Rush Street Interactive, Inc.
For the period ended Mar 31, 2025. Filed May 1, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 1, 2025
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Item 1. Financial Statements
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands except for share and per share data)
| March 31,2025 | December 31,2024 | |
|---|---|---|
| (Unaudited) | ||
| ASSETS | ||
| Current assets | ||
| Cash and cash equivalents | $228,218 | $229,171 |
| Restricted cash | 3,792 | 3,585 |
| Players’ receivables | 16,466 | 14,910 |
| Due from affiliates | 21,042 | 18,211 |
| Prepaid expenses and other current assets | 18,093 | 19,169 |
| Total current assets | 287,611 | 285,046 |
| Intangible assets, net | 78,169 | 77,347 |
| Property and equipment, net | 9,535 | 7,239 |
| Operating lease assets | 2,381 | 2,419 |
| Other assets | 9,321 | 7,415 |
| Total assets | $387,017 | $379,466 |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
| Current liabilities | ||
| Accounts payable | $22,570 | $25,798 |
| Accrued expenses | 68,622 | 72,702 |
| Players’ liabilities | 42,415 | 43,703 |
| Other current liabilities | 39,479 | 20,927 |
| Total current liabilities | 173,086 | 163,130 |
| Non-current liabilities | 18,570 | 18,020 |
| Total liabilities | 191,656 | 181,150 |
| Commitments and contingencies (Note 13) | ||
| Stockholders’ equity | ||
| Class A common stock, $0.0001 par value, 750,000,000 shares authorized as of March 31, 2025 and December 31, 2024; 95,509,061 and 90,511,441 shares issued as of March 31, 2025 and December 31, 2024, respectively; 95,010,439 and 90,511,441 shares outstanding as of March 31, 2025 and December 31, 2024, respectively | 9 | 9 |
| Class V common stock, $0.0001 par value, 200,000,000 shares authorized as of March 31, 2025 and December 31, 2024; 133,434,736 and 135,748,023 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively | 13 | 13 |
| Treasury stock, at cost; 498,622 and nil shares as of March 31, 2025 and December 31, 2024, respectively | (2,147) | — |
| Additional paid-in capital | 215,374 | 217,675 |
| Accumulated other comprehensive loss | (1,329) | (3,090) |
| Accumulated deficit | (130,610) | (135,929) |
| Total stockholders’ equity attributable to Rush Street Interactive, Inc. | 81,310 | 78,678 |
| Non-controlling interests | 114,051 | 119,638 |
| Total stockholders’ equity | 195,361 | 198,316 |
| Total liabilities and stockholders’ equity | $387,017 | $379,466 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands except for share and per share data)
| Three Months EndedMarch 31, | ||
|---|---|---|
| 2025 | 2024 | |
| (Unaudited) | (Unaudited) | |
| Revenue | $262,407 | $217,428 |
| Operating costs and expenses | ||
| Costs of revenue | 170,883 | 144,523 |
| Sales and marketing | 42,139 | 38,404 |
| General and administrative | 25,317 | 25,868 |
| Depreciation and amortization | 9,491 | 7,101 |
| Total operating costs and expenses | 247,830 | 215,896 |
| Income from operations | 14,577 | 1,532 |
| Other income | ||
| Interest income, net | 1,699 | 1,559 |
| Income before income taxes | 16,276 | 3,091 |
| Income tax expense | 5,065 | 5,300 |
| Net income (loss) | 11,211 | (2,209) |
| Net income (loss) attributable to non-controlling interests | 5,892 | (1,482) |
| Net income (loss) attributable to Rush Street Interactive, Inc. | $5,319 | $(727) |
| Earnings (loss) per common share attributable to Rush Street Interactive, Inc. – basic | $0.06 | $(0.01) |
| Weighted average common shares outstanding – basic | 93,850,707 | 76,027,427 |
| Earnings (loss) per common share attributable to Rush Street Interactive, Inc. – diluted | $0.05 | $(0.01) |
| Weighted average common shares outstanding – diluted | 234,292,159 | 76,027,427 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Amounts in thousands)
| Three Months EndedMarch 31, | ||
|---|---|---|
| 2025 | 2024 | |
| (Unaudited) | (Unaudited) | |
| Net income (loss) | $11,211 | $(2,209) |
| Other comprehensive income | ||
| Foreign currency translation adjustment | 4,527 | 101 |
| Comprehensive income (loss) | 15,738 | (2,108) |
| Comprehensive income (loss) attributable to non-controlling interests | 8,555 | (1,416) |
| Comprehensive income (loss) attributable to Rush Street Interactive, Inc. | $7,183 | $(692) |
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Amounts in thousands except for share data)
| Class ACommon Stock · Class VCommon Stock · Treasury Stock · Additional Paid-inCapital · AccumulatedOtherComprehensiveLoss · AccumulatedDeficit · TotalStockholders’EquityAttributableto RSI · Non-ControllingInterests · TotalStockholders’Equity | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Shares · Amount · Shares · Amount · Shares · Amount | ||||||||||||
| Balance at December 31, 2024 | 90,511,441 | $9 | 135,748,023 | $13 | — | $— | $217,675 | $(3,090) | $(135,929) | $78,678 | $119,638 | $198,316 |
| Share-based compensation expense | — | — | — | — | — | — | 3,665 | — | — | 3,665 | 5,148 | 8,813 |
| Issuance of Class A Common Stock under the equity compensation plan, net of shares withheld for employee taxes | 2,684,333 | — | — | — | — | — | (9,293) | — | — | (9,293) | (13,051) | (22,344) |
| Issuance of Class A Common Stock upon RSILP Unit Exchanges | 2,313,287 | — | (2,313,287) | — | — | — | — | — | — | — | — | — |
| Foreign currency translation adjustment | — | — | — | — | — | — | — | 1,864 | — | 1,864 | 2,663 | 4,527 |
| Repurchase of Class A Common Stock | — | — | — | — | 498,622 | (2,147) | — | — | — | (2,147) | (3,015) | (5,162) |
