Good day ladies and gentlemen. Thank you for standing by. Welcome to the Rush Street Interactive First Quarter 2026 Earnings Conference Call. 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, April 28, 2026. I will now turn the call over to Kyle Sowers, President and Chief Financial Officer. Please go ahead.

Thank you, Operator, and good afternoon. By now, everyone should have access to our first quarter 2026 earnings release. It 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 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, 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 in financial condition. 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. 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. A reconciliation of these non-GAAP measures to the most directly comparable GAAP measure is available in our first quarter 2026 earnings release and our investor deck, which is available in the investor section of the RSI website at RushStreetInteractive.com. 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, we have Richard Schwartz, Chief Executive Officer. We will first provide some opening remarks and then open the call for questions. And with that, I'll turn the call over to Richard.

Thank you, Kyle, and good afternoon, everyone. For the first quarter, we generated record revenue of $370 million, up 41% year over year, and a record adjusted EBITDA of $60 million, up 81% year over year. Our continued momentum demonstrates the strength of our Casino First strategy, the effectiveness of our operational execution, and the powerful momentum we're building across our business. We're scaling revenue off a much larger base at very strong growth rates, while improving profitability at about double that pace. The Casino First approach continues to be a fundamental differentiator of our business model, a business model focused on online casino as our primary value driver, with sports betting and poker serving as important complementary products. This strategic choice delivers meaningful advantages in player economics. Our casino players engage more consistently, demonstrate higher lifetime values, and exhibit superior retention characteristics. These structural advantages compound over time, creating a virtuous cycle that drives both growth in revenue and profitability. Our player base expanded dramatically during the quarter. Extremely impressive results from our teams. Monthly active users in North America grew 46% year-over-year to 296,000, while Latin America's MALs increased 54% to 543,000. In our North American online casino markets, specifically, MAL growth reached 62%, eclipsed seeing the 51% growth we just experienced last quarter. We've now seen accelerating year-over-year player growth in these markets, each of the last four quarters, demonstrating the powerful underlying strength of our business. We also achieved record first-time depositors this quarter, beating our previous record set in each of the last two quarters by a wide margin. The combination of record new player acquisition with improving marketing efficiency creates a powerful dynamic that will drive our business to new heights. We're filling the top of the funnel faster. We're doing it more efficiently than ever. And our retention remains strong. Customer acquisition and retention efficiency continues to be a key pillar of our success. Our brand awareness is increasing, which gives us a meaningful advantage in acquiring players at favorable rates. This isn't about any single initiative. It's the result of systematic improvements across customer acquisition strategy, product and user experience, loyalty programs, data analytics, and customer service. This quarter, we estimate we grew market share sequentially by around 90 basis points in the North American online casino markets where we operate. Our established markets continue performing well and we're seeing the benefits of our relentless focus on player experience and operational excellence. The consistency of these results across both mature and newer jurisdictions validates that our approach is working well. Latin America also delivered exceptional results. In Colombia, despite navigating a complex regulatory environment, we posted our fastest malgrowth in the past four quarters. The strategic approach we took throughout 2025, absorbing the tax burden through increased bonusing rather than passing costs to players, has proven to be an effective decision. Our commitment to our players and retaining their trust has positioned us well for 2026. As discussed at our prior earnings call, the Constitutional Court suspended the emergency decree of 19% VAT on GGR in late January. Furthermore, there was another positive development earlier this month whereby the Constitutional Court determined the 19% VAT to be unconstitutional and therefore ruled that no tax was to be imposed under that decree. In mid-March, a new emergency decree was implemented that imposed a temporary 16% tax on GGR. This new emergency decree and associated tax decrees will also undergo a new and distinct review by the Constitutional Court during the coming months. The result of all this is that the original temporary 19% tax that was determined to be unconstitutional was not applied to us. Therefore, during the first two and a half months of the first quarter, we had no additional taxes. Moving forward, we have assumed that we will have a new temporary 16% tax from mid-March through the end of the year when considering our raised guidance. Turning to Mexico, this market continues to ramp nicely and to be more meaningful for us both from a revenue and profitability perspective. Along with increasing brand awareness, we're seeing strong player acquisition, excellent retention metrics, and healthy growth and profitability. The competitive environment remains favorable, and we're gaining share by delivering the superior player experience that has made us successful in other markets we have grown revenue by over a hundred percent in each of the last four quarters and remain excited about the long-term opportunity and substantial size of this growing market looking ahead we are getting closer to launching in alberta the regulator has set july 13th as the launch date this represents a significant expansion opportunity for our business. As Kyle will also cover, our increased revenue and EBITDA guidance now includes the impact of the Alberta launch for the back half of the year. We expect to begin investing in marketing and brand building ahead of our launch in Alberta. This will occur in the second quarter, and Kyle will have more details. With each new market launch, we build on and improve what we've learned in prior launches. Here, we're taking a deliberate, measured approach to market entry, focusing on building a sustainable business with strong unit economics. This discipline approach has served us well in other markets, and we're confident it would drive long-term value in Alberta as well. As we look to the remainder of 2026 and beyond, I'm incredibly excited about the opportunities ahead of us. We're operating from a position of strength with momentum across our business, a clear and focused strategic roadmap, and the operational capabilities to continue executing at a high level. We're continuing to invest in product innovation, technology enhancements, and geographic expansion while maintaining the financial discipline that has long characterized our approach. We believe that this balanced strategy positions us to continue to deliver sustainable growth and increasing profitability over the long term. Our first quarter performance and the momentum we're seeing across the business gives us increased confidence. We remain focused on delivering exceptional player experiences while creating long-term value for our shareholders. With that, I'll turn it back to Kyle to discuss the financial details.

