RSI Earnings: BetRivers Hits Q2 Profit Milepost Too

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Add Rush Street Interactive (RSI) to the list of profitable online betting and gaming companies in Q2 as its BetRivers brand rounded that corner sooner than expected.

Its $1.2 million in adjusted EBITDA compares to a loss of $18.6 million in the second quarter of 2022.

“Through the first half of the year, the organization performed exceptionally well, achieving positive adjusted EBITDA ahead of schedule,” CEO Richard Schwartz said on the second-quarter earnings call Wednesday. “This performance capped our strong first half with an adjusted EBITDA improvement of over $54 million compared to the first half of the prior year.

“This increase in profitability was mainly driven by operational improvements, as well as 15% revenue growth, led by strong growth in Colombia and markets that we launched after 2020.”

The report pleased the market, with the BetRivers owner up 20.1% to $4.46 at Thursday‘s close. Volume hit 2.4 million, nearly 5 times its average volume.

BetRivers expects H2 profit

Schwartz said he was proud of the adjusted EBITDA improvement seen in the first half. The company reported a loss of $7.4 million for the half, a significant improvement from the loss of $62 million reported in the first half of 2022.

Two-thirds of that improvement came from revenue growth. The other third is attributed to more efficient marketing spend, Schwartz added.

“These results set us up well for the second half of the year, where we continue to expect to be adjusted EBITDA positive,” Schwartz said.

The third quarter could be adjusted EBITDA positive as well if revenue is about even with the second quarter, he added.

Revenue guidance upgraded

RSI now forecasts its full-year revenue to fall between $650 million and $690 million. That is an increase of $5 million at the midpoint.

Hitting $670 million in annual revenue would be a 13% increase over 2022.

Adding sports betting features a ‘priority’

BetRivers continues to add features to encourage more parlay and prop bets, Schwartz said. One example from the second quarter was making it easier to find player props and prop bet types by aggregating them into lists.

That had “immediate” impact, he said, with baseball prop bets up more than 60% compared to last year.

Another change was making its NBA Squares product available for same game parlays. SGP handle from the NBA jumped more than 150% after that was implemented.

To improve NFL betting, RSI is rolling out a product called Prop Central that will highlight all player props in one place. Right now, players have to click on individual games to find available player props.

iGaming legalization coming?

RSI has always emphasized the online casino side of BetRivers above the sports betting side.

Schwartz updated those on the call of positive progress in Illinois, Indiana, Maryland, New York and Ohio.

“In most instances, in states where we see progress, the topic doesn’t simply recede,” Schwartz said. “Rather, it tends to evolve. Those are the types of discussions we continue to see where there was active legislation this past year.”

BetRivers focused on high-value players

BetRivers is “constantly refining and optimizing” its promotional strategies, Schwartz said. The focus is on high-value players who are expected to be profitable over the long term, he added.

That is seen through the improvement of average revenue per monthly active user, Schwartz explained. Users averaged $359 in monthly revenue during the second quarter, up from $325 last year.

RSI is also offering promotional credits as a lower percentage of gross revenue than its four largest competitors. That percentage stood at 25.1% for RSI compared to 34% for its competitors in the first quarter.

Casino vs. sports betting in detail

RSI broke out key data to show the comparison between casino and sports betting customers: