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0001698991false00016989912025-02-272025-02-27

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 27, 2025
ACCEL ENTERTAINMENT, INC.
(Exact name of registrant as specified in its charter)
 
 
Delaware 001-38136 98-1350261
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)
140 Tower Drive
Burr Ridge , Illinois 60527
(Address of principal executive offices) (Zip Code)

(630) 972-2235
(Registrant’s telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading symbol(s) Name of each exchange on which registered
Class A-1 common stock, par value $0.0001 per share ACEL New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Item 2.02 Results of Operations and Financial Condition.
On February 27, 2025, Accel Entertainment, Inc. (the "Company") issued a press release announcing its financial and operating results for the three months and year ended ended December 31, 2024. Copies of the Company’s press release and investor presentation are attached and furnished herewith as Exhibits 99.1 and 99.2 to this Form 8-K and are incorporated herein by reference.
Information in this report (including Exhibits 99.1 and 99.2) furnished pursuant to Item 2.02 shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section. 
The Company announces material information to the public through a variety of means, including filings with the Securities and Exchange Commission, press releases, public conference calls, and the Company’s investor relations website (https:// ir.accelentertainment.com) as means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.

Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
Number
Description
99.1
99.2
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)


2



SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
ACCEL ENTERTAINMENT, INC.
Date: February 27, 2025
By: /s/ Mathew Ellis
Mathew Ellis
Chief Financial Officer
 

3
EX-99.1 2 q42024earningspressrelease.htm EX-99.1 Document

accel_logographicxglossya.jpg

Accel Entertainment Announces 2024 Operating Results and Replenishment of Share Repurchase Program

Chicago, IL – February 27, 2025 – Accel Entertainment, Inc. (NYSE: ACEL) today announced certain financial and operating results for the three months and year ended December 31, 2024.

Highlights:
•Ended Q4 2024 with 4,117 locations; an increase of 3.9% compared to Q4 2023
•Ended Q4 2024 with 26,346 gaming terminals; an increase of 5.0% compared to Q4 2023
•Record revenues of $317.5 million for Q4 2024; an increase of 6.9% compared to Q4 2023
•Record revenues of $1.2 billion for YE 2024; an increase of 5.2% compared to YE 2023
•Net income of $8.4 million for Q4 2024; a decrease of 47.5% compared to Q4 2023
•Net income of $35.3 million for YE 2024; a decrease of 22.6% compared to YE 2023
•Adjusted EBITDA of $47.4 million for Q4 2024; an increase of 6.2% compared to Q4 2023
•Adjusted EBITDA of $189.1 million for YE 2024; an increase of 4.2% compared to YE 2023
•Q4 2024 ended with $314 million of net debt; an increase of 11.8% compared to Q4 2023
•Repurchased approximately $4.0 million of Accel Class A-1 common stock in Q4 2024
•Acquisition of Toucan Gaming, a distributed gaming operator in the state of Louisiana, closed on November 1, 2024
•Acquisition of the FanDuel Sportsbook & Horse Racing in Collinsville, Illinois, closed on December 2, 2024
•Board of Directors approved an amendment to the share repurchase program to replenish the dollar amount that may be repurchased under the program back to $200 million of shares of Class A-1 common stock

Accel CEO Andy Rubenstein commented, “I am very pleased to report that we ended 2024 on very strong footing, positioning us well as we enter 2025. We delivered another record quarter in terms of revenue, entered the Louisiana market with our acquisition of Toucan Gaming, and closed on our acquisition of FanDuel Sportsbook & Horse Racing, where we have already started construction on Phase I of our casino in anticipation of opening in the second quarter of 2025. We continue to strengthen our core and are expanding our offerings, which we believe will maintain attractive low-teens returns on capital, generate more free cash flow, and improve our trading multiples, making Accel a compelling investment opportunity.”
1




Condensed Consolidated Statements of Operations and Other Data
Three Months Ended
December 31,
Year Ended
December 31,
(in thousands) 2024 2023 2024 2023
Total net revenues
$ 317,515  $ 297,068  $ 1,230,972  $ 1,170,420 
Operating income 20,797  25,451  90,884  107,407 
Income before income tax expense 14,563  19,377  53,729  65,724 
Net income 8,394  15,988  35,291  45,603 
Other Financial Data:    
Adjusted EBITDA(1)
47,355  44,577  189,147  181,445 
Adjusted net income (2)
17,851  21,953  77,089  82,520 

(1)Adjusted EBITDA is a non-GAAP metric. See "Non-GAAP Financial Measures" for a reconciliation to GAAP.
(2)Adjusted net income is a non-GAAP metric. See "Non-GAAP Financial Measures" for a reconciliation to GAAP.

