Accel Entertainment, Inc.

Previous 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.

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 half 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 to our tax expense for the three months ended March 31, 2026, which was 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 taxpayers 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 current tax expense for the three and six months ended June 30, 2026, which was offset by an increase to deferred tax expense.

Previous 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:

Current wording

Total net revenues for the three months ended June 30, 2026 were $368.1 million, an increase of $32.2 million, or 9.6%, compared to the prior-year period. This increase was primarily driven by higher net gaming revenue of $33.5 million, which reflected an increase in gaming locations, terminals and revenue from our casino operations, partially offset by a decrease in manufacturing revenue of $1.2 million, or 67.8%, due to lower equipment and software sales. Net revenues by state are presented below:

Previous 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.

Current wording

Cost of revenue for the three months ended June 30, 2026 was $252.6 million, an increase of $22.9 million, or 10.0%, 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 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.

Current wording

Cost of manufacturing goods sold for the three months ended June 30, 2026 was $0.3 million, a decrease of $0.6 million, or 69.8%, compared to the prior-year period due to the previously mentioned decrease in equipment and software sales.

Previous 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.

Current wording

General and administrative expenses for the three months ended June 30, 2026 were $59.6 million, an increase of $4.7 million, or 8.5%, compared to the prior-year period. The increase was primarily attributable to higher compensation-related costs, as we continue to grow our operations, as well as higher professional fees and advertising costs.

Previous 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.

Current wording

Depreciation and amortization of property and equipment for the three months ended June 30, 2026 was $13.8 million, an increase of $0.7 million, or 5.6%, 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 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.

Current wording

Amortization of intangible assets and route and customer acquisition costs for the three months ended June 30, 2026 were $6.8 million, an increase of $0.5 million, or 7.9%, compared to the prior-year period was primarily due to an increase in route and customer acquisition costs.

Previous 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.

Current wording

Interest expense, net for the three months ended June 30, 2026 was $8.6 million, which was a decrease of $0.1 million, or 1.5%, compared to the prior-year period. We experienced lower interest rates, partially offset by the absence of the prior year benefit realized on our interest rate caplets and an increase in average outstanding debt. For the three months ended June 30, 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 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.

Current wording

The change in the fair value of contingent earnout shares for the three months ended June 30, 2026 was a loss of $5.0 million, compared to a loss of $5.7 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 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.

Current wording

Income tax expense for the three months ended June 30, 2026 was $5.9 million, an increase of $0.8 million, or 15.4%, compared to the prior-year period. The effective tax rate for the three months ended June 30, 2026 was 31.9% compared to 41.2% 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 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

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.

Current wording

Other expenses, net for the six months ended June 30, 2026 were $6.5 million, a decrease of $0.4 million, or 5.9%, compared to the prior-year period. The decrease was primarily attributable to lower non-recurring expenses, lower fair value adjustments associated with the revaluation of contingent consideration liabilities and lower lobbying and legal expenses related to new markets, partially offset by losses on sales of assets.

Previous wording

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

Previous wording

(1)Loss on sale of fixed assets was $0.7 million for the three months ended March 31, 2026 and is included in Other expenses, net. Loss on sale of fixed assets was $0.1 million for the three months ended March 31, 2025 and is presented in general and administrative expenses, which is not an adjustment for EBITDA.

Current wording

(1)Loss on sale of fixed assets was$2.5 million and $3.2 millionfor the three and six months ended June 30, 2026, respectively, and is included in Other expenses, net. Loss on sale of fixed assets was$0.1 million and $0.3 millionfor thethree and six months ended June 30, 2025, respectively, and is presented in general and administrative expenses, which is not an adjustment for EBITDA. Also includes approximately$0.1 million for both the loss contributed from unconsolidated affiliates and emerging markets for thethree and six months ended June 30, 2026, and 2025.

Previous 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.

Current wording

Adjusted EBITDA for the three months ended June 30, 2026, was$58.9 million, an increase of $5.7 million, or 10.8%, compared to the prior-year period. Adjusted EBITDA for the six months ended June 30, 2026, was$112.7 million, anincrease of$10.0 million, or 9.7%, compared to the prior-year period. The increase for both periods 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 (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.

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 June 30, 2026, we had $255.5 million in cash and cash equivalents.

Previous wording

From time to time, we may take advantage of favorable financing terms offered by vendors for purchases of property and equipment. Financed property and equipment totaled$4.5 million and $4.8 millionas of March 31, 2026 and December 31, 2025, respectively, of which $1.7 million is recorded in accounts payable and other accrued expenses for both periods with the remaining $2.8 million and$3.1 million recorded in other long-term liabilities on the condensed consolidated balance sheets for theyears ended March 31, 2026, and December 31, 2025, respectively.

Current wording

From time to time, we may take advantage of favorable financing terms offered by vendors for purchases of property and equipment. Financed property and equipment totaled$4.2 million and $4.8 millionas of June 30, 2026 and December 31, 2025, respectively, of which $1.7 million is recorded in accounts payable and other accrued expenses for both periods with the remaining $2.5 million and$3.1 million recorded in other long-term liabilities on the condensed consolidated balance sheets as of June 30, 2026, and December 31, 2025, respectively.

Previous 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.

Current wording

We recognized interest income on the caplets of$0.4 million for thesix months ended June 30, 2026, as the caplets expired in January of 2026. In comparison, we recognized interest income on the caplets of$1.8 million and$3.6 million for thethree and six months ended June 30, 2025, respectively. These amounts arereflected in interest expense, netin the condensed consolidated statements of operations and other comprehensive income.

Previous wording

On May 1, 2026, we purchased $18.2 million of 2025 production tax credits for a total cost of $16.9 million. We will use the purchased tax credits on our 2025 federal tax return. Any excess credits that are not used on the 2025 federal tax return will be carried back to tax years 2022-2024 and will be fully utilized.

Current wording

On May 1, 2026, we purchased $18.2 million of 2025 production tax credits for a total cost of $16.9 million. We will use the purchased tax credits on our 2025 federal tax return to the extent allowable. Any excess credits that were not utilized on the 2025 federal tax return were carried back to tax years 2022-2024 and fully utilized.

Previous 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.

Current wording

For the six months ended June 30, 2026, net cash provided by operating activities was $62.7 million, a decrease in cash provided of $1.9 million compared to the prior-year period due primarily to unfavorable working capital adjustments largely due to an increase in income tax receivables due to the previously mentioned purchase of production tax credits, partially offset by increases in operating income attributable to higher revenues.

Previous 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.

Current wording

For the six months ended June 30, 2026, net cash used in investing activities was $47.2 million, a decrease in cash used of $12.8 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, and the absence of cash paid for an operating license in the prior year period, partially offset by increased cash used for business acquisitions. We anticipate our capital expenditures will be approximately $60-70 million in 2026.

Previous 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.

Current wording

For the six months ended June 30, 2026, net cash used in financing activities was $56.6 million, an increase in cash used of $35.3 million compared to the prior-year period. The increase is primarily attributable to higher net repayments on debt.