back of our current momentum, which includes increasing our adjusted EBITDA guidance by 38% at the midpoint,” Schwartz said. “With this growth and scale comes improving earnings and free cash flow. Looking forward, we remain energized in our view that the team is primed to continue executing on our strategy and delivering value to shareholders.”
Meanwhile, the executives were asked in the Q&A about the reports that Rush Street is considering a sale of RSI. Industry giants such as DraftKings are said to be interested in an acquisition.
“I can’t respond to the rumors or speculation in the press,” said Schwartz. “But what I can say is that the board and the management regularly evaluate all opportunities that we have and our goal is to always maximize shareholder value… We have a lot of assets that are valuable to us [and] interesting to other companies and we will continue to evaluate all opportunities as part of our shareholder obligations.”
