Rush Street Interactive Q3 Earnings Call Highlights

Key Points

• Strong Q3 results: Revenue rose 39% year over year to $385.9 million, while adjusted EBITDA increased 73% to $62.2 million and net income nearly doubled to $28.7 million. Growth was led by the casino-focused strategy and Latin American operations.
• Latin America and player acquisition drove momentum: Latin American revenue surged 218%, with monthly active users up 46% to more than 607,000. World Cup campaigns also produced strong cross-selling, with about half of new depositors later placing online casino wagers.
• Guidance was maintained but near-term revenue trends softened: RSI reiterated 2026 revenue guidance of $1.56 billion to $1.60 billion and adjusted EBITDA guidance of $245 million to $265 million, although October revenue trends were tracking near the low end. The company ended the quarter with $382 million in cash, no debt and continued share repurchases.

Rush Street Interactive NYSE: RSI reported third-quarter revenue of $385.9 million, up 39% from a year earlier, while adjusted EBITDA rose 73% to $62.2 million. Net income increased 93% to $28.7 million, compared with $14.8 million in the prior-year period.

Chief Executive Officer Richard Schwartz said the company’s casino-first strategy and Latin American operations were the primary drivers of the quarter. Online casino accounted for 75% of revenue and grew 32% year over year, while online sports betting represented nearly 25% of revenue and increased 70%, helped by Latin American activity and the World Cup.

Latin America Drives Growth

Revenue in Latin America climbed 218% year over year, while North American revenue rose 14%. Schwartz said Latin American net revenue held at the record level set in the second quarter and increased more than 200% from the prior year, with healthy performance in Colombia, Mexico and Peru.

Latin American monthly active users rose 46% to more than 607,000, the company’s second-highest quarterly level. North American monthly active users increased 34% to more than 300,000, a quarterly record. Monthly active users in North American online casino markets rose 42%.

The company said World Cup-related player acquisition was particularly effective. Kyle Sauers, President and Chief Financial Officer, said roughly half of first-time depositors acquired during the event had subsequently placed an online casino wager. He said that cross-selling rate was well above the result from Copa América first-time depositors.

Schwartz said players acquired during the World Cup were retained at a similar rate to those acquired during Copa América, but have delivered a higher average value after the event. He also cited stronger brand awareness and improved execution as factors supporting the results.

Margins, Marketing and Balance Sheet

Gross margin was 36.4%, up 240 basis points from the prior-year quarter and more than 90 basis points from the second quarter. Sauers attributed the improvement to faster growth in higher-margin markets and the company’s marketing allocation.

Marketing expense increased 44% to $54.7 million, or 14.2% of revenue, versus 13.7% a year earlier. The company increased marketing investment during the quarter because it continued to see favorable player-acquisition costs. Sauers said acquisition costs remained at their lowest levels to date, although expected values for new players were lower than in earlier years.

General and administrative expense was $23.6 million, or 6.1% of revenue. That figure included an approximately $4.3 million foreign-exchange gain related to the conversion of Colombian pesos into U.S. dollars. Excluding the gain, adjusted EBITDA would have been $57.9 million, representing a 15% margin.

Rush Street Interactive ended the quarter with $382 million in cash, up from $340 million at the end of the second quarter, and no debt. The company repurchased about $14 million of shares during the quarter and another $11 million after quarter-end. It said $75 million remains available under its $100 million repurchase authorization.

Guidance Maintained, Though October Trends Point Lower on Revenue

The company reiterated its full-year 2026 revenue outlook of $1.56 billion to $1.60 billion, representing growth of 38% to 41%. However, Sauers said October operating trends were tracking closer to the low end of that range.

Rush Street Interactive also maintained adjusted EBITDA guidance of $245 million to $265 million, including the $4.3 million foreign-exchange gain. October trends were tracking near the midpoint of the EBITDA range, according to Sauers.

Management said the difference between its current revenue outlook and the midpoint of its guidance was largely tied to slower North American online casino market growth rather than market-share losses. Sauers said October online casino trends looked similar to September after a sharper moderation from July to August.

The company said it continued to gain North American online casino market share year over year in all markets except Michigan, where management cited increased competitive intensity from newer privately held entrants. Sauers said player activity moderation was broad-based across customer cohorts rather than concentrated among a particular segment.

Regulation and Market Expansion

In Colombia, Schwartz said the government’s approved 2027 budget did not include new gaming taxes. The company continues to assume that a temporary 16% excise tax will remain in effect through the end of 2026, after which it is scheduled to expire. Management said the underlying gaming tax rate is expected to revert to 15%, while cautioning that it will continue monitoring potential legislative changes.

Rush Street Interactive also said its Alberta launch, which began July 13, remained encouraging. On a population-adjusted basis, first-time depositors and daily active users were tracking at more than twice the level seen in Ontario at a comparable point after launch. Management said Alberta is expected to be a gradual revenue build.

Schwartz pointed to Virginia, Ohio, Washington, D.C., Indiana, Illinois and New York as potential U.S. online casino legalization opportunities. He said fiscal pressure on state budgets and the growth of unregulated gaming alternatives could support broader interest in regulated online casino markets.

Regarding Brazil, Schwartz said the company was disappointed by restrictions affecting that regulated market and would remain open-minded about opportunities there only on a risk-adjusted basis. Management also said it is monitoring prediction markets and has filed for licenses with the Commodity Futures Trading Commission.

Looking ahead, Sauers said the company expects marketing expense growth in 2027 to be “quite a bit less” than in 2026, excluding potential new market launches. He said Rush Street Interactive expects to gain operating leverage on marketing while continuing to invest in growth and product development, including internally developed casino games.

About Rush Street Interactive (NYSE:RSI)

Rush Street Interactive, Inc is an online gaming and sports betting company that operates regulated internet casino and sportsbook platforms. Its primary consumer brands include BetRivers, PlaySugarHouse and RushBet, offering online casino games, sports wagering and related digital gaming products through websites and mobile applications.

The company serves customers in regulated markets across the United States and Latin America, with operations also extending to select international jurisdictions.

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