Rush Street Interactive Inc (RSI) 2025 Q4 法說會逐字稿

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Rush Street Interactive Fourth quarter and full year 2025 earnings conference call. All participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. Please note that this conference call is being recorded today, February 17, 2026. I will now turn the call over to Kyle Sauers, President and Chief Financial Officer. Thank you. You may go ahead.

Thank you, operator, and good afternoon. By now, everyone should have access to our 4th quarter in full year 2025 earnings release. It can be found under the heading Financials, Quarterly Results in the investors section of the RSI website at Rushstreetinteractive.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 fact 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 our 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. We will be discussing adjusted EBITDA, which we define as net income or loss before interest, income taxes, depreciation and amortization, share-based compensation, adjustments for certain one-time or non-recurring items, and other adjustments that are either non-cash or not related to our underlying business performance. A reconciliation of these non-GAAP measures to the most directly comparable GAAP measure is available in our 4th quarter and 4-year 2025 earnings release and our investor dump, which is available in the investor section of the RSI website at Rushstreetinteractive.com.

For purposes of today's call, unless noted otherwise, when discussing profitability, EBITDA, or other income statement measures other than revenue, we're referring to those items on a non-GAAP adjusted EBITA basis. With me on the call today, we have Richard Schwartz, Chief Executive Officer. We will first provide some opening remarks and then open the call to questions.

And with that, I'll turn the call over to Richard.

Thanks, Kyle. Good afternoon and welcome to our 4th quarter and full year 2025 earnings call. I want to begin by expressing my profound gratitude to the entire RSI team for delivering what can only be described as an extraordinary year. Their dedication, innovation, and relentless focus on excellence in delivering exceptional results have been the driving force behind our success. I couldn't be more proud of what we've accomplished together.

As I reflect on a performance in 2025. This has been a record year. Hitting new highs across virtually every metric. We continue to set new records in revenue, profitability, cash flow, and user counts, as well as other core KPIs. In 2025, without the benefit of any new markets, we achieved record revenue of $1.13 billion, representing 23% year over year growth and exceeding the high end of our raised guidance range. Even more impressive, we grew adjusted EBITDA by 66% year over year to a record of $153.7 million, also exceeding the high end of our raised guidance and demonstrating the powerful operating leverage inherent in our business model. In 2025 we also materially grew the bottom line with net income of $74 million compared to $7.2 million in 2024.

What makes these results particularly compelling is their consistency and breadth. This strong performance is evident across all geographies and product verticals. Our player engagement remains exceptionally strong, as evident by record-setting monthly active users in 2025. In North America, our mouths grew 37% year over year in the fourth quarter to over $278,000, including an impressive 51% in online casino markets. Not to be outdone in Latin America, we grew mouths 47% to over $493,000, demonstrating impressive growth and resilience amongst temporary tax headwinds.

When discussing the strength of our 2025 results, we're frequently asked about the secret that is driving our accelerating growth and profitability. What is the magic bullet that's driving our success? The answer is there isn't one single factor that is responsible for our success. Our exceptional performance is a product of our intense focus on our customers and the cumulative improvements we've made across every aspect of our business. Over the past several years we've systematically enhanced our capabilities throughout the entire customer journey.

We've advanced our customer acquisition strategies, diversifying our marketing channels, and optimizing each one to reach the right customers at the right time with the right message. We've reduced friction in our user experience, making it easier for players to discover, engage with, and enjoy our platform. We've invested heavily in enhancements to our loyalty programs and retention strategies, creating more personalized experiences that we believe keep players coming back. These improvements span every touch point with our players from the moment they first discover our brand to their ongoing relationship with us.

We've also enhanced our data analytics capabilities, allowing us to make more informed decisions about player preferences and behaviors. We've improved our customer service operations, ensuring that every interaction reinforces our commitment to player satisfaction. And we've continuously innovated our product offerings to create unique differentiated experiences that players won't find elsewhere. Throughout 2025, we also continue to invest in the operational excellence and technological innovation that differentiate our platform. These innovations aren't only about technology they're about understanding what our players want and delivering experiences that exceed their expectations.

Our focus on customer centricity drives everything we do from product development to customer service to marketing strategy. The result of these cross-functional improvements is a virtuous cycle. Stronger customer acquisition brings in higher quality players.Improved retention keeps.Players better engaged. And enhanced experiences drive increased player value. When you execute well across all these areas simultaneously. The cumulative impact is significant and yields sustainable growth.

Our casino first strategy continues to be a fundamental differentiator of our business. While we maintain a growing and profitable sports betting business, our focus on leading with online casino has positioned us uniquely in the market. This strategic focus has proven particularly valuable in 2025.