Thanks, Richard. Let me walk through the details of our exceptional first quarter performance. Record first quarter revenue of $370.4 million represents 41% year-over-year growth, a significant acceleration from the growth rates we delivered in 2025 and our fastest growth rate in over four years. This performance was driven by strong execution across all aspects of our business, with growth accelerating throughout the quarter. Adjusted EBITDA reached a record 60.2 million, representing 81% year-over-year growth and over 16% margins. This profitability expansion demonstrates the operating leverage in our business model as we continue to scale. Gross margins came in at 35.7%, an 80 basis point improvement year-over-year. Our marketing efficiency continues to improve. Marketing expenses in the quarter were $46.2 million, an increase of 19% year-over-year, and representing 12.5% of total revenue, which compares to 14.8% of revenue in the year-ago quarter. Our disciplined marketing spend, combined with record player acquisition levels, demonstrates the competitive advantage we're building within player acquisition channels and our cost to acquire players, which again are the lowest they've been since we went public over five years ago. G&A for the first quarter was 25.8 million, or 7.0 percent of revenue, compared to 7.4 percent in the prior year period. As forecasted, we are increasing our investments in our people and technology in 2026, but nonetheless, we achieved leverage over the G&A line during the quarter. The foundation of our financial success is our exceptional user acquisition and retention performance. As Richard mentioned, our user growth this quarter was really impressive, hitting another new record for first-time depositors. In North America, our mouths of 296,000 demonstrate growth of 46% year-over-year. Online casino markets in North America grew a notable 62% year-over-year. And in Latin America, mouths of 543,000 grew 54% year-over-year, demonstrating the brand awareness and customer loyalty we're building in these markets. North America ArtMau was $317 in the first quarter, down 14% year-over-year. Given the record volumes of new players we're adding to the platform, the trend of declining ArtMau is both healthy and anticipated. New players initially generate lower ArtMau than our established customer base, but they represent new high-quality player cohorts that we're acquiring at very attractive levels. The key is that we're acquiring these players efficiently and retaining them effectively, which positions us for strong long-term value creation. In Latin America, our art mile for the first quarter was $54, up 51% year over year, largely driven by faster growth in Mexico, which has higher player values than our other Latin American markets, and the removal of the VAT bonus in Colombia, which we incurred in 2025. This validates the strategic approach we took throughout 2025 and demonstrates the underlying strength of our latin american business breaking down our performance by product and geography we saw continued strength across all segments in the first quarter online casino revenue grew 39 percent and online sports betting revenue grew 47 percent regionally revenue in north america grew 26 percent in the first quarter and revenue in Latin America grew 134%. Our balance sheet remains strong with $331 million in cash on hand as of March 31st and we still have zero debt on our books. During the first quarter, we did not repurchase any shares under our $50 million share repurchase program. Based on the strength of our first quarter performance and our improved visibility into the remainder of the year, we are raising our full year 2026 guidance. We now expect revenue to be in the range of $1.49 to $1.54 billion, representing year-over-year growth of 31% to 36%. At the midpoint of $1,515,000,000, this represents a $115,000,000 increase from our initial 2026 guidance and 34% year-over-year growth. This is a meaningful increase from the guidance we offered in mid-February, so where is this coming from? In order of impact, as we mentioned earlier, we grew iCasino market share substantially in North America markets during the first quarter. This outsized growth had a positive impact on Q1, but also sets us up well for the remainder of the year, and our significant growth in North American iCasino users supports that confidence. Next, while we had a lot of confidence in our growth prospects for Latin America heading into the year, that entire market continues to outperform both in player growth and top-line revenue. In the first quarter, we also benefited from better sports outcomes in both North America and Latin America. Lastly, we have included in our guidance the Alberta launch expected in July, which will add some modest revenue in the back half of the year. Turning to profitability guidance, we now expect adjusted EBITDA to be in the range of 230 30 to 250 million representing year-over-year growth of 50 to 63 percent at the midpoint of 240 million this represents a 20 million dollar increase from our initial 2026 guidance and 56 percent year-over-year growth this is a nine percent increase in our ebitda guide and reflects the benefits of all the reasons i mentioned for raising revenue guidance plus the benefits of the new temporary tax in columbia being a bit lower than the prior 19 temporary tax that was overturned and partly offset by significant investments planned for Alberta and modestly higher marketing spend than G&A costs than expected earlier in the year. Even with these plans for increased spend, at the midpoints of our guidance, we do expect to get meaningful leverage over marketing spend and modest leverage over G&A as well. It's worth noting that our EBITDA guidance raise would have been closer to $30 million without the effect of our Alberta investment now being included in guidance. This would be a 14% increase over our previous guidance. Our first board of results demonstrate the strength of our business model and our ability to execute. We're growing rapidly, we're growing profitably, and we're doing so in a way that positions us well for sustained success. The continued momentum we're seeing across player growth, marketing efficiency, and profitability gives us confidence in our ability to deliver on our RAISE guidance and create long-term shareholder value. So with that, operator, we're ready to take questions.

