All right, good afternoon. My name is Jacques Cornet with ICR, and I'm very pleased to introduce our next session. With us today is Kyle Sauers. Kyle is the CFO of Rush Street Interactive. Rush Street is a leading online gaming and sports entertainment company operating its BetRivers brand in the U.S. and Canada, and its RushBet brand in Latin America. So welcome, Kyle. Thanks for having me. Of course. Let's start. If you could provide an overview of the company, the growth strategy, really how it's differentiated in what is a developing yet fairly competitive online gaming and sports betting market? Sure. So for those that aren't familiar with Rush Street, we operate in 19 markets for sports betting and nine for iCasino. The majority of those are in the United States, but we're also in Ontario, Canada, and then in Latin America. We're in Colombia, Mexico, and recently launched in Peru, so the company's about thirteen years old, twelve years old at this point. Our CEO and founder, Richard Schwartz, has got a deep background in gaming and slots and player experience and founded the company pre-legalization, and we built the company up over those many years, went public through a SPAC in late 2020, and have had continued growth since then, with this year being no exception with record growth in revenue and profitability, growth in improving gross margins, continued leverage over marketing expenses. We've had growth in first-time depositors again this year, record growth. And then I think we're at seven straight quarters of accelerating growth in our year-over-year user count. So a lot of success all around. So, in terms of that, the consistency, obviously there have been a couple of peers that have come out lately and mentioned something about fourth quarter sports outcomes. It's specifically the NFL, and that sports outcomes have been less favorable for some of your peers. Can you comment sort of on how that impacts you and your business? Sure. Yeah. So obviously sporting outcomes impact the operator and impact the players. And I suppose the good news about sporting outcomes that are favorable for the players is it fills their player accounts. Hopefully they can use that later or use it on the iCasino side. For us, we are about 70% of our revenue is iCasino, 30% sports. So it's less impactful for us. The other piece of it is a good chunk, not quite half, but approaching that, a good chunk of our revenue on the sports side comes from Latin America. And Latin America, as you would imagine, has a lot more of its sporting activity in soccer, tennis, and other sports besides NFL. So we've got a lot more. I'll call it a balanced portfolio across the Americas between different sports. So while we'd prefer underdogs and low scores in NFL, it doesn't have a negative impact on us the same way as it might some of our competitors. And for those who don't follow the iCasino industry as closely, one of the nice things, and certainly for a CFO who has to forecast where we're going to end up in the coming quarters and year, the consistency of hold and therefore the revenue in iCasino is much steadier. So you might see 20 basis points of variability in hold for your slots for a given quarter versus hundreds of basis points that you might see in sports. So it is nice to have that consistency on 70% of our revenue. So in terms of obviously the iGaming has been a significant contributor to the growth over the last several years. Can you talk about, from a competitive standpoint, how you've built the platform, how you differentiate versus your peers, and what's really been one of the key drivers to the success that the company's seen over these last, call it, five years? Sure. So I think maybe I'll start with kind of comparing sportsbook to iCasino. So sportsbook, it's important to have a great product that has the depth in different markets, all the different sports, all the different teams and players that people would want to place a bet on. But at the end of the day, and it's important to have a good user interface, be able to move your money in and out quickly and safely. But it is a transactional engine, and the entertainment is going to be on the screen. Maybe you're streaming it from a device, but it's the game that's going to provide the entertainment. Contrast that to iCasino, where the experience, the entertainment is the platform. It is what you're playing. As you mentioned, we have a lot of really good competitors in the industry, many who have very strong brand names and big databases. We think we've been able to compete really well against that field because of our DNA in iCasino and in developing experiences. I mentioned Richard, our CEO, who's got a lot of experience in this area throughout his career. We've got a team of developers in Estonia, many who came previously from the iGaming industry that are all about developing experiences. So us and our competitors, we're using most of the same slot content from the various providers in this industry. We use content from over 70 different slot providers. And it's important to have a variety of games, have all the top games in the industry, present them in the right way, have good recommendation engines, the ability to select your favorites. But we don't