Earnings call transcript Q4 2022

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Operator

Good afternoon, and thank you for attending today's Rush Street Interactive Fourth Quarter and Year End 2022 Earnings Call. My name is Jason, and I'll be the moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. [Operator Instructions]

And now, let's pass the conference over to our host, Kyle Sauers.

Kyle Sauers

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

Federal comments will statements meaning Some of Securities be our Laws. within forward-looking the of

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

reconciliation we to directly GAAP discuss fourth the Investors should the is During RSI at be these not will measures results as the GAAP. in the comparable evaluating call, be These website useful investor a we our of measures, release rushstreetinteractive.com. quarter available is most in considered our and earnings available in accordance with measure XXXX our our isolation believe company's A performance. which prepared financial for in measures deck, or can the operating section substitute of which in non-GAAP

to who we Richard With some will the then me Schwartz, and Officer, questions. first remarks Chief on provide the Executive call opening have call today, open

to the Richard. With call turn over that, I'll

Richard Schwartz

objective towards fourth great Last earnings terrific was Kyle. year a having business. long-term afternoon profitable year our strides quarter year-end and XXXX welcome of sustainable call. Thanks, Good and a made our building to

delivering and sports-book. investments XXXX continuing as online enter casino goals, our topline balance right between continue positioned online growth between well also to are We balance the on striking and profitability to we while

XXXX, so customer during five year-over-year disciplined Louisiana. York, we and did launched investing Specifically, by and Ontario, jurisdictions, new in our New into topline Mexico, acquisition We our XX% maintaining to while and Maryland retention. grew including our approach platform

revenue During one of XX% the active achieving users. rates leading while $XXX, in monthly fourth we've of user growth our of per the maintained monthly quarter,

We industry. believe where online technology made we we've unrestricted our no user cash a significant and improvements million proprietary leading year ended platform, having reach and the balance us more sustained And in $XXX than funded in fully with as one recognized and sheet features in particularly debt. strong this of position the We functionalities been in products the our interface, on leaves the of cash profitability. to betting

revenues $XXX finished million. We XXXX of record with

customers investment and levels. with retain players friendly, delight experience sensible designed user engage at offering delivering fair by and at purpose-driven For that a is top-line growth result to is time, acquire appreciate those a us that our not you costs who it our offers growth reflect as and best-in-class product fun rather have experiences. will a followed over betting all to We lead ability demonstrated

to our see remain We spend, G&A plus on solid combination evaluating gross path When improving firmly growth of our and corporate costs. growth results, the moving revenue we in modest disciplined margins closer marketing profitability.

initiated guidance revenue for will but expect As EBITDA provide XXXX of the year we full in further back of the million range and on details, achieve adjusted Kyle we've stated calls, we $XXX prior half positive $XXX to million. XXXX.

betting are online casino on where and aggregate, thoughts continue markets. our want both. the to In alive continue volumes growth, our markets strong markets, provide some US in across see we solid I we sports to that, With revenue with for

demonstrated XX% databases Latin launch, awareness. our after revenue existing time ability our launched player grow saw have markets to the limited new we where, new at year. we of XXXX, This markets American in North and in no brand nicely the American and fact, growth In during

our less in only marketing In newest Ohio, our early sports-only relative initiatives we our to launches. previous invested sports and states market and have approach evolved of Maryland

reflected by this in market level investment market rates growth expect share, our of our very faster substantial expand Internationally, revenue continue also launches. We of where continues to results expect to we initial in be be our recovery investment at to but these year-over-year. current anchored Columbia

development. Colombian presence. In support we grew our a global for US our technology fourth location expansion while Latin the announced reported the talent technology Medellin, which to new hub Bogota, in house of headquarters tech a year-over-year to we a we team, Latin in our the operations XX% expanded of fourth new on areas Also and team to of roadmap Bogota opening In product in serve quarter, Medellin as the pesos, to to our American American and offices amounts our remarkable top quarter, healthy opened maintain Colombia the our of dollars. in basis, XX% a growth during platform support

third performance. our or a to regulated during from to XX% pleased either quarter, progress Ontario. transitioning the remain We competitive Ontario XX market up launching obviously, Moving over sites with is, end of and quarter. with an the additional the fourth

