Executive Summary

Q4 2025 revenue was $534.5M and diluted EPS was $0.24 GAAP; adjusted EPS was $0.69. Relative to S&P Global consensus, EPS modestly beat, while revenue missed; consensus EPS $0.683 and revenue $545.8M. Values retrieved from S&P Global. Actuals: revenue and EPS .
Adjusted EBITDA was $127.2M (23.8% margin). Consensus EBITDA was $128.3M; company reports Adjusted EBITDA while consensus is EBITDA, implying a slight shortfall on a non-like-for-like basis. Values retrieved from S&P Global. Actual Adjusted EBITDA .
Management flagged execution missteps by prior leadership (marketing, menu, remodels, game investment) and outlined “back to basics” actions; March–April trends improved meaningfully, with sequential SSS recovery from February through April and continued progress into June .
FY25 outlook reiterated: capex < $220M, pre-opening ~$20M, cash interest $130–$140M; plan to open 10–12 new stores plus one relocation; management focused on converting operating cash flow to free cash flow. Liquidity ended Q4 at $510.4M; net total leverage ratio 2.8x .
Catalyst: visible operational reset (TV back in mix, Eat & Play Combo push, new game slate including Human Crane), remodel discipline (lower hurdle rates), and improving traffic drive near-term sentiment; evidence of sequential comp improvement supports potential estimate revisions once sustained .

What Went Well and What Went Wrong

What Went Well

Reintroduction of TV advertising and return to historical promotion cadence (including Eat & Play Combo) driving traffic and attach; management noted improving March–April trends and further progress in June .
New game rollout (Human Crane and six premium titles) showing strong early performance with expected payback <6 months; supports refresh cadence and experiential appeal .
Strong liquidity and capital access: $510.4M available liquidity at Q4 end; sale-leaseback proceeds of $111.4M in Q4; ability to repurchase shares ($85M in Q4; ~$172M FY24; $23.9M in Q1 FY25) .

What Went Wrong

Q4 comparable store sales down 9.4% YoY (like-for-like calendar); revenue down 10.8% YoY with a tougher prior-year 53rd week contributing $39.5M to Q4 FY23 baseline .
GAAP profitability compressed: operating margin 8.3% vs 15.0% prior year; diluted EPS $0.24 vs $0.88; Adjusted EBITDA down 16.2% YoY .
Execution issues from prior leadership (eliminated TV, overcomplicated promos/menu changes, remodel overspend, deemphasis of new games) pressured brand perception and operations; company now unwinding these changes .

Financial Results

Quarter-over-Quarter Trend (oldest → newest)

Metric	Q4 2025	Q1 2025	Q2 2025
Revenue ($USD Millions)	$534.5	$567.7	$557.4
Operating Income ($USD Millions)	$44.1	$63.2	$53.0
Net Income ($USD Millions)	$9.3	$21.7	$11.4
Diluted EPS (GAAP, $)	$0.24	$0.62	$0.32
Adjusted Net Income ($USD Millions)	$26.8	$26.7	$14.1
Adjusted EPS ($)	$0.69	$0.76	$0.40
Adjusted EBITDA ($USD Millions)	$127.2	$136.1	$129.8
Adjusted EBITDA Margin %	23.8%	24.0%	23.3%
Comparable Store Sales (% YoY)	-9.4%	-8.3%	-3.0%

Year-over-Year Comparison (Q4)

Metric	Q4 2024 (prior year)	Q4 2025 (current)
Revenue ($USD Millions)	$599.1	$534.5
Diluted EPS (GAAP, $)	$0.88	$0.24
Adjusted EPS ($)	$1.03	$0.69
Adjusted EBITDA ($USD Millions)	$151.8	$127.2
Adjusted EBITDA Margin %	25.3%	23.8%
Comparable Store Sales (% YoY)	N/A	-9.4%
Prior Year 53rd Week Revenue Contribution ($USD Millions)	$39.5	N/A

Results vs S&P Global Consensus (Q4 2025)

Metric	Consensus	Actual
Revenue ($USD Millions)	545.8*	$534.5
Primary EPS ($)	0.683*	$0.69
EBITDA ($USD Millions)	128.3*	$127.2 (Adjusted EBITDA)

Values retrieved from S&P Global. Note: Company reports Adjusted EBITDA; consensus figure reflects EBITDA, not directly like-for-like.

Segment Breakdown (Q4 2025)

Segment	Revenue ($USD Millions)	Mix of Total	Cost ($USD Millions)	Cost % (vs segment)
Entertainment	$335.0	62.7%	$27.4	8.2%
Food & Beverage	$199.5	37.3%	$50.1	25.1%
Total	$534.5	100.0%	$77.5 (products)	14.5% (of total)

KPIs and Balance Sheet

KPI	Q4 2025
Liquidity (cash + revolver availability) ($USD Millions)	$510.4
Operating Cash Flow ($USD Millions)	$108.9
Net Total Leverage Ratio (x)	2.8x
Share Repurchases (Q4)	~$85M; ~3M shares
Share Repurchases (FY24 total)	~$172.0M; ~5M shares
Share Repurchases (FY25 to date through Q1)	~$23.9M; ~1M shares
Stores Opened (Q4)	5 (4 D&B; 1 Main Event)
Company-owned stores (end of Q4)	232
Sale-leaseback proceeds (Q4)	$111.4M

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Capital Expenditures	FY25 (ends Feb 3, 2026)	< $220M	< $220M	Maintained
Pre-opening Expense	FY25	~$20M	~$20M	Maintained
Cash Interest Expense	FY25	$130–$140M	$130–$140M	Maintained
New Store Openings	FY25	10–12 + 1 relocation	10–12 + 1 relocation	Maintained

Management also guided to no material changes to working capital as a cash source in FY25 due to Power Card timing dynamics .