| Net income | — | — | — | — | — | — | — | — | 5,319 | 5,319 | 5,892 | 11,211 |
| Allocation of equity and non-controlling interests upon changes in RSILP ownership | — | — | — | — | — | — | 3,327 | (103) | — | 3,224 | (3,224) | — |
| Balance at March 31, 2025 (Unaudited) | 95,509,061 | $9 | 133,434,736 | $13 | 498,622 | $(2,147) | $215,374 | $(1,329) | $(130,610) | $81,310 | $114,051 | $195,361 |
| Class ACommon Stock · Class VCommon Stock · Additional Paid-inCapital · AccumulatedOtherComprehensiveLoss · AccumulatedDeficit · TotalStockholders’EquityAttributableto RSI · Non-ControllingInterests · TotalStockholders’Equity | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Shares · Amount · Shares · Amount | ||||||||||
| Balance at December 31, 2023 | 72,387,409 | $7 | 150,434,310 | $15 | $192,163 | $(100) | $(138,317) | $53,768 | $112,361 | $166,129 |
| Share-based compensation expense | — | — | — | — | 2,979 | — | — | 2,979 | 5,446 | 8,425 |
| Issuance of Class A Common Stock under the equity compensation plan | 2,106,202 | — | — | — | — | — | — | — | — | — |
| Issuance of Class A Common Stock upon RSILP Unit Exchanges | 5,050,000 | 1 | (5,050,000) | (1) | — | — | — | — | — | — |
| Foreign currency translation adjustment | — | — | — | — | — | 35 | — | 35 | 66 | 101 |
| Net loss | — | — | — | — | — | — | (727) | (727) | (1,482) | (2,209) |
| Allocation of equity and non-controlling interests upon changes in RSILP ownership | — | — | — | — | 4,769 | (7) | — | 4,762 | (4,762) | — |
| Balance at March 31, 2024 (Unaudited) | 79,543,611 | $8 | 145,384,310 | $14 | $199,911 | $(72) | $(139,044) | $60,817 | $111,629 | $172,446 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
| Three Months EndedMarch 31, | ||
|---|---|---|
| 2025 | 2024 | |
| (Unaudited) | (Unaudited) | |
| Cash flows from operating activities | ||
| Net income (loss) | $11,211 | $(2,209) |
| Adjustments to reconcile net income (loss) to net cash provided by operating activities | ||
| Share-based compensation expense | 8,813 | 8,425 |
| Depreciation and amortization expense | 9,491 | 7,101 |
| Deferred income taxes | 100 | (697) |
| Noncash lease expense | 224 | 194 |
| Changes in operating assets and liabilities: | ||
| Players’ receivables | (1,449) | (2,992) |
| Due from affiliates | (2,832) | 12,879 |
| Prepaid expenses and other assets | (35) | (5,963) |
| Accounts payable, accrued expenses and other liabilities | 4,760 | 14,504 |
| Players’ liabilities | (1,571) | (334) |
| Net cash provided by operating activities | 28,712 | 30,908 |
| Cash flows from investing activities | ||
| Internally developed software costs | (6,831) | (6,335) |
| Acquisition of other intangibles | (276) | (259) |
| Acquisition of developed technology | (225) | — |
| Purchases of property and equipment | (161) | (278) |
| Acquisition of gaming licenses | (61) | (413) |
| Short-term investments | — | (128) |
| Net cash used in investing activities | (7,554) | (7,413) |
| Cash flows from financing activities | ||
| Payments for employee taxes related to shares withheld | (20,366) | — |
| Repurchase of Class A Common Stock | (5,162) | — |
| Principal payments of finance lease liabilities | (1,650) | (182) |
| Net cash used in financing activities | (27,178) | (182) |
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | 5,274 | 26 |
| Net change in cash, cash equivalents and restricted cash | (746) | 23,339 |
| Cash, cash equivalents and restricted cash, at the beginning of the period (1) | 232,756 | 170,977 |
| Cash, cash equivalents and restricted cash, at the end of the period (1) | $232,010 | $194,316 |
| Three Months EndedMarch 31, | ||
|---|---|---|
| 2025 | 2024 | |
| (Unaudited) | (Unaudited) | |
| Supplemental disclosure of noncash investing and financing activities: | ||
| Right-of-use assets obtained in exchange for new or modified operating lease liabilities | $93 | $— |
| Right-of-use assets obtained in exchange for new or modified finance lease liabilities | $3,085 | $436 |
| Allocation of equity and non-controlling interests upon changes in RSILP ownership | $(2,663) | $4,762 |
| Shares withheld for employee taxes in Other Current Liabilities | $3,805 | $— |
| Capitalized intangible assets in Accounts Payable and Accrued Expenses | $2,745 | $2,980 |
| Property and equipment purchases in Accounts Payable and Accrued Expenses | $14 | $79 |
| Supplemental disclosure of cash flow information: | ||
| Cash paid for income taxes | $3,067 | $2,157 |
| Cash paid for interest | $236 | $252 |
(1)Cash and cash equivalents and Restricted cash are each presented separately on the condensed consolidated balance sheets.
- Description of Business
Rush Street Interactive, Inc. is a holding company organized under the laws of the State of Delaware and through its main operating subsidiary, Rush Street Interactive, LP and its subsidiaries (collectively, “RSILP”), is a leading online gaming company that provides online casino and sports betting in the U.S., Canadian and Latin American markets. Rush Street Interactive, Inc. and its subsidiaries (including RSILP) are collectively referred to as “RSI” or the “Company.” The Company is headquartered in Chicago, Illinois.
- Summary of Significant Accounting Policies and Recent Accounting Pronouncements
Basis of Presentation and Principles of Consolidation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the applicable regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto as of and for the year ended December 31, 2024 included in the Company’s Annual Report on Form 10-K, as filed with the SEC on February 28, 2025.
