Rush Street Interactive Reports Strong Q3

Online gambling operator Rush Street Interactive (RSI) looks as though it has shrugged off the global effects of the coronavirus pandemic and has come out with some surprising and impressive Q3 numbers thanks in large part to a “solid execution and financial discipline”. It is not all that shocking for a Company that is widely considered one of the top sports providers in the exploding US legal sports betting space.

Greg Carlin, Chief Executive Officer of RSI, said: “Solid execution and financial discipline helped drive our third quarter success. During our third quarter, we grew revenues 370% year-over-year with an 81% increase in marketing spend during the same period. As we move toward completing a transformational year for RSI, we have built a strong technological and operational foundation that we expect will continue to serve us well as we expand into new markets. We are excited to be on the path to becoming a publicly listed company and expect that our customer acquisition strategy and growing market share will create sustainable long-term value for our shareholders.”

A Deeper Dive Into the Overall Numbers

Rush Street Interactive's latest earnings statement is for the three-month period that ended September 30. It showed an eye-opening 368.2% year-over-year revenue increase from last year's Q3 figures of $16.7 million. This year, RSI can report $78.2 million in revenue for Q3.

Adjusted earnings also showed a significant increase year-over-year. The third quarter of 2019 showed a $1.3 million loss while Q3 of 2020 revealed $9.9 million in earnings. Active users for the company's US operations grew 87% quarter-over-quarter and 135% year-over-year.

Those numbers, while impressive are brought back down to earth a bit by a substantial rise in operating costs, which has caused net losses for the Company overall. Marketing expenses jumped to $17.5 million and the Company went on an acquisition and partnership blitz during the quarter. In turn, the total loss reported by the operator during the quarter was $28.1 million.

Recent Moves that Led to the Q3 Surge and Losses

RSI recently entered a business combination agreement with dMY Technology Group, Inc., they signed strategic marketing or sponsorship arrangements with the five-time Stanley Cup champions Pittsburgh Penguins, former six-time NFL all-pro running back and Hall of Famer, Jerome Bettis and TopGolf, the global sports and entertainment company.

The company also signed on with iHeart Media and Entercom, two of the largest broadcasting and entertainment companies in the United States and expanded their media presence thanks to a multi-year agreement with VSiN, the first multi-platform broadcasting company dedicated to delivering news, analysis and proprietary data about the sports betting industry.

What It All Means

Obviously, Rush Street Interactive can boast about their company being on good financial footing as they try to expand in the rapidly growing US legal sports betting scene. It also points to a realization that the Company's focus has been in the right places during the last quarter and year.

Richard Schwartz, President of RSI, said: “Our third-quarter results demonstrate RSI’s commitment to excellence and validates our focus on player engagement and building a best-in-class technology stack, which have enabled us to attract and retain a loyal and diverse user base.

“We have maintained the number-one online casino share in the US for the second straight quarter, according to Eilers & Krejcik. The discipline in how we bring new players onto the BetRivers.com and PlaySugarHouse.com platforms, and retain existing players, is the hallmark of our approach and will remain core to the company as we continue to expand and enhance our product offerings.”

The Future of RSI

RSI's third quarter figures have allowed the Company to raise its full-year revenue guidance by 20%. Kyle Sauers, Chief Financial Officer of RSI, said: “On the back of our strong third quarter results, we are raising full year 2020 revenue guidance to a range of $265 to $275 million. At the midpoint this represents an increase from our previous guidance of 20%.”

Rush Street Interactive's good financial news couldn't have come at a better time with the company looking to become a publicly listed company on the NYSE under the ticker symbol “RSI.”

RSI continues to be a major force in the US legal sports betting space and based on the moves they have made recently and their Q3 report, they certainly aren’t ready to relinquish their standing as a Heavyweight in the industry.