Accel Entertainment, Inc.

Previous wording

We are a leading distributed gaming operator in the United States (“U.S.”), as well as a developer of brick-and-mortar casinos that serve local gaming markets and horse racing venues. We are a preferred partner for local business owners in the markets we serve. We offer turnkey, full-service gaming solutions to bars, restaurants, convenience stores, truck stops, and fraternal and veteran establishments across the country as well as casinos and horse racing venues. Our focus is providing unmatched customer support, guidance, and expertise so our location partners can grow their businesses with incremental revenue.

Current wording

We are a leading distributed gaming operator in the United States (“U.S.”), as well as a developer of brick-and-mortar casinos that serve local gaming markets and horse racing venues. We are a preferred partner for local business owners in the markets we serve. We offer turnkey, full-service gaming solutions to bars, restaurants, convenience stores, truck stops, and fraternal and veteran establishments across the country as well as casinos and horse racing venues. Our focus is providing unmatched customer support, guidance, and expertise so our location partners can grow their businesses with an additional revenue stream. We install, maintain, operate and service gaming terminals and related equipment for our location partners as well as redemption devices that have automated teller machine (“ATM”) functionality and stand-alone ATMs. We offer amusement devices, including jukeboxes, dartboards, pool tables, and other entertainment related equipment. These operations provide a complementary source of lead generation for our gaming business by offering a “one-stop” source of additional equipment for our location partners.

Previous wording

We install, maintain, operate and service gaming terminals and related equipment for our location partners as well as redemption devices that have automated teller machine (“ATM”) functionality and stand-alone ATMs. We offer amusement devices, including jukeboxes, dartboards, pool tables, and other entertainment related equipment. These operations provide a complementary source of lead generation for our gaming business by offering a “one-stop” source of additional equipment for our location partners. We also design and manufacture gaming terminals and related equipment. We are continuously evaluating additional opportunities that are complementary to our core business, such as our acquisition of Fairmount Park - Casino & Racing (“Fairmount”) in Collinsville, Illinois. In April 2025, the casino opened and the racing season began at Fairmount.

Current wording

We also design and manufacture gaming terminals and related equipment. We are continuously evaluating additional opportunities that are complementary to our core business, such as our acquisition of Fairmount Park - Casino & Racing (“Fairmount”) in Collinsville, Illinois.

Previous wording

Ongoing interest rate uncertainty, persistent inflation and increased and/or reciprocal tariffs may increase the risk of an economic recession and volatility in the capital or credit markets in the U.S. and other markets globally. Our location partners may be adversely impacted by changes in overall economic and financial conditions, and certain location partners may cease operations in the event of a recession or inability to access financing. Furthermore, our revenue is largely driven by players’ disposable incomes and level of gaming activity, and economic conditions that adversely impact players’ ability and desire to spend disposable income at our location partners may adversely affect our results of operations and cash flows.

Current wording

Ongoing interest rate uncertainty, persistent inflation, economic impacts from the conflict in Iran, and increased and/or reciprocal tariffs may increase the risk of an economic recession and volatility in the capital or credit markets in the U.S. and other markets globally. Our location partners may be adversely impacted by changes in overall economic and financial conditions, and certain location partners may cease operations in the event of a recession or inability to access financing. Furthermore, our revenue is largely driven by players’ disposable incomes and level of gaming activity. Economic conditions that adversely impact players’ ability and desire to spend disposable income at our location partners may adversely affect our results of operations and cash flows. For the first three months of 2026, we have not observed any material impacts to our business or outlook from the macroeconomic factors noted above.

Previous wording

The One Big Beautiful Bill Act (the “Act”) was signed into law on July 4, 2025. The Act contains significant tax law changes impacting business tax payers with various effective dates, with certain provisions effective in 2025 and others to be implemented through 2027. Among the tax law changes that impact us are those that relate to the timing of certain tax deductions including depreciation expense, interest expense and research and development expenditures. Because these tax law changes impact the timing of these deductions, they will not reduce our overall effective tax rate. However, these tax law changes have resulted in a favorable reduction in our current tax expense which is offset by an increase to deferred tax expense.

