Executive Summary

Q2 FY25 revenue declined 6.0% YoY to $39.725M; adjusted EBITDA was $(0.691)M vs $(0.321)M YoY; GAAP net loss widened to $(9.258)M or $(2.57) per share, driven by a $3.44M goodwill impairment and a $4.799M deferred tax asset valuation allowance, partially offset by stable underlying comps (+0.4% SSS ex-closed units) .
Management cited ~$650k of Bryant Park–related legal/consulting fees that depressed Q2 EBITDA; excluding these, EBITDA would have improved vs last year; Las Vegas efficiency and Florida strength were called out as operational positives .
Cash was $11.124M and debt $4.280M at quarter-end; ARKR is finalizing a new $15–$20M facility with its current lender while terming out $4.3M over three years (existing facility matured June 1) .
Key risk and stock overhang: Bryant Park Grill & Café and The Porch leases—~15% of 1H FY25 revenue—remain under litigation; ARKR is operating as a holdover tenant and expects to remain for 12–18 months pending resolution/appeal .

What Went Well and What Went Wrong

What Went Well

“We’re considerably more efficient than we’ve ever been [in Las Vegas]… while volumes are steady, the cash flows weekly are improving dramatically,” positioning EBITDA to have improved ex ~$650k Bryant Park fees .
Florida revenue trends improved; company-wide same-store sales rose 0.4% YoY ex-closed units in Q2; Florida SSS +3.9% YoY; Alabama steady .
Balance sheet remains liquid with $11.1M cash vs $4.3M debt, and management expects to secure a $15–$20M revolver, providing operating flexibility during legal uncertainty .

What Went Wrong

Q2 GAAP results included a $3.44M goodwill impairment (triggered by stock price decline and Bryant Park uncertainty) and a $4.799M full valuation allowance on DTAs, driving a 569% effective tax rate and the $(2.57) EPS loss .
Same-store softness in New York (–8.1%), Washington, D.C. (–4.2%), Atlantic City (–11.3%) and Alabama (–3.2%) offset Las Vegas/Florida strength; New York event business was weaker YoY .
Elevated Bryant Park litigation spend (~$650k in Q2) weighed on profitability; lease renewal risk remains material given the sites’ ~15% share of 1H revenue .

Financial Results

Consolidated results (oldest → newest)

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$43.406	$44.988	$39.725
Operating Income (Loss) ($M)	$(5.519)	$5.689	$(4.617)
Net Income (Loss) Attributable to ARKR ($M)	$(4.457)	$3.164	$(9.258)
Diluted EPS ($)	$(1.24)	$0.88	$(2.57)
EBITDA, as adjusted ($M)	$0.503	$1.378	$(0.691)

Notes: Adjusted EBITDA excludes specified non‑cash/one‑time items (goodwill impairment, lease termination gains/losses, etc.) as reconciled in the releases .

Q2 FY25 same-store sales by region (YoY)

Region	Q2 FY25 ($M)	Q2 FY24 ($M)	YoY %
Las Vegas	$13.975	$13.799	+1.3%
New York	$4.040	$4.394	−8.1%
Washington, D.C.	$1.377	$1.438	−4.2%
Atlantic City, NJ	$0.677	$0.763	−11.3%
Alabama	$3.453	$3.567	−3.2%
Florida	$15.512	$14.936	+3.9%
Company SSS	$39.034	$38.897	+0.4%

Excludes El Rio Grande and Tampa Food Court. Management attributed NY softness to lower event revenue and D.C. to hybrid work headwinds .

Balance sheet snapshot (oldest → newest)

Metric	Q4 2024	Q1 2025	Q2 2025
Cash and Cash Equivalents ($M)	$10.273	$13.101	$11.124
Total Debt ($M)	$5.235	$4.702	$4.280
Shares Outstanding (Basic, ‘000)	3,604	3,604	3,605

Other notable items: 26‑week gain on Tampa Food Court lease termination $5.235M (distribution of ~$1.71M to minority partners in Q2); El Rio Grande closure net loss $5k YTD .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Company Guidance	FY25/Q3–Q4	None	None provided	N/A
Dividend	Ongoing	Not indicated	No Q2 dividend paid (prior year had dividends)	Maintained suspension