We will now begin the question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Dan Pollitzer with J.P. Morgan. Dan, your line is now open. Please go ahead.

Good morning, everyone. Thanks for the question. I wanted to touch first on the MALS, the monthly active users in North America. I mean, it's been a pretty impressive acceleration over the last five quarters there. you know, the 46% growth this quarter. Can you just talk about who, you know, who these customers are that you're acquiring? You know, are they from different platforms? Is there a different demographic? Are they concentrated in one state versus another? It's just, it's obviously pretty impressive growth, so just better understanding, I think, would be helpful. Thanks.

Yeah, thanks, Dan. I'll take that one. We are very pleased with the progress there, and I'll point out that, you know, the growth in markets that have a casino in North America are actually growing faster than the total numbers that you mentioned. So we've been really pleased with that. We're filling the top of the funnel faster than we ever have, you know, three straight quarters of record first-time depositors. The players we're acquiring look, I mean, if you look at our average revenue per monthly active user, while that's come down a little bit in recent quarters, That's because we're diluting it so much with these new players, new players that may not be around for a full month, new players that are getting bonusing when they start out and take longer to build value over time. So I'd say the players look a lot like the ones that we've acquired before. Surely there's some additional kind of casual player base that we're adding, but we're seeing only modest lowering of the expected long-term value in all these new players that we're bringing on. And it's coming from a bunch of different channels. Our marketing team just continues to optimize where we spend, what the messaging looks like, and continuing to track a lot of players. I think one of the benefits for us, even though we're growing much faster than the industry is, there's a lot of players who still don't know who BetRivers is in North America. So there's a lot of opportunity for us to go after players who maybe haven't played iCasino before, but also played with some of our competitors and give them a shot to play on one of the best platforms, if not the best platform that's out there.

Got it. That's helpful. And then just turning to Alberta, I think that you mentioned, I think was implied about a $10 million launch cost or EBITDA impact in the year. Can you talk about, I guess, what you're underwriting there in terms of market share? Is it predominantly going to be iGaming? And then just maybe talk about expectations for the competitive environment.

So we expect it to be competitive, just like Ontario has been competitive. You know, it also has incumbent gray market operators that all the new entrants like us will be dealing with. I don't think we want to put a market share bogey out there just yet. You know, Ontario, which has been a great market for us, we've grown really nicely. We're taking share there, but we're still relatively, you know, small in the scope of the entire market. That's probably a good target for us early on. But I'll also say we've had a lot of lessons operating in Ontario, and we think we'll do really well launching in Alberta.