we transitioning XX% nicely early helping casino for low-single quarter by and during to [indiscernible]continuing growth of much market remains strength certainly market fourth online in evidenced the rapidly mode. our days. operators, online digits almost in sports However, our mid-single to grow online for us In share expanding continue digits a as the ramp-up casino very is book. sequential

focus the in that growth and building stable support long-term our deliberate on will very foundation profitability. Mexico, continues to Turning remain ramp. The measured we be to and

and and our brand localize to experience. leverage media partner build We work further continuing platform are user awareness our and to with

we far. expect the from see said, Mexico are back As we this significant of have half year. foundation we contribution established towards pleased said to a beginning prior, have the more That we with thus

our online industry about before across casino conversations legislation ever more we've are there forward, than Looking witnessed.

already casino introduced of outcomes, online been area. is effort demonstrates Regardless the our being this that this greater in fact, In this made a year. legislative count bills have five

even importantly, straightforward. by to are itself But betting significantly we given to mentioned to online in sports betting more often earn the market. As prior, outsized could be potential and market the way market an sports market The casino compared benefit facts that larger same times the has three in than states. it casino RSI flat the five in share online we the online have those

heading spend marketing the front, our increased markets. in winter the On we casino specifically months, into

anticipation Jersey, states. have there we We increased the New the specifically also supporting remind in previously of investors rebrand. rebranding I that back BetRivers spend in in spend of our pulled

spend first points basis a last were is last net to marketing the revenue three we when of year, year. If full down revenue. at improvement quarters, an was we've a spend an over investment-heavy seen percentage year of percentage the points net of XXX XXX about to look with this quarter this For of as And compared as measured marketing year-over-year. basis

disciplined last compared in this same remain Marketing cost we results. to by We approach. our efficiency second our in improved measured forward, period in the see year. to the half as our by players Looking one-third acquire

and focused spend. we on We are the data-driven get for what

development treating them leveraging to experiences reduce earning seamless focus at our expertise and every loyalty well, being to customer on continue and friction thoughtful touch create retaining We by and point. by possible

and new existing both markets in efficient enter. remain any we will We

culture it we and imperative We sustained this our and to is around long-term built platform operating believe have philosophy achieving profitability.

product Turning and to innovation.

Things made teams player in experience leaders making new have speed, we we've onboarding user quarter. improvements each building this the we of bring innovate where on been like market. progress industry, Our and tremendous seamless. to more quarter continue again Many the payment once are and and but also options to the make features and efficiencies areas

game segments. allows personalized custom us experience games to behavior. Our different for in preferences and usage create lobby the and player lobby casino banners lobby and provide more This layouts to now according displayed the supports lobby a players'

introduced we to and efforts dramatically parlay machine parlay translated as put experience. lobby by increased advance XX%. that'll for them season a their merchandising further to our the front learning recommendation improve experience also our games and players better center get this excite the sports, and single-game improve bets single-game engines chance our of is offer percentage of options parlay a products our have In significantly our players product NFL to them nicely for and These for entertainment payouts. improved the to and We've larger

casino Super On promotion. the free through randomized proprietary payouts. to they our on football Bowl XX% been our fully feature wages call, in we game received, launching last This squares betters had parties. criteria betting and boost game, we that size the never subsequently our case the of the to based which allows boost of to well the squares parlay games, can what released, new players came In us football a Squares each bet to for games new the winnings partway was who previewed to of NFL trigger feature itself. played likely squares, the offer integrated was participate to be configure [indiscernible] tremendously that has to you all season, on partly something soon

average reactivation Our activity. in strong bet size and XX% football up we is saw

of transitioned for functionality this games. success, heels where NBA to we squares innovation been has the a just On launched the basketball,

over With that, to call I'll the Kyle. turn

Kyle Sauers

of year-over-year. revenue Richard. up This and year up our up million, XX% revenue consecutive XX% was quarter quarter-over-quarter. million, year-over-year revenue growth. Fourth XXXX quarter was $XXX.X XX% Full XXth marks Thanks, $XXX.X