Current wording

The One Big Beautiful Bill Act (the “Act”) was signed into law on July 4, 2025. The Act contains significant tax law changes impacting business tax payers with various effective dates, with certain provisions effective in 2025 and others to be implemented through 2027. Among the tax law changes that impact us are those that relate to the timing of certain tax deductions including depreciation expense, interest expense and research and development expenditures. Because these tax law changes impact the timing of these deductions, they will not reduce our overall effective tax rate. However, these tax law changes have resulted in a favorable reduction to our tax expense for the three months ended March 31, 2026, which was offset by an increase to deferred tax expense.

Previous wording

ATM fees and other. ATM fees and other consist of fees charged for the withdrawal of funds from our redemption devices and stand-alone ATMs and is recognized at the time of the ATM transaction. Beginning in the first quarter of 2025, revenues from our racing operations are also included.

Current wording

ATM fees and other. ATM fees and other consist of fees charged for the withdrawal of funds from our redemption devices and stand-alone ATMs and is recognized at the time of the ATM transaction. Revenues from our racing operations are also included.

Previous wording

Cost of revenue. Cost of revenue consists of i) taxes on net gaming revenue that is payable to the appropriate jurisdiction (effective July 1, 2024, the tax on net gaming revenue in the State of Illinois increased from 34% to 35%, which is split equally between us and our locations in Illinois), ii) licenses, permits and other fees required for the operation of our business, iii) location revenue share, which is governed by local governing bodies and location contracts, iv) ATM and amusement commissions payable to locations, v) ATM and amusement fees and vi) expenses from our casino and racing operations.

Current wording

Cost of revenue. Cost of revenue consists of i) taxes on net gaming revenue that is payable to the appropriate jurisdiction, ii) licenses, permits and other fees required for the operation of our business, iii) location revenue share, which is governed by local governing bodies and location contracts, iv) ATM and amusement commissions payable to locations, v) ATM and amusement fees and vi) expenses from our casino and racing operations.

Previous wording

General and administrative. General and administrative expenses consist of operating expense and general and administrative expense. Operating expense includes compensation-related costs for service technicians, route technicians, route security, and preventative maintenance personnel. Operating expense also includes vehicle fuel and maintenance, and non-capitalizable parts expenses. Operating expenses are generally proportionate to the number of locations and gaming terminals. General and administrative expense includes compensation-related costs for account managers, business development managers, marketing, and other corporate personnel. In addition, general and administrative expense also includes marketing, information technology, insurance, rent and professional fees.

Current wording

General and administrative. General and administrative expenses consist of operating expense and general and administrative expense. Operating expense includes compensation-related costs for service technicians, route technicians, route security, preventative maintenance personnel and marketing. Operating expense also includes vehicle fuel and maintenance, and non-capitalizable parts expenses. Operating expenses are generally proportionate to the number of locations and gaming terminals. General and administrative expense includes compensation-related costs for account managers and other corporate personnel. In addition, general and administrative expense also includes information technology, insurance, rent and professional fees.

Previous wording

Amortization of intangible assets and route and customer acquisition costs. Route and customer acquisition costs consist of fees paid at the inception of contracts entered into with third parties and our gaming locations, which allows us to install and operate gaming terminals. The route and customer acquisition costs and route and customer acquisition costs payable are recorded at the net present value of the future payments using a discount rate equal to our incremental borrowing rate associated with its long-term debt. Route and customer acquisition costs are amortized on a straight-line basis over 18 years, which is the expected estimated life of the contract, including expected renewals.