Got it. Thanks so much, and nice quarter. Thanks, Dan.

Our next question comes from the line of Bernie McTernan with Needham. Bernie, your line is now open.

Great. Thanks for taking the questions. Maybe just to start, just piggybacking on the question on the strong MAU growth, what customer acquisitions channels are working in particular? Is anything performing better? I know you brought in a chief marketing officer not too long ago. So just, you know, the fact that we continue to see nice growth here on a sustained basis, just want to see, you know, what's working and then have a follow-up.

Yeah, great. And, yeah, we did bring in our first CMO a couple years ago now. We've added a lot of great talent to the team, supplemented the great people we already had there, both in North America and Latin America. So they're doing a fantastic job. I'll say we're trying a lot of different channels, trying a lot of different things. and clearly it's working really well. The ones that are working exceptionally well, I'm not sure that I want to highlight that on a public call, though.

Fair enough. Ben wanted to ask on just the World Cup, just any, you know, I'm assuming we'll see the impact greater in the financials in LADAM over the U.S., but just, you know, any commentary on what's contemplated in the gap would be helpful.

Yeah, so without being, you know, super specific, on exactly what's in the guide. We have built in some upside from the World Cup and the extra games that will be played because it's largely incremental to the whole soccer calendar for the year. But I think we're very excited about that. We're very excited about the player acquisition that comes along with it. So hopefully that'll turn into a bigger impact than what we've modeled and what we've guided to. So that could be exciting. I'll say one, I think one point of it, a reference that'd be interesting, the COPA America in 2024, that summer, we saw our monthly active users in Columbia increase by an average of 170% year over year in June and July, which was the two months where that event happened. So that was a big driver of the future growth for us in Columbia. So, you know, we're hoping for a great World Cup, a lot of engagement from new players and existing players, but also sustained growth in our player base afterwards for both sports and for iCasino.

If I could just add that this is a unique World Cup and that it's taking place in three countries and all three of them are countries where we operate. And we're excited that it's less than 45 days away from the first match, which will open up on June 11th in Mexico City, a great market where we're operating in. Mexico will play to host that game. So I think there's a lot of excitement because of that. But also the time zones for all of our players in America will be the same time zones that are awakened, which is rare compared to how it's been the last several World Cups where you've been over in Europe or the Middle East. So I think this is a chance for us to really capture a large amount of interest from bettors in these markets because we know it expands the pie of recreational users who we can then cross those colleges side to do casino. Makes a lot of sense.

Thank you both. Thank you.

Our next question comes from the line of Jordan Bender with Citizens. Jordan, your line is now open.

Hey, everyone. Thanks for the question. I want to touch on the comments around your malgrowth in Columbia, the fastest you've seen in the last four quarters. You kind of talked about what you're doing and what's going right there. But can you maybe just kind of tell us or explain, like, what the exit rate is in the country, kind of exiting the VAT tax? And do you think that you're gaining overall share just based off of the adjustments that you've made to the business model in recent quarters?

Yeah, sure. So we talked about it in the prepared remarks, but we're very pleased with how, you know, the strategy we used last year to kind of combat the deposit tax on the players. And we had a lot of extra bonusing, which was a little painful in 2025, but it served us really well because we treated customers the right way. So the business grew at a handle, GGR, player count base really nicely last year. And we're seeing more of that flow through to the net revenue line this year because there's less of that bonusing. We have increased our marketing spend in Latin America. So that's been certainly impactful on growing the player counts down there and having a faster growth. Um, there's not, in any of the Latin American countries, we don't have good reported, uh, data from the, um, from the regulators. Um, it'd be really hard to imagine that we are not taking share, um, in all three of those markets given, given our performance. Um, so we're pretty confident that that's, that's happening.

Great. Um, and then just sticking with Columbia, you know, that's clearly been a standout market for you guys over the last couple years. Are you seeing similar malgrowth engagement monetization trends in Peru and Mexico at their point in their life cycles, you know, similar to kind of what you saw in Colombia in early days?

Yeah. So I'll say it this way. So Mexico is ahead of Colombia in terms of, you know, where we were this quarter relative to the launch date and then comparing that to Colombia versus our original launch date down there. So we're ahead in Mexico from that perspective on this quarter and in aggregate since launch. Now, Mexico is a larger market, so I think we've got a much bigger opportunity there potentially.

