Accel Entertainment NYSE: ACEL reported record second-quarter revenue and adjusted EBITDA, citing higher productivity in Illinois, growth in developing markets and continued preparation for the opening of video gaming terminals in Chicago.
Revenue rose 10% year over year to $368 million, while adjusted EBITDA increased 11% to a record $59 million. Operating income was $32 million, up from $27 million in the prior-year quarter. Net income increased to $13 million from $7 million, and diluted earnings per share rose to $0.15 from $0.08.
The company ended the quarter operating nearly 4,700 locations and more than 29,000 gaming terminals, representing year-over-year increases of 6% and 7%, respectively. Founder, Chairman and Chief Executive Officer Andy Rubenstein said the results reflected the durability of Accel's distributed gaming model, growth in its largest market and contributions from developing markets.
Illinois productivity and Chicago licensing
Illinois remained the foundation of Accel's business. Revenue from Illinois distributed gaming operations, excluding Fairmount Park, rose 6% year over year, supported by higher hold per day and a higher-performing customer mix. Average Illinois location hold per day increased 9% to $992, even as the company’s Illinois location and terminal counts declined modestly.
President Mark Phelan said the company is prioritizing route quality rather than absolute machine or location growth. Locations added to the Illinois route generally have higher performance, while locations removed were often lower-volume, unprofitable or independently closed establishments, he said.
Accel also completed the rollout of ticket-in, ticket-out technology, or TITO, across its Illinois installed base. Phelan said the technology has received encouraging customer feedback and is beginning to reduce the amount of cash held in the field, which could improve working capital over time. Rubenstein said it was difficult to isolate any revenue contribution from TITO but that the company believes it reduces friction for players.
Chicago remained a central near-term opportunity. The Illinois Gaming Board issued establishment licenses for video gaming locations in June and July, and Accel had been approved for 17 of the 39 establishments licensed to date, or about 44%. The city’s Department of Business Affairs and Consumer Protection has begun accepting and processing city video gaming license applications.
Rubenstein said Accel expects the first Chicago establishments could begin operating in the coming weeks, although the precise timing remains uncertain. The company has staged equipment, mapped routes and prepared logistics infrastructure for deployments. Phelan said Accel ultimately expects its Chicago share to be relatively close to its statewide market share.
Management continues to estimate that Chicago could represent roughly $1 billion in total revenue at maturity, based on the city’s population and Illinois market trends, though Rubenstein said a full deployment could take more than five years.
Developing markets and Fairmount Park
Outside Illinois, Nebraska and Georgia posted revenue growth of 55% and 47%, respectively. Phelan said both markets also generated significant adjusted EBITDA growth and are becoming more meaningful contributors to companywide earnings growth.
In Nevada, quarterly revenue grew 17% year over year, while locations and terminals increased 54% and 53%, respectively. The expansion reflected the Dynasty Games acquisition and agreements involving Anabi Oil-owned Rebel and Green Valley Grocery convenience stores. Accel’s agreement with Green Valley Grocery added approximately 600 terminals in Southern Nevada, bringing its terminal count with Anabi Oil to more than 1,000.
Nevada hold per day declined 15.8% year over year, which Phelan attributed primarily to a shift toward convenience-store locations, which produce lower hold per day than participation bars. He said the Rebel and Green Valley sites are in the early stages of upgrades that include improved equipment, refreshed gaming environments, payment technology and the AE Player Rewards loyalty program. Accel expects the transition process to take six to 12 months.
In Louisiana, the company completed its acquisition of Rice Palace Truck Stop Casino, adding 50 gaming terminals with plans to expand the site to 60 terminals. Toucan revenue rose 14% year over year and terminal count increased 27%. Phelan said Accel sees additional acquisition opportunities in the state.
Fairmount Park delivered its highest quarterly gross profit since Accel acquired the property, with gross profit rising 33% from the second quarter of 2025. Management said table games and slots continued to gain traction, while gaming revenue supported an approximately $500,000 increase in 2026 racing purses. The company remains committed to developing a permanent casino at the property and expects to provide further details on the scope and timing over the next quarter or two.
Cash flow, capital spending and share repurchases
Operating cash flow was $20 million in the second quarter, equal to 34% of adjusted EBITDA, compared with $43 million, or 80% of adjusted EBITDA, in the first quarter. Chief Financial Officer Brett Summerer said the company purchased a green tax credit that moved $17 million of operating cash flow from the second quarter into the third quarter. Excluding that purchase, operating cash flow would have been $37 million, or 63% of adjusted EBITDA.
Free cash flow was $10 million, or 16% of adjusted EBITDA, during the quarter. Excluding the tax-credit purchase, free cash flow was $26 million, or 45% of adjusted EBITDA. Summerer cautioned that working-capital movements can materially affect quarterly free cash flow.
Accel expects full-year capital expenditures of $60 million to $70 million, depending on year-end payment timing and Chicago licensing and deployment timing, compared with approximately $89 million in 2025. The company said most spending is replacement capital for newer equipment at existing locations, with expected paybacks generally between two and three years.
The company ended the quarter with approximately $255 million in cash and cash equivalents, total debt of approximately $573 million and net debt of about $318 million. Net leverage was approximately 1.4 times trailing 12-month adjusted EBITDA, while its $300 million revolving credit facility was undrawn.
Accel repurchased approximately 500,000 shares for $5.6 million during the quarter, bringing first-half repurchases to 1.6 million shares for $18 million. Since beginning its buyback program in late 2021, the company has repurchased about $201 million of shares and had approximately $146 million of remaining authorization.
Leadership transition
Rubenstein said the call was his final quarterly earnings call as chief executive. Phelan is scheduled to become CEO on Aug. 7, while Rubenstein will remain chairman. The company also promoted Stan Guidroz to chief operating officer.
Phelan said he intends to emphasize Accel’s evolution from a logistics-focused business toward a gaming and hospitality company, with investments in player experience, exclusive content where allowed, hospitality and table games at Fairmount Park, and portfolio upgrades in Nevada.
About Accel Entertainment (NYSE:ACEL)
Accel Entertainment, Inc is a Chicago-based gaming and entertainment company specializing in the provision of regulated electronic gaming terminals and related management services to licensed establishments across the United States. The company’s core offerings include video gaming terminals (VGTs), digital payment solutions, player loyalty programs and compliance support, all designed to enhance customer engagement and operational efficiency for bars, restaurants, truck stops and convenience stores.
Founded in 2005, Accel Entertainment has built a network that spans multiple states, including Illinois, Pennsylvania, Ohio, and Iowa.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
Continue following MarketBeat
Add MarketBeat as your preferred source on Google to see our latest stories in your feed.
Before you consider Accel Entertainment, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Accel Entertainment wasn't on the list.
While Accel Entertainment currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
MarketBeat just released its list of the 7 hottest IPOs expected to hit Wall Street in 2026. See which companies are preparing to go public and why investors are watching closely.
Get This Free Report