Current wording

Amortization of intangible assets and route and customer acquisition costs. Route and customer acquisition costs consist of fees paid at the inception of contracts entered into with third parties and our gaming locations, which allows us to install and operate gaming terminals. The route and customer acquisition costs and route and customer acquisition costs payable are recorded at the net present value of the future payments using a discount rate equal to our incremental borrowing rate associated with our long-term debt. Route and customer acquisition costs are amortized on a straight-line basis over 18 years, which is the expected estimated life of the contract, including expected renewals.

Previous wording

Interest expense, net consists of interest on our current credit facilities, amortization of financing fees, accretion of interest on route and customer acquisition costs payable, and interest (income) expense on the interest rate caplets. Interest on the current credit facility is payable monthly on unpaid balances at the variable per annum Secured Overnight Financing Rate (“SOFR”) rate plus an applicable margin, as defined under the terms of the credit facility, ranging from 1.5% to 2.5% depending on the first lien net leverage ratio.

Current wording

Interest expense, net consists of interest on our credit facility, amortization of financing fees, accretion of interest on route and customer acquisition costs payable, and interest (income) expense on the interest rate caplets. Interest on the current credit facility is payable monthly on unpaid balances at the variable per annum Secured Overnight Financing Rate (“SOFR”) rate plus an applicable margin, as defined under the terms of the credit facility, ranging from 1.75% to 2.50% depending on the first lien net leverage ratio.

Previous wording

Total net revenues for the three months ended September 30, 2025 were $329.7 million, an increase of $27.5 million, or 9.1%, compared to the prior-year period. This increase was primarily driven by higher net gaming revenue of $18.6 million, which reflected an increase in gaming locations, terminals and revenue from our casino operations, as well as higher ATM fees and other revenue of $14.6 million, an increase of $9.1 million, or 164.9%, which included revenue from our racing operations. Net revenues by state are presented below:

Current wording

Total net revenues for the three months ended March 31, 2026 were $351.6 million, an increase of $27.6 million, or 8.5%, compared to the prior-year period. This increase was primarily driven by higher net gaming revenue of $29.5 million, which reflected an increase in gaming locations, terminals and revenue from our casino operations, partially offset by a decrease in manufacturing revenue of $2.6 million, or 67.9%, due to lower equipment (timing) and software sales. Net revenues by state are presented below:

Previous wording

Cost of revenue for the three months ended September 30, 2025 was $225.5 million, an increase of $14.7 million, or 7.0%, compared to the prior-year period, driven by higher net gaming revenue and revenue from our racing operations, as described above.

Current wording

Cost of revenue for the three months ended March 31, 2026 was $241.6 million, an increase of $20.1 million, or 9.1%, compared to the prior-year period, driven by higher net gaming revenue and revenue from our casino operations, as described above.

Previous wording

Cost of manufacturing goods sold for the nine months ended September 30, 2025 was $3.9 million, a decrease of $1.4 million, or 26.6%, compared to the prior-year period primarily due to lower manufacturing revenue.

Current wording

Cost of manufacturing goods sold for the three months ended March 31, 2026 was $0.6 million, a decrease of $1.4 million, or 69.4%, due to the previously mentioned decrease in equipment and software sales.

Previous wording

General and administrative expenses for the three months ended September 30, 2025 were $55.6 million, an increase of $7.7 million, or 16.0%, compared to the prior-year period. The increase was attributable to higher compensation-related costs, as we continue to grow our operations.

Current wording

General and administrative expenses for the three months ended March 31, 2026 were $58.0 million, an increase of $5.0 million, or 9.5%, compared to the prior-year period. The increase was primarily attributable to higher compensation-related costs, as we continue to grow our operations.

Previous wording

Depreciation and amortization of property and equipment for the three months ended September 30, 2025 was $13.3 million, an increase of $2.3 million, or 21.3%, compared to the prior-year period due to an increased number of gaming terminals.

Current wording

Depreciation and amortization of property and equipment for the three months ended March 31, 2026 was $13.9 million, an increase of $1.6 million, or 12.7%, compared to the prior-year period due to an increased number of gaming terminals.