Our North American online casino markets continues to derive exceptional growth, as stated earlier, with Mao's increasing 51% in the fourth quarter, representing our second highest quarterly growth rate during the past 4.5 years, and impressively achieved on a much larger player base and without the benefit of new market launches. What's even more encouraging is that in each successive quarter of 2025 we saw the continued acceleration of year over year growth in monthly active users in our North American online casino markets.

Our casino first approach allows us to focus our resources and expertise where we believe that we can create the greatest value. Online casino players typically demonstrate higher lifetime values, better retention rates, and more consistent engagement patterns compared to sports-only customers. By prioritizing these markets and continuously improving our casino experience, we've been able to drive both growth and profitability simultaneously.

In fact, in 2026 in support of our casino first strategy. We plan to increase our investments in developing differentiated casino content and online casino legalization efforts. Another significant accomplishment of 2025 was our successful navigation of the challenging tax environment in Colombia, one of our core latam markets.

I'm proud to report that not only did we successfully manage through this period, but we're confident that we gained a market share from our competitors, setting ourselves up for continued success. Our approach in Colombia was measured and strategic. Rather than immediately passing VAT tax cost onto our players, we absorbed much of the tax impact through adjusted bonusing strategies, which inherently reduced revenue.

This allowed us to maintain player engagement and loyalty while still attracting a significant number of new customers. The results speak for themselves, that despite a temporary drop in net revenue last year, for the full year we achieved annual GR growth of 66%. And increased mouths by 34%.

Looking ahead, the temporary VAT tax that was in place during 2025 is now expired. There was a new emergency decree issued in late December 2025 along with associated tax decrees that were issued for 2026. This structure has a more traditional but lesser impact on our business as a tax on revenue rather than a tax on deposits which we offset in 2025 through a higher bonus.

However, this emergency tax decree was suspended less than a month after it was issued in late January 2026 by the Constitutional Court and will be under further review in the months ahead. This is a positive step towards recalibrating to the previous and what we view as the more appropriate tax structure in Colombia. Our experience in Colombia demonstrates our ability to navigate regulatory changes while maintaining our focus on long-term player relationships and market leadership.

Now I want to briefly address the topic of addiction markets, which has been highly topical in recent industry discussions. At our side we're constantly evaluating. The evolving industry landscape. Prediction markets today are primarily benefiting from sports event contracts, which is not an area of high priority for us. We will continue to monitor developments in the event contract space and in the meanwhile continue to focus on executing our proven casino-first strategy and delivering exceptional experiences in our current markets while capitalizing on significant growth opportunities ahead of us.

As we look to 2026 and beyond, we have tremendous confidence in our growth trajectory and strategic positioning. We're particularly excited about our upcoming launch in Alberta, where the regulatory environment is progressing toward a launch timeline that could occur in the coming quarters, sooner than we were anticipating during our last earnings call.

This represents a significant opportunity for us to leverage our success in other North American online casino markets, particularly given our strong performance in Ontario and our established and growing brand recognition across Canada. Beyond Alberta, we continue to evaluate additional expansion opportunities in both North America and Latin America. The success of our selective, disciplined approach to market entry has enabled us to achieve strong returns on our investments while building sustainable competitive positions. We will continue to prioritize markets where we can deploy our full suite of gaming offerings and create a meaningful value for both players and shareholders.

The 2026 calendar is also filled with marquee international sporting events such as the current Winter Olympics and the upcoming World Cup. We are well positioned to capitalize on these multinational events across both our sports betting and online casino products.

Overall, 2025 was a transformational year for RSI. We demonstrated the power of our business model, the effectiveness of our strategic approach, and the dedication and execution abilities of our team. We've built a strong foundation for expected continued growth while maintaining the operational discipline that has driven our success. We're excited about the opportunities ahead and confident in our ability to continue delivering strong results for our shareholders while providing industry-leading experiences for our players. We have a clear path forward, strong financial resources, and a team that is executing at the highest level. With that overviewed me turn the call over to Kyle to walk through our detailed financial results and provide guidance for 2026.

Thanks Richard. I'm excited to walk you through what was truly an outstanding fourth quarter and full year 2025 with record breaking performance. Fourth quarter revenue of $324.9 million up 28% year over year, set another record high and marks our 11th consecutive quarter of sequential revenue growth. Full year 2025 revenue of $1.13 billion grew 23% compared to 2024, exceeding the high end of our raised guidance range. This strong top-line performance was driven by exceptional user growth and engagement across our platform. Our gross margins during the fourth quarter were 34.4%, reflecting the continued shift we've made to higher margin markets.

