Rush Street Interactive, Inc. (NYSE:RSI) Q4 2025 Earnings Call Transcript

Rush Street Interactive, Inc. (NYSE:RSI) Q4 2025 Earnings Call Transcript February 18, 2026

Operator: 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. [Operator Instructions] 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.

Kyle Sauers: Thank you, operator, and good afternoon. By now, everyone should have access to our fourth quarter and 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 onetime or nonrecurring items and other adjustments that are either noncash 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 fourth quarter and full year 2025 earnings release and our investor deck, which is available in the Investors 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 EBITDA 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.

Richard Schwartz: Thanks, Kyle. Good afternoon, and welcome to our fourth 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 our 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 evidenced by record-setting monthly active users in 2025. In North America, our MAUs 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 MAUs 47% to over 493,000, demonstrating impressive growth and resilience amongst temporary tax headwinds. When discussing the strength of our 2025 results, we are 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 continued 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 continue to drive exceptional growth, as stated earlier, with MAUs 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 Lat Am markets.

I’m proud to report that not only did we successfully manage through this period, but we’re confident that we gained market share from our competitors, setting ourselves up for continued success. Our approach in Colombia was measured and strategic. Rather than immediately passing the VAT tax cost on to 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, but despite a temporary drop in net revenue last year, for the full year, we achieved annual GGR growth of 66% and increased MAUs by 34%. Looking ahead, the temporary VAT tax that was in place during 2025 has 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 tax on deposits, which we offset in 2025 through a higher bonusing. 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 prediction markets, which has been highly topical in recent industry discussions. At RSI, 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 time line 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 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 overview, let me turn the call over to Kyle to walk through our detailed financial results and provide guidance for 2026.

Kyle Sauers: 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 spend 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 EBITDA 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 raised 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 MAUs grew 37% year-over-year to 278,000 total users.

What’s particularly impressive is our performance in North American online casino markets, where MAUs 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 MAU 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 ARPMAU 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 ARPMAU compression was not only expected but confirms that we’re successfully attracting large volumes of new players to our platform, who initially have lower ARPMAU 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 ARPMAU 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 3 quarters, validating the continued strength in our user experience. ARPMAU should return to meaningful year-over-year growth in Lat Am with the removal of our VAT bonusing strategy as of the end of last year. Breaking down our performance by geography and product. We saw strength across all segments. North America and 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 Colombia bonusing that 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 results 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 this 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 in cash on hand at the end of the year. Net 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 EBITDA in the range of $210 million to $230 million, representing growth of 37% to 50% year-over-year. When it comes to cadence throughout the year, we would generally expect both revenue and EBITDA 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.

Operator: [Operator Instructions] Our first question comes from the line of Dan Politzer with JPMorgan.

Q&A Session

Daniel Politzer: I wanted to touch on Colombia. 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 EBITDA with the tax on deposits versus maybe what you’re forecasting if it is, in fact, in place for the full year in ’26? Is it the tax on revenue?

Kyle Sauers: Yes, Dan, let me — I’ll try to help with a little bit more color. So you’ll recall, in the third quarter, Colombia had more challenging sports sold 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 sold. 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 EBITDA on the year. I think despite the disruption, pretty good news, grew GGR at 66%, grew the user base by 34%, took some meaningful share in the market.

And then that headwind, the deposit bonusing goes away in 2026 because we aren’t making up for that VAT on the players. So as I shared 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 bonusing. 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 Colombia 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.

Daniel Politzer: No, that’s helpful. And just in terms of Canada, obviously, you have 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 and sports betting share is there?

Richard Schwartz: Sure. Why don’t I take the first one, Dan, on Alberta. Yes, 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 there are moving at a very determined pace, and it looks like a Q2 opportunity is within the possibility towards the end of that quarter.

Kyle Sauers: Yes. 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 there — 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 fourth 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.

Operator: Our next question comes from the line of Bernie McTernan with Needham.

Bernard McTernan: Maybe just a follow-up on that on the first question from Dan. If I just add back $75 million to your revenue for Lat Am in ’25, I get to an ARPU that’s in the mid-40s, let’s say. And so that — if we look at ’22 to — sorry, ’22, ’23, ’24, ARPU is coming down slightly. And then I think if 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 ARPU, again, if my math’s right?

Kyle Sauers: Yes. And you’re trying to kind of triangulate around the trends of ARPU 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 U.S. dollars is there are currency fluctuations over these years. So you’d probably want to normalize for that. 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 ARPMAU in Colombia and therefore, for our total Lat Am. 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.

Bernard McTernan: Understood. That’s really helpful. 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. Maybe focusing on the content side and given the context of the G&A guide to be growing more closely to revenue, is that bringing on more engineers? Or how should we think about what’s actually going to be coming to market with these investments?

Richard Schwartz: Yes. Bernie, yes, 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 road map, 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 the experience they have playing those games. On the 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 election later this year and really trying to mobilize and get additional states to open up in a way that will be very favorable for our company.

Operator: Our next question comes from the line of Jordan Bender with Citizens.

Jordan Bender: 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, of you looking to implement that to kind of offset any of the future tax increases?

Kyle Sauers: Yes. 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 we think 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 tax is probably good for the consumers. So we’ll see how that plays out in other markets.

Jordan Bender: 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 changed the tone, but you’re looking to markets you’re not currently in now to basically launch a sports betting product.

Kyle Sauers: So I’m actually not certain which comment you’re referring to, but 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 sportsbook-only markets that we’ve passed on, we’ve done for good reason and focusing on iCasino specifically in North America has been a real winner for us.

Operator: Our next question comes from the line of David Katz with Jefferies.

David Katz: 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?

