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 most recent 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 Annual Report on Form 10-K for fiscal 2024 as filed with the SEC on April 7, 2025.

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. 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.

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

Current wording

•Comparable store sales decreased 4.0% compared to the same calendar period in 2024. See further discussion of comparable store sales below at Revenues.

Previous 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.

Current wording

•Adjusted EBITDA of $59.4 decreased 13.0%, or $8.9, from the third 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 loss, the most comparable GAAP measure, at Reconciliations of Non-GAAP Financial Measures below.

Previous 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.

Current wording

Our Dave & Buster’s stores average 36,800 square feet and range in size between approximately 16,100 and 70,000 square feet. Our Main Event stores average about 53,300 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 218 stores, of which 160 are Dave & Buster's branded stores and 58 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 exclude 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.

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 six months ended August 5, 2025, we opened five 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 nine months ended November 4, 2025, we opened six new Dave & Buster’s branded stores, three new Main Event locations, and relocated one additional Dave & Buster’s branded store.

Previous wording

In addition to the results provided in accordance with GAAP, we provide non-GAAP measures which present operating results on an adjusted basis. These are supplemental measures of performance that are not required by or presented in accordance with GAAP and include Adjusted EBITDA, Credit Adjusted EBITDA and Store Operating Income Before Depreciation and Amortization (defined below). These non-GAAP measures do not represent and should not be considered as an alternative to net income or cash flows from operations, as determined in accordance with GAAP, and our calculations thereof may not be comparable to similarly titled measures reported by other companies and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.

Current wording

In addition to the results provided in accordance with GAAP, we provide non-GAAP measures which present operating results on an adjusted basis. These are supplemental measures of performance that are not required by or presented in accordance with GAAP and include Adjusted EBITDA, Credit Adjusted EBITDA and Store Operating Income Before Depreciation and Amortization (defined below). These non-GAAP measures do not represent and should not be considered as alternatives to net income (loss) or cash flows from operations, as determined in accordance with GAAP, and our calculations thereof may not be comparable to similarly titled measures reported by other companies and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.

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 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.

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 (loss) to measure operating performance.

Previous wording

We define “Adjusted EBITDA” as net income, plus interest expense, net, loss on debt refinancing, provision for (benefit from) income taxes, depreciation and amortization expense, (gain) loss on property and equipment transactions, impairment of long-lived assets, share-based compensation, currency transaction (gains) losses and other costs.

Current wording

We define “Adjusted EBITDA” as net income (loss), plus interest expense, net, loss on debt refinancing, provision for income taxes, depreciation and amortization expense, (gain) loss on property and equipment transactions, impairment of long-lived assets, share-based compensation, currency transaction (gains) losses, transaction and integration costs, system implementation costs and other items, net.

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 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.

Current wording

We define “Credit Adjusted EBITDA” as net income (loss) 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 the metric provides additional information to investors about the calculation of, and compliance with, certain financial covenants in the Credit Agreement.

Previous wording

We define “Store Operating Income Before Depreciation and Amortization” as operating income, plus depreciation and amortization expense, general and administrative expenses, pre-opening costs and other charges and gains. Store Operating Income Before Depreciation and Amortization allows us to evaluate operating performance of each store across stores of varying size and volume.

Current wording

We define “Store Operating Income Before Depreciation and Amortization” as operating income, plus depreciation and amortization expense, general and administrative expenses, pre-opening costs and other charges and gains. Store Operating Income Before Depreciation and Amortization allows for the evaluation of operating performance across stores of varying size and volume.

Previous wording

We believe that Store Operating Income Before Depreciation and Amortization is another useful measure in evaluating our operating performance because it removes the impact of general and administrative expenses, which are not incurred at the store level, and the costs of opening new stores, which are non-recurring at the store level, and thereby enables the comparability of the operating performance of our stores for the periods presented. We also believe that Store Operating Income Before Depreciation and Amortization is a useful measure in evaluating our operating performance within the entertainment and dining industry because it permits the evaluation of store-level productivity, efficiency, and performance, and we use Store Operating Income Before Depreciation and Amortization as a means of evaluating store financial performance compared with our competitors. However, because this measure excludes significant items such as general and administrative expenses, pre-opening costs, and other charges and gains, as well as our interest expense, net, loss on debt refinancing and depreciation and amortization expense, which are important in evaluating our consolidated financial performance from period to period, the value of this measure is limited as a measure of our consolidated financial performance.

