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Accel Entertainment, Inc. (ACEL)·Q1 2025 Earnings Summary

Executive Summary

  • Record net revenues of $323.9M (+7.3% y/y) and adjusted EBITDA of $49.5M (+7.1% y/y); diluted EPS was $0.17. Management emphasized “highest quarterly revenue since going public” and strong Fairmount ramp post-opening in April .
  • Versus S&P Global consensus, revenue beat by ~$5.2M, EPS was below by ~$0.03, and adjusted EBITDA was modestly above the Street (definition differences noted below). Bolded outcomes in tables below reflect the beat/miss magnitude*.
  • Guidance maintained: 2025 CapEx $75–$80M; normalized company-wide CapEx expected to return to $40–$45M after Fairmount Phase 1 and Louisiana initial build-out .
  • Strategic/catalyst developments: Fairmount Park Casino & Racing soft-opened 4/18 with early “very strong play” despite Derby Day weather; Louisiana integration tracking ahead of plan; continued portfolio optimization in Illinois; repurchased 1M shares for ~$10.2M in Q1 .

What Went Well and What Went Wrong

What Went Well

  • Record quarterly net revenues and y/y EBITDA growth as locations and terminals expanded; CEO: “highest quarterly revenue since going public and strong Adjusted EBITDA” .
  • Fairmount opening delivered early traction; President U.S. Gaming: “fantastic turnout that drove very strong play at the casino” during Derby Day despite race cancellations .
  • Capital allocation: repurchased 1M shares at ~$10.34, reiterated balanced growth and buybacks with $422M liquidity and low leverage .

What Went Wrong

  • Nevada softness: location hold-per-day down 5.3% y/y (loss of a key customer due to ownership change) .
  • EPS below consensus despite revenue beat; start-up costs at Fairmount (labor ahead of revenue) pressured Q1 profitability *.
  • Ongoing pruning of underperforming Illinois locations reduced location count (-1.5% y/y in IL), with near-term net unit growth potentially flat as assets are redeployed .

Financial Results

MetricQ1 2024Q4 2024Q1 2025Q1 2025 Consensus
Net Revenues ($USD Millions)$301.8 $317.5 $323.9 $318.7*
Net Income ($USD Millions)$7.4 $8.4 $14.6 N/A
Adjusted EBITDA ($USD Millions)$46.2 $47.4 $49.5 $48.1*
Diluted EPS ($USD)$0.09 $0.09 $0.17 $0.197*
  • Note: Management remarks cited “total revenue of $344M” on the call; company’s press release reports net revenues of $323.9M (authoritative). The difference likely reflects terminology or gross vs net presentation on the call .
  • Consensus values marked with an asterisk are from S&P Global; see disclaimer in “Estimates Context”.
MarginQ1 2024Q1 2025
Net Income Margin %2.46% (=$7.4/$301.8) 4.51% (=$14.6/$323.9)
Adjusted EBITDA Margin %15.32% (=$46.2/$301.8) 15.29% (=$49.5/$323.9)

Segment breakdown (net revenues):

Segment ($USD Millions)Q1 2024Q1 2025
Net Gaming$288.1 $302.0
Amusement$6.1 $5.9
Manufacturing$2.2 $3.9
ATM Fees & Other$5.3 $12.2
Total Net Revenues$301.8 $323.9

Geographic breakdown (net revenues):

State ($USD Millions)Q1 2024Q1 2025
Illinois$224.9 $233.5
Montana$38.1 $41.1
Nevada$29.2 $27.6
Louisiana—$9.0
Nebraska$5.8 $7.2
Georgia$2.6 $4.3
Other$1.1 $1.1
Total$301.8 $323.9

KPIs

KPIQ1 2024Q1 2025
Total Locations (units)4,267 4,391
Total Gaming Terminals (units)26,029 27,180
IL Location Hold/Day ($)$860 $885
MT Location Hold/Day ($)$594 $610
NV Location Hold/Day ($)$847 $802
LA Location Hold/Day ($)—$972
NE Location Hold/Day ($)$233 $263
GA Location Hold/Day ($)$91 $145

Balance sheet and cash flow highlights

  • Net debt at 3/31/25: $308.8M; debt (net of current) $546.4M; cash & equivalents $271.9M .
  • Q1 operating cash flow: $44.8M; investing cash flow: $(26.2)M; financing cash flow: $(27.9)M .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total CapExFY 2025$75–$80M (Q4 call) $75–$80M (Q1 call) Maintained
CapEx – Existing MarketsFY 2025$39–$41M $39–$41M Maintained
CapEx – LouisianaFY 2025$5–$7M $5–$7M Maintained
CapEx – FairmountFY 2025$31–$32M $31–$32M Maintained
Normalized CapEx (post builds)Ongoing$40–$45M (long-term) $40–$45M (reiterated) Maintained
Fairmount Phase 1 OpeningQ2 2025 targetQ2 2025 targeted Opened 4/18/25 Achieved (earlier in Q2)
Fairmount Phase 2 TimelineThrough end-2027End of 2027 Will reassess post racing season; still proceeding Maintained trajectory
Fairmount EBITDA (Full-run)Post Phase 2~$25M EBITDA (long-term) ~$25M re-affirmed Maintained
Fairmount Phase 1 EBITDAUpon opening~1/3 of full-run ~1/3 of full-run (prorated for mid-Q2 start) Maintained
Share Repurchase AuthorizationOngoingReplenished to $200M (2/27/25) Active; Q1 repurchases $10.2M Capacity replenished; continued execution