Richard Schwartz: David, thanks for asking the question. I think I could have predicted perhaps the predictions questions from you given that, I think, you’ve hit us with one every quarter so far this year. But it’s a great question and obviously, a lot of discussion in this topic. So yes, so first of all, we have been monitoring it very, very closely, as we’ve repeatedly said. And monitoring means that we don’t do things at a surface level of this company. 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 an underlying event, the underlying event — game is being played for stakes, I think it’s harder to justify that as being 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 continue monitoring the 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.

David Katz: Okay. And perhaps 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 tech upgrades? Or why would that grow in line with revenue?

Kyle Sauers: Yes. So I think it’s notable that it will 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 it a little bit, but we do have — we feel like we’ve got the real opportunity here to spend more on 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 iCasino 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 — 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.

Operator: Our next question comes from the line of Ryan Sigdahl with Craig-Hallum.

Ryan Sigdahl: Richard, Kyle, another really nice strong quarter and guidance. I want to start with the North America MAUs, grew 51% online casino. I mean I’d ask 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?

Kyle Sauers: Yes. 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 number is not just about first-time depositors, although despite not launching in any new markets, we now have our third 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 got to keep people reactivating 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 the great product in front of them when they show up.

Richard Schwartz: I’ll just add that…

Ryan Sigdahl: Maine — go ahead, Richard.

Richard Schwartz: 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, being 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.

Kyle Sauers: And just I’ll pile on one more, Ryan, just because it would 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 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 Maine.

Ryan Sigdahl: All very helpful color. Yes, Maine would be the follow-up question here, just legalizing iGaming. Is that a strategic state for RSI and then your confidence level that you could get a skin agreement with 1 of the 4 tribe licensees there?

Richard Schwartz: Ryan, I think this is a — Maine is an attractive market by virtue that online casino, which is our strength, will be available there. As you know, there’s 4 tribal partners there — tribes there that are — that 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 other tribes and other lotteries, et cetera. We’ve proven ourselves to be very strong in smaller states, populations and be able to really generate large share in those opportunities. And so I think if someone who operated 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 are considering the options there to hopefully have a chance to be in that market someday.

Operator: Our next question comes from the line of Mike Hickey with StoneX.

Michael Hickey: Richard, Kyle, congrats, guys. Great quarter, great year, great guide. You’re sort of a beacon of light here in a tough market. Just 2 questions, both, 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 market. So just curious 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 [ guidance ], offering sort of incremental TAM or TAM expansion. So curious if you’re also obviously seeing some level of that. And then I’m 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 on to 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, it seems like an opportunity for you guys.

Kyle Sauers: All right, Mike, I’ll jump in and 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’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, do you want to talk about just the product and kind of how it relates to what’s out there for prediction markets today?

Richard Schwartz: Yes, sure. I mean so on the technology side, a lot of the technology elements of the CFTC-approved platforms aren’t as technically advanced as what we perhaps have in our industry. And so certainly, a lot of the platforms, 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, I can envision there being an ability to cross-sell between the different verticals and treating prediction markets like you might treat a poker, a 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 were referring to. Clearly, if you’re having a product that has a skill involved, you’re going to sort of appeal to 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-sell. 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-sell. But certainly, from a core technology standpoint, there are a lot of similarities between for platforms that are being used today in the CFTC markets and real money gambling platforms.

Michael Hickey: Just a quick follow-up. I guess 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?

Richard Schwartz: Yes. 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 a little bit of an easier process perhaps to try things out that maybe would be harder to do in a state-level regulatory environment. I think it’s still too early to really appreciate 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 sportsbook 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 sportsbook.

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, are 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.

Operator: Our next question comes from the line of Jed Kelly with Oppenheimer.

Jed Kelly: 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 first — sports-first player? Would just love just some background on that.

Kyle Sauers: Yes, Jed. So just to be clear, that 51%, I’m sorry, is the growth in North America in markets that have iCasino. 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. I mean not coincidentally, that’s where we’re investing most of our marketing dollars and our efforts there from a marketing perspective, and we’re seeing the returns.

Jed Kelly: Got it. And then just as some of your larger competitors start to 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 share?

Kyle Sauers: 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.

Richard Schwartz: 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, they stay with us. And so our focus really is about — less about using incentives to encourage players to stay with us but more about having them stay with us for the 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, honest and treating them well.

Operator: Our next question comes from the line of Chad Beynon with Macquarie.

Chad Beynon: I wanted to ask about the sports betting hold maybe for the year, for 2025. I know there was some nice improvement just from a parlay mix standpoint. But can you talk about 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?

Kyle Sauers: Yes. So maybe I’ll start with the last piece. Yes, I mean, obviously, we’ve got a guidance range that has ranges for — of outcomes for various different things, but it is — our expectations for hold 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 hold in the U.S. in our history.

And then we did that once again in the fourth quarter. We had a little bit better outcomes in Q4 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 will happen to more parlay bets. Did I catch all your questions in there?

Chad Beynon: Yes, that’s perfect. And then just a 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?

Richard Schwartz: 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 couple of states where it [ enjoyed ] 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 bet sizes. And what’s been happening with our efforts is that we’ve now launched, in the last 12 months, poker in 4 states, tie them all together to share liquidity. There’s no operator right now in the U.S. who has more than 4 states, and we’re — we’ve talked about our plans this year to add a fifth state, which will make us, I think, the first operator to be in 5 states in the United States.

And we — 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 a 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, Poker Night in 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.

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

Richard Schwartz: Thank you for joining us today. We’re excited about the road ahead and look forward to sharing our first quarter results in late April.

Operator: That concludes today’s call. Thank you for your participation, and enjoy the rest of your day.