RSI - Earnings call transcript Q2 2022 | Rush Street Interactive, Inc.

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Operator

Good afternoon, ladies and gentlemen and welcome to Rush Street Interactive Second Quarter 2022 Earnings. [Operator Instructions] It is now my pleasure to turn the floor over to your host Lauren Seiler. Ma'am the floor is yours.

Lauren Seiler

Thank you, operator and good afternoon. By now everyone should have access to our second quarter 2022 earnings release. under of Financials the found the Results be section Investors RSI can the Quarterly heading in It website rushstreetinteractive.com.

comments federal our meaning of will statements forward-looking Some within of the securities laws. be the

by We for expect. other in actual Therefore, and filings not and refer condition. statements responsibility impact detailed we uncertainties assume should relying numerous from you as, facts future could our that usually more words to Forward-looking our statements We financial results and materially statements. the should, are no discussion operating what of forward-looking of any or are updating use expect, risks risks and of cause to phrases them. exercise SEC interpreting and caution a you differ the that historical are for upon results could identified similar will, to such subject

Chief These useful with considered substitute the can financial During reconciliation Richard the quarter company's the we which prepared comparable for call, Chief section website deck believe performance. should available measures directly these we of is measures A our most will in accordance as earnings in Officer. a Schwartz evaluating and With me non-GAAP the Financial results in isolation or our www.rushstreetinteractive.com. measures Sauers not be GAAP. our investor today at measure and discuss have to release Executive of call operating in our which second be we in GAAP available RSI is XXXX Investors the the Kyle on Officer;

that I'll the open and to With provide turn Richard. questions. some over will We remarks to then opening the call call

Richard Schwartz

to everyone and our call. quarter Thanks second Lauren. Good earnings welcome afternoon,

and and between results a sustainable retention reflect returns. customer acquisition This performance topline a focus on with quarter's growth balanced efficient

EBITDA continue XXXX. growing and back for to on remain target to as be well of are profitably we positive positioned adjusted the We growing half

for launch casino to with also our sophisticated how we sports such and new Ontario, Revenue the in great online the in to US the further was our positioned for where to million. growth we quarter existing world-class up with XX% in Monthly were XX% future. extended Canada year-over-year Mexico users existing from as feel product. markets, our combined about Virginia our second both users year-over-year and We derived $XXX When active and markets great online existing continuing other see growth industry and a markets. the active grew to was technology for grow opportunity added within in markets. to a experience, West than our new flat average user continue sign our we brand and that while markets year-over-year recently in market all are one continues which We access we just up

combined million last profitability markets negative higher and Michigan, New their marketing for first second revenue, profitability. and line We margin EBITDA. profitable improved in last In quarter, quarter, adjusted validating the were costs. improvement of Columbia. The G&A progress a we to a modest was driven Jersey, towards our by in compared quarter. the quarter $XX.X lower Pennsylvania, Illinois continued only posted increase costs, five corporate-wide And with gross our to at Looking improvement considerable a combination of improving

quarters Virginia us four West of second operation. addition, quarter only the full In turned after positive for in

Michigan. time period in As profitability a we is this reminder in which the reached short same

considerations. few we on tightening to As the are which reflects the and our remainder a $XXX year key million the $XXX of million, guidance between for range

even metrics like today not want our average and we headwinds look conservative or at when we any taking consumer busy as as to clear seeing season. First, from fall consumer we the such with our handover headwinds of are view are heading things potential I around a into But deposit player. be bedside any

those Second, lot where a also markets This opportunity, we the the online some the dynamics creates ramp but out. operate be as of approach play up season, will during since sportsbook. how season Mexico will in seven learn football of competitive will full and lastly, how And and added last football have intensity unknowns respond we start markets our we as a gradual. we disciplined

We be months longer market expect in initial a investment for over during six significant this operations But the a growth modest to expect the contribution and term of contributor XXXX. RSI.

a are in XXXX, launches four countries. of and now half Ontario recent business four with second the of states, Colombia. all US and We to online Mexico Mexico in into Ontario, and in move operate building combined and casino live we continues that global we Canada we the As are in scale now Canada sportsbook

in on In us in other addition, to recent launches. giving operated states online that our the sportsbook few our some thoughts a opportunities. we set of diverse I a growth nine provide US, of With want

second months our short-term the learned approach our them in existing in to customers upcoming incentivizing the results for the targeting players experience customer-friendly with in financially excitement prior approach. a world-class on is market our football forward high-quality retaining season attracting more We continue football focused to time. First and evident bending the the experience, customers York, the look user as to which have opening measured and New the about season opposed the our We Rivers of remain platform quarter and quarter. first will with compared more we And during Bay behavior. more as of and our

during we Ontario. in Next, beginning launched quarter the the of

market established databases. player number we As a preceding this and a existing brands already great years, for has Meaning, had reminder, equally the a XX-plus operators of important been a where market. entered

vantage fact migrate exactly to the a our From unclear started market we transition it notable operator would the point, how and the out smoothly it operators existing gray until to able TV user would an were brand awareness This the in broad knew also casino off is white pay April. that market Ontario players relatively important portion Winter in casino market. a product of our plays and a from into campaign built market awareness online to the Although was innovation in in close regulated strength, to invest launch, Olympics we play meant ultimately given markets, shine with during opened previous the with as our really also advantage. The the our early The to the February. experience. began market be in when in

