Executive Summary

Revenue of $567.7M modestly exceeded Wall Street consensus ($565.0M*) while adjusted EPS of $0.76 missed consensus (~~$1.01*) and adjusted EBITDA came in slightly below (~~$136.1M vs ~$137.4M*) .
Sequential comp trends improved through the quarter (Feb -11.9%, Mar -8.4%, Apr -4.3%) and into Q2-to-date (-2.2%), supported by “back to basics” execution and reintroduction of the Eat-and-Play Combo; management cited 11 of the last 30 days with positive SSS .
Guidance reiterated: FY2025 capex < $220M, pre-opening ~$20M, cash interest $130–$140M; share repurchases of $23.9M in Q1 left $104.1M remaining authorization .
Key call themes: remodels outperforming system by >700bps, game-room refresh with eight new cabinets and two attractions, Summer Pass launch, and tightened marketing spend/messaging; management emphasized improved traffic, weekend strength, and higher F&B attach rates .
Near-term stock catalysts: continued SSS recovery, menu refresh later in the year, gamified promotions (leaderboards, sweepstakes), and proof of free cash flow conversion alongside disciplined capital deployment .

What Went Well and What Went Wrong

What Went Well

Sequential comps markedly improved across months and into Q2-to-date as “back to basics” initiatives took hold; management noted 11 of the last 30 days with positive same-store sales .
Eat-and-Play Combo reintroduced and performing strongly, driving double-digit opt-in and higher F&B attachment; ~30% of customers upgraded to all-you-can-play option in tests .
Remodel cohort outperformed system by >700bps over last three months; new game content and “Summer of Games” rollout enhanced guest engagement .

What Went Wrong

Comparable store sales down 8.3% YoY and adjusted EBITDA margin contracted to 24.0% from 27.1% YoY as higher marketing and R&M spend and pre-opening costs weighed on profitability .
GAAP diluted EPS fell to $0.62 vs $0.99 YoY amid lower operating income and higher net interest expense, including sale-leaseback financing costs .
Prior strategic missteps (marketing, menu, operations, remodels, game pricing) required unwinding and reset, delaying top-line inflection; management acknowledged the recovery remains early innings .

Financial Results

Summary Financials (Quarterly)

Metric	Q3 2025	Q4 2025	Q1 2026
Revenue ($USD Millions)	$453.0	$534.5	$567.7
GAAP Diluted EPS ($)	$(0.84)	$0.24	$0.62
Adjusted EPS ($)	$(0.45)	$0.69	$0.76
Operating Income ($USD Millions)	$6.3	$44.1	$63.2
Adjusted EBITDA ($USD Millions)	$68.3	$127.2	$136.1
Adjusted EBITDA Margin (%)	15.1%	23.8%	24.0%

Revenue Mix and Costs (Q1 2026 vs Prior Year)

Metric	Q1 2025 (Prior Year)	Q1 2026
Entertainment Revenues ($USD Millions)	$385.7	$366.6
Food & Beverage Revenues ($USD Millions)	$202.4	$201.1
Total Cost of Products ($USD Millions)	$87.3	$82.1
Cost of Entertainment (% of Entertainment)	8.6%	8.3%
Cost of Food & Beverage (% of F&B)	26.7%	25.6%
Operating Margin (%)	14.5%	11.1%
Net Income ($USD Millions)	$41.4	$21.7
Net Margin (%)	7.0%	3.8%

KPIs and Operating Data (Q1 2026)

KPI	Q1 2026
Comparable Store Sales YoY	-8.3%
Company-owned Stores (End of Period)	234
Store Operating Weeks	3,018
Revenue per Store Operating Week ($000s)	$188
Revenue per Sq Ft per Store Operating Week ($)	$4.55
Monthly SSS vs PY (QTD progression)	Feb -11.9%, Mar -8.4%, Apr -4.3%, Q2’25 QTD -2.2%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Capital Expenditures	FY 2025	< $220M	< $220M	Maintained
Pre-opening Expense	FY 2025	~$20M	~$20M	Maintained
Cash Interest Expense	FY 2025	$130M–$140M	$130M–$140M	Maintained
Share Repurchase Authorization Remaining	Current	~$104M	$104.1M	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2025 and Q4 2025)	Current Period (Q1 2026)	Trend
Marketing & “Back to Basics”	Reset strategy after missteps; emphasis on improving comps and execution	Rebalanced media (back on TV), simplified messaging; sequential SSS improvement	Improving
Menu & Eat-and-Play	Issues with menu presentation noted; focus on value	Eat-and-Play Combo reintroduced; double-digit opt-in; menu reskin now, broader menu refresh later in year	Positive attach, pipeline
Remodel Program	44 remodels completed by Q4; outperforming base	Remodels outperform system by >700bps; refined prototype, prioritization, budget control	Outperformance with refinement
Games Investment	Game-room underinvestment acknowledged; plan to refresh	Eight new cabinets + two attractions; Summer leaderboard/sweepstakes; Human Crane in 100 stores	Accelerating
Special Events	Strong YoY growth; new banquet menu investments	Events outpaced walk-in; continued focus	Stable to improving
Liquidity & Leverage	Liquidity $510M, NTL ratio 2.8x	Liquidity $423M availability; NTL ratio 3.1x	Leverage up modestly
International Franchising	First franchise in India; >35 stores committed	Expect ≥7 international openings over next year	Expanding pipeline

