Dave & Buster's Entertainment, Inc.

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read together with the accompanying consolidated financial statements and the related notes in Item 1 and with the audited consolidated financial statements and the related notes included in our Annual Report on Form 10-K as filed with the SEC on April 7, 2025.

Current wording

The following discussion and analysis of our financial condition and results of operations should be read together with the accompanying consolidated financial statements and the related notes in Item 1 and with the audited consolidated financial statements and the related notes included in our most recent Annual Report on Form 10-K as filed with the SEC on April 7, 2025.

Previous wording

Unless otherwise specified, the meanings of all defined terms in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” are consistent with the meanings of such terms as defined in the Notes to consolidated financial statements. This discussion contains statements that are, or may be deemed to be, “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements can be identified by the use of forward-looking terminology, including the terms “believes,” “estimates,” “anticipates,” “expects,” “intends,” “may,” “will” or “should” or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this report and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our results of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which we operate.

Current wording

Unless otherwise specified, the meanings of all defined terms in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” are consistent with the meanings of such terms as defined in the Notes to consolidated financial statements. This discussion contains statements that are, or may be deemed to be, “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 (the “Exchange Act”). These forward-looking statements can be identified by the use of forward-looking terminology, including the terms “believes,” “estimates,” “anticipates,” “expects,” “intends,” “may,” “will” or “should” or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this report and include statements regarding our intentions, beliefs or current expectations concerning, among other things: our results of operations; financial condition; liquidity, prospects; growth, strategies; the industry in which we operate; expansion and opening of new locations; expectations regarding variability in run-rate levels in our stores and seasonality; expectations of future proceeds from sale leaseback transactions; anticipated breakage; our compliance with debt covenants and the terms of our debt agreement; our defenses to various legal claims we may face; and opportunities and risks affecting our business, industry and financial results, including macroeconomic factors.

Previous wording

By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not a guarantee of future performance and our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements contained in this quarterly report as a result of various factors, including those set forth in the section entitled “Risk Factors” in our Annual Report on Form 10-K filed with the SEC on April 7, 2025. In addition, even if our results of operations, financial condition and liquidity, and the development of the industry in which we operate are consistent with the forward-looking statements contained in this Form 10-Q, such results or developments may not be indicative of results or developments in subsequent periods.

Current wording

By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: Our ability to successfully design and execute our business strategy; our effectiveness at integrating and operating our past or future acquisitions; the effects of new or improved technologies or changes in consumer behavior; the potential for unfavorable publicity; our ability to obtain and renew leases on favorable terms or at all; our substantial indebtedness and covenants in our debt agreements restricting our ability to implement our business plan; our success in opening and operating new stores profitability and optimizing existing stores; risks related to our information systems and potential cybersecurity breaches or other privacy or data incidents; the cost and availability of certain commodities; our procurement of new games and entertainment offerings and our ability to obtain related licensing rights; the extensive laws and regulations in which we must comply with; and other factors, including those set forth in the section entitled “Risk Factors” in our Annual Report on Form 10-K filed with the SEC on April 7, 2025. In addition, even if our results of operations, financial condition and liquidity, and the development of the industry in which we operate are consistent with the forward-looking statements contained in this Form 10-Q, such results or developments may not be indicative of results or developments in subsequent periods. Forward-looking statements are based only on information currently available to us and speak only as of the date of this Form 10-Q. We do not undertake any obligation to update or revise the forward-looking statements to reflect events that occur or circumstances that exist after the date on which such statements were made, except to the extent required by law.

Previous wording

•Comparable store sales decreased 8.3% compared to the same calendar period in 2024. See further discussion of comparable store sales below at Revenues.

Current wording

•Comparable store sales decreased 3.5% compared to the same calendar period in 2024. See further discussion of comparable store sales below at Revenues.

Previous wording

•Net income totaled $21.7, or $0.62 per diluted share, compared with net income of $41.4, or $0.99 per diluted share in the first quarter of 2024.

Current wording

•Net income totaled $11.4, or $0.32 per diluted share, compared with net income of $40.3, or $0.99 per diluted share in the second quarter of 2024.