For the full year, our gross margins were 34.6% in line with the prior year. On the expense side, we continue to drive operating leverage through our disciplined approach. Marketing expenses in the quarter were $45.4 million an increase of 5% year over year, and 14% of total revenue. For the full year, marketing expenses were $158.4 million, representing a 2% year over year increase and 14% of total revenue. Compared to the full year 2024, marketing spends as a percentage of revenue decreased by 290 basis points.

This demonstrates our team's ability to continue to optimize our acquisition channels and improve our player acquisition costs while simultaneously growing our player base and hitting new records for first-time depositors each of the last 3 quarters. G&A for the fourth quarter was $22.3 million, or 6.9% of revenue compared to 7.5% in the prior year period. For the full year, G&A was $81 million, or 7.1% of revenue compared to 8.1% in 2024. This reflects our continued investment in technology, personnel, and infrastructure to support our growth while maintaining operational leverage.

Fourth quarter adjusted EBITA of $44.1 million set a new quarterly record and increased 44% year over year. Full year adjusted EBITDA reached $153.7 million, an impressive 66% increase year over year. Above the high end of our raise estimates and reflects our disciplined approach to growth and operational efficiency.

The foundation of our financial success continues to be our exceptional user acquisition and retention performance. In the fourth quarter, North American MOs grew 37% year over year to 278,000 total users. What's particularly impressive is our performance in North American online casino markets, where MOs grew 51% year over year in Q4, which represents our second highest quarterly growth rate during the past 4.5 years and again achieved on a much larger base of players.

In Latin America, we delivered equally strong results with mild growth of 47% year over year in Q4, reaching 493,000 total users. This growth demonstrates the strength of our platform, operations, and brand recognition across the region, even as we have navigated the challenging tax environment in Colombia.

North American Amal declined 5% year over year, which reflects the healthy and expected dilution that comes along with our exceptional growth in user volumes. When you're growing your player base at the rates we've achieved, some art mal compression is not only expected but confirms that we're successfully attracting large volumes of new players to our platform who initially have lower art miles than established players. The key is that we're acquiring these players efficiently and retaining them effectively, which positions us for strong long-term value creation.

In Q4 Latin America, Arma was down 21% year over year due largely to the extra bonusing in Colombia. However, Q4 player values in Colombia were at their highest point of the last three quarters, validating the continued strength in our user experience. Art Muse should return to meaningful year over year growth in latam with the removal of our VAT bonus strategy as of the end of last year.

Breaking down our performance by geography and product, we saw strength across all segments. North American Online Casino continue to be our primary growth drivers. Benefiting from our strategic focus on these higher value markets, our sports betting business also contributed meaningfully to our results, growing consistently throughout the year.

In the fourth quarter, online casino revenues grew 30% and grew 28% for the full year. Online sports betting revenue grew 20% in the fourth quarter and grew 7% for the full year. Regionally, revenue in North America grew 29% in the fourth quarter and grew 25% for the full year. Revenue in Latin America grew 17% in the fourth quarter and grew 12% for the full year. Of note, all these growth rates include the burden of the extra Columbia bonus and it stopped at the end of 2025.

As Richard previously mentioned, the tax situation in Colombia remains dynamic. Let me provide more detail and discuss the implications for 2026 in our guidance. The temporary 19% VAT tax on deposits that impacted us throughout much of 2025, which was implemented through an emergency decree, expired at the end of the year as we expected. Under a new emergency decree, a new tax was implemented for 2026 with a 19% VAT on revenue. Compared to the tax on deposits that we navigated in 2025, this tax on revenue will have less of a punitive impact on our business from a profitability perspective.

However, the Constitutional Court of Colombia suspended the emergency decree and associated decreed taxes at the end of January. The result of this review should be concluded in the next few months, and we're optimistic that it will be resolved in our favor.

In any event, we expect the additional tax to be paid for the month of January before the suspension occurred, and given the dynamic nature of the situation, for the purposes of our guidance, we assume that this new 19% tax on revenue will be in place for the full year 2026.

This new tax environment combined with the market share gains we achieved in 2025 positions us well for strong growth in Colombia and across Latin America. Our balance sheet remains strong with $336 million cash on hand at the end of the year. That of stock repurchases, we generated $142 million of cash during 2025. Our cash generation capabilities have improved dramatically, and we expect to continue building our cash position throughout 2026.

During the fourth quarter we did not repurchase any shares under our previously announced $50 million share repurchase program, which has approximately $42 million remaining. As we look ahead to 2026, our guidance philosophy reflects both confidence in our business momentum and prudent assumptions about market dynamics. There are some key growth drivers that influence our 2026 outlook. First, we expect continued strong performance in our North American online casino markets, which have shown consistent acceleration throughout 2025.

