Q1 2024 Rush Street Interactive Inc Earnings Call

[music].

Unknown Attendee: Good day to you, ladies and gentlemen. Thank you for standing by.

Good day to you ladies and gentlemen, thank you for standing by welcome to the Rush Street Interactive first quarter 'twenty 'twenty four earnings conference call.

Unknown Attendee: Welcome to the Rush Street Interactive First Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. Please note that this conference call is being recorded today, May 1st, 2021 for. I would now turn the call over to Kyle Sauers, Chief Financial Officer.

Kyle L. Sauers: At this time all participants are in a listen only mode.

Unknown Attendee: A question and answer session will follow the formal presentation. Please note that this conference call is being recorded today may 1st 2021 for <unk>.

Unknown Attendee: I would now turn the call over to Kyle Sauers, Chief Financial Officer.

Kyle L. Sauers: Thank you, operator, and good afternoon. By now, everyone should have access to our first quarter 2024 earnings release, which 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 they 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.

Kyle L. Sauers: Thank you operator and good afternoon.

Kyle L. Sauers: 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 conditions. During the call, we will discuss our non-GAAP measures, which we believe can be useful in evaluating the company's operating performance. However, these measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP.

Kyle L. Sauers: By now everyone should have access to our first quarter 2024 earnings release. It can be found under the heading financials quarterly results in the investors section of the Rsi website at Rush Street Interactive Dot com.

Kyle L. Sauers: 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 are usually identified by the use of words, such as will expect should or other similar phrases are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect.

Kyle L. Sauers: 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.

Kyle L. Sauers: 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 and.

Kyle L. Sauers: In particular, 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 one-time or non-recurring items, and other adjustments that are either non-cash or not related to our underlying business performance. The reconciliation of these non-GATT measures to the most directly comparable GATT measure is available in our first quarter 2024 REINS release and our investor deck, which is available in the investor section of the RSI website at RushStreetInteractive.com.

Kyle L. Sauers: In particular, 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 non cash or not related to our underlying business performance a reconciliation of these.

Kyle L. Sauers: non-GAAP measures to the most directly comparable GAAP measure is available in our first quarter 2024 earnings release, and our investor deck, which is available in the investors section of the Rsi website at <unk> interactive Dot com.

Kyle L. Sauers: 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 is 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.

Kyle L. Sauers: 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.

Kyle L. Sauers: With me on the call today, we have Richard Schwartz, Chief Executive Officer, who 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 Todd Schwartz: Thanks, Kyle. Good afternoon, and welcome to our first quarter 2024 earnings call. We are pleased to report that we began 2024 with the same strong momentum with which we ended 2023. First quarter revenue was $217 million, up 34% year over year, and EBITDA was $17 million, representing a $26 million improvement year over year. Both of these figures represent quarterly records by a wide margin, something our team is very proud of.

Richard Todd Schwartz: Thanks, Kyle and good afternoon, and welcome to our first quarter 2024 earnings call.

Richard Todd Schwartz: We are pleased to report that we began 2024 with the same strong momentum with which we ended 2023.

Richard Todd Schwartz: First quarter revenue was $217 million up 34% year over year, and EBITDA was $17 million.

Richard Todd Schwartz: Representing a 26 million dollar improvement year over year.

Richard Todd Schwartz: Both of these figures represent quarterly records by a wide margin.

Richard Todd Schwartz: Something our team is very proud of.

Richard Todd Schwartz: We were able to achieve these milestones are continuing to focus on the quality of our product experience.

Richard Todd Schwartz: We were able to achieve these miles by continuing to focus on the quality of our product experience and the Billy to sufficiently acquire and retain high-value players. Said simply, we are adding players to our platform more quickly, and players on average are higher value.

Richard Todd Schwartz: And the ability.

Richard Todd Schwartz: Efficiently acquire and retain high value players.

Richard Todd Schwartz: Said simply.

Richard Todd Schwartz: We are adding players to our platform more quickly player.

Richard Todd Schwartz: Players on average are higher value, we are finding these new players more efficiently than ever.

Richard Todd Schwartz: We are finding these new players more efficiently than ever, and we are driving meaningful profitability from this impressive growth. During the quarter, both iCasino and online sports grew over 35%, demonstrating balanced growth across our product verticals. This is a continuation of what we saw last quarter, and it continues to be driven by both rapidly increasing player counts and improving player values, as a result of efforts to continually differentiate our user experience and offer a high quality experience that engages and retains players on our platform. In North America, we again achieved a new record in monthly active users. For the first quarter, Mao growth was 20% year over year.

Richard Todd Schwartz: And we are driving meaningful profitability from this impressive growth.

Richard Todd Schwartz: During the quarter, both I casino and online sports grew over 35%.

Richard Todd Schwartz: Demonstrating balanced growth across our product verticals.

Richard Todd Schwartz: This is a continuation of what we saw last quarter.

Richard Todd Schwartz: Continues to be driven by both rapidly increasing player counts and improving player values.

Richard Todd Schwartz: The results of efforts to continually differentiate our user experience and offer a high quality experience that engages and retains players on our platform.

Richard Todd Schwartz: In North America, we again achieved a new record and monthly active users.

Richard Todd Schwartz: For the first quarter now growth was 20% year over year.

Richard Todd Schwartz: Going back to the beginning of Q4 last year, we have seen our growth in North American mouths accelerate monthly in each of the last six months. In Latin America, our mouths continued to grow rapidly during the first quarter, as we were up 72% year over year. It is noteworthy that this growth in users across our market did not come at the expense of player value, as we increased both North American and LATAM art mail in the first quarter.

Richard Todd Schwartz: Going back to beginning of Q4 last year.

Richard Todd Schwartz: We have seen our growth in North American mouse accelerate monthly and each of the last six months.

Richard Todd Schwartz: In Latin America, our mouse continued to grow rapidly during the first quarter as we were up 72% year over year.

Richard Todd Schwartz: It is noteworthy that this growth in users across our markets.

Richard Todd Schwartz: Did not come at the expense of player value.

Richard Todd Schwartz: As we increase both North American and Latam art now in the first quarter.

Richard Todd Schwartz: Next there are.

Richard Todd Schwartz: Next, there are a few market-specific takeaways to highlight. While we experience growth across all market vintages, Our newer markets continue to drive outsized revenue growth; in Latin America, and in US Canadian markets launched in 2021, revenue grew 78% year over year in quarter one. This growth across newer markets led to our revenue contribution for markets other than Illinois and Pennsylvania to reach 57%, up from 47% during the first quarter of 2023. As a reminder, our operating margins in Pennsylvania and Illinois are lower due to the arrangements with our land-based partners in these states.

Richard Todd Schwartz: A few market specific takeaways to highlight.

Richard Todd Schwartz: While we experienced growth across all market vintages.

Richard Todd Schwartz: Our newer markets continue to drive outsized revenue growth.

Richard Todd Schwartz: In Latin America and in U S. Canadian markets launched 2021 revenue grew 78% year over year and quarter one.

Richard Todd Schwartz: This growth across newer markets led to our revenue contribution from markets other than Illinois, and Pennsylvania to reach 57%.

Richard Todd Schwartz: Up from 47% during the first quarter of 2023.

Richard Todd Schwartz: As a reminder, our operating margins in Pennsylvania, and Illinois are lower due to the arrangements with our land based partners in these states thus.

Richard Todd Schwartz: Thus, as a percentage of revenue contributed from other markets increases, our overall margin should expand, which is what we saw in Q1. Our newest market, Delaware, continued its strong early performance that we highlighted during our last earnings call. For Q1, our annual GGR run rate increased and was nearing 70 million. A $10 million increase from the $16 million level we shared on our last call was driven by a strong end to the quarter. We ran over four times the rate of the previous operator during the month of March.

Richard Todd Schwartz: Thus as a percentage of revenue contributed from other markets increases.

Richard Todd Schwartz: Our overall margin should expand which is what we saw in Q1.

Richard Todd Schwartz: Our newest market Delaware continued its strong early performance that we highlighted during our last earnings call.