Ontario, is to effective new term, promote attract unique can the experiences differentiated like our because consistent time from very promote to the since that range in to number operator we selling register it a sites the over an an get fact, this and door. In that can't more We other lead to has advantage will us near in a an In years. in of approach our think customers. ultimately, of of Ontario next can the feel will growth result wide we inducements has over good operators start grow gradual points in But way as an build there. substantially fires players

the consistently is XX for sports that We Colombia without and a We compared And share were million good the population progress full built think in online a database sportsbook. able a we year with brand, position. enter late adding country a Ontario, approximately market July's people to without to is enter experience A lighter million bit we we It history went region. market seeing player casino June, and over of book of in a is a informative. standing a people. have market we Mexico. with we without are with and Mexico, better with a a of out only where casino. operated online over we a in live to the in of force XX%, gate larger population XXX even day start In launch is and revenues June, calendar. before in were both per almost a with about Yet up three from any In time. top

that respected. well In known building local brand, terms great have we of partner is media and our a

Latin already we In have a both and in addition, that's North markets. technology American American proven

players that approach. high-quality believe experience excited as share Mexico with really to to Mexico will market Colombian user in us grow measured are stand our players it enabling has and out We about appeal a and to

Looking about ahead, in state to demographics, Ohio betting other markets, four that online where the excited at to already and planning as in given a we Ohio are are sports we sports January. launch book. operating we the River adjacency are sizable population that

lot whenever the World, location a of online we And in overlap. is just at just allow. there launched week, market, partners our earlier regulators So Baltimore. the retail we are betting, exciting which outside this state is located to another with Bingo preparing where is a sports of media launch Maryland

betting. to approve the exciting newest become it's to see Lastly, state sports US to Massachusetts

about share partner access market and a with the our plans in agreement future. in recent will is an details legislation we the have We that included more

marketing. to Turning

are what any We seeing to continuation and a QX revenues pullback continue of rational be generating saw reflective of a a at We somewhat lighter scores focus into from and of with a fundamental pullback shift a appears this singular likely away during cost. QX with develop more start calendar. environment the seasonality

acquire to are XX%. QX down compared our the cost around to by even period, players year However, ago

marketing will again, with sportsbook but Looking football football plan ahead said, another to calendar continue to to prone cost in such at dollars. customers we advertising the levels when fall times most betting with we customer are and we the continue may when mindful during are viable the we us, upcoming those picks up aggressive phase the of invest to sports data-driven That prudent and begin of that see year, our the be acquisition season at as season. to remain

the really shines. trust and to our at where well, and expect, focus platform being shift friction our a grow them point. rational we developing their share advantage, by more rather our to a plays to thoughtful, and customer The will possible customers high-quality continue service of loyalty experiences trading on earning customers every earning than by environment recent reducing buying earning We is

to offered profitable as get experience continue opposed to focus cost in and much service. For run, and players markets approach in to strong emphasize our need first view you to as is players retention the a financial and remain to to how has new door reasonable long user on customer been at be launch, our will the incentive

our and generation. and a movement paying cash spent focus built profitability customer on is experience We and the a improving towards have and around we perspective, laser technology flow the we it philosophy our product last From off have on scalability. and believe this platform quarter culture

improvements rating back frictionless talked While many about not these experience evident a to year. significant validated continued over evergreen surface end with the always ensuring the the effort These we've high-quality been is the on features user, and by year have minimal our the an over last app disruption improvements be end. initiatives may the on and last

sportsbook Our creation stock. was content Together Night we acquisition this cross-sell average America, $X.X opportunities and I'm a for poker time and operating we media $X.X last completed and let turn bring an of business. will further to help excited events. Night will from two of and point has poker our serve TV of as BetRivers associated on up With deep that capabilities you well year. profitability poker acquisition when launch platform. of million basis. Kyle. don't provider strong in position or also and our a following our We enabler acquisition we out that online with and expect Poker a tuck-ins a leading on the I'll know impact the verticals. over approximately to rather but that any and have ago, full cash content growth million these the the for poker for ongoing RSI network is us live revenues will call strong casino an to tournaments quarters paid over Poker will engage poker of near-term and it target also library recorded to that recently purchased a this and either The online eventually audience Recall build two to