Earnings Call Themes & Trends

Topic	Q4 2025 (Apr 2025)	Q1 2025 (Jun 2025)	Q2 2025 (Sep 2025)	Trend
Marketing/TV mix	TV reintroduced; move back toward ~50% TV spend if ROI proves out; pruning promos; focus on Eat & Play Combo	Sequential SSS improvement tied to revamped marketing; March–April comps improved	Continued optimization; new CEO emphasizes guest-first growth	Improving execution; sustained focus
Menu and attach	Restoring higher-ticket entrees; pricing architecture reset; 90% of guests upgrade combo; ribs added with high mix	Execution improvements; sequential attach uplift implied	N/A in release; continued store-level focus	Positive attach momentum
Games/attractions	New slate incl. Human Crane; expected <6-month payback; six premium games incl. Godzilla VR, NBA Superstars	Continued investment; game refresh cadence	Ongoing rollout; remodels completed	Strengthening experiential appeal
Remodels/capex discipline	Slowed pace; value engineering; hurdle rate lowered to mid–high single digits from mid-teens; 16 remodels in FY25	Capex reiterated (<$220M net); focus on FCF	Capex buckets not disclosed; flexibility emphasized	More disciplined, ROI-driven
Macro/tariffs	Noted uncertainty from tariffs and consumer concerns; confidence in value proposition	Sequential comp improvement despite macro	QTD SSS trends consistent with Q2 exit rate	Monitoring; modest headwind
Lower-income consumer	Weakness seen historically; aiming to target via TV and value promos; data lagging	Sequential comp recovery suggests outreach traction	N/A	Potentially stabilizing
Technology/ERP	System implementation costs noted in non-GAAP recon	Continued ERP/HCM rollout costs	Ongoing system implementation costs	Investment continuing; cost normalization expected

Management Commentary

“Previous leadership... made significant and ill-advised changes to marketing, food and beverage, operations, remodels and games investment... The current leadership team has been systematically unwinding these mistakes and pursuing a back to basics strategy.” — Kevin Sheehan .
“Results in March and April have notably improved... We expect results to continue to improve in the coming months.” — Kevin Sheehan .
“We currently expect total capital expenditures to not exceed $220 million... preopening expense of approximately $20 million, interest expense within the range of $130 million to $140 million.” — Darin Harper .
“Leading the new lineup attractions is our all-new Human Crane... The initial performance has been electric, and we expect to see a less than 6-month payback.” — Kevin Sheehan .
“We’re moving back towards half [TV], and if we get good returns... we’ll move up from there.” — Kevin Sheehan .

Q&A Highlights

Sequential improvement: March–April traffic and F&B tickets improved; management “~55% of the way” toward desired performance; calendar timing (spring break/Easter) mixed but near-term weeks favorable .
Capex/SLB: FY25 net capex guide assumes typical landlord TI and sale-leasebacks; flexibility across buckets, with breakdown deferred; remodels planned at 16 stores in FY25 .
Value proposition: Testing to extend time-of-play on games; driving F&B attach via kiosks and Eat & Play Combo upgrades (~90% upgrade rate) .
Competitive landscape: Management views recent top-line pressure as mostly internal execution rather than category competition; pursuing lunch tests and seven-day traffic initiatives (e.g., $11.99 lunch with timed play) .
Remodel ROI: Lowering hurdle rates to mid–high single digits via value engineering; TV mix targeting ~50% initially .

Estimates Context

Q4 2025 EPS modestly beat consensus: $0.69 vs $0.683*. Revenue missed: $534.5M vs $545.8M*. EBITDA (consensus 128.3M*) compared to company-reported Adjusted EBITDA of $127.2M; metrics are not strictly comparable. Values retrieved from S&P Global. Actuals .
Consensus breadth: 7 EPS estimates* and 10 revenue estimates* for the quarter. Values retrieved from S&P Global.
Implications: Sequential comp improvement and early success of new games/marketing reset may drive upward revisions to revenue and EPS if trends persist; near-term margin trajectory depends on remodel discipline and F&B/menu optimization .

Key Takeaways for Investors

Near-term setup: Narrative pivot to “back to basics” with tangible actions (TV back, promo simplification, menu restore, game refresh) and improving weekly trends is a potential positive catalyst if sustained in Q1–Q2 prints .
Margin path: EBITDA margin compressed YoY; disciplined capex and remodel ROI (lower hurdle rates) plus attach initiatives provide levers to stabilize/improve margins without materially adding SG&A .
Cash flow and capital allocation: Strong liquidity, sale-leaseback proceeds, and ongoing buybacks (authorization ~$104M remaining) support total shareholder return amid operating reset .
Watch KPIs: SSS trajectory (monthly cadence), Eat & Play attach, Human Crane payback and game ROI, TV/digital ROAS, and store-level productivity; these will shape revenue recovery and estimate revisions .
Risks: Macro/tariffs and lower-income consumer sensitivity; execution risk in remodels/menu/pricing changes; potential non-GAAP adjustments (impairments, property transactions) affecting reported EPS volatility .
Strategic optionality: Franchise expansion (India) and pipeline of 10–12 new stores plus a relocation provide unit growth; lunch/daypart tests could unlock incremental traffic on underutilized periods .
Trading lens: Expect stock to react to evidence of sustained comp recovery and margin stabilization; near-term beats likely anchored on sequential improvement and operational KPIs, while any slippage in comps or remodel ROI could pressure sentiment .

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