Second, the incrementally improved tax environment in Colombia should allow us to capture more of the strong underlying growth in that market. And although not included in guidance, our anticipated launch in Alberta, as well as other potential new markets, provide additional upside. For 2026, we expect revenue in the range of $1.375 billion to $1.425 billion, representing growth of 21% to 26% year over year. We expect adjusted EBITA in the range of $210 million to $230 million, representing growth of 37 to 50% year over year.

When it comes to katy throughout the year, we would generally expect both revenue and EBITD to improve as the year progresses, similar to what we've seen in years past. Regarding other line items in our financials and where we'll see leverage, gross margins should improve modestly in 2026 compared to 2025. We continue to improve our cost structure, drive revenue growth faster in higher margin markets, but are absorbing the impact of some higher gaming taxes, including the 19% emergency decreed tax on revenue in Colombia.

We have continued to get more efficient with marketing spend, which gives the opportunity to keep increasing investment in this area, so we expect meaningful increases in marketing spend in 2026, but at a rate slower than our expected revenue growth, driving leverage across that line item.

Regarding G&A, we continue to see opportunities to improve the product, improve our player experience, and explore new opportunities. So, we expect G&A to grow more closely in line with our revenue growth. This guidance reflects our confidence in the underlying strength of our business while incorporating prudent assumptions about market maturation and competitive dynamics. We believe this positions us to continue delivering strong shareholder returns while investing appropriately in innovation and long-term growth opportunities.

And with that operator, please open the line for questions.

Of course. We will now begin the question-and-answer session. (Operator Instructions)

Dan Pulitzer, JPMorgan.

Hey, good afternoon, everyone. Thanks for taking my questions. I wanted to touch on Columbia. You gave a lot of helpful commentary in the remarks about how this could play out, in terms of the timing and the year, but is there any way to perhaps put some numbers around maybe what the impact was in 2025 in terms of revenue and even though with the tax on deposits versus maybe what you're, forecasting if it is in fact in place for the full year in 2026, the tax on revenue?

Yeah, Dan, let me, I'll TRY to help a little bit more color. So you'll recall in the 3rd quarter, Columbia had more challenging sports hold, and that cost us incrementally on the deposit bonusing and then, that, in turn reduces revenue in Q4 we didn't have that same issue with challenging sports hold, so you saw that play out, in our results as well in total for 2025. We had about $75 million of incremental bonusing that we did due to the VAT, tax on the players, so that's a direct reduction of revenue, it probably cost us in the range of $25 million to $30 million in EBITA on the year. I think, despite the disruption, pretty good news grew GGR 66%. Grew the user base by 34%, took some meaningful share in the market, and then this this that headwind, the deposit bonusing goes away in 2026, because we aren't making up for that bad on the players.

So you know this year earlier this means that within our guidance for 2025 we no longer have or for 2026 I should say we don't have that revenue headwind for the extra bonus in, and just to be clear we are assuming the burden of the 19% tax on revenue for the full year of 2026. The impact of that probably, is it's harder to give you a specific answer on that because, we aren't guiding to a specific revenue number for Columbia alone. We do at the very least expect to have to pay that tax for January, but it is, it's a 19% tax on revenue, that doesn't mean the exact impact is 19% because we do have a decent number of variable costs that are based on revenue after tax, so it is lower than 19% but hopefully that frames it a little bit for you.

No, that's helpful, thank you. And just in terms of Canada, obviously of the Alberta launch at some point, I don't know if there's any additional detail in terms of the expectation of when that might happen and then also along those lines in terms of framing that expectation, Ontario, could you just remind us maybe ballpark of what your approximate iGaming sports betting share is there?

Sure, why don't I take the first one down, on Alberta. Yeah, so the timing is looking like it could, it will be, end of Q2, early Q3, but we're hopeful and it looks like the regulators they're moving at a very determined pace and it looks like, Q2 opportunities is within the possibility towards the end of that quarter.

Yeah and then maybe just other pieces around Alberta and related to Ontario, our casino share in Ontario is kind of, mid to low single-digits sports is a little bit lower than that we're very excited about Alberta. I'll tell you, we don't have it in guidance either for revenue or for, incremental costs so that when that comes around and we have clarity on the date.

There'll be some marketing costs associated with that. We think we're set up really well to be successful there. The other thing I would just point out, and we've mentioned this before, but every North American online casino market that we've launched in, we've been profitable by the by the 4th quarter of operations, and we don't see a reason that that should be different with Alberta. So, we're very excited to have another iCasino market launching in the near future here.

Got it, thanks so much for all the detail.

Thank you for your questions.

Bernie McTernan, Needham & Company.