Kyle Sauers

Richard. Thanks

revenue million, up Second year-over-year. XX% quarter was $XXX.X

during acquisition through and as as both player and US our Ontario Art in active A player revenue our continue of as monthly reported monthly retention mile see include [ph] second active and quick disclosure engagement to We per well launch growth in our now users as markets. measured quarter, user. and note strong regarding our the average Canada evident with Miles metrics monetization the

reflects and and increase XXX,XXX, active casino monthly new year-over-year. acquisition sports retention across were Our into plus and jurisdictions. users up The XX% steady sports expansion the betting betting of online player casino

than quarter higher as are in it during few results Art saw although moved quarter, New recent the this first QX. attract XX% the us launches quarters, from our launch. positively being was the consistently year second increase Looking investment initial we XXXX. the New in $XXX sequentially, past typical reflection Miles the fall was a QX with platform Art York impacted had seasonality from away miles were a our of Miles market a illustrate to mode. Miles We smaller decline we have high-quality the since we These As last the for heavy York new iCasino of customers at string strong called including and out Art

on year. in of markets the adjusted of track for new investments second plans are towards EBITDA While our continue, next will we half profitability

first loss million quarter second quarter. was adjusted EBITDA Our with compared better the $XX.X vastly

earlier. quarter Virginia markets mentioned profitable profitability that second mid-$XX quarter, markets running promotions the that was were quarter. produced been for QX we in the during were other the expense the our level profitable Richard five two and all the live were higher Our in Advertising well-below $XX.X first to as quarter quarters. have turned million prior closer also during during million profitability of in West QX during the second

on touched acquire new been players. very to lowering focused last on we players engage and and As cost our retain we've call, existing

more the we've the take the finding quarter success marketing increase and to flexible find the we XXXX the for spend highlight of ways to the able in reduce and efforts be dollars football that marketing continue QX costs said the back marketing that, plan year. to to opportunities targeted point of returns, But results refine we quarter's efficient. third the season. Having expect QX to marketing marketing to to bring seeing the to thus more best in of be This plans and and quarter second with in been for ways our spend advantage approach more year. QX with marketing due we're invest Consistent as we sequentially to half during again in still high our again

invest and As G&A second QX expected, of modestly during to to the in improved in the $XX.X in teams million technology in this we quarter. the so back gross further infrastructure, year. the of $XX.X from item to the expect to half improve year. up grow quarter, the expect to our back continue to them costs second we million margins compared increased in and first that We'll continue half quarter continue the line corporate will

the balance to sheet. Turning

we're We continue comfortably unrestricted in our cash with existing net flow EBITDA a ended cash quarter to cash no positive be positive adjusted position. We return and cash We the positioned to in believe with position. to $XXX debt. well and million

XXXX, $XXX the between million at full year $XXX range the and revenue rest our Looking tightened of guidance to on million. we've

signs that on half the customers, latest As want we've from that our of our mentioned, back to mindful built any thinking of revenue. haven't Richard year, we some of consumer of be seen in but the so weakness into we possibility

states tightened also what also creates of and the markets dynamics implies of of which full a a about competitive lot in some the half growth football this haven't fast which is will how At through the back midpoint very range, grow opportunity, of season, been exciting. those We have like. number look XX% but of revenue the our will year, a that unknowns large

to markets, is As are towards reminder, live. which currently a revenue only guidance policy our quick include those

increase time saw increase The football QX as profitability. casino substantially loss markets nice quarter. in a But investment for the half to on also some and revenue. half range increase in the be marketing we I that's than could losses by result will mentioned, somewhere second be head Now net could half, while that of the be the we but into from back as season high-level first markets, QX. many in in second in and to saw first QX less the what in We costs thoughts significant and accompanied in expect progress a QX we

well additional get a you with of we closer share market to us. the profitability and clear we'll We business In questions. line excited see execute and with industry and all from meantime, please by new excited details the that, open and perspective, And the path a we to an as mark. continue on be to ahead overall to operator, you for remain markets that can growth level

Operator

Certainly. Ladies from the questions. gentlemen, question open Your and floor [Operator for from Jefferies. is now first coming Instructions] Katz David is

Your line live. is

David Katz

Richard, my to taking guidance, about for thanks back and the the, we comment go and also. afternoon, guess Hi, Can I Kyle your question.

assumed decided So sort thought to you of of you've can you're how and you off case, end making top there sort in talk provision take how you of what in just and a much the just of about a about upon it. kind how

a complex but more just Just help? recognizing elaboration would an it's for everyone, circumstances incredibly little

Kyle Sauers

exciting. so but thinking Then is want into mindful that we're want Yes, relative belt. just said in the is, and half the midpoint a assumptions. going certainly that it's radar, Sure. there's this, about say, which mindful the to some potential big under football seen really lower data to second a everybody on at, the I'll to Richard be have I one, of the haven't be think, weakness. season, the in there. the tight Obviously, of this We up we year We now And from quarter. the in of investment very It's for take highlight we're that half about tried tightening thinking just our new wouldn't talking the range. some just looking previous the since Dan, guidance. lot it's signs we're less than thanks I of is on headwinds last do we consensus, the than changes thinking remarks our of guess, revenue and of question. We I guidance community. to, the X% consumer

been have season. I football it's think, We -- a markets that haven't full seven through

also we exciting, is has just a want want to account people new to us market, not revenue but realize it but that. And to take here, of about for quarter, expenses since excited really that that's going out we're on so for that modest addition it more that's -- and we'll our Mexico the impact time but to a we make then So gate some unknown, sure build a big and investment, it. last be