Net Revenues
(in thousands) Three Months Ended
December 31,
Year Ended
December 31,
2024 2023 2024 2023
Net revenues by state:
Illinois $ 231,278  $ 219,297  $ 906,572  $ 867,200 
Montana 41,326  39,314  161,698  154,402 
Nevada 27,670  29,241  114,551  117,074 
Nebraska 6,763  5,830  25,384  19,043 
Louisiana (1)
5,445  —  5,445  — 
Other 5,033  3,386  17,322  12,701 
Total net revenues $ 317,515  $ 297,068  $ 1,230,972  $ 1,170,420 
(1)Revenues for Louisiana only represents two months of operations.
2




Key Business Metrics
Locations (1)
As of December 31,
Increase / (Decrease)
2024 2023 Change
Change (%)
Illinois 2,775  2,762  13  0.5  %
Montana 619  609  10  1.6  %
Nevada 357  352  1.4  %
Nebraska 270  238  32  13.4  %
Louisiana 96  —  96  100.0  %
Total locations 4,117  3,961  156  3.9  %

Gaming terminals (1)
As of December 31,
Increase / (Decrease)
2024 2023 Change
Change (%)
Illinois 15,693  15,276  417  2.7  %
Montana 6,467  6,276  191  3.0  %
Nevada 2,650  2,704  (54) (2.0) %
Nebraska 948  827  121  14.6  %
Louisiana 588  —  588  100.0  %
Total gaming terminals 26,346  25,083  1,263  5.0  %

Location hold-per-day (2)
Three Months Ended December 31, Increase / (Decrease)
2024 2023
Change ($)
Change (%)
Illinois $ 868  $ 839  $ 29  3.5  %
Montana 614  587  27  4.6  %
Nevada 786  842  (56) (6.7) %
Nebraska 253  239  14  5.9  %
Louisiana
979  — 
Twelve Months Ended
December 31,
Increase / (Decrease)
2024 2023
Change ($)
Change (%)
Illinois $ 864  $ 849  $ 15  1.8  %
Montana 609  582  27  4.6  %
Nevada 823  851  (28) (3.3) %
Nebraska 241  234  3.0  %
Louisiana
979  — 
(1)Based on a combination of third-party portal data and data from our internal systems. This metric is utilized by Accel to continually monitor growth from existing locations, organic openings, acquired locations, and competitor conversions.
(2)Location hold-per-day is calculated by dividing net gaming revenue in the period by the average number of locations. We then divide the calculated amount by the number of operational days. We utilize this metric to compare market and location performance on a normalized basis. The percent change in location hold-per-day is the underlying metric used to determine the change in same-store sales.
3



Condensed Consolidated Statements of Cash Flows Data 

Year Ended
December 31,
(in thousands) 2024 2023 Change ($)
Net cash provided by operating activities $ 121,194  $ 132,530  $ (11,336)
Net cash used in investing activities (124,151) (59,793) (64,358)
Net cash provided by (used in) financing activities
22,651 (35,239) 57,890

Non-GAAP Financial Measures
Adjusted net income is defined as net income plus:
•Amortization of intangible assets and route and customer acquisition costs
•Stock-based compensation expense
•Loss from unconsolidated affiliates
•Loss on change in fair value of contingent earnout shares
•Gain on expiration of warrants
•Other expenses, net which consists of (i) non-cash expenses including the remeasurement of contingent consideration liabilities, (ii) non-recurring lobbying and legal expenses related to distributed gaming expansion in current or prospective markets, and (iii) other non-recurring expenses
•Tax effect of adjustments
Adjusted EBITDA is defined as net income plus:
•Amortization of intangible assets and route and customer acquisition costs
•Stock-based compensation expense
•Loss from unconsolidated affiliates
•Loss on change in fair value of contingent earnout shares
•Gain on expiration of warrants
•Other expenses, net
•Tax effect of adjustments
•Depreciation and amortization of property and equipment
•Interest expense, net
•Emerging markets, which reflects the results, on an Adjusted EBITDA basis, for non-core jurisdictions where our operations are developing
◦Markets are no longer considered emerging when we have installed or acquired at least 500 gaming terminals in the jurisdiction, or when 24 months have elapsed from the date we first install or acquire gaming terminals in the jurisdiction, whichever occurs first
◦We currently view Pennsylvania as an emerging market
◦Prior to January 2024, Iowa was considered an emerging market
◦Prior to April 2023, Nebraska was considered an emerging market Net debt is defined as debt, net of current maturities:
•Income tax expense
4




•plus Current maturities of debt
•less Cash and cash equivalents

Adjusted net income and Adjusted EBITDA

  Three Months Ended
December 31,
Increase / (Decrease)
(in thousands) 2024 2023 Change ($) Change (%)
Net income $ 8,394  $ 15,988  $ (7,594) (47.5) %
Adjustments:
Amortization of intangible assets and route and customer acquisition costs
5,769  5,386  383  7.1  %
Stock-based compensation expense
3,277  2,443  834  34.1  %
Loss from unconsolidated affiliates (1) —  (1) (100.0) %
Loss on change in fair value of contingent earnout shares
(2,914) (2,524) (390) (15.5) %
Gain on expiration of warrants
(13) —  (13) (100.0) %
Other expenses, net
5,719  1,446  4,273  295.5  %
Tax effect of adjustments
(2,380) (786) (1,594) (202.8) %
Adjusted net income 17,851  21,953  (4,102) (18.7) %
Depreciation and amortization of property and equipment 11,749  9,992  1,757  17.6  %
Interest expense, net 9,162  8,598  564  6.6  %
Emerging markets
44  (142) 186  131.1  %
Income tax expense 8,549  4,176  4,373  104.7  %
Adjusted EBITDA $ 47,355  $ 44,577  $ 2,778  6.2  %