Current wording

We believe that Store Operating Income Before Depreciation and Amortization is another useful measure in evaluating our operating performance because the metric removes the impact of general and administrative expenses, which are not incurred at the store level, and the costs of opening new stores, which are non-recurring at the store level, and thus enables the comparability of the operating performance of our stores for the periods presented. We also believe that Store Operating Income Before Depreciation and Amortization is a useful measure in evaluating our operating performance within the entertainment and dining industry because the metric permits the evaluation of store-level productivity, efficiency, and performance, and we use Store Operating Income Before Depreciation and Amortization as a means of evaluating store financial performance compared with our competitors. However, because the measure excludes significant items such as general and administrative expenses, pre-opening costs, and other charges and gains, as well as our interest expense, net, loss on debt refinancing and depreciation and amortization expense, which are important in evaluating our consolidated financial performance from period to period, the value of this measure is limited as a measure of our consolidated financial performance.

Previous wording

On May 6, 2024, the first day of the second quarter of fiscal 2024, the Company changed its fiscal year to end on the Tuesday after the Monday closest to January 31 st. Prior to the change, the Company’s fiscal year ended on Sunday. The change was made to improve labor and operational efficiencies by ending the Company's periods outside of the busier weekend timeframe. As a result of this change, the second quarter of fiscal 2024 and year-to-date fiscal 2024 had two additional days added to its normal 13-week quarter and 52-week year, respectively.

Current wording

On May 6, 2024, the first day of the second quarter of fiscal 2024, the Company changed its fiscal year to end on the Tuesday after the Monday closest to January 31 st. Prior to the change, the Company’s fiscal year ended on Sunday. The change was made to improve labor and operational efficiencies by ending the Company's periods outside of the busier weekend timeframe. As a result of this change, each of the second quarter of 2024 and fiscal 2024 had two additional days added to its normal 13-week quarter and 52-week year, respectively.

Previous 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”)

Current wording

Three Months Ended November 4, 2025 (the “third quarter of 2025”) Compared to the Three Months Ended November 5, 2024 (the “third quarter of 2024”)

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 Statements of Comprehensive Income.

Current wording

The following table sets forth selected data for the periods indicated. All information, other than Company-owned stores at the end of the period, was derived from the accompanying unaudited Consolidated Statements of Comprehensive Income.

Previous wording

The following table reconciles Net income to Adjusted EBITDA for the periods indicated:

Current wording

The following table reconciles Net loss to Adjusted EBITDA for the periods indicated:

Previous wording

(5)The amount for the 2025 period primarily consisted of $0.5 severance and restructuring charges, $1.1 of one-time third-party consulting fees and $0.9 of discretionary retention incentives. The amount for the 2024 period primarily consisted of $7.2 of one-time, third-party consulting fees and $0.3 severance and restructuring charges, partially offset by a$3.1 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.

Current wording

(5)The amount for the 2025 period primarily consisted of $0.9 of one-time third-party legal consulting fees, legal settlements of $0.9, and $0.8 of discretionary retention incentives. The amount for the 2024 period primarily consisted of $1.3 of one-time, third-party consulting fees and $0.3 severance and restructuring charges, partially offset by a$0.4 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.

Previous wording

Total revenues for the second quarter of 2025 increased $0.3 to $557.4 compared to $557.1 for the second quarter of 2024. The increase in revenue was primarily attributable to a $19.8 increase in new store revenues, partially offset by a $17.9 decrease in comparable store sales and a decrease of $1.6 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 second quarter of 2024. The change in other revenues and deferrals reflected 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 third quarter of 2025 decreased $4.8 to $448.2 compared to $453.0 for the third quarter of 2024. The decrease in revenue was primarily attributable to a $16.4 decrease in comparable store sales and a decrease of $7.7 in other noncomparable revenues, partially offset by a $19.3 increase in new store revenues. The decrease in comparable store revenues was due to a reduction in walk-in business relative to the prior year period. The change in other revenues and deferrals reflected breakage on unredeemed game play credits and tickets corresponding to guest redemption patterns over time. See Revenue Recognitionat Note 1 to the unaudited consolidated financial statements for discussion of revenue recognition associated with game play credits and tickets.

Previous wording

The total cost of products decreased to $76.4 for the second quarter of 2025 compared to $81.8 for the second quarter of 2024. The total cost of products as a percentage of total revenues decreased to 13.7% for the second quarter of 2025 compared to 14.7% for the second quarter of 2024. 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.

Current wording

The total cost of products decreased to $63.5 for the third quarter of 2025 compared to $67.8 for the third quarter of 2024. The total cost of products as a percentage of total revenues decreased to 14.2% for the third quarter of 2025 compared to 15.0% for the third quarter of 2024. The decrease in total cost of products as a percentage of total revenues was 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 $29.2 in the second quarter of 2025 compared to $32.9 in the second quarter of 2024. The cost of entertainment, as a percentage of entertainment revenues, decreased to 8.0% for the second quarter of 2025 from 8.8% in the second quarter of 2024. The decrease was primarily attributable to vendor cost savings and lower redemptions due to certain ticket payout adjustments and redemption center pricing changes.

Current wording

Cost of entertainment decreased to $21.6 in the third quarter of 2025 compared to $25.1 in the third quarter of 2024. The cost of entertainment, as a percentage of entertainment revenues, decreased to 7.7% for the third quarter of 2025 from 8.5% in the third quarter of 2024. The decrease was primarily attributable to vendor cost savings and lower redemptions due to certain ticket payout adjustments and redemption center pricing changes.

Previous wording

Cost of food and beverage products decreased to $47.2 for the second quarter of 2025 compared to $48.9 for the second quarter of 2024. Cost of food and beverage products, as a percentage of food and beverage revenues, decreased to 24.5% for the second quarter of 2025 from 27.0% for the second quarter of 2024. The decrease was primarily attributable to food and beverage menu price increases, continued supply chain and ingredient optimization, and a more favorable mix of products sold.

Current wording

Cost of food and beverage products decreased to $41.9 for the third quarter of 2025 compared to $42.7 for the third quarter of 2024. Cost of food and beverage products, as a percentage of food and beverage revenues, decreased to 24.8% for the third quarter of 2025 from 27.0% for the third quarter of 2024. The decrease was primarily attributable to offering fewer discounts compared with the prior period, continued supply chain and ingredient optimization, and a more favorable mix of products sold.

Previous wording

Total operating payroll and benefits was $138.7 in the second quarter of 2025 compared to $131.2 in the second quarter of 2024. Of the $7.5 increase, $5.0 was related to noncomparable stores, while the balance of the increase was primarily associated with wage rate increases and higher medical claims expense. The total cost of operating payroll and benefits as a percentage of total revenues was 24.9% in the second quarter of 2025 compared to 23.6% in the second quarter of 2024.

Current wording

Total operating payroll and benefits was $124.9 in the third quarter of 2025 compared to $120.9 in the third quarter of 2024. The $4.0 increase was primarily related to wage increases associated with noncomparable stores. The total cost of operating payroll and benefits as a percentage of total revenues was 27.9% in the third quarter of 2025 compared to 26.7% in the third quarter of 2024.

Previous wording

Other store operating expenses increased to $186.9 in the second quarter of 2025 compared to $170.6 in the second quarter of 2024. Of the $16.3 increase, $7.1 is attributable to new stores, $3.2 is related to increases in insurance expense primarily due to a favorable reserve adjustment recognized in the prior year, $3.8 is related to non-capitalizable games maintenance, systems costs and other preventative maintenance costs, and the balance of the increase is primarily attributable to higher media spend and occupancy costs. Other store operating expense as a percentage of total revenues increased to 33.5% in the second quarter of 2025 compared to 30.6% in the second quarter of 2024.

Current wording

Other store operating expenses increased to $174.8 in the third quarter of 2025 compared to $171.0 in the third quarter of 2024. Of the $3.8 increase, $2.6 was related to new stores, $2.7 was related to non-capitalizable games maintenance, systems costs and other preventative maintenance costs, partially offset by $1.3 in lower marketing expense. Other store operating expense as a percentage of total revenues increased to 39.0% in the third quarter of 2025 compared to 37.7% in the third quarter of 2024.

Previous wording

General and administrative expenses increased to $32.0 in the second quarter of 2025 compared to $28.0 in the second quarter of 2024. The increase in general and administrative expenses in 2025 was driven primarily by a $5.5 increase in share-based compensation. 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 increased to 5.7% in the second quarter of 2025 compared to 5.0% in the second quarter of 2024.

Current wording

General and administrative expenses increased to $32.9 in the third quarter of 2025 compared to $24.6 in the third quarter of 2024. The increase in general and administrative expenses in 2025 was driven primarily higher share-based compensation of $8.9. 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 increased to 7.3% in the third quarter of 2025 compared to 5.4% in the third quarter of 2024.

Previous wording

Depreciation and amortization expense increased to $65.2 in the second quarter of 2025 compared to $57.5 in the second quarter of 2024, primarily due to new store openings and remodels.

Current wording

Depreciation and amortization expense increased to $63.0 in the third quarter of 2025 compared to $53.9 in the third quarter of 2024, primarily due to new store openings and remodels.

Previous wording

Interest expense, net increased to $38.7 in the second quarter of 2025 compared to $33.9 in the second quarter of 2024 due primarily to incremental interest expense associated with the sale-leaseback transactions, 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 consolidated financial statements.

Current wording

Interest expense, net increased to $40.2 in the third quarter of 2025 compared to $32.9 in the third quarter of 2024 due primarily to incremental interest expense associated with the sale-leaseback transactions, 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 consolidated financial statements.

Previous wording

The following table sets forth selected data for the periods indicated. All information is derived from the accompanying unaudited Consolidated Statements of Comprehensive Income.

Current wording

The following table sets forth selected data for the periods indicated. All information, except for Company-owned stores at the end of the period, is derived from the accompanying Consolidated Statements of Comprehensive Income.

Previous wording

The following table reconciles Net income to Adjusted EBITDA for the periods indicated:

Current wording

The following table reconciles Net income (loss) to Adjusted EBITDA for the periods indicated:

Previous 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.

Current wording

(5)The amount for the 2025 period primarily consisted of $2.6 of discretionary retention incentives, $2.0 of one-time, third-party legal consulting fees, $0.9 in legal settlements,$0.8 of severance costs and a $4.0 loss on property and equipment transactions. The amount for the 2024 period primarily consisted of $10.3 of one-time, third-party consulting fees and $1.3 severance and restructuring charges, partially offset by a $3.0 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)During the second quarter of 2024 we adjusted our period close from Sunday to Tuesday of each week (see further discussion at Note 1). This adjustment had the effect of adding 79 store operating weeks for our comparable stores and 2 weeks for our noncomparable stores for the 2024 period.

Current wording

(1)During the second quarter of 2024, we adjusted our period close from Sunday to Tuesday of each week (see further discussion at Note 1). This adjustment had the effect of adding 59 store operating weeks for our comparable stores and ten weeks for our noncomparable stores for the 2024 period.

Previous wording

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

Current wording

(3)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 $20.2, 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.

Current wording

Total revenues for the 2025 period decreased $25.0, or 1.6%, to $1,573.2 compared to $1,598.2 for the 2024 period. The decrease in revenue was primarily attributable to an $81.5 decrease in comparable store sales, partially offset by a $54.6 increase in noncomparable store revenues, and an increase of $1.9 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 $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.

Current wording

Cost of products -The total cost of products was $222.1 for the 2025 period and $236.9 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 was 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 $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.

Current wording

Cost of entertainment decreased to $81.4 in the 2025 period compared to $91.2 in the 2024 period. The cost of entertainment, as a percentage of entertainment revenues, decreased to 8.1% for the 2025 period from 8.6% 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 $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.

Current wording

Cost of food and beverage products decreased to $140.7 for the 2025 period compared to $145.7 for the 2024 period. Cost of food and beverage products as a percentage of food and beverage revenues decreased to 25.0% for the 2025 period from 26.9% for the 2024 period. The decrease was primarily attributable to offering fewer discounts compared with the prior period, continued supply chain and ingredient optimization, and a more favorable mix of products sold.

Previous 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.

Current wording

Total operating payroll and benefits increased to $398.6 in the 2025 period compared to $393.7 in the 2024 period. The $4.9 increase was primarily due to a $12.3 increase associated with noncomparable stores, partially offset by labor efficiencies. The total cost of operating payroll and benefits as a percentage of total revenues for 2025 was 25.3% compared to 24.6% in 2024.

Previous wording

Other store operating expenses increased to $375.3 in the 2025 period compared to $346.6 in the 2024 period. Of the $28.7 increase, $11.8 is related to noncomparable stores, $6.2 is related to increases in non-capitalizable games maintenance, systems costs and other preventative maintenance costs, and the balance of the increase is related to higher marketing spend, occupancy costs, and a favorable self-insurance reserve adjustment recognized in the prior year. Other store operating expense as a percentage of total revenues increased to 33.4% in the 2025 period compared to 30.3% in the 2024 period.

Current wording

Other store operating expenses increased to $550.1 in the 2025 period compared to $517.6 in the 2024 period. Of the $32.5 increase, $21.1 was related to noncomparable stores, $9.9 was related to increases in non-capitalizable games maintenance, systems costs and other preventative maintenance costs, and the balance of the increase was related to higher marketing spend, occupancy costs, and a favorable self-insurance reserve adjustment recognized in the prior year. Other store operating expense as a percentage of total revenues increased to 35.0% in the 2025 period compared to 32.4% in the 2024 period.

Previous 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.

Current wording

General and administrative expenses increased to $89.2 in the 2025 period compared to $80.6 in the 2024 period. The increase in general and administrative expenses in 2025 was driven primarily by higher share-based compensation of $19.8, 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 5.7% in the 2025 period compared to 5.0% in the 2024 period due primarily to the reasons noted above.

Previous wording

Depreciation and amortization expense increased to $128.4 in the 2025 period from $120.3 in the 2024 period, primarily due to new store openings and remodels.

Current wording

Depreciation and amortization expense increased to $191.4 in the 2025 period from $174.2 in the 2024 period, primarily due to new store openings and remodels.