Richard Todd Schwartz: For Q1, our annual <unk> run rate increased and was nearing $70 million.

Richard Todd Schwartz: The $10 million increase from the $60 million level, we shared on our last call was driven by a strong end to the quarter.

Richard Todd Schwartz: We ran over four times the rate of the previous operator during the month of March.

Richard Todd Schwartz: With around 75% of this GGR attributed to iCasino, similar in market proportion to other states where both iCasino and online sports betting are allowed. We achieved this level of scale with a focused marketing spend and approach, validating our belief that players appreciate our differentiated product and respond to our focus on a high quality and trustworthy customer experience. While on the topic of Delaware, many of you have seen that there has been a bill introduced to expand online sports betting to additional operators.

Richard Todd Schwartz: With around 75% of the CAGR attributed to Iqos sito similar in market proportion to other states for both <unk> and online sports betting are allowed.

Richard Todd Schwartz: We achieved this level of scale with a focused marketing spend and approach.

Richard Todd Schwartz: Validating our belief that players appreciate our differentiated product and respond to our focus on a high quality and trustworthy customer experience.

Richard Todd Schwartz: While on the topic of Delaware. Many of you have seen there has been a bill introduced to expand online sports betting traditional operators.

Richard Todd Schwartz: We are actively involved in discussions on this topic and have support from key stakeholders in this state, leading us to feel positive about the current structure remaining in place. In the event there is a change, I'll remind you that the lobbying effort only applies to online sports.

Richard Todd Schwartz: We are actively involved in discussions on those topics and have support from key stakeholders in this state leading us to feel positive on the current structure remaining in place.

Richard Todd Schwartz: In the event there is a change I'll remind you that the logging effort only applies to online sports betting.

Richard Todd Schwartz: While our newer markets continue the strong growth. We also saw a resurgence from some of our more mature markets.

Richard Todd Schwartz: While our newer markets continue to show strong growth, we also saw a resurgence from some of our more mature markets. During the quarter, our three largest online casino markets in North America, Michigan, New Jersey, and Pennsylvania. Each had their highest year-over-year revenue growth rates in the last two years. Our focus on the iCocido experience is resonating with new and existing customers, driving very solid growth in these existing markets. Turning to our left, Am Operation.

Richard Todd Schwartz: During the quarter, our three largest online casino markets in North America.

Richard Todd Schwartz: <unk>, New Jersey and Pennsylvania.

Richard Todd Schwartz: Each had the highest year over year revenue growth rates in the last two years.

Richard Todd Schwartz: Our focus on the I can see the experience is resonating with new and existing customers.

Richard Todd Schwartz: Driving very solid growth in these existing markets.

Richard Todd Schwartz: Turning to our Lat am operations.

Richard Todd Schwartz: We continue to be extremely pleased with our performance in Colombia and Mexico. The rush back brand is responding with customers, as evidenced by our year-over-year Mao and Art Mao growth. This translated to year-over-year revenue increases of 84% in Latin America, with a lot of room for continued growth as we invest in both these markets. In terms of marketing approach,

Richard Todd Schwartz: We continue to be extremely pleased with our performance in Colombia and Mexico.

Richard Todd Schwartz: Our rush that brand is resonating with customers as evidenced by our year over year, MAU and art MAU growth.

Richard Todd Schwartz: This translated to year over year revenue increases of 4% in Latin America with a lot of room for continued growth as we invest in both these markets.

Richard Todd Schwartz: In terms of marketing approach, while our strategy has not wavered, our execution continues to improve.

Richard Todd Schwartz: While our strategy has not wavered, our execution continues to improve. We target the highest ROI opportunities with an emphasis on attracting the highest value players to our platform and retaining them by offering them a high-quality experience. And this is Work It.

Richard Todd Schwartz: We target the highest our oi opportunities with an emphasis on attracting the highest value players to our platform and retaining them by offering a high quality experience.

Richard Todd Schwartz: And this is working.

Richard Todd Schwartz: Specifically, I'm very proud that we have continued to deliver results in driving greater efficiency and lower marketing costs. In fact, in Q1, we had our highest number of first-time depositors ever as a company and the highest in North America since our launch in New York in the first quarter of 2022. And we've been able to do this while lowering our CPA to less than half of what it was a year ago.

Richard Todd Schwartz: Specifically I'm very proud that we have continued to deliver results and driving greater efficiency in our marketing costs.

Richard Todd Schwartz: In fact in Q1, we had our highest number of first time depositors ever as a company.

Richard Todd Schwartz: And our highest in North America since our launch in New York in the first quarter of 2022.

Richard Todd Schwartz: And we've been able to do this while lowering our CPA.

Richard Todd Schwartz: Two less than half of what they were a year ago.

Richard Todd Schwartz: One of our unique strategies for acquiring customers.

Richard Todd Schwartz: One of our unique strategies for acquiring customers is our BetRivers network, which we use to engage players and keep the BetRivers brand top of mind for our players. In light of this strategy, we were excited to recently announce the renewal of our partnership with sports broadcasting legend Mike Francesa, who is a staple on our Bed Rivers network. Subsequent to quarter end, we were also proud to announce our partnership as a title sponsor for the NASCAR XFINITY Series Dash 4 cash race. The Bent Rivers 200, which took place on April 27th at Dover Motor Speedway, marked the first time in Delaware history that fans could place mobile sports wagers from inside a sporting event.

Richard Todd Schwartz: As our <unk> network.

Richard Todd Schwartz: Which we used to engage players and keep the debt rivers brand top of mind for our players.

Richard Todd Schwartz: In light of the strategy, we were excited to recently announced the renewal of our partnership with Sports Broadcasting Legend, Mike <unk>, who is a staple on a bet rivers network.

Richard Todd Schwartz: Subsequent to quarter end, we were also proud to announce our partnership as the title sponsor for the NASCAR Xfinity series Dash for cash raise.

Richard Todd Schwartz: The <unk> 200, which took place on April 27th at Dover Motor Speedway.

Richard Todd Schwartz: Mark the first time in Delaware history.

Richard Todd Schwartz: Sounds good place mobile sports wagers from inside his sporting event.

Richard Todd Schwartz: This historic event came on the heels of our online sports putting launch in this state and served as a unique opportunity to promote our brand while also investing locally in Delaware.

Richard Todd Schwartz: This historic event came on the heels of our online sports betting launch in the state and served as a unique opportunity to promote our brand while also investing locally in Delaware and supporting an unforgettable event for FAME Raceway. Lastly, we furthered our commitment to return-based marketing through the announcement of the hiring of Brian Sapp as the company's first chief marketing officer. Throughout his career in the gaming and mobile industries, Brian has repeatedly led marketing teams to deliver successful brand and data-driven campaigns. That's skill business, while achieving growth and profitability goals.

Richard Todd Schwartz: And supporting an unforgettable event Fame Raceway.

Richard Todd Schwartz: Lastly, we furthered our commitment to returns based marketing through the announcement of the hiring of Brian SAP as the company's first chief marketing officer.

Richard Todd Schwartz: Throughout his career in the gaming and mobile industries.

Richard Todd Schwartz: Brian has repeatedly led marketing teams to deliver successful brand and data driven campaign.

Richard Todd Schwartz: Our scaled businesses, while achieving growth and profitability goals.

Richard Todd Schwartz: Our entire team is very excited to have Ryan on board on the New Markets Front. We continue to be excited about a variety of opportunities opening up across the Americas. Our next likely market launch will be Peru, which we anticipate will be later this summer. We are finalizing our plans and strategy. We are very excited about this help. As a reminder, Peru is about two-thirds the population of Colombia, with a slightly higher GDP per capita.

Richard Todd Schwartz: Our entire team is very excited to have Brian on board.

Richard Todd Schwartz: On the new markets fronts.

Richard Todd Schwartz: We continue to be excited about a variety of opportunities opening up across the Americas.

Richard Todd Schwartz: Our next likely market launch will be Peru.

Richard Todd Schwartz: Which we anticipate to be later this summer.

Richard Todd Schwartz: We are finalizing our plans and strategy and we are very excited about this opportunity.