5



  Year Ended
December 31,
Increase / (Decrease)
(in thousands) 2024 2023
Change
Change %
Net income $ 35,291  $ 45,603  $ (10,312) (22.6) %
Adjustments:
Amortization of intangible assets and route and customer acquisition costs
22,577  21,211  1,366  6.4  %
Stock-based compensation expense
12,204  9,416  2,788  29.6  %
Loss from unconsolidated affiliates —  —  —  —  %
Loss on change in fair value of contingent earnout shares
1,276  8,539  (7,263) (85.1) %
Gain on expiration of warrants
(13) —  (13) 100.0  %
Other expenses, net
19,339  6,453  12,886  199.7  %
Tax effect of adjustments
(13,585) (8,702) (4,883) (56.1) %
Adjusted net income 77,089  82,520  (5,431) (6.6) %
Depreciation and amortization of property and equipment 43,978  37,906  6,072  16.0  %
Interest expense, net 35,892  33,144  2,748  8.3  %
Emerging markets
165  (948) 1,113  117.4  %
Income tax expense 32,023  28,823  3,200  11.1  %
Adjusted EBITDA $ 189,147  $ 181,445  $ 7,702  4.2  %

Net Debt
As of December 31,
(in thousands) 2024 2023
Debt, net of current maturities $ 560,936  $ 514,091 
Plus: Current maturities of debt 34,443  28,483 
Less: Cash and cash equivalents (281,305) (261,611)
Net debt $ 314,074  $ 280,963 

6



Amendment to Share Repurchase Program
On November 22, 2021, Accel previously announced a share repurchase program of up to $200 million shares of Class A-1 common stock. As of December 31, 2024, Accel had purchased a total of 13,855,897 shares under the share repurchase program at a total purchase price of $143.6 million.
On February 27, 2025, the Board of Directors approved an amendment to the share repurchase program to replenish the dollar amount that may be repurchased under the program back to up to $200 million of shares of Class A-1 common stock. The timing and actual number of shares repurchased will depend on a variety of factors, including price, general business and market conditions, and alternative investment opportunities.
Under the share repurchase program, repurchases can be made from time to time using a variety of methods, including open market purchases or privately negotiated transactions, in compliance with the rules of the Securities and Exchange Commission (the “SEC”) and other applicable legal requirements. The share repurchase program does not obligate Accel to acquire any particular amount of shares, and the share repurchase program may be suspended or discontinued at any time at Accel’s discretion.
Conference Call
Accel will host an investor conference call on February 27, 2025 at 4:30 p.m. Central time (5:30 p.m. Eastern time) to discuss these financial and operating results. Interested parties may join the live webcast by registering at https://www.netroadshow.com/events/login?show=a8e678a0&confId=71436 or accessing the webcast via the company’s investor relations website: ir.accelentertainment.com. Following completion of the call, a replay of the webcast will be posted on Accel’s investor relations website.
About Accel
Accel is a leading distributed gaming operator in the United States and a preferred partner for local business owners in the markets it serves. Accel offers turnkey full-service gaming solutions to authorized non-casino locations such as bars, restaurants, convenience stores, truck stops, and fraternal and veteran establishments across the country. Accel installs, maintains, operates and services gaming terminals and related equipment for its location partners as well as redemption devices, stand-alone ATMs and amusement devices, including jukeboxes, dartboards, pool tables, and other entertainment related equipment. Accel also designs and manufactures gaming terminals and related equipment.
Media Contact:
Eric Bonach
H/Advisors Abernathy
212-371-5999
eric.bonach@h-advisors.global
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, contained in this press release are forward-looking statements, including, but not limited to, any statements regarding our estimates of number of gaming terminals, locations, revenues, Adjusted EBITDA, Adjusted net income, location hold-per-day and capital expenditures, our ability to continue to generate returns on capital and improve our trading multiples, our expansion into casino operations and horse racing, and our ability to consummate share repurchases in the amounts authorized pursuant to our share repurchase program or at all.
7