So factors dominated, point -- that at but we in. and went kind they're one that the you portfolio as where those I relook entire head we look imagine, how to. the to think they're at performing and wouldn't the to are markets of can we going all all

And a tightened we it so bit. up just little

David Katz

can And widen. so And said and may Understood. loss me humor of of go thought a If the would mind you widens back bit talked XQ would again more, me. you I I would thought some you even I in ramps marketing there? setting there ask you and about Kyle have you and -- XQ sort XQ expense straight just to commentary your said up

Kyle Sauers

Sure.

if also it spend sense, want also to if to the But But we I'll that to here. on doing, spent to that I sense. it to second less marketing or probably makes where ability super was most we So focus with speaks we it can which maybe it quarter in than makes really where start back originally and that if we be cater we the on when choose opportunities to and anticipated spend and marketing dial our the flexible think marketing invest necessary. see the the most we

the of the The from marketing But to the casino. we has that betters. the a the for we're we to markets I then have half that increase for I majority half we that to in us returns also some back spend course, where guess football So on provide back pegged of if half. look keen the spend season at better of shifted But that expecting QX sports back year track in in shifted us. where of just sell-side

what we as a I I kind the money will think in quarter depending already of have thinking in range you flexibility that and spend we're as which how near out although for to can some just opportunities work generally imagine we are we on see. the we group analysts put pointed

David Katz

just one Right. more. And

you're You and thinking XQ? said is what XQ half but the the between back approximately cadence

Kyle Sauers

Yes.

Sorry.

this third trying matched coincides marketing higher not spend quarter for So from probably bit to change step-up just remarks can the thinking a in expect say that exactly but even. we'd a revenue the with last to -- well. prepared to than the the QX. QX they decent then quarter high suggest that is see revenue XXXX that cadence I'd the And in piece as growth my think our was we'll than probably our that QX should be expense of still initial do be to we first then and mark and And a up expect the quarter of QX well QX little I'm again more I quite we be for was do in I year.

David Katz

it. Got

Okay. I appreciate it.

Richard Schwartz

I those additional if quick that One many -- about that of in to excited are ready just add but we're this half the Ontario, all of could one is really secured integrations the year. of And we've not second really comments. two

lot market. those period -- given of be fourth excitement we which of in coming sorry the already that to we've for of the quarter a but year that us third for secure be a are great going investments and them lot would third and So second have

we the to because New quarter quarter of planning coming house some in rebrand Jersey actually we BetRiver addition In allocated of and were that to quarter soon. New site the the in second spend from also Jersey third sugar marketing is fourth process

QX,l of that occurring be make which in in rebrand QX. in the sort that more after we market to of would investment -- sure spend So that we wanted will

allocated further a little why a of got of to some of QX marketing later in year. that's explanation the So bit the

David Katz

Appreciate it. much. Thank Got very it. you

Richard Schwartz

David. Thanks,

Operator

Politzer Your coming next is question Wells from Fargo. Dan from

live. is Your line

Dan Politzer

my afternoon, questions. Good for everyone. Hey. Thanks taking

as quarter. was hit on in the gross year-over-year. little of of was know but components the still sequentially unpack kind about quarter. any for it down that talked of If we first through a I fourth year that the Thanks. is the mid-XX margin it still with bit to rest last think of still up expectation wanted quarter And just flowing a to think in quarter? the it the you there's way I second just kind reasonable I range So about that

Kyle Sauers

Yes.

excuse I me, can back to to that think, work by up quarter. the -- we close fourth range

confirming So that – yes, thinking still. on

reason the there's for think on two the probably year-over-year we decline I quarter. primary about talked pieces: last one and this was the

New to are headwind then before in will to drag associated headwind But have go that. we've a in ahead beginning you're on markets the York your talked we happening going New margins also first And margins of about on looking absent lot might -- improve as market margins. the over still not quarter mature. into some first launches there York costs QX a negative and much. along margins. we expect revenue I different that currently than Ontario QX dramatically That's new know QX. the but nearly as on right second time with was a of be launched launch quarter and impacting And something the at a heading in as with quarter that And

to them So we'd expect improve.

Dan Politzer

none don't none sports have have think about -- have you these then And states all Maryland, of of Massachusetts, states it. they but these as states you have there, upcoming iGaming that states Ohio, Kansas all might in the these launch right now. sports out Got

think think about later? some of in So your launch imperative iGaming have the a how a each have states it path or these road is And that there's maybe for do strategy? down how to states, presence of major do you these you to

Richard Schwartz

Sure, have I'll adding in that are as eye Casino We we other one. considering Certainly approach state well and overlaps don't as just state of with the those states. is for likelihood unique. take markets every single a every

But will in example, announced efficient prepared have be? But plans earlier from because them. thing in your be will lot many to it remarks For a will to relatively Main, markets be the certainly if market of certainly having case overlap there. -- markets it the haven't that at is has will lot one of there markets. be a cost mentioned you're other you'll we've we limited that a adjacency there competitors changes. any number on When a look how will going be like we we Ohio And that comes of

of competitive places markets in Ohio when the the look certainly those happening prioritize on recognize those time all of certainly, around planning to the But strength those us strategy of the for and markets we look year a tax we Maryland the and is cases at the launch and make we decisions want casino criteria. adjacency based we that So the when are to rate, those like at markets. are look to is at course set, enter And typically look can.