These unaudited condensed consolidated financial statements include the accounts of the Company, its directly and indirectly wholly owned subsidiaries, and all entities in which the Company has a controlling interest. RSI is deemed to have a controlling interest of RSILP through its wholly owned subsidiary, RSI GP, LLC (“RSI GP”), which is the sole general partner of RSILP. For consolidated entities that are less than wholly owned, third-party holdings of equity interests are presented as non-controlling interests in the Company’s condensed consolidated balance sheets and condensed consolidated statements of changes in equity. The portion of net income (loss) attributable to the non-controlling interests is presented as net income (loss) attributable to non-controlling interests in the Company’s condensed consolidated statements of operations, while the portion of comprehensive income (loss) attributable to non-controlling interests is reported as comprehensive income (loss) attributable to non-controlling interests in the Company’s condensed consolidated statements of comprehensive income (loss). All intercompany accounts and transactions have been eliminated upon consolidation.
The Company is organized as an umbrella partnership-C corporation (“Up-C”), resulting from the transactions contemplated in the Business Combination Agreement, dated as of July 27, 2020 (as amended and/or restated from time to time, the “Business Combination Agreement” and the transactions contemplated thereby, the “Business Combination”). The Business Combination Agreement was entered among RSILP, the sellers set forth on the signature pages thereto (collectively, the “Sellers” and each, a “Seller”), dMY Sponsor, LLC (the “Sponsor”) and Rush Street Interactive GP, LLC, resulting in dMY Technology Group, Inc. acquiring certain Class A Units of RSILP (the “RSILP Units”).
As an UP-C, substantially all of the assets of the combined company are held by RSILP and the Company’s primary assets are its equity interests in RSILP (which are held indirectly through wholly owned subsidiaries of the Company – RSI ASLP, Inc. (the “Special Limited Partner”) and RSI GP). The Company controls RSILP through RSI GP. As of March 31, 2025, the Company owned 41.59% of the RSILP Units and the holders of the non-controlling interest owned 58.41% of the RSILP Units.
Interim Unaudited Condensed Consolidated Financial Statements
The accompanying condensed consolidated balance sheet as of March 31, 2025 and the condensed consolidated statements of operations, comprehensive income (loss), changes in equity and cash flows for the three months ended March 31, 2025 and 2024 are unaudited. The condensed consolidated balance sheet as of December 31, 2024 was derived from audited consolidated financial statements, but may omit certain disclosures required by U.S. GAAP previously disclosed in the most recent annual consolidated financial statements. The interim unaudited condensed consolidated financial statements have been prepared on a basis consistent with the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to state fairly the Company’s financial condition, its operations and cash flows for the periods presented. The historical results are not necessarily indicative of future results, and the results of operations for the three months ended March 31, 2025 are not necessarily indicative of the results to be expected for the full year or any future period.
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant estimates and assumptions reflected in the condensed consolidated financial statements relate to and include, but are not limited to: the valuation of share-based awards; internally developed software; long-lived assets and investments in equity; estimated useful lives of property and equipment and intangible assets; redemption rate assumptions associated with the loyalty program and other discretionary player bonuses; deferred revenue; accrued expenses; determination of the incremental borrowing rate to calculate certain operating lease liabilities and finance lease liabilities; and deferred taxes and amounts associated with the tax receivable agreement (“TRA”) entered into in connection with the closing of the transactions contemplated in the Business Combination Agreement on December 29, 2020.
Cash and Cash Equivalents and Restricted Cash
Cash and cash equivalents consist of highly liquid, unrestricted savings, checking, instant access internet banking accounts, money market funds and certificates of deposits with original maturities of 90 days or less at acquisition.
Restricted cash includes any cash and cash equivalents held by the Company that are legally restricted as to withdrawals or usage. This consists of certain deposits that are restricted under regulatory requirements. Regardless of whether customer deposits are legally restricted, the Company maintains separate bank accounts to segregate cash that resides in customers’ accounts from operational funds.
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consist primarily of prepaid expenses and short-term investments. Prepaid expenses consist of various advance payments for goods or services to be received in the future. These costs include insurance, subscriptions, marketing, other contracted services and deposits paid in advance. As of March 31, 2025 and December 31, 2024, the Company had prepaid expenses of $8.7 million and $5.5 million, respectively.
Short-term investments consist of certificates of deposit with an original maturity greater than three months but not greater than one year. As of March 31, 2025 and December 31, 2024, the Company had short-term investments of $4.6 million and $4.3 million, respectively.
Surety Bonds
The Company had been issued $31.1 million in surety bonds as of March 31, 2025 and December 31, 2024 that are used to satisfy regulatory requirements related to securing cash held for the benefit of customers.
The Company had been issued $6.3 million and $6.1 million in surety bonds as of March 31, 2025 and December 31, 2024, respectively, to satisfy regulatory requirements necessary to operate in certain jurisdictions.
There have been no claims against any of the Company’s surety bonds and the likelihood of future claims is expected to be remote.
Foreign Currency Gains and Losses
The Company’s reporting currency is the U.S. dollar while the functional currency of its subsidiaries not deemed to be the U.S. dollar include the Colombian Peso, Mexican Peso, Canadian Dollar, and Peruvian Soles. The financial statements of non-U.S. subsidiaries are translated into the U.S. dollar in accordance with Accounting Standards Codification (“ASC”) 830, Foreign Currency Matters, using period-end exchange rates for assets and liabilities, and average exchange rates for the period for revenues, costs and expenses. The U.S. dollar effects that arise from translating the net assets of these subsidiaries at changing rates are recorded in the foreign currency translation adjustment account, which is included in equity as a component of accumulated other comprehensive loss.
