Rush Street Interactive(RSI) - 2024 Q3 - Quarterly Results

Financial Performance and Outlook Third Quarter 2024 Financial Highlights RSI reported record Q3 2024 financial results, marked by substantial revenue growth, a shift to net income, and strong user expansion Q3 2024 Key Financial Metrics (vs. Q3 2023) | Metric | Q3 2024 | Q3 2023 | Change | | :--- | :--- | :--- | :--- | | Revenue | $232.1M | $169.9M | +37% | | Net Income (Loss) | $3.2M | ($13.4M) | N/A | | Adjusted EBITDA | $23.4M | $4.1M | +471% | | Adjusted Advertising & Promotions | $38.6M | $34.1M | +13% | Q3 2024 User Metrics (vs. Q3 2023) | Region | Metric | Q3 2024 | Q3 2023 | Change | | :--- | :--- | :--- | :--- | :--- | | U.S. & Canada | MAUs | ~168,000 | ~131,000 | +28% | | | ARPMAU | $388 | $373 | +4% | | Latin America | MAUs | ~329,000 | ~148,000 | +122% | | | ARPMAU | $39 | $43 | -9% | - Unrestricted cash and cash equivalents increased to $216 million as of September 30, 2024, up from $194 million at the end of the previous quarter (June 30, 2024)[2] Management Commentary Management attributes record performance to strategic innovation, efficient player acquisition, and focus on high-value users - The company's strategy focuses on innovation to attract and retain high-value players, which is credited for driving significant growth and profitability[3] - RSI achieved accelerated player growth in the quarter with significantly improved marketing efficiency[3] - Management expressed confidence in the company's future and commitment to shareholder value, citing strong cash generation and balance sheet as enablers for the new share repurchase program[3] Full Year 2024 Guidance RSI raised its full-year 2024 guidance for revenue and Adjusted EBITDA, reflecting strong projected growth over the prior year Updated Full Year 2024 Guidance | Metric | New FY2024 Guidance | Prior FY2024 Midpoint | New FY2024 Midpoint | Change in Midpoint | | :--- | :--- | :--- | :--- | :--- | | Revenue | $900M - $920M | $880M | $910M | +$30M | | Adjusted EBITDA | $82M - $86M | $68M | $84M | +$16M | - At the midpoint, the new revenue guidance of $910 million represents a 32% increase over 2023 revenue of $691 million[4] - The guidance assumes operations only in jurisdictions where RSI was live as of the report date[5] Share Repurchase Program RSI's Board authorized a $50 million share repurchase program, signaling confidence in future and commitment to shareholder value - The Board of Directors authorized the repurchase of up to $50 million of RSI's Class A common stock[1][2] - The repurchase program is flexible, allowing for open market purchases or privately negotiated transactions, and does not obligate RSI to acquire a specific number of shares[2] Financial Statements Condensed Consolidated Statements of Operations RSI's Q3 2024 operations show significant revenue growth, transitioning from an operating loss to net income year-over-year Q3 Statement of Operations Highlights (in thousands) | Line Item | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | Revenue | $232,109 | $169,887 | | Total operating costs and expenses | $225,645 | $181,589 | | Income (loss) from operations | $6,464 | ($11,702) | | Net income (loss) | $3,239 | ($13,366) | | Net income (loss) attributable to RSI, Inc. | $1,190 | ($4,179) | | Diluted EPS | $0.01 | ($0.06) | Nine Months Ended Sept 30 Statement of Operations Highlights (in thousands) | Line Item | YTD 2024 | YTD 2023 | | :--- | :--- | :--- | | Revenue | $669,916 | $497,310 | | Income (loss) from operations | $12,193 | ($48,084) | | Net income (loss) | $748 | ($54,600) | | Diluted EPS | $0.00 | ($0.25) | Condensed Consolidated Statements of Comprehensive Income (Loss) RSI reported comprehensive income in Q3 2024, a substantial improvement from a prior-year loss, driven by net income Comprehensive Income (Loss) (in thousands) | Line Item | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | Net income (loss) | $3,239 | ($13,366) | | Foreign currency translation adjustment | ($148) | $1,495 | | Comprehensive income (loss) | $3,091 | ($11,871) | | Comprehensive income (loss) attributable