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Accel Entertainment, Inc. (ACEL)·Q2 2025 Earnings Summary

Executive Summary

  • Record Q2 revenue of $335.9M (+8.6% YoY) and record Adjusted EBITDA of $53.2M (+7.1% YoY); GAAP diluted EPS was $0.08, pressured by a loss from the change in fair value of contingent earnout shares .
  • Versus S&P consensus: revenue beat by ~$3.4M (+1.0%), Primary (normalized) EPS beat ($0.26 vs $0.225), and Adjusted EBITDA slightly beat ($53.2M vs $52.7M); GAAP EPS of $0.08 reflects non-GAAP adjustments .
  • Management reaffirmed FY25 CapEx of $75–$80M with allocations for legacy ($39–$41M), Louisiana ($5–$7M), and Fairmount ($31–$32M), and expects normalized annual CapEx to return to $40–$45M after projects .
  • Near-term catalysts: Illinois hold-per-day strength, TITO rollout in Illinois, Louisiana expansion (legislation adding machines), and steady Fairmount ramp; buybacks of ~$6.7M in Q2 signal capital return commitment .

What Went Well and What Went Wrong

What Went Well

  • Record quarterly revenues ($335.9M) and record Adjusted EBITDA ($53.2M) driven by core Illinois strength and contributions from new markets, including Louisiana and Fairmount .
  • Illinois revenue at a quarterly record ($245.4M) with location hold-per-day up 5.6% YoY to $910; management highlighted consistent monthly volume through Q2 .
  • Louisiana (Toucan Gaming) generated ~$9.6M in Q2 revenue, benefitting from legislation allowing an additional VGM per route location and additional VGMs at truck stops; Fairmount ramp tracking to contribute meaningfully in 2026 .

What Went Wrong

  • GAAP net income fell 50.2% YoY to $7.3M, primarily due to the loss on change in fair value of contingent earnout shares versus a gain in the prior period .
  • Nevada revenue declined 7.7% YoY due to the loss of a key customer in 2024; while margins improved through optimization, this weighed on consolidated performance .
  • Manufacturing revenue declined YoY (Q2 manufacturing $1.8M vs $5.2M) as GrandVision Gaming updated its operating platform and timing of software sales shifted .

Financial Results

Core Financials vs Prior Periods

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$317.5 $323.9 $335.9
GAAP Diluted EPS ($)$0.0903*$0.17 $0.08
Adjusted EBITDA ($USD Millions)$47.4 $49.5 $53.2
EBITDA Margin (%)13.35%*13.52%*13.57%*
EBIT Margin (%)8.02%*7.96%*8.00%*
Net Income Margin (%)2.63%*4.52%*2.18%*

Values with an asterisk were retrieved from S&P Global.

Q2 2025 Results vs S&P Global Consensus

MetricConsensusActualSurprise
Revenue ($USD Millions)$332.5*$335.9 +$3.4 (+1.0%)*
Primary EPS (Normalized) ($)$0.225*$0.259*+$0.034 (+15.3%)*
Adjusted EBITDA ($USD Millions)$52.7*$53.2 +$0.5 (+0.9%)*
GAAP Diluted EPS ($)—$0.08 —

Values with an asterisk were retrieved from S&P Global.

Segment Breakdown (Net Revenues by State)

StateQ2 2024 ($USD Millions)Q2 2025 ($USD Millions)YoY Change ($)YoY Change (%)
Illinois$227.1 $245.4 +$18.3+8.1%
Montana$42.6 $40.1 -$2.5-5.8%
Nevada$29.3 $27.1 -$2.2-7.5%
Louisiana—$9.6 +$9.6N/A
Nebraska$6.2 $7.9 +$1.6+25.9%
Georgia$3.1 $4.8 +$1.7+54.0%
Other$1.0 $1.0 -$0.1-6.2%
Total$309.4 $335.9 +$26.5+8.6%

KPIs

KPIQ2 2024Q2 2025ChangeSource
Locations (Total)4,294 4,427 +133 (+3.1%)
Gaming Terminals (Total)26,481 27,388 +907 (+3.4%)
Illinois Hold-per-Day ($)$862 $910 +$48 (+5.6%)
Net Debt ($USD Millions)$310.8 (Jun-24) $330.9 (Jun-25) +$20.1
Shares Repurchased (Q2)—0.6M ($6.7M) —