Previous wording

Amortization of intangible assets and route and customer acquisition costs for the three months ended September 30, 2025 were $6.4 million, an increase of $0.6 million, or 10.5%, compared to the prior-year period due to higher amortization expense on location contracts acquired.

Current wording

Amortization of intangible assets and route and customer acquisition costs for the three months ended March 31, 2026 were $6.8 million, an increase of $0.5 million, or 7.9%, compared to the prior-year period due to higher amortization expense on route and customer acquisition costs.

Previous wording

Other expenses, net for the three months ended September 30, 2025 were $2.6 million, a decrease of $1.3 million, or 33.4%, compared to the prior-year period. The decrease was primarily attributable to lower non-recurring expenses, lower non-recurring lobbying and legal expenses related to new markets, and lower fair value adjustments associated with the revaluation of contingent consideration liabilities.

Current wording

Other expenses, net for the three months ended March 31, 2026 were $3.5 million, a increase of $0.7 million, or 25.2%, compared to the prior-year period. The increase was primarily attributable to higher fair value adjustments associated with the revaluation of contingent consideration liabilities and losses on sales of assets, partially offset by lower non-recurring expenses, and lower non-recurring lobbying and legal expenses related to new markets.

Previous wording

Interest expense, net for the three months ended September 30, 2025 was $8.6 million, which was a decrease of $0.5 million, or 5.9%, compared to the prior-year period. We experienced lower interest rates and the benefit realized on our interest rate caplets, partially offset by an increase in average outstanding debt. For the three months ended September 30, 2025, the weighted average interest rate, excluding the impact of our interest rate caplets, was approximately 6.4% compared to 7.6% in the prior-year period.

Current wording

Interest expense, net for the three months ended March 31, 2026 was $8.5 million, which was a decrease of $0.2 million, or 2.1%, compared to the prior-year period. We experienced lower interest rates, partially offset by a lower benefit realized on our interest rate caplets and an increase in average outstanding debt. For the three months ended March 31, 2026, the weighted average interest rate, excluding the impact of our interest rate caplets, was approximately 5.5% compared to 6.5% in the prior-year period.

Previous wording

The change in the fair value of contingent earnout shares for the three months ended September 30, 2025 was a gain of $2.2 million, compared to a loss of $4.2 million the prior-year period. The change was primarily due to the change in the market value of our Class A-1 common stock, which is the primary input to the valuation of the contingent earnout shares.

Current wording

The change in the fair value of contingent earnout shares for the three months ended March 31, 2026 was a gain of $1.5 million, compared to a gain of $2.4 million the prior-year period. The change was primarily due to the change in the market value of our Class A-1 common stock, which is the primary input to the valuation of the contingent earnout shares.

Previous wording

Income tax expense for the three months ended September 30, 2025 was $4.5 million, an increase of $0.9 million, or 25.9%, compared to the prior-year period. The effective tax rate for the three months ended September 30, 2025 was 25.2% compared to 42.2% in the prior-year period. Our effective income tax rate can vary from period to period depending on, among other factors, the amount of permanent tax adjustments and discrete items. The change in the fair value of the contingent earnout shares is considered a discrete item for tax purposes and can be the primary driver for the fluctuations in the tax rate year over year.

Current wording

Income tax expense for the three months ended March 31, 2026 was $5.4 million, an increase of $0.4 million, or 7.7%, compared to the prior-year period. The effective tax rate for the three months ended March 31, 2026 was 26.8% compared to 25.5% in the prior-year period. Our effective income tax rate can vary from period to period depending on, among other factors, the amount of permanent tax adjustments and discrete items. The change in the fair value of the contingent earnout shares is considered a permanent, non-taxable item for tax purposes and can be the primary driver for the fluctuations in the tax rate year over year.

Previous wording

Location hold-per-day is calculated by dividing net gaming revenue in the period by the average number of locations. Then divide the calculated amount by the number of operational days. We utilize this metric to compare market and location performance on a normalized basis. The percent change in location hold-per-day is the underlying metric we use to determine the change in same-store sales.

