Rush Street Interactive Announces First Quarter 2022 Results and Raises Full Year 2022 Guidance

- First Quarter Revenue of $135 Million, up 21% Year-over-Year -

- Raising Full Year 2022 Revenue Guidance to between $600 and $650 Million -

Rush Street Interactive, Inc. (NYSE: RSI) (“RSI”), a leading online casino and sports betting company in the United States, today announced financial results for the first quarter ended March 31, 2022.

First Quarter 2022 Financial Highlights

• Revenue was $134.9 million during the first quarter of 2022, an increase of 21%, compared to $111.8 million during the first quarter of 2021.
• Net loss was $52.3 million during the first quarter of 2022, compared to a net loss of $0.1 million during the first quarter of 2021.
• Adjusted EBITDA¹ was a loss of $43.4 million during the first quarter of 2022, compared to an Adjusted EBITDA loss of $15.1 million during the first quarter of 2021.
• Adjusted advertising and promotions expense¹ was $66.3 million during the first quarter of 2022, compared to $40.5 million during the first quarter of 2021.
• Real-Money Monthly Active Users (“MAUs”) in the United States for the first quarter of 2022 grew 32% year-over-year to over 150,000 with average revenue per MAU (“ARPMAU”) of $265 during the first quarter of 2022.
• As of March 31, 2022, unrestricted cash and cash equivalents on the balance sheet were $232.2 million with no debt outstanding.

Richard Schwartz, Chief Executive Officer of RSI, said, “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. We grew MAUs sequentially at our fastest pace in six quarters and experience shows that these players build significant value over time.”

“We remain disciplined in our approach and are balancing profitability from more developed markets with investments in new market launches. In fact, excluding the impact of our New York launch during the first quarter, our Adjusted EBITDA loss is less than $15 million, demonstrating the growing profitability of our previously launched markets. Achieving consistent profitability is our top priority and we expect RSI to be Adjusted EBITDA positive for the second half of 2023.”

Increasing 2022 Revenue Guidance

RSI expects revenues for the full year ending December 31, 2022 to increase to between $600 million to $650 million, up from its previous guidance of between $580 and $630 million. At the midpoint of the range, revenue of $625 million represents 28% year-over-year growth when compared to $488 million of revenues for 2021.

This range is based on certain assumptions, including that (i) only operations in live jurisdictions as of today’s date are included, (ii) all professional and college sports calendars that have been announced come to fruition, including the completion of their 2022 seasons, and (iii) RSI continues to operate in markets in which it is live today.

Recent Business Highlights

• Launched online sportsbook in New York and in Louisiana.
• Launched online casino and online sportsbook in Ontario, Canada following the end of the first quarter.
• Crowned Operator of the Year, Social Gaming Operator of the Year, and Customer Service Operator of the Year at the EGR North America Awards 2022, winning the latter award for the 3rd year in a row. The continued recognition for customer service demonstrates our ongoing commitment to delivering a market leading user experience.
• Further expanded our Ambassadors and Betting Content Production during the first quarter with additions of New York sports broadcasting legend Mike Francesca, Canadian broadcasting icon Dan O’Toole, retired New York Mets manager Bobby Valentine, and former Chicago Bull great Joakim Noah.
• Became an official sportsbook partner of the New Orleans Pelicans, including the rebranding of the new BetRivers Chairman’s Club.
• Named the first U.S.-based online casino and sports betting operator to receive RG Check iGaming Accreditation from the Responsible Gaming Council. This respected designation demonstrates to both regulatory bodies and customers that RSI prioritizes and embeds responsible gaming into the core of its operations.
• BetRivers sportsbook mobile app continues to be highly rated and independently ranked #4 by Eilers & Krejcik out of 41 apps in the US market.

Earnings Conference Call and Webcast Details

RSI will host a conference call and audio webcast today at 5:00 p.m. Eastern Time (4:00 p.m. Central Time), during which management will discuss first quarter results and provide commentary on business performance and its current outlook for 2022. A question-and-answer session will follow the prepared remarks.