Previous wording

•Adjusted EBITDA of $136.1 decreased 14.5%, or $23.0, from the first quarter of 2024. See further discussion of Adjusted EBITDA, a non-GAAP measure, at Non-GAAP Financial Measures below along with a reconciliation to net income, the most comparable GAAP measure, at Reconciliations of Non-GAAP Financial Measures below.

Current wording

•Adjusted EBITDA of $129.8 decreased 14.4%, or $21.8, from the second quarter of 2024. See further discussion of Adjusted EBITDA, a non-GAAP measure, at Non-GAAP Financial Measures below along with a reconciliation to net income, the most comparable GAAP measure, at Reconciliations of Non-GAAP Financial Measures below.

Previous wording

We are a leading owner and operator of high-volume venues primarily in North America that combine dining and entertainment for both adults and families under the “Dave & Buster’s” and “Main Event” brands. The core of our concept is to offer our customers various forms of entertainment along with quality dining all in one location. Our entertainment offerings provide an extensive assortment of attractions centered around playing games, bowling, and watching live sports and other televised events. Our brands appeal to a relatively balanced mix of male and female adults, as well as families and teenagers. We believe we appeal to a diverse customer base by providing a highly customizable experience in a dynamic and fun setting.

Current wording

We are a leading owner and operator of high-volume venues primarily in North America that combine entertainment and dining for both adults and families under the “Dave & Buster’s” and “Main Event” brands. The core of our concept is to offer our customers various forms of entertainment along with quality dining all in one location. Our entertainment offerings provide an extensive assortment of attractions centered around playing games, bowling, and watching live sports and other televised events. Our brands appeal to a relatively balanced mix of male and female adults, as well as families and teenagers. We believe we appeal to a diverse customer base by providing a highly customizable experience in a dynamic and fun setting.

Previous wording

Our Dave & Buster’s stores average 37,000 square feet and range in size between 16,000 and 70,000 square feet. Our Main Event stores average 54,000 square feet and range in size between 37,500 and 78,000 square feet. Generally, our stores are open seven days a week, with normal hours of operation generally from between 10:00 to 11:30 a.m. until midnight, with stores typically open for extended hours on weekends.

Current wording

Our Dave & Buster’s stores average around 36,900 square feet and range in size between approximately 16,100 and 70,000 square feet. Our Main Event stores average 53,100 square feet and range in size between approximately 37,500 and 78,200 square feet. Generally, our stores are open seven days a week, with normal hours of operation generally from between 10:00 to 11:30 a.m. until midnight, with stores typically open for extended hours on weekends.

Previous wording

Comparable store sales —Comparable store sales are a comparison of sales to the same period of prior years for the comparable store base. We historically define the comparable store base to include those stores open for a full 18 months before the beginning of the current fiscal year and excluding stores permanently closed or planned for closure during the current fiscal year. For fiscal 2025, our comparable store base consists of 210 stores, of which 153 are Dave & Buster's branded stores and 57 are Main Event branded stores.

Current wording

Comparable store sales —Comparable store sales are a comparison of sales to the same period of prior years for the comparable store base. We historically define the comparable store base to include those stores open for a full 18 months before the beginning of the current fiscal year and excluding stores permanently closed or planned for closure during the current fiscal year. For fiscal 2025, our comparable store base consists of 218 stores, of which 160 are Dave & Buster's branded stores and 58 are Main Event branded stores.

Previous wording

New store openings —Our ability to expand our business and reach new customers is influenced by the opening of additional stores in both new and existing markets. The success of our new stores is indicative of our brand appeal and the efficacy of our site selection and operating models. For the three months ended May 6, 2025, we opened two new Dave & Buster’s branded stores and relocated one additional Dave & Buster’s branded store.

Current wording

New store openings —Our ability to expand our business and reach new customers is influenced by the opening of additional stores in both new and existing markets. The success of our new stores is indicative of our brand appeal and the efficacy of our site selection and operating models. For the six months ended August 5, 2025, we opened five new Dave & Buster’s branded stores and relocated one additional Dave & Buster’s branded store.