Great, thanks for taking the question. Maybe just to follow-up on that, on the first question from Dan, if I just add back $75 million to your revenue for latam and '25, I get to an RPU that's in the mid-40s, let's say, and so that, if we look at '22, '23 to '24, our poo is coming down slightly, and then I think we add back $75 million and then it spiked up. So was there anything that you were seeing from a cohort level or just like maturity of users that caused such an increase in our poop again if my math's right.

Yeah, and you're trying to kind of triangulate around the trends of our poo and the dip down, I think the thing that you probably need to work in there, Bernie, is what we're putting in our deck and obviously we're reporting in US dollars is there are currency fluctuations over these years, so you'd probably want to normalize for that.

Okay.

I would say I mean we're highly confident that the that without this deposit tax bonusing that we're going to have a nice rebound. In our art MAO in Colombia and therefore for our total latam, the other piece that I guess I would throw in just to think about how you do that analysis in, Mexico is becoming more significant part of the business in Latin America and for the company in total we're having a lot of great results down there and the player values are higher in Mexico than they are in Colombia. So that starts to impact what you'd see in those numbers and what you will see for the coming years here.

Understood. That's really helpful. Thanks, Kyle. And then for Richard, I just want to follow-up on one of the comments you made earlier in the investment in content and legalization for, that's going to go on in 2026. Me focusing on the content side, and given the context of the G&A guide to, be growing more closely to revenue, is that like bringing on more engineers or how should we think about, what's actually going to be coming to market with these investments?

Yeah, hey, Bernie, yeah, so, as you might know, I have a passion for the content side of the business. Started years ago, when I entered the industry for about 10 years working at a slot machine supplier, so I recognize the value of great content. And the ability for us to differentiate further by having great libraries of games that are unique and proprietary to ourselves, having said that, we obviously have included in guidance all the costs of, and the revenue upside we expect to see for new content that we add throughout the rest of this year. We have been able to sort of build our studio and our technology roadmap and we'll start to launch. Those games in the future, during this year and try to grow our position as sort of a casino leader in the industry. I think it comes down to quality or quantity and making sure that when you prepare some content that it's really at a very competitive and high-quality level where players will enjoy engaging with that content, not because you're incentivizing them only to play it, but because of the quality of experience they have playing those games.

Got it. On the legalization front, we are on legalization front, we are continuing to plan and put effort into, taking advantage of the opportunity that exists in the markets right now where you have states that are, having in some cases erosion of taxes or in other cases going to lose some taxes from fewer less federal aid for things like, Medicaid in the future after the election later this year. And really trying to mobilize and get additional states to open up in a way that would be very favorable for our company.

All right, Bernie, thank you so much for your questions.

Jordan Bender, Citizens.

Hey everyone, good afternoon. Thanks for the question. I want to start maybe on the tax increases and maybe more specifically in Illinois, I saw your minimum bet went from $1 up to $5. I guess question one is that was that more specific to the city tax that went in place or is there something in that market that changed that strategy and then I guess more broadly.

I mean, did that is the strategy the minimum bet do you think that's something that we can expect if we do see other states, whether it's this year or some point down the line, are you looking to implement that to kind of offset any of the future tax increases?

Yeah, so Jordan, the minimum bet was not necessarily in response to the Chicago tax, so at this point we're not passing through a transaction fee, like some of our competitors are. We've chosen to use a minimum bet strategy. Could we use that in other markets in response to, some sort of different tax structure? Absolutely. I think we want to make sure we're using. All the levers we have that that we think to make the most sense both for us financially as a company and so that we're treating players as fairly as we can under a construct, I mean certainly when you look at Illinois, the activity levels have not shown that that that tax is probably good for the consumers, so we'll see how that plays out in in other markets.

Great, and then just on my follow-up, the North American entrance comment was that related to Alberta specifically or is that more of a broader, I don't know if it's change of tone, but you're looking to markets you're not currently in now to basically launch a sports betting product.

So I'm actually not certain which comment you're referring to, but I, I think we can answer the question either way. It was, it's more about Alberta or other, potential North American online markets that might newly legalize, and not so much about, revisiting. I mean, we definitely continue to monitor and look at all the different markets, but I think we've been pretty clear that. Most of the sports book only markets that we've passed on, we've done for good reason and focusing on, iCasinos specifically in North America, has been a real winner for us.

Okay, perfect, thank you very much.

Thank you for your questions.

David Katz, Jefferies LLC.

Thank you. Hi, I appreciate you taking my question. There's, I know you addressed prediction markets in some of the prepared remarks, but we continue to hear about, the prospects of more traditional gaming products being produced with, prediction underlying math models. Is that something that you have looked at and explored. Because that seemingly might be more, relevant for the core of your business.