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total CapExFY 2025$75–$80M (reaffirmed) $75–$80M Maintained
CapEx – Legacy MarketsFY 2025N/A$39–$41M Provided
CapEx – LouisianaFY 2025N/A$5–$7M Provided
CapEx – Fairmount (Phase 1 + Phase 2 planning)FY 2025N/A$31–$32M Provided
Normalized Annual CapEx (post projects)Steady-stateN/A$40–$45M Provided
TITO (Illinois)2H 2025 rolloutN/APhased rollout; full implementation date TBD New initiative
Share Repurchase AuthorizationOngoing$200M authorization (replenished 2/27/25) $200M; repurchased $6.7M in Q2 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24, Q1’25)Current Period (Q2’25)Trend
Technology/TITONo prior TITO disclosure; manufacturing/GrandVision platform present Illinois TITO began in July; expected to improve player experience and reduce cash/logistics costs; impact to be assessed by Q3 Positive operational efficiency tailwind
Regional TrendsQ4/Q1: Illinois steady growth; Nevada soft; Nebraska/Georgia growing IL record $245.4M and +5.6% hold/day; NE +25.9% YoY; GA +54.0%; NV -7.5% YoY due to lost customer Mixed: strength in IL/NE/GA; NV recovering mix/margins
Regulatory/LegalEntry into Louisiana (Toucan); racino approval LA legislation enabling additional machines per route location/truck stops Positive growth enabler
Product/OperationsFairmount opening planned in Q2’25 Fairmount Phase 1 soft-open; ramp steady; meaningful contribution seen into 2026 Building toward 2026
Manufacturing PlatformGrandVision present; improving content Timing of software sales lowered manufacturing revenue; platform update underway Transitional headwind, strategic upgrade
Capital AllocationBuyback replenished to $200M (Feb) Q2 repurchase: 0.6M shares, $6.7M; net debt ~$331M, liquidity ~$392M Ongoing repurchases; strong liquidity

Management Commentary

  • “Our record second quarter results demonstrate continued progress and consistent execution… Our results reflect the benefits of our disciplined expansion strategy and our successful improvement of the operating results in new and acquired locations.” — CEO Andy Rubenstein .
  • “As the market leader in Illinois… Profitability is improving in our developing markets, Nebraska, Georgia and Nevada… recent results from Toucan Gaming in Louisiana and Fairmount Park Casino & Racing… reinforce our confidence that these acquisitions will contribute even more as we move into next year.” — CEO Andy Rubenstein .
  • “Looking ahead, our M&A pipeline remains active… focused on disciplined, accretive transactions that do not stretch our balance sheet… below-the-radar assets create attractive opportunities.” — CEO Andy Rubenstein .
  • “We are reaffirming our full year 2025 CapEx forecast of $75–$80M… Following completion… normalized annual CapEx to return to the $40–$45M range.” — President U.S. Gaming & Interim CFO Mark Phelan .
  • “Illinois increased operating margins by 70 bps… launched TITO late in July… better player experience… lower field cash needs… potentially lower operating expenses.” — President U.S. Gaming & Interim CFO Mark Phelan .

Q&A Highlights

  • Illinois cadence: Q2 monthly volume was “pretty consistent”; no notable peaks/valleys despite consumer volatility concerns .
  • TITO rollout: Early days; over half of machines not yet implemented; no material Q3 impact expected; aims to improve experience and reduce cash logistics .
  • Nevada: Ex-key customer, revenue grew slightly YoY; team improved margins by focusing on licensed locations and negotiated splits .
  • Fairmount: Positive indicators across casino/racing/sportsbook/F&B; still early (~13 weeks); Phase 2 design underway with IGB engagement; meaningful contribution expected in 2026 .

Estimates Context

  • Q2 revenue beat consensus ($335.9M vs $332.5M; +1.0%)* and Primary EPS beat ($0.259 vs $0.225; +15.3%)*, suggesting upward pressure on near-term EPS estimates.
  • Company-reported Adjusted EBITDA ($53.2M) was modestly above consensus ($52.7M); S&P standardized EBITDA “actual” appears lower, reflecting differing definitions, but non-GAAP Adjusted EBITDA is the management’s primary profitability metric .
  • GAAP diluted EPS of $0.08 was below Primary EPS due to non-GAAP adjustments (e.g., loss on contingent earnout fair value) and should be considered when calibrating Street models *.

Values with an asterisk were retrieved from S&P Global.

Key Takeaways for Investors

  • Operational momentum in core Illinois (record revenue; stronger hold/day) remains the primary driver; developing markets (NE/GA) show share gains, while NV optimization improves margins despite customer loss .
  • Near-term efficiency tailwinds from TITO in Illinois and platform updates should support margins and cash logistics; watch Q3 commentary for early read-throughs .
  • Regulatory positives in Louisiana (additional machines allowed) and the steady ramp at Fairmount broaden growth drivers into 2026 .
  • Capital deployment remains disciplined: reaffirmed FY25 CapEx with targeted allocations, strong liquidity (~$392M), net debt ~$331M, and ongoing buybacks ($6.7M in Q2) .
  • Estimate revisions: expect modest upgrades to normalized/adjusted EPS and EBITDA on beats; GAAP EPS remains affected by non-cash items (contingent earnout revaluation) requiring careful model reconciliation *.
  • M&A pipeline in fragmented local gaming offers bite-sized, accretive opportunities leveraging manufacturing, systems, and loyalty capabilities to enhance acquired assets .
  • Watch manufacturing timing and platform update impacts on reported “manufacturing” revenue near term; strategic upgrades aim to bolster content availability across markets .
S&P Global disclaimer: Values marked with an asterisk (*) were retrieved from S&P Global.