Richard Todd Schwartz: As a reminder, peruse about two thirds the population of Columbia with a slightly higher GDP per capita.

Richard Todd Schwartz: We believe we are well positioned for success there, given the market adjacent and overlap with Columbia and established teams in Columbia, we will elaborate, as per other regulated markets in Latin America. We continue to evaluate a range of opportunities. The regulations for Brazil have been beginning to roll out, so as they are published, we are reviewing and assessing them. We will continue to share updates about these markets, which, as noted in the past, typically include both online casino and online sports, playing to our demonstrated strengths in multi-product markets and Latin America. With that, I'll turn the call over to Kyle.

Richard Todd Schwartz: We believe we are well positioned for success there given the market adjacencies and overlap with Columbia and established teams in Colombia, we will leverage.

Kyle: As for other regulated markets in Latam.

Kyle: We continue to evaluate a range of opportunities.

Kyle: The regulations for Brazil have been beginning to rollout. So as they are published we are reviewing and assessing them.

Kyle: We will continue to share updates about these markets, which as noted in the past typically include both online casino and online sports betting.

Kyle: Turning to our demonstrated strengths of multi product markets and Latin America.

Richard Todd Schwartz: With that I'll turn the call over to Kyle.

Kyle: Thanks, Richard first quarter revenue was $217 4 million up 34% year over year, driven by strong growth of over 35% year over year across both our I casino and online sports betting products.

Kyle L. Sauers: Richard. First quarter revenue was $217.4 million, up 34% year over year, driven by strong growth of over 35% year over year across both our iCasino and online sports betting products. As Richard highlighted previously, our first quarter results were also strong across market vintages and geography. We continued our trend of positive EBITDA for the fourth consecutive quarter and reached a record $17.1 million, up from negative $8.7 million during the prior year period

Kyle L. Sauers: As Richard highlighted previously our first quarter results were also strong across market vintages and geographies.

Kyle L. Sauers: We continued our trend of positive EBITDA for the fourth consecutive quarter and reached a record $17 1 million up from negative $8 $7 million during the prior year period.

Kyle L. Sauers: We were able to achieve these results through the increased flow-through we're able to capture as our business scales and our operations and marketing continue to optimize. As previously mentioned, our top line growth was the result of growth in both the number and value of our user base. In North America, mouths reached 176,000, up 20% year over year, while our mile was up 9% year over year to $355. Our Latin America metrics were also up, with miles reaching 224,000 during the quarter, representing a 72% year-over-year increase, and Art Mao reaching $43, a 4% increase over the prior year period.

Kyle L. Sauers: We were able to achieve these results due to the increased flow through we're able to capture as our business scales and our operations and marketing continues to optimize.

Kyle L. Sauers: As previously mentioned our top line growth was the result of growth in both the number and value of our user base.

Kyle L. Sauers: In North America, <unk> reached 176000 up 20% year over year, while our mile was up 9% year over year to $355 or.

Kyle L. Sauers: Our Latin American metrics were also up with now is reaching 224000 during the quarter, representing a 72% year over year increase in art mile reaching $43, a 4% increase over the prior year period.

Kyle L. Sauers: We continue to find the right ways to efficiently bring new players onto the platform retain them well and work hard to reactivate those that had been away for a while.

Kyle L. Sauers: We continue to find the right ways to efficiently bring new players onto the platform, retain them well, and work hard to reactivate those that have been away for a while. We are as convinced as ever that once players find the BetRivers or RushBet experience, they will dedicate a large share of their entertainment wallets and keep returning for years to come.

Kyle L. Sauers: Convinced as ever that once players fine that bet reverse a rush bet experience. They will dedicate a large share of their entertainment wallets and keep returning for years to come.

Kyle L. Sauers: For the quarter gross profit margin increased 160 basis points sequentially to 33, 7% as Richard highlighted revenue from the markets other than Pennsylvania, and Illinois accounted for 57% of revenue during the first quarter the highest percentage since we've been public and a trend that we expect to continue.

Kyle L. Sauers: For the quarter, gross profit margin increased 160 basis points sequentially to 33.7%. As Richard highlighted, revenue from the markets other than Pennsylvania and Illinois accounted for 57% of revenue during the first quarter, the highest percentage since we've been public and a trend that we expect to continue. As evidenced by our strong growth in MoUs and ArtMoU, we're very pleased with the impact of our marketing spend in Q1. For the quarter, advertising and promotions were 37.8 million, which is up single digits sequentially but down 23% from the same period last year.

Kyle L. Sauers: As evidenced by our strong growth in miles and art mile. We're very pleased with the impact of our marketing spend in Q1.

Kyle L. Sauers: For the quarter advertising and promotions were $37 8 million, which is up single digit sequentially, but down 23% from the same very last year.

Kyle L. Sauers: As a percentage of revenue, this equated to 17%, which is down from 30% in the first quarter of 2023. Our current thinking is that marketing spend is likely to be up sequentially in the second and third quarter compared to the first quarter, with a bigger step up in Q4. Of course, given our success in finding cost-effective and unique ways to drive customer acquisition, we'll continue to remain flexible with our plan.

Kyle L. Sauers: As a percentage of revenue this equated to 17%, which is down from 30% in the first quarter of 2023.

Kyle L. Sauers: Our current thinking is that marketing spend is likely to be up sequentially in the second quarter and third quarter compared to the first quarter with a bigger step up in Q4.

Kyle L. Sauers: Of course, given our success in finding cost effective and unique ways to drive customer acquisition will continue to remain flexible with our plans.

Kyle L. Sauers: G&A for the first quarter was $18.3 million, equating to 8.4% of revenue. As highlighted in our last call, much of the run rate increase in G&A was absorbed in Q1 due to an annual compensation adjustment. Going forward, we continue to believe that our full-year G&A expense as a percentage of revenue will be below 2023 is 8.8% due to the leverage we experience as the business scales. We ended the quarter with $191 million in unrestricted cash, an increase of $23 million during the quarter, and we continue to have no debt.

Kyle L. Sauers: G&A for the first quarter was $18 3 million equating to eight 4% of revenue as highlighted in our last call much of the run rate increase in G&A was absorbed in Q1 due to annual compensation adjustments.

Kyle L. Sauers: Going forward, we continue to believe that our full year G&A expense as a percentage of revenue will be below 2023 is eight 8% due to the leverage we experienced as the business scales.

Kyle L. Sauers: We ended the quarter with $191 million in unrestricted cash an increase of $23 million during the quarter.

Kyle L. Sauers: And we continue to have no debt.

Kyle L. Sauers: Following on our strong first quarter results, we are raising both our full year revenue and EBITDA guidance for 2024, we now expect full year revenue to be between 810, and $860 million, which increases the midpoint to $835 million up $35 million from our initial guidance.

Kyle L. Sauers: Following on our strong first quarter results, we are raising both our full-year revenue and EBITDA guidance for 2024. We now expect full-year revenue to be between $810 and $860 million, which increases the midpoint to $835 million, up $35 million from our initial guidance. We expect full-year EBITDA to be between $50 and $60 million, which increases the midpoint to $55 million, up $15 million, and up 38% from our initial guidance. And as a reminder, our guidance includes only those markets that are live as of today. And with that, Operator, please open the lines for questions.

Kyle L. Sauers: We expect full year EBITDA to be between 50, and $60 million, which increases the mid point to $55 million up $15 million and up 38% from our initial guidance.

Kyle L. Sauers: And as a reminder, our guidance includes only those markets that are live as of today.

Kyle L. Sauers: And with that operator, please open the lines for questions.

Speaker Change: Absolutely if you would.

Unknown Attendee: Absolutely. If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason you would like to remove that question, please press star followed by two. Again, to ask a question, press star one. As a reminder, if you're using a speakerphone, please remember to pick up your handset before asking your question. Our first question will go to the line with Jed Kelly and Oppenheimer. Your line is now open.

Kyle L. Sauers: Like to ask a question. Please press star followed by one on your telephone keypad. If for any reason you would like to remove that question. Please press star followed by two again to ask a question for Star one.

Unknown Attendee: Reminder, if youre using a speakerphone, please remember to pick up your handset before asking a question.