Current wording

Location hold-per-day is calculated by dividing net gaming revenue in the period by the average number of locations, which is then further divided by the number of operational days. We utilize this metric to compare market and location performance on a normalized basis. The percent change in location hold-per-day is the underlying metric we use to determine the change in same-store sales.

Previous wording

The following tables set forth information with respect to our location hold-per-day in our primary locations for the three and nine months ended:

Current wording

The following tables set forth information with respect to our location hold-per-day in our primary locations for the three months ended:

Previous wording

Adjusted EBITDA for the three months ended September 30, 2025, was$51.2 million, an increase of $5.3 million, or 11.5%, compared to the prior-year period. Adjusted EBITDA for the nine months ended September 30, 2025, was$153.9 million, anincrease of$12.1 million, or 8.5%, compared to the prior-year period. The increase was attributable to an increase in the number of locations and gaming terminals.

Current wording

Adjusted EBITDA for the three months ended March 31, 2026, was$53.8 million, an increase of $4.2 million, or 8.6%, compared to the prior-year period. The increase was attributable to an increase in the number of locations and gaming terminals.

Previous wording

We believe that our cash and cash equivalents, cash flows from operations and borrowing availability under the Credit Agreement will be sufficient to meet our capital requirements for the next twelve months and the foreseeable future thereafter. Our primary short-term cash needs are paying operating expenses and contingent earnout payments, purchases of property and equipment, servicing outstanding indebtedness, and funding our Board of Directors (“Board”) approved share repurchase program and near-term acquisitions. As of September 30, 2025, we had $290.2 million in cash and cash equivalents.

Current wording

We believe that our cash and cash equivalents, cash flows from operations and borrowing availability under the Credit Agreement (as defined below) will be sufficient to meet our capital requirements for the next twelve months and the foreseeable future thereafter. Our primary short-term cash needs are paying operating expenses and contingent earnout payments, purchases of property and equipment, servicing outstanding indebtedness, and funding our Board of Directors (“Board”) approved share repurchase program and near-term acquisitions. As of March 31, 2026, we had $274.1 million in cash and cash equivalents.

Previous wording

At the Borrower’s election, borrowings under the Credit Agreement bear interest at either (i)a base rate equal to the highest of (a) the federal funds effective rate plus 0.5%, (b) the prime rate announced by CIBC Bank USA, or (c) 1-month Term SOFR plus 1% or (ii) Term SOFR for an applicable interest period, in each case plus an applicable margin. The applicable margin is determined by reference to the Borrower’s First Lien Net Leverage Ratio (as defined in the Credit Agreement) and ranges from (i) 0.75% to 1.75% for base rate borrowings and (ii) 1.5% to 2.5% for Term SOFR borrowings. As of September 30, 2025, the weighted-average interest rate on our borrowings was approximately 6.5%.

Current wording

As of March 31, 2026, the weighted-average interest rate on our borrowings under the Credit Agreement was approximately 5.5%.

Previous wording

We manage our exposure to some of our interest rate risk through the use of interest rate caplets, which are derivative financial instruments. On January 12, 2022, we hedged the variability of the cash flows attributable to the changes in the 1-month SOFR interest rate on the first $300 million of the term loan under the prior credit agreement by entering into a 4-year series of 48 deferred premium caplets (“caplets”), which remain in effect under the new Credit Agreement and are set to expire in January 2026.

Current wording

On January 12, 2022, we hedged the variability of the cash flows attributable to changes in the 1-month SOFR interest rates on the first $300 million of the term loan under the prior credit agreement by entering into a 4-year series of 48 deferred premium caplets (“caplets”), which expired in January 2026.

