What Management Said
Read the full Q1 2026 transcript ↗For reconciliations of the non-GAAP measures as well as other information regarding these measures, please refer to our earnings release and other materials in the Investor Relations section of our website. Accel Entertainment delivered a strong start to 2026 with the company's highest ever Q1 Adjusted EBITDA result. First quarter revenue increased 9% YoY to $352 million, marking an all-time quarterly record for the company. Adjusted EBITDA also grew 9% to $54 million, reflecting solid underlying performance across the business.
Total Illinois revenue, excluding Fairmount Park, increased 6% YoY to $242 million. Chicago represents one of the most exciting near-term growth opportunities we have seen in some time. Nebraska delivered outstanding results with revenue increasing 57% YoY, and total average location hold per day up 57%, supported by new machine placements. We continue to see the benefit of our operating leverage with the business growth and market density.
Georgia also delivered strong growth with revenue up 43% YoY and total average location hold per day up 14%. In Nevada, we grew locations 27% and terminals 28% YoY, reflecting the significant footprint expansion from the Dynasty Games acquisition and our new route partnership with Rebel Convenience Stores. Our $300 million revolving credit facility remains fully undrawn, providing significant financial flexibility as we continue to evaluate organic growth, tuck-in acquisitions, and capital return opportunities. Our cost to serve allows us to flex, which means we have the ability to manage our business efficiently, even in periods of softer consumer demand.
What went well
- Record first quarter: total revenue rose 9% YoY to an all-time quarterly record of $352 million, and adjusted EBITDA grew 9% to $54 million, the company's highest-ever Q1 adjusted EBITDA result.
- Net gaming revenue increased 10% YoY to $331 million, the primary driver of the top line, with growth described as broad-based across Illinois, Nebraska, Georgia, Nevada, and Louisiana.
- Developing markets delivered outstanding growth: Nebraska revenue up 57% YoY, Georgia revenue up 43% YoY, and Louisiana revenue up 12% YoY, aided by new machine placements and proprietary content.
- Illinois, the foundation of the business, grew revenue (excluding Fairmount Park) 6% YoY to $242 million with total average location hold per day up 9% YoY, driven by route optimization and higher-yielding placements even as VGT counts stayed broadly flat.
- Nevada footprint expanded sharply via the Dynasty Games acquisition and the new Rebel Convenience Stores route partnership, lifting locations 27% and terminals 28% YoY to 450 locations and 3,348 gaming terminals.
- Strong balance sheet and shareholder returns: $274 million cash, net leverage of ~1.4x, a fully undrawn $300 million revolver, ~1.1 million shares repurchased for $12 million in the quarter, plus the launch of live dealer table games at Fairmount Park.
What went wrong
- Net income was essentially flat at $15 million and diluted EPS was $0.17 in both Q1 2026 and Q1 2025, as higher operating income was offset by higher depreciation and amortization on the growing asset base and the timing of purse expense.
- A $2 million shift in the timing of the Fairmount Park purse expense accrual pulled expense earlier into the year; excluding it, adjusted EBITDA and net income would have been approximately $2 million and $1.5 million higher, respectively.
- TITO player adoption is running at about 13%, below the internal estimate of up to roughly 20%, and management cautioned that any cash-handling and cost benefit will play out gradually and is difficult to isolate (all terminals only became TITO-enabled a handful of weeks ago).
- Management is not particularly optimistic about legislative progress in 2026: the Virginia VGT/skill-games bill was vetoed by the governor and little other legalization is expected to advance across states this year.
- Illinois location count declined modestly YoY under a deliberate pruning strategy, and Chicago remains a regulatory wild card as the city has not yet promulgated VGT rules while the JCAR-approved vertical integration rules have been contested by some operators in circuit court.
