Accel Entertainment ((ACEL)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Accel Entertainment’s recent earnings call highlighted a generally positive sentiment, underscored by strong revenue growth and an increase in EBITDA. This growth was primarily driven by strategic expansions in developing markets such as Nebraska and Georgia, along with the successful integration of acquisitions in Louisiana. Despite a revenue decline in Nevada due to customer loss, the overall sentiment remained optimistic, with the company’s growth and strategic initiatives outweighing the challenges faced.
Strong Revenue Growth
Accel Entertainment reported a 9.1% year-over-year increase in total revenue, reaching $330 million. This growth was significantly bolstered by contributions from developing and new markets, showcasing the company’s successful expansion strategies.
Adjusted EBITDA Growth
The company’s adjusted EBITDA saw an impressive 11.5% year-over-year increase, amounting to $51 million. This growth reflects Accel’s strong cost discipline and effective top-line growth strategies.
Expansion in Nebraska and Georgia
Nebraska and Georgia emerged as key growth markets for Accel, with Nebraska’s revenue increasing by 30% to $9 million and Georgia’s revenue rising by 49.3% to $5 million. This growth was driven by strategic location expansions and market share gains.
Successful Integration in Louisiana
The integration of the Toucan Gaming acquisition in Louisiana has been successful, contributing to about 3% of Accel’s revenue. The company expanded to 670 terminals across nearly 100 locations, demonstrating effective acquisition integration.
New Credit Facility
Accel completed a $900 million senior secured credit facility, which strengthens its balance sheet, enhances liquidity, and lowers the cost of capital. This strategic financial move positions the company for future growth and stability.
Revenue Decline in Nevada
Despite overall positive growth, Nevada experienced a 7.4% revenue decline to $26 million. This was primarily due to the loss of a key customer following a change in ownership, highlighting a challenge in maintaining revenue in this market.
Forward-Looking Guidance
Looking ahead, Accel Entertainment plans to continue optimizing its gaming routes, expand its market presence, and explore mergers and acquisitions, particularly in Louisiana, to drive future growth. The company remains focused on enhancing its core markets while capitalizing on new opportunities in developing regions.
In summary, Accel Entertainment’s earnings call painted a picture of robust growth and strategic expansion, despite some challenges in Nevada. The company’s strong revenue and EBITDA growth, coupled with successful market expansions and financial strategies, underscore a positive outlook for future performance.