Previous wording

Although we use these non-GAAP measures to assess the operating performance of our business, they have significant limitations as an analytical tool because they exclude certain material costs. For example, Adjusted EBITDA does not take into account a number of significant items, including our interest expense and depreciation and amortization expense. In addition, Adjusted EBITDA excludes certain other costs that may be important in analyzing our GAAP results. Because Adjusted EBITDA does not account for these expenses, its utility as a measure of our operating performance has material limitations. Our calculations of Adjusted EBITDA adjust for these amounts because they do not directly relate to the ongoing operations of the currently underlying business of our stores and therefore complicate comparison of the underlying business between periods. Nevertheless, because of the limitations described above, management does not view Adjusted EBITDA, Credit Adjusted EBITDA or Store Operating Income Before Depreciation and Amortization in isolation and also uses other measures, such as revenues, gross margin, operating income and net income to measure operating performance.

Current wording

Although we use these non-GAAP measures to assess the operating performance of our business, they have significant limitations as an analytical tool because they exclude certain material costs. For example, Adjusted EBITDA does not take into account a number of significant items, including our interest expense and depreciation and amortization expense. In addition, Adjusted EBITDA excludes certain other costs that may be important in analyzing our GAAP results. Because Adjusted EBITDA does not account for these expenses, its utility as a measure of our operating performance has material limitations. Our calculations of Adjusted EBITDA adjust for these amounts because we believe they do not directly relate to the ongoing operations of the current business of our stores and therefore complicate comparison of the underlying business between periods. Nevertheless, because of the limitations described above, management does not view Adjusted EBITDA, Credit Adjusted EBITDA or Store Operating Income Before Depreciation and Amortization in isolation and also uses other measures, such as revenues, gross margin, operating income and net income to measure operating performance.

Previous wording

We define “Credit Adjusted EBITDA” as net income plus certain items as defined at Adjusted EBITDA above, as well as certain other adjustments as defined in our Credit Facility (see Liquidity and Capital Resources below for additional discussion and reconciliation). These other adjustments include (i) increases in entertainment revenue deferrals, (ii) the cost of new projects, including store pre-opening costs, and (iii) other costs and adjustments as permitted by the debt agreements. We believe the presentation of Credit Adjusted EBITDA is appropriate as it provides additional information to investors about the calculation of, and compliance with, certain financial covenants in the Credit Facility.

Current wording

We define “Credit Adjusted EBITDA” as net income plus certain items as defined at Adjusted EBITDA above, as well as certain other adjustments as defined in our Credit Agreement (see Liquidity and Capital Resources below for additional discussion and reconciliation). These other adjustments include (i) increases in entertainment revenue deferrals, (ii) the cost of new projects, including store pre-opening costs, and (iii) other costs and adjustments as permitted by the credit agreement. We believe the presentation of Credit Adjusted EBITDA is appropriate as it provides additional information to investors about the calculation of, and compliance with, certain financial covenants in the Credit Agreement.

Previous wording

We operate on a 52- or 53-week fiscal year that ends on the Tuesday after the Monday closest to January 31. Each quarterly period reported has 13 weeks, except for 53-week fiscal years when the fourth quarter has 14 weeks. Fiscal 2024, which ended on February 4, 2025, followed this calendar and had 52 weeks. The first quarter of both fiscal 2025 and 2024 had 13 weeks, however the first quarter of 2024 followed our previous fiscal calendar, which ended on a Sunday. The fourth quarter of fiscal 2025 will end on February 3, 2026.

Current wording

We operate on a 52-week or 53-week fiscal year that ends on the Tuesday after the Monday closest to January 31. Each quarterly period reported has 13 weeks, except for 53-week fiscal years when the fourth quarter has 14 weeks. Fiscal 2025, which will end February 3, 2026 and fiscal 2024, which ended on February 4, 2025, both follow a 52-week calendar.

Previous wording

Three Months Ended May 6, 2025 (the “2025 period”) Compared to the Three Months Ended May 5, 2024 (the “2024 period”)

Current wording

Three Months Ended August 5, 2025 (the “second quarter of 2025”) Compared to the Three Months Ended August 6, 2024 (the “second quarter of 2024”)

Previous wording

(2)Non-cash share-based compensation expense, net of forfeitures, recorded in General and administrative expenses on the Consolidated Statement of Comprehensive Income.