Guidance Changes
| Metric | Period | Current guidance |
|---|---|---|
| Full-year CapEx | FY2026 | $60 million-$70 million, mostly maintenance-oriented with growth capital concentrated in developing markets |
| Free cash flow | FY2026 and beyond | Expected to continue to grow as CapEx normalizes and developing markets scale profitably; now a key priority and a metric to be discussed more regularly (Q1 free cash flow was $20 million, 38% cash conversion) |
| Chicago VGT market launch | Late 2026 / Q1 2027 | First Chicago locations could go live in late 2026 or the first quarter of 2027, pending final regulatory approvals and city rulemaking |
| TITO benefit ramp | Remainder of 2026 | Benefit expected to build through the rest of 2026 as players grow accustomed to TITO; adoption ~13% and not yet tapered off |
| EBITDA margin seasonality | FY2026 | Not quantified (forward-looking); management pointed to prior-year pattern where Q4 was higher and Q1-Q3 were in the mid-15% range, with the non-regulated 'all other' gross margin increasing |
| Fairmount purse increase | FY2026 | Total purses increased $500,000 for the 2026 season (a full-year impact; the accrual-timing change is otherwise full-year neutral) |
Performance Breakdown
| Metric | YoY | Note |
|---|---|---|
| Total revenue | +9% to $352 million | All-time quarterly record; broad-based strength across Illinois, Nebraska, Georgia, Nevada, and Louisiana. |
| Net gaming revenue | +10% to $331 million | Primary driver of top-line performance across the distributed gaming footprint. |
| Adjusted EBITDA | +9% to $54 million | Highest-ever Q1 result; growth essentially in line with revenue, dampened ~$2 million by the Fairmount purse-accrual timing shift. |
| Net income | Flat at $15 million | Higher operating income offset by higher D&A on the growing asset base and the timing of purse expense; diluted EPS $0.17 in both years. |
| Operating income | $27 million vs. $26 million prior year | Modest increase on revenue growth. |
| Locations / gaming terminals | +3% to 4,540 locations / +4% to 28,353 terminals | Growth in developing markets and Nevada expansion, partly offset by deliberate Illinois pruning. |
| Illinois revenue (ex-Fairmount) | +6% to $242 million; hold per day +9% | Strategic location optimization, new machine placements, and TITO rollout; VGT counts broadly flat in a mature market. |
| Developing markets (Nebraska / Georgia / Louisiana / Montana) | Nebraska revenue +57%, Georgia revenue +43%, Louisiana revenue +12%, Montana hold per day +5% | New machine placements, proprietary content, market density, and operating leverage; Georgia locations +20% and terminals +35%. |
Earnings Call Themes & Trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Chicago VGT market opportunity | Signing up locations while awaiting regulatory approvals | Called one of the most exciting near-term growth opportunities in company history; the Illinois Gaming Board is processing applications, first locations could go live late 2026 or Q1 2027, though the city has not yet promulgated VGT rules (management handicaps rules within about a quarter). | — |
| TITO rollout in Illinois | Rollout progressing; internal estimate of up to ~20% adoption | All terminals now TITO-enabled (reached 100% only weeks ago); adoption ~13% with potential upside, and benefit to cash handling and cost expected to build organically through 2026. | — |
| Gaming & hospitality repositioning | Viewed more as a logistics business competing on efficiency, scale, and cost | Increasingly framed as a gaming and hospitality business competing on experience, content, relationships, and differentiation, which commands better economics and is seen as the next phase of margin expansion (exclusive content, table games, higher purses, TITO, Rebel upgrades). | — |
| Capital allocation and free cash flow | Disciplined, return-focused framework across organic investment, M&A, debt reduction, and buybacks | Free cash flow elevated as a key priority and a metric to discuss more regularly ($20 million in Q1, 38% cash conversion); ~1.1 million shares bought back for $12 million; ~$151.2 million remaining on the buyback authorization; new interest rate collar (4% cap / 2.92% floor, matures Sept 2029). | — |
| Leadership transition | Announced in February 2026 | Andy Rubenstein has moved to Chairman and Mark Phelan will assume the CEO role effective August 7, 2026, after 17 years of building the business; full confidence expressed in the leadership team. | — |
| Macro resilience and trade-down tailwind | — | Amid tariffs, inflation, and geopolitical uncertainty, management stresses the hyper-local, community-rooted model as highly resilient and potentially benefiting from consumer trade-down toward local, affordable entertainment; no material impact observed into Q2 to date, and no noticeable gas-price effect on players. | — |
| M&A / bolt-on pipeline | Active and attractive pipeline | Louisiana remains the top focus with more favorable seller price expectations and Accel as buyer of choice; Illinois still offers accretive route acquisitions; all markets viewed as potential acquisition candidates, with any deal required to be accretive. | — |
| Fairmount Park evolution | Casino operations the primary driver; heavy construction investment in 2025 | Launched live dealer table games (Blackjack, Roulette, Ultimate Texas Hold'em, Baccarat, novelty games) in April 2026; new gaming revenue reinvested into racing with purses up $500,000; over 7,000 attendees on Derby Day; optimal size of 'The Permanent' still being evaluated. | — |
Q&A Summary
Patrick Keough (Truist Securities) asked for early color on TITO player adoption in Illinois and any impact on cash-handling costs.
