Rush Street Interactive’s first quarter results showed solid operational momentum, with revenue growth led by its core online casino segment and disciplined marketing execution. However, the negative market reaction suggests investor concerns about future growth trajectory, largely due to external headwinds. Management credited the balanced expansion across product lines, particularly online casino, as well as efficient player acquisition and retention for the quarter’s performance. CEO Richard Schwartz highlighted that, despite challenging sports betting outcomes during major events, the company “continued to achieve strong results by prioritizing innovation and the quality of our player experience.”
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Rush Street Interactive (RSI) Q1 CY2025 Highlights:
- Revenue: $262.4 million vs analyst estimates of $261 million (20.7% year-on-year growth, 0.5% beat)
- Adjusted EPS: $0.09 vs analyst estimates of $0.06 (47.7% beat)
- Adjusted EBITDA: $33.23 million vs analyst estimates of $27.1 million (12.7% margin, 22.6% beat)
- The company reconfirmed its revenue guidance for the full year of $1.05 billion at the midpoint
- EBITDA guidance for the full year is $125 million at the midpoint, in line with analyst expectations
- Operating Margin: 5.6%, up from 0.7% in the same quarter last year
- Monthly Active Users: 203,000, up 27,000 year on year
- Market Capitalization: $1.38 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Rush Street Interactive’s Q1 Earnings Call
- Bernie McTernan (Needham & Company) asked about competitive responses to the Colombian VAT tax and whether Rush Street Interactive is gaining market share. CEO Richard Schwartz explained all major operators are absorbing the tax and that strong GGR growth implies likely share gains.
- Jordan Bender (Citizens) probed potential adjustments to the business model in Colombia to improve net revenue. CFO Kyle Sauers discussed reducing deposit turnover and marketing spend, and said future changes depend on competitor actions and tax developments.
- Jed Kelly (Oppenheimer) questioned the sustainability of marketing leverage given increased competition. Schwartz attributed results to product differentiation and player experience, not simply marketing budget size or brand strength.
- Chad Beynon (Macquarie) asked about sports betting product improvements and hold rates. Sauers noted ongoing product enhancements and a shift toward higher-margin bet types, such as parlays and prop bets.
- Mike Hickey (Benchmark Company) inquired about tax impacts in Colombia on EBITDA and the company’s strategy for cross-selling between casino and sportsbook. Schwartz highlighted ongoing technology and promotional investments to maximize cross-sell and player value.
Catalysts in Upcoming Quarters
Going forward, our analysts will be watching (1) the outcome of the Colombian Constitutional Court’s decision regarding the VAT tax and its impact on net revenue, (2) signs of progress in legislative efforts in Alberta and other U.S. states that could open new markets, and (3) continued efficiency in player acquisition and cross-sell initiatives between casino, sportsbook, and poker. We will also pay close attention to how marketing discipline influences profitability as the year progresses.
Rush Street Interactive currently trades at $14.40, up from $12.12 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free).
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