Unknown Attendee: Our first question will go to the line of Jed Kelly with Oppenheimer Your.

Jed Kelly: Your line is now open.

Jed Kelly: Hey, guys. Thanks for taking my question and great quarter, just looking at the back half.

Jed Kelly: Hey guys, thanks for taking my question and for a great quarter. Just looking at the back half, kind of the updated guidance, you know, implies some sort of a deceleration, but you do have easing COPS. You get the benefit of a full year of Delaware.

Jed Kelly: The updated guidance implies.

Jed Kelly: Some sort of a deceleration, but you do have easier comps.

Jed Kelly: You get a benefit of a full year of Delaware. So can you just talk about what's going on there and then can you give us an update on households are trending in April relative to March in one queue. Thanks.

Kyle L. Sauers: So can you just talk about what's going on there? And then, can you give us an update on how holds are trending in April relative to March and 1Q? Thanks.

Speaker Change: Sure John Thanks for the thanks for the question.

Kyle L. Sauers: Sure. Jed, thanks for the question. We feel like we put really solid growth numbers in the guidance here, with revenue up something like 17 to 24% and EBITDA up 42 to 52 million compared to last year. I'll remind you that when we put out guidance at the beginning of the year, we were above consensus and then just increased EBITDA and revenue again since the call before. I think on your question about implied revenue for the back half of the year or the last three quarters of the year, there are a couple of things to have in mind. Obviously, there's a lot of factors that go into creating that guidance. There are, you know, different hold outcomes.

Kyle L. Sauers: I would say, we feel like we put really really solid growth numbers and the guidance here with revenue up.

Kyle L. Sauers: Something like 17% to 24% and EBITDA, 42% to 52 million.

Kyle L. Sauers: Baird to last year.

Kyle L. Sauers: I'll remind you that we're when we put our guidance at the beginning of the year were above consensus and then.

Kyle L. Sauers: Just increased EBITDA and revenue again.

Kyle L. Sauers: Since the since the call before I think on your question about.

Kyle L. Sauers: Implied revenue for back half of the year or the last three quarters of the year couple of things to have in mind, obviously theres a lot of factors that go into creating that guidance there is different hold outcomes.

Kyle L. Sauers: Growth rates in our newer markets, you referenced Delaware, which is going great, but obviously new for us. So some variability there. We've got seasonality in the business, both in sports, more so in sports, but both in sports and iCasino. Maybe specific to your question, two things that I would point out.

Kyle L. Sauers: Growth rates in our newer markets, you referenced Delaware, which is going great, but obviously new for us. So so some variability there we've got seasonality in the business both in sports more so in sports, but both in sports and casino maybe specific to your question two things that I would point out one is that.

Kyle L. Sauers: There's some tailwind in the first half of the year.

Kyle L. Sauers: For FX differences.

Kyle L. Sauers: One is that there are some tailwinds in the first half of the year for FX differences between Columbia last year and this year. And those tailwinds go away in the second half of the year, assuming exchange rates stay where they are. The other thing is our hold rates in sports and, maybe to a lesser extent, casino, but both of them were closer to the higher end of our expected ranges last year in Q2 and Q3. So the comps are a little bit tougher in Q2 and Q3 because of that.

Kyle L. Sauers: In Colombia last year to this year and those <unk> go away in the second half of the year, assuming exchange rates stay where they are.

Kyle L. Sauers: Other thing is our our hold rates in sports and maybe to a lesser extent casino, but both of them both of them were <unk>.

Kyle L. Sauers: Closer to the higher end of our expected ranges.

Kyle L. Sauers: Last year in Q2, and Q3, so the comps are a little bit a little bit tougher in Q2 and Q3.

Kyle L. Sauers: Because of that reason.

Speaker Change: Got it and then.

Kyle L. Sauers: Got it. And then you did mention you're stepping up marketing in 2Q, I think. Can you just give us a reason for the marketing and how your ROI is trending? Thanks.

Kyle L. Sauers: You did mention you're stepping up marketing and <unk>.

Speaker Change: <unk> I think.

Kyle L. Sauers: Can you just give us a reason for the marketing and how your ROI is trending thanks.

Kyle L. Sauers: Yeah, so I think we mentioned in the prepared remarks that, first of all, FTDs are at the highest rate they've been in the company's history. CPAs are half what they were this time last year, and we're trying to get some directional trends on marketing spend, but we, because we're always looking for good ways to put money to use to bring in new players that are going to be valuable for us, we want to stay pretty dynamic on that.

Speaker Change: Yes, So I think we've mentioned in the prepared remarks that our.

Kyle L. Sauers: So first of all Ftes are at the highest rate they have been in the company's history.

Kyle L. Sauers: Cpas are half what they were this time last year.

Kyle L. Sauers: And trying to give some directional trends on marketing spend but we.

Kyle L. Sauers: Because we're always looking for good ways to put money to use to bring in new players that are going to be valuable for us we want to stay pretty dynamic on it.

Kyle L. Sauers: We spent less in Q1 than we had originally anticipated, and we see a lot of opportunities, a lot of good places to put money to work, so I think the current thinking is that Q2 and Q3 would both be a little bit more than what we spent in Q1. But that could change. That's part of the reason for a range in our guidance, and then in Q4, you know, the sports calendar going into the winter for iCasino, we'd expect it to step up a little bit further. Just adding on, Jed, that we just want to remain flexible and focus on

Kyle L. Sauers: We spent less in Q1 than we had originally anticipated too.

Kyle L. Sauers: And we see a lot of opportunities a lot of good good places to put money to work. So I think the current thinking is that Q2 and Q3.

Kyle L. Sauers: Both be a little bit more than what we spent in Q1.

Kyle L. Sauers: Certainly that could change that is part of the reason for a range in our guidance and then in Q4.

Kyle L. Sauers: The sports calendar.

Kyle L. Sauers: Going into the winter for for a casino, we would expect it to step up a little bit further.

Kyle L. Sauers: Just adding, Jed, that we want to remain flexible and focus on investing where we see the best value. It gives us a chance to do that.

Gi: Adding on Gi that just we want to remain flexible and focus on investing where we see the best value.

Kyle L. Sauers: It gives us a chance to do that.

Speaker Change: Thank you.

Speaker Change: Thank you.

David Brian Katz: Our next question goes to David Katz with Jefferies. Your line is now open.

Kyle L. Sauers: Our next question comes from the line of David Katz with Jefferies. Your line is now open.

Richard Todd Schwartz: Good evening, everyone, or afternoon, depending on where you are. Thanks for taking my question. I know that Jed mentioned Delaware, and Richard, I'm not sure I heard a ton in your prepared remarks. Apologies if I missed it, but could you just give us a sense for how you're doing there and what your outlook and expectations are?

David Brian Katz: Good evening, everyone or afternoon, depending on where you are.

Richard Todd Schwartz: Thanks for taking my question.

Richard Todd Schwartz: Yes.

Richard Todd Schwartz: I know, the Jud mentioned, Delaware and Richard I'm, not sure I heard a ton.

Richard Todd Schwartz: In your prepared remarks apologies, if I missed it but could you just give us a sense for how you're doing there and what your outlook and expectations are.

Richard: Sure I think when we shared is that we went from last quarter. We thought the run rate was around $60 million, we'd be able to accelerate that to the run rate now being at a 70 near $70 million.

Richard Todd Schwartz: Sure, I think what we shared is that, you know, we went from last quarter thinking that the run rate was around 60 million; we'd be able to accelerate that to the run rate now being at 70, near a $70 million GGR for the year. I would say that we're having tremendous success. I think the quality of our casino product and the user experience we offer through our customer service is definitely being noticed by the players. And we're seeing that dramatic improvement in performance versus what it was prior to us taking over the business. So we're looking forward to the end of December.

Richard Todd Schwartz: <unk> for the year I would say that we're having tremendous success I think the quality of our casino product and the user experience we offer through our customer service.

Richard Todd Schwartz: We are being noticed by the players and Youre seeing that dramatic improvement in performance versus what it was prior to us taking over the business at the end of December.

