Accel Entertainment(ACEL) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - For Q4 2024, total revenue reached $318 million, a year-over-year increase of 6.9$47 million, up 6.2% year-over-year [23] - For the full year, total revenue was $1.2 billion, reflecting a 5.2$189 million [7][23] - As of December 31, the company had 26,346 terminals across 4,117 locations, representing year-over-year increases of 5% and 3.9%, respectively [23] Business Line Data and Key Metrics Changes - In Illinois, revenue per location was $868 per day, a 3.5$614 per day, up 4.6% year-over-year [23] - Nebraska reported $253 per day, a 5.9$786 per day [23] Market Data and Key Metrics Changes - Illinois, the largest market, posted market-wide GGR growth of 4% year-over-year, outperforming Illinois casinos which were down 3% year-over-year [8] - The company strategically closed 54 underperforming locations in 2024 to right-size operations in response to a 1% increase in state gaming tax [10] Company Strategy and Development Direction - The company is focused on organic growth in Illinois, Nebraska, and Georgia, while also pursuing M&A opportunities in the fragmented local gaming market [16][17] - The Fairmont acquisition includes a master sports betting license and aims to develop a locally focused casino, with phase one expected to open in Q2 2025 [19][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth opportunities within the local gaming market, emphasizing the importance of maintaining a healthy balance sheet and low leverage [30] - The company is optimistic about the potential rollout of ticket in, ticket out (TITO) technology in 2025, which is expected to enhance the gaming experience [13] Other Important Information - Capital expenditures for 2024 were $67 million, with forecasts of$75 million to $80 million for 2025 [25] - The board authorized replenishing the share repurchase program back to$200 million, indicating a commitment to returning capital to shareholders [26][27] Q&A Session Summary Question: Contributions from Louisiana and Fairmont to the model - Management indicated that Louisiana is expected to contribute $6 million of EBITDA for the full year 2025, with Fairmont projected to generate$25 million of EBITDA once fully operational [34] Question: Trends in Illinois and other markets - Management noted favorable weather conditions in January contributed to strong performance, while February saw less favorable conditions [38] Question: Pruning of Illinois units and future growth - Management clarified that pruning is an ongoing process and that growth will manifest as assets are redeployed into better-performing locations [44] Question: Expansion in e-pull tabs and legislative developments - Management acknowledged the potential of the e-pull tab market but emphasized the need for partnerships to participate effectively [49] Question: Growth opportunities in Louisiana - Management highlighted the fragmented nature of the Louisiana market, particularly in truck stops and bars, as a significant growth opportunity [61]