If transactions are recorded in a currency other than the functional currency, remeasurement into the functional currency is required and may result in transaction gains or losses. Transaction gains were $0.1 million for the three months ended March 31, 2025 compared to losses of $0.4 million for the same period in 2024. Amounts are recorded in general and administrative on the Company’s unaudited condensed consolidated statements of operations.
Recent Accounting Pronouncements Not Yet Adopted
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which is intended to enhance the transparency, decision usefulness and effectiveness of income tax disclosures. The amendments in this ASU require a public entity to disclose a tabular tax rate reconciliation, using both percentages and currency, with specific categories. A public entity is also required to provide a qualitative description of the states and local jurisdictions that make up the majority of the effect of the state and local income tax category and the net amount of income taxes paid, disaggregated by federal, state and foreign taxes and also disaggregated by individual jurisdictions. The amendments also remove certain disclosures that are no longer considered cost beneficial. The amendments are effective prospectively for annual periods beginning after December 15, 2024, and early adoption and retrospective application are permitted. The Company will adopt this standard beginning with its fiscal year ending December 31, 2025. The Company is currently evaluating the impact of these new disclosure requirements on its condensed consolidated financial statements.
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income-Expense Disaggregation (Subtopic 220-40): Disaggregation of Income Statement Expenses. The ASU requires the disclosure of additional information related to certain costs and expenses, including amounts of inventory purchases, employee compensation, and depreciation and amortization included in each income statement line item. The ASU also requires disclosure of the total amount of selling expenses and the Company’s definition of selling expenses. The ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its condensed consolidated financial statements and related disclosures.
- Revenue Recognition
The Company’s revenue from contracts with customers is derived from online casino, online sports betting, retail sports betting and social gaming.
Online casino and online sports betting
Online casino offerings typically include the full suite of games available in land-based casinos, such as table games (i.e., blackjack and roulette), slot machines and poker games. The Company generates revenue from these offerings (other than online poker) through hold, or gross winnings, as customers play against the house. Online casino revenue other than from online poker is generated based on total customer bets less amounts paid to customers for winning bets, less other incentives awarded to customers, plus or minus the change in the progressive jackpot liability. Online casino revenue from online poker is recognized as rake (i.e., percentage of a game’s wagers earned by the Company for satisfying the performance obligation) less any value given back to players, which could be in the form of cash, tournament tickets or other form of bonuses.
Online sports betting involves a user placing a bet on the outcome of a sporting event, sports-related activity or a series of the same, with the chance to win a pre-determined amount, often referred to as fixed odds. Online sports betting revenue is generated by setting odds such that there is a built-in theoretical margin in each bet offered to customers. Online sports betting revenue is generated based on total customer bets less amounts paid to customers for winning bets, less other incentives awarded to customers, plus or minus the change in unsettled bets.
Retail sports betting
The Company provides retail sports services to land-based partners in exchange for a monthly commission based on that partner’s retail sportsbook revenue. Services generally include ongoing management and oversight of the retail sportsbook, technical support for the partner’s customers, risk management, advertising and promotion, and support for third-party vendors’ sports betting equipment. The Company has a single performance obligation to provide retail sports services and records the revenue as services are performed and when the commission amounts are no longer constrained (i.e., the amount is known).
Certain relationships with business partners provide the Company the ability to operate the retail sportsbook. In this scenario, revenue is generated based on total customer bets less amounts paid to customers for winning bets, less other incentives awarded to customers, plus or minus the change in unsettled retail sports bets and unclaimed retail tickets for settled retail bets.
Social gaming
The Company provides a social gaming platform for users to enjoy free-to-play games that use virtual credits. While virtual credits are issued to users for free, some users may choose to purchase additional virtual credits through the Company’s virtual cashier. The Company has a single performance obligation associated with social gaming services to provide social gaming services to users upon the redemption of virtual credits. Deferred revenue is recorded when users purchase virtual credits and revenue is recognized when the virtual credits are redeemed, and the Company’s performance obligation has been fulfilled.
Disaggregation of revenue for the three months ended March 31, 2025 and 2024, was as follows:
| Three Months EndedMarch 31, | ||
|---|---|---|
| ($ in thousands) | 2025 | 2024 |
| Online casino and online sports betting | $260,881 | $215,622 |
| Retail sports betting | 327 | 708 |
| Social gaming | 1,199 | 1,098 |
| Total revenue | $262,407 | $217,428 |
Revenue by geographic region for the three months ended March 31, 2025 and 2024, was as follows:
| Three Months EndedMarch 31, | ||
|---|---|---|
| ($ in thousands) | 2025 | 2024 |
| United States and Canada | $224,862 | $188,537 |
| Latin America, including Mexico | 37,545 | 28,891 |
| Total revenue | $262,407 | $217,428 |
Deferred revenue associated with online casino and online sports betting revenue and retail sports betting revenue includes unsettled customer bets and is included within players’ liabilities in the condensed consolidated balance sheets.
The deferred revenue balances as of March 31, 2025 and 2024 were as follows:
| Three Months EndedMarch 31, | ||
|---|---|---|
| ($ in thousands) | 2025 | 2024 |
| Deferred revenue, beginning of period | $10,814 | $7,013 |
| Deferred revenue, end of period | $10,022 | $8,275 |
| Revenue recognized during the period from amounts included in deferred revenue at the beginning of the period | $9,733 | $6,312 |
- Intangible Assets, Net
The Company had the following intangible assets, net as of March 31, 2025 and December 31, 2024:
| ($ in thousands) | Weighted-Average Remaining AmortizationPeriod (years) | GrossCarryingAmount | AccumulatedAmortization | Net |
|---|---|---|---|---|
| License Fees | ||||
| March 31, 2025 | 6.34 | $55,424 | $(24,615) | $30,809 |
| December 31, 2024 | 6.85 | $52,933 | $(22,491) | $30,442 |
| Internally Developed Software | ||||
| March 31, 2025 | 2.15 | $74,852 | $(34,907) | $39,945 |
| December 31, 2024 | 2.19 | $68,291 | $(29,346) | $38,945 |
| Developed Technology | ||||
| March 31, 2025 | 4.65 | $6,381 | $(2,424) | $3,957 |
| December 31, 2024 | 4.89 | $6,381 | $(2,224) | $4,157 |
| Other Intangible Assets(1) | ||||
| March 31, 2025 | 1.88 | $7,629 | $(4,171) | $3,458 |
| December 31, 2024 | 2.08 | $7,373 | $(3,570) | $3,803 |
(1)Other intangible assets include trademarks, media content, customer lists and software licenses.