Yeah, hi, David. Thanks for, asking a question. I think I could have predicted perhaps the predictions questions from you given, I think you've hit us with one every quarter so far this year, but it's a great question and it's obviously a lot of discussion, in this topic. So yeah, so, first of all, we have been monitoring it very closely. We've repeatedly said and monitoring means that we don't do things at a surface level of this company, we, we're very thorough in our ways that we monitor, so, we have looked at every angle possible and I think, or certainly most of them, I think that we are a very nimble organization. If we need to react in some way at some point we are able to do so, but when it comes to your specific question, I think that, it would be more challenging to justify.

A prediction market when the underlying event is being played for stakes, right, when you're betting on the underlying event or the underlying event game is being played for stakes, I think it's harder to justify that as being a, the type of market that's regulated there. So having said that, I think obviously a lot of courts are going back and forth. You'll continue to see that. I saw the Ninth Circuit came out with a ruling, earlier this afternoon. And so we're going to kind of continue monitoring, stakeholders' views, including regulators, legislators, and anyone else, involved here to kind of make sure that we're on top of the opportunities, but I certainly think that there's a lot more to come in this area.

Okay, and perhaps you know an easier one, and I hope you haven't touched on this already, Kyle, in your remarks you mentioned that G&A grows in line with revenue. Did you or can you elaborate on, what's in there? Are there some upgrade tech upgrades, or what, why would that grow in line with revenue?

Yeah, so I mean it's notable it'll grow faster than it has, the last couple of years, and I think we've been known to be, a company that's prudent with our investments. Richard talked about a little bit, but we do have, we feel like we've got the real opportunity here to spend more on the, some differentiated casino content, that we put out there, also increasing lobbying efforts in. A moment in time here where we think there's a real opportunity to get some my casino legalization across the finish line in the next couple of years, obviously we're always investing in our people and, we have our pay increases in the, just in terms of modeling we've talked about this before, but our biggest incremental or sequential step up in G&A is from Q4 to Q1, so we just, we feel like this is a good time to be investing in those areas. And that's built into our guidance for '26.

Got it. Thanks very much. A nice quarter.

Thank you.

Thank you for your questions.

Ryan Sigdahl, Craig-Hallum.

Hey Richard, Kyle, another really nice strong quarter, and guidance. I want to start with the North American MAOs through 51% online casino. I mean, I'd asked the generic question just how that's possible. I think Richard, you gave some of that in the prepared remarks, but more specifically, are there specific acquisition channels that you're opening up or that you're leaning into, or really where is that acceleration coming from in a very competitive market?

Yeah, it's really broad-based Ryan. I think our team just keeps getting better and better you're right, it's a very, I don't remember what word you just used, but it's an impressive number. Our cost to acquire players, are the, they're the lowest they've been, since before we went public where we didn't necessarily have the funding to put the right money to work. So our teams are they're continuing to evaluate different channels different creative it is certainly helpful to have a product that people want to come back to over and over again because that that number is not just about first time depositors although.

Despite not launching any new markets, we now have our 3rd quarter in a row of record first time deposit numbers, so that fills the top of the funnel, but you've got to keep those people coming back and you've got to keep people, reactivating that that maybe have been away for a little while, so it's a combination of all kinds of things, but our teams are doing a fantastic job in bringing in new players, making sure they know. What the product is about and then putting a great product in front of them when they when they show up.

I'll just add that we have a go-ahead Richard. Oh sorry, Ryan, just one quick thing we have a, focus on offering the best user experience, but high-quality is great but also differentiated and again if you just differentiate something but you don't get the experience right, it doesn't matter if you're different if players don't really find what you've done differently to be all that compelling.

So, for us. Better and different has been a goal, and everyone in the organization is working towards achieving those high level goals and through that you then have all sorts of A B testing and all kinds of technical tools that we're using to ensure that we're sort of delivering the right type of customers, the right type of experience that matches their interests.

And just I'll pile on one more Ryan just because it'd be a shame if I didn't mention it, but I think another piece of the puzzle is customer service and the way we treat customers and making it easy and friendly for them to get through, the first time they show up, to easily getting a deposit on the platform, easily getting their money off the platform, and when they have any issues, that we're responsive and treat them in the right way. So, I think we focus a lot on that and do a really good job at it. Now I'll let you ask about Main.

All very helpful color. Yes, main would be the follow-up question here just legalizing eye gaming. Is that a strategic state for RSI and then your confidence level that you could get a skin agreement with one of the four tribe licenses there?

