Dave & Buster's Entertainment, Inc.
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ITEM 1. Business
Dave & Buster’s Entertainment, Inc. (“D&B Entertainment”) is the owner and operator of 243 venues in North America that offer premier entertainment and dining experiences for both adults and families under the Dave & Buster's and Main Event brands. As of February 3, 2026, the Company had 179 Dave & Buster’s branded stores in 43 states, Puerto Rico, and Canada that offer guests the opportunity to “Eat Drink Play and Watch”, all in one location. Each store offers a full menu of entrées and appetizers, a complete selection of alcoholic and non-alcoholic beverages, and an extensive assortment of entertainment attractions centered around playing games and watching live sports and other televised events. Internationally, the Company is in early-stage growth as a franchisor of the Dave & Buster’s brand, with four franchised locations currently open. As of February 3, 2026, the Company also has 64 Main Event stores in 22 states across the United States. Main Event offers food, drinks and entertainment, including state-of-the-art bowling, laser tag, arcade games and virtual reality, making it the perfect place for families to connect and make memories.
Unless otherwise provided in this report, references to “Dave & Buster’s,” “we,” “us,” “our” or the “Company” refer to D&B Entertainment and its wholly owned subsidiaries and any predecessor entities. All dollar amounts are presented in millions, unless otherwise noted or the context otherwise requires, except for per share amounts.
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Our fiscal year consists of 52 or 53 weeks ending on the Tuesday after the Monday closest to January 31. During fiscal 2024, we adjusted the year-end day from Sunday to Tuesday to improve labor and operational efficiencies by ending the Company's periods outside of the busier weekend timeframe. Each quarterly period has 13 weeks, except in a 53-week year when the fourth quarter has 14 weeks. Fiscal 2025 and fiscal 2024 contained 52 weeks, while fiscal 2023 contained 53 weeks. We refer to our fiscal years ended February 3, 2026, February 4, 2025 and February 4, 2024 as “fiscal 2025,” “fiscal 2024,” and “fiscal 2023,” respectively, throughout this report.
Entertainment
Game play is a key aspect of the entertainment experience at each of our stores, which we believe is the core differentiating feature of our brands. The arcade in each of our stores is an area where we offer a wide array of entertainment options (including redemption, simulation, virtual reality, traditional arcade and other midway-style games and experiences), some of which are exclusive to our Dave & Buster's and Main Event brands on a permanent or temporary basis. Our Dave & Buster’s and Main Event stores average approximately 125 and 112 games, respectively. The number of entertainment options at any particular store depends on the location footprint and other activities offered, which may include bowling, laser tag, billiards and gravity ropes.
Most of our games are activated by game play credits on cards or other radio-frequency identification devices. A customer purchases a card with game play credits or “chips” at an automated kiosk, through our mobile application, or from one of our team members. Our entertainment revenues accounted for approximately 62.9% of our total revenues during fiscal 2025. Redemption games offer our customers the opportunity to win tickets that are redeemable at a retail-style space in our stores with prizes ranging from branded novelty items to high-end electronics.
We believe this “opportunity to win” creates a fun and highly energized social experience that is an important aspect of the in-store experience and cannot be easily replicated at home. Many of our non-redemption games, which include our virtual reality, video, and simulation offerings, can be played by multiple customers simultaneously and include some of the latest high-tech games that are commercially available.
Sports viewing is another key component of the entertainment experience at Dave & Buster’s. All our stores have multiple large screen televisions and high-quality audio systems providing customers with a dedicated area for watching live sports and other immersive programming. The majority of our Dave & Buster's branded stores have an enhanced viewing experience with huge cutting-edge LED “Wow Walls” that deliver an elevated viewing experience and provide a platform for broader programming and marketing opportunities. Our sports-viewing areas offer an immersive viewing environment that provide customers with large, high-definition televisions, where customers watch national and local sports programming and enjoy our full bar and food menu. We strive to create an energetic environment that includes a differentiated and interactive viewing experience for customers. We believe these features create an energetic and social environment and support our strategy of positioning Dave & Buster’s as an entertainment destination. At Dave & Buster’s guests can enjoy arcade games, complemented by sports viewing, along with food and beverage offerings as part of an integrated entertainment experience.
