After a 72.4% growth in Latin America revenues in Q2, Rush Street Interactive remains eager to launch in Brazil, but is waiting for clarity regarding rules and regulations in the market.
Brazil will open its legal betting market on January 1, 2025. Rush Street CEO Richard Schwartz stated on the Q2 earnings conference that he was eager to get in on the action.
The Brazilian Ministry of Finance’s Secretariat of Prizes and Bets, or SPA (Secretariat of Prizes and Bets), has published final gambling regulations. RSI’s CEO Schwartz, however insists that the operator won’t rush to enter the market.
Schwartz stated in the call following Q2. “Brazil represents a huge and exciting market.” There are many moving parts in Brazil. We need to be more disciplined in our approach and remain thoughtful.
We are waiting for clarity in several areas, including how to regulate the gray market and the tax structure. Our strategy is to keep a certain level of fiscal discipline on all new and old markets. Brazil is no exception.”
Latin America is a major highlight of RSI’s Q2
Schwartz made his comments about Brazil after an impressive Q2, where Latin America was a major highlight.
Group revenue for the three months to 30 June was $220.4m (PS172.8m/EUR200.8m), a rise of 33.5%. The revenue includes $218.8m in online sports and casino betting, $1.1m for social gaming and $461k retail betting on sports.
The contribution of LatAm to the total revenue (which grew 28.6%) was significant. The revenue from this region increased by 72.4%, to $31.9m.
In the US and Canada, this growth rate was also similar at 20% to reach 176,000 monthly active users. This growth in Latin America was 72% higher, up to 224,000 users, and from just two markets.
Schwartz stated that “While Colombia and Mexico account for the majority of the revenue growth, we are still seeing solid growth. We remain well ahead of our previous position at this point of time following the launch of the Colombian business.”
RSI is expanding its footprint across the region, following last week’s launch in Peru.
Schwartz stated that Peru is an exciting market. It has about two thirds the population of Colombia and a slightly higher per capita GDP. The marketing overlap and adjacencies with Colombia as well as the existing brand recognition in Latin America and our established team will help us to be successful.
We continue to assess other Latin American markets.
Rush Street Interactive closes in on net profit
RSI’s Q2 operating costs were $206.2m, 20.5% more than the same period last year. The revenue increase was so significant that the operating profit reached $4.2m compared with a loss of $14.3m last year.
RSI reported $1.9m of interest income. This left a $6.1m pre-tax profit, compared to a loss of $16.7m in 2024. The Q2 growth in revenue boosted the adjusted EBITDA by 1,683.3%, to $21.4m.
After accounting for financial items, RSI reported a net loss of $100,000. This was a significant improvement over the $5.1m lost last year.
RSI reduces losses for H1
The group’s revenue in the first six months was up by 33.7%, reaching $437.8 million. The revenue is made up of $434.5m in online sports and casino betting, $2.2m for social gaming and $1.2m for retail sports betting.
The US and Canada revenue grew by 28.7%, reaching $377.4m. In Latin America and Mexico the revenue jumped 78.3%, to $60.8m.
RSI posted a $5.7m profit in operating income, compared with a loss of $36.4m last year. Adjusted EBITDA went from a loss of $7.4m to a gain $38.5m.
The operator’s net loss was reduced to $827,000 after taxes and financial time, down from a loss of $12.4m the year before.
RSI raises guidance after strong H1
The operator has increased its full-year forecast for the second quarter in a row after a very successful first half.
Rush Street Interactive anticipates that revenue will be between $860m to $900m in the twelve months ending 31 December. The revised Q1 guidance was $810m-$860m. This latest estimate is 21.0% more than the previous one.
The adjusted EBITDA range is expected to increase from $50m-60m in Q1 to $62m- $72m. Midpoint of new range, $68 would represent a 729.3% increase from last year.
Schwartz stated, “We’re excited to be able to grow the company and scale it on our current momentum. This includes raising our EBITDA forecast.”
We remain confident that our team will continue to execute our strategy, and deliver value to our shareholders.