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
Illinois TITO regulatoryExpected H1’25 rollout; enhances convenience “Hopeful” for 2025 rollout No new timing; continued monitoring Steady progress expected
Portfolio pruning (IL)Strategic closures to lift margins Continued pruning; flat near-term net units Program “continuous”; IL locations down y/y Ongoing optimization
Louisiana integrationDeal near close; update before YE Entered LA; track remodels begin Early performance strong; remodeling driving uplift Positive traction
Fairmount developmentPhase 1 in Q2’25; Phase 2 plan outlined Phase 1 Q2’25; full-run EBITDA ~$25M Opened 4/18; strong early play; Phase 2 timing post season Ahead, ramping
CapEx normalizationCore CapEx trending to ~$40M 2025: $75–$80M; post-build normalize $40–$45M Reiterated same Maintained
Tariffs/macroNot highlightedMacro/weather commentary (Jan/Feb) Minimal near-term CapEx impact; steel cost risk for Phase 2 Watchful, contained

Management Commentary

  • CEO: “We generated our highest quarterly revenue since going public and strong Adjusted EBITDA as we expanded the number of locations we serve and increased the number of gaming terminals.”
  • President U.S. Gaming: “Despite the inclement weather forcing us to cancel races, we still had a fantastic turnout that drove very strong play at the casino.”
  • CFO: “We are reiterating our full year CapEx forecast of $75 million to $80 million… After Fairmount and the initial CapEx in Louisiana, we expect company-wide normalized annual CapEx to return to $40 million to $45 million.”
  • CEO on IL optimization: “We are always looking to increase our profitability… reallocate the assets into better performing situations… this program [will] continue market after market.”

Q&A Highlights

  • Tariffs: Pricing largely locked for 2025; minimal near-term impact; steel inflation could affect Phase 2 timing/budget but visibility still evolving .
  • Weather and demand: Weather impact neutral; April trends tracking expectations amid tax refund season; no notable consumer weakness .
  • Illinois pruning: Ongoing portfolio optimization to lift margins and free cash flow; IL location count down y/y, consistent with strategy .
  • Louisiana: Stronger-than-expected Q1; remodeling and proprietary tech expected to sustain run-rate improvement through 2025 .
  • Fairmount: Phase 2 timing clarity expected post racing season (October); Phase 1 ramp on track; start-up costs hit Q1 (labor ahead of revenue) .

Estimates Context

  • Q1 2025 comparisons vs consensus: revenue beat; EPS below; adjusted EBITDA above Street (noting definitional differences). See table.
MetricActual Q1 2025Consensus Q1 2025Beat/MissDelta
Net Revenues ($USD Millions)$323.9 $318.7*Beat+$5.2M*
Diluted EPS ($USD)$0.17 $0.197*Miss-$0.03*
Adjusted EBITDA ($USD Millions)$49.5 $48.1*Beat+$1.4M*
  • Note: S&P Global’s consensus “EBITDA” may reference standardized EBITDA; company reports “Adjusted EBITDA,” which excludes/normalizes certain items; comparisons are directional.
  • Consensus coverage: 3 estimates for EPS and revenue in Q1 2025*.
  • Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Distributed gaming fundamentals intact: broad-based y/y growth across IL, MT, NE, GA; LA adds a new leg of growth; NV softness appears idiosyncratic (customer change) .
  • Fairmount is a visible near-term catalyst with Phase 1 already open and strong early play; Phase 2 decisioning post racing season should frame medium-term EBITDA trajectory .
  • Capital discipline: Guidance unchanged; normalized CapEx return to $40–$45M supports FCF expansion and buyback capacity; Q1 repurchases show continued willingness to return capital .
  • IL portfolio optimization likely sustains margin improvement and ROIC despite flat near-term net units; traders should watch monthly IL hold/day and location churn as KPIs .
  • Expect estimate revisions: modest upward tweaks to revenue and adjusted EBITDA; EPS may see mixed revisions given start-up costs and share count dynamics *.
  • Monitoring points: Fairmount ramp cadence (slots, F&B, sportsbook), LA remodeling progress, NV account replacement strategy, regulatory TITO timing in IL .
  • Narrative drivers: execution in new markets, definitional clarity between net vs total revenue on calls, and consistency of CapEx normalization to unlock valuation re-rating per management’s comments .
Discrepancy note: The call referenced “total revenue of $344M,” while the press release reports “total net revenues of $323.9M.” We anchor on press release net revenues for financial tables and benchmarking **[1698991_ACEL_3425265_0]** **[1698991_1c93e261a62642109ddf88db6d223da9_0]**.

* S&P Global disclaimer: Consensus values (and # of estimates) are retrieved from S&P Global.