Dan Politzer

Thanks much. so

Operator

you. Thank

is coming from Your Bernie Needham. from question next McTernan

Your line is live.

Bernie McTernan

the taking for you Thank Great. question.

then could it ballpark question call but will of when you you more second that start you that size environment. you headwind to generation think go that – a do out had the a the are And Just a seeing become in revenue I'll to you see, competitive we'll that on as terms that guys? in go point for then. yet back as your to Colombia it if I just guide, competition back the market think want if signals factoring you're Mexico same any would

Richard Schwartz

the Bernie. second take and will I question, I'll think Kyle take the Okay one. then Hi. first

in investing actually we'll aggressive competitive, and modest remains environment, marketing to their of the happens many terms rational that but certainly ensure vibe the going what to year. they're seeing. watching more in what competitive in and less We've be as not being In as is heard we're that of reflected a last very our be say approach. little But peers

focus players where rates, can we return of is get acquisition we'll confident be strategy – on investments. reasonable that at players to positive Our sort those of a on

Kyle Sauers

give in us better Maybe, but a of momentum. two a us answer give I'll start bit is you maybe first, around let faster we'll the piece, give Mexico a I'd a to that. I'll jump little Bernie. the say And non-answer, than I'll building some on you or let, quarter Colombia, answer

lot I entering Mexico just Richard a with We think advantages. – of highlighted, are as we're

that we we've it's in infrastructure got Mexico. partner, great good a being lot access well which us for And down Just We've had that for gets that set bigger a there up really there. population. leveraged really obviously assets to obviously, Colombia down much is a of some done

away months on X.X that some it give So but launch. as will we'll or more and thoughts details we so from little from faster, a further the be move

Richard Schwartz

product about about up give And just all we the excited be. offer. the a where bit it's we some opportunity campaigns to as first and quality configure longer to to just the a way little needed over bit business term. We're it the launch rate right the we time. little and of context, took us optimistic the We experience starting we're grow time Mexico in really a payments of in think the extra get way It very first to for really and the now said of marketing significant to we're

Operator

you. Thank

from Mike question Hickey Your from coming next is Benchmark.

is line Your live.

Mike Hickey

if otherwise? players transaction guess, would bake the can less was guys. if is, activity questions, consumer, the weakening compensate signs early seeing that my transactions to happening And I of number. experience EBITDA What be sort are Richard, happening? your to sort taking see it's that hold for do adjust or was new consumer or the promotional coming thanks a rate given Lauren, app weakening Good you what the into you size? your of question job into of indications I the that start you are Kyle, Richard, the obviously there ways on of was Hey, that that the guidance. that sort whether a guess, app sort early first

Kyle Sauers

Yeah.

start been I'll we've Richard bunch just I So on wasn't and to at I sure what from not you a different looking And was it weakening that any – different of lot We've look your said jump-in. points. of can that, clear, because ways. question. let we a seen yet and want sure make data just at

bets. players bet valuable base your don't and average at deposit those – size, can wager the as or player then, average at lot of look you've you the to segment, factor part are they at But any slower more if in to so calendar, you can the much much look a you You number there's see, things And those of of the can frequency size in cracks. your look got segment we're who a sports between seasonality.

but that haven't we We did sure want were we factoring in. to yet it seen make

Richard Schwartz

of couple a things. Add

of right like in fees expenses someone not think impact unique mentioned incur from is see incremental indication, a more there, One And obviously I well the player home. to costs. that an prepared amount, and the high-quality and that participate, to as smaller average the And online to enhanced to Bet thing that, the fees, players having anywhere, the very way we have are is handover seen overnight. I gas which that experience incurring a haven't want again really so any you consumers and from size a it's a in lowering would it's have not at. look indication entertainment service to perspective, deposit gaming the be have I bet seen. restaurant frequency, any things to size the not remarks an we incurring note that. go you're affordable of we which to if you not to certainly might size, having travel factors for drive

attractive a great there's home that's experience unparalleled terms things in of a for at-home be very a in a really other lot it'd about providing user hours, compelling this that's service category in can way entertained the So $XX the and four where I really have entertainment. or $XX night think, types of and on for a experience stay product of category

Mike Hickey

Fair enough. that thank Richard, -- you mentioned hey, Kyle, you.

that the of seeing given mentioned peer set the your curious same they seeing backdrop doesn't. more what But are sticks, terms retention you I'm You staying rationalized getting on spend disciplined you're they environment that maybe just Are player better? maybe more trends? it spend? from Are a in

Kyle Sauers

this we the you that good I tells when metrics. specific look spend it's industry. marketing on have within generated retention retention of what change we some Probably there. players, our No, And revenue I from But and really a haven't we a that's question. not think lot think strong at disclosed you

really we're of proud So that.

any We haven't for in way that metrics. we a But negative specific recently. given be haven't us seen

Mike Hickey

guys. Thanks Thanks.