The words “predict,” “estimated,” “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “would,” “continue,” and similar expressions or the negatives thereof are intended to identify forward-looking statements. These forward-looking statements represent our current reasonable expectations and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance and achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. We cannot guarantee the accuracy of the forward-looking statements, and you should be aware that results and events could differ materially and adversely from those contained in the forward-looking statements due to a number of factors including, but not limited to: Accel’s ability to operate in existing markets or expand into new jurisdictions; Accel’s ability to offer new and innovative products and services that fulfill the needs of location partners and create strong and sustained player appeal; Accel’s dependence on relationships with key manufacturers, developers and third parties to obtain gaming terminals, amusement machines, and related supplies, programs, and technologies for its business on acceptable terms; the negative impact on Accel’s future results of operations by the slow growth in demand for gaming terminals and by the slow growth of new gaming jurisdictions; Accel’s heavy dependency on its ability to win, maintain and renew contracts with location partners; Accel's expansion into casino operations and horse racing; unfavorable macroeconomic conditions or decreased discretionary spending due to other factors such as interest rate volatility, persistent inflation, increased or relaliatory tariffs, actual or perceived instability in the U.S. and global banking systems, high fuel rates, recessions, epidemics or other public health issues, terrorist activity or threat thereof, civil unrest or other macroeconomic or political uncertainties, that could adversely affect Accel’s business, results of operations, cash flows and financial conditions and other risks and uncertainties indicated from time to time in documents filed or to be filed with the SEC.
Accordingly, forward-looking statements, including any projections or analysis, should not be viewed as factual and should not be relied upon as an accurate prediction of future results. The forward-looking statements contained in this press release are based on our current expectations and beliefs concerning future developments and their potential effects on Accel. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control), or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described in the section entitled “Risk Factors” in the Annual Report on Form 10-K for the fiscal year ended December 31, 2024. Except as required by law, we do not undertake publicly to update or revise these statements, even if experience or future changes make it clear that any projected results expressed in this or other press releases or future quarterly reports, or company statements will not be realized. In addition, the inclusion of any statement in this press release does not constitute an admission by us that the events or circumstances described in such statement are material. We qualify all of our forward-looking statements by these cautionary statements. In addition, the industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors including those described in the section entitled “Risk Factors” in the Form 10-K, as well as Accel’s other filings with the SEC. These and other factors could cause our results to differ materially from those expressed in this press release.
Industry and Market Data
Unless otherwise indicated, information contained in this press release concerning our industry and the markets in which we operate, including our general expectations and market position, market opportunity, and market size, is based on information from various sources, on assumptions that we have made that are based on those data and other similar sources, and on our knowledge of the markets for our services. This information includes a number of assumptions and limitations, and you are cautioned not to give undue weight to such information.
8



In addition, projections, assumptions, and estimates of our future performance and the future performance of the industry in which we operate are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the Form 10-K, as well as Accel's other filings with the SEC. These and other factors could cause results to differ materially from those expressed in the estimates made by third parties and by us.
Non-GAAP Financial Information
This press release includes certain financial information not prepared in accordance with Generally Accepted Accounting Principles in the United States (“GAAP”), including Adjusted EBITDA, Adjusted net income, and Net Debt. Adjusted EBITDA, Adjusted net income, and Net Debt are non-GAAP financial measures and are key metrics used to monitor ongoing core operations. Management of Accel believes Adjusted EBITDA, Adjusted net income, and Net Debt enhance the understanding of Accel’s underlying drivers of profitability and trends in Accel’s business and facilitates company-to-company and period-to-period comparisons, because these non-GAAP financial measures exclude the effects of certain non-cash items, represents certain nonrecurring items that are unrelated to core performance, or excludes non-core operations. Management of Accel also believes that these non-GAAP financial measures are used by investors, analysts and other interested parties as measures of financial performance.

9



ACCEL ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts) Years ended December 31,
2024 2023 2022
Net revenues:
Net gaming $ 1,172,777  $ 1,113,573  $ 925,009 
Amusement 22,244  23,973  21,106 
Manufacturing 12,235  13,353  7,621 
ATM fees and other 23,716  19,521  16,061 
Total net revenues 1,230,972  1,170,420  969,797 
Operating expenses:
Cost of revenue (exclusive of depreciation and amortization expense shown below) 852,373  809,524  666,126 
Cost of manufacturing goods sold (exclusive of depreciation and amortization expense shown below) 7,100  7,671  4,775 
General and administrative 194,721  180,248  145,942 
Depreciation and amortization of property and equipment 43,978  37,906  29,295 
Amortization of intangible assets and route and customer acquisition costs 22,577  21,211  17,484 
Other expenses, net 19,339  6,453  9,320 
Total operating expenses 1,140,088  1,063,013  872,942 
Operating income 90,884  107,407  96,855 
Interest expense, net 35,892  33,144  21,637 
Loss (gain) on change in fair value of contingent earnout shares
1,276  8,539  (19,544)
Gain on expiration of warrants
(13) —  — 
Income before income tax expense 53,729  65,724  94,762 
Income tax expense 18,438  20,121  20,660 
Net income $ 35,291  $ 45,603  $ 74,102 
Less: Net income attributed to non-controlling interests
$ 39  $ —  $ — 
Net income attributable to Accel Entertainment, Inc.
$ 35,252  $ 45,603  $ 74,102 
Earnings per common share:
Basic $ 0.42  $ 0.53  $ 0.82 
Diluted 0.41  0.53  0.81 
Weighted average number of common shares outstanding:
Basic 83,747  85,949  90,629 
Diluted 84,977  86,803  91,229 