Food and Beverage
We strive to differentiate our food with quality, flavorful offerings guided by a “modern American dining” identity at both our Dave & Buster’s and Main Event locations. These offerings are rooted in enhanced flavors and quality ingredients across a condensed number of menu items that enable our customers to explore new flavors while offering a balanced selection of familiar dishes. In recent years, we have modified our menus for simplified execution and made kitchen enhancements to allow us to deliver dishes to customers faster and drive an improved customer experience. During the third quarter of 2025, we launched our “back-to-basics” menu at our Dave & Buster’s stores, to bring back historically favored menu items and to add new menu options. We will continue to evolve our menus to reflect the changing tastes of our broad customer base, with options for full meals and appetizers to share with friends. We deliver high-quality offerings, including a wide variety of starters, one-of-a-kind burgers and handhelds, choice-grade steaks, pasta, and low calorie, vegetarian, and gluten-friendly options. We believe our broad menus offer something for everyone and are appropriate for many different occasions. To ensure that we stay on-trend, we continue to update our menus regularly with new food items or tailored promotions.
Each of our locations also offers full bar service, including a variety of beers, hand-crafted cocktails, and premium spirits. We are focused on maintaining a streamlined beverage menu for ease of execution, while using quality ingredients including fresh juices, purees and house-made mixers. Beverage service is typically available throughout the entire store, allowing for multiple point-of-sale opportunities. We believe that our high margin beverage offering is complementary to the other offerings at each of our stores.
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Competitive Positioning
The out-of-home entertainment market is highly competitive. We compete for customers’ discretionary income on entertainment with localized attraction facilities such as movie theaters, sporting events, bowling alleys, sports activity centers, arcades and entertainment centers, night clubs and restaurants as well as theme parks. We also face competition from local, regional, and national establishments that offer similar entertainment experiences and restaurants that are highly competitive with respect to price, quality of service, location, ambience and type and quality of food. Some of these establishments may exist in multiple locations, and we may also face competition on a national basis in the future from other similar concepts. We also face competition from increasingly sophisticated home-based forms of entertainment, such as internet and video gaming and home movie streaming.
The key elements that drive our total customer experience and help position us from a competitive standpoint include the following:
High brand awareness with broad customer appeal.
We believe that the customer experience at our stores, supported by our extensive marketing reach, has helped us create widely recognized brands. As of February 3, 2026, we had approximately 90% national brand awareness for Dave & Buster’s as an entertainment and dining venue, and a broad customer appeal across families and young adults. The primary target audience for our Dave & Buster’s locations is young adults and families, while our Main Event stores primarily focus on families with children.
Multi-faceted customer experience highlights our value proposition.
We believe that our combination of interactive games, attractive television viewing areas, high-quality dining, and full-service beverage offerings, delivered in a highly energized atmosphere, provides a multi-faceted customer experience that cannot be easily replicated at home or elsewhere without having to visit multiple destinations. We aim to offer our customers a value proposition comparable or superior to many separately available dining and entertainment options. We continuously work with game manufacturers and others to create new games and attractions that include content exclusively available at our Dave & Buster’s and Main Event stores on a permanent or temporary basis. Our new games in combination with new food and beverage offerings and focused attention to the customer experience are intended to help us to retain and generate customer traffic. Our value proposition is enhanced by marketing initiatives including unlimited game play offers or free game play as an introduction to new games, game play dollar volume discounts and eat and play promotional offers. We believe these initiatives encourage customers to participate more fully across our food, beverage, and entertainment offerings.
Store models generate favorable store economics and strong returns.
We believe our store models offering entertainment, food, and beverage options provide the benefit of historically higher revenue per store, higher gross margins, and higher operating income margins in comparison to traditional restaurant concepts.
Our entertainment offerings have low variable costs, generating a gross margin of 91.9% for fiscal 2025. Because entertainment generated 62.9% of our fiscal 2025 revenues, we have less exposure to increasing food costs and associated restaurant labor than traditional restaurant concepts. As a result, our business model generates strong operating cash flow which we can use to reinvest in the business, pay down debt or return capital to shareholders through share repurchases or dividends.
Our favorable store economics allow us to target new store returns of at least 30% and 25% cash-on-cash returns over one and five-year periods, respectively. We define and calculate cash-on-cash returns for an individual store as (a) Adjusted EBITDA (defined in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations”) at the store level, divided by (b) our net development costs. Net development costs include equipment, building, leaseholds and site costs, net of tenant improvement allowances and other landlord payments, sale-leaseback proceeds, excluding pre-opening costs and capitalized interest.
Commitment to customer satisfaction.
We aim to continuously enhance our entertainment, food, and beverage offerings through our service philosophy of providing a high quality and consistent customer experience through dedicated training and development of our team members, supported by a corporate culture that fosters employee engagement.
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Strategy
We have a multi-faceted growth strategy focused on the following key components:
Drive growth in comparable store sales.