Kyle Sauers

bet. You

Operator

you. Thank

Your Craig-Hallum. next coming Ryan from question Sigdahl from is

Your live. line is

Ryan Sigdahl

Good afternoon, guys.

Richard Schwartz

Hey, Ryan.

Ryan Sigdahl

trying Just guess together. to I me. for this all one bring

guidance your year-over-year of et on the cautious half in more seems year. the growth yield mentioned the reacceleration a in But versus assumptions, cetera, would commentary the assumes XX% You on then be second half, which cetera. et again consumer XX% growth the first year-over-year

drive that's assumptions? included more So there given what's I in those to guess that conservative reacceleration other going

Kyle Sauers

Yeah.

a few I continues Ontario build. One is to there's think things.

seen than I think his XX% in per comments, highlighted metric. we've June day Richard is net July revenue higher

exciting progress is, a football all Ontario. couple part it a And got markets haven't we've these big of in football that seen, that's many and of see which haven't at to season. another season haven't all So seen seen continued that full a then

we're these for are So as in markets that's us And exciting all well. that growing. there's still

that. think good So feel I about we

Ryan Sigdahl

Great. Thanks guys. Good luck.

Operator

you. Thank

from is Stauff question Susquehanna. next coming from Joe Your

line Your is live.

Joe Stauff

you. Thank right. good KPIs couple are a questions All of How afternoon. your I could. Richard, on Sauers, had I Kyle if you?

a Just just a of talking you KPIs. particular? looked an states. about number or look I a that us it's and if say in how OSB wondering naturally suggested like say read core of your strength basis iCasino monetization down what might product iCasino year-over-year in wondering it give you in you assessment was as on the But launched your within can

Kyle Sauers

Yeah.

want just sure question. I to the I So make understand

we when -- saying KPIs you're the about you're talking and the referenced? ARPMAUs the talking You're there, that about MAUs

Joe Stauff

Yeah.

sort MAU. about average Specifically I'm revenue of talking your per here,

Kyle Sauers

Yeah.

Joe Stauff

your down it again, say look the versus iCasino, what competitive flattish is XX% And like core year-over-year? advantage that more for within

Kyle Sauers

Yeah.

of have it ARPMAU of from between also don't next quarter two. for from we the tell aren't variability remember is segment to the will out -- quarterly I you So is the It's on we that And seeing that actually it's from a valuable the which referenced and sports we've markets And in, launched had -- with call that's or more only the MAUs sports about large actually number we last revenue. that that then where us. there's New we came and our of you breaking to the like we one negative but more real recently less also a growth generated what casino. in we're in over, specifically York, have type cross players casino side. QX and

real do the figure can out, not ARPMAU you number. math So positive the that's for and

So up sequentially. that's why popped it back

of year brings quite So see factors impacted the more. We'll the here. rest bit what those a

growth new on number. see betters about good markets build, like that how bring in that. the the looks for and these football all season coming are board feel see MAU I we're these think to to I Ontario going first what in very the casino we'll ARPMAU, what new us markets. all

Joe Stauff

changes? the is right likely in given the maybe makes sense. year, of as of how moderate to think ARPMAU you its metric. seems of you number year-over-year we would it evolving, And maybe just isolating this on as kind User second of terms expect new guess markets kind about that the I again particular market And this half growth grows suggested but of

Kyle Sauers

the I'd go asking, of if to You're expect year? the back down half in it

Joe Stauff

Yeah.

Kyle Sauers

Yeah.

on a So I necessarily. give that don't guide you to want

I'll guided that tell should that found something it opposing to But go sports. in on either see we've think cause some is haven't I could forces there's you concentration more we that way. We One Joe.

lower as more of of the that So as And initial spending do amounts. positive them lot build aren't impacts of we time that number a building. these on more are have enjoying valuable as the become dollar that bonusing a negative markets be because players and can some many so they as more well. markets your players the they're app of that to But many side, at on the [indiscernible] and

against confident will be tell down two direction. other. either because I But that don't or work want you that I'm move it each could it XX% to things will So up those XX%

Joe Stauff

Fair enough. Thank you.

Operator

Thank you.

is Securities. Bender from Your next Jordan question coming from JMP

is live. line Your

Jordan Bender

for afternoon. my Good taking Thanks question.

time. your up So IDMA continues both to sports betting for GGR over per and move user

you So returns very more when as you customer you are player think think potential the finding acquisitions? potential diverse as your about you're attractive about spending when acquisitions towards are – base investment that in the

Kyle Sauers

we sure you're I'm more what at. Jordan, Can time you one not exactly ask understood that getting

Jordan Bender

Yes.