Current wording

(2)Non-cash share-based compensation expense, net of forfeitures, recorded in General and administrative expenses on the Consolidated Statements of Comprehensive Income.

Previous wording

(3)Transaction and integration costs related to the acquisition and integration of Main Event recorded in Other charges and gains on the Consolidated Statement of Comprehensive Income.

Current wording

(3)Transaction and integration costs related to the acquisition and integration of Main Event recorded in Other charges and gains on the Consolidated Statements of Comprehensive Income.

Previous wording

(4)System implementation costs represent expenses incurred related to the development of new enterprise resource planning, human capital management and inventory software for our stores and store support teams. These charges are recorded in Other charges and gains on the Consolidated Statement of Comprehensive Income.

Current wording

(4)System implementation costs represent expenses incurred related to the development of new enterprise resource planning, human capital management and inventory software for our stores and store support teams. These charges are recorded in Other charges and gains on the Consolidated Statements of Comprehensive Income.

Previous wording

The following table sets forth selected data for the periods indicated (in dollars and a percentage of revenues). All information is derived from the accompanying Consolidated Statement of Comprehensive Income.

Current wording

The following table sets forth selected data for the periods indicated (in dollars and a percentage of revenues). All information is derived from the accompanying Consolidated Statements of Comprehensive Income.

Previous wording

(5)The amount for the 2025 period primarily consisted of $0.9 of discretionary retention incentives, $0.3 of severance costs and a $3.7 loss on property and equipment transactions. The amount for the 2024 period primarily consisted of $1.8 of one-time, third-party consulting fees and $0.8 severance and restructuring charges, partially offset by a $0.3 gain on property and equipment transactions. The third-party consulting fees are not part of our ongoing operations and were incurred to execute two related, discrete, and project-based strategic initiatives aimed at transforming our marketing strategy, and one discrete, project-based initiative to transform our supply chain operational efficiency. The transformative nature, narrow scope, and limited duration of these incremental consulting fees are not reflective of the ordinary course expenses incurred to operate our business. Third-party consulting fees, discretionary retention incentives and severance costs are included in General and administrative expenses on the Consolidated Statement of Comprehensive Income. (Gain) loss on property and equipment transactions is included in Other charges and gains on the Consolidated Statement of Comprehensive Income.

Current wording

(5)The amount for the 2025 period primarily consisted of $1.8 of discretionary retention incentives, $1.1 of one-time, third-party consulting fees, $0.8 of severance costs and a $4.0 loss on property and equipment transactions. The amount for the 2024 period primarily consisted of $9.0 of one-time, third-party consulting fees and $0.9 severance and restructuring charges, partially offset by a $3.4 gain on property and equipment transactions. The third-party consulting fees for the 2025 period are not part of our ongoing operations and were incurred in association with a change in leadership to execute a discrete, project-based strategic initiative aimed at analyzing and summarizing growth opportunities for the Company. The third-party consulting fees for the 2024 period were not part of our ongoing operations and were incurred to execute two related, discrete, and project-based strategic initiatives aimed at transforming our marketing strategy and one discrete, project-based initiative to transform our supply chain operational efficiency. The transformative nature, narrow scope, and limited duration of these incremental consulting fees are not reflective of the ordinary course expenses incurred to operate our business. Third-party consulting fees, discretionary retention incentives and severance costs are included in General and administrative expenses on the Consolidated Statements of Comprehensive Income. (Gain) loss on property and equipment transactions is included in Other charges and gains on the Consolidated Statements of Comprehensive Income.

Previous wording

(1)Includes changes in deferred entertainment revenues, gift card deferrals and certain other revenues not associated with stores.

Current wording

(2)Includes changes in deferred entertainment revenues, gift card deferrals and certain other revenues not associated with stores.

