Online casino and sportsbook company Rush Street Interactive (RSI) beat its earnings guidance for 2023, driven in no small part by a record fourth quarter.
The operator reported $193.9 million of revenue during Q4, an increase of 17% compared to $165.5 million from the same period in 2022. Its net loss narrowed during the quarter to $5.5 million from $31.1 million a year ago.
The company’s full-year 2023 revenue stood at $691.2 million, which also marks an increase of 17% when compared to $592.2 million for 2022. Meanwhile, its net loss for the year narrowed sharply to $60.1 million from $134.3 million during full-year 2022, more than halving.
The revenue for the 12-month period falls within the upper range of Rush Street’s guidance issued in early 2023, which ranged from $630 million to $700.1 million.
“These results and the ensuing momentum have carried into strong guidance for the new year, reflecting our longstanding customer-centric principles and obsession with developing innovative and differentiated user experiences,” Richard Schwartz, Chief Executive Officer of RSI, said.
“With a substantial cash balance and no debt, our financial wherewithal provides us the luxury of being able to continue executing on our long-term strategy and investing appropriately in new markets. Our strong launch in Delaware exemplifies our ability to identify and grow new and exciting markets, including the opportunities we are pursuing across the Americas.”
Other financial highlights
Adjusted EBITDA stood at a positive $11.5 million for the last quarter of the year, compared to a loss of $17.3 million in the same period last year, marking an improvement of $28.8 million. Adjusted advertising and promotions expense decreased 45% to $34.6 million in Q4 from $63.2 million in the fourth quarter of 2022.
Monthly Active Users (MAU) in the United States and Canada were approximately 160,000, up 7% year over year. MAUs in Latin America (which includes Mexico) were approximately 204,000, up 33% year-over-year.
Average Revenue per Monthly Active User (ARPMAU) in the United States and Canada was $345 during the fourth quarter of 2023, up 5% year-over-year. Turning to Latin America, ARPMAU was $42, up 28% year-over-year.
For the full year of 2023, adjusted EBITDA stood at $8.2 million, compared to an Adjusted EBITDA loss of $91.8 million during the previous year, which is an improvement of $100 million. The positive full-year EBITDA was beyond RSI’s hopes of just a positive second half.
Adjusted advertising and promotions expenses stood at $158.4 million in 2023, a decrease of 27% compared to $218.4 million during the full year 2022. Notably, Latin America revenue increased over 50% for the full year 2023.
While the company initially set out to be profitable for the second half of 2023, Schwartz said the company’s focused efforts allowed it to deliver better results and be profitable for the full year. “We ended the year with a record-setting quarter and have started 2024 with strong momentum,” he said.
Guidance and future prospects
As per the revenue guidance for the full year ending December 31, 2024, the company expects to clock between $770 and $830 million. At the midpoint of this range, revenue of $800 million represents 16% year-over-year growth when compared to $691 million of revenues for 2023.
RSI expects the Adjusted EBITDA to be between $35 and $45 million for the full year of 2024. At the midpoint of this range, Adjusted EBITDA of $40 million represents over 390% year-over-year growth when compared to $8.2 million of Adjusted EBITDA for 2023.
Schwartz also discussed the possibility of expanding to new markets with RSI’s online casino product. With the US near the start of its 2024 legislative session, the Chief Executive said the company is monitoring several markets, including New York, Maryland and Illinois. Some provinces in Canada are also of interest for RSI, which is watching legalization prospects in Alberta.
But the company’s focus is also placed further south, as RSI eyes expansion in the burgeoning Latin American market. While the operator already has a presence in several markets across the region, including Colombia and Mexico, plans are in place to also launch in Peru, with the RushBet brand’s debut expected later in the year.