And then in Peru, it's probably a little bit behind uh where columbia was post-launch but all of them still still growing really really nicely and we're very excited about great thank you very much and nice quarter thanks jordan our next question comes from the line of ryan signal with craig hellum capital ryan your line is now open hey good afternoon guys uh if i look at industry i can see no growth in the u.s wall continues to be very durable and strong it's decelerating a bit your growth is accelerating um you're doing that despite discipline spend many of your competitors are still out there aggressively spending i guess i think i asked this every quarter but i'm gonna ask it again i guess how it feels like things are getting easier for you guys with accelerating growth um when it feels like it's getting harder for everybody else yeah so thanks for the comments I wouldn't say it's getting easier, Ryan.

I think our teams work really hard and really smartly. I do think we're doing a lot of things much better than we were a year ago or two years ago. But that doesn't mean that there's not a lot of things we can keep doing better. But it is, you know, I think we've said it all, and there's probably no new answers from your question last time. We're acquiring players faster, so more of them coming in to fill the top of the funnel. we're doing it at lower rates per player and you know retention is still really really good you know we we try to be really fair with with bonusing and we're trying to continue to optimize that make sure that players are getting a meaningful experience with with their their bonusing and promotions but but again an area we can continue to optimize and you know just the whole life cycle and journey for a player from the time they hear about us to the time they start playing on, you know, our industry leading product. We try to make it as great of an experience for them as we can. And then obviously we've got a great customer service team who takes care of, takes care of the players because there's, there's always going to be issues that you have to deal with.

I mean, Rod, I just got a couple of things, you know, our, one of our goals is to create a fun and fair experience for our players. And when you consistently see their feedback to us, whether it's to our customer service team or in their public comments on our apps in the app store, that they themselves, without knowing that after our strategy, when they repeat themselves, that you guys are fun and fair and fast, things that they care about, that just reinforces that we're delivering the experience and meeting the expectations or hopefully exceeding them. You know, I think a lot of this comes from an ideation process of having a lot of insights from the consumer, really understanding the audience, having the technology capabilities is deliver leading experiences that are new to the industry, not just here in the Americas, but globally, and then delivering experiences that are differentiated for the player that they enjoy enough to sustain their play with us versus others. So I think it's just the consistency of leading, having the confidence to build new experiences. Our team is tremendous at understanding how to translate insights into products that the user wants to play, and of course, making sure the service element is always there to remind those players that we're a thoughtful living company that's really treating players fairly.

Well done, guys. For my follow-up question just on Columbia, constitutional court declared that there needs to be a refund mechanism for the VAT collected in 2025. Curious if you think you guys will be entitled to refunds, if you're able to quantify that, and if you're able to provide any kind of additional detail on that process?

Yeah, so I think you're referring to payments that would have been made in 2026 related to the 19% emergency VAT that was declared right at the end of December. So the court has suggested that that money needs to go back to operators that have paid it. We did not pay any of that into the system from the 2026 19% tax that was ultimately deemed to be unconstitutional. So not really relevant for us.

Very good. All right. Thanks, guys. Well done. Thanks, Ryan.

Our next question comes from the line of Mike Hickey with StoneX. Mike, your line is now open.

Thank you. Hey, Richard. Kyle, congrats, guys. Amazing quarter. Great start to the year. Just curious on Mexico. It seems like you're having a tremendous amount of success there. And the market, of course, looks like to be about nearly 10 times Columbia. You're already a top five share position in the market. But I think your overall share is still pretty small, given that I think one operator has the majority of it. So just curious, the competitive dynamics that you're seeing in Mexico and your ability, you think, over time to take meaningful share in that market. And how big, obviously, the World Cup can be in sort of supercharging you to that point. because it seems like on paper, given the success in Columbia, you could do 10 times the business in Mexico.

Hey, Mike, I'll start and maybe Kyle will add in a little bit. We really like Mexico for the opportunity to really differentiate on the casino side. I think a lot of the players there, especially the largest market share operator, is really historically focused on sports and has that in more of their DNA than do casino online. So we're very excited to be able to continue to invest in all the things that are necessary to show those casino players there. Don't forget that country has a very large legacy retail casino marketplace that we'll be able to leverage those players to help deliver this experience online that is, I think, superior to what you typically would see. So from that standpoint, we are leaning in on our casino experience, naturally relying on the sportsbook to acquire customers during high-profile events such as Copa America that Kyle referenced in the past, but also more exciting for the upcoming World Cup that I mentioned will be opening up on June 11th in Mexico City. So I think the competitive situation there really favors a casino-first operator like us, and we're continuing to try to make sure we do all the little things necessary to deliver the type of experience, not just from the casino experience, but all the little localizations you need to constantly improve upon to ensure you're staying current with the latest data, the technology that you need to reduce friction for the players in that market.