Previous wording

Total revenues for the 2025 period decreased $20.4, or 3.5%, to $567.7 compared to $588.1 for the 2024 period. The decrease in revenue is primarily attributable to a $46.6 decrease in comparable store sales, partially offset by a $15.7 increase in new store revenues and an increase of $10.5 in other noncomparable revenues. The decrease in comparable store revenues is due primarily to a reduction in walk-in business relative to the prior year period. The change in other noncomparable revenues reflects breakage on unredeemed game play credits and tickets corresponding to guest redemption patterns over time. See Revenue Recognition at Note 1 to the unaudited consolidated financial statements for discussion of revenue recognition associated with game play credits and tickets.

Current wording

Total revenues for the 2025 period decreased $20.2, or 1.8%, to $1,125.0 compared to $1,145.2 for the 2024 period. The decrease in revenue was primarily attributable to a $64.4 decrease in comparable store sales, partially offset by a $35.5 increase in noncomparable store revenues, and an increase of $8.7 in other noncomparable revenues. The decrease in comparable store revenues was due to a reduction in walk-in business relative to the prior year period and a decrease in the number of operating weeks as a result of the change in fiscal calendar during the 2024 period. The change in other noncomparable revenues reflects breakage on unredeemed game play credits and tickets corresponding to guest redemption patterns over time. See Revenue Recognition at Note 1 to the unaudited consolidated financial statements for a discussion of revenue recognition associated with game play credits and tickets.

Previous wording

Cost of products -The total cost of products was $82.1 for the 2025 period and $87.3 for the 2024 period. The total cost of products as a percentage of total revenues decreased to 14.5% for the 2025 period compared to 14.8% for the 2024 period.

Current wording

Cost of products -The total cost of products was $158.6 for the 2025 period and $169.1 for the 2024 period. The total cost of products as a percentage of total revenues decreased to 14.1% for the 2025 period compared to 14.8% for the 2024 period. The decrease in total cost of products as a percentage of total revenues is associated with declines in both entertainment and food and beverage cost of sales, partially offset by a higher mix of food and beverage revenue.

Previous wording

Cost of entertainment decreased to $30.6 in the 2025 period compared to $33.2 in the 2024 period. The cost of entertainment, as a percentage of entertainment revenues, decreased to 8.3% for the 2025 period from 8.6% in the 2024 period. The decrease was primarily attributable to sales price increases.

Current wording

Cost of entertainment decreased to $59.8 in the 2025 period compared to $66.1 in the 2024 period. The cost of entertainment, as a percentage of entertainment revenues, decreased to 8.2% for the 2025 period from 8.7% in the 2024 period. The decrease was primarily attributable to vendor cost savings and lower redemptions due to ticket payout adjustments and redemption center pricing changes.

Previous wording

Cost of food and beverage products decreased to $51.5 for the 2025 period compared to $54.1 for the 2024 period. Cost of food and beverage products as a percentage of food and beverage revenues decreased to 25.6% for the 2025 period from 26.7% for the 2024 period. The decrease was due to food and beverage menu price increases, and the mix of products sold with our new menu, offset by certain commodity pricing increases.

Current wording

Cost of food and beverage products decreased to $98.8 for the 2025 period compared to $103.0 for the 2024 period. Cost of food and beverage products as a percentage of food and beverage revenues decreased to 25.1% for the 2025 period from 26.8% for the 2024 period. The decrease was primarily attributable to food and beverage menu price increases, continued supply chain and ingredient optimization, and more favorable mix of products sold.

Previous wording

Total operating payroll and benefits decreased to $135.0 in the 2025 period compared to $141.6 in the 2024 period. The total cost of operating payroll and benefits as a percentage of total revenues was relatively comparable at 23.8% in the 2025 period compared to 24.1% in the 2024 period.

Current wording

Total operating payroll and benefits increased slightly $273.7 in the 2025 period compared to $272.8 in the 2024 period. The $0.9 increase was primarily due to a $9.0 increase associated with noncomparable stores, largely offset by labor efficiencies. The total cost of operating payroll and benefits as a percentage of total revenues for 2025 was 24.3% compared to 23.8% in 2024.

