Rush Street Interactive (RSI) Q3 2026 earnings review
Rush Street profits jump 73%, but it holds its outlook
Rush Street Interactive, the operator of BetRivers online casinos and sportsbooks, kept its Latin American gains while North American growth cooled. Third-quarter revenue rose 39% from a year ago and Ebitda excluding one-offs jumped 73% as gaming tax and overhead costs took a smaller share of sales. Chief executive Richard Schwartz kept the full-year outlook unchanged after two straight raises, which by our math leaves revenue growth slowing to 32% in the fourth quarter.
| Revenue | $385.9M +39% from a year ago |
|---|---|
| Ebitda, excluding one-offs | $62.2M +73% from a year ago |
| North America monthly revenue per user | $309 -15% from a year ago |
| Full-year revenue outlook | Unchanged middle of the range: 39% growth |
⚖️ Verdict: ⚪ Neutral
The story is unchanged because Latin American strength offset weaker North American player spending, leaving the full-year plan where it was. Retaining World Cup bettors at $58 in monthly spend proved the second-quarter jump in Latin America was not a one-time spike. The bad news: North American monthly spend per user fell for a fifth quarter to $309, slowing regional sales growth to about 13% by our math.
The question now is whether record North American user counts will turn into higher sales once newer players settle in. Either those newer bettors increase their monthly spending over time, or the company is adding lower-spending players who permanently dilute regional revenue. Fourth-quarter North American revenue per user and the initial 2027 outlook will settle it.
🐂 Bull Case
Latin America Held Its World Cup Gains
Rush Street Interactive runs online casinos and sportsbooks across the Americas. A key question entering the fall was whether Latin American bettors who signed up during the summer soccer tournament would leave once the games ended. Chief executive Richard Schwartz said "customers who joined us during the World Cup continue to play across our products".
- Latin America monthly active users: 607,308, up 46% from a year ago but down 7% from last quarter
- Average monthly revenue per user in Latin America: $58, up 115% from $27 a year ago and up $3 from last quarter
- Regional revenue, by our math: about $106 million, more than triple last year's level and within $2 million of the second quarter
The numbers back up Schwartz's claim because higher spending per remaining player offset the small drop in active accounts after the tournament. Ending promotional bonuses in Colombia earlier this year lifted revenue per player to a new level that held through the third quarter.
What to watch: Latin America revenue per user in the first quarter of 2027. That period marks a full year since the company cut Colombian promotional bonuses, so growth will then depend on adding players rather than pricing.
Lower Gaming Costs Lifted the Profit Margin
"Our third quarter results demonstrated the scale we’ve built into our business model," Schwartz said. Rush Street measures its operating profit through Ebitda excluding one-offs, which means earnings before interest, taxes, depreciation, amortization and stock pay. That figure rose 73% from a year ago to $62.2 million, or 16.1% of revenue, up from 13.0% a year earlier.
Two cost lines drove the margin gain. Costs of revenue — gaming taxes, payment processing and market-access fees — fell by 2.4 percentage points of sales to 63.6%. General and administrative overhead fell by 1.6 points to 7.7%. Marketing spending, excluding stock pay, rose $6.1 million from the second quarter to $54.7 million (14.2% of revenue) to fund the launch in Alberta, Canada, but stayed below the $55.6 million to $58.6 million range finance chief Kyle Sauers had indicated.
What to watch: fourth-quarter marketing spending as a share of sales. The full-year outlook points to an Ebitda margin of 15.8% in the fourth quarter by our math, which would mean higher promotional spending during the football season.
🐻 Bear Case
North America Users Spend Less Each Month
"Online casino remains the engine of our profitability, and we’re pleased to have reached a new quarterly record this period for monthly active users in North America," Schwartz said. Supporters view fast user growth in online casino markets, plus the July launch in Alberta, as a source of future sales. In the third quarter, active users in the US and Canada rose 34% from a year ago to 300,572.
User growth is not turning into matching revenue growth because newer players spend less. Average monthly revenue per user in North America fell 15% from a year ago and $11 from the second quarter to $309, the fifth straight quarterly decline. From the second quarter to the third, the company added only 4,165 net new North American users despite three months of operations in Alberta, where Schwartz said "we expect the ramp to be gradual".
By our math, multiplying users by monthly spend shows North American revenue grew about 13% from a year ago to $279 million, down from 23% growth in the second quarter and 26% in the first. That slowdown explains why total company revenue slipped 2% from the second quarter.
