Accel Entertainment ((ACEL)) has held its Q4 earnings call. Read on for the main highlights of the call.
Accel Entertainment’s recent earnings call exuded a positive sentiment, underscoring the company’s robust financial performance and strategic market expansions. Despite facing some hurdles in the Nevada market and making strategic closures in Illinois, Accel’s impressive revenue growth, expansion initiatives, and share repurchase plans paint an optimistic picture for the future.
Record-Setting Annual Revenue
Accel Entertainment celebrated a milestone year, achieving a record-setting total revenue of $1.2 billion and an adjusted EBITDA of $189 million. This remarkable financial performance highlights the company’s strong growth trajectory and its ability to capitalize on market opportunities.
Successful Market Expansion
The company made significant strides in market expansion by entering Louisiana on November 1st and acquiring Fairmont Park outside Saint Louis on December 2nd. These strategic moves underscore Accel’s commitment to broadening its footprint and tapping into new revenue streams.
Growth in Core Markets
In its home market of Illinois, Accel posted a 4% year-over-year growth in gross gaming revenue (GGR), outperforming local casinos. This resilience in core markets demonstrates the company’s strong competitive position and ability to thrive despite external challenges.
Increase in Terminals and Locations
As of December 31st, Accel reported 26,346 terminals in 4,117 locations, reflecting year-over-year increases of 5% and 3.9%, respectively. This growth in infrastructure is indicative of Accel’s strategic efforts to expand its operational capacity and market reach.
Share Repurchase Program
The company repurchased 2.4 million shares for $25 million in 2024, with a renewed authorization of $200 million for further repurchases. This move signals confidence in Accel’s financial strength and commitment to enhancing shareholder value.
Positive Performance in Several States
Accel reported revenue per location increases in Illinois (3.5%), Montana (4.6%), and Nebraska (5.9%), highlighting strong performance across key states. These results reflect the company’s effective operational strategies and market adaptability.
Decline in Nevada Revenue
Despite overall positive results, Accel faced challenges in Nevada, where revenue per location decreased by 6.7% year-over-year. This decline indicates specific market difficulties that the company may need to address moving forward.
Strategic Closures in Illinois
In response to a 1% increase in state gaming tax, Accel strategically closed fifty-four underperforming locations in Illinois. This decision reflects the company’s focus on maintaining profitability and optimizing its operational model.
Forward-Looking Guidance
Looking ahead, Accel Entertainment aims for mid-single-digit EBITDA growth and plans to continue investing in high-margin revenue gaming products and labor-light self-service technology. The company is also focused on optimizing its sales and operating model, with significant capital expenditures expected in 2025, ranging from $75 million to $80 million. These forward-looking strategies highlight Accel’s commitment to sustainable growth and operational efficiency.
In conclusion, Accel Entertainment’s earnings call conveyed an overall positive sentiment, driven by strong financial results and strategic initiatives. The company’s record-setting revenue, successful market expansions, and proactive operational strategies position it well for future growth, despite some challenges in specific markets.