Rush Street Interactive Inc (RSI) 2021 Q1 法說會逐字稿

Thank you for standing by. Welcome to the RSI First Quarter 2021 Earnings Conference Call. (Operator Instructions) Please note that this conference call is being recorded today, May 13, 2021. I will now turn the call over to Lauren Seiler, Associate Vice President of Investor Relations and Development. Please go ahead, ma'am.

Thank you, operator, and good afternoon. By now, everyone should have access to our first quarter 2021 earnings release. It can be found under the heading Financials Quarterly Results in the Investors section of the RSI website at rushstreetinteactive.com.

Some of our comments will be forward-looking statements within the meaning of the federal securities laws. Forward-looking statements are not statements of historical facts and are usually identified by the use of words such as will, expect, should or other similar phrases and are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect.

We assume no responsibility for updating any forward-looking statements. Therefore, you should exercise caution in interpreting and relying on them. We refer you to the SEC filings for a more detailed discussion of the risks that could impact our future operating results and financial condition.

During the call, we will discuss our non-GAAP measures, which we believe can be useful in evaluating the company's operating performance. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. A reconciliation of these measures to the most directly comparable GAAP measure is available in our first quarter 2021 earnings release, which is available on the Investors section of the RSI website at www.rushstreetinteractive.com.

Also on the call today, we have Greg Carlin, Chief Executive Officer; Richard Schwartz, President; and Kyle Sauers, Chief Financial Officer.

We will first provide some opening remarks and then open the call to questions. With that, I'll turn the call over to Greg.

Thanks, Lauren, and good afternoon, everyone. Welcome to our First Quarter 2021 Earnings Call. We're off to a great start in 2021, posting revenue of $111.8 million during the first quarter, which represents an increase of 218% year-over-year. We're also pleased with our quarter-over-quarter growth, which is underpinned by stable online casino revenue.

This strong result includes sequential growth in both the markets that were live in Q4, along with a positive contribution from the combination of our recently launched markets of Michigan, Virginia and Iowa. We are now operating in a total of 11 jurisdictions, including the 4 largest U.S. online casino markets and 1 international market, Colombia, where we offer online casino and sports betting.

Adjusted EBITDA loss was $15.1 million for the quarter, and U.S. average revenue per monthly active user, ARPMAU, of $302 was up 21% year-over-year, and monthly active users were up 166%.

As we discussed on our last call, we increased marketing investment in Q1 with the continued focus on payback period, and we expect our increased marketing investments will drive meaningful revenue growth and long-term value.

On the legalization front, we continue to see strong interest at the state level to legalize online gaming. During the quarter, New York, Maryland and Arizona all passed bills legalizing sports betting. In Maryland and Arizona, there are multiple opportunities for securing market access, and we are working to be able to operate in both markets when they go live.

In New York, Rush Street Interactive has operated the most successful commercial retail sportsbook in the state, and we're excited about the upcoming process for New York to select the preferred operating partners for mobile sports betting.

We're also preparing to enter the market in Canada, which has made great progress legalizing sports betting and creating an open market framework for regulating online casino.

Neil and I were part of the team that developed and managed the Fallsview Casino in Niagara Falls, which is one of the most successful tourist attractions in the country. Given similarities and market characteristics and on the heels of a strong start in Michigan, where online casino was also available from day 1, we are very excited about entering a market that is leading with an online casino, which plays to our strengths.

While regulatory momentum in new states continues to begin with online sports betting, as expected, we continue to see strong momentum for online casino in several jurisdictions that are looking for additional revenue sources to fund expanded budgets.

Online casino generates more tax revenue than sports betting in states where both are legal, and we anticipate that many states that have legalized sports betting will consider legalizing online casino as well. Importantly, we have the infrastructure in place to quickly capitalize on and capture the market when able.

Turning now to our guidance. As we indicated in our earnings press release, we're very encouraged by our Q1 results and our strong start to Q2. And accordingly, we're raising our 2021 revenue guidance figure to be between $440 million and $480 million, an increase of $20 million at the midpoint. The $460 million midpoint of range would represent an increase of 65% over our 2020 revenues of $278.5 million.

RSI ended the quarter with $363 million of cash, no debt and no outstanding warrants. The strength of our balance sheet and position in the marketplace set us up well for continued success. We look forward to executing in future quarters and years as we progress our goals of growing our existing markets, securing access in new markets, improving our technology stack and customer experience as well as continuing to evaluate potential acquisitions and strategic partnerships.