Yeah, hey Ryan, I think this is a main attractive market by virtue that, online casino, which is our strength, will be available there. As there's 4 tribal partners there, tribal tribes there that are, currently have the licenses and so obviously it's about trying to find the right fit and the right relationship and create the right proper value for the partnerships to work together well. Clearly, we are a great partner in other states for. Tribes and other lotteries, etc. We've proven ourselves to be very strong in smaller states' populations and be able to really generate a large share in those opportunities. And so, I think as someone who operates a top-rated casino and has a poker platform that I think does add a lot of value to acquisition in a small state, we are a very attractive, appealing partner there. We would, are considering the options there to hopefully have a chance to be in that market someday.

Thanks guys, good luck.

Thanks man.

Thank you for your questions.

Mike Hickey, Stone.

Hey Richard, Kyle, congrats guys. Great quarter, great year, great guy, and you're sort of a beacon of light here in a tough market. Just two questions.

Well, I think on the prediction market, so forgive us, Richard. I don't think it's your favorite topic, but obviously it's important here, I guess first it looks like there's some evidence now of some handle share loss to prediction markets. So just curious in your view, especially in concentrated markets like Delaware where you're 100% share.

If you're seeing anything there, the second piece would be the opportunity also hearing sort of its offering sort of incremental TAM or TAM expansion. So curious, if you're also obviously seeing some level of that and then, wondering, Richard, your ability if you see it over time. Still early days, but if you see a migration path from prediction market players to traditional products where they're looking to sort of get a better value, better parlay. Obviously, a better overall experience if you see an opportunity there and in particular if you see an opportunity on getting them onto your casino product.

Obviously the cross sell is very strong. This wouldn't be a pure cross sell but given that you're the only casino offering in Delaware and other states, and it seems like an opportunity for. You guys. Thank you.

All right Mike, I'll jump in and then Richard can follow on if he wants. There's a lot of questions in there, so hopefully I'll get them all. I think, the first is what we're seeing. I think the fact is it's hard to tell. It doesn't appear that it's hurting our OSB business and handle, but it is, it's definitely hard to measure, I think when it comes to Delaware, I mean if you just look at the last 4 months and I'll include January. We're up over 50%, year over year each of those months, in revenue, so again it's, I think it's hard to measure but that's those are pretty solid results.

And when you get to, TAM expansion, I think it does. This all of this activity brings a lot of awareness to consumers so there's certainly an element there that can draw more people in and more interest. I don't know Richard, you want to talk about the just the product and you know kind of how it relates to what's out there for prediction markets today.

Yeah, sure, I mean, so on the technology side, a lot of the technology elements of the CFTC approved platforms aren't as, tech technical advanced as what we perhaps have in our industry and so certainly a lot of the platforms that the player account management systems that exist in our industry could be repurposed and leveraged for prediction markets in terms of if you were to have a prediction market product that could envision there being a Ability to cross between the different verticals and treating prediction markets like you might treat a poker, third-party platform or even your own in-house poker platform having the verticals across the different.

Jurisdictions where an operator is operating, so I think there's certainly cross sell opportunities. It comes down to the types of mechanics and products that you're referring to. Clearly if you're having a product that has a skill involved, you're going to sort of appeal to a maybe a player that has a skill interest in a different type of prediction market. And I think if there's elements of chance involved, which is still being worked through the courts, then certainly I think that is a different type of cross sale. So I think there's a lot of opportunity in that. Ability to sort of learn what works and doesn't work on the cross sale, but certainly from a core technology standpoint there are a lot of similarities between, the platforms that are being used today in the CFTC markets and real money gambling platforms.

Nice, thanks, Richard. Just a quick follow-up, I guess it's maybe a couple of quarters ago we asked you if you saw, and I know you're a product guy, that's one of the reasons why you're so strong and have the market share you do, looking at the prediction market platforms, are there certain qualities on the platform, whether it's ease of use or maybe the cash out piece, being more visible. Are there certain qualities that you think might resonate to one of your traditional gaming customers that you could look to do sort of product enhancements in the future?

Yeah, I know, I mean, there's always innovation in all kinds of areas. I think one thing about prediction markets is that operators are self-certifying, which means it's a little bit of an easier process perhaps to TRY things out that maybe it would be harder to do in a state level regulatory environment. I think it's still too early to really appreciate what all the different elements of what's going to be improved or not, but certainly you're going to see improvements made in prediction market operators, and I think some are going to come from the approach of trying to replicate. A sports book interface and others are going to probably come up with approaches that are going to be novel and differentiated and bring a different element of experience to a user that may be different from what they can get in a more conventional sports book. So, I think there's still a lot of the leading minds in our industry who historically have kind of moved from one vertical to next. Our focused very heavily on prediction markets right now. So, I think you'll start to see some of those types of innovations come to market.

Nice, thanks guys. Good Luck.

Thank you for your question.

Jed Kelly, Oppenheimer.