stop there. We go well beyond and create gamification around all of that slot content. We create new and different ways for people to win besides just playing slots. So we're the only provider that has, or only operator that has online slot tournaments. We're the only operator that has community chat. We have moderators that chat that do trivia. We've got bingo games. We've got scratch cards. So these are ways for people to win in different and fun ways, to take a break from real money gaming, to either be surprised with an entry into a tournament or a bingo game, excuse me, or use their loyalty points to do that. So it's a different way for us to bonus people besides just giving them free bets or free spins or deposit matches and give them ways to win that are new and innovative. So that kind of leads to the marketing. Obviously, in the early years, customer acquisition and the dollars being invested in marketing in the industry were super competitive, very high, some would argue. How has the market evolved over the last year? Where do you see it going? And differentiate for us between OSB and iGaming and what spend is required to acquire and retain customers. I know that's a lot. Yeah. So I mean, you're right, and you can remind me if I don't answer one of those questions. But it was a lot more intense, and the amount of marketing dollars being spent two, three years ago far greater than it is today, both in absolute terms and also what people were willing to spend for particular marketing assets or to acquire players. I think the good news is we weren't as aggressive as others, so we didn't have to change behavior as much. But certainly we were impacted by the market dynamics of the amount that people were spending on marketing. For us, the equation is fairly simple. It's what's the value of the players that we're bringing in, the predicted value. And we get better and better at determining that over time. So what are we willing to spend to bring those players in? The reality is that we've gotten a lot better at it over the last year, year and a half. I suspect that our competitors have as well. In the first half of last year, our cost to acquire players were down by 50%. By the third quarter, I think we were down maybe a third compared to the prior year, but sequentially had gotten better from the second quarter to the third quarter. I'm certainly not going to model out improvements like that going forward to the next year. I know our marketing team and our marketing leadership believes we can continue to get better at that. We've made a lot of improvements in the way we not only acquire new players, but deal with reactivations and incentivizing and attracting previous players to rejoin us. That's part of the reason we've, in addition to record first-time depositors, the reason our monthly active user counts have continued to accelerate over the last many quarters is because of the CRM activities and being able to reactivate those players. When I think about sportsbook versus iCasino, so far more, as I mentioned, we're in 19 markets for sports and only 9 for iCasino. Really, we are in all of the iCasino markets in the Americas that are available to us at this point, except for a few in Latin America that we are and continue to look at over the next coming quarters and years. The value of the iCasino player is far greater. What we're willing to spend to bring in a player in an iCasino market is multiples of what we would spend in a sports-only market. So does that value also flow down to profitability? Absolutely. I mean, I think one of the things, maybe back to, I'll connect this back to the product and kind of a product-first and experience-first mentality for our business is that the casino experience is about the play and about being live and being in the action, and you're not taking breaks to go watch the game on TV. So that means those players are around longer. They're generally more valuable. Our average revenue per monthly active user, I think last quarter it was around $380, and it's consistently been over $350. That is two and a half to three times what our competitors have talked about in terms of their average revenue per player. I think that says a lot about the experience and the retention for our players. Interesting. If we just step back for a second, obviously the industry is relatively young in sort of age. Can you share, and it's evolving, can you share your perspective on where it's going, where RSI is focused, where do you see those opportunities for RSI over the coming years? Yeah. I think that as much success as there's been in this industry, we're still early in this first quarter, however we want to describe it. Maybe there's a different way to describe it for iCasino, the first spin. We've got New Jersey that's been around close to a decade, Pennsylvania that's been around for five-ish years now. Those are the more mature markets. And each of those grew something like mid-20% this past year. Most of the other markets are growing, still growing at rates faster than that. So we're in an industry that, first off, has a large number of states still to potentially legalize over time, but the existing markets are still growing very, very nicely. We have solid market share in