What happened?
Shares of online casino and sports betting company Rush Street Interactive (NYSE:RSI) fell 9.4% in the afternoon session after investors continued to bid down on the company's reported third-quarter earnings which missed revenue estimate targets. On the earnings call, the company reported third-quarter revenue of $385.9 million, up 39%, and adjusted EBITDA of $62.2 million, up 73%. Online casinos made up 75% of revenue and grew 32%. Online sports betting grew 70%. Latin America revenue grew 218%, while North America revenue grew 14%. Chief Executive Officer Richard Schwartz said North American online casino and sports markets grew at a more measured pace in the quarter, and that September brought the worst sports hold of the year in both the United States and Latin America. President and Chief Financial Officer Kyle Sauers reiterated full-year 2026 revenue guidance of $1.56 billion to $1.60 billion and adjusted EBITDA guidance of $245 million to $265 million. He said October operating trends put revenue closer to the low end of that range and adjusted EBITDA near the midpoint. He tied the revenue gap mainly to slower North American online-casino market growth, and said the company continued to gain share against publicly traded peers.
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What is the market telling us
Rush Street Interactive's shares are very volatile and have had 23 moves greater than 5% over the last year. In that context, today's move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was about 22 hours ago when the stock dropped 9.1% on the news that the company reported third-quarter revenue below analyst estimates and left its full-year revenue outlook unchanged. According to a company press release, Rush Street Interactive reported revenue of $385.9 million, up 39% from $277.9 million and below the consensus estimate of $390.78 million. Adjusted earnings per share was 15 cents, above the consensus estimate of 14 cents. Net income rose 93% to $28.7 million, and adjusted EBITDA rose 73% to $62.2 million. Monthly active users rose 42% to 907,881. The company reiterated full-year 2026 revenue guidance of $1.56 billion to $1.60 billion, compared with a consensus estimate of $1.58 billion, and adjusted EBITDA guidance of $245 million to $265 million.
Rush Street Interactive is down 36.8% since the beginning of the year, and at $12.21 per share, it is trading 64.6% below its 52-week high of $34.52 from July 2026. Investors who bought $1,000 worth of Rush Street Interactive's shares 5 years ago would now be looking at only $583.42.
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