Management Commentary

“Our ‘back to basics’ strategy is working and is driving a material recovery in our top-line trajectory… we unwound many clear mistakes and made high confidence changes to marketing, menu, operations, remodels and games investment.” — Kevin Sheehan, Interim CEO .
“Results so far in June continue to show improvement. In fact, we have produced positive same-store sales in 11 of the last 30 days.” — Kevin Sheehan .
“Remodeled stores… have outperformed the system by over 700 basis points over the last three months.” — Kevin Sheehan .
“Of the $115 million gross spends, $53 million new stores, ~$20 million remodels/other initiatives, $30 million on games, ~$12.5 million on maintenance.” — Darin Harper (CapEx cadence) .

Q&A Highlights

Trajectory and predictability of comps: management framed recovery as multi-quarter, targeting sustainable positive SSS over time with lean cost discipline and cash conversion focus .
Drivers of improvement: traffic led gains; weekend strength; higher F&B attach via Eat-and-Play; less discounting vs prior year .
Game pricing/value tests: simplifying rate cards, lowering pricing to extend time-in-midway; ~30% upgrade to all-you-can-play option on Eat-and-Play .
Capital allocation: reiterated capex guidance; sale-leaseback partners to fund development efficiently; maintaining 10–14 new units per year strategy .
Special events vs walk-in: events performing slightly better and outpacing walk-in; D&B and Main Event tracking similarly overall .

Estimates Context

Metric	Consensus*	Actual	Beat/Miss
Revenue ($USD Millions)	565.0*	$567.7	Beat
Adjusted EPS ($)	~$1.01*	$0.76	Miss
Adjusted EBITDA ($USD Millions)	~$137.4*	$136.1	Miss

Values retrieved from S&P Global.
Notes: Consensus targets used are S&P Global compiled estimates; actuals are as reported. Adjusted EPS and adjusted EBITDA reflect company non-GAAP metrics reconciled in filings .

Key Takeaways for Investors

Sequential comp recovery is credible and supported by operational resets, marketing simplification, and stronger weekend traffic; monitor June/July trends for sustained momentum .
Despite a modest revenue beat, profitability compression (higher marketing/R&M, pre-opening) and EPS miss reflect transitional investments; watch adjusted EBITDA margin trajectory as initiatives normalize .
Remodel ROI remains a differentiator with >700bps outperformance; continued disciplined rollout and prototype refinement should drive incremental sales/cash flow .
Game-room refresh and gamification (leaderboards, sweepstakes) plus Summer Pass can extend stay and increase spend; near-term drivers for traffic and F&B attach .
Guidance intact for capex, pre-opening, and interest expense; free cash flow conversion is a central 2025 narrative alongside share repurchases ($23.9M in Q1; $104.1M authorization remaining) .
Balance sheet/liquidity adequate (Revolver availability ~$411M net of LCs) though net total leverage ticked up to 3.1x; sale-leaseback financing contributes to interest expense—monitor interest burden vs margin recovery .
Board/leadership transitions progressed, CEO search ongoing during quarter; execution consistency under interim leadership has improved — governance changes did not derail operating plan .

Additional Context and Prior Quarter Benchmarks

Q4 2024/Q1 2025 trend: Revenue $534.5M and adjusted EPS $0.69 in Q4; Q3 2024 revenue $453.0M and adjusted EPS $(0.45); highlights reset underway before Q1 acceleration .
Liquidity and leverage: Q4 liquidity ~$510.4M and NTL 2.8x vs Q1 availability $423.2M and NTL 3.1x as capex front-loaded and debt activity flowed through .
Operational investments: Q1 capex gross $115.2M (new stores $53.0M; remodels/initiatives $19.6M; games $30.0M; maintenance $12.6M) .

Other Q1 2026 Press Releases

Board transitions: nomination of Allen R. Weiss and Nathaniel J. Lipman; several directors not standing for reelection at June 20, 2025 annual meeting .
Earnings date announcement: Q1 results scheduled for June 10, 2025 .

Citations: .

S&P Global disclaimer: Asterisked consensus values are from S&P Global; actuals and guidance are from company filings and press releases.

Dave & Buster's Entertainment, Inc. (PLAY)·Q1 2026 Earnings Summary