Rush Street Interactive Signals Confident Growth After Record Year

Rush Street Interactive, Inc. ((RSI)) has held its Q4 earnings call. Read on for the main highlights of the call.

Rush Street Interactive’s latest earnings call struck an upbeat tone as management highlighted record revenue, surging profitability and strong cash generation despite headwinds in Colombia and some pressure on player economics. Executives framed regulatory and tax risks as manageable and stressed confidence in the company’s ability to sustain double‑digit growth into 2026.

Record Annual Financial Performance

Rush Street Interactive reported full‑year 2025 revenue of $1.13 billion, up 23% year over year and above the high end of its already raised guidance range. Adjusted EBITDA jumped 66% to $153.7 million, while net income surged to $74 million from just $7.2 million in 2024, underscoring the company’s march from growth-at-any-cost to profitable scale.

Strong Fourth Quarter and Revenue Momentum

Fourth quarter 2025 revenue reached $324.9 million, a 28% increase from a year earlier and the company’s 11th straight quarter of sequential growth. Q4 adjusted EBITDA climbed 44% to $44.1 million, setting a new quarterly high and signaling that profitability is accelerating alongside top-line momentum rather than lagging it.

Robust User Growth and Engagement

User metrics showed broad-based strength, with North America monthly active users rising 37% to more than 278,000 in Q4. Latin America MAUs expanded even faster, jumping 47% to over 493,000, while North American online casino MAUs alone grew 51%, pointing to deepening engagement in the higher-value casino vertical.

Improving Operating Leverage and Margins

The company delivered a full‑year gross margin of 34.6%, including 34.4% in Q4, as it scaled revenue faster than costs. Marketing fell to roughly 14% of revenue, a nearly 290 basis point improvement, while G&A expenses declined to 7.1% of revenue from 8.1%, highlighting better operating leverage even as the business expands.

Market Share Gains in Colombia Despite Tax Headwinds

Colombia remained a growth engine despite a temporary VAT on deposits that pressured economics throughout 2025. Rush Street grew Colombian GGR by 66% and increased MAUs by 34%, strategically using bonusing to absorb much of the tax burden in order to protect customer engagement and defend its market share.

Solid Balance Sheet and Cash Generation

The company ended the year with $336 million of cash on hand, providing ample flexibility for investment and shareholder returns. It generated $142 million of cash during 2025 net of stock repurchases and still has $42 million remaining under its $50 million share buyback, underscoring the strength of its cash flow profile.

Product and Market Expansion Initiatives

Management detailed plans to step up investment in differentiated online casino content to deepen customer engagement and loyalty. It also highlighted an anticipated Alberta launch as early as late Q2 or early Q3 2026 and continued poker expansion, now live in four states with a fifth planned, as key drivers of retention and cross-sell.

Colombia VAT and 2025 Profitability Impact

The temporary 2025 VAT on deposits in Colombia forced Rush Street to deploy roughly $75 million of incremental bonusing, directly reducing reported revenue. Management estimated the EBITDA impact at $25 million to $30 million, but emphasized that the strategy protected long‑term customer value and market positioning in a priority region.

Compression in Player Value Metrics

Average revenue per monthly active user came under pressure as the user base expanded rapidly and Colombia bonusing increased. North America ARPMAU declined 5% year over year in Q4 due to dilution from a wave of new customers, while Latin America ARPMAU fell 21%, largely reflecting the heavy incentives deployed in Colombia during the tax shock.

Colombia 2026 Tax Uncertainty and Risk Assumptions

For 2026, an emergency decree introduced a 19% VAT on revenue, which the company is treating as in force even though the Constitutional Court has suspended it pending review. Management expects at least January payments to stand and stressed that, while the net impact will be below 19% after variable costs, it could still materially weigh on regional profitability.

Prediction Markets and Competitive Landscape

Executives flagged prediction markets as an emerging competitive and regulatory theme that could shape the broader online wagering space. With legal interpretations still evolving and recent court actions adding ambiguity, Rush Street is monitoring developments but is not making prediction markets a strategic priority until the risk-reward and regulatory framework become clearer.

Planned Step-Up in Marketing and G&A Spend

The company plans to increase marketing investment meaningfully in 2026, although still at a slower pace than revenue growth, to support new products and markets. G&A is expected to grow more in line with revenue as Rush Street ramps spending on content, lobbying and personnel, which could temper near-term margin expansion if returns arrive more slowly than anticipated.

Guidance and Forward-Looking Outlook

Looking ahead to 2026, Rush Street guided revenue to $1.375 billion to $1.425 billion, implying 21% to 26% growth, and adjusted EBITDA to $210 million to $230 million, up 37% to 50% from 2025. The outlook assumes the 19% Colombia revenue tax is in place all year, excludes any upside from an Alberta launch and calls for modest gross margin improvement with profitability building as the year progresses.

Rush Street Interactive’s call painted the picture of a company balancing aggressive growth with disciplined profitability as it scales across the Americas. While Colombia’s shifting tax regime and evolving competitive dynamics add risk, record results, strong cash generation and confident 2026 targets suggest the operator is well positioned for investors seeking exposure to online gaming growth with improving earnings power.