For states. our year, revenue US in for we the smaller all of full experienced our growth except of solid one markets,

casino the nicely As we a in grew result, during online year. sports both and online

our player same casino The across betting, in North quarter new active compared Fourth year. last were our jurisdictions to We positive efforts monthly continue XX% and and users. online successful measured up signs reflects see retention retention American and increase sports through as the acquisition of plus to player the in miles period addition acquisition year-over-year. XXX,XXX,

remain to compared high-quality we per the was of user engagement as revenue last period healthy We which monthly is attract monetization, retain our with during and average In active to terms players quarter, art stable player fourth very to same pleased continue the mouths year. the and $XXX platform.

of new last a various As the launched required levels states XXXX. reminder, during we investment year

some we're to However, benefits. see beginning

As target of profitability on, for Richard EBITDA the we second half continue touched to year. adjusted this

XX% quarter year. Our fourth which quarter improvement from is the EBITDA last was million, a fourth adjusted loss $XX.X

investments markets XXXX, the XXXX. and For we market the loss million, our due an launched primarily made over the $XX.X to new XXXX in that during EBITDA year, XX increase which was is

about our $XX those this past vintage launches fact, of XXXX XXXX million during year. loss accounted In and for million $XX

mature markets As down marketing and these expenses build, and improve. come margins our our

will Our and quarter. that down promotions anticipation contribution for expense be in slightly fourth aggregate $XX.X year's the positive million was these fourth market is quarter, for launches XXXX. last XX Advertising from

expect we for call, was our figure quarters lower on That said, last we coming previewed quarter marketing to sequentially quarter. go we from closer our the As third up profitability. EBITDA as to spend this over the the move being fourth adjusted

and a marketing should For XXXX revenue both lower XXXX, be percentage as in dollars. absolute costs than of

the expect and to the is result old half New recent less still spend the Ontario of as earlier. rebranding during We Richard first a second efforts launches more Jersey than Ohio market than that a and in mentioned in Mexico, Maryland the and that half year

expect value to again We spending improved we and margins rational to acquire the in should year quarter solid year benefit returns ended Gross them, a we when through economic several basis players margins improve of those full channels remain and where fourth the to Gross the it XXX sense. or sequentially, XX.X%. reducing see committed amounts and we eliminating again investing acquire XXXX marketing more points. in at players, make which see where of doesn't the monitoring

the to increased in quarter. quarter G&A fourth costs million, million the $XX.X third from in up slightly $XX.X

investments the of product make We technology in prudent to our and continue and corporate growth teams.

expect grow the G&A to modestly we to continue coming quarters. over So

to guidance balance and the pristine. Richard million no million. unrestricted remains ended $XXX year in currently million expect initiated between year full revenue with revenue to funded debt. Our highlighted, as $XXX be for we're sheet XXXX. believe We've we cash We and $XXX fully And profitability. We

today. guidance those a markets our that as As reminder, live includes are of only

our our on well costs while execute growth to strategy, continue We appropriately. managing

a our in position existing We no have balance debt and a and markets. strong strong sheet, new

such, shareholders a gives As we where clear make have can or investments returns. initiatives we us reducing profitability. where generate All to our the see we eliminating solid the returns don't for continued path best and this to flexibility possible

the line please operator, open that, for With questions.

Operator

Our from Macquarie. Instructions] is question Chad Beynon with first [Operator

Your open. line now is

Unidentified Participant

Chad. for Hi, good my evening. taking This on Sam questions. is Thanks for

there relative the I is saw And during question, any World relates to First time how on guys touch Latin that America expectations? what if customer your period? wanted engagement, North played with same saw out Cup what and to it you as in major acquisitions you and to America in it differences

Richard Schwartz

Sam. you America, imagine, us was our interest sport opportunity It the of in the and a was market. successful experience. the us. this engage would to that very much in the players And acquire could a World Columbia strong existing soccer we Colombian Sure, customers new Cup for the number is were Richard. customers and impact all say tremendous. Yes, we're large was where great as Latin quality it business running real We particularly Hey, everything it stronger about was feel the of cylinders a for fact, of in on in and positive was a for

on a and during weeks want break weeks just World I in think rest having have that the would does also have. multiple that the take the that you several impact the does for that soccer of -- make said Cup, of has before not the up you're Cup leagues same of we the revenues, the I normally strength impact and -- an or to because difference. schedule Having some World caution, the growth once

