Increase of 61% in Q1 Latin American Monthly Active Users at Rush Street Interactive, despite the influence of Colombia's taxes on the numbers.
Here's a refreshed take on the Q1 earnings report from Rush Street Interactive:
On the Money Trail: Rush Street Interactive's Q1 Results Unveil Booming Business
Wednesday saw the unveiling of Rush Street Interactive's Q1 numbers, revealing a 21% YoY revenue surge to a staggering $262.4 million. Columbia's 19% VAT, introduced in Feb, may soon be history if the Colombian courts declare it unconstitutional.
Quarterly active users (MAUs) hit a record-breaking 354,000, with Colombia maintaining a strong presence despite the VAT, thanks to the company's strategic bonusing strategy, as explained by CEO Richard Schwartz.
Financial metrics, however, fell short of expectations in Colombia – a rough patch Schwartz attributes to the temporary VAT tax. "In March and April, our net revenue growth took a significant hit," he admitted. Yet, the company managed to retain its market share and maintain near-peak GGR levels in local currency, up by a whopping 55%.
The Colombian VAT Tax: Temporary or Here to Stay?
The government implemented the VAT tax in Feb, pinning it on temporary removal of the online gambling operators' exemption to raise funds for addressing civil unrest in the Catatumbo region. Despite the tax being scheduled to end by year's end, industry uncertainty remains over its permanence. Lawyer Juan Camilo Carrasco, a partner at Bogota's Asensi Advogados, hinted at the possible permanence of the tax when he stated, "We know that regarding taxes, nothing is more permanent than something that comes in temporarily."
The court review is underway, with a final ruling expected by late May or June. Schwartz remains optimistic the tax could be reversed, emphasizing, "Given the impressive growth volumes in Colombia, the removal of the VAT tax would mean a substantial boost to both revenue and EBITDA."
Mexico and Peru: Rush Street Interactive's Latin American Adventure Continues
Colombia aside, Rush Street Interactive is bullish about its endeavors in other Latin American markets like Mexico and Peru. Mexico's Q1 growth tallied close to 50%, with CEO Richard Schwartz expressing high excitement about the market. Peru, on the other hand, is still being nurtured, with Rush Street Interactive continuing to optimize the user experience and localize the market.
Escape Artists: Expansion Opportunities in Latin America
Rush Street Interactive's Q1 presentation hinted at potential expansion markets in Chile, Argentina, and Ecuador, along with the newly regulated Brazil. Schwartz shared that the company is keeping an eye on other markets in Latin America, but further details were withheld.
By 2028, Rush Street Interactive could have a mouth-watering total addressable market of $15.9 billion in Latin America. Schwartz added, "Once you've got a great brand, a great platform, a great team, great marketing, and local knowledge, it's a lot easier for us to be successful in future markets."
The EBITDA Boom: Rush Street Interactive's Q1 Highlight
Apart from revenue growth, Rush Street Interactive also announced a 95% increase in adjusted EBITDA to $33.2 million in Q1, despite a slight 3% uptick in adjusted sales and marketing expenses to $38.8 million. MAUs in the US and Canada inched up 17% to 203,000, with average revenue per MAU in North America significantly higher than LatAm at $368 compared to $36.
Schwartz remains confident about Rush Street Interactive's FY2025 outlook, expecting revenue to range between $1.01 billion and $1.08 billion, and adjusted EBITDA to reach $115-135 million. "Our commitment to innovation, enhancing the player experience, and efficient acquisition and retention of high-value players are driving these impressive results," he concluded.
- The Q1 earnings report from Rush Street Interactive, released on Wednesday, cited a 21% year-over-year revenue surge to $262.4 million.
- Despite the introduction of a 19% VAT in February in Colombia, Rush Street Interactive's quarterly active users (MAUs) hit a record-breaking 354,000 thanks to the company's strategic bonusing strategy.
- The Colombian VAT tax, implemented by the government to raise funds for addressing civil unrest in the Catatumbo region, could potentially be reversed, as Rush Street Interactive's CEO, Richard Schwartz, emphasized that its removal would mean a substantial boost to both revenue and EBITDA.
- Rush Street Interactive is bullish about its endeavors in other Latin American markets like Mexico and Peru, with Mexico's Q1 growth tallied close to 50%.
- By 2028, Rush Street Interactive could have a total addressable market of $15.9 billion in Latin America, with the company keeping an eye on other potential expansion markets such as Chile, Argentina, Ecuador, and the newly regulated Brazil.