Management did not issue formal revenue, margin, OpEx, tax, or segment guidance; capital structure update: working to finalize $15–$20M facility and term out $4.3M over three years .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024)	Previous Mentions (Q1 2025)	Current Period (Q2 2025)	Trend
Bryant Park leases	Highlighted risk; goodwill impairment tied partly to uncertainty	Expectation of being “still in the game”; process viewed as flawed; risk to dividends/buybacks if lost	Holdover tenant; litigation underway; ~$650k Q2 legal/consulting fees; expects 12–18 months presence	Legal risk ongoing; operating continuity near term
Las Vegas efficiency	Margin pressure from wages; operations stable	Improving vs rents; more efficient payroll; new GM at Sequoia	“Considerably more efficient… weekly cash flows improving dramatically”	Improving execution
Florida performance	Challenging revenue environment	Exceeding last year depending on weather	Florida SSS +3.9% YoY ; management: “picked up”	Improving
Washington, D.C. (Sequoia)	Prior impairments; cash-flow positive	Demand problem; new GM brought in	SSS −4.2% YoY; early improvement noted by mgmt	Still pressured; management actions ongoing
Meadowlands casino option	Dependent on NY downstate licenses; lobbying active	Similar message; timing later this year possible	Reiterated dependency; potential catalyst if NY moves	Watching regulatory timeline
Pricing/Inflation	Reluctance to raise prices; input costs high (e.g., crab)	Maintain value; efficiency initiatives	Cost inflation persists; corporate legal costs elevated	Cost discipline focus

Management Commentary

CFO (Q2): “We… had to write off the balance of our goodwill in the amount of $3.4 million… [and] put a full valuation allowance on our deferred tax assets of $4.8 million,” explaining the outsized tax provision in Q2 and noting work to finalize a $15–$20M facility while terming out $4.3M of debt .
CEO (Q2): “EBITDA… was negatively affected by some $650,000 of consultancy fees and legal fees in conjunction with our fight to retain the Bryant Park lease… the big improvement is coming from Las Vegas… the cash flows weekly are improving dramatically” .
CEO (Q2): On Bryant Park: “We are a holdover tenant… we think we’re definitely there for the next year, 1–1.5 years… we hope at some point, there’ll be a political settlement” .

Q&A Highlights

There were no analyst questions on the Q2 call; management delivered prepared remarks and closed the call .
Clarifications delivered in remarks: drivers of non-cash charges (goodwill impairment; DTA valuation allowance), legal spend impact on EBITDA, operational commentary by region, and status of the credit facility process .

Estimates Context

S&P Global consensus for Q2 FY25 was not available for EPS or revenue (no estimates returned); we therefore benchmark against reported actuals only. Values retrieved from S&P Global.
Without consensus, estimate revisions are unlikely to be a near-term catalyst; investors should watch for increased sell-side coverage or company-provided targets to re-anchor expectations [GetEstimates returned no consensus; values retrieved from S&P Global].

Key Takeaways for Investors

Core operations stable with improving Las Vegas efficiency and Florida growth, but legal fees (~$650k in Q2) and Bryant Park lease risk remain the central overhang on margins and capital return policy .
Q2 headline loss reflects non-cash items (goodwill impairment $3.44M; DTA valuation allowance $4.799M); underlying comps ex‑closures were modestly positive (+0.4%), suggesting demand is holding in aggregate .
Liquidity looks adequate near term (cash $11.1M vs debt $4.3M), and a new $15–$20M facility would bolster flexibility if Bryant Park uncertainty persists or for opportunistic tuck-ins .
Bryant Park sites represented ~15% of 1H revenue; ARKR is operating as a holdover tenant and anticipates at least 12–18 months of continuity pending litigation—clarity here is the single biggest stock catalyst .
The Tampa Food Court lease termination added $5.235M in gains YTD, but minority distributions reduce parent-level benefit; recurring EBITDA from this unit will not continue, requiring offset from efficiency and growth elsewhere .
Absent formal guidance and with limited analyst coverage, seasonal strength (summer outdoor dining) and progress on legal/banking milestones may drive near-term trading; medium term, replicable concepts (e.g., Lucky Pig) and Las Vegas execution are key to rebuilding earnings power .

Citations: Q2 FY25 8-K/press release ; Q2 FY25 10-Q ; Q2 FY25 call transcript ; Q1 FY25 press/call ; Q4 FY24 press/call .

ARK RESTAURANTS CORP (ARKR)·Q2 2025 Earnings Summary