Amortization expense was $8.5 million for the three months ended March 31, 2025 and $6.1 million for the same period in 2024.
- Property and Equipment, net
The Company had the following property and equipment, net as of March 31, 2025 and December 31, 2024:
| ($ in thousands) | March 31,2025 | December 31, 2024 |
|---|---|---|
| Computers, software and related equipment | $4,550 | $4,427 |
| Operating equipment and servers | 3,237 | 3,231 |
| Furniture | 1,271 | 1,143 |
| Leasehold improvements | 1,884 | 1,797 |
| Property and equipment not yet placed into service | 199 | 199 |
| Total property and equipment | 11,141 | 10,797 |
| Less: accumulated depreciation | (8,267) | (7,732) |
| 2,874 | 3,065 | |
| Finance lease right-of-use assets | 10,132 | 7,041 |
| Less: accumulated amortization | (3,471) | (2,867) |
| 6,661 | 4,174 | |
| Property and equipment, net | $9,535 | $7,239 |
The Company recorded depreciation expense on property and equipment of $0.4 million and $0.6 million for the three months ended March 31, 2025 and 2024, respectively. The Company recorded amortization expense on finance lease right-of-use assets of $0.6 million and $0.4 million for the three months ended March 31, 2025 and 2024, respectively.
- Accrued Expenses and Other Liabilities
The Company has the following accrued expenses as of March 31, 2025 and December 31, 2024:
| ($ in thousands) | March 31,2025 | December 31,2024 |
|---|---|---|
| Accrued compensation and related expenses | $11,067 | $17,218 |
| Accrued operating expenses | 34,332 | 32,427 |
| Accrued marketing expenses | 17,836 | 17,959 |
| Accrued administrative expenses | 4,531 | 4,319 |
| Accrued other expenses | 856 | 779 |
| Total accrued expenses | $68,622 | $72,702 |
The Company has the following other current and non-current liabilities as of March 31, 2025 and December 31, 2024:
| Current | Non-Current | |||
|---|---|---|---|---|
| ($ in thousands) | March 31,2025 | December 31,2024 | March 31,2025 | December 31,2024 |
| Income tax payable | $19,374 | $15,009 | $— | $— |
| Value-added tax payable | 5,423 | — | — | — |
| License fees payable | 2,380 | — | — | — |
| Deferred royalty liabilities | 1,844 | 1,814 | 10,112 | 10,581 |
| Finance lease liabilities | 1,324 | 1,296 | 2,703 | 1,297 |
| Operating lease liabilities | 665 | 673 | 1,347 | 1,370 |
| Other | 8,469 | 2,135 | 4,408 | 4,772 |
| Total other current and non-current liabilities | $39,479 | $20,927 | $18,570 | $18,020 |
- Stockholders’ Equity
Non-Controlling Interests
Non-controlling interests represents the RSILP Units held by holders other than the Company.
Non-controlling interests owned 58.41% and 60.00% of the RSILP Units outstanding as of March 31, 2025 and December 31, 2024, respectively. The table below illustrates a rollforward of the non-controlling interests’ ownership during the three months ended March 31, 2025:
| Non-Controlling Interest % | |
|---|---|
| Non-controlling interests ownership % as of December 31, 2024: | 60.00% |
| Issuance of Class A Common Stock upon RSILP Unit Exchanges | (1.01)% |
| Issuance of Class A Common Stock under the equity compensation plan, net of shares withheld for employee taxes | (0.71)% |
| Repurchases of Class A Common Stock | 0.13% |
| Non-controlling interests ownership % as of March 31, 2025: | 58.41% |
Non-controlling interests owned 64.64% and 67.51% of the RSILP Units outstanding as of March 31, 2024 and December 31, 2023, respectively. The table below illustrates a rollforward of the non-controlling interests’ ownership during the three months ended March 31, 2024:
| Non-Controlling Interest % | |
|---|---|
| Non-controlling interests ownership % as of December 31, 2023: | 67.51% |
| Issuance of Class A Common Stock upon RSILP Unit Exchanges | (2.26)% |
| Issuance of Class A Common Stock under the equity compensation plan | (0.61)% |
| Non-controlling interests ownership % as of March 31, 2024: | 64.64% |
Treasury Stock
On October 24, 2024, the Board of Directors authorized the repurchase of an aggregate of up to $50 million of the Company’s Class A Common Stock (the “Stock Repurchase Program”) through open market purchases, privately negotiated transactions or other transactions in accordance with applicable securities laws.
During the three months ended March 31, 2025,498,622 shares of Class A Common Stock were repurchased pursuant to the Stock Repurchase Program for an aggregate purchase price of approximately $5.2 million at an average price of $10.35. The repurchased shares are considered issued but not outstanding.
- Share-Based Compensation
Incentive Plan
The Company adopted the Rush Street Interactive, Inc. 2020 Omnibus Equity Incentive Plan, as amended from time to time (the “2020 Plan”), to attract, retain and incentivize employees, certain consultants and directors who will contribute to the success of the Company. Awards that may be granted under the 2020 Plan include incentive stock options, non-qualified stock options, stock appreciation rights, restricted awards, performance share awards, cash awards and other equity-based awards. There is an aggregate of approximately 35.8 million shares of Class A Common Stock reserved under the 2020 Plan. The 2020 Plan will terminate on December 29, 2030.