So that in in the business positive. us a for us, real but a US, lesser positive impact still In was for market. it overall, it’s as that

Unidentified Participant

Okay. Awesome. for that. Thank you

how single you're it had you the wanted sports just it or both follow-up Wondering opportunity game see how impact much of retention long-term generally forth? over potential so a of just customer for an on a iGaming on hold As and relates sports. negative. couple about to and it hold touch if of business sort upside And positive balancing years, the quarter, as your for thinking for parlay next to and as and

Kyle Sauers

Yes, I'll take the part. first

expect I impact and lack maybe, longer didn't specific or from our weigh QX as negative, and in or when doing that we QX we or of and planning really positive and the have hold either when impact, alluded range experience. term in they But player strategies to, then possibilities really will an much fell in we of the both casino sports, on thereof Just into Richard guidance. on offer we're

exciting nothing really to So share there.

Richard Schwartz

look of always opportunity long-term terms an is there goal, for margin improvement. the opportunities at In to

awareness customer to clear been not how want retention and we've think value And aggressive those you some the for though with with think diminishes long-term margins very the if I experience too Certainly, we of towards aggressive that end amount of always customers. [indiscernible] you the think brings And that years, we to having from setting months. profits for that some shorter up we limits this that customers. you're the be value do a customers. actually lifecycle you of is

in focus -- positive efforts that area results that the lot to and parlay to think we some we're talk often products, very look starting on betting particular, it's a it's I So a our there something some margin item balance, to sports it we higher are energy in we parlay that the single at carefully of on. and certainly And some is about see an game opportunities increase from subject

Unidentified Participant

for the Thanks color. Awesome.

Operator

next with Our Kelley Oppenheimer. is from Jed question

open Your line is now

Jed Kelley

Hey, Thanks for my question. great. taking

on Just an circling give online -- back legislative. legislative or you to us the could iCasino, potential update

York I meeting like in having think New potential is Midwest. a

progressing give could get into Can we your Latin share in then just just to gains competitors? update So that? are on relative an on strategy. update your an you. how American And Thank growth us you going Mexico

Richard Schwartz

legislation Mexico color on well. about talk casino some online Sure, I'll as and question the share

you seen the to see extremely seen That’s being you're haven't investments way casino legalize I industry a aligned in last made the lot online haven't a and the lobbying way before and and decade. In online over in that exciting. efforts starting terms of is to a casino, that of

it why a I casino think larger, the the of effective the category, is. combination, it's and clear more value is are realizing profitable industry legislators how

While that now that, is conversations I'll timelines is exact drop, year of as this fifth introduced share Maryland, tricky an there turned legislation are introduction We've the draft predict it's New of draft movement into far for one. may too that. and bills legislation to so clear into [indiscernible] the five in when of actually mentioned. example York, Illinois, turning we've and in is had cases Indiana, states

made towards is sponsor enthusiasm, dollars step the now a being introducing applied a effort to is there going opportunity, to there bill bill So but first is interested And starting Probably happen and not, goal. of a it to excited, and we're is that. get overnight. see this the being of you're starting lobbing to lot see

So I starting we one haven't of particularly really casino industry, of casino which think large in and share the ones may think of for the outstanding revenues in do us because you're disproportionately the is get markets. course the we well all momentum to of companies built, be being we

So very welcomed. type of for this is momentum us,

Mexico? of terms In

Kyle Sauers

maybe Yeah, American question, in jump Latin on I'll the Jed.

obviously, in down success in there Richard Columbia, fourth We the get data. we've So on our fantastic quarter. highlighted market information the sporadic just been having

in there. the approaching So solid in we currency had, XX% third share, quarter to that fourth place close we It'd the down hard with in we growth were XX% that see we've that no Colombian days, any imagine lost to be data momentum increasing last meaningful there half not the expecting and year. It's back changes still contributions what towards from Mexico. kind -- of said really Mexico of to before more this we're early from

nothing really So share market there share on to yet.