Did you have something to add on, or are you good?

I don't think I'll react to your 10 times just yet. Give us a little time, but I'll remind you, we started later than others did in Columbia. We came into a market that was already existing, and we've secured ourselves as the number two operator in Columbia and growing growing really quickly. So we're certainly optimistic that Mexico can bring really good success over the coming years.

Thanks, guys. Just a quick follow-up on LATAM. I think you teased us before about maybe looking to open a new market in LATAM. Just curious your appetite this year or next year to do that still?

Yeah, we have mentioned that in the past. We do continue to see a broad set of attractive growth opportunities across Latin America. We are actively progressing those efforts. I think given our strong performance in existing markets, which the three countries that we're operating cover a population of 220 million people, we still have the flexibility to be deliberate and pursue those opportunities with discipline, which is what we're doing. So we still have opportunities. We're continuing to advance those opportunities, but we're not ready to share anything at this point in time. Awesome. All right. Thanks, guys.

Thanks, Mike.

Our next question comes from the line of Jed Kelly with Oppenheimer. Jed, your line is now open.

Hey, great. Thanks for taking my question. Just on North America and ARPMUPS, is that entirely being driven by just the accelerating users you're seeing, or is the decline in ARPMUPS also being driven by the way you're bonusing? Thanks.

I want to make sure I'm understanding the question. I'm sorry, Jed, you're asking if the decline in the average value of the player in North America is just because of bonusing of new players?

No, is it due because you're seeing just an accelerating of users and those first-time users are causing it to run faster? Or is there something else you're doing in the bonusing? I'm just wondering about the art mob trends you can speak to.

No, it's largely a factor of new players coming in. You know, we added 60% year over year in iCasino markets, which is where most of our focus is. You know, any one of those players might be coming in in the last part of a month that goes into that average calculation of the value they're providing. You know, most players have negative value early on in their life cycle because they're moving through the bonusing that we give them. So that's the largest factor there. Great problem to have. We're surely not going to grow player counts 60% year over year forever. So as that slows down and the players that we're bringing in are maturing, retention improves with those players that stay around longer. we'd expect that number to move back up over time.

Got it. And I think you said earlier that you're seeing pretty favorable CPAs. Is that being driven more by what your marketing team is doing, maybe around AI and certain investments? Or do you think some of your competitors might be focusing on other product launches coming up? Thanks.

Yeah, it's a good question. I don't know that we've seen a big change in the competitive intensity for the marketing assets that we're going after. Obviously, any one competitor might have in flow with what they're doing. Could some of them be allocating marketing dollars someplace else, certainly towards new market launches and pulling away someplace? I suppose that's possible. I don't think that's as much of it as it is our team is doing a great job. We continue to improve the player journey. So it's not just about getting people to show up to the App Store. They've got to download. They've got to register. They've got to go through KYC. It's got to be easy for them to get a deposit on the platform. so all of that it seems so simple but it's pretty complicated and our team does a great job and we're making it better and better so there's a lot of different things involved but I think probably the competitive intensity for marketing assets is not a big driver and all that I think it's more about what we're doing.

Thank you and great quarter.

Thanks Jed.

Just a reminder if you would like to ask a question press star then the number one on your telephone keypad our next person to ask a question will come from the line of zach silverberg with wells fargo zach your line is now open hi uh good afternoon thanks for taking my question um it just went on mexico um so there was an article that stated that a couple of your competitors had their gaming license blocked during the quarter um what are you seeing there you know post this event and it's an opportunity to kind of take share from those operators yeah sure hey uh zach uh yeah bet365 and batano are

the two of the operators that you're referencing but they actually i think that have their license quality been earlier than this quarter uh and so they i think their absence from the market both were meaningful uh market share contenders and so i think they were their exit for the market certainly have helped us to acquire some customers from them that previously maybe weren't aware of our brand and didn't know who we are. Certainly, I think in both those cases, though, there are companies that are primarily, I think, stronger in sports. So what I said earlier about us being a casino-first operator still holds true, and we think competitively with an environment that we're continuing to kind of be able to grow our casino player volumes, and as we know, those players tend to generate a larger revenue-proactive user and ultimately the type of player engaged, higher level player engagement, the type of players that we like and are very strong at retaining. So we feel pretty strong about the market opportunity there, and it certainly has helped us to have those two operators out of the market.