iCasino ranges between eight, or call it 8%-9% blended, obviously some bigger and some smaller. On the sportsbook side, we're 1%-2%, generally higher in markets where we have iCasino because of the cross-sell, so we're excited about the opportunity for new markets being legalized in the U.S. and also in Canada, and we expect that to come, and we think there's momentum, but the good news is we don't need to rely on that for really solid revenue growth over the coming years. If those markets that we're in continue to grow double digits or into the 20%, we expect to get our share of that, and then we layer in on top of that the opportunity in Latin America, where we've been growing over 50%. Latin America, if I didn't mention earlier, makes up roughly 15%-16% of our revenue today. It's a higher margin market for us, and Colombia, we estimate 20%-25% market share. The government doesn't actually report numbers, so we've got to do a good job of triangulating around that. In Mexico, which we launched a couple of years ago, it's on the same trajectory as Colombia post-launch, but we're still only low single-digit share in Mexico. And that market is probably three times the size of Colombia. So a lot of opportunity there. And then Peru, we just launched a few months ago, so just getting going there, revenue really just starting to build a little bit, and we're putting some marketing dollars to work. So while we're excited about new legalization in different markets, the markets we're in provide a really strong growth path for us. In terms of real near-term legalization, we're anticipating Alberta to go live potentially later this year for both iCasino and sportsbook. While we haven't committed to Missouri just yet, it's an interesting state for us for online sportsbook, and that was approved through referendum in the last election. And then in Latin America, as we've talked about on some of our earnings calls, there's four or five markets in Latin America that have legalized or are going through a legalization process, most of which have both iCasino and sportsbook. And with the base of business and the operations teams that we've built up and down in Colombia and the success there, that's a great way for us to leverage that into some new markets down there. So a lot of growth avenues. So with all the opportunities in Latin America, there's many choices at the moment. Canada, we'll see where the U.S. takes us. How do you pick? Obviously, in OSB, there's lots of opportunities. How do you select where you're going to invest capital and where you're going to maybe hold back? Yeah, it's a good question. So I think if you go back three years, four years, we were making sure that we were entering every new market that was opening up in the U.S. And most of those were sportsbook markets. We revisited that a couple of years ago and decided we were going to make sure that if we were entering sportsbook-only states, that those were going to be states that we anticipated having iCasino opportunities down the road that had reasonable tax rates and that we could be successful in. So with lower market share, we are profitable in U.S. sportsbook-only markets. But more money is made in iCasino. Our product is far more differentiated, and the opportunity is greater for us in iCasino. So we've been spending more of our time and resources in the existing iCasino markets because of that product advantage and because it's more profitable. One new example, I guess I failed to mention, is Delaware. So maybe you probably had it on your list. But Delaware had been live with iCasino for 10 years. It had a single operator, a European highly successful iCasino operator. It came up for bid a year and a half ago. We won that bid, went live just over a year ago. The highest revenue recorded by that operator in Delaware during the previous 10 years was around $15 million. And by the end of the Q3, we were run rating close to $100 million in annual revenue. So that's with swapping out our product, not a ton of marketing. Swapping in. Swapping in our product, yeah. Swapping out there, exactly. And just a ton of success there. And again, I think says a lot about the product. And there aren't a lot of Delawares out there, but Delaware also still has, we feel, a big runway to continue to grow. If you just look at the other iCasino markets, you look at income levels and adult population, that it should be well over a $200 million market over the coming years. So a lot of opportunity there also. I think I want to give audience members a chance to ask questions. If there's any questions in the audience, if not, I can continue. One of the things over the last year, you have a balance sheet that's debt-free. You're generating. I think your cash balance is more than doubled over the last couple of years. How are you, or how broader, how does the board sort of look at the financial position? Yeah, no, we're in good shape. So we don't have any debt. We've got over $200 million in cash. We're generating very solid cash flow. I think analyst estimates are for roughly $120 million of EBITDA next year. If those numbers are accurate, that probably means roughly $90 million of free cash flow. So that's a great position for us to be in. And the economics of