Restricted Stock Units (“RSUs”)
The Company granted 714,723 and 1,813,694 RSUs with service conditions during the three months ended March 31, 2025 and 2024, respectively. RSUs with service conditions generally vest over athree- tofour-year period, with each tranche vesting annually. The grant date fair value of RSUs with service conditions is determined based on the quoted market price.
The Company granted 423,269 and 1,152,122 RSUs with market-based conditions (e.g., total shareholder return) during the three months ended March 31, 2025 and 2024, respectively. RSUs with market-based conditions generally vest over athree-year period and fair value was determined using a Monte Carlo simulation using the following assumptions:
| Three Months EndedMarch 31, | ||
|---|---|---|
| 2025 | 2024 | |
| Volatility rate | 62.75% | 68.48% |
| Risk-free interest rate | 4.00% | 4.55% |
| Average expected life (in years) | 2.8 | 2.8 |
| Dividend yield | None | None |
| Stock price at grant date | $10.70 | $5.79 |
RSU activity for the three months ended March 31, 2025 and 2024 was as follows:
| Number of units | Weighted-average grant price | |
|---|---|---|
| Unvested balance at December 31, 2024 | 9,965,432 | $6.06 |
| Granted | 1,137,992 | 12.07 |
| Additional shares based on performance(1) | 1,055,328 | 21.19 |
| Vested(2) | (4,842,177) | 3.74 |
| Forfeited | (55,987) | 5.89 |
| Unvested balance at March 31, 2025 | 7,260,588 | $7.67 |
| Unvested balance at December 31, 2023 | 9,218,142 | $5.70 |
| Granted | 2,965,816 | 7.06 |
| Vested(2) | (1,532,353) | 3.92 |
| Forfeited | (3,264) | 3.59 |
| Unvested balance at March 31, 2024 | 10,648,341 | $6.34 |
(1)RSUs with market conditions include a performance achievement multiplier that is assessed upon vesting of the shares. RSUs with market conditions vested during three months ended March 31, 2025, resulting in the issuance of shares incremental to the initial target when the conditions were met.
(2)Includes 479,552 and 279,061 of RSUs that vested during the three months ended March 31, 2025 and 2024, respectively, but the resulting shares of Class A Common Stock have not yet been issued. There were 985,588 and 530,780 RSUs that vested for which the resulting shares of Class A Common Stock were not issued as of March 31, 2025 and 2024, respectively.
The aggregate fair value of the RSUs granted during the three months ended March 31, 2025 and 2024 was approximately $13.7 million and $20.9 million, respectively. The aggregate grant date fair value of RSUs vested during the three months ended March 31, 2025 and 2024 was approximately $18.1 million and $6.0 million, respectively.
As of March 31, 2025, the Company had unrecognized share-based compensation expense related to RSUs of $41.8 million. The outstanding RSUs had a remaining weighted-average vesting period of 1.26 years as of March 31, 2025.
The Company withheld 1,704,266 shares of its Class A Common Stock associated with the tax withholding obligations due from employees upon the vesting of equity-based awards at an average price of $13.11 and a total cost of $22.3 million during the three months ended March 31, 2025, compared tonil shares for the same period in 2024.
Stock Options
The Company granted 344,391 and 630,897 stock options during the three months ended March 31, 2025 and 2024, respectively. The estimated grant date fair value of stock options was determined using a Black-Scholes valuation model using the following weighted-average assumptions:
| Three Months EndedMarch 31, | ||
|---|---|---|
| 2025 | 2024 | |
| Volatility rate | 65.00% | 68.00% |
| Risk-free interest rate | 4.10% | 4.30% |
| Expected term(1) (in years) | 6.0 | 6.0 |
| Dividend yield | None | None |
| Stock price at grant date | $10.70 | $5.79 |
| Exercise price | $10.70 | $5.79 |
(1)Calculated using the simplified method (the midpoint between the requisite service period and the contractual term of the option) due to the Company’s insufficient historical exercise information to provide a basis for an estimate.
Stock option activity for the three months ended March 31, 2025 was as follows:
| Number of options | Weighted-average exercise price | |
|---|---|---|
| Outstanding balance at December 31, 2024 | 2,582,071 | $4.57 |
| Granted | 344,391 | 10.70 |
| Exercised | — | — |
| Forfeited | — | — |
| Outstanding balance at March 31, 2025 | 2,926,462 | $5.29 |
| Exercisable balance at March 31, 2025 | 1,536,552 | $4.63 |
Stock option activity for the three months ended March 31, 2024 was as follows:
| Number of options | Weighted-average exercise price | |
|---|---|---|
| Outstanding balance at December 31, 2023 | 1,971,611 | $4.16 |
| Granted | 630,897 | 5.79 |
| Exercised | — | — |
| Forfeited | — | — |
| Outstanding balance at March 31, 2024 | 2,602,508 | $4.56 |
The weighted-average grant-date fair value of options granted during the three months ended March 31, 2025 and 2024 was $6.70 and $3.74, respectively. The aggregate fair value of the stock options granted during the three months ended March 31, 2025 and 2024 was $2.3 million and $2.4 million, respectively. The outstanding stock options and exercisable stock options as of March 31, 2025 had an intrinsic value of $16.4 million and $9.8 million, respectively.
As of March 31, 2025, the Company had unrecognized share-based compensation expense related to stock options of $4.8 million. The outstanding options had a remaining weighted-average vesting period of 1.14 years as of March 31, 2025.
