Rush Street Interactive said that it will remain “selective” in its investments, despite reporting a higher net loss for the 2022 financial year.
RSI stated that it had become more disciplined and efficient with its marketing spending in the third quarter. This was with the goal of targeting markets where it can experience the best returns.
Although marketing spending increased in the last quarter of the year by a significant amount, Richard Schwartz, chief executive, stated that the operator remains committed to spending more in a selective manner with the goal of prioritizing investments made in specific areas.
Schwartz stated, “Looking ahead, we remain disciplined with our approach.” This is evident in our results. Our cost to acquire players increased by one-third in second half of last year’s period.
“We are data-driven, and we focus on the return on our spend. We will continue to work hard to earn and retain customer loyalty. This means treating customers well, being thoughtful, and using our development expertise to create seamless experiences that reduce friction at all touch points.
“We will continue to be efficient in all markets, new and existing.” This operating philosophy is the cornerstone of our culture and platform. It is essential to long-term sustainability.
Fourth quarter
Let’s break down RSI’s performance, starting with the fourth quarter. Revenue for the three months ended December 31 was $165.5m. This is 26.7% more than the $130.6m the previous year.
The quarter’s total operating costs increased 15.7% to $193.9m. This resulted in an operating loss of $28.4m. However, this was less than the $37.1m loss at the end Q4 2021.
RSI earned $91,000 in interest income. This means that pre-tax loss was $28.3m compared to $37.2m the previous year. The net loss was $31.1m. This is an improvement over $38.1m in previous years.
RSI also noted that $22.1m was attributable in part to non-controlling interest. This meant that the total loss attributable RSI to RSI was $9.0m compared to $10.4m 2021. Additionally, the adjusted earnings before interest tax, depreciation, amortization and amortisation loss (EBITDA), increased from $31.2m a $17.3m.
Full year
Looking at the entire year, revenue was $592.2m. This is a 21.3% increase over the previous year and a record for the company.
Operating costs increased 35.7% year-on year to $717.0m. This resulted in an operating loss of $124.8m for the year, compared with $94.3m in 2021.
Pre-tax loss was $125.4m after adding $573,000 net interest expenses. This is much higher than the $66.4m reported at the close of the previous year. RSI spent $9.0m on income tax. This resulted in net loss of $134.3m compared to $71.1m for the 2021 financial years.
After removing a loss of $95.7m due to non-controlling interest, the net loss attributable RSI was reduced to $38.6m. However, it was still higher than the $19.5m net loss in 2021. The adjusted EBTIDA loss grew from $65.1m up to $91.8m.
RSI published guidance for the financial year 2023. Revenue is expected to be between $630.0m-$700.0m with the middle of this range – $665.0m – representing a 12.0% increase year-on-year and a new record for the organization.
Schwartz stated, “We will continue to work hard on gaining and maintaining customer loyalty by treating customers well, being thoughtful, creating seamless experiences, and reducing friction wherever possible.”
“We have created our proprietary platform and culture around an operating philosophy that is disciplined, which is evident in our results.”