little Maybe did year that opportunity large. growth color we year just more million. second the we with Columbia $XX to was the very $X in respect revenues, for Columbia, plans there, Comparing million in first that like is to a see something

getting market we've like have, to relative really that. it when in got when or at that going a Columbia, more We our ahead We you advantage It's market, Mexico, launching a at Mexico. faster of and pace we bigger in pattern even didn't partner that look the we're Columbia feel media in expect with off started favorable. though in are in early growth just well we Columbia, demographics we're

we're So Mexico. excited about really

Richard Schwartz

on. I've top matters. Just localize quick before, thing One make to because really, as to quality it user a on the to rated Mexico, said is add the really focus our experience experience,

And effectively. that been so, doing we've very

app we've customers make ratings extremely feel and the form improves our we're customer has into future. the value position effort to that that and since entered feedback do we’ve matter In market the gone our in we dramatically we our long-term start on fact, deliver to been be sure and putting our -- effort very from strong it things take little a to in there able the to and the

Jed Kelley

Thank you.

Richard Schwartz

Jed. Thanks,

Operator

Our is Bernie from Needham next question McTernan & with Co.

line Your is open. now

Bernie McTernan

the taking at for to the questions. Thanks to dovetail last Maybe start one.

additional thoughts or I pretty on Columbia at have international maybe year headwinds going international the growth? any you is any could market Just guidance some the on significant and provide FX US between to market much of know change on improving color the be anything are domestic versus least rest share data growth? to second versus acquire customers in science it'd you a lower strategy. And differently, was third, or efficiencies doing versus that now of cost or market guys two, whether by then for that how just

any helpful. would insights Just there be additional

Kyle Sauers

Yes.

in come the where just part from. take year and kind revenue to and the growth of first our about revenue I'll So build that expect we thinking this and

So North breaking short America. I'll it versus probably stop international US down just or

this So the little remarks. in we bit about a opening talked

that of XX% live likely to growth our from for more the a in is have something range come of than year. the markets been think XX% I to

is rough So XXXX America. American North that in about XXXX of after same growth to the and markets come launched our that's thinking Most basis, if a you're store from Latin going guideline.

last Richard prepared I group XX% think that in remarks, markets I year. of mentioned think grew

guidance, to XXXX of these at and Pennsylvania, strong could the year start those of Illinois, portion later you have then XX% more get estimate about are from US came really launch. last continued grow the and revenue, All state neighborhood our very lot reported New the Latin markets revenue had both in a Jersey. America markets of a three after competitive. after our those Illinois this closely that's nice upcoming and data Pennsylvania two-thirds year markets of we from where the midpoint our So of of

years. casino those but that So a that are of growing the I our and for in takeaway markets expected new newer brand we a is that launch sign all growth markets more over markets that from think -- or known are didn't database to new with is great enter also the markets markets, really are that's leverage modest, coming but nicely the

Richard Schwartz

terms of In second question. your

team works doesn't as maturity organization, to marketing what us an a work. Our better what know and as allows

marketing and marketing we're so efforts towards deliver And the best applying channels the results. more strategies obviously that

each also defined that continues We've always where paybacks very the case been have each market disciplined and we be and for to vertical.

And market. back have us, other times getting is who a operators are so there, we continue were that longer that they those certain higher than investing were while from what maybe level opportunities to and true investing opportunities channels in willing it no highest at we for the some come many rate to still pay at back are

So is in but lot I that’s that maturity it we've to in the disciplined return you combined affordable, our sure and we are investment going be developing as invest only made science capital. teams something continuing of with of that becoming doesn't is a and would say in combination on and data a referenced, that give and there markets works work the best making experience what to more us

Bernie McTernan

both. you thank Great,

Richard Schwartz

Thank you.

