Shares of Rush Street Interactive (NYSE: RSI) surged in Wednesday’s after-hours trading session after the gaming company boosted its 2024 earnings guidance and announced a $50 million share buyback plan.
In conjunction with the release of its third-quarter results, the BetRivers parent company revealed it now expects 2024 earnings before interest, taxes, depreciation, and amortization (EBITDA) to be in the range of $82 million to $86 million. This forecast significantly exceeds the company’s earlier projections for the year. The adjusted EBITDA guidance for 2024 represents a midpoint of $84 million, a notable increase from the $8.2 million adjusted EBITDA for 2023.
Alongside the revised earnings expectations, the Chicago-based gaming company also upgraded its revenue forecast. It now anticipates annual revenue in the range of $900 million to $920 million, with the midpoint of $910 million being $30 million higher than previously guided and indicating a year-over-year growth of 32%.
Rush Street Interactive is also entering the growing trend of share repurchases within the gaming industry. The company has announced that its board of directors has approved a $50 million buyback plan. Although companies are not mandated to complete the entirety of announced buyback programs, should RSI proceed with repurchasing the full $50 million of its stock, it would represent a substantial portion of its $2.39 billion market capitalization. This buyback could make short sellers uneasy, especially considering that short interest in the stock stands at 5.09%, according to Seeking Alpha data.
The announcement of the buyback comes on the heels of an impressive year-to-date gain of 139.64% for RSI, positioning it as one of the top performers in the gaming sector. CEO Richard Schwartz expressed confidence in this move, stating, “This move reflects our confidence in the company’s future and our commitment to enhancing shareholder value. Our cash generation and strong balance sheet provide us with the option to make this strategic investment.”
Latin America is emerging as a significant growth driver for RSI, an often-overlooked aspect of the company’s broader investment appeal. During the third quarter, RSI reported a 122% surge in monthly active users (MAUs) in Latin America, including its operations in Mexico. Although the average revenue per monthly active user (ARPMAU) in this region fell to $39 from $43, the increase in user volume provided a cushion against this decline.
Investors traditionally focused on iGaming and sports wagering stocks tend to prioritize operators with strong US footprints and, to a lesser extent, operations in Ontario, Canada. Latin America, however, is becoming increasingly relevant for RSI, underscoring the diversified growth prospects beyond the North American market.
 jumps after boosting 2024 earnings guidance, announcing a $50M share buyback, and posting strong Q3 results.){kind=link}