our business continue to improve. So we've got gross margins that will continue to improve from 2024, both for structural reasons and revenue mix reasons. We'll get leverage over our marketing spend once again in 2025. We'll get leverage over our G&A costs. So the financial profile continues to improve. We did just, or our board just authorized our first buyback of $50 million, gives us the flexibility to buy back stock when we think it makes sense. That cash balance obviously gives us the ability to continue to invest in the business, think about tucking in M&A that could be around product extensions, could be about accelerating market entry into other Latin American countries. It could also be, if we had a few U.S. states that legalized iCasino around the same time as each other, give us the flexibility to make sure we're making the right investments in launching in those markets. So it's a good position to be in. It wasn't too long ago that people were asking us if we were going to have enough cash to be able to continue to compete. And now people are asking us what we're going to do with all the cash that we have. And not asking for specific M&A targets, but just how would you describe the M&A environment? It's a very obviously fragmented industry at a level. How do you think about it as you look out? The question about what types of things would be interesting? What's out there? What types of things are interesting? I mean, certainly we and our team at RSI follows the industry very closely. We use a lot of third-party suppliers for all parts of our business. The player account management, the bonusing engine, all the UI/UX, those are all things that we build and own in-house, but there are areas where you could add product extensions, things like bingo, like lottery, you could have, there could be game development where we have our own games where we don't pay a third-party supplier, and those are the kinds of things that we look at, and it really comes back to, obviously we want to make sure that we're maximizing our financial profile, improving our margins, and some of those things would do that, but it all comes back to the player experience. So if we can control more of the supply chain and make that a better player experience, and at the same time, that's better economics, that fits well into the wheelhouse. The other area that I mentioned a bit, but if we could accelerate growth in a market, most likely in a Latin American country, by partnering or acquiring somebody, we're very confident and proud in the technology we've built. So using that to combine with someone who has a strong player base or a strong brand or maybe both could be a different type of opportunity that would be interesting for us. So I think that raises an interesting topic, right? You're one of the few U.S. operators that have a pretty significant presence in Latin America. How do you view the Latin America landscape in terms of, obviously there's lots of opportunities you've chosen very deliberately, I'd say. How do you look at that? And how does the experience down there for your customers compare to, say, the U.S.? Yeah, so I mean, I think the advantage we have is while we do need to localize the product for different markets, it is the same platform, and our development and technology teams are developing on one standard platform and then localizing it for things, language for prioritization of content or sports depending on location. I think I said payment methods already, but that's an advantage for us for sure. Some of the markets that are available are going to be smaller. There's ones like Brazil that are obviously very, very large opportunities, but it's about deciding the right cadence and the right ordering of those markets that fits best. When you look at our product in those markets, I'll start with sports because sports is more dominant in Latin America for us. While I mentioned that we're 70% iCasino for the whole company and 30% sports in Latin America, it actually flips the other direction, so the markets we're in down there are very sports-heavy cultures, so you take a product that we've developed initially for a U.S. market against some really solid competitors, and the product competes really well, so you take that down to markets like Colombia and Mexico where most people haven't even heard of the competitors we're against and their competitors who are often only in one market. That product works really, really well. And obviously, if we're confident that our iCasino technology and experience is differentiated in the U.S., that we take that down to Latin American countries and it does the same. Listen, there's good competition all over the place, but we feel like we're in a good spot. We need to make sure that we continue to optimize the way we're bringing players in, marketing in the right way and doing it efficiently. But as we've seen in Colombia, over time, that brand awareness builds and you start to get some good flywheel action going. And the growth in Colombia that we've seen over the last several years is a good example of what we're hoping to see in Mexico and Peru and other countries. All right, we're at time, and so I want to say thanks to Kyle for joining us, and thank you, everyone.