So go the Would your time. rather base into around the user GGR you and cash kind down your grow rather back you to and per over acquisition that is or way? go would continues up the player, reinvest it use of

Kyle Sauers

time it's you do we investment jump that let whether But whether I'll sports. which or where casino mature as front the of a lean, on in Richard mean You're marketing it's and about would in. put saying existing balance total over and changes I'll I if markets be external that we just you.. think that or dollars dollars definitely one let in promotional is depends players,

Richard Schwartz

it valuable Yes been on know a Jordan. plus really just sure. more we over existing player over with worth on Yes market. Thanks, the year that's a is so you and a depending the But multiple with Kyle And for of obviously time. consistent more lot players. years focused or varies what and said, are certainly retention

So you want to those segmenting make players. sure you're investments towards properly

very has right which customers. our segmentation ability retain big sure players to of right and incentives, get do part we of making think the a players driven a job nice I our the the of

balancing substantial player be have are you. when become the part and to comes to every deposits marketing a them side those – for going for out any pretty on up amount, Because So costs offering with a the an new of bonusing signs you're sign retention bonuses you first significant you your right? budget, that those incentive of join

from reflected don't bonus it's reflected obviously you So the that we're GGR I the because in have you are increase that more GGR, you door, do in think players the deduct in GGR. the bonusing in successful not getting

associated who So our between bonus with goal cost with the I right costs does also reduce the is the is to also segmenting of terms have that the day, acquire providing we by sure And significant ensuring recognize job a right customers nice a it. have with then are that bonus we do we it our that up acquire with to being but think sign a the in acquisition lapsed that players two. new you're of do at continue of a some making balance the think them when players you end I we do that affordable

Kyle Sauers

on us for a And clear spending being of as dollars that more of more just maybe percentage that marketing relatively that's the obvious, but become as there's top seems throw one markets we're there pattern I'll revenue generated. a very probably less mature,

it's where occurs that is leverage – on have because also then of you model. process. of more early out, the bonusing acquisition the as So pointed the lot And part Richard a in the

help them dollars sign the external Bed to those giving and So yourself you're are incentives up you players paying only start your also enjoying platform. Rivers platform, to to attract get of not them and in front

shifting to players shifts is that time going you're more that of are return. to and over and but that the get incentive you're So where going best with to it sticking dissipates your great you

So I business probably provide for goes entire those time and think our industry of as leverage points on. the both

Jordan Bender

in guys gaming. Great. interest Peru Is a would that And then looks this turning just for a back second. to South America you online it legalized like entering? have market

Richard Schwartz

Peru in market. take not foundation population from had far Certainly, and a a Colombia, one. I'll large a America. really years that time And fact over certainly We markets. is Sure, some of in media overlap TV have too invested strong the certainly, has between establishing Latin energy the over lot two

on eye President and bill very for the So sign to legislator it. and closely certainly the monitoring the an have that's a as we we're path that market we waiting are it

Jordan Bender

you. thank Great,

Operator

you. Thank

ROTH next is Engel from coming from question Your Edward Capital.

is line Your live.

Edward Engel

late, or Hi. kind expense addressed. Ontario despite down last sorry a question quarter? marketing and kind was Thank and your you of versus kind the I'm marketing bit year? that XQ you ticked Should for we in in on sequential you kind continued of the back if declines costs the XQ expect of half Mexico. flattish throughout see do lot a said sequentially of taking trend How of both launching my this hopping so But

Kyle Sauers

sure. Yes,

decent the good is but of a amount back go there I appreciate stuff maybe So and question. review, to

marketing of the our or to QX. QX more We to be in some So shifted little from back QX a allocate bit a spend QX. to was down pull quite able delayed and

increase uptick see then a the to we're second our expecting -- is into QX than marketing a decent watermark with QX that spend what from year. QX QX and little quarter probably high from even higher in less So of bit being still the this further from third quarter

of think that cadence strong lot of expecting. but that's we you've casino the see. really There's we season putting a markets football from. Obviously, that starting, -- get we we're So can investment into casino got opportunities kind like returns

Edward Engel

the Okay. the Perfect. much US, be to into some of as US Is kind important How it of it one launch? so? And whether then, outside these or kind newly of to just as flagged regulated a day first you're a market when markets less expanding as that's priority Canada. those is of AMR in territories is new little or bit

