Rush Street Interactive Soars on Record Earnings Call

Rush Street Interactive, Inc. ((RSI)) has held its Q1 earnings call. Read on for the main highlights of the call.

Rush Street Interactive’s latest earnings call struck an upbeat tone, with management leaning into record revenue, surging profitability, and rapid user growth. Executives acknowledged regulatory and launch-related headwinds, but framed them as acceptable costs of capturing long-term market share, leaving investors with a distinctly optimistic outlook on the company’s trajectory.

Record Revenue Growth

Rush Street Interactive posted first-quarter revenue of $370.4 million, up 41% year over year and marking its fastest growth rate in more than four years. Management highlighted that this performance set a new company record, underscoring the strength of both its online casino and sports betting operations across key geographies.

Record Adjusted EBITDA and Margin Expansion

Adjusted EBITDA surged 81% year over year to $60.2 million, driving an adjusted EBITDA margin above 16% and showcasing meaningful operating leverage. Executives emphasized that this profitability jump demonstrates the scalability of the platform as revenue grows faster than underlying fixed and semi-fixed costs.

Improved Gross Margin and Marketing Efficiency

Gross margin improved to 35.7%, an 80-basis-point increase versus last year, reflecting better product mix and disciplined promotional spending. Marketing expense rose 19% to $46.2 million, yet declined to 12.5% of revenue from 14.8%, signaling more efficient customer acquisition and healthier unit economics.

Accelerating User Growth and Record New Depositors

Monthly active users continued to climb sharply, with North America MAUs up 46% to 296,000 and Latin America MAUs up 54% to 543,000, including a 62% jump in North American online casino users. The company also logged a third straight quarter of record first-time depositors, reinforcing the depth of its growth pipeline.

Strong Product and Market Execution

Online casino revenue grew 39% and online sports betting revenue climbed 47% in the quarter, pointing to broad-based product momentum. Management cited improving market share in North American iCasino, estimating about 90 basis points of sequential share gains, alongside continued outperformance in Latin America.

Material Guidance Raise

The company significantly lifted its full-year 2026 outlook, now projecting revenue of $1.49 billion to $1.54 billion, implying 31% to 36% growth and a midpoint $115 million higher than prior guidance. Adjusted EBITDA guidance was raised to $230 million to $250 million, with the midpoint up $20 million and signaling expected growth of roughly 56%.

Strong Balance Sheet

Rush Street closed the quarter with $331 million in cash and no debt, providing ample flexibility to fund launches and strategic investments without balance-sheet strain. Management positioned this fortress-like liquidity profile as a competitive advantage in a capital-intensive and highly regulated industry.

Latin America Momentum in Colombia and Mexico

Latin America revenue jumped 134% year over year, powered by rapid growth in both Colombia and Mexico and supported by improving promotional dynamics. Colombia delivered its fastest MAU growth in four quarters, while Mexico has posted revenue growth above 100% in each of the last four quarters and is emerging as a meaningful profit driver.

North America ARPMAU Decline Amid Influx of New Players

North America ARPMAU fell 14% year over year to $317, a metric that might initially concern some investors focused on near-term monetization. Management attributed the decline mainly to a wave of new players and associated introductory bonuses, arguing this dilution is a natural byproduct of aggressive customer acquisition.

Colombia Tax and Regulatory Uncertainty

The company flagged ongoing regulatory and tax uncertainty in Colombia, where an earlier 19% VAT on gross gaming revenue was ruled unconstitutional and replaced with a new 16% temporary tax. This evolving framework is under court review and could create short-term margin volatility and complexity around future tax treatment and potential refunds.

Alberta Launch Costs and Profitability Impact

Rush Street is preparing for an Alberta iGaming launch in mid-July, which is included in its upgraded guidance and expected to contribute modest revenue later in the year. However, management noted that upfront marketing and brand spend will weigh on profitability and that the EBITDA guide would have been roughly $30 million higher absent these Alberta investments.

Planned Increases in Marketing and G&A

Despite improved marketing efficiency, the company plans modest increases in both marketing and G&A in 2026 to support Alberta and other growth initiatives. Executives signaled that while margins should still expand, these investments will absorb some of the potential upside in the near term as the company prioritizes scale.

Share Repurchase Program Inactivity

Rush Street did not execute any buybacks under its $50 million share repurchase authorization during the quarter, opting instead to conserve cash. This leaves the company with flexibility to deploy capital as opportunities arise, but also means it did not take advantage of potential share-price weakness to enhance per-share metrics.

Political and Election Risk in Colombia

Management also pointed to upcoming elections in Colombia as another source of uncertainty for its Latin American business. A potential change in administration could alter the regulatory and tax environment, adding another layer of risk to a region that currently delivers some of the company’s fastest growth.

Upgraded Guidance and Long-Term Outlook

Looking ahead, Rush Street’s raised 2026 guidance reflects confidence in sustained revenue growth, rising profitability, and continued share gains in both North America and Latin America. The company expects meaningful operating leverage, particularly in marketing, and reiterated its ambition to reach low- to mid-20% adjusted EBITDA margins over the longer term.

Rush Street Interactive’s earnings call painted a picture of a company balancing aggressive expansion with improving profitability, underpinned by a strong balance sheet and record user metrics. While investors must weigh regulatory risks and near-term investment drag, the overall message was one of robust momentum and management conviction in the firm’s multi-year growth story.