10



ACCEL ENTERTAINMENT, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except par value and share amounts)
December 31,
2024 2023
Assets
Current assets:
Cash and cash equivalents $ 281,305  $ 261,611 
Accounts receivable, net 10,550  13,467 
Prepaid expenses 8,950  6,287 
Inventories 8,122  7,681 
Interest rate caplets 6,342  8,140 
Other current assets 10,883  15,408 
Total current assets 326,152  312,594 
Property and equipment, net 307,997  260,813 
Noncurrent assets:
Route and customer acquisition costs, net 23,258  19,188 
Location contracts acquired, net 202,618  176,311 
Goodwill 116,252  101,554 
Other intangible assets, net 53,940  23,352 
Interest rate caplets, net of current 479  4,871 
Other assets 17,702  14,210 
Total noncurrent assets 414,249  339,486 
Total assets $ 1,048,398  $ 912,893 
Liabilities, Temporary equity, and Stockholders’ equity
Current liabilities:
Current maturities of debt $ 34,443  $ 28,483 
Current portion of route and customer acquisition costs payable 2,197  1,505 
Accrued location gaming expense 4,734  9,350 
Accrued state gaming expense 19,802  18,364 
Accounts payable and other accrued expenses 41,944  36,012 
Accrued compensation and related expenses 12,117  12,648 
Current portion of consideration payable 3,116  3,288 
Total current liabilities 118,353  109,650 
Long-term liabilities:
Debt, net of current maturities 560,936  514,091 
Route and customer acquisition costs payable, less current portion 7,160  4,955 
Consideration payable, less current portion 14,596  4,201 
Contingent earnout share liability 33,103  31,827 
Other long-term liabilities 7,571  7,015 
Deferred income tax liability, net 47,372  42,750 
Total long-term liabilities 670,738  604,839 
Temporary equity - Redeemable noncontrolling interest 4,278  — 
Stockholders’ equity:
Class A-1 Common Stock, par value $0.0001; 250,000,000 shares authorized; 95,865,026 shares issued and 85,670,255 shares outstanding at December 31, 2024; 95,016,960 shares issued and 84,123,385 shares outstanding at December 31, 2023
Additional paid-in capital 221,625  203,046 
Treasury stock, at cost (105,485) (112,070)
Accumulated other comprehensive income 4,145  7,936 
Accumulated earnings 134,736  99,484 
Total stockholders' equity 255,029  198,404 
Total liabilities, temporary equity, and stockholders' equity $ 1,048,398  $ 912,893 
11

EX-99.2 3 accel4q24resultspresenta.htm EX-99.2 accel4q24resultspresenta
Fourth Quarter 2024 Earnings Presentation February 2025


 
Important Information Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, contained in this presentation are forward-looking statements, including, but not limited to, any statements regarding our estimates of number of gaming terminals, locations, revenues, Adjusted EBITDA, capital expenditures, our expansion into casino operations and horse racing, and our ability to consummate share repurchases in the amounts authorized pursuant to our share repurchase program or at all. The words “predict,” “estimated,” “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “would,” “continue,” and similar expressions or the negatives thereof are intended to identify forward-looking statements. These forward-looking statements represent our current reasonable expectations and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance and achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. We cannot guarantee the accuracy of the forward-looking statements, and you should be aware that results and events could differ materially and adversely from those contained in the forward-looking statements due to a number of factors including, but not limited to: Accel’s ability to operate in existing markets or expand into new jurisdictions; Accel’s ability to offer new and innovative products and services that fulfill the needs of location partners and create strong and sustained player appeal; Accel’s dependence on relationships with key manufacturers, developers and third parties to obtain gaming terminals, amusement machines, and related supplies, programs, and technologies for its business on acceptable terms; the negative impact on Accel’s future results of operations by the slow growth in demand for gaming terminals and by the slow growth of new gaming jurisdictions; Accel’s heavy dependency on its ability to win, maintain and renew contracts with location partners; Accel's expansion into casino operations and horse racing; unfavorable macroeconomic condit ions or decreased discretionary spending due to other factors such as interest rate volatility, persistent inflation, increased or retaliatory tariffs, actual or perceived instability in the U.S. and global banking systems, high fuel rates, recessions, epidemics or other public health issues, terrorist activity or threat thereof, civil unrest or other macroeconomic or political uncertainties, that could adversely affect Accel’s business, results of operations, cash flows and financial conditions and other risks and uncertainties indicated from time to time in documents filed or to be filed with the Securities and Exchange Commission (“SEC”). Accordingly, forward-looking statements, including any projections or analysis, should not be viewed as factual and should not be relied upon as an accurate prediction of future results. The forward-looking statements contained in this presentation are based on our current expectations and beliefs concerning future developments and their potential effects on Accel. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control), or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described in the section entitled “Risk Factors” in the Annual Report on Form 10-K for the fiscal year ended December 31, 2024. Except as required by law, we do not undertake publicly to update or revise these statements, even if experience or future changes make it clear that any projected results expressed in this or other presentations or future quarterly reports, or company statements will not be realized. In addition, the inclusion of any statement in this presentation does not constitute an admission by us that the events or circumstances described in such statement are material. We qualify all of our forward-looking statements by these cautionary statements. In addition, the industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors including those described in the section entitled “Risk Factors” in the Form 10-K, as well as Accel’s other filings with the SEC. These and other factors could cause our results to differ materially from those expressed in this presentation. Industry and Market Data Unless otherwise indicated, information contained in this presentation concerning our industry and the markets in which we operate, including our general expectations and market position, market opportunity, and market size, is based on information from various sources, on assumptions that we have made that are based on those data and other similar sources, and on our knowledge of the markets for our services. This information includes a number of assumptions and limitations, and you are cautioned not to give undue weight to such information. In addition, projections, assumptions, and estimates of our future performance and the future performance of the industry in which we operate are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the Form 10-K, as well as Accel’s other filings with the SEC. These and other factors could cause results to differ materially from those expressed in the estimates made by third parties and by us. Use of Non-GAAP Financial Measures This presentation includes non-GAAP financial measures, including Adjusted net income, Adjusted EBITDA, EBIT, Capex, and Net Debt. Management believes that these non-GAAP measures of financial results enhance the understanding of Accel’s underlying drivers of profitability and trends in Accel’s business and facilitate company-to-company and period-to period comparisons, because these non-GAAP financial measures exclude the effects of certain non-cash items or represent certain nonrecurring items that are unrelated to core performance. Management of Accel also believes that these non-GAAP financial measures are used by investors, analysts and other interested parties as measures of financial performance and to evaluate Accel’s ability to fund capital expenditures, service debt obligations and meet working capital requirements. For definitions of non-GAAP financial measures and reconciliations of non-GAAP financial measures to the most directly comparable GAAP measure, please see the Appendix to this presentation. 2


