Rush Street (RSI) Q2 Profit Jumps 175%

Rush Street Interactive (RSI -3.79%), a prominent online gaming and sports betting operator, reported its Q2 2025 earnings results on July 30, 2025. The company delivered record GAAP revenue and notable profit growth, comfortably beating Wall Street estimates on a GAAP basis. It achieved adjusted earnings per share (EPS) of $0.11, compared to analyst expectations of $0.06, while revenue (GAAP) reached $269.2 million, surpassing GAAP revenue forecasts by more than $18.3 million. Results showed strong year-over-year progress in both revenue and key profitability metrics, with notable momentum in core North American and Latin American markets. The quarter was marked by robust performance across product lines, improved marketing efficiency, and a significant profitability turnaround.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

Company Overview and Key Success Factors

Rush Street Interactive is an online gaming and sports betting company based in the U.S, known for its proprietary technology platform and operations in 19 jurisdictions across North America and Latin America. Its core business offers online casino games such as slots, table games, and live dealer experiences and sports betting options to players via websites and mobile apps. The company has established itself by focusing on a proprietary platform that enables customization, rapid product rollout, and seamless integration of casino and sports betting products.

Recently, the company has focused on enhancing its product offering through technology-led improvements, expanding into new geographies, and constantly refining its customer acquisition and retention strategies. Success for Rush Street Interactive hinges on maintaining product differentiation, securing market access in regulated environments, effective user acquisition, and sustaining high engagement levels through unique loyalty and rewards programs. The company’s flexibility in adapting to both U.S. and international regulations and its drive to introduce innovative features are seen as key elements of its ongoing growth strategy.

Quarterly Highlights and Business Developments

In Q2 2025, Rush Street Interactive set several records in revenue, users, and profitability. Its reported revenue (GAAP) was $269.2 million, up 22% from the same period in 2024, and comfortably ahead of the $250.914567 million analysts had predicted. Net income hit $28.8 million, a significant improvement from a slight net loss in the prior-year period.

Profitability saw a marked improvement as adjusted EBITDA nearly doubled, rising from $21.4 million to $40.2 million. This outperformance was supported by increased efficiency on the marketing front: adjusted sales and marketing spending was essentially flat at $36.2 million. At the same time, active user growth in North America and Latin America drove higher revenues. U.S. and Canada monthly active users (MAUs) reached approximately 197,000, an increase of 21% year over year. Notably, average revenue per monthly active user (ARPMAU) in North America reached a record high of $391.

This was supported in part by enhancements within the sports betting product family such as new features for parlays (bets combining multiple outcomes) and expanded "Prop Central" offerings, which allow for customized proposition bets.

The business made further strides in both user acquisition and operational scale, as reflected in its flat adjusted sales and marketing expense despite sharply higher revenue and user counts. Expansion in Latin America continued, with active users in the region covering Colombia, Mexico, and Peru, increasing by nearly 42% year-over-year. However, average revenue per active user in Latin America dropped to $30 from $38, impacted by increased “bonusing,” where the company issues generous rewards and credits, to offset a temporary government-imposed value-added tax (VAT) on gaming in Colombia. Management noted that while this strategy maintained high activity, it compressed profit margins in the region during Q1 2025.

Market Trends, Regional Dynamics, and Product Performance

The company’s proprietary technology platform, which enables features like community chat, multi-product integration, and customizable loyalty rewards, provided clear benefits throughout the period. Management highlighted that its platform’s flexibility supports both real-money and social gaming, making it easier to enter new markets quickly and customize games for specific jurisdictions.

Regulatory conditions presented both opportunities and risks, particularly in Latin America. The introduction of the VAT in Colombia drove an aggressive bonusing approach to keep users engaged, which allowed continued user and carryover gross gaming revenue growth (“GGR”), but pressured net revenue during Q1 2025. Management cited these promotions as necessary to retain share amid regulatory changes, and signaled that any reversal of the VAT could unlock growth in both revenue and margin. Meanwhile, the U.S. and Canada continued to show sustainable growth, especially in high-value online casino markets like New Jersey, Michigan, and Delaware.

Rush Street Interactive’s market access now covers 19 jurisdictions, reflecting a strategic push into geographies with favorable regulation and growing online gaming acceptance. The company noted ongoing localization efforts in Peru as it seeks further growth there. Management remains vigilant of regulatory changes and competitive pressures, which are challenges common across the online gaming sector.

Finally, Rush Street Interactive’s approach to marketing continued to focus on efficiency and return. Despite rising revenue, adjusted sales and marketing expense remained unchanged year over year, demonstrating improved leverage over its customer base and return on investments.

Financial Outlook and What to Watch

Management raised its full-year FY2025 revenue guidance, now targeting $1.05 to $1.10 billion (midpoint $1.075 billion, up 16% from FY2024 revenue of $924 million), and adjusted EBITDA guidance of $133 to $147 million (midpoint: $140 million, up 51%) for the full year. These figures assume no major shifts in regulatory regimes, especially in key markets like Colombia where the VAT policy could have a material financial impact if repealed. According to the company, “tax should be a very meaningful driver of growth for us.”

Looking forward, investors and industry watchers should pay attention to the pace of user growth in both North America and Latin America, margin recovery in jurisdictions hit by new levies, and the ongoing rollout of differentiated features across the company’s digital gaming products. Changes in regulatory conditions, especially any update to the Colombian VAT, remain a critical variable for future performance. Rush Street Interactive does not currently pay a dividend.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.