Moreover, the company made notable progress towards profitability, achieving positive adjusted EBITDA of $4.1m in the third quarter of this year.
This stands in stark contrast to the same period in the previous year, which saw an adjusted EBITDA loss of $12.5m.
This is the second consecutive quarter where RSI has reported improved profitability and RSI now expects to be adjusted EBITDA positive for the full year 2023.
RSI also managed to shrink its net loss by 41% year-on-year to $13.4m in Q3 2023.
The standout news is RSI’s expectation of achieving positive adjusted EBITDA for the entire year, driven by strong revenue growth and more efficient marketing expenditure.
In Q3 2023, RSI’s adjusted expenses for advertising and promotions amounted to $34.1m, marking a 24% year-on-year reduction.
These results have not only met but exceeded RSI’s initial expectations, as CEO Richard Schwartz emphasised.
He attributed RSI’s success to the company’s diverse portfolio, which includes iGaming and sports betting in the US, Canada and Latam, all of which reported double-digit growth during the quarter.
Schwartz highlighted that RSI’s quarterly online casino market shares in New Jersey, Michigan and West Virginia have surged to their highest levels in years.
Additionally, RSI has seen similar trends in eight of its online sportsbook markets, with states such as Michigan, Virginia, New York, Maryland, and Ohio boasting their highest market shares since launch.
Schwartz added that Latin America, particularly Colombia, continued to be a growth engine for the company.Revenue in Colombia grew by 41% compared to the previous year, while Mexico, despite starting with a small base, experienced nearly 90% sequential growth in revenue compared to the previous quarter.
Moreover, Q3 marked the first time in the company’s history that its sportsbook-only markets have been profitable.
Looking ahead, RSI is set to expand its footprint and launch in Delaware as the exclusive online provider for the state’s online casino and sports betting offerings.
The company is also closely monitoring legislative developments in various states in the US Canada, and Latam, expecting more opportunities in the near and long term.
The expansion of iCasino legislation is becoming a matter of “when” rather than “if”, Schwartz said.
Dan Politzer from Wells Fargo asked Schwartz and CFO Kyle Sauers to clarify the type of market share growth – gross revenue, net revenue, handle – RSI was referring to and the key drivers behind it.
He also enquired about their perspective on how market share might evolve in response to changes in the competitive landscape.
While Sauers clarified that they are primarily looking at GGR for market share assessment, Schwartz responded:
“Market share is not our primary motivation. Our focus is on achieving profitability in every market and ensuring a quick return on invested capital.
“However, it’s nice that we were able to reduce marketing expenses while still expanding our market share, particularly in a highly competitive marketplace. I think this does validate the quality of improvements on the product side.”
Current trading & outlook
In the first nine months of 2023, RSI reported an adjusted EBITDA loss of $3.3m. This marks a significant improvement of over $70m compared to the same period in 2022.
Based on its robust performance in the first three quarters, RSI has revised its full-year revenue projection to be in the range of $665m to $685m.
This adjustment represents an increase in the midpoint compared to the previous guidance.
At the midpoint of the range, revenue of $675m represents 14% year-over-year growth.