Rush Street Interactive(RSI) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company's first quarter revenue was $262 million, representing a 21$33.2 million, nearly double compared to the same period last year [8][22]. - Gross profit margins increased by 125 basis points year-over-year to 34.9%, driven by revenue diversification and higher growth in more profitable markets [24]. - Marketing spend was $38.8 million, or 15$368, up 3% year-over-year [10][22]. - Latin America saw MAUs increase by 61% year-over-year, reaching a new quarterly record of 354,000 [10][23]. Market Data and Key Metrics Changes - North American markets showed revenue growth in 15 out of 16 online markets, with Michigan revenue up 40% and Delaware exceeding 80% growth in its first year of comparisons [12]. - In Colombia, gross gaming revenue (GGR) was up 55% in local currency, despite a 19% value-added tax on player deposits [13][14]. - The company is optimistic about the potential growth in Alberta, Canada, as legislation for online gaming progresses [17]. Company Strategy and Development Direction - The company focuses on innovation and enhancing player experience to drive growth and profitability [8][20]. - The strategy includes differentiating offerings to improve user engagement and retention across product verticals [10][20]. - The company is monitoring legislative developments in various U.S. states to capitalize on potential online gaming opportunities [18][19]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate challenges, including the impact of taxes in Colombia, while maintaining strong player activity and market share [14][32]. - The company anticipates continued growth in revenue and adjusted EBITDA for 2025, with guidance remaining between $1.1 billion and$1.8 billion in revenue [27][28]. - Management highlighted the resilience of the online gaming sector, particularly during challenging economic times, and the potential for increased tax revenues from legalized online casinos [19][20]. Other Important Information - The company ended the quarter with $228 million in unrestricted cash and no debt, generating approximately$25 million in cash during the quarter [26]. - The company repurchased approximately 500,000 shares at an average price of $10.35 under its share repurchase program [27]. Q&A Session Summary Question: Insights on Colombia's competitive landscape and market share - Management indicated that they are absorbing the tax through higher bonusing, similar to competitors, and are confident in retaining or growing market share despite the challenges [32]. Question: Growth expectations for Delaware in 2025 - Management expects continued growth in Delaware, although the growth rate may slow as the market matures [34][36]. Question: Adjustments to business model in Colombia - Management is continuously adjusting strategies to maximize net revenue and reduce deposit turnover in response to the VAT tax [42][44]. Question: Impact of Pennsylvania joining the multistate Internet gaming agreement - Management expressed excitement about the launch in Pennsylvania and the potential for increased player liquidity across platforms [46]. Question: Tax impact from Colombia on revenue and EBITDA - Management noted that the VAT tax has significantly impacted net revenue growth, with expectations for meaningful growth once the tax is removed [52][94]. Question: User growth concentration in North America - Management indicated that Delaware contributed mid-single digits to the overall 17% user growth, with most growth coming from higher-value markets [87][88].