Rush Street Interactive(US:RSI)2022-11-03 02:14Financial Data and Key Metrics Changes - Revenue for Q3 2022 was $148 million, representing a 20% year-over-year increase [10][31] - Adjusted EBITDA was negative $12.5 million, an improvement from negative $18.6 million in the previous quarter [12][37] - The company revised its full-year revenue guidance to a range of $580 million to $600 million, reflecting the impact of lower iCasino hold and foreign exchange headwinds [14][41] Business Line Data and Key Metrics Changes - Online casino hold rate was lower than normal, negatively impacting revenue by an estimated $4 million [11][31] - Foreign exchange movements negatively impacted revenue by approximately $2 million during the quarter [11][32] - Monthly active users (MAUs) were 130,000, up 31% year-over-year, with September showing a 40% increase [34] Market Data and Key Metrics Changes - The online casino vertical is significantly larger and more profitable than sports betting in the markets where both are operated [15] - Market share in Ontario was approximately 7% for iCasino and 2% for online sports betting [18] - The company is optimistic about the market opportunity in Mexico, expecting significant contributions starting in the latter half of next year [20] Company Strategy and Development Direction - The company aims to achieve profitability by focusing on player acquisition and retention, improving gross margins, and managing marketing spend [9][10] - A data-driven marketing approach is emphasized, with a focus on customer loyalty and reducing friction in user experience [23] - The company plans to increase marketing spend in Q4 to support the rebranding of BET Rivers in New Jersey and capitalize on the winter months [24][54] Management's Comments on Operating Environment and Future Outlook - Management noted that competitive intensity is lower than last year but more competitive than Q2, particularly with the NFL season [50] - There are no indications of negative impacts on the online player base due to macroeconomic conditions [85] - The company remains focused on balancing profitability with revenue growth, expecting lower losses and a stronger cash position than initially anticipated [43][44] Other Important Information - The company ended the quarter with $195 million in unrestricted cash and no debt, positioning itself well for future investments [41][44] - Significant advancements in product and innovation were made, including new betting options and features to enhance user engagement [25][28] Q&A Session Summary Question: Profitability outlook for online sports book and iGaming - Management indicated that profitability can be achieved sooner when casino operations are included, with recent losses in sports book markets showing improvement [47][48] Question: Changes in sales and marketing strategy - The company is leaning into the casino category and allocating more spend in Q4 to attract players during the winter months [53][54] Question: Impact of hold rates in sports betting - Management noted that while there have been good weekends in NFL, the overall impact on revenue is balanced by various sports activities [62][63] Question: Legislative momentum for iGaming - There is growing momentum for iGaming legalization in states like Iowa, Indiana, and Illinois, with potential opportunities in New York as well [65][66] Question: Market dynamics in Mexico compared to Colombia - The company is off to a quicker start in Mexico than in Colombia and expects to achieve similar success in market share over time [72][73] Question: Brand recognition and marketing strategies - Management acknowledged that brand awareness is lower compared to competitors but is actively working on building it through content and partnerships [90][92] Question: Changes in marketing costs and strategy - The company has seen a reduction in marketing costs due to a less competitive environment, allowing for better negotiation on advertising assets [103][104] Question: Online casino hold rate explanation - The lower hold rate was attributed to luck, which impacted revenue, marking a deviation from historical consistency [106][108] Question: Changes in promotional offerings and ROI - The new promotional offering has shown better ROI and has been positively received by consumers [111][113]