Operator

Our is Dan Politzer next from question Fargo. Wells with

open. Your line now is

Daniel Politzer

to the high moving Hey, about Richard between the end piggyback talk some end Kyle. and pieces on Can the coming maybe a and just of the wanted range? it good revenue. I afternoon, on in new us and ramp the these might Is the high-end the of of low-end to way bit range competition about guidance you of pieces kind low can moving kind Just in kind think the market, get the kind of better promotions, that we Mexico? -- what of it be level is Thanks. there. of and

Kyle Sauers

Sure. Thanks, Dan.

little those and might than that that the is our existing to a quarter. a but new standards players More market be, a with called harder that that we you way other value have what I And as value players about some model you others that another out size costs the which to and difference of are going think model, going sure I'm going to for. think be got you're the the that piece players for, obviously, share players be we're that's which some what players, really we've in that the The acquire of and to us those your to the apply any competition have given going things you produce, in bring. space to retention then the is hold, can we impacts aware. volatile in sports, it's

mentioned other the you piece a don't probably around of out that's have into. turn we've Mexico, that think markets, in could a into visibility fair for We been to how that then probably is, relative strong market I example. that's operating as been And newer couple a years

to. we market could not far So better as the well we'd or maybe expect a quite Mexico, like do as on variability

factor all So going and those in. this range of are inputs that into the different

Daniel Politzer

Got then you that in rational be marketing economical to about or think what have I do may off on benefit on it. sponsorships reduced And EBITDA extent that the that short years just and would ramp, the the your be in we're know mentioned peers color that stuff. of some -- have trying marketing things more Can like and from some medium that advertising years. few and some marketing? advertising the term or not coming they some the roll extent the might term and contract have as give the next mostly

Kyle Sauers

Yeah.

industry. it's good hot So obviously a topic a the question. in been It's

partnerships term We in or think often have large investments about. I make tended types talked of really to are long not those that

think none the which we've we're really big spend. part local localized in bringing I sponsorship individually do or and with in with deals even are the of we endorsers, aggregate a our more been teams, marketing and strategic of investors that

are $XX of commitments next kind for say Our areas for those next million. XXXX sub shouldn't in I for year, year,

So it's huge spend. of piece not a our

of way. in wouldn't And I we roll something that about a a think way so, think as But to also lot off that's dramatic it have it in the about I'd be work other are we to going do seeing results and dollars marketing is in areas, can back because in where we pulling marketing places spend put of good our have doubling nimble variable. we're down flexibility most

Daniel Politzer

Understood. Thanks all that for

Richard Schwartz

Thanks, Dan.

Operator

Jefferies. is Our next with question Katz from David

now is line open. Your

David Katz

get what you margin things time an are people level mean, aspirational this And have think I day. right for there to Hi. one the at is you're can and Thanks do of Europe I to years those of take you double you wanted a of Evening, but profitability, longer-term for for to XX%. know in you in just need the maybe business digits cusp achievable. I looking growing Like a on couple detail. get place look kinds gentlemen. over all out the revenues right and pivoting to view to the that

Richard Schwartz

Thanks for question. David. the Yes,

a drive have I about unreasonable. to think not and I think see sustainable long-term the opportunity business we is do you range consistent And talk this profitability. real

innings is, view we're profile. growth company's our our think this early I still very in industry the of

talked time. get to get this still as team overtime. costs leverage technology invest -- to corporate going doing about, our -- we our and we've in We're but infrastructure over we're over we're continued year, So that we leverage that will and those

industry, we at Our years the has over total time. to ramp that costs live market had for the the got it's really because but many been new significant significant. markets last been launches new market so the and couple That's many so in relative we've marketing launches of

impactful relative on -- to revenue So or that's spend to the marketing relative your revenue. net

less cost base. in So impactful launch market that total as each headwind becomes decreases

and cost we higher us to profile. think I to And the some state and more as you'll grow the margins that margin have gross markets decline revenue see continue about as talked markets scale some relative to should over margin lower in earlier as coming larger changes of and our mix for years new improvements. are we've due of also less mature our total. as And state, revenue of our So improve marketing percentage you gross a have launching

So has course. an but to rate, surprise tax no example, of high Pennsylvania very you,

I us EBITDA all we driving and things leverage of excitement So lot about stronger long give those term. over get the a margins the think will

David Katz

Okay, perfect. you. Thank

Richard Schwartz

Thanks, David.

