Company: ACEL
Filing Date: 2025-08-05
Form Type: 10-Q
Source: 0001698991-25-000034
Chunk: 70

Company: Accel Entertainment, Inc.
Filing Date: 2025-08-05
Form: 10-Q
Item: Item 2
Chunk 70
---
 an increased number of gaming terminals.

Amortization of intangible assets and route and customer acquisition costs

Amortization of intangible assets and route and customer acquisition costs for the three months ended June 30, 2025 were $6.3 million, an increase of $0.7 million, or 13.1%, compared to the prior-year period due to higher amortization expenses on location contracts acquired.

Other expenses, net

Other expenses, net for the three months ended June 30, 2025 were $4.1 million, a decrease of $3.2 million, or 44.1%, compared to the prior-year period. The decrease was primarily attributable to lower fair value adjustments associated with the revaluation of contingent consideration liabilities.

32

Interest expense, net

Interest expense, net for the three months ended June 30, 2025 was $8.8 million, which was essentially flat compared to the prior-year period. We experienced an increase in average outstanding debt, which was offset by lower interest rates and the benefit realized on our interest rate caplets. For the three months ended June 30, 2025, the weighted average interest rate, excluding the impact of our interest rate caplets, was approximately 6.5% compared to 7.7% in the prior-year period.

Loss (gain) on change in fair value of contingent earnout shares

The change in the fair value of contingent earnout shares for the three months ended June 30, 2025 was a loss of $5.7 million, compared to a gain of $4.7 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. 

Income tax expense

Income tax expense for the three months ended June 30, 2025 was $5.1 million, an increase of $1.2 million, or 29.4%, compared to the prior-year period. The effective tax rate for the three months ended June 30, 2025 was 41.2% compared to 21.2% 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 discrete item for tax purposes and can be the primary driver for the fluctuations