Company: ACEL
Filing Date: 2025-05-05
Form Type: 10-Q
Source: 0001698991-25-000023
Chunk: 26

Company: Accel Entertainment, Inc.
Filing Date: 2025-05-05
Form: 10-Q
Item: Item 1
Chunk 26
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 rate curves. The valuation of the interest rate caplets is considered to be a Level 2 fair value measurement as the significant inputs are observable. Unrealized changes in the fair value of the interest rate caplets are classified within other comprehensive income on the accompanying condensed consolidated statements of operations and comprehensive income. Realized gains on the interest rate caplets are recorded to interest expense, net on the accompanying condensed consolidated statements of operations and comprehensive income and included within cash payments for interest, net on the condensed consolidated statements of cash flow. Liabilities measured at fair valueThe following tables summarizes the Company’s liabilities that are measured at fair value on a recurring basis (in thousands):Fair Value Measurement at Reporting Date UsingMarch 31, 2025Quoted Prices in Active Markets for Identical Assets (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)Liabilities:Contingent consideration$13,797 $— $— $13,797 Contingent earnout shares30,748 — 30,748 — Total$44,545 $— $30,748 $13,797 Fair Value Measurement at Reporting Date UsingDecember 31, 2024Quoted Prices in Active Markets for Identical Assets (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)Liabilities:Contingent consideration$13,928 $— $— $13,928 Contingent earnout shares33,103 — 33,103 — Total$47,031 $— $33,103 $13,928 Contingent ConsiderationThe Company uses a discounted cash flow analysis to determine the value of contingent consideration upon acquisition and updates this estimate on a recurring basis. The significant assumptions used in the Company's cash flow analysis includes the probability adjusted projected revenues after state taxes, a discount rate as applicable to each acquisition, and the estimated number of locations that “go live” with the Company during the contingent consideration period. The valuation of the Company's contingent consideration is considered to be a Level 3 fair value measurement as the significant inputs are unobservable and require significant judgment or estimation. Changes in the fair value of contingent consideration liabilities are classified within other expenses, net on the accompanying condensed consolidated statements of operations and comprehensive income.Contingent earnout shares