to RSI, Inc. | $1,135 | ($3,710) | Non-GAAP Financial Measures and Reconciliations Explanation of Non-GAAP Measures and Key Metrics RSI defines its non-GAAP financial measures, including Adjusted EBITDA, and key operating metrics like MAUs and ARPMAU - RSI defines Adjusted EBITDA as net income (loss) adjusted for interest, taxes, depreciation & amortization, share-based compensation, and other one-time items[13] - The company defines MAUs as the number of unique users per month who have placed at least one real-money bet, and ARPMAU as average revenue divided by average MAUs for the period[18] - RSI states that reconciling forward-looking Adjusted EBITDA guidance to its GAAP equivalent (net income) is not possible without unreasonable effort due to the high variability of certain components[12] Reconciliation of GAAP to Non-GAAP Financial Measures RSI provides detailed reconciliations of GAAP net income to Adjusted EBITDA, Adjusted Operating Costs, and Adjusted EPS Reconciliation of Net Income (Loss) to Adjusted EBITDA Q3 2024 Adjusted EBITDA is reconciled from GAAP net income by adjusting for interest, taxes, D&A, and share-based compensation Adjusted EBITDA Reconciliation - Q3 (in thousands) | Line Item | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | Net income (loss) | $3,239 | ($13,366) | | Interest income, net | ($2,049) | ($762) | | Income tax expense | $5,274 | $2,426 | | Depreciation and amortization | $8,471 | $8,401 | | Share-based compensation expense | $8,458 | $7,402 | | Adjusted EBITDA | $23,393 | $4,101 | Reconciliation of GAAP to Adjusted Operating Costs Total GAAP operating costs for Q3 2024 are reconciled to Adjusted Operating Costs by removing non-GAAP adjustments Adjusted Operating Costs Reconciliation - Q3 (in thousands) | Line Item | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | Total GAAP operating costs and expenses | $225,645 | $181,589 | | Non-GAAP adjustments (Share-based comp.) | ($8,458) | ($7,402) | | Total adjusted operating costs and expenses | $217,187 | $174,187 | Reconciliation of GAAP to Adjusted Net Income and EPS RSI's GAAP diluted EPS is reconciled to Adjusted Net Income and Adjusted EPS by adjusting for share-based compensation and non-controlling interests Adjusted EPS Reconciliation - Q3 | Line Item | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | Net income (loss) attributable to RSI, Inc. – diluted | $3.2M | ($4.2M) | | Share-based compensation expense | $8.5M | $7.4M | | Net loss attributable to non-controlling interests | — | ($9.2M) | | Adjusted net income (loss) | $11.7M | ($6.0M) | | Adjusted weighted-average shares outstanding | 233.1M | 222.0M | | Adjusted Earnings (loss) per share | $0.05 | ($0.03) | Supplementary Information About Rush Street Interactive Rush Street Interactive is an online gaming and sports entertainment company operating across the Americas under key brands - RSI operates real-money mobile and online gaming in fifteen U.S. states and the international markets of Colombia, Ontario (Canada), Mexico, and Peru[9] - The company's primary brands are BetRivers, PlaySugarHouse, and RushBet[9] - RSI has been recognized for its customer service, winning the EGR North America Awards Customer Services Operator of the Year for five consecutive years (2020-2024)[9][10] Conference Call Information Details for RSI's Q3 2024 earnings conference call and webcast, including access to investor presentations, are provided - A conference call was held on October 30, 2024, at 6:00 p.m. ET to discuss Q3 results[6] - A live audio webcast and investor slide presentation are available on RSI's investor relations website until at least November 30, 2024[8] Forward-Looking Statements This section outlines forward-looking statements regarding RSI's future performance and strategic plans, subject to various risks - Forward-looking statements include guidance on revenue and Adjusted EBITDA, future financial condition, and strategic plans[21] - Key risks that could cause results to differ include changes in regulations, ability to sustain growth, and general economic and market conditions[21]