Accel Entertainment, Inc.

First-quarter revenue increased 9% year over year to $352 million, net gaming revenue rose 10% to $331 million, operating income was $27 million versus $26 million a year ago, net income was $15 million, and diluted EPS was $0.17 in both Q1 2026 and Q1 2025. Adjusted EBITDA increased 9% to $54 million. CapEx was $23 million versus $27 million a year ago, operating cash flow was $43 million, and free cash flow was $20 million. The company ended the quarter with $274 million in cash, total debt net of issuance costs of $581 million, net debt of approximately $306 million, and net leverage of approximately 1.4x. For 2026, CapEx is expected to be $60 million to $70 million; management did not give formal revenue or EBITDA guidance, but said it expects free cash flow to continue to grow. They also said Chicago locations could go live in late 2026 or in Q1 2027, and that TITO adoption in Illinois is around 13% so far versus an earlier internal estimate of up to around 20%.

Andy Rubenstein described the quarter as a strong start to 2026 and emphasized that Accel’s hyperlocal model has been resilient through uncertainty from tariffs, inflation and geopolitics. He framed the business as benefiting from trade-down behavior toward local, affordable entertainment and said no material impact from the broader consumer environment had been seen into early Q2. He also highlighted the CEO transition to Mark Phelan effective August 7 and pointed to Chicago as a major near-term growth opportunity.

Brett Summerer walked through the financials, noting revenue of $352 million, net gaming revenue of $331 million, adjusted EBITDA of $54 million, and EPS of $0.17. He explained that a $2 million change in the timing of Fairmount Park purse expense recognition affected quarter-to-quarter comparability, and said excluding that item adjusted EBITDA and net income would have been approximately $2 million and $1.5 million higher, respectively. He also said CapEx should normalize to $60 million to $70 million in 2026, that free cash flow was $20 million with 38% cash conversion, and that the balance sheet remained strong with $274 million in cash, $306 million of net debt, and a fully available $300 million revolver.

Analysts focused on early Illinois TITO adoption, the vertical integration rule in Illinois, gas prices and consumer demand, location pruning in Illinois, Fairmount’s permanent buildout timing, legislative momentum in other states, Nevada’s growth potential, and capital allocation. Management said TITO adoption is around 13% so far, still early, and that any benefit to cash handling will play out over time rather than as a one-time change. On Chicago and Illinois rules, management said the city’s DGT framework is still a wildcard and the vertical integration rule is being contested in court, while on legislation they said they are not particularly optimistic about much legalization progress in 2026. They also said Illinois pruning is opportunistic, Fairmount is still in a maturation phase, and Louisiana remains a key M&A focus with a good pipeline.