Share-based Compensation Expense
Share-based compensation expense for the three months ended March 31, 2025 and 2024 was as follows:
| Three Months Ended March 31, | ||
|---|---|---|
| ($ in thousands) | 2025 | 2024 |
| Costs of revenue | $63 | $270 |
| Sales and marketing | 3,324 | 570 |
| General and administrative | 5,426 | 7,585 |
| Total share-based compensation expense | $8,813 | $8,425 |
- Income Taxes
Income tax expense for the three months ended March 31, 2025 and 2024 was as follows:
| Three Months Ended March 31, | ||
|---|---|---|
| ($ in thousands) | 2025 | 2024 |
| Income tax expense | $5,065 | $5,300 |
The Company recognized federal, state and foreign income tax expense of $5.1 million and $5.3 million during the three months ended March 31, 2025 and 2024, respectively. The effective tax rates for the three months ended March 31, 2025 and 2024, were 30.5% and 171.5%, respectively. The difference between the Company’s effective tax rate and the U.S. statutory tax rate of 21% was primarily due to a full valuation allowance recorded on the Company’s net U.S. deferred tax assets, non-taxable income / (loss) attributable to non-controlling interest and income tax rate differences related to the Company’s Colombia operations for which both current and deferred taxes were recorded. The Company evaluates the realizability of the deferred tax assets on a quarterly basis and establishes a valuation allowance when it is more likely than not that all or a portion of a deferred tax asset may not be realized.
In connection with the Business Combination, the Special Limited Partner entered into the TRA, which generally provides that it pay 85% of certain net tax benefits, if any, that the Company (including the Special Limited Partner) realizes (or in certain cases is deemed to realize) as a result of an increase in tax basis and tax benefits related to the transactions contemplated under the Business Combination Agreement and the exchange of Retained RSILP Units (as defined in the Business Combination Agreement) for Class A Common Stock (or cash at the Company’s option) pursuant to RSILP’s amended and restated limited partnership agreement and tax benefits related to entering into the TRA, including tax benefits attributable to payments under the TRA. These payments are the obligation of the Special Limited Partner and not of RSILP. The actual increase in the Special Limited Partner’s allocable share of RSILP’s tax basis in its assets, as well as the amount and timing of any payments under the TRA, will vary depending upon a number of factors, including the timing of exchanges, the market price of the Class A Common Stock at the time of the exchange and the amount and timing of the recognition of RSI and its consolidated subsidiaries’ (including the Special Limited Partner’s) income. While many of the factors that will determine the amount of payments that the Special Limited Partner will make under the Tax Receivable Agreement are outside of the Company's control, the Company expects that the payments the Special Limited Partner will make under the Tax Receivable Agreement will be substantial and could have a material adverse effect on the financial condition of the Company.
Based primarily on historical losses of RSILP, management has determined it is more-likely-than-not that the Company will be unable to utilize its deferred tax assets subject to the TRA. Based on tax benefits realized in the current and prior tax year, the Company recognized a TRA liability of $1.1 million and $0.7 million, as of March 31, 2025 and December 31, 2024, respectively. Management has not recorded the deferred tax asset or a corresponding liability under the TRA related to the remaining tax savings the Company may realize from the utilization of tax deductions related to basis adjustments created by the transactions in the Business Combination Agreement and subsequent exchanges. The unrecognized TRA liability as of March 31, 2025 and December 31, 2024 was $115.1 million and $104.3 million, respectively. The increase in the liability is primarily due to the issuance of Class A Common Stock upon RSILP unit exchange. The Company's deferred tax assets and corresponding TRA liability, that are unrecognized, do not impact the Company’s consolidated statements of operations. However, given the Company’s current earnings and anticipated future earnings, the Company believes that there is a reasonable possibility that within the next 12 months, sufficient positive evidence may become available to allow the Company to reach a conclusion that deferred tax assets and the related TRA liability may be realized. Recognition of the TRA liability would result in an increase to General and administrative expense for the period the liability is recorded. However, the exact timing and amount of the liability to be recorded are subject to change on the basis of the level of profitability that the Company is able to actually achieve.
- Earnings (Loss) Per Share
The basic and diluted earnings (loss) per share for the three months ended March 31, 2025 and 2024 were as follows (amounts in thousands, except for share and per share amounts):
| Three Months EndedMarch 31, | ||
|---|---|---|
| 2025 | 2024 | |
| Numerator: | ||
| Net income (loss) | $11,211 | $(2,209) |
| Less: Net income (loss) attributable to non-controlling interests | 5,892 | (1,482) |
| Net income (loss) attributable to Rush Street Interactive, Inc. – basic | $5,319 | $(727) |
| Effect of dilutive securities: | ||
| Increase to net income attributable to non-controlling interests | 5,892 | — |
| Net income (loss) attributable to Rush Street Interactive, Inc. – diluted | $11,211 | $(727) |
| Denominator: | ||
| Weighted-average common shares outstanding – basic | 93,850,707 | 76,027,427 |
| Adjustments: | ||
| Conversion of Weighted Average RSILP units to Class A Common Shares | 134,065,127 | — |
| Incremental shares from assumed conversion of stock options and restricted stock units(1) | 6,376,325 | — |
| Weighted-average common shares outstanding – diluted | 234,292,159 | 76,027,427 |
| Earnings (loss) per Class A Common Share - basic | $0.06 | $(0.01) |
| Earnings (loss) per Class A Common Share - diluted | $0.05 | $(0.01) |
| (1) In periods of Net loss, assumed conversion of stock-based awards and RSILP units are anti-dilutive and therefore excluded from the diluted loss per share calculation. | ||
The Class V Common Stock does not participate in the Company’s earnings or losses and is therefore not a participating security. As such, separate presentation of basic and diluted earnings per share of Class V Common Stock under the two-class method has not been presented.
The Company excluded the following securities from its computation of diluted shares outstanding for the three months ended March 31, 2025 and 2024 as their effect would have been anti-dilutive:
| Three Months EndedMarch 31, | ||
|---|---|---|
| 2025 | 2024 | |
| RSILP Units(1) | — | 145,384,310 |
| Unvested RSUs | 712,121 | 10,648,341 |
| Vested RSUs(2) | — | 530,780 |
| Outstanding Stock Options | 441,218 | 2,602,508 |
(1) RSILP Units that are held by non-controlling interest holders and may be exchanged, subject to certain restrictions, for Class A Common Stock. Upon exchange of an RSILP Unit, a share of Class V Common Stock is cancelled.