We strive to differentiate our brands from other entertainment and dining alternatives and drive growth in our comparable sales through the following strategies:
•Offer the latest entertainment to bring people together. We believe that our diverse offering of games and amusement activities is the core differentiating feature of our brands. Staying current with the latest amusement offerings promotes customer traffic to our stores and provides an exciting environment to enjoy with friends and family through the latest multiplayer games and challenges and social gaming experiences. We plan to continually update our games each year through the development of innovative and proprietary games and the purchase of new games that we believe will resonate with our customers to drive brand relevance due to a variety of factors, including their large scale, eye-catching appearance, association with recognizable brands, ability to be experienced by a group or the fact they cannot be easily replicated at home. We intend to extend our programming capabilities at our stores by offering more curated content and creating a calendar of ongoing and one-time events leveraging our investments in the best and latest audio-visual technology. We also plan to continuously review and update pricing of our games and amusement activities to provide affordable entertainment while remaining competitive with our peers.
•Offer novel food & drink at competitive prices. We aim to offer a wide variety of craveable items at optimized prices for our guests. We strive to increase efficiency by simplifying execution, allowing us to deliver dishes to the table hotter and faster for an improved customer experience. We continually update and innovate our food offerings based on customer research and optimize our selections to improve execution efficiency.
•Drive customer engagement through an optimized media mix and strategic loyalty offerings. We continue to review and optimize our media mix to both drive incremental visits from our existing customer base and increase new customer traffic. We maintain our focus on delivering personalized messaging that connects with consumers to drive incremental visitations and focus our advertising on our brand story and our attractive offerings. In addition, we continue to leverage our customer relationship management program and our growing loyalty database by delivering more targeted individualized offers, creative content, and exclusive offerings.
•Refresh our existing sites. We consistently update our existing sites through regular maintenance. We will invest in remodels of certain existing stores, as needed, to modernize our layouts, maintain or grow customer traffic and drive efficiency.
•Drive incremental sales volume through special event hosting. Our dedicated sales team strives to drive incremental special events traffic in each of our stores. We maintain our focus on opportunities to grow special events sales including optimized online booking and entertainment offerings tailored towards group events, and the introduction of ticketed experiences that allow smaller groups and individual guests to participate in themed or limited-time programming within our venues. We also offer elevated banquet menu offerings and dedicated service to provide an exceptional guest experience.
•Drive an improved experience and optimize operations through targeted technology investments. We continue to streamline our service model through store-level technology improvements including kiosks and other self-service technology. We regularly invest in analytics tools and technology upgrades to more efficiently measure and improve performance, drive incremental sales, and continuously monitor costs and profitability.
Invest domestically in our brands.
We believe the Dave & Buster’s and Main Event brands have significant domestic growth opportunities in the United States. In fiscal 2025, we opened eight Dave & Buster's stores and three Main Event stores, in addition to the relocation of one Dave & Buster’s location. In fiscal 2026 and beyond, the number of openings will depend on many factors, including our ability to locate appropriate sites, negotiate acceptable purchase or lease terms, generate sufficient operating cash flows or have sufficient financing capacity to construct new stores, obtain necessary local governmental permits, and recruit and train team members.
We select new site locations through an evaluation of a set of drivers we believe increase the probability of successful, high-volume stores, including: site quality, visibility, accessibility and traffic volume, population density, competitive presence and trade area demographics. The experience and established relationships derived from our development team enable us to focus our attention on the most relevant network of real estate brokers, which gives us access to a large pool of qualified potential store sites.
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Dave & Buster's Stores - Our Dave & Buster's stores vary in size from approximately 16,000 to 70,000 square feet. To optimize sales per square foot and further enhance our store economics, we currently utilize three basic formats when designing new stores. The target size of our future large format stores is expected to be between 30,000 and 45,000 square feet, the target size of our future medium format stores is expected to be between 25,000 and 30,000 square feet and the target size of our small future format stores is expected to be 25,000 square feet. The stores we opened in fiscal 2025 averaged approximately 28,000 square feet. We believe the smaller store format allows us to reduce capital investment risk per store and enter smaller markets that would not have warranted the investment of a larger box. For the smaller format, we have reduced the back-of-house space and optimized the customer-facing area dedicated to simulation and redemption games. We believe the smaller format maintains the dynamic customer experience that is the foundation of our brand and allows us flexibility in our site selection process.
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Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
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DAVE & BUSTER’S ENTERTAINMENT, INC.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
(in millions, except per share amounts; unaudited)
Overview
The following discussion and analysis of our financial condition and results of operations should be read together with the accompanying unaudited consolidated financial statements and the related notes in Item 1 and with the audited consolidated financial statements and the related notes included in our Annual Report on Form 10-K for fiscal 2025 as filed with the SEC on March 31, 2026.