The conference call may be accessed by dialing 1-844-450-0390 for domestic callers or 1-236-714-3032 for international callers. The conference call access code is 1857599.

A live audio webcast of the earnings conference call may be accessed on RSI’s website at ir.rushstreetinteractive.com, along with a copy of this press release and an investor slide presentation. The audio webcast and investor slide presentation will be available on RSI’s investor relations website until at least June 4, 2022.

About Rush Street Interactive

RSI is a trusted online gaming and sports entertainment company focused on markets in the United States, Canada and Latin America. Through its brands, BetRivers, PlaySugarHouse and RushBet, RSI was an early entrant in many regulated jurisdictions. It currently offers real-money mobile and online operations in thirteen U.S. states: Pennsylvania, Illinois, New Jersey, New York, Connecticut, Michigan, Indiana, Virginia, Colorado, Iowa, West Virginia, Arizona and Louisiana, as well as in the regulated international markets of Ontario, Canada and Colombia. RSI offers, through its proprietary online gaming platform, some of the most popular online casino games and sports betting options in the United States. Founded in 2012 in Chicago by gaming industry veterans, RSI was named the 2022 EGR North America Awards Operator of the Year, Customer Services Operator of the Year and Social Gaming Operator of the Year, and the 2021 SBC Latinoamérica Awards Sportsbook Operator of the Year. RSI was the first U.S.-based online casino and sports betting operator to achieve RG Check iGaming Accreditation from the Responsible Gaming Council. For more information, visit www.rushstreetinteractive.com.

Non-GAAP Financial Measures

In addition to providing financial measurements based on accounting principles generally accepted in the United States (“GAAP”), this press release includes certain financial measures that are not prepared in accordance with GAAP, including Adjusted EBITDA, Adjusted Operating Costs and Expenses, Adjusted Net Loss Per Share, Adjusted Net Loss and Adjusted Weighted Average Common Shares Outstanding, each of which is a non-GAAP performance measure that RSI uses to supplement its results presented in accordance with GAAP. A reconciliation of each such non-GAAP financial measure to the most directly comparable GAAP financial measure can be found below. RSI believes that presentation of these non-GAAP financial measures provides useful information to investors regarding RSI’s results of operations and operating performance, as they are similar to measures reported by its public competitors and are regularly used by securities analysts, institutional investors and other interested parties in analyzing operating performance and prospects. These non-GAAP financial measures are not intended to be considered in isolation or as a substitute for any GAAP financial measures and, as calculated, may not be comparable to other similarly titled measures of performance of other companies in other industries or within the same industry.

RSI defines Adjusted EBITDA as net income (loss) before interest, income taxes, depreciation and amortization, share-based compensation, adjustments for certain one-time or non-recurring items and other adjustments. Adjusted EBITDA excludes certain expenses that are required in accordance with GAAP because certain expenses are either non-cash (for example, depreciation and amortization, and share-based compensation) or are not related to our underlying business performance (for example, interest income or expense).

RSI defines Adjusted Operating Costs and Expenses as RSI’s GAAP operating costs and expenses adjusted to exclude the impacts of share-based compensation, certain one-time or non-recurring items and other adjustments. Adjusted Operating Costs and Expenses excludes certain expenses that are required in accordance with GAAP because certain expenses are either non-cash (for example, share-based compensation) or are not related to our underlying business performance.

RSI defines Adjusted Net Loss Per Share as Adjusted Net Loss divided by Adjusted Weighted Average Common Shares Outstanding. Adjusted Net Loss is defined as net loss attributable to Rush Street Interactive, Inc. as used in the diluted net loss per share calculation, adjusted for the reallocation of net loss attributable to non-controlling interests, share-based compensation, certain one-time or non-recurring items and other adjustments. Adjusted Weighted Average Common Shares Outstanding is defined as the weighted average number of common shares outstanding as used in the diluted net loss per share calculation, adjusted for the assumed conversion of the non-controlling interest’s Rush Street Interactive, LP Class A units to Class A common stock of RSI on a one-to-one-basis.