Previous wording

General and administrative expenses decreased to $24.4 in the 2025 period compared to $28.0 in the 2024 period. The decrease in general and administrative expenses was driven primarily by lower labor and consulting costs and decreased share-based compensation in the current year. General and administrative expenses as a percentage of total revenues decreased to 4.3% in the 2025 period compared to 4.8% in the 2024 period due primarily to the reasons noted above.

Current wording

General and administrative expenses increased slightly to $56.3 in the 2025 period compared to $56.0 in the 2024 period. The increase in general and administrative expenses in 2025 was driven primarily by higher share-based compensation of $4.5, largely offset by system maintenance costs and other non-recurring and restructuring items. See Note 6 to the consolidated financial statements for share-based compensation by period presented. General and administrative expenses as a percentage of total revenues were 5.0% in the 2025 period compared to 4.9% in the 2024 period due primarily to the reasons noted above.

Previous wording

Pre-opening costs increased to $6.1 in the 2025 period compared to $3.3 in the 2024 period. This increase was primarily due to the timing of costs in our pipeline of new stores for each period.

Current wording

Pre-opening costs increased to $10.1 in the 2025 period compared to $7.4 in the 2024 period. This increase was primarily due to the timing of costs in our pipeline of new stores for each period.

Previous wording

Other charges and gains increased to $5.3 in the 2025 period compared to $3.6 in the 2024 period primarily due to the write-off of certain assets, partially offset by decreased system implementation costs.

Current wording

Other charges and gains increased to $6.4 in the 2025 period compared to $3.0 in the 2024 period primarily due to the write-off of certain assets, partially offset by decreased system implementation costs.

Previous wording

Interest expense, net increased to $36.8 in the 2025 period compared to $33.1 in the 2024 period due primarily to incremental interest expense associated with sale-leaseback transactions and borrowings outstanding under our Credit Agreement, partially offset by a decrease in interest rates on our Credit Facility. See further discussion of the Company's debt activity and failed sale-leaseback transaction at Note 4 and Note 3, respectively, to the unaudited consolidated financial statements.

Current wording

Interest expense, net increased to $75.5 in the 2025 period compared to $67.0 in the 2024 period due primarily to incremental interest expense associated with sale-leaseback transactions and borrowings outstanding under our Credit Agreement, partially offset by a decrease in interest rates on our Credit Facility. See further discussion of the Company's debt activity and failed sale-leaseback transaction at Note 4 and Note 3, respectively, to the unaudited consolidated financial statements.

Previous wording

The effective tax rate for the 2025 period was 17.8%, compared to 21.0% for the 2024 period. The effective tax rate decrease for the 2025 period in comparison to the 2024 period was impacted by a significant reduction in pre-tax book income. As pre-tax income decreases, the effect of certain tax attributes and permanent items, specifically our employment tax credits become more pronounced, which cause fluctuations in the effective tax rate.

Current wording

The effective tax rate for the 2025 period was 18.7%, compared to 20.7% for the 2024 period. The effective tax rate decrease for the 2025 period in comparison to the 2024 period was impacted by a reduction in pre-tax book income. As pre-tax income decreases, the effect of certain tax attributes and permanent items, specifically our employment tax credits, become more pronounced, which causes fluctuations in the effective tax rate.

Previous wording

In fiscal 2022, the Company entered into a senior secured credit agreement (the “Credit Facility”), which included a revolving credit facility (the “Revolving Credit Facility”) and a term loan facility (together with the Revolving Credit Facility, the “Credit Facility”). On November 1, 2024, D&B Inc. entered into an amendment with its banking syndicate, which amended the Credit Facility (the “Fourth Amendment”). The Credit Facility is unconditionally guaranteed by D&B Holdings and certain of D&B Inc.’s existing and future wholly owned material domestic subsidiaries.

Current wording

In fiscal 2022, the D&B Inc. entered into a senior secured credit agreement (as amended from time to time, the Credit Agreement”) that provides for a revolving credit facility and a term loan facility (together with the Revolving Credit Facility, the “Credit Facility”). On November 1, 2024, D&B Inc. entered into an amendment with its banking syndicate, which amended the Credit Agreement (the “Fourth Amendment”). The Credit Facility is unconditionally guaranteed by D&B Holdings and certain of D&B Inc.’s existing and future wholly owned material domestic subsidiaries.

