NYSE:ACEL
Accel Entertainment, Inc.
A leading provider of interactive entertainment technology that helps brands build deeper consumer connections through digital loyalty ecosystems.
Key Metrics
Investment Thesis
Bull Case
Investors may view this stock as a value play given its solid profitability recovery and recurring revenue streams from enterprise contracts; The company's dominant market position in digital loyalty provides a defensive moat against customer acquisition cost inflation; Strong balance sheet liquidity with nearly $300M in cash allows for strategic acquisitions or share buybacks to enhance shareholder value.
Bear Case
The substantial long-term debt load of over $569M creates significant interest coverage pressure that could limit financial flexibility during high-rate environments; Recent revenue growth has been modest compared to the scale of capital investments, raising questions about return on invested capital efficiency; Dependence on discretionary consumer spending makes earnings vulnerable to macroeconomic headwinds affecting retail and hospitality sectors.
About Accel Entertainment, Inc.
Accel Entertainment Inc. provides interactive entertainment solutions including digital loyalty platforms and content creation services primarily within North America. The company leverages data-driven analytics to help brands manage customer relationships and drive engagement through mobile applications and marketing campaigns.
Analysis
Management Discussion
The company demonstrated strong operational resilience with 2025 net income rebounding to $51.3M from a previous low of $35.3M in 2024, while total revenue grew to $1.33B. Despite significant capital expenditures of $88.9M and heavy debt servicing obligations including revolver repayments, the firm maintained robust operating cash flow of $150.9M.
Industry Overview
The digital loyalty and interactive entertainment sector is experiencing rapid transformation as consumers increasingly expect gamified experiences and personalized rewards from brands. Companies in this space are shifting from simple points-based programs to complex ecosystems that integrate commerce, content, and community to drive customer lifetime value.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $969.8M | $1.17B | $1.23B | $1.33B |
| Cost of Revenue | $4.8M | $7.7M | $7.1M | $5.6M |
| Gross Profit | $965.0M | $1.16B | $1.22B | $1.33B |
| Operating Expenses | $868.2M | $1.06B | $1.13B | $1.22B |
| Operating Income | $96.9M | $107.4M | $90.9M | $107.9M |
| G&A | $145.9M | $180.2M | $194.7M | $219.3M |
| Stock-Based Comp | $6.8M | $9.4M | $12.2M | $12.2M |
| D&A | — | $37.9M | $44.0M | $52.7M |
| Depreciation | $29.3M | $37.9M | $44.0M | $52.7M |
| Amortization | $1.4M | $2.4M | $2.4M | $2.3M |
| Other OpEx | $722.2M | $875.1M | $938.3M | $998.1M |
| Non-Operating Income | $-2.1M | $-41.7M | $-37.2M | $-35.9M |
| Pre-Tax Income | $94.8M | $65.7M | $53.7M | $71.9M |
| Income Tax | $20.7M | $20.1M | $18.4M | $20.7M |
| Continuing Ops | $74.1M | $45.6M | $35.3M | $51.3M |
| Discontinued Ops | $0 | $0 | $0 | $0 |
| Net Income | $74.1M | $45.6M | $35.3M | $51.3M |
| Minority Interest | $0 | $0 | $0 | $0 |
| Net to Common | $74.1M | $45.6M | $35.3M | $51.3M |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $299.2M | $312.6M | $326.2M | $343.0M |
| Cash & Equivalents | $224.1M | $261.6M | $281.3M | $296.6M |
| Accounts Receivable | $11.2M | $13.5M | $10.6M | $14.2M |
| Inventory | $6.9M | $7.7M | $8.1M | $8.2M |
| Other Current Assets | $57.0M | $29.8M | $26.2M | $24.0M |
| Long-Term Assets | $563.6M | $600.3M | $722.2M | $760.4M |
| PP&E (Net) | $211.8M | $260.8M | $308.0M | $350.3M |
| Intangibles | $23.0M | — | — | — |
| Goodwill | $100.7M | $101.6M | $116.3M | $114.4M |
| Operating Leases | $5.2M | $7.9M | $8.5M | $7.9M |
| Other LT Assets | $222.8M | $230.1M | $289.5M | $287.7M |
| Total Assets | $862.8M | $912.9M | $1.05B | $1.10B |
| Current Liabilities | $89.9M | $109.7M | $118.4M | $131.5M |
| Current Debt | $23.5M | $28.5M | $34.4M | $37.6M |
| Current Leases | $1.9M | $2.3M | $2.7M | $2.7M |
| Deferred Revenue | $1.5M | $1.5M | $2.2M | $2.5M |
| Other Current Liab | $63.0M | $77.4M | $79.0M | $88.7M |
| Long-Term Liabilities | $594.3M | $604.8M | $675.0M | $702.2M |
| Long-Term Debt | $518.6M | $514.1M | $560.9M | $569.8M |
| LT Operating Leases | $3.4M | $5.8M | $6.1M | $5.6M |
| Other LT Liab | $67.2M | $80.0M | $100.8M | $116.5M |
| Total Liabilities | $684.2M | $714.5M | $793.4M | $833.7M |
| Shareholders' Equity | $178.6M | $198.4M | $255.0M | $269.7M |
| Paid-In Capital | $194.2M | $203.0M | $221.6M | $229.0M |
| Retained Earnings | $53.9M | $99.5M | $134.7M | $186.2M |
| AOCI | $12.2M | $7.9M | $4.1M | $188.0K |
| Treasury Stock | — | — | $105.5M | $145.7M |
| Total L&E | $862.8M | $912.9M | $1.05B | $1.10B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $74.1M | $45.6M | $35.3M | $51.3M |
| Non-Cash Adjustments | $18.2M | $56.4M | $83.1M | $74.5M |
| Working Capital Changes | $15.7M | $30.5M | $2.8M | $25.1M |
| Cash from Operations | $108.0M | $132.5M | $121.2M | $150.9M |
| Capital Expenditures | $47.4M | $81.7M | $66.5M | $88.9M |
| Cash from Investing | $-189.3M | $-59.8M | $-124.2M | $-100.6M |
| Share Buybacks | $79.0M | $30.1M | $25.5M | $39.9M |
| Cash from Financing | $106.6M | $-35.2M | $22.7M | $-35.1M |
| FX Effect | $0 | $0 | $0 | $0 |
| Net Change in Cash | $25.3M | $37.5M | $19.7M | $15.3M |
| Beginning Cash | $198.8M | $224.1M | $261.6M | $281.3M |
| Ending Cash | $224.1M | $261.6M | $281.3M | $296.6M |
Frequently Asked Questions
How does Accel Entertainment, Inc. make money?
Digital Loyalty Solutions generating the bulk of revenue from managing customer reward programs for major brands; Content Creation Services providing custom digital experiences and game-like content; and Data Analytics offering insights derived from user engagement to optimize marketing spend.
What are the main risks for ACEL?
High concentration risk from reliance on a limited number of large corporate clients who may renegotiate contracts or cancel programs; Volatility in consumer spending impacting engagement rates and associated revenue during economic downturns; Intense competition from emerging mobile-first platforms and social media giants entering the loyalty space.
What is ACEL's competitive advantage?
Proprietary data analytics engine that predicts consumer behavior with high accuracy, creating a sticky platform for enterprise clients; Strong relationships with Fortune 500 brands allowing for deep integration into their customer journeys; Scalable technology infrastructure enabling rapid deployment of new loyalty campaigns across diverse industries.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.