Richard Todd Schwartz: We think the growth has been exciting, and we think there are lots of things we're going to continue to do to try to grow that business. But it's unclear, you know, what growth will look like moving forward, but we know that we are continuing to invest in some targeted marketing opportunities. We just recently held the last weekend. There was a big NASCAR race in Dover, and we were the featured sponsor, along with the three racinos there.

Richard Todd Schwartz: We think the growth has been exciting we think theres lots of things, we're going to continue to do to try to grow that business, but it's.

Richard Todd Schwartz: Im unclear.

Richard Todd Schwartz: What the growth will look like moving forward, but we know that we are continuing to invest in some targeted marketing opportunities. We just recently held the last weekend. There was a big NASCAR race in Dover. We were the featured sponsor along with a three <unk> there and it was a great event a lot of positive feedback from that a lot of.

Richard Todd Schwartz: It was a great event, and we got a lot of positive feedback from that, a lot of positive awareness for the brand and the activity that we're supporting there. So we feel very optimistic about the future, but we feel like it's a market that is far beyond what people expected it to be.

Richard Todd Schwartz: Positive.

Richard Todd Schwartz: <unk> for the brand and the activity that we're supporting there. So we feel very optimistic about.

Richard Todd Schwartz: Future, but we feel like.

Richard Todd Schwartz: It's a market that I think is far beyond people expected it to be up for us.

Richard Todd Schwartz: Alright.

David Brian Katz: And just one kind of bigger picture question about iGaming. We spend, you know, a great deal of time focusing on sort of the next product and, you know, product depth within sports betting. But we could shift the discussion to iGames.

Richard Todd Schwartz: And just one kind of bigger picture question about gaming I mean, we spend.

David Brian Katz: A great deal of time, focusing on sort of the next product and.

David Brian Katz: Product depth within sports betting if we could shift the discussion to I gaming.

Richard Todd Schwartz: And, you know, are there sort of next product types or product categories that, you know, can provide a similar step function and performance like we've seen in sports betting, and I, if that's what they are, we won't tell anyone. Yeah, I think on a public call like this, I'll have to be a little bit careful of the specifics for credit reasons. But I will tell you that we are unique in that we know how to manufacture fun as an operator.

David Brian Katz: And.

David Brian Katz: Are there sort of next.

Speaker Change: Product types or product categories.

Speaker Change: Provide a similar step function.

Richard Todd Schwartz: Sure.

Richard Todd Schwartz: Performance like we've seen in sports betting.

Richard Todd Schwartz: Sure.

Speaker Change: We won't tell anyone.

Richard Todd Schwartz: Most companies that are operators don't create them; they sort of license them from third-party suppliers. So having that capability, that technology in house, the design, and understanding of how to create compelling user experiences has given us a great level of confidence that the next things we're rolling out are going to be very exciting for the customer. There are a couple big ones coming down the pipeline that we've been working on very closely that we're very excited about.

Speaker Change: Yes, I think on a public call like this I'll give you a little bit careful with specifics competitive reasons, but I will tell you that.

Richard Todd Schwartz: We are unique in that we know how to manufacture fund as an operator, most company that our operators don't create it.

Richard Todd Schwartz: Sort of a license it from third party suppliers, so having that capability that technology in house design understanding of how to create compelling user experiences.

Richard Todd Schwartz: Given us a great level of confidence that the next things are rolling out are going to be.

Richard Todd Schwartz: It's very exciting for the customer it was a couple of big ones coming down the pipeline that we've been working on very closely that we're very excited about again I think most companies strategies are to aggregate game library as soon as many third parties as possible, we do that probably better than many of our competitors, but it's not something that's unique to us, but where we really differentiate ourselves.

Richard Todd Schwartz: Again, I think most companies' strategies are to aggregate game libraries from as many third parties as possible. We do that probably better than many of our competitors, but it's not something that's unique to us. So when you put all those things together, you personalize the experience, you offer these really exciting promotions, you develop experiences that are fun, and that's what you want to create for this audience. And again, it's hard to do, but we think we've done it well in the past, and the results have delivered exceptional returns for us. And we're about to launch new ones in the future, later this year, that we're equally or even more excited about. We'll stay tuned. Thanks very much.

Richard Todd Schwartz: Ability to create community features Sitewide community features Gamify features social experiences that are unique to our site offering ways for players to win in unique ways that aren't available elsewhere, and creating a fun experience for players that they really can't repeat if we play it somewhere else. So when you put all those things together.

Richard Todd Schwartz: Personalized experience to offer these really exciting promotions.

Richard Todd Schwartz: You develop experiences that are fun and Thats, what you want to create for this audience and it can it's hard to do but we think we've done it well in the past in the results.

Richard Todd Schwartz: <unk> are delivered.

Richard Todd Schwartz: Exceptional returns for us.

Richard Todd Schwartz: And we're about to launch some new ones in the future. Later this year that we are equally or even more excited about it.

Speaker Change: Okay, we'll stay tuned thanks very much.

Speaker Change: Thank you.

Chad C. Beynon: Our next question goes to the line of Chad Beynon with Macquarie. Your line is now open.

Richard Todd Schwartz: Our next question comes from the line of Chad Beynon with Macquarie. Your line is now open.

Chad C. Beynon: Good afternoon, and thanks for taking my question and nice results and outlook.

Kyle L. Sauers: Afternoon, thanks for taking my question and for the nice results and outlook. Kyle, your balance sheet's in a really strong position. It looks like, based on the end of the quarter, your cash balance is the highest it's been in at least six quarters here. So given the outlook for EBITDA, and your cash balance, how are you thinking about uses of this, whether it's M&A, or capital allocation? Can you

Kyle L. Sauers: Kyle your balance sheets, and a really strong position it looks like based on end of quarter. Your cash balance is the highest it's been in at.

Kyle L. Sauers: At least six quarters here so given.

Kyle L. Sauers: Given the outlook of EBITDA the cash balance.

Kyle L. Sauers: How are you thinking about uses of this whether it's M&A capital allocation can you kind of frame that up thanks.

Kyle L. Sauers: Yeah, I'll point out it wasn't that many quarters ago that you guys were asking about that, you know, did we have enough cash, and now we're generating plenty. So we're pretty excited, and we're happy to be in that position, and don't see that changing. I think in terms of the use of the cash, obviously, we're always looking at the highest return opportunities and where those might be. And that conversation evolves, and we continue to look at different things.

Kyle L. Sauers: Yes.

Kyle L. Sauers: I will point out it wasn't that many quarters ago that.

Kyle L. Sauers: You guys were asking about do we have enough cash and now now we're generating plenty. So we're pretty excited and we're happy to be in that position and don't see don't see that changing.

Kyle L. Sauers: I think in terms of use of the cash obviously, we're always looking at the highest return opportunities and where those where those might be.

Kyle L. Sauers: That conversation.

Kyle L. Sauers: And we continue to look at different things I think the biggest thing that we've got to be ready for and have have dry powder for as new market launches.

Kyle L. Sauers: I think the biggest thing that we've got to be ready for and have dry powder for is new market launches. So that's first and foremost. And I think the other thing that we continue to look at is M&A or tuck-in acquisitions that could be additive to what we're doing.

Kyle L. Sauers: So that's first and foremost and I think the other thing that we continue to look at is M&A or tuck in acquisitions that could be additive to what we're doing.

Speaker Change: Thank you I appreciate it.

Richard Todd Schwartz: And then with respect to Live Dealer, where are we on that journey and just kind of thinking or looking at your active users? Are these customers that are interested in Live Dealer? Are they, you know, generally, customers that are going to use significantly more of their time towards slots? Could you kind of help us with that place?

Kyle L. Sauers: And then with respect to live dealer.

Richard Todd Schwartz: Where are we in that.

Richard Todd Schwartz: That journey, and just kind of thinking or looking at your active users are these customers that are interested in live dealer are they generally.

Richard Todd Schwartz: Customers that are going to skew significantly more of their time towards slots.

Richard Todd Schwartz: Could you kind of help us with that please.

Richard Todd Schwartz: Sure Hi, this is Lee.