 
Accel at a Glance 1. Calculated as Net Gaming Revenue in the period divided by the number of operational days. There were 217 and approximately 347 operational days for the years ended December 31, 2020 and 2021, respectively. 2. Calculated as of December 31, 2024. Net Debt is a non-GAAP financial measure that may not be comparable to other similarly titled measures of other companies. Accel does not consider this Non-GAAP measure in isolation or as an alternative to similar financial measures determined in accordance with GAAP. For more information with respect to this Non-GAAP financial measure, see page 2 “Use of Non-GAAP Financial Measures,” and for a reconciliation of this measure to its most directly comparable GAAP measure, see page 10 "Non-GAAP to GAAP Reconciliation.” Strong Track Record of Growth Disciplined Stewards of Capital As of December 31, 2024, Accel owned and operated 26,346 gaming terminals across 4,117 locations in Illinois, Montana, Nevada, Nebraska, and Louisiana Average Daily Net Gaming Revenue(1) ($ in thousands) Long, recurring agreements Continued strong customer engagement Firm backlog of contracted locations waiting to go-live High Quality Service Company in Gaming Vertical Contracted, Recurring Revenue 3 Balance sheet strength Conservative net leverage $314 million of Net Debt(2) High returns on invested capital Return capital to shareholders via share repurchases $658 $882 $1,125 $1,383 $2,030 $2,534 $3,051 $3,204 2017 2018 2019 2020 2021 2022 2023 2024


 
Q4 2024 Highlights • Record revenues of $318 million for Q4 2024, an increase of 7% compared to Q4 2023 • Q4 2024 net income of $8 million, a decrease of 48% compared to Q4 2023 • Adjusted EBITDA(1) of $47 million for Q4 2024, an increase of 6% compared to Q4 2023 • Repurchased $4 million of Accel Class A-1 Common Stock in Q4 2024, and $144 million since the repurchase program was announced in November 2021(2) • Acquisition of Toucan Gaming, a distributed gaming operator in the state of Louisiana, closed on November 1, 2024 • Acquisition of the FanDuel Sportsbook & Horse Racing in Collinsville, Illinois, closed on December 2, 2024 • Board of Directors approved an amendment to the share repurchase program to replenish the dollar amount that may be repurchased under the program back to $200 million of shares of Class A-1 common stock 4 1. Adjusted EBITDA is a non-GAAP financial measure that may not be comparable to other similarly titled measures of other companies. Accel does not consider non-GAAP measures in isolation or as an alternative to similar financial measures determined in accordance with GAAP. For more information with respect to our non-GAAP financial measures, see page 2 “Use of Non-GAAP Financial Measures,” and for a reconciliation of each of these measures to their most directly comparable GAAP measure, see page 10 "Non-GAAP to GAAP Reconciliation.” 2. On November 22, 2021, the Company’s Board of Directors approved a share repurchase program of up to $200 million of shares of its Class A-1 common stock, and on February 27, 2025, the Board of Directors approved an amendment to the share repurchase program to replenish the dollar amount that may be purchased under the program back up to $200 million shares of Class A-1 common stock. The timing and actual number of shares repurchased will depend on a variety of factors, including price, general business and market conditions, and alternative investment opportunities. Under the repurchase program, repurchases can be made from time to time using a variety of methods, including open market purchases or privately negotiated transactions, in compliance with the rules of the United States SEC and other applicable legal requirements. The repurchase program does not obligate the Company to acquire any particular amount of shares, and the repurchase program may be suspended or discontinued at any time at the Company’s discretion. As of December 31, 2024, the Company has purchased a total of 13,855,897 shares under the repurchase program at a cost of $143.6 million.