We believe we are well positioned to take advantage of the substantial market opportunity in front of us. I will now turn the call over to our President, Richard Schwartz, who will describe our operating metrics in more detail.

Thanks, Greg. As Greg noted, we continued to grow our player base nicely in the first quarter, aided by the opening of some new markets. We've talked a lot about our strong marketing payback metrics in the past and have highlighted New Jersey as a more mature market, with good data that supports our strong returns on invested capital.

As more markets mature, we are seeing cohort data from other markets telling the same story. In fact, when you include all of our states measured by net gaming revenue, we are seeing average payback period on marketing spend within 6 months. Additionally, we're delivering 3.5x payback returns from players after only 1 year and over 5.5x payback returns from players after 3 years. We feel these results validate the quality of our operations.

These results also validate our strategy to increase marketing spend to focus on driving more high-quality players to our platforms, the type of players who are loyal to us because they like our product and the way we treat them and not because we are over bonusing them for short-term market share.

We increased our marketing spend sequentially by 80% during the quarter, which was driven in large part by our launch in Michigan, and we expect to continue or increase this level of investment as the year goes on. The pace and timing of marketing increases will ultimately depend on when new markets go live, the sports calendar and where we can find and deliver strong economics from our marketing investments, something we've proven to do well.

As we continue to increase marketing spend, which in Q1 was only 36% of revenue, we can further extend our 6-month payback period to drive accelerated growth in player acquisition.

I'd like to turn next to some state-specific details. We are particularly happy with how our results have been trending in the newly launched state of Michigan. While it is still in the early innings, as more players are exposed to and enjoy the BetRivers experience, we are growing casino revenue significantly. In fact, our gross gaming revenue increased in March by over 60% on a per-day basis when compared to January. That strong momentum has continued, and our gross gaming revenue has been up over 20% on a per-day basis thus far in Q2 compared to Q1. This is meaningful growth considering the starting player databases and aggressive volume of marketing spend we are competing against.

These early results in Michigan not only serve to validate the industry views of a larger-than-expected and increasing total addressable market but also demonstrates the success of our operational strategy of early-market entry with a casino-led focus in attracting and retaining high-quality customers.

In West Virginia, which is a materially smaller market, we have seen good reception to our recently launched casino and are growing consistently since we launched in that market.

In Illinois, the state has returned to in-person registration for new online players. While this clearly has a negative impact on the total new player additions in the Illinois market, we think it will give us the opportunity to highlight the quality of our existing retention strategies while simultaneously improving our product.

I'd also like to touch on the Colombian market. This has been a nice contributor for us. And while it was a mid-single-digit percentage of our total revenue last year and in Q1, there is significant potential for future growth. Just as important, our platform and operations resonate well in the Colombian market and offers a great jumping-off point for other markets in Latin America.

The last market I'd like to comment on is Pennsylvania, which have continued to show positive overall market growth. While this market has seen an increase in competition over recent quarters, both from new entrants and more aggressive marketing spend from existing entrants, we are very proud of the fact that we've continued to grow revenues and maintained a 30% share of the online slot revenues again during the first quarter. This further demonstrates how we attract and retain loyal players with our focus on delivering a high-quality player experience.

On the technology front, as planned, I'm pleased to report that we recently pushed out a major iOS update to improve user experience in all of our sportsbook-only markets, including Illinois, Iowa, Colorado and Virginia. While it's still early, reception among our players has been very strong. For those who had the chance to use it, they would notice much-improved site navigation, shorter transition times and overall stronger usability and performance.

On last quarter's call, we discussed Google's favorable change in policy to allow gaming applications in the Google Play Store. One of the benefits of owning our own technology is that we were able to act quickly to meet all of Google's requirements and submit for approval our BetRivers Android apps. We are now excited to have BetRivers available for Android users in the App Store (sic) [Google Play Store] for all states that are allowing it.

In fact, Google is just now allowing applications for Michigan and West Virginia. So we are working diligently to be live in those markets with the Android apps in the Google Play Store.

As an update to the iOS app in development for our combined casino and sportsbook markets, we continue to be on track for launch in the second half of this year. While the strength of our product has been demonstrated in markets like Pennsylvania and Michigan without an iOS app, we believe this will enhance the user experience while also improving our player acquisition and conversion rates.