RSI includes these non-GAAP financial measures because management uses them to evaluate RSI’s core operating performance and trends and to make strategic decisions regarding the allocation of capital and new investments. Management believes that these non-GAAP financial measures provide investors with useful information on RSI’s past financial and operating performance, enable comparison of financial results from period-to-period where certain items may vary independent of business performance, and allow for greater transparency with respect to metrics used by RSI’s management in operating our business. Management also believes these non-GAAP financial measures are useful in evaluating our operating performance compared to that of other companies in our industry, as these metrics generally eliminate the effects of certain items that may vary from company to company for reasons unrelated to overall operating performance.

Key Metrics

RSI provides certain key metrics, including MAUs and ARPMAU, in this press release. RSI defines MAUs as the number of unique users per month who have placed at least one real-money bet across one or more of our online casino or online sports betting offerings, and it defines ARPMAU as average revenue for the applicable period divided by the average MAUs for the same period.

The numbers RSI uses to calculate MAUs and ARPMAU are based on internal RSI data. While these numbers are based on what RSI believes to be reasonable judgments and estimates of its customer base for the applicable period of measurement, there are inherent challenges in measuring usage and engagement with respect to RSI’s online offerings across its customer base. Such challenges and limitations may also affect RSI’s understanding of certain details of its business. In addition, RSI’s key metrics and related estimates, including the definitions and calculations of the same, may differ from estimates published by third parties or from similarly-titled metrics of its competitors due to differences in operations, offerings, methodology and access to information. RSI regularly reviews, and may adjust its processes for calculating, its internal metrics to improve their accuracy.

Forward-Looking Statements

This press release includes "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. RSI's actual results may differ from their expectations, estimates and projections and consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as "expect," "estimate," "project," "budget," "forecast," "anticipate," "intend," "plan," "may," "will," "could," "should," "believes," "predicts," "potential," "continue," and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, statements regarding guidance, RSI’s future results of operations or financial condition, RSI’s strategic plans and focus, anticipated launches of RSI’s current or new offerings in existing or future jurisdictions, player growth and engagement, product initiatives and the objectives of management for future operations. These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results. Most of these factors are outside RSI's control and are difficult to predict. Factors that may cause such differences include, without limitation: changes in applicable laws or regulations; RSI’s ability to manage growth; RSI’s ability to execute our business plan and meet its projections; unanticipated product or service delays; general economic and market conditions impacting the demand for RSI’s products and services; economic and market conditions in the gaming, entertainment and leisure industry in the markets in which RSI operates; the potential adverse effects of the COVID-19 pandemic on capital markets, general economic conditions, inflation rates, unemployment and RSI’s liquidity, operations and personnel; and other risks and uncertainties indicated from time to time in RSI's filings with the SEC. RSI cautions that the foregoing list of factors is not exclusive. RSI cautions readers not to place undue reliance upon any forward-looking statements, which speak only as of the date made. RSI does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based.

1. Non-GAAP Operating Costs and Expense Adjustments for the three months ended March 31, 2022 and March 31, 2021 include Share-based compensation.

1. Net loss attributable to Rush Street Interactive, Inc. – diluted for the three months ended March 31, 2021, includes the Net loss attributable to Rush Street Interactive, Inc. adjusted for the dilutive effect of previously outstanding warrants that were redeemed in March 2021 (i.e., the portion of the change in fair value of warrants attributed to Rush Street Interactive Inc.). There was no dilutive effect for the three months ended March 31, 2022.
2. Weighted average common shares outstanding – diluted for the three months ended March 31, 2021, includes the basic number of weighted average common shares outstanding, adjusted for the dilutive effect of previously outstanding warrants that were redeemed in March 2021 using the Treasury Stock Method. There was no dilutive effect for the three months ended March 31, 2022.

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