Thanks. And just for my follow-up, in Columbia, there's an election coming up in a few weeks. Is there anything you guys are looking out for there and anything you guys are handicapping to this election in terms of the future outlook of the 16% consumption tax?

Yeah, thanks, Zach. Certainly, we're watching it very closely. There's the initial round here coming up in a few weeks, and then the final election will be in June. So we are watching it closely. We're not handicapping it necessarily. Certainly, there's an opportunity there. We talked earlier about this 16% tax, that there's a mandated constitutional review of the emergency decree that allowed that tax to be put in place, and then also a review of the tax itself. And then another opportunity for that to be relooked at would be the next administration that comes into office and how they view the emergency decree, assuming it doesn't get overruled, how they view that decree and the associated taxes. So potential opportunity for upside for us there. Thanks, Robert Conner.

Our next question comes from the line of Joseph Stauf with Sasquana. Joseph, your line is now open.

Thank you. Richard, I was wondering if you could comment on maybe the state of product parity for iCasino. You know, I think it's fair to say for OSB, everyone is sort of approaching some level of product parity versus each other. And wondering, you know, your observation, obviously you've always been front-footed about product development. And have others caught up in terms of offering jackpots, offering bonus spins? What's your assessment of the industry today?

Well, that's a big question, Joe. I'll try to answer it efficiently with that. We continue to sort of lead away our opinion on creating innovative features. and while others are investing more resources the casino experience largely we've seen things that are very me too is what how i would describe it where everyone kind of just copies each other and if someone offers a free-to-play game as part of a promotion you know when you first register every day everyone does the same thing uh people improve the lobby everyone improves the lobby those are real simple things ultimately to improve upon but they're still important and valuable but i would to say that it's sort of a math mentality, everyone sort of doing the same improvements in the same area. So I referenced the lobby. I referenced the free game. I referenced the jackpots. I think we were one of the first ones to have a site-wide jackpot across all of our products. Others are doing some jackpots that are site-wide, but our execution I still think is more interesting for a player than the others are, and I won't get into the reasons why. But, you know, I think we have good insights into what values we're delivering and why we make the decisions that we do. So I think what's validating ultimately is the app scores in the store. You know, we have the highest rated app in the store, 4.9 out of the five, it being the highest level, which is rare to achieve for a casino app, largely because a large number of players are already going to penalize it on a casino operator on the basis that they lose playing the app and they may not feel like it was an experience that was positive for them where it's not like a sports book app primarily where the better makes the bets based on skill and ultimately doesn't really blame the operator if they get the outcome wrong, whereas in the casino world, it's a little bit different. So the fact that we have such a high score on the app, I think is very validating to the quality of experience we offer. And as I've shared before, we've been building this technology since 2012, modernizing it along the way, constantly bringing new experience to the players. so it's not just one or two things that we have built but we built dozens of features that are still unique to the industry and it takes a long time to build it uh and it's hard to build it even if you know you're going to try to copy something it's hard to get the copy to reflect the quality of experience that we have built so we feel pretty strongly that we have built a nice note around our product experience in the casino space and having said that we're always pushing the limits and we're never going to be satisfied and we're constantly looking to improve and we lots of opportunities to get better and that's what our team was focused on and and do you think

those higher app scores you know is that a function of you know your retention engine and mechanics and capabilities or is it you know you know a variety of factors including say product depth and so forth do you think the retention capabilities that you have really are say a difference maker versus, say, other iCasino products that are up?

I think what's different about us, or what's unique for us, is from the very beginning, from day one, and when I started the business, the number one goal was to retain customers. It was less about acquisition. It was more about how do we deliver an experience that offers the same quality and quantity of high-quality games, but how can we create differentiation and experience that drives users to prefer to play with us over other apps they may be playing with? So ultimately, when you do the little things right, you pay attention to the details, and you get the customer service team doing a great job, as our team does, combined with the innovative experience that's unique for the players. Ultimately, you encourage greater retention, which delivers the kind of results that we're seeing. So I think it's really just a matter of paying attention to the details. they all matter and as i said in the prepared remarks every thing we do is systematic across all parts of the journey and all the touch points where you interface with the customer matter and if we are constantly improving each and one of those paying attention to every detail along the way you ultimately end up with experience that comes together and the players notice it and we think that's a big part of why a large percentage of our players prefer to play with us we believe versus other apps where they also have accounts, but are probably playing at the same level that they play with us. Thanks a lot, Richard.

