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Rush Street Interactive (RSI) said it has plenty of dry powder for new market launches but remained silent on rumours that it is exploring strategic options, including a potential sale of the business.

Topline numbers

In Q1 2024, RSI generated revenue of $217.4m, up 34% on Q1 2023.

Adjusted EBITDA stood at $17.1m for the quarter, compared to a loss of $8.7m in Q1 2023.

“Both of these figures represent quarterly records by a wide margin, something our team is very proud of,” said RSI CEO Richard Schwartz.

“This was accomplished by growing both our iCasino and online sports businesses by over 35% year-over-year, in large part by acquiring new players more efficiently while simultaneously increasing the number and value of our users,” he added.

Despite this growth, the company reported a net loss of $2.2m for Q1 2024, which still represented a significant improvement compared to the $24.5m net loss it posted in Q1 2023.

What’s next?

RSI undeniably delivered on its turnaround, with an increase in monthly active users (MAU) of 20% year-on-year in the US and Canada, and a 72% surge in Latin America, including Mexico.

However, during the earnings call, analysts were eager to understand the implications for the company’s future trajectory.

Schwartz said: “We are very excited about the opportunity to continue to scale the business and drive growth on the back of our current momentum, which includes increasing our adjusted EBITDA guidance by 38% at the midpoint.

“With this growth and scale comes improving earnings and free cash flow. Looking forward, we remain energised in our view that the team is primed to continue executing on our strategy and delivering value to shareholders,” Schwartz said.

CFO Kyle Sauers chimed in, reflecting on the past and reminding analysts that not too long ago, many of them questioned RSI’s cash reserves.

“Now we’re generating plenty, so we’re pretty excited and we’re happy to be in that position and don’t see that changing,” he added.

However, he said that the “conversation evolves” about how best to deploy the funds.

“I think the biggest thing that we’ve got to be ready for and have dry powder for are new market launches.”

RSI said its next likely market launch will be in Peru, anticipated for the summer.

However, Sauers also stated that RSI continues to look at “M&A or tuck-in acquisitions that could be additive to what we’re doing.”

No answer

Yet, analysts left the call without a definitive answer to rumours about RSI exploring a sale.

Schwartz said he cannot address rumours or speculation directly.

“But what I can say is that the board and the management regularly evaluate all opportunities that we have and our goal is to always maximise shareholder value.”

“We have a lot of assets that are valuable to us, so it’s likely they’re interesting to other companies,” he said.

When pressed on why RSI hasn’t initiated a strategic review for a potential sale, Schwartz declined further comment, stating: “I can’t respond to that question in this public setting.”

Current trading & outlook

Following its strong Q1 results, RSI raised both its revenue and EBITDA guidance for 2024. 

RSI now expects revenue for full-year 2024 to come in between $810m and $860m, increasing the midpoint by $35m compared to previous guidance.

At the midpoint of the range, revenue of $835m represents 21% year-on-year growth when compared to $691m of revenue in 2023.

RSI expects adjusted EBITDA to reach between $50m and $60m, increasing the midpoint by $15m compared to the original guidance.

At the midpoint of the range, adjusted EBITDA of $55m represents 573% year-on-year growth compared to 2023.

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