Accel Entertainment, Inc. Q2 FY2025 earnings call

• Accel generated record quarterly revenue and adjusted EBITDA in Q2 2025. - Continues to lead in U.S. locals gaming market with over 27,000 terminals at over 4,400 locations in 10 states. - Growth in majority of markets operated; Illinois up 8%, Montana 2.6%, Nebraska 26.1%, Georgia 53.5%; Nevada down 7.7% due to key customer loss. - Toucan Gaming acquisition in Louisiana added over 600 terminals; Fairmount Park Phase 1 complete, soft opening successful. - Active M&A pipeline focusing on accretive transactions in fragmented local gaming market. - Full-year CapEx reaffirmed at $75-80 million, with breakdown by markets. - Repurchased 634,000 shares in Q2 at an average price of $10.58 per share, total $6.7 million.

In the 2025 second quarter, Accel generated record quarterly revenue of $336 million and adjusted EBITDA of $53 million. Key segments: Illinois, the largest core market, saw second quarter revenue up over 8% to $245 million. Montana distributed gaming route grew revenue by 2.6%. Nebraska revenue grew by 26.1%, Georgia by 53.5%, while Nevada declined by 7.7% due to loss of a key customer. The Toucan Gaming acquisition in Louisiana generated approximately $10 million in second quarter revenue. Fairmount Park had a soft opening just prior to the Kentucky Derby and is ramping up steadily.

• Expect near- and long-term growth in revenue, adjusted EBITDA, and free cash flow by leveraging operating expertise and M&A opportunities. - Reaffirmed full-year CapEx forecast of $75-80 million. - Confident Fairmount Park will contribute to adjusted EBITDA growth in 2026.

• Forward-looking statements subject to risks and uncertainties; actual results may differ from projections. - Risks related to M&A integration, market dynamics, regulatory changes, and customer retention/loss.

Q: Strong growth in Illinois, any detail on quarter's shape given consumer volatility?

A: Mark Phelan said it was pretty consistent growth through the quarter, no peak or valley.

Q: Size of asset portfolio EBITDA for M&A, leverage?

A: Andy Rubenstein said they're opportunistic but conservative, evaluating opportunities to deploy cash, looking at adjacent markets. Mark Phelan added local gaming market has smaller assets, bite-sized acquisitions.

Q: TITO in Illinois impact on earnings?

A: Andy Rubenstein said early days, won't see material impact in Q3, but expects reduced cash, better player experience, mild reduction in collection costs.

Q: Nevada market growth ex key customer, changes in Q3?

A: Mark Phelan said net of key customer, revenue grew slightly, market is bifurcated, team performed better in margin.

Q: Fairmount performance vs initial expectations, updated expectations?

A: Mark Phelan said all four aspects (casino, racing, sportsbook, F&B) matched internal expectations, still early, confident in 2026 contribution.

Q: Timing of key customer loss in Nevada for year-over-year comps?

A: Mark Phelan said it was end of Q3 2024.