Unless otherwise specified, the meanings of all defined terms in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” are consistent with the meanings of such terms as defined in the Notes to unaudited consolidated financial statements. This discussion contains statements that are, or may be deemed to be, “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements can be identified by the use of forward-looking terminology, including the terms “believes,” “estimates,” “anticipates,” “expects,” “intends,” “may,” “will” or “should” or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this report and include statements regarding our intentions, beliefs or current expectations concerning, among other things: our results of operations; financial condition; liquidity; prospects; growth; strategies; the industry in which we operate; expansion and opening of new locations; expectations regarding variability in run-rate levels in our stores and seasonality; expectations of future proceeds from sale leaseback transactions; anticipated breakage; our compliance with debt covenants and the terms of our debt agreement; our defenses to various legal claims we may face; and opportunities and risks affecting our business, industry and financial results, including macroeconomic factors.
By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: our ability to successfully design and execute our business strategy; our effectiveness at integrating and operating our past or future acquisitions; the effects of new or improved technologies or changes in consumer behavior; the potential for unfavorable publicity; our ability to obtain and renew leases on favorable terms or at all; our substantial indebtedness and covenants in our debt agreements restricting our ability to implement our business plan; our success in opening and operating new stores profitably and optimizing existing stores; risks related to our information systems and potential cybersecurity breaches or other privacy or data incidents; the cost and availability of certain commodities; our procurement of new games and entertainment offerings and our ability to obtain related licensing rights; the extensive laws and regulations in which we must comply with; and other factors, including those set forth in the section entitled “Risk Factors” in our Annual Report on Form 10-K filed with the SEC on March 31, 2026. In addition, even if our results of operations, financial condition and liquidity, and the development of the industry in which we operate are consistent with the forward-looking statements contained in this Form 10-Q, such results or developments may not be indicative of results or developments in subsequent periods. Forward-looking statements are based only on information currently available to us and speak only as of the date of this Form 10-Q. We do not undertake any obligation to update or revise the forward-looking statements to reflect events that occur or circumstances that exist after the date on which such statements were made, except to the extent required by law.
Quarterly Financial Highlights
•First quarter revenue of $559.2 decreased 1.5% compared to the first quarter of 2025.
•Comparable store sales decreased 5.4% compared to the same calendar period in 2025. See further discussion of comparable store sales below at Revenues.
•Net income totaled $5.7, or $0.16 per diluted share, compared to net income of $21.7, or $0.62 per diluted share in the first quarter of 2025.
•Adjusted EBITDA of $123.2 decreased 9.5%, or $12.9, from the first quarter of 2025. See further discussion of Adjusted EBITDA, a non-GAAP measure, at Non-GAAP Financial Measures below along with a reconciliation to net income, the most comparable GAAP measure, at Reconciliations of Non-GAAP Financial Measures below.
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DAVE & BUSTER’S ENTERTAINMENT, INC.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
(in millions, except per share amounts; unaudited)
General
We are a leading owner and operator of high-volume venues primarily in North America that combine entertainment and dining for both adults and families under the “Dave & Buster’s” and “Main Event” brands. The core of our concept is to offer our customers various forms of entertainment along with quality dining all in one location. Our entertainment offerings provide an extensive assortment of attractions centered around playing games, bowling, and watching live sports and other televised events. Our brands appeal to a relatively balanced mix of male and female adults, as well as families and teenagers. We believe we appeal to a diverse customer base by providing a highly customizable experience in a dynamic and fun setting.
Our Dave & Buster’s stores average 36,800 square feet and range in size between approximately 16,100 and 70,000 square feet. Our Main Event stores average about 53,300 square feet and range in size between approximately 37,500 and 78,200 square feet. Generally, our stores are open seven days a week, with normal hours of operation generally from between 10:00 to 11:30 a.m. until midnight, with stores typically open for extended hours on weekends.
Key Measures of Our Performance
We monitor and analyze several key performance measures to manage our business and evaluate financial and operating performance, including:
Comparable store sales — Comparable store sales are a comparison of sales to the same period of prior years for the comparable store base. We historically define the comparable store base to include those stores open for a full 18 months before the beginning of the current fiscal year and exclude stores permanently closed or planned for closure during the current fiscal year. For fiscal 2026, our comparable store base consists of 224 stores, of which 165 are Dave & Buster's branded stores and 59 are Main Event branded stores.
New store openings — Our ability to expand our business and reach new customers is influenced by the opening of additional stores in both new and existing markets. The success of our new stores is indicative of our brand appeal and the efficacy of our site selection and operating models. For the three months ended May 5, 2026, we opened one new Dave & Buster’s branded store.
Non-GAAP Financial Measures
In addition to the results provided in accordance with GAAP, we provide non-GAAP measures which present operating results on an adjusted basis. These are supplemental measures of performance that are not required by or presented in accordance with GAAP and include Adjusted EBITDA, Credit Adjusted EBITDA and Store Operating Income Before Depreciation and Amortization (defined below). These non-GