Company: ACEL
Filing Date: 2025-05-05
Form Type: 10-Q
Source: 0001698991-25-000023
Chunk: 67

Company: Accel Entertainment, Inc.
Filing Date: 2025-05-05
Form: 10-Q
Item: Item 2
Chunk 67
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59.3 %

Non-GAAP Financial Measures

Adjusted EBITDA and Adjusted net income are non-GAAP financial measures, but are key metrics management uses to monitor ongoing core operations. Adjusted EBITDA and Adjusted net income exclude the effects of certain non-cash items or represent certain nonrecurring items that are unrelated to core performance. Management believes these non-GAAP financial measures enhance the understanding of our underlying drivers of profitability, trends in our business, and facilitate company-to-company and period-to-period comparisons. Management also believes that these non-GAAP financial measures are used by investors, analysts and other interested parties as measures of financial performance and to evaluate our ability to fund capital expenditures, service debt obligations and meet working capital requirements. 

Adjusted net income is defined as net income plus: 

•Amortization of intangible assets and route and customer acquisition costs 

•Stock-based compensation expense

•Loss from unconsolidated affiliates

34

•(Gain) loss on change in fair value of contingent earnout shares

•Other expenses, net which consists of (i) non-cash expenses including the remeasurement of contingent consideration liabilities, (ii) non-recurring lobbying and legal expenses related to distributed gaming expansion in current or prospective markets, and (iii) other non-recurring expenses

•Tax effect of adjustments

Adjusted EBITDA is defined as net income plus:

•Amortization of intangible assets and route and customer acquisition costs 

•Stock-based compensation expense

•Loss from unconsolidated affiliates

•(Gain) loss on change in fair value of contingent earnout shares

•Other expenses, net 

•Tax effect of adjustments

•Depreciation and amortization of property and equipment

•Interest expense, net

•Emerging markets which reflects the results, on an Adjusted EBITDA basis, for non-core jurisdictions where our operations are developing

◦Markets are no longer considered emerging when we have installed or acquired at least 500 gaming terminals in the jurisdiction, or when 24 months have elapsed from the date we first install or acquire gaming terminals in the jurisdiction, whichever occurs first

◦We currently view Pennsylvania as an emerging market

◦Prior to January 2024, Iowa was considered an emerging market

•Income tax expense

35

Adjusted net income and Adjusted EBITDA

(in thousands)Three Months EndedMarch 31,Increase / (