Final call for questions. If you would like to ask a question, please press star, then the number one on your telephone keypad. Our next question comes from the line of Chad Bainan with McQuarrie. Chad, your line is now open.

Thanks for taking my question. I wanted to ask about Virginia, given your current OSB license and the fact that Rush Street Land-Based Gaming has a property there. From what we've heard, it sounds like there were a lot of constituents that were in favor. Obviously, it didn't get across the goal line, but wondering if you think the progress that was made there sets Virginia up for higher likelihood in 27, and if you guys would have interest if that opened from an iGaming standpoint.

Thanks for asking that question, because it definitely would be a very exciting market for us, and we are very interested in that opportunity. We remain focused on expanding online casino into a large number of states that have shown recent interest, but Virginia being a key example. We view Virginia as a real opportunity. It's encouraging legislation to progress as far as it did this year, with versions passing both the senate and the house and so uh it's a market that we have been working with collaborating with our peers and it seems like a really exciting opportunity potentially for us in the next year in addition as we noted our prepared marks we are advancing plans to bring our platform to alberta so we have plenty of exciting things happening in the next couple months but we are viewing Virginia in partnership with the land-based property, Rivers Casino there, that's a great opportunity for us.

And maybe I would just add to that, Chad, just to think about the opportunity there, maybe not to put exact numbers around it, but not dissimilar in size from a Michigan, you know, unclear exactly how many licenses there'll be, but that's a market where we We started off with mid-single-digit share, and we've grown it to high single-digit share over time. And we did that without a lot of brand awareness or any brand awareness when we launched and no access to strong database of players. So we have some real advantages in Virginia that we haven't had in a lot of other markets. So it's very exciting for us as that moves along.

Okay, great. Thank you. And then lastly, and this is probably assumed based on your user growth that we've talked about throughout the call, but prediction markets, I guess one of the other digital operators said that CPAs had increased. they didn't grow users as much as you guys did. So is it safe to say that you're just not seeing any pressure or you're not seeing significant pressure from CPA standpoint or just from user standpoint? And do you think that could potentially change as some of these prediction companies just develop their technology throughout the year? Thanks.

Yeah, I think it's fair to say that we haven't seen from a from a marketing asset cpa we haven't seen pressure from from those entrants i think a lot of that is that we're we're searching for different uh different types of players and we're searching for them in different places so um i don't think that's impacted our business and certainly you said it it's but it's with our cpas going down uh being lowest they've been that's probably a pretty good indication of that thank you both thanks our last question comes from the line of david cats with jeffries david your line is now open

thank you so much appreciate you all taking my question um i wanted to just finish off with a discussion on sort of flow through and aspirational margins, obviously not in any kind of a timed or guided way. You know, the increase in guidance on the revenue side of 100 million and, you know, around 20, you know, just I think begs the question of, you know, where do you think an aspirational flow through level could be? And do you have sort of margin targets out there in the future that you're able to talk about with us?

Yeah. So on the longer term margins, we still think that we can get to kind of low to mid 20%. And obviously that means we're going to have some decent flow through over the coming years. We need a couple more markets, casino markets in North America likely to get to that point and have them mature a little bit. You know, on flow-through in general, we look at 2026, let's say, at the midpoint of our guide, flow-through is very solid, kind of mid-20%. A couple of things, keep in mind that because of the deposit tax and that associated bonusing going away in Colombia from last year. But with this new tax on revenue, which impacts our gross margins, we've got a bigger improvement in revenue than we do in operating margins in Colombia. So that impacts that metric a little bit. And then I think maybe you alluded to this, but adding Alberta to our guidance, both a little bit of revenue, but also all of the launch costs impacts that as well. You know, we don't expect Alberta to be profitable in 2027. Having said all that, I'll also point out that we've, we're always trying to consistently outperform our expectations. So we're going to continue to strive to do that.

Understood. I'm all set. Thanks very much.

Thanks a lot, David.

There are no further questions at this time. I will now turn the call back to Richard Swartz for closing remarks.

Thank you for joining us today. We look forward to updating you in our progress when we share our second quarter results in the summer.

This concludes today's call. Thank you for attending. You may now disconnect.