Richard Todd Schwartz: Sure. Hi.

Richard Todd Schwartz: <unk> deal there is a great category as you know is improving globally and it's certainly doing well in the U S. We think theres an opportunity for us to do better than we have done in live dealer and we've put a lot of efforts into.

Richard Todd Schwartz: LiveDealer is a great category. As you know, it's improving globally, and it's certainly doing well in the U.S. We think there's an opportunity for us to do better than we have done with LiveDealer. We've put a lot of effort into achieving some additional strategies there that will help us to deliver, I think, stronger growth in the LiveDealer category. One of the things we did is we were early to launch LiveDealer in additional markets, and we've also been able to diversify our vendors, who will probably use it probably more than others have.

Richard Todd Schwartz: Achieving some additional strategies there that will help us to deliver I think stronger.

Richard Todd Schwartz: <unk> in the live dealer category one of the things. We've done is we've been early to launch a live dealer in additional markets and we've also been able to diversify our vendors that we use it in probably in a more.

Richard Todd Schwartz: More than others have so I think variety of content is helpful. But ultimately ways, we're integrating the games and adding some side.

Richard Todd Schwartz: So I think a variety of content is helpful, but also the ways we're integrating the games and adding some side capabilities and side bets and other types of community features that will allow our players to sort of engage with the LiveDealer in a way that creates fun. Again, sort of the theme of the player experience from our standpoint is making fun for the players. So LiveDealer is a great category. We believe there's a lot of growth ahead for us in it, and we are working very diligently on creating an environment where we can sort of be one of the leaders in the LiveDealer category.

Richard Todd Schwartz: Capabilities and side bets and other types of community features that will allow our players to sort of engage with the live dealer in a way that creates fun again sort of a theme of the player experience from our standpoint, its manufacturing funded for the players. So live live dealer is a great category. We believe there is a lot of growth ahead for us.

Richard Todd Schwartz: And we are working very diligently on creating a environment, where we can sort of be one of the leaders in the live dealer category.

Chad C. Beynon: Great to hear. Thank you very much. I appreciate it.

Speaker Change: Great to hear thank you very much appreciate it.

Speaker Change: Thank you.

Daniel Brian Politzer: Our next question goes to the line of Dan Politzer with Wells Fargo. Your line is now open.

Chad C. Beynon: Our next question goes to the line of Dan Pulitzer with Wells Fargo. Your line is now open.

Daniel Brian Politzer: Hey, good afternoon, everyone. Thanks for taking my question.

Kyle L. Sauers: Hey, good afternoon, everyone. Thanks for taking my question. In terms of the revenue growth, it looks like in the US it accelerated in the first quarter. I think it was your highest pace of growth in a number of quarters. So, I mean, I assume that that's from Delaware, but to what extent are there other factors in there, you know, maybe a reduction in promotions or even an acceleration in some of the markets you're in? If you could just kind of unpack that and maybe give some some detail on how to think about the rest of the year as it relates to US versus versus Latin America. Yeah.

Kyle L. Sauers: In terms of the revenue growth it looks like in the U S. It accelerated in the first quarter.

Kyle L. Sauers: Or is your highest pace of growth.

Kyle L. Sauers: A number of quarters, so I mean, I assume that that's from Delaware, but to what extent are there other factors in there maybe a reduction in promotions or even an acceleration in some of the markets. You're in if you could just kind of unpack that and maybe give some some detail on how to think about the rest of the year as it relates to U S versus versus Latam.

Kyle L. Sauers: Yes.

Kyle L. Sauers: Yeah, no, it's a great question, Dan. I think the growth is really very broad-based. Certainly, Delaware has been a nice win for us. But to your point, in the US, in the UK, and Canada, our highest growth rate, even excluding Delaware, it's our highest growth rate in many, many quarters. Obviously, Latin America is growing wildly. That's fantastic.

Speaker Change: Great question, Dan I think the growth is really very broad based certainly Delaware, it's been a nice win for us.

Kyle L. Sauers: But to your point in the U S.

Kyle L. Sauers: U S and Canada, our highest growth rate, even excluding Delaware, it's our highest growth rate in many many quarters.

Kyle L. Sauers: Obviously, Latin America is growing wildly thats fantastic.

Kyle L. Sauers: Richard pointed out that in Michigan.

Kyle L. Sauers: New Jersey and Pennsylvania, three of our largest markets, had our highest growth rate in over two years, highest year over year quarterly growth rate. So, there's just a lot of really great things going on. We talked about, you know, the user count growing pretty significantly. And when you do that, and you're also increasing the player value, it's obviously pretty powerful.

Kyle L. Sauers: New Jersey, and Pennsylvania, three of our largest markets, we had our highest growth rate in over two years.

Kyle L. Sauers: Hi, its year over year quarterly growth rate. So just there's just a lot of really great things going on we talked about.

Kyle L. Sauers: The user count growing pretty significantly.

Kyle L. Sauers: And when you do that and you're also increasing the player value.

Kyle L. Sauers: Obviously pretty powerful.

Speaker Change: Got it and then.

Daniel Brian Politzer: Got it. And then in terms of the customers that you're seeing that the newer customers coming onto the platform, are your, you know, based on the data that you have and the intelligence that you get access to, are these new customers to iGaming? Are these customers that are maybe coming over from different tiers in the market?

Kyle L. Sauers: In terms of the customers that youre seeing that the newer customers coming onto the platform.

Daniel Brian Politzer: Sure.

Daniel Brian Politzer: Based on the data that you have in the intelligence.

Daniel Brian Politzer: Access to are these new customers to I gaming are these customers that are maybe coming over from different peers in the market.

Speaker Change: Yes is your question, whether the people we're bringing on.

Kyle L. Sauers: Is your question whether the people we're bringing on to the BetRivers or RushBet platforms are incremental players in online gaming, or whether we're getting more share from someone who is already on a platform? Yeah, are they new to the product or, you know, just more new to the brand as you kind of accelerate your growth in those markets and maybe take a little bit of share? Yeah, I think it's hard to know for sure.

Kyle L. Sauers: To the bet rivers, a rush, but platforms. If those are incremental players to online gaming or whether we're we're getting more share from from someone who is already on our platform are they are they new to product or just more new to brand.

Kyle L. Sauers: Are you kind of accelerate your growth growth in those markets and maybe take a little bit of share.

Kyle L. Sauers: I'll tell you that our growth in user counts obviously shows that the value of an iCasino player is greater than the value of someone who only plays sports. Someone who does both is far more valuable. We actually have a slide in our investor deck that we keep in there each quarter that just demonstrates that. But the user counts and the growth that we had this past quarter, and even going back to Q4, are very balanced between players that are playing iCasino, playing sports, or playing both.

Kyle L. Sauers: Yes, I think it's hard to know for sure I will tell you that our our growth in user counts obviously the value of a.

Kyle L. Sauers: And I casino player is greater than the value of our.

Kyle L. Sauers: Someone who only plays sports.

Kyle L. Sauers: Someone who does both is far more valuable we actually have a slide in our investor deck that we keep in there each quarter that just just demonstrates.

Kyle L. Sauers: It demonstrates that.

Kyle L. Sauers: The user counts and the growth that we had.

Kyle L. Sauers: This past quarter, and even going back to Q4 is very balanced between.

Kyle L. Sauers: Players that are.

Kyle L. Sauers: Playing casino, playing sports or playing both.

Kyle L. Sauers: So I think there is an element of us, bringing new people into the ecosystem, the gaming ecosystem and us getting more share and I think it would be it would be hard to suggest that.

Kyle L. Sauers: So I think there's an element of us bringing new people into the ecosystem and the gaming ecosystem, and us getting more share. I think it'd be it'd be hard to suggest that we're able to grow our average revenue per user, like we did add as many users and have them all be new to iGaming. Because it would have been pretty dilutive, I would imagine.

Kyle L. Sauers: We're able to grow our average revenue per user like we did add as many users.

Kyle L. Sauers: And have them all be new tie gaming because it would have been pretty dilutive I would I would imagine.

Kyle L. Sauers: Alright.