Hey, great. Thanks for taking my question. Just going back to the MAU growth, very healthy once again. Are you, is it strength with that casino first, that historically casino first player, or are you having success more with the 1st, sports first player? We just love some, just some background on that. Thanks.

Yeah, just, so just to be clear that that 51%, I'm sorry, is the growth in North America in. Markets that have I casino, if you look at just North America in total, which includes all of our sports only markets, it grew 37%. So that strength is really coming from, the online casino markets. Not, I mean, not coincidentally, that's where we're investing most of our marketing dollars and our and our efforts there, from a marketing perspective, and we're seeing the returns.

Got it. And then, just as some of your larger competitors start to, market in market the prediction market products, specifically into football, are you seeing any changes in the promotional environment where you may have an opportunity to take a share?

I don't think we've seen, you'll have, different operators have different strategies and at different times, right? And some of them will lean in a little bit more, but I wouldn't suggest that there's been any significant change in the promotional intensity.

Across the landscape, I Would just add that, our strategy is really not to TRY to gain share through bonusing but by focusing when others are maybe distracted and by delivering innovative experiences that are unique and different for the player with the goal that players when they find us will stay with us and. So our focus really is about less about using incentives to get encourage players to stay with us, but more about having them stay with us for reasons that we talked about earlier that Kyle also mentioned with our customer service, making sure we reduce friction for the players and let them know that we're fair, H1st, and treating them well.

Great thanks. Nice job.

Thank you.

Thank you for your questions.

Chad Beynon, Macquarie.

Good afternoon, Richard and Kyle. Thanks for taking my question. Wanted to ask about the sports betting hold, maybe for the year for 2025. I know there was some nice improvement just from a parley mix standpoint, but can you talk about the. The year over year hold growth that you had, in the year and then more importantly for '26, are there still opportunities to increase that hold and is that a part of the guidance Thank you.

Yeah, so I'll maybe I'll start with the last piece that yes, I mean, obviously we, we've got a guidance range that has ranges for of outcomes for various different things, but it is our expectations for holder are built into the guidance, probably not, expectations that we're going to improve it dramatically on the sports side, but I think we do have the opportunity to continue to improve it and to your point we've continued to improve over the last several years. The product, the depth of the markets, has gotten so much better. Our, percentage of parlays and prop bets has continued to increase, even in Q3 last quarter, I think we pointed this out on the call, but, when it was a bit tougher for sports hold, we had our highest. Sports holding in the US in our in our history and then we did that once again in the 4th quarter. We had a little bit better outcomes in Q4 in in the industry, but we've continued to see improvements there so we think that can continue to happen. There's the product will continue to get better, and we think there's continued shift that'll happen to more parlay bets. Did I catch all your questions in there?

Yes, that's perfect thanks Kyle and then, just to follow-up I know you have a slide in there and you've talked about the poker opportunity and how that, differentiates you versus, some of the other competitors.

Where are we on the poker journey either with, from a Rush Street perspective or just from, a North America, consumer awareness perspective?

Sure, I think I'll take that one. Poker is sort of, was expected to be a lot larger market years ago when New Jersey first regulated, but because historically it had been a national liquidity and it only opened in a single coup couple of states were joined liquidity, I think it was Nevada and New Jersey initially, you really didn't get the liquidity that you needed to kind of create sustainable table sizes, tournament sizes, variety of tables, different sizes, and what's been happening with our efforts is that we've, we, we've Now launched in the last 12 months poker in 4 states, tie them all together through shared liquidity. There's no operator right now in the US who has more than 4 states, and we're, we've talked about our plans this year to add a 5th state, which would make us, I think, the first operator to be in 5 states in the United States. And our view of poker has been. Really clear that it does appeal to a broad gambler and poker players and enthusiasts like to play other casino games and certainly if we can attract a customer who likes to play poker and then win their business over to play casino games, it's a win for us and the same thing happens if we can. Acquire a customer and have an active customer who then stays with us playing poker because they no longer have to leave us to go play with a competitor's brand for poker during the tournament time. So at the end of the day, we really feel that poker completes the ecosystem. And it really is a great retention tool for us to have. We do have a TV platform as well and a poker Night America nationally broadcast TV on CBS Sports for now many years. So it helps us with brand building and it brings personality and engagement to the brand and brings it alive for betters and ultimately that's what's important for us is to have a way to grow our brand and attract and retain customers.

Thank you both.

Thank you.

Thank you for your questions, Chad.

There are no further questions at this time. I would now like to pass the call back to Richard Schwartz for closing remarks.

Thank you for joining us today. We're excited about the road ahead and look forward to sharing our 1st quarter results in late April.

That concludes today's call. Thank you for your participation and enjoy the rest of your day.