Operator

from with Craig-Hallum. is Ryan question next Our Sigdahl

line Your is now open.

Unidentified Participant

Good Will questions. for afternoon, for guys. This is our taking Thanks Ryan. on

you bit parlay you XX% touch it in I a quarter? First wanted on, during mix being year-over-year. and how if about up any insight trended I had was play to wondering mix the into talked

Richard Schwartz

trending don't haven't front but I that. difference you disclosed look. it to I'd huge if have in actually we get for that Yeah, one. know number don't typically back have We of a to on was up, It's us NFL. generally that me. can I in

Unidentified Participant

fine. And me. one more Perfectly from

With in the the of iGaming Curious new to Pennsylvania, your been what to guys do bidding especially market, bit there? them has up going you new talk are there operators. potential for opening to about leading a competitors defend in share

Richard Schwartz

we business of competition these on Yeah, a our leading we our Since nice existing maintaining invested XX our coming I'll ago really markets. fair in capital done share share new competition, years this we've job started think based well faced one. and over consistent above take that And markets, in I markets.

into players that be retain a had constant early we a experience great example, large is Pennsylvania despite for for the in entrants share, we've great to shares brand [indiscernible] a slots the and great the able we develop to been marketplace. years coming market example online new there a for think I have leading So where able market and

to of I license competitive there a do is will think the casino, there Online unlimited I standpoint. continue intensity is from there. be So, that agree Pennsylvania

area. a alluded successful really we what we how relatively and and So want been that, something We by what stay I focused have with That's user working how and players innovating execute very can’t is, have just and there great do we that very and now is on tax innovate rate that ahead actually we as sure what us can that we're make to, better lot can in we're experiences that high stay competitors well constantly to ideas going a we to well think help that control. delivering of developing create are we does a the years to day the over so, we we on but we've experience. in Kyle control control us

Unidentified Participant

Thanks guys. Great.

Richard Schwartz

Will. Thanks,

Operator

is with JMP. Our from question next Jordan Bender

now open. is line Your

Jordan Bender

taking already so existing online that talk we to footprint your Great. remind [indiscernible] all states primarily were sports state. Thanks are my iGaming if the iGaming legalization get the coming betting, in for states can With of into you around an payback period the these introduced established question. have us states kind with up, just

Richard Schwartz

Thanks. Jordan. Yeah,

access to is it's landscape the the is states You're talk if parts On state, around where the with -- and or and or opportunity. it's there active. going all on if right, maybe market Certainly we're rate -- it partner already the partner tax competitive we're depend right? a most around for an even in open

market. already advantage are opened database that a there think people being players, of a is that aware we've I We've to in huge a of. the got brand got

big So those advantages. are

it that was quarters most for And launched if we you market. with US of US West both casino, that just Virginia those entire look in the after recent participated and and Michigan were the for at profitable four two states recent states,

launch. Michigan necessarily did know Virginia. I West were -- Indiana, in advantages to I or to want it and that don't or that I'd [indiscernible] one think a do York, But like we've than got lot commit we wherever if is Illinois to starting more So New Iowa we

that of some be are history played how it's on the we'd And those think out. opportunity. pretty excited I So about

in and remember we I most we sports, casino in the casino thing typically three markets one both to share think to times carry in do sports. is, than have that five

So, we times get if in in sports, single-to-mid and double-digit that could got in New for Indiana darn of low that's those we've got digit if single us. you've share -- share York in any or three Illinois, we've states, if pretty got meaningful

So to by iCasino we're talking industry about excited legislation the more. the obviously a movement be and very about the lot

Jordan Bender

And my follow-up. Great. then

of not the at MAU end growth those you able users I'll sure Canada? you'll what Are quarter-over-quarter in versus this, number. give Looking from to US out kind but it the anyways. the I'm if parse contribute try

Richard Schwartz

Yeah.

short it's It countries is much just our think MAU you stop of I then for us we'll a to and try. because the in is QX think number. growth that the America MUAs certainly Latin all but numbers American I our North those good it's Ontario raised -- And the everyone, is meaningful in and than doesn't probably markets. to disclosed we It important are this, that, incremental include for one. in lower remind the Canada. our higher although where are only US and or MAU North American Obviously,

Jordan Bender

Great, thank you.