(2) RSUs that vested but the resulting shares of Class A Common Stock have not yet been issued.
- Segment Reporting
An operating segment is a component of an entity that (i) engages in business activities from which it may earn revenues and incur expenses; (ii) has discrete financial information available; and (iii) is regularly reviewed by the entity’s chief operating decision maker (“CODM”) for purposes of performance assessment and resource allocation.
The Company’s CODM is its chief executive officer. The Company manages its operations as a single operating segment that engages in online gaming and retail sports betting business activities. The Company derives its revenues from its gaming offerings such as real-money online casino, online sports betting and retail sports betting (i.e., sports betting services provided at bricks-and-mortar locations), as well as social gaming, which involves free-to-play games using virtual credits that user can earn or purchase. The accounting policies for this segment are consistent with those described in the summary of significant accounting policies. The measure of segment assets is reported on the condensed consolidated balance sheets as total consolidated assets.
The Company’s revenue, significant expenses and net income (loss) for its consolidated segment are as follows:
| Three Months EndedMarch 31, | ||
|---|---|---|
| ($ in thousands) | 2025 | 2024 |
| Revenue | $262,407 | $217,428 |
| Less: | ||
| Costs of revenue(1) | 170,820 | 144,253 |
| Sales and marketing(1) | 38,815 | 37,834 |
| General and administrative(1) | 19,546 | 18,283 |
| Interest income | (1,935) | (2,497) |
| Interest expense | 236 | 938 |
| Depreciation and amortization | 9,491 | 7,101 |
| Income tax expense | 5,065 | 5,300 |
| Other segment items(2) | 9,158 | 8,425 |
| Consolidated net income (loss) | $11,211 | $(2,209) |
(1) Excludes share-based compensation expense and tax receivable agreement expense.
(2) Other segment items includes share-based compensation expense and tax receivable agreement expense.
- Related Parties
Affiliated Land-Based Casinos
Neil Bluhm and his adult children (including Mr. Andrew Bluhm and Ms. Leslie Bluhm, both members of the Board), through their individual capacities, entities or trusts that they have created for the benefit of themselves or their family members, and Greg Carlin, through his individual capacity, entities or trusts that he has created for the benefit of himself or his family members, are direct or indirect owners, directors and/or officers of certain land-based casinos. The Company has entered into certain agreements with these affiliated land-based casinos that create strategic partnerships aimed to capture the online gaming, online sports betting and retail sports services markets in the various states and municipalities where the land-based casinos operate.
Generally, the Company pays a royalty fee to the land-based casino (calculated as a percentage of the Company’s revenue less reimbursable costs or other consideration received as defined in the applicable agreement) in exchange for the right to operate real-money online casino and/or online sports betting under the gaming license of the land-based casinos or for marketing gaming offerings under the land-based casinos’ brand. Royalties related to arrangements with affiliated casinos were $17.4 million and $15.6 million for the three months ended March 31, 2025 and 2024, respectively, which were net of any consideration received from the affiliated casino for reimbursable costs, as well as costs that are paid directly by the affiliate casino on the Company’s behalf. Net royalties paid are recorded as costs of revenue in the accompanying condensed consolidated statements of operations. In certain cases, the affiliate casino maintains the bank account that processes cash deposits and withdrawals for the Company’s customers. Accordingly, at any point in time, the Company will record a receivable from the affiliate, representing the Company’s total gaming revenue (with customers) that was collected by the affiliate, less consideration payable to the affiliate for use of its license, which is offset by any consideration owed to the Company from the affiliate based on the terms of the applicable agreement. Receivables due from affiliated land-based casinos were $21.0 million and $18.2 million at March 31, 2025 and December 31, 2024, respectively.
In addition, the Company provides retail sports services to certain affiliated land-based casinos in exchange for a monthly commission based on the casino’s retail sportsbook revenue. Services generally include ongoing management and oversight of the retail sportsbook, technical support for the casino’s customers, risk management, advertising and promotion, and support for third-party vendors’ sports betting equipment. Revenue recognized relating to retail sports services provided to affiliated land-based casinos for the three months ended March 31, 2025 and 2024 were not material to the condensed consolidated financial statements. Any payables due to the affiliated land-based casinos are netted against affiliate receivables to the extent a right of offset exists.
- Commitments and Contingencies
Legal Matters
The Company is not a party to any material legal proceedings and is not aware of any material pending or threatened claims. From time to time however, the Company may be subject to various legal proceedings and claims that arise in the ordinary course of its business activities.
Other Contractual Obligations
The Company is a party to several non-cancelable contracts with vendors and licensors for marketing and other strategic partnership-related agreements where the Company is obligated to make future minimum payments under the non-cancelable terms of these contracts as follows ($ in thousands):
| Remainder of 2025 | $10,429 |
|---|---|
| Year ending December 31, 2025 | 13,018 |
| Year ending December 31, 2026 | 7,857 |
| Year ending December 31, 2027 | 5,326 |
| Year ending December 31, 2028 | 4,269 |
| Thereafter | 13,231 |
| Total(1) | $54,130 |
| (1) | Includes obligations under license and market access commitments totaling $32.2 million, obligations under non-cancelable contracts with marketing vendors totaling $15.0 million and non-cancelable lease contracts totaling $6.9 million. Certain market access arrangements require the Company to make additional payments at a contractual milestone date if the market access fees paid through that milestone date do not meet a minimum contractual threshold. In these instances, the Company calculates the future minimum payment as the total milestone payment less any amounts already paid to the partner and includes such payments in the period in which the milestone date occurs. |
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.