Daniel Brian Politzer: Right, that's kind of what I was getting at. Okay. All right. Thanks so much for the detail. Nice quarter. Thanks, Dan. Thank you. Our next question goes to the line of Bernie McTernan with

Speaker Change: That's kind of what I was getting at.

Bernard Jerome McTernan: Alright, thanks, so much for the detail and nice quarter.

Bernard Jerome McTernan: Thanks, Dan.

Bernard Jerome McTernan: Thank you.

Bernard Jerome McTernan: Thank you. Our next question goes to the line of Bernie McTernan with Needham. Your line is now open. Hi, this is Stefanos Crist calling in for Bernie.

Bernard Jerome McTernan: Our next question comes from the line of Bernie Mcternan with Needham. Your line is now open.

Bernard Jerome McTernan: Hi, This is stefanos crist, calling in for Bernie Thanks for taking our questions.

Stefanos Crist: Just wanted to ask on Mexico, continuing to show strong growth just wanted to ask on the.

Stefanos Crist: Timing and path to profitability of that thank you.

Stefanos Crist: I'll start.

Stefanos Crist: I'll start. We're still having great success in that launch period. We've referenced Colombia in the past, but if you were to update the information, we're about two times the Colombian launch revenue over the same time period. So you can see we've accelerated at a really nice pace relative to where we were in Colombia. We know how great the story of Colombia has unfolded for us in recent years, and I think, in terms of profitability, we actually have crossed the threshold, and we're profitable in the first quarter on a contribution basis from that.

Stefanos Crist: We're still having a great success in that launch period.

Stefanos Crist: <unk>, Colombia in the past, but if you were to update the information.

Stefanos Crist: We're about two times the Columbia launch revenue over the same time period. So you can see we've accelerated at a really nice pace relative to where we were in Colombia, We know how great. The story of Columbia has unfolded for us in recent years.

Stefanos Crist: And I think in terms of the profitability we actually.

Stefanos Crist: Have crossed the threshold, we're profitable in the first quarter on a contribution basis for Mexico.

Speaker Change: That's great. Thank you.

Speaker Change: Thank you.

Richard Todd Schwartz: Our next question goes to the line of Ryan Sigdahl with Craig Hallam Capital Group. Your line is open.

Stefanos Crist: Your next question comes from the line of Ryan <unk> with Craig Hallum Capital Group. Your line is now open.

Ryan Ronald Sigdahl: Hey, good afternoon, guys I want to stay on Mexico.

Ryan Ronald Sigdahl: Hey, good afternoon, guys. I want to stay on Mexico. Good to hear profitability there. I guess how much of that do you think is attributed to the product and the assortment you guys are offering from a user experience standpoint? Also, thinking about the largest operator there that has a dominant market share had some legal issues, and had some issues with their tech partners. I guess how much of that competitive dynamic is also helping?

Ryan Ronald Sigdahl: Good to hear profitability, there I guess, how much of that do you think is attributed to product in the assortment you guys are offering from a user experience standpoint also.

Ryan Ronald Sigdahl: Thinking about the largest operator, there that is dominant market shares had some legal issues had some issues with their tech partner I guess, how much of that competitive dynamic is also helping.

Ryan Ronald Sigdahl: Yeah.

Ryan: Hey, Ryan.

Richard Todd Schwartz: Hey, Ryan. It's Mexico is a complicated market. There are a lot of quality operators there and some quality experiences. I do think that we've done a really nice job of building the right functions that you need to localize the product in the proper way to optimize our results before we start to spend too aggressively. I would say that as a casino-first operator with the quality of our casino, it does stand out when players play versus other products in the marketplace. But even the sports book, as you know, in Columbia, our sports book revenues are larger than our casino revenues.

Ryan Ronald Sigdahl: Mexico is a complicated market. It's there's a lot of quality operators, there and some quality experiences I do think that we've done a really nice job of.

Richard Todd Schwartz: Building the right functions that you need to localize the product and the proper way to optimize our results before we started to spend too aggressively.

Richard Todd Schwartz: I would say that as a casino first operator with the quality of our casino. It does stand out one players play versus the other products in the marketplace.

Richard Todd Schwartz: This forced because Columbia sportswear revenues are larger than our casino and our sports. The quality is very good for that market in our region and I think we've been able to do some things in a market that really are high quality, we brought the assuming and partly its a market that many of the local.

Richard Todd Schwartz: And our sports book quality is very good for that market and that region, and I think we've been able to do some things in that market that are really high quality. We brought some steel and game parlays to the market that many of the local Mexican operators didn't offer in their solution. The registration flows that we've offered are unique. We've added some tools that others don't have in the market to make it an easier experience for users to register, and make their first deposit.

Richard Todd Schwartz: The Mexican operate and offer in their solution. The registration flows that we've offered our unique we've added some tools that others don't have in the market to make it easier experience for users to register making first deposit.

Richard Todd Schwartz: We have a seasoned marketing team that's doing a lot of really good promotions and advertisements reaching audiences in the right places at the right times. We see a lot of growth ahead for us in that market. There are some exciting promotions we're running with some unique features we have. As you probably know, we have a unique tournament system we've built, and there are some clever ways that we're using that to engage customers in an experience that isn't available anywhere else.

Richard Todd Schwartz: We have a seasoned marketing team is doing a lot of really good <unk>.

Richard Todd Schwartz: <unk> and advertisements reaching audiences in the right places at the right times, we see a lot of growth ahead for us in that market and there's some exciting promotions, we're running with some unique features we have and.

Richard Todd Schwartz: As you probably know we have a unique tournament system. We built in there is some clever ways that we're using that to engage customers.

Richard Todd Schwartz: The experience that isn't available anywhere else and when we can do something like that where the players enjoy that and are engaged with us on a frequent basis, we have a chance to retain those customers and generate a higher wallet share from them. So I would say that yes. There is a tough competitor there was a lot of market share, but they are declining in share it appears and companies like us are slowly growing.

Richard Todd Schwartz: And when we give you something like that, where the players enjoy it and are engaged with us on a frequent basis, we have a chance to retain those customers and generate a higher wallet share for them.

Richard Todd Schwartz: So I would say that, yes, there's a tough competitor there, and it owns a lot of market share, but they are declining in share, it appears, and companies like us are slowly growing market share and expect to be able to have a long path ahead of growth for us.

Richard Todd Schwartz: Sure and I expect to be able to have a long path ahead of growth for us there.

Speaker Change: Great. Thanks, Richard Good luck guys.

Ryan Ronald Sigdahl: Great. Thanks, Richard. Good luck, guys.

Speaker Change: Thanks Ryan.

Michael Joseph Hickey: Thank you. Our next question goes to the line of Mike Hickey with the Benchmark Company. Your line is now open.

Ryan Ronald Sigdahl: Thank you. Our next question comes from the line of Mike Hickey with the Benchmark Company. Your line is now open.

Michael Joseph Hickey: Hey, Richard Thanks for taking our questions and congratulations on a great quarter.

Richard Todd Schwartz: Hey, Richard, Kyle, thanks for taking our questions and congratulations on a great quarter. I guess, Richard, first there was the media noise in the quarter as reported by Bloomberg, which I think is still pretty credible that potentially you're seeking strategic alternatives and a possible sale of the company. I think DraftKings and Storm and the mix is maybe being inquisitive.

Richard Todd Schwartz: I guess, Richard first nearly as long.

Richard Todd Schwartz: The media noise in the quarter as reported by Bloomberg, which I think is still pretty.

Richard Todd Schwartz: Incredible that.

Richard Todd Schwartz: Potentially you are seeking strategic alternatives and a possible.

Richard Todd Schwartz: Sale of the company I think.

Richard Todd Schwartz: Draft Kings as dawn that mixes.

Richard Todd Schwartz: Acquisitive so.

Kyle L. Sauers: So, I probably won't comment on it, but I'm curious if you would and why you wouldn't just start a formal process if that's true. And the second question for Kyle: I heard the "Yeah, you know, you're asked, I guess, for your guidance, and I get nothing wrong with being conservative and raising your numbers. I mean, that's awesome. But when you look back over the last four years, Kyle, you've grown your revenue sequentially from Q1 each quarter through year end.