Richard Schwartz

Jordan. Thanks,

Operator

Engel ROTH. Edward Our next from question with is

is open. line now Your

Edward Engel

looks of sequential the kind really for is increasing? despite 'XXs the It XQ quarter. And there mid quarter pretty market of big fourth you a and OSB year kind being taking driving like on for first-quarter kind maybe margin is my in the there a question. gross Q-on-Q uptick is launches? excluding side, that What's guess, of Hi, the when for new a of kind nice thank some sustainable that rate Q-on-Q next I that's

Richard Schwartz

Yeah. Thanks, Ed.

last we quarter to margins call since our we've a bit product lot a on impact is one mix, gross and one can vary there's about we product talked to and we casino. things can impact that margins pointed our The quarter expecting mix and But higher that can between margins from also got think out, OSB I business fourth big quarter. from next. a were that that during The different within can have market different the you casino of geographic So it. the mix of quite

in us variable we the an XXX can improvement that are prepared into as what fixed the we get to full for full-year out and XXXX were in those of Margins cost with some had QX structure, costs but revenue few And XX.X%. our XXXX. over have then XXXX XXXX total points full-year margin so do in have we basis most costs -- a mentioned extrapolate impact expect remarks not the year would in and I is, well.

the think as or new of to we've maybe higher launches and that. this range, early pointed couple little market I'd than a out, got year. Obviously, variability. there's be late year a in XX% year last -- about you more also going some So early in the

probably I goes for year will gave So gross while build I as think margins, margins, gross what should the target XXXX on. full-year it I you think our be

some front year cost stronger economies year and on the in that So the throughout scale we've the of of benefits pricing a of in back that the half lower the of structure half and got little back

Edward Engel

is more And states helpful. is where I'm get a guess is versus And kind year, is, Really scenario go? $XXX How the entering marketing Thanks. There full or expense way maybe guess OSB year, percent I guess. then but break trying launching marketing on to I this what of that the a your to is what there expense? I million year next that low fixed year, percent out. a iGaming, marketing of after. what in we're discretionary new no external and not maybe costs, could year for

Kyle Sauers

Yes.

So a very percentage small is fixed.

sure when Just to to say that. understand, fixed or multi-year -- make you're with and endorses to commitments I you referring like sponsorships things

Edward Engel

head Even marketing Yeah. your count within department

Kyle Sauers

Got you.

Yeah. Okay.

team So think costs, as marketing pretty we've great a at that fixed RSI. about a here we certainly got

-- XX% probably even the now much. -- costs, long-term and something I'm in it's XX% of now not is it's that yes, that to it's our probably range, to right sorry, total number. commitments XX% team it's the So makeup XX% --

in spend away. where So and nimble or because getting to about we've spend just think that to flexibility want we're of got more be to returns back a lot we be able good

Edward Engel

way low is no is there year where marketing launches think new can cost a of then I and said, to that during guess state there That go about how the kind

Kyle Sauers

percentage if that haven't in absolute saying go don't guidance respect. an long-term out on that revenue think relative I'd now. number put or a want just to since yet, [Multiple years from three You're Speakers] we I to offered we

a that's depend mature, how and the revenue or for depend to of sports spend go we on So to going markets opportunity. on competitive I think there's see down obviously, of much environment, some to with a it's more invest, to lot percentage whether there's going as the as because of we legislation room casino want

and flexible so. think but think I with So we invest on achieved lot how modest investments a we've that in we've proven while been we our doing I remain will marketing,

Edward Engel

I color. Great. appreciate the

Richard Schwartz

Ed. Thanks,

Operator

There are no questions. more

remarks. closing team So management to I'll pass back over for the call

Richard Schwartz

today. we share Thank We you joining to our again us updating a you first in forward months. of for our couple progress look results when quarter on

Operator

the conference lines. you disconnect you concludes call. now That for may participation, your your Thank

Rush Street Interactive (RSI) 1 Mar 232022 Q4 Earnings call transcript