Richard Schwartz

an be examples and was of XX a on same give launch the be a to customers to gray Ontario were of and ready Mexico. years that think Ontario market. opening want regulated are existed to to It I with helpful, pretty that I'll time market safe at secure in because there tends invested So play for it were at one handful folks operators where we sites. environment depends day the or yet, regulated two of and a regulated looking the audience. really that which is The market the of as able one, more playing those the

for up a those opening certainly in to capture key high-quality showing the the relatively this it's are trying getting one really there reach market for job the we spending assets be -- just those right in mainstream year on. point to meaningful time, did But, that early in to in to -- think nice very players. that want secure a it that before marketing marketing limited some market that we day but in And wasn't assets market certainly customers I of So terms of day market one way. the at consumers

yet many now the just be having of continue grow So, by to preparing there the really some sort to still not are working entering live we operating as wasn't not market that quarter and we and to it open, time we move assets competitor Mexico is that the complete also the that additional of for and great we that but spend integrations When when had forward of any not yet last a in there lot are. market same market are really to around been are able which years comes on. for

a for and the So, make to we're setting build taking brand up success. that in build a sure right our that long-term it quality at ourselves and high we're we sure make time Mexico way

of have you aggressiveness in having launching of at don't time pressure a Ontario. with Mexico the number the large same saw You the that competitors same in

are a as the it right we to the So payments flows working want that working them. of are the way, as do bit we're are able doing, and we take to exactly make systems on all sure time the registration little

So to pressure. start applying larger going then, we marketing that the get a it, you're after with are players towards really person satisfied

Edward Engel

That’s helpful. Thank you.

Operator

Thank you.

is Beynon question Macquarie. Your from coming next Chad from

Your line live. is

Chad Beynon

my Hi. Good taking for Thanks afternoon. question.

states launched quarter. And the been? to customer look is response in You in How Dealer other the Live what's West potential like? rollout Thanks. Virginia the

Richard Schwartz

to to you the be shows start believe up a the random and to number you doubt you pull have you out that a companies from always more might willing card tendency gaming X at from believe get it trustworthy and less Right. Live really program course, from its dealer generator just globally the XX X successful that of playing of car you really of a is of you chutes. is see And company players more as dealt live see in product. person the know, any the The a see. because you you when Really, would, that you saw you of solution outcome. many outcome trust than pioneered if what shoot, have you company. type if a computer saw they the you you're than being Blackjack a is evolution, one of if a RNG great And dealer a

popular, because So category the that, successful. of very is very

coming we're And brands have that, seeing grow where markets for been we've just very in in us. our a markets space. it's Pennsylvania like suppliers added category West with dedicated our we've And Ontario, popular in other too product are helpful, a markets, tables, Michigan been and to not it's like partnership but very this so, is soon. for We've Virginia, additional proactive able but we in like some very great and

So to it continue it's experience. invested And to you we've and important point very exciting, games, lower to because in offer a category well. I still table that it as different have need as RNG brings a is the RNG And are price those invest believe games because really players it. generator random a for table we well. think really it's going in and number at us means

to play higher. play RNG smaller the if you bet for to If fee a the systems. it play live want to is size, you little a you're entry automated want typically going But table, bit a

have So for that's and everybody offer. to I what think something you have we

Chad Beynon

of given more the the state that fourth specific progress, believe will you've get any you Great. that the start bit maybe Thanks. industry? to tax a there be prediction, revenues the but risks and states that success Thanks. understanding some after benefits the mid-term of this. better and And a as legislators quarter, just elections little of from this you of not to in growth hold the talked this iGaming your then, to generating Do about competitors

Richard Schwartz

question. sure. point, to and Good momentum increasing these actually online legalize From Yes, by are efforts we shared is Previously, had peers our Thanks. support vantage building. accelerating casino.

I is and The as to in than excited incremental additional computers, for casino, a regulation we're nothing to a start iCasino by regulating think sportsbook so honest, computer products needs many is So very between -- because integration because, are casino place. taxes, in really other already the there's live. you brands be typically And To adding which these just more developments. markets. are see regulating regulator already challenging considering are product of the states easier already proven really

to couple starting thing just to over adding investments provider, for focus service of desire be industry you're states next try to and is easy real from can an but happening the some our done It And years. do. to additional see, lip make So not quickly. iCasino

in year we where So iCasino to mentioned I in I've it early that they markets think in you sports sportsbook you're sometimes way see only then that happen with you that added Europe, the you started West they here, global before, saw Virginia, and a trend later. saw going saw happening and started iCasino. added

a see is starting see work-aligned, coming of So studies why of small you all things legalize really more additional to that states and additional of a are legalized the iCasino, out some people many would generate more lot even betting. that even states combination number and substantially new showing sports than positive --

So is the being opportunity everyone is to revenue recognizing additional adding generate driven really states iCasino. for by more states incremental

Chad Beynon

Thanks, Richard. Appreciate it.

Richard Schwartz

Thanks.

Operator

for the [Operator remarks. concludes back session. Q&A our ahead. conference Schwartz I’ll That Instructions] to you. now Thank Thank go Please, you. hand Richard closing

Richard Schwartz

you. again, you, We us speaking forward was soon. with doing again look It today. pleasure to for Thank joining it a

Operator

concludes event. today's ladies you, This and gentlemen. Thank

you wonderful and You have your for may Thank participation. a day. disconnect at this time

Rush Street Interactive (RSI) 7 Aug 222022 Q2 Earnings call transcript