Our commitment to user experience and customer service remains a key advantage for RSI, which we believe will continue to benefit us as we look to expand and constantly improve our proprietary platform and improve how we acquire and retain new players.

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

Thanks, Richard. Turning to our financial results. As Greg noted, we posted first quarter revenue of $111.8 million, representing an increase of 218% year-over-year. Adjusted EBITDA loss for the first quarter of 2021 was $15.1 million. Our adjusted EBITDA for the quarter removes the effects of share-based compensation, the change in fair value of earnout interest liability and the change in fair value of our outstanding warrants from the beginning of the quarter until the point at which the warrants were redeemed or expired.

After adjusting for share-based comp, our cost of revenue was $78.8 million during the first quarter or 70.4% of revenue, up from $22.4 million a year ago. Advertising and promotions expense was $40.5 million during the first quarter of 2021 compared to $8.5 million in the prior year quarter. G&A was $7.6 million for the first quarter of 2021 compared to $3.3 million a year ago.

It's worth noting that the adjustments I mentioned regarding the change in earnout liability and change in warrant liability will not continue after this first quarter as we no longer have any outstanding warrants or earnout obligation. Also, our share-based compensation will reduce significantly starting next quarter and is expected to be approximately $3.5 million for each of the next 3 quarters.

We highlighted in our press release the successful redemption of our public warrants. On February 22, we announced the redemption, and on March 24, all outstanding warrants were canceled. A total of 11.4 million warrants were exercised or about 99.5% of the total, generating cash proceeds of $131.6 million for RSI. In addition, during March, all 6.675 million private placement and working capital warrants were converted on a cashless basis into approximately 2.6 million Class A shares, further simplifying our capital structure as we have no warrants outstanding as of the end of the quarter.

Following the completion of the warrant redemption, RSI ended the quarter with $363 million in unrestricted cash on the balance sheet with no debt. We believe this puts us in a strong position to execute on our strategy, launch quickly in new markets when available and continue to increase spending on marketing to attract new players.

As Greg mentioned, we're increasing our 2021 guidance to a full year revenue range of between $440 million and $480 million or $460 million at the midpoint. This increase reflects our confidence in the continued growth and the strong trends we've been seeing so far during 2021 and, at the midpoint, would be an increase of 65% over last year's revenue number. And as a reminder, our guidance does not include any revenue contribution from jurisdictions that are not live as of today.

Regarding marketing spend, we continue to expect to have significant increases in our marketing investments on a year-over-year basis in 2021 as we invest in attracting new players in both our new and our existing markets. And as such, we continue to expect a loss at the adjusted EBITDA line for the short term.

And with that, operator, we can open the line for questions.

(Operator Instructions) And your first question comes from the line of Ryan Sigdahl from Craig-Hallum Capital.

Congrats on the nice results. First, just on the integrated Android app launch in Pennsylvania. I know it's fairly recently, so a short period of time. But how has performance changed, if at all, pre app versus post app? And then secondly, can you walk through kind of the main features that you're getting good feedback there on?

Sure. This is Richard. Yes. So the app is really great feedback as we noted. In particular, the average time for a player to placing bet has decreased by around 20 seconds, which is directly correlated to the improved app speed and performance. We've also noted that -- we've seen about a 40% decrease in player contacts related to betting on their iOS app with us, which is another strong indicator of improved performance for the players.

Across the board, when a user who uses the product has many times reached out to us and said, "Hey, this thing is just incredibly fast now. It's much stronger than it was." We're very appreciative that we were able to make those changes. So all in all, I think it was a very positive response. We haven't been able to really quantify it beyond the points I just shared with you a minute ago.

And then on the iOS app, I know you said, again, kind of reiterated second half timing. Any way to get a little more granular there, I guess, early 2 half, late 2 half? And then kind of talk to the progress there, I guess, and what's taking kind of till second half to get that out.

Well, I think because we've seen the success that we're generating in strong numbers in Pennsylvania and Michigan without an iOS app, it's really given us the confidence not to rush it to market and to really take the time to make sure it's done well.

And so again, I think the only timing we're willing to share is really later half of this year. And I'll just make a note that we are taking some time to make sure that when we do launch it, it does achieve the quality that we expect it to.

Great. Then just on Illinois. So mobile registration ended there. Do you think that's a positive or a negative for Rush Street Interactive given you guys do have a better physical location than many of your competitors near Chicago?

Well, I'll take that one, Ryan. What I'd say is that we had strong customer acquisition during the governor's order suspending in-person registration. We've definitely seen a drop in sign-ups since the market reverted back to in-person.

However, to your point, I think we do have a great location to drive in-person sign-ups. And we continue to -- we expect to continue to be a top operator in the Illinois market.

And your next question comes from the line of Stephen Grambling from Goldman Sachs.

Before -- I guess, first on the guidance increase, can you just give us any updated thoughts around the mix of ARPMAU and [lumping up] average users and/or any seasonality to think through for the rest of the year?

Sure. So on the first point, the -- this is Kyle, by the way. We continue to believe that we'll attract kind of high-quality loyal players to the platform, as we've talked about in the past. That's a big part of why our average revenue per player is so strong.

Obviously, there's going to be variability in that ARPMAU over time: the timing of new market launches, at what point those are happening, the maturity of markets. Seasonality can impact that as well, particularly in sports, obviously; and then whether new markets are -- in the longer term, whether those are casino, sports or both. But I'd say, in general, I think you can expect that more of the growth is going to come from adding new players to the platform, both in existing and new markets than it is an expansion of the ARPMAU.

And then second question on seasonality. We're -- we have a bigger portion of our revenue mix that is casino, which has less seasonality. We do expect some seasonality on the casino side in Q2 and Q3 in the summer months but not nearly as impactful as it would be to sports, where, obviously, you have a much lower expectation for sports betting in Q2 and Q3 than you do in a Q4 when football season comes back around.

And I guess one bigger-picture question that we -- this is something that's [not as] related to the quarter but we've gotten from investors. How do you think about the B2B and B2B2C versus B2C margins long term?

Yes. So the B2B2C that you're referencing, I'm assuming is the Pennsylvania and Illinois markets where those market access deals are structured a little differently in PA and Illinois than our other markets. But just to be clear, the way we operate the business there, the way we attract players, offer the platform, provide the user experience is the same in all markets.

To your point, though, the gross margins in those 2 states can vary a bit from period to period and are a little bit lower than the B2C or all the other markets. And then the EBITDA margins are a bit lower and expect it to be a bit lower in the long term in those 2 markets.

So part of our expectation is that, as we continue to grow in new markets, since Pennsylvania and Illinois are bigger for us today, that will be a big opportunity for us to expand margins over time as that revenue mix shifts to newer states where we have great success, example, like we're seeing in Michigan.

Got it. And maybe one quick follow-up on that. I mean, is there -- does it leverage differently? I mean that market is -- the B2B2C markets are still growing fairly rapidly. So how does the flow-through look there versus these other markets?

Yes, there's more leverage. So there's more upfront investments in other states that we've entered since Illinois and PA. And therefore, there's also a bit, longer term, more leverage in those markets than there is in PA and Illinois. But PA and Illinois offer nice consistent margins for us that aren't going to have the same level of leverage over time on the EBITDA line.

And your next question comes from the line of Bernie McTernan from Needham & Company.

I was just wondering if you could just comment on the Michigan iGaming share, how it increased sequentially throughout the quarter according to the state data. Was there any particular drivers that led to that? Like, did you notice increased marketing spend or efficiencies throughout the quarter or if there's any other kind of underlying trends that were driving that?

Yes. This is Richard. I'll take that one. So really, it comes down to just exposing a higher percentage of players to the quality of our product and our service. And we find is that, as we've indicated with our strong payback percentages time lines, that when players experience us, they like the quality of the experience and they stay longer with us. So we always have this belief that if more players were exposed to the product early, they would have an understanding of the differentiation that our product offers compared to the other products in the market. And when it came to choosing a wallet of their choice and a brand of their choice, they will stay with us because they like the way we treat them.

And we're starting to see that in Michigan, where we are spending on marketing in a way that's significant, but I think we're certainly being outspent by some other companies in the marketplace. But we're seeing the results are still proving that players want to play with the brand they trust and the quality of the product experience that's unique and differentiated. And with that, they find a product to achieve those goals for them.

Got it. And was that new player growth in Michigan or just increasing wallet share within the existing players that you might have gotten in January?

So what we referenced on this call was, again, the growth that we're seeing month-over-month from January to March, and now we've seen even a 20% increase so far in April compared -- or Q2 compared to Q1. It's really coming down to new players coming in the door, having experience with us and been able to stay loyal to us and generate higher revenues. As you know, casino generates a much larger margin for us than -- and for the industry than sportsbook does.

So we're getting a great opportunity in Michigan by focusing on a market that leads by casino with strong unit economics to be able to acquire a high-quality player base there. And mostly, it's new players coming in throughout every month, but we're having a very good retention of existing players that are already there from the very beginning.

Got it. And then just lastly for me, as we're moving into a lighter sports calendar here, can you talk about just the level of competition you're anticipating on the iCasino side? Is this an opportunity for you guys to take share? Or do you expect it -- or do you expect marketing dollars and promotions to -- for maybe some of the daily fancy first providers to shift from online sports betting to iCasino? So is it an opportunity or a threat?

We think it's an opportunity because we're able to acquire players for 2 channels. We do cross-sell sportsbook players to casino in the same way that others do. But what's noteworthy is that we don't rely on that as a primary source of our casino traffic. So we do have opportunities to go directly to casino players with our brand and our product and acquire players directly who have no interest in sports betting.

So I think as the seasonality in sports diminishes, we will still have a primary source of traffic available for us and to grow our player base through casino.

And our next question comes from the line of Jed Kelly from Oppenheimer & Company.

It's actually Sam on for Jed. Two questions, if I could. Richard, you talked about the strong Michigan data about bringing in the new players, and our overall MAU has been solid. Could you maybe break out where you've been seeing the majority of new customers from? Like, are you seeing any benefit from OSB cross-sell? Or is it mainly like the middle-age target market you guys talked about before?

And then, Kyle, can you maybe give us some color on the 1Q gross margins? Is the sequential increase like a result of lesser B2B2C revenue mix, better return on promotions or a little of both?

I'll start first, and then, Kyle, you can take the second question as noted. Yes, in terms of Michigan, we're really pleased with Michigan because, I think, without a database to start with, we've been able to grow at a faster rate and achieve a higher market share than others have who'd started from a similar position without having a starting database.

And like as I said, our strategy really has been to focus pretty heavily on the casino category given that it has stronger unit economics. When a player plays both casino and sports, as we noted, they generate nearly 10% of revenues as someone who just has sports betting. And so it's in our interest to have players playing both, but we also notice that casino-only players are still 5x more valuable than a sports betting-only player is. So we have targeted casino players because of their economics, and the quality of our brand and our service really appeals to that audience.

And as you see in our investor deck, we've also seen overall, the company mix, about 53% of our casino players are female, which is an indication that we are attracting a diverse set of demographic and not really focused only on the male audience that typically plays sportsbook.

Yes, and I'll -- so I'll jump on that second one then. I appreciate you noticing the -- although modest improvement in the gross margin, some improvement there. And I think that goes back to what we've said. And I think you made this point, is that as our mix shifts towards other new jurisdictions outside of Pennsylvania and Illinois that, that will help us to expand both the gross margins and then, over time, EBITDA margins as well. So it's largely a mix benefit that we saw there sequentially into Q1.

Right. And one other point, Kyle, is that if you look at the tax rates in Pennsylvania in casino, they tend to be higher than other jurisdictions. So that impacts the gross margin as well.

And our next question comes from the line of David Katz from Jefferies.

This is Cassandra. Can I just ask about -- I'll just ask -- Cassandra asking on behalf of David Katz. In terms of product, you currently have multiple apps for different states. Can you talk about when would you potentially roll out one single app across multiple states or a single wallet product?

Sure. So that's something that we've had on our road map for a while, but we've actually decided to prioritize some other things because, at the end of the day, what's been very helpful for us was to be able to launch quickly in new markets. We have a track record of launching early in a wide range of markets over the last couple of years in part because we focus very narrowly on what that market's requirements are, and we do little things that help, I think, to create a unified experience early for a player when we're getting the approvals we need to launch.

As the markets evolve and mature and as Wire Act issues legally get more settled, we think it becomes easier to create a unified app that does include casino games as well as sportsbook without worrying about Wire Act considerations.

So our thought was, early on, let's focus on getting to market quickly. And over time, it will be something we are able to unify, especially now that we're getting more comfortable with the Wire Act situation. But it's something that we have planned in the future.

Got it. And if I may add one more. So other operators kind of talk about cost of acquisitions. There's been kind of a wide range from $100 to maybe $600 or more. Has there been any change in how you think about marketing spend per customers and where you might fall on that range?

So we focus very heavily on our return on invested capital and how long it takes us to get a return on that player acquisition, which I've noted on this call. It takes -- the average for all our cohorts since 2017 across our company in the U.S. has been 6 months.

So for us, we don't disclose specific CPAs as there is a significant variation between markets depending on a wide range of factors, such as which product verticals are allowed in the casino, sportsbook, both; the number of competitors in the market; the type and range of media assets that are available in the market.

So rather than sort of looking at things with a predefined CPA focus, we look at things from a standpoint of how can we get a return on investment, how can we bring in high-quality players that have long-term profitability goals for us. So I think that's something that we -- that's how we approach it.

(Operator Instructions) Your next question comes from the line of Mike Hickey from The Benchmark Company.

Congrats on a strong quarter. Curious on, I guess, the reopening of retail casinos for you guys. Looks like Caesars and MGM got cleared sort of full capacity for Vegas. And this morning, I saw 2 casinos in Philadelphia will be fully cleared of any restrictions. That's on June 11. So wondering what you think the impact would be for the reopening of retail, in particular, the slots business in Pennsylvania.

Sure. I think that the -- if you look at the market adoption in Michigan, it was very quick, quicker than in Pennsylvania. Pennsylvania was quicker than New Jersey. I think folks are just getting more comfortable with playing online, and it's just another activity. So we're seeing people go to the casinos as well as playing online. And so we really don't think it's going to have much of an impact on online revenues.

Curious on social functionality within the app. It seems like that's sort of an emerging narrative that's pretty exciting in terms of retention and engagement and monetization. I think you guys have been early in terms of developing that social piece to your apps. I'm just sort of curious where you are on social, your experience there and how important do you think it is for all those key metrics.

Yes. There are a lot of ways to approach community features and developing them and designing them. As you noted, we pioneered a lot of these features within the casino vertical and had success there.

We do think it has applicability in sports betting as long as it's executed in a way that provides value to the player. And to be able to achieve that, you have to really understand the insights of the player, of a gambler mindset and you have to be able to innovate and have your own technology -- proprietary technology to build things that are there that you want. And then ultimately, you got to deliver value. So I think those are things that are exciting for us, and we plan to -- at some point in the future, to bring up some additional features in this area. But again, I think it's something that's easier as a concept to embrace but actually much more difficult to execute on in a way that provides value to the players.

Great. One quick one. I think [we're maybe on] the last question, so I'll throw a couple more. Illinois, just a clarification, we -- if I have your -- if I'm in Chicago and I've already downloaded your app, can I switch to a competitor's app without going in-person registration within that respective casino? Or am I limited from doing that and so now I guess [I'd have to go through registration]?

So when the governor suspended in-person registration, I believe, on April -- what day was it, April 3 or 6? And so if you haven't signed up online for any other apps in the state, you'll have to go to those casinos to sign up.

Okay. Last question. New York, obviously, you're a leader in that market for sports betting, [retail casino]. Pretty interesting scenario here. I'm guessing you're sort of limited in terms of visibility. But how do you think -- I mean, what's your sort of edge, do you think, in getting access there? And do you think you'll be successful, I guess, [also, at the moment]?

Sure. Sure. Well, we're sort of watching and waiting for more information like everybody else. But I will say we've got a very strong track record of success in New York. We helped achieve the state's goals in both authorization of land-based casinos upstate in Schenectady and further seeing success in New York retail sports betting. So we're sort of watching and waiting for clarity on the process, but we're very excited to participate. And we've had many productive discussions with other interested parties.

And I'm showing no further questions at this time. I will now turn it back to Mr. Greg Carlin for the closing remarks.

Thank you, operator. I'm very proud of our team and the results we posted for the quarter. When you look at our low cash burn and our revenue relative to marketing spend, we compare very favorably to our competitive set.

We approach each market differently, and we're continually measuring and adjusting our spend in channel mix with the goal of maximizing our long-term return on marketing investment. One thing is for sure: when you look at the size of our addressable market, new information, like the strong start in Michigan and the opportunity in Canada, continue to validate that the market is larger than we thought just 6 months ago.

As we continue to grow our existing business and launch new markets, there are strong tailwinds for the foreseeable future, and we've never felt better about our long-term prospects for revenue and profit generation.

I want to thank everybody for participating on the call, and we'll talk to you next quarter. Thank you.