• Revenue: $302 million, a year-over-year increase of 5.1%.

• Adjusted EBITDA: $46 million, a year-over-year increase of 3.9%.

• Terminals and Locations: 25,729 terminals in 4,014 locations, year-over-year increases of 4.1% and 2.8% respectively.

• Revenue per Location: Illinois: $839 per day (+1.7% YoY), Montana: $613 per day (+3.7% YoY), Nevada: $802 per day (flat YoY), Nebraska: $257 per day (+16.8% YoY).

• Capital Expenditures: $17 million for the third quarter; projected $60-65 million for 2024.

• Net Debt: Approximately $289 million.

• Liquidity: $538 million, including $265 million in cash and $273 million credit facility availability.

• Share Repurchase Program: 585,000 shares repurchased at $10.52 per share, totaling $6 million; 70% completed with 13.5 million shares repurchased for $140 million.

• Warning! GuruFocus has detected 6 Warning Signs with ACEL.

Release Date: October 30, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Accel Entertainment Inc (NYSE:ACEL) reported strong financial performance with Q3 2024 revenue of $302 million and adjusted EBITDA of $46 million, showcasing resilience in their local gaming offering.

• The company made significant progress in its pending acquisition of Fairmont Park, expected to close in early December, which includes a master sports betting license and partnership with Fanduel.

• Accel Entertainment Inc (NYSE:ACEL) demonstrated growth in its largest market, Illinois, with a 5% year-over-year increase in market-wide GGR, outperforming Illinois casinos.

• The company is optimizing its operations by strategically closing underperforming locations and focusing on high-performing sites, which is expected to enhance returns on invested capital.

• Accel Entertainment Inc (NYSE:ACEL) is actively pursuing growth opportunities through M&A, with a focus on acquiring establishments in markets where it is profitable and preparing for future opportunities in new states likely to legalize local gaming.

Negative Points

• The company faced a modest drag from recent tax increases in Illinois, impacting profitability and prompting strategic closures of underperforming locations.

• Sequential decline in location count in Illinois due to strategic closures and delays in openings caused by the cancellation of a gaming board meeting.

• The introduction of new gaming terminals led to elevated capital expenditures, with projected CapEx for 2024 between $60 million and $65 million, although expected to decrease in the longer term.

• The acquisition of Fairmont Park involves significant capital investment, with the project expected to cost between $20 million and $25 million over the next couple of years.

• The company faces challenges in the M&A market, with a narrowing bid-ask differential and the need to overcome hurdles with potential targets to reach agreements.