 
$46 $47 $44 $45$46 $50 $46 $47 Q1 Q2 Q3 Q4 2023 2024 $293 $293 $287 $297$302 $309 $302 $318 Q1 Q2 Q3 Q4 2023 2024 Accel Quarterly KPIs 1. Adjusted EBITDA is a non-GAAP financial measure that may not be comparable to other similarly titled measures of other companies. Accel does not consider this Non-GAAP measure in isolation or as an alternative to similar financial measures determined in accordance with GAAP. For more information with respect to this Non-GAAP financial measure, see page 2 “Use of Non-GAAP Financial Measures,” and for a reconciliation of this measure to its most directly comparable GAAP measure, see page 10 "Non-GAAP to GAAP Reconciliation.” Locations (#) Terminals (#) Revenue ($ in millions) Adjusted EBITDA(1) ($ in millions) 5 2,663 2,690 2,724 2,762 620 610 611 609 345 355 352 352 165 197 219 238 2,786 2,816 2,791 2,775 609 620 615 619 355 359 356 357 237 239 252 270 96 3,793 3,987 3,852 4,034 3,906 4,014 3,961 4,117 Q1 Q2 Q3 Q4 2023 IL 2023 MT 2023 NV 2023 NE 2024 IL 2024 MT 2024 NV 2024 NE 2024 LA 14,546 14,767 15,020 15,276 6,247 6,210 6,252 6,276 2,704 2,782 2,744 2,704 488 609 688 827 15,494 15,743 15,714 15,693 6,280 6,435 6,448 6,467 2,714 2,735 2,685 2,650 833 844 882 948 588 23,985 25,321 24,368 25,757 24,704 25,729 25,083 26,346 Q1 Q2 Q3 Q4 2023 IL 2023 MT 2023 NV 2023 NE 2024 IL 2024 MT 2024 NV 2024 NE 2024 LA


 
2024 Results 6 Note: Numbers may not total due to rounding. Percent change may not recalculate due to rounding. $ in millions, except %s Q4 2023 Q4 2024 % Change 2023 2024 % Change Locations 3,961 4,117 4% 3,961 4,117 4% Terminals 25,083 26,346 5% 25,083 26,346 5% Revenue $297 $318 7% $1,170 $1,231 5% Adj EBITDA $45 $47 6% $181 $189 4% CapEx $22 $11 -47% $82 $67 -19% Net Debt $281 $314 12% $281 $314 12%


 
Historical Financial Summary 7 $ in millions Note: Numbers may not total due to rounding. Q4 YE YoY YoY 2020 2021 2022 2023 2023 2024 Growth 2023 2024 Growth No. of Locations 2,435 2,584 3,741 3,961 3,961 4,117 4% 3,961 4,117 4% No. of Terminals 12,247 13,639 23,541 25,083 25,083 26,346 5% 25,083 26,346 5% Net Gaming Revenue 301 706 925 1,114 283 301 7% 1,114 1,173 5% Other Revenue 16 29 45 57 15 16 10% 57 58 2% Gross Revenues 316 735 970 1,170 297 318 7% 1,170 1,231 5% % YoY Growth (26%) 132% 32% 21% 7% 5% Less: Cost of revenue (exclusive of amortization and depreciation expense show n below ) (211) (494) (671) (817) (207) (221) 7% (817) (859) 5% Gross Profit 105 241 299 353 90 97 7% 353 372 5% % Margin 33% 33% 31% 30% 30% 30% 30% 30% Less: G&A Expenses (77) (111) (146) (180) (48) (53) 10% (180) (195) 8% EBITDA 28 130 153 173 42 44 4% 173 177 2% Adjusted EBITDA 34 140 162 181 45 47 6% 181 189 4% % Margin 11% 19% 17% 16% 15% 15% 16% 15% % YoY Growth (57%) 312% 16% 12% 6% 4% Less: Depreciation & amortization of property & equipment (21) (25) (29) (38) (10) (12) (38) (44) Less: Amortization of intangible assets and route and customer acquisition costs (23) (22) (17) (21) (5) (6) (21) (23) EBIT (16) 83 106 114 27 27 114 110 Less: Other expenses, net (9) (13) (9) (6) (1) (6) (6) (19) Less: Interest expense, net (14) (13) (22) (33) (9) (9) (33) (36) Less: Income tax benefit (expense) 17 (15) (21) (20) (3) (6) (20) (18) Less: Loss from unconsolidated aff iliates -- -- -- -- -- 0 -- -- Less: Loss (gain) on change in fair value of contingent earnout shares 8 (10) 20 (9) 3 3 (9) (1) Less: Gain on expiration of w arrants 13 -- -- -- -- 0 -- 0 Less: Loss on debt extinguishment -- (1) -- -- -- -- -- -- Reported Net Income (Loss) (0) 32 74 46 16 8 46 35 Adjusted Net Income 6 71 80 83 22 18 83 77 Twelve Months Ended Three Months Ended Twelve Months Ended December 31, December 30, December 31,


 
Accel Balance Sheet 8 Note: Numbers may not total due to rounding. $ in millions December 31, 2023 December 31, 2024 Assets Current Assets: Cash and cash equivalents $262 $281 Other current assets 51 45 Total current assets $313 $326 Property and equipment, net 261 308 Route and customer acquisition costs, net 19 23 Location contracts acquired, net 176 203 Goodwill 102 116 Other assets 42 72 Total assets $913 $1,048 Liabilities, Temporary equity and Stockholders' equity Current liab ilities: Short term debt and current maturities $28 $34 Accrued state and location gaming expense 28 25 Other current liabilities 53 59 Total current liabilities $110 $118 Long-term liab ilities: Long-term debt $514 $561 Contingent earnout share liability 32 33 Other liabilities 59 77 Total liabilities $714 $789 Total temporary and stockholders' equity $198 $259 Total liabilities, temporary equity, and stockholders' equity $913 $1,048


