However, while RSI’s revenue grew, so too did its net loss. For the first quarter of 2021, this amounted to $100,000, but as of the latest reporting period, RSI’s net loss had widened to $52.3m.
Rush Street’s adjusted EBITDA loss likewise increased, rising from approximately $15m to $43.4m. These wider losses can be largely attributed to additional expenses incurred as a result of RSI’s New York launch.
The company’s Chief Financial Officer (CFO), Kyle Sauers, touched on this during RSI’s Q1 earnings call.
“Our New York launch was the biggest contributor to our loss during the quarter, with almost two thirds of our adjusted EBITDA loss coming from New York,” said Sauers.
“As we previewed on our last quarterly call, we had negative revenue contribution from New York during the first quarter, providing a headwind of almost $6m on the revenue line.
“This, combined with our New York launch marketing and brand-building efforts during the quarter contributed significantly to our loss.”
Adjusted advertising and promotions expense amounted to $66.3m for Q1, up by nearly 64% on a year-over-year basis.
However, RSI’s greater marketing spend may have paid off. Real-money monthly active users in the US grew by 32% to almost 150,000.
The company’s CEO, Richard Schwartz, was optimistic about RSI’s future and expects it to be adjusted EBITDA positive for H2 2023.
“Launching five new markets in seven months, with an additional market set for launch by the end of the second quarter, positions us well to continue to rapidly expand and diversify the business with an eye towards profitability,” remarked Schwartz.
He added: “Achieving consistent profitability is our top priority and we expect RSI to be adjusted EBITDA positive for the second half of 2023.”