What to watch: exact US and Canada revenue in the third-quarter filing, and fourth-quarter revenue per user. Another drop in monthly spend per player would show that newer user groups are not catching up to older ones.
Rush Street Paused Its Pattern of Plan Raises
Raising the full-year outlook had been a regular habit for the Chicago-based company. Management lifted its 2026 sales target by $115 million at the middle of the range in the first quarter and by another $65 million in the second. This quarter, it left both the $1.56 billion to $1.60 billion sales plan and the $245 million to $265 million Ebitda plan unchanged.
Holding the plan followed a third quarter in which sales of $385.9 million fell 2% short of the $393.8 million second-quarter level that Sauers had used as a benchmark. By our math, the middle of the full-year range leaves $430 million of revenue for the fourth quarter. That represents 32.4% growth from a year ago, down from 38.8% in the third quarter and 46.3% in the second.
What to watch: the initial 2027 revenue outlook, which management plans to issue with fourth-quarter results. A target below 20% growth would confirm that the boost from Latin American pricing and World Cup sign-ups is fading.
Colombia Tax and Other Standing Risks
Several regulatory, tax and ownership risks remain open after the third-quarter release, with Colombia's gaming tax and rising tax-sharing obligations showing the clearest numbers.
- Colombia gaming tax: the outlook still includes "the temporary emergency 16% tax decree in Colombia" through year-end; a court ruling or government repeal would add roughly $7 million to $9 million of quarterly Ebitda.
- Tax receivable agreement liability: rose to $243.4 million from $128.8 million at year-end as insiders exchanged partnership units; the company also paid $30.9 million in employee share-withholding taxes over nine months, consuming cash outside Ebitda.
- Related-party royalties: payments to affiliated land-based casinos are only disclosed in the quarterly filing, which will show if they stayed near 35% of Ebitda.
- State and Mexican taxes: potential gaming tax hikes in US states and Mexico, along with slow US online casino legalization, received no update in the release.
- Event contract competition: the release did not mention prediction markets or the company's federal application to offer event contracts.
💲 Other KPIs
Unrestricted cash on the balance sheet rose by $42.0 million from the second quarter and by $45.7 million since the start of the year, with no debt. During the third quarter, the online gaming operator spent $13.5 million to buy back Class A shares, bringing nine-month repurchases to $42.3 million.
Cash generated from operations over the first nine months rose 49.4% from $95.9 million a year earlier. By our math, third-quarter free cash flow — operating cash flow minus software development and equipment purchases — rose 90.1% from a year ago to $62.2 million, matching third-quarter Ebitda excluding one-offs.
Diluted profit per share, excluding stock pay and one-offs, grew 66.7% from $0.09 a year ago, holding even with the second quarter's $0.15. The fully converted share count stood at 236.8 million, up 0.2% from a year ago as share buybacks offset employee stock grants.
🔮 Guidance
Unchanged. The middle of the range stays at $1.58 billion, or 39.3% growth for the year. By our math, that leaves $430.0 million for the fourth quarter, meaning growth slows to 32.4% from 38.8% in the third quarter. This pause follows two straight raises of $115 million and $65 million earlier in the year. Last year, full-year sales beat the third-quarter outlook by 2.2%.
Unchanged. The middle of the range stays at $255 million, or 66.0% growth for the year. By our math, that leaves $68.0 million for the fourth quarter, up 54.0% from a year ago, with an Ebitda margin of 15.8% against 16.1% in the third quarter. Management had raised the middle of this target by $20 million in the first quarter and $15 million in the second.
❓ Key Questions
Why is North American spending per user still falling?
Monthly revenue per North American user fell 15% from a year ago to $309, the fifth straight decline. Investors need to know how much older player groups are spending versus new sign-ups in places like Alberta.
Why did third-quarter sales dip from the second quarter?
Finance chief Kyle Sauers previously indicated third-quarter revenue would stay roughly even with the second quarter's $393.8 million, but sales slipped 2% to $385.9 million. Did unfavorable sports betting results or slower North American casino play cause the gap?
What are the profit margins in Latin America?
By our math, Latin America generated about $106 million of third-quarter revenue, or 27% of the company total, while Colombia's 16% gaming tax remained in place. Management has not disclosed how much profit the region contributes.
How much cash will tax-sharing agreements require next year?
The tax receivable agreement liability — a commitment to pay insiders 85% of tax savings from unit exchanges — rose to $243.4 million from $128.8 million at year-end. Investors need a schedule of upcoming cash payments.