Company: ACEL
Filing Date: 2025-08-05
Form Type: 10-Q
Source: 0001698991-25-000034
Chunk: 46

Company: Accel Entertainment, Inc.
Filing Date: 2025-08-05
Form: 10-Q
Item: Item 1
Chunk 46
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 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 in the tax rate year over year.

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The following table summarizes our results of operations on a consolidated basis for the six months ended June 30, 2025 and 2024:

(in thousands, except %'s)Six Months EndedJune 30,Increase / (Decrease)20252024Change ($)Change (%)Net revenues:Net gaming$615,870 $581,377 $34,493 5.9 %Amusement11,425 11,668 (243)(2.1)%Manufacturing5,621 7,417 (1,796)(24.2)%ATM fees and other26,905 10,768 16,137 149.9 %Total net revenues659,821 611,230 48,591 7.9 %Operating expenses:Cost of revenue (exclusive of depreciation and amortization expense shown below)451,230 422,484 28,746 6.8 %Cost of manufacturing goods sold (exclusive of depreciation and amortization expense shown below)2,962 4,321 (1,359)(31.5)%General and administrative107,882 94,175 13,707 14.6 %Depreciation and