Previous wording

•increased the Revolving Credit Facility by $150.0 to a total $650.0 and extended the maturity to November 1, 2029.

Current wording

•increased the Revolving Credit Facility by $400.0 to a total of $650.0 and extended the maturity to November 1, 2029.

Previous wording

Both the Existing Term B Loans and the Incremental Term B Loans bear interest at Term SOFR or ABR (each, as defined in the amended Credit Facility) plus (i) in the case of Term SOFR loans, 3.25% per annum and (ii) in the case of ABR loans, 2.25% per annum. Loans under the Revolving Credit Facility bear interest subject to a pricing grid based on net total leverage, at Term SOFR plus a spread ranging from 2.50% to 3.00% per annum or ABR plus a spread ranging from 1.50% to 2.00% per annum. Unused commitments under the Revolving Credit Facility incur initial commitment fees of 0.30% to 0.50%. Additionally, the interest rate margin applicable to the Existing Term B Loans and loans outstanding under the Revolving Credit Facility are subject to an additional 0.25% step-down if a rating of B1/B+ or higher from Moody’s and S&P is achieved (which will step up if such rating is subsequently not maintained).

Current wording

Both the Existing Term B Loans and the Incremental Term B Loans bear interest at Term SOFR or ABR (each, as defined in the amended Credit Agreement) plus (i) in the case of Term SOFR loans, 3.25% per annum and (ii) in the case of ABR loans, 2.25% per annum. Borrowings under the Revolving Credit Facility bear interest subject to a pricing grid based on net total leverage, at Term SOFR plus a spread ranging from 2.50% to 3.00% per annum or ABR plus a spread ranging from 1.50% to 2.00% per annum. Unused commitments under the Revolving Credit Facility incur initial commitment fees of 0.30% to 0.50%. Additionally, the interest rate margin applicable to the Existing Term B Loans and loans outstanding under the Revolving Credit Facility are subject to an additional 0.25% step-down if a rating of B1/B+ or higher from Moody’s and S&P is achieved (which will step up if such rating is subsequently not maintained).

Previous wording

A portion of the Revolving Credit Facility not to exceed $35.0 is available for the issuance of letters of credit. As of May 6, 2025, we had letters of credit outstanding of $13.7 and an unused commitment balance of $411.3 under the Revolving Credit Facility. The Credit Facility may be increased through incremental facilities, by an amount equal to the greater of (i) $650.0 and (ii) 0.75 times trailing twelve-month Adjusted EBITDA, as defined in the Credit Facility, plus additional amounts subject to compliance with applicable leverage ratio and/or interest coverage ratio requirements.

Current wording

A portion of the Revolving Credit Facility not to exceed $35.0 is available for the issuance of letters of credit. As of August 5, 2025, we had letters of credit outstanding of $13.7 and an unused commitment balance of $431.3 under the Revolving Credit Facility. The Credit Facility may be increased through incremental facilities, by an amount equal to the greater of (i) $400.0 and (ii) 0.75 times trailing twelve-month Adjusted EBITDA, as defined in the Credit Facility, plus additional amounts subject to compliance with applicable leverage ratio and/or interest coverage ratio requirements.

Previous wording

During fiscal 2020, the Company issued $550.0 aggregate principal amount of 7.625% senior secured notes (the “Notes”). Interest on the Notes is payable in arrears on November 1 and May 1 of each year. The Notes mature on November 1, 2025, unless earlier redeemed, and are subject to the terms and conditions set forth in the related indenture. The Notes were issued by D&B Inc. and are unconditionally guaranteed by D&B Holdings and certain of D&B Inc.’s existing and future wholly-owned material domestic subsidiaries. During fiscal 2021, the Company redeemed a total of $110.0 outstanding principal amount of the Notes.

Current wording

During fiscal 2020, the Company issued $550.0 aggregate principal amount of 7.625% senior secured notes (the “Notes”). During fiscal 2021, the Company redeemed a total of $110.0 outstanding principal amount of the Notes. In November 2024, using the proceeds from the Fourth Amendment discussed above, the Company redeemed the remaining $440.0 outstanding principal amount of the Notes.

Previous wording

These transactions were accounted for as failed sale leasebacks based on GAAP under ASC 842, Leases. As a result, the store property assets remain on the Consolidated Balance Sheet at their historical net book value and are depreciated over the remaining term of the applicable master lease. Financing liabilities were recognized in the amount of the proceeds received, net of certain transactions costs. The Company will not recognize rent expense related to the leased assets. Instead, monthly rent payments under the applicable master lease agreement are recorded as interest expense and a reduction of the outstanding liability.

Current wording

The sale-leaseback transactions were accounted for as failed sale leasebacks based on GAAP under ASC 842, Leases. As a result, the store property assets remain on the Consolidated Balance Sheet at their historical net book value and are depreciated over the remaining term of the applicable master lease. Financing liabilities were recognized in the amount of the proceeds received, net of certain transactions costs. The Company will not recognize rent expense related to the leased assets. Instead, monthly rent payments under the applicable master lease agreement are recorded as interest expense and a reduction of the outstanding liability.

Previous wording

Credit Adjusted EBITDA, a non-GAAP measure, represents net income plus certain items as defined at Adjusted EBITDA at Non-GAAP Financial Measures above, as well as certain other adjustments as defined in our Credit Facility. The following table reconciles Net income to Credit Adjusted EBITDA, as defined in our Credit Facility for the period indicated:

Current wording

Credit Adjusted EBITDA, a non-GAAP measure, represents net income plus certain items as defined at Adjusted EBITDA at Non-GAAP Financial Measures above, as well as certain other adjustments as defined in our Credit Agreement. The following table reconciles Net income to Credit Adjusted EBITDA, as defined in our Credit Agreement for the period indicated:

Previous wording

(4)Primarily consists of discretionary retention incentives, severance costs, (gain) loss on property and equipment transactions and certain third-party consulting fees. The third-party consulting fees are not part of our ongoing operations and were incurred to execute two related, discrete, and project-based strategic initiatives aimed at transforming our marketing strategy, and one discrete, project-based initiative to transform our supply chain operational efficiency. The transformative nature, narrow scope, and limited duration of these incremental consulting fees are not reflective of the ordinary course expenses incurred to operate our business. Third-party consulting fees, discretionary retention incentives and severance costs are included in General and administrative expenses on the Consolidated Statement of Comprehensive Income. (Gain) loss on property and equipment transactions is included in Other charges and gains on the Consolidated Statement of Comprehensive Income.

Current wording

(4)Primarily consists of discretionary retention incentives, severance costs, (gain) loss on property and equipment transactions and certain third-party consulting fees. The third-party consulting fees are not part of our ongoing operations and were incurred to execute (i) two related, discrete, and project-based strategic initiatives aimed at transforming our marketing strategy, (ii) one discrete, project-based initiative to transform our supply chain operational efficiency and (iii) certain costs incurred in association with a change in leadership to execute a discrete, project-based strategic initiative aimed at analyzing and summarizing growth opportunities for the Company. The transformative nature, narrow scope, and limited duration of these incremental consulting fees are not reflective of the ordinary course expenses incurred to operate our business. Third-party consulting fees, discretionary retention incentives and severance costs are included in General and administrative expenses on the Consolidated Statements of Comprehensive Income. (Gain) loss on property and equipment transactions is included in Other charges and gains on the Consolidated Statements of Comprehensive Income.

Previous wording

The following table provides the Net Total Leverage Ratio calculation, as defined in our Credit Facility, as of and for the period indicated:

Current wording

The following table provides the Net Total Leverage Ratio calculation, as defined in our Credit Agreement as of and for the period indicated:

Previous wording

(1)Amount represents the face amount of debt outstanding, net of unamortized debt issuance costs and debt discount.

Current wording

(1)Amount represents the face amount of debt outstanding, net of unamortized debt issuance costs and debt discounts, and balances outstanding under finance leases. See discussion of finance leases at Note 3 to the unaudited consolidated financial statements.