Brett Summerer said adoption is running around 13% versus an internal estimate of up to ~20% and has not fully tapered off, so there may be more upside. He cautioned it is not a one-time cash benefit; rising overall play increases cash on the street (and pickup cost), while TITO reduces it organically over time. With 100% TITO-enablement only reached weeks ago, more benefit should show up as additional cash in banks and in the cost structure.
Patrick Keough (Truist Securities) followed up on the JCAR-approved Illinois Gaming Board vertical integration rules and whether Accel is a net beneficiary.
Andy Rubenstein said that although the rule was passed by JCAR, it has recently been contested by some operators in circuit court, so Accel will wait to see how that plays out before drawing conclusions.
Steven Pizzella (Deutsche Bank) asked about recent trends into April (IGB data showed strong Jan/Feb, softer March) and how sensitive the customer base is to gas prices.
Rubenstein said Accel has not seen any noticeable impact from gas prices, which historically have not been a major factor. Because players travel less to reach Accel's local establishments than a regional casino, the company can actually benefit when players stay closer to home and may capture a larger share of a tighter entertainment budget.
Jordan Bender (Citizens) asked for an update on Illinois pruning and whether future location/unit removals would have less impact than the earlier low-hanging fruit, and separately on the timeline for 'The Permanent' at Fairmount.
Mark Phelan said pruning is opportunistic, removing locations that burn cash, and there is no longer particular low-hanging fruit; it is a balance against new organic revenue. On Fairmount, the property is still maturing (table games launched a month ago, 7,000+ on Derby Day) and the optimal size of The Permanent is still being contemplated, with an update to come once decided.
Chad Beynon (Macquarie Capital) asked about legislative momentum across states and whether Nevada is still the biggest growth market versus emerging markets.
Phelan said Accel is not particularly optimistic about VGT/skill-game legalization advancing in 2026 (the Virginia bill was vetoed, with little life left). On growth, he said the Nevada additions were opportunistic space-lease model changes; Accel is optimistic about all markets, with Louisiana, Illinois (accretive routes), and others all viewed as potential acquisition avenues.
David Bain (Texas Capital Securities) asked how the Chicago licensing process is progressing and whether Illinois M&A valuations are moving higher as Chicago approaches.
Phelan said the Illinois Gaming Board is processing applications, but the city has yet to promulgate VGT rules, a wild card he handicaps as likely resolved in the next quarter or so. On valuations, he pointed to Accel being the only public company in the industry and its multiple, stressing it will only buy accretive assets.
Max Marsh (CBRE) asked whether higher gas prices could hurt the truck-stop business, especially Louisiana/Toucan, and for detail on EBITDA margins approaching ~16%.
Rubenstein and Phelan said truck stops are a misnomer; players are mostly local people seeking a gaming-focused venue (Louisiana truck stops have up to 60 games, like small casinos), and Louisiana may actually benefit from higher energy prices and offshore drilling employment. Summerer, limited on forward-looking detail, pointed to last year's pattern (Q4 higher, Q1-Q3 mid-15% range) and the increasing gross margin in the non-regulated 'all other' segment disclosed in the earnings release.
Greg Gibas (Northland Securities) asked how much of the $60-70 million CapEx is Fairmount versus maintenance, and whether Louisiana remains the top tuck-in priority.
Summerer said the ~20% YoY capital decline is mainly because Fairmount's hard construction is largely done; most 2026 CapEx is maintenance, but Accel's maintenance capital earns a return (roughly two-to-three-year payback, high IRR well above WACC), distinct from non-return upkeep. Phelan reaffirmed Louisiana as a key M&A focus with a good pipeline, while noting other states also have creative acquisition candidates under review.
More on Accel Entertainment, Inc.
Reported 2026-05-05 · figures from the Accel Entertainment, Inc. Q1 2026 earnings call.
See how Top Bucket AI works for your firm
Request DemoTop Bucket AI Research
Stay ahead of private markets
Research and market intelligence for private-markets professionals.
✓
You're subscribed.
Thanks for signing up.