Speaker Change: You probably won't comment comment on it but I'm curious.

Kyle L. Sauers: If you would and why you wouldn't just started a formal process.

Kyle L. Sauers: If that's true.

Kyle L. Sauers: And the second question.

Kyle L. Sauers: Kyle.

Kyle L. Sauers: Yes, you are.

Kyle L. Sauers: Or asked I guess on your guidance and I get nothing wrong in conservatism amazing numbers, that's awesome, but when you look back over the last four years Kyle.

Kyle L. Sauers: Grown your revenue sequentially.

Kyle L. Sauers: Q1, each quarter through the year end and so I would hold in seasonality and FX that maybe if you could just double click again on.

Kyle L. Sauers: And so I heard hold and seasonality and FX, but maybe if you could just double click again on your guide on the top line given that your first quarter is sort of 26% off the midpoint of your range here, seems like that's a pretty conservative race given that backdrop.

Kyle L. Sauers: Our guide on the top line given that.

Kyle L. Sauers: Your first quarter is sort of a 26%.

Kyle L. Sauers: At the midpoint of the range here.

Kyle L. Sauers: It seems like that.

Kyle L. Sauers: A pretty conservative range given that backdrop. Thank you.

Kyle L. Sauers: Yes.

Michael Joseph Hickey: Yeah, I'll take that one first, Mike. And so I think I think you heard it. There's a there's a bit of a tailwind, more so in Q1 than it is in Q2, but still still there in Q2. And then absent in Q3 and Q4, given where the exchange rate is right now for Columbia. And then Q2 and Q3, little tougher comparables with better hold last year. And I think the other thing just to keep in mind when it it's a good point about, if you go back and look at history, and how our revenue has progressed throughout the year, I think the thing that is different at this point around that cadence is that we don't have two, three, four markets that are launching each year that are in the super high growth phase, or maybe even had negative revenue in the first quarter that it launched and then turned positive, that would have aided that kind of that sort of a cadence throughout the year.

Speaker Change: Take that one first.

Michael Joseph Hickey: Mike So I think I think you heard theres a bit of a tailwind.

Michael Joseph Hickey: More so in Q1 than it is in Q2, but still still there in Q2.

Michael Joseph Hickey: And then absent.

Michael Joseph Hickey: In Q3, and Q4, given where the exchange rate is right now for Colombia.

Michael Joseph Hickey: And then Q2 and Q3, a little tougher comparable with better hold last year and I think the other thing just to keep in mind. It's a good point about if you go back and look at history.

Michael Joseph Hickey: And.

Michael Joseph Hickey: How our revenue has progressed throughout the year I think the thing that is different.

Michael Joseph Hickey: At this point around that cadence is that we don't have 234 markets that are launching each year that are.

Michael Joseph Hickey: The Super high growth phase or maybe even had negative revenue in the first quarter that at launch and that in turn positive that would've aided that kind of that sort of.

Michael Joseph Hickey: Cadence throughout the year.

Michael Joseph Hickey: So.

Michael Joseph Hickey: We've put up put out a new revenue guide.

Michael Joseph Hickey: So you know, we've put out a new revenue guide and increased it nicely. Certainly, we had a really, really nice first quarter. But it's the range that we're comfortable with, given all the different factors. And obviously, like any quarter or any year, we endeavor to get on the phone with you guys the following quarter and post good results and raise those estimates if we can.

Michael Joseph Hickey: And an increased it nicely certainly we had a really really nice first quarter.

Michael Joseph Hickey: But.

Michael Joseph Hickey: It's the range that we're comfortable with given all the different factors and obviously like any quarter or any year, we endeavor to.

Michael Joseph Hickey: Get on the phone with you guys. The following quarter and post good results and raised those estimates if we can.

Speaker Change: But I will jump in on the first question.

Kyle L. Sauers: But I'll jump in on the first question: you got a follow-up. No, go ahead. That's on the first.

Speaker Change: Thanks Richard.

Speaker Change: Once you got a follow up.

Speaker Change: No go ahead.

Richard Todd Schwartz: All right, good. On the first question, I read the same article you referenced, and you know, there is the same speculation that you have. I can't respond to the rumors or speculation in the press from the press, obviously, on this call.

Speaker Change: Alright, good on the first question.

Richard Todd Schwartz: I read the same article you referenced.

Richard Todd Schwartz: Here are the same speculation that you have I can't respond to rumors or speculation in the press from the press obviously on this call, but what I can say is that the board and management regularly evaluate.

Richard Todd Schwartz: But what I can say is that the board and management regularly evaluate all opportunities that we have, and our goal is always to maximize shareholder value. As substantial shareholders ourselves, the management team, we're fully aligned with the shareholders. What we have built and continue to build is what we believe is tremendous value for our investors, and we have a lot of assets that are valuable to us just like they're interesting to other companies, and we will continue to evaluate all opportunities as part of our shareholder obligations.

Richard Todd Schwartz: All opportunities that we have.

Richard Todd Schwartz: And our goal is to always maximize shareholder value.

Richard Todd Schwartz: A substantial shareholders ourselves as a management team we are fully aligned with the shareholders.

Richard Todd Schwartz: What we have built and continue to build it.

Richard Todd Schwartz: We have a tremendous value to our investors.

Richard Todd Schwartz: And we have a lot of assets that are valuable to us just like there are interesting to other companies and we will continue to evaluate all opportunities as part of our shareholder obligations.

Michael Joseph Hickey: Richard, I get that, man, and you guys are definitely delivering, and it doesn't look like you're necessarily getting a fair shake from the market here in terms of your valuation. I guess, why wouldn't you start a formal process on a strategic alternative, including the possible sale? Like, why not be formal about it? I guess that's the question.

Richard Todd Schwartz: Richard I get that man and you guys are definitely delivering and it doesn't look like you're getting necessarily a fair shake from a market here in terms of your valuation I guess why wouldn't you.

Michael Joseph Hickey: Florida, a formal process on a strategic alternative.

Michael Joseph Hickey: Including the possible sale.

Speaker Change: Why not be formal about it I guess you answered the question.

Michael Joseph Hickey: Yes.

Richard Todd Schwartz: Yeah, we just, as I said, I can't respond to that question in this public setting. Thanks, guys.

Speaker Change: That said I can't respond to that.

Speaker Change: Questions in the public setting.

Michael Joseph Hickey: Okay. Thanks, guys. Good luck.

Speaker Change: Okay. Thanks, guys. Good luck.

Michael Joseph Hickey: Thank you.

Unknown Attendee: There are no additional questions waiting at this time, so I'll pass the conference back over to Mr. Schwartz for closing remarks.

Richard Todd Schwartz: There are no additional questions waiting at this time, so I'll pass the conference back over to Mr. Schwartz for closing remarks.

Richard Todd Schwartz: Thank you again for joining us today, I'm really proud of our team and what they are achieving.

Richard Todd Schwartz: Thank you again for joining us today. I'm really proud of our team and what they are achieving. Our executive team recently visited all of our offices and team members across the globe. We left those visits feeling inspired by the quality and the commitment of our team. They were enthusiastic, passionate, and fully aligned with our goals for the company. The best is yet to come. We look forward to updating you on our progress as we share our second quarter results in a couple of months. Thank you. That concludes our discussion.

Richard Todd Schwartz: Our executive team recently visited all of our offices and team members across the globe.

Richard Todd Schwartz: We left those visits feeling inspired by the quality of the commitment of our teams.

Richard Todd Schwartz: They are enthusiastic passionate and fully aligned with our goals for the company the.

Richard Todd Schwartz: The best is yet to come.

Richard Todd Schwartz: We look forward to updating you on our progress we share our second quarter results in a couple of months.

Speaker Change: Thank you.

Speaker Change: That concludes today's conference call. Thank you for your participation I Hope you have a wonderful rest of your day.

Unknown Attendee: That concludes today's conference call. Thank you for your participation. I hope you have a wonderful rest of your day.

Unknown Attendee: That concludes today's call.