 
Definition of Non-GAAP Financial Measures Adjusted net income is defined as net income plus: • Amortization of intangible assets and route and customer acquisition costs • Stock-based compensation expense • Loss from unconsolidated affiliates • Loss (gain) on change in fair value of contingent earnout shares • Gain on change in fair value of warrants • Other expenses, net – consists of (i) non-cash expenses including the remeasurement of contingent consideration liabilities, (ii) non-recurring lobbying and legal expenses related to distributed gaming expansion in current or prospective markets, and (iii) other non-recurring expenses • Tax effect of adjustments Adjusted EBITDA is defined as net income plus: • Amortization of intangible assets and route and customer acquisition costs • Stock-based compensation expense • Loss from unconsolidated affiliates • Loss (gain) on change in fair value of contingent earnout shares • Gain on expiration of warrants • Other expenses, net • Tax effect of adjustments • Depreciation and amortization of property and equipment • Interest expense, net • Emerging markets – reflects the results, on an Adjusted EBITDA basis, for non-core jurisdictions where our operations are developing − Markets are no longer considered emerging when we have installed or acquired at least 500 gaming terminals in the jurisdiction, or when 24 months have elapsed from the date we first install or acquire gaming terminals in the jurisdiction, whichever occurs first − We currently view Pennsylvania as an emerging market − Prior to January 2024, Iowa was considered an emerging market − Prior to April 2023, Nebraska was considered an emerging market • Income tax expense • Loss on debt extinguishment 9 Accel uses non-GAAP measures as a key performance measure of the results of operations for purposes of evaluating performance internally. Management believes these non-GAAP financial measures enhance the understanding of our underlying drivers of profitability, trends in our business, and facilitate company-to-company and period-to-period comparisons. Management also believes that these non- GAAP financial measures are used by investors, analysts and other interested parties as measures of financial performance and to evaluate our ability to fund capital expenditures, service debt obligations and meet working capital requirements. EBIT is defined as EBITDA less: • Depreciation and amortization of property and equipment • Amortization of intangible assets and route and customer acquisition costs Capex is defined as purchases of property and equipment Net debt is defined as debt, net of current maturities plus: • Current maturities of debt less cash and cash equivalents


 
Non-GAAP to GAAP Reconciliation 10 Note: Numbers may not total due to rounding. $ in millions 2020 2021 2022 2023 2023 2024 2023 2024 Reported Net Income (Loss) (0) 32 74 46 16 8 46 35 (+) Amortization of intangible assets and route and customer acquisition costs 23 22 17 21 5 6 21 23 (+) Stock-based compensation expense 6 6 7 9 2 3 9 12 (+) Loss from unconsolidated aff iliates – – – – – (0) – – (+) Loss (gain) on change in fair value of contingent earnout shares (8) 10 (20) 9 (3) (3) 9 1 (+) Gain on change in fair value of w arrants (13) – – – – (0) – (0) (+) Other expenses, net 9 13 9 6 1 6 6 19 (+) Tax effect of adjustments (10) (11) (8) (9) (1) (2) (9) (14) Adjusted Net Income 6 71 80 83 22 18 83 77 (+) Depreciation and amortization of property & equipment 21 25 29 38 10 12 38 44 (+) Interest expense, net 14 13 22 33 9 9 33 36 (+) Emerging markets 1 3 3 (1) (0) 0 (1) 0 (+) Income tax (benefit) expense (7) 26 29 29 4 9 29 32 (+) Loss on debt extinguishment – 1 – – – – – – Adjusted EBITDA 34 140 162 181 45 47 181 189 Twelve Months Ended Three Months Ended Twelve Months Ended December 31, December 31, December 31, March 31, June 30, Sep. 30, Dec. 31, March 31, June 30, Sep. 30, Dec. 31, 2023 2023 2023 2023 2024 2024 2024 2024 Reported Net Income 9 10 10 16 7 15 5 8 (+) Amortization of intangible assets and route and customer acquisition costs 5 5 5 5 5 6 6 6 (+) Stock-based compensation expense 2 3 3 2 2 3 3 3 (+) Loss from unconsolidated aff iliates – – – – – – 0 (0) (+) Loss (gain) on change in fair value of contingent earnout shares 5 5 2 (3) 5 (5) 4 (3) (+) Other expenses, net 3 0 2 1 2 7 4 6 (+) Depreciation & amortization of property & equipment 9 9 9 10 10 11 11 12 (+) Interest expense, net 8 8 8 9 9 9 9 9 (+) Emerging markets (1) 0 (0) (0) 0 0 0 0 (+) Income tax expense 6 6 5 3 5 4 4 6 Adjusted EBITDA 46 47 44 45 46 50 46 47 Three Months Ended Three Months Ended December 31, 2023 2024 Debt, net of current maturities 514 561 (+) Current maturities of debt 28 34 (-) Cash and cash equivalents (262) (281) Net Debt 281 314