Rush Street Says October Trends Point To Low End Of $1.56 Billion To $1.6 Billion Revenue Guidance
The CFO said fourth-quarter revenue leans on North America and is "more about the market" than share, while EBITDA tracks near the midpoint.
Rush Street Interactive, which runs the BetRivers online casino and sports betting sites, said October trends put full-year revenue closer to the low end of its $1.56 billion to $1.6 billion guidance. President and CFO Kyle Sauers made the remark on the company's Wednesday third-quarter earnings call, while keeping the range itself unchanged.
Low-end revenue, midpoint EBITDA
Sauers reiterated full-year adjusted EBITDA guidance of $245 million to $265 million and said October operating trends put it near the midpoint. That range includes a $4.3 million foreign-currency gain.
The third quarter itself was strong. CEO Richard Schwartz said revenue rose 39% from a year earlier to $385.9 million, and adjusted EBITDA rose 73% to $62.2 million. Net income was $28.7 million, up 93% from $14.8 million.
Online casino was 75% of revenue and grew 32%. North America revenue grew 14%, while Latin America grew 218%.
The $4.3 million gain came from converting Colombian pesos held in Colombia into dollars, and Sauers said the cash remains on the balance sheet. Asked by a Stifel analyst, he said the gain was not in the guidance the company gave in July.
A cooling market, not a share loss
Pressed by a Barclays analyst on whether the gap between the midpoint and the low end came from the market or from share, Sauers said the fourth-quarter revenue outlook is largely attributable to North America. He added: "I think it's more about the market than it is the share."
October online casino growth so far "looks a lot like September did," he said. Growth fell from July to August, with a smaller drop from August to September.
Sauers pointed to more competitive intensity in Michigan from newer privately held entrants. He said the company is 8% or 9% of the total online casino market, so it cannot speak for the whole category.
Asked by a Wells Fargo analyst what could lift results above the low end, Sauers named a faster-growing online casino market, more share, continued Latin America strength, or better sports results. If any or all happened, he said, the company would have a chance to move above that low end.
Cash, buybacks and 2027
Rush Street ended September with $382 million in cash, up from $340 million at the end of the second quarter, and no debt. It bought back about $14 million of stock in the third quarter and another $11 million since, leaving $75 million of a $100 million repurchase program.
Sauers said the company will give 2027 guidance on its next call, including its view on industry growth. He said he expects gross margins to improve next year and does not anticipate cost cutting.
Rush Street will lay out its 2027 outlook when it reports fourth-quarter and full-year results.
Sources
- Stifel Cuts Q3 Online Gambling Earnings Forecasts - Legal Sports Report — legalsportsreport.com
- Rush Street Interactive Non-GAAP EPS of $0.15 beats by $0.02, revenue of $385.9M misses by $2.13M (RSI:NYSE) — seekingalpha.com
- Rush Street Interactive earnings: what to look for from RSI — Yahoo Finance
- Barclays Praises Platform, Retention In BetRivers Parent Initiation - Legal Sports Report — legalsportsreport.com
- Down 20.0% in 4 Weeks, Here's Why You Should You Buy the Dip in Rush Street Interactive (RSI) — Yahoo Finance
