Accel Entertainment, Inc.

Good afternoon. Thank you for attending the Excel Entertainment Third Quarter 2025 Earnings Call. My name is Cameron and I'll be your moderator for today. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star followed by one on your telephone keypad. And I would now like to pass the conference over to your host, Scott Levin. You may proceed.

Welcome to Excel Entertainment's Third Quarter 2025 Earnings Call. Participating on the call today are Andy Rubenstein, Excel's Chief Executive Officer, Brett Sommerer, Excel's Chief Financial Officer, and Mark Phelan, Excel's President of US Gaming. Please refer to our website for the press release and supplemental information that will be discussed on this call. Today's call is being recorded and will be available on our website under events and presentations within the investor relations section of our website. Some of the comments in today's call may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties. Actual results may differ materially from those discussed today, and the company undertakes no obligation to update those statements unless required by law. For a more detailed discussion of these and other risk factors, Investors should review the forward-looking statement section of the earnings press release available on our website as well as other risk factor disclosures in our filings with the SEC. Any projected financial information presented in this call is for illustrative purposes only and should not be relied upon as being predictive of future results. The inclusion of any financial forecast information in this call should not be regarded as a representation by any person that the results reflected in such forecasts will be achieved. During the call, we may discuss certain non-GAAP financial measures. For reconciliations of the non-GAAP measures, as well as other information regarding these measures, please refer to our earnings release and other materials in the investor relations section of our website. Following management's prepared remarks, we will open the call for a question and answer session. With that, I would now like to introduce Andy. Please go ahead.

Thank you, Scott. And good afternoon, everyone. We appreciate you joining us today. In the third quarter, Accel delivered another strong and resilient performance. For the quarter, total revenue increased 9.1% year over year to $330 million. Net income was $13 million, and adjusted EBITDA grew 11.5% to $51 million, reflecting consistent execution and expansion across our markets. Growth this quarter was supported by higher gaming terminal counts, stable machine performance, and improved efficiency in capital deployment. This demonstrates the strength and resilience of our distributed gaming model and our discipline, return-focused approach to growth investments, including Vermont Park. In our core markets, Illinois and Montana, we continue to build on our leading positions and leverage our scale to drive efficiencies, optimize our location mix, and expand margins. Together, Illinois and Montana represent approximately 82% of our revenue. In Illinois, top-line growth continues to be driven by same-store performance and new machine placements. Our focus on higher-yielding locations and disciplined capital management remains a key driver of consistent results. We are also advancing the rollout of ticket-in, ticket-out functionality, which enhances player convenience and streamlines operations. In our developing markets, Nebraska, Georgia, and Nevada, we continued to build scale and make steady progress in growing profitability. Nebraska and Georgia both delivered strong double-digit revenue growth driven by location expansion and market share gains. As previously discussed, this compensated for a modest decline in year-over-year revenue for Nevada. due to the loss of a key customer in 2024, resulting from a change in ownership. Across these markets, our capital investments are translating into stronger returns, with Nebraska and Georgia delivering the highest quarterly revenue growth within our developing portfolio. Both markets continue to experience significant profitable growth and are tracking toward market expansion through 2026, consistent with our expectations and long-term model. Developing markets currently represent just over 12% of our total revenue. In our new markets, performance continues to ramp up steadily. In Louisiana, which currently represents about 3% of revenue, results continue to impress and scale, reflecting the successful integration of our Toucan gaming acquisition. The Louisiana market now includes 670 terminals across nearly 100 locations, and we continue to optimize our routes to drive higher returns for the future. We look forward to developing a strong pipeline of bolt-on acquisitions of truck stops in Louisiana. At Fairmont Park, we continue to see strong player engagement and revenue growth since opening the casino in April. In these early months of the park's operations, we've gained valuable insight, which will be helpful in evaluating the timing and scope for our Phase 2 expansion. Early results support our long-term confidence in the property's contribution through the racino, food and beverage offerings, and our sports betting partnership with FanDuel. We are highly encouraged by sequential monthly revenue growth, reflecting the steady ramp up of customer engagement as we refine the gaming experience and expand brand awareness heading into next year. Across all of our markets, we continue to benefit from the diversification and flexibility of our distributed gaming model. This allows us to allocate capital efficiently and capture growth opportunities across both new and established markets. Our CapEx execution process is rigorous and data-driven, supporting deployment of capital where it is expected to generate the highest incremental return. During the quarter, we completed a $900 million senior secured credit facility consisting of a $600 million term loan and a 300 million dollar revolver each with a five-year maturity this refinancing strengthens our balance sheet enhances liquidity and lowers our cost of capital while extending maturities to 2030. we also repurchased 6.8 million dollars of our common stock during the quarter bringing total year-to-date soccer purchases to roughly 2.2 million shares, or $23.7 million. We look forward our growth investments, including software, technology, and data analytics upgrades, in addition to machine refreshes, remain balanced across our core and developing markets, as well as our new markets, where early investments are producing solid returns. As it relates to M&A, we continue to evaluate opportunities within the large and fragmented local gaming market, estimated at over $15 billion nationally. Our approach remains being disciplined and focused on accretive opportunities that strengthen our gaming platform without stretching our balance sheet. Looking ahead, our priorities remain clear. driving steady growth and efficiency in our core markets, scaling profitability in our developing and new markets, and maintaining financial discipline while returning capital to shareholders through opportunistic share repurchases. With strong recash flow generation, enhanced capital efficiency, and scalable opportunities across both existing and emerging markets, We believe Excel is well-positioned to deliver steady top-line growth and improving returns as we move into 2026. Our third quarter results demonstrate the strength of our unique business model and our success in generating consistent financial performance and cash flow across a diversified, locals-focused gaming portfolio. With that, I want to take a moment to thank Mark Phelan for leading our finance team as interim CFO over the past seven months, all while continuing his role as the president of U.S. Gaming. Mark brought focus and steady leadership through this transition and has played a big part in helping our new CFO, Brett Sommerer, as he gets up to speed across all of Excel's operations. Mark will continue to join our quarterly earnings call as Excel's operational leader, providing valuable insight into our business performance and growth potential from an operations perspective. I will now hand it over to Mark.