Previous wording

We recognized anunrealized loss, net of taxes, on the change in fair value of the caplets of$1.1 million and $3.0 million for the three and nine months ended September 30, 2025. In comparison, we recognized an unrealized loss, net of taxes, of$4.1 million for both the three and nine months ended September 30, 2024. We also recognized interest income on the caplets of$1.8 million and$5.3 millionfor thethree and nine months ended September 30, 2025, respectively. In comparison, we recognized interest income on the caplets of$2.6 million and$7.7 million for thethree and nine months ended September 30, 2024, respectively. These amounts are reflected in interest expense, netin the condensed consolidated statements of operations and other comprehensive income.

Current wording

We recognized anunrealized loss, net of taxes, on the change in fair value of the interest rate hedging instruments of less than$0.1 million for the three months ended March 31, 2026. In comparison, we recognizedan unrealized loss, net of taxes, of$1.1 million for the three months ended March 31, 2025. We also recognized interest income on the caplets of$0.4 million for thethree months ended March 31, 2026. In comparison, we recognized interest income on the caplets of$1.8 million for thethree months ended March 31, 2025. These amounts arereflected in interest expense, netin the condensed consolidated statements of operations and other comprehensive income. As of March 31, 2026 there has been no realized gain or loss on the interest rate collar.

Previous wording

For the nine months ended September 30, 2025, net cash provided by operating activities was $119.8 million, an increase in cash of $12.1 million compared to the prior-year period due primarily to higher deferred income taxes and changes in working capital adjustments.

Current wording

For the three months ended March 31, 2026, net cash provided by operating activities was $42.7 million, a decrease in cash of $2.0 million compared to the prior-year period due primarily to favorable changes in working capital adjustments for accounts payable and accrued expenses, partially offset by unfavorable changes related to income taxes.

Previous wording

For the nine months ended September 30, 2025, net cash used in investing activities was $80.7 million, a decrease in cash used of $9.5 million compared to the prior-year period. The decrease in cash used was primarily attributable to less cash used for acquisitions and an investment in an unconsolidated affiliate in the prior year, partially offset by higher purchases of property and equipment and an acquisition of an indefinite-lived operating license at Fairmount. We anticipate our capital expenditures will be approximately $75-80 million in 2025, of which $31-32 million relates to Fairmount, $5-7 million relates to Louisiana and the remaining $39-41 million for all other capital expenditures.

Current wording

For the three months ended March 31, 2026, net cash used in investing activities was $23.1 million, a decrease in cash used of $3.1 million compared to the prior-year period. The decrease in cash used was primarily attributable to less cash used for the purchase of property, plant and equipment. We anticipate our capital expenditures will be approximately $60-70 million in 2026.

Previous wording

For the nine months ended September 30, 2025, net cash used in financing activities was $30.2 million, an increase in cash used of $16.2 million compared to the prior-year period. The increase is primarily attributable to lower net borrowings, payments for debt issuance cost on our new credit facility and higher repurchases of our common stock.

Current wording

For the three months ended March 31, 2026, net cash used in financing activities was $42.1 million, an increase in cash used of $14.2 million compared to the prior-year period. The increase is primarily attributable to higher payments on debt and higher repurchases of our Class A-1 common stock.

Previous wording

Our results of operations can fluctuate due to seasonal trends and other factors. For example, the gross revenue per gaming terminal per day is typically lower in the summer when players will typically spend less time indoors at our locations, and higher in cold weather between February and April, when players will typically spend more time indoors at our locations. Our horse racing operations only operate during the months where the weather is conducive to racing, which is typically from late spring through the early fall. Holidays, vacation seasons, and sporting events may also cause our results to fluctuate.

Current wording

Our results of operations can fluctuate due to seasonal trends and other factors. For example, the gross revenue per machine per day is typically lower in the summer when players will typically spend less time indoors at our locations, and higher in cold weather between February and April, when players will typically spend more time indoors at our locations. Our horse racing operations only operate during the months where the weather is conducive to racing, which is typically from late spring through the early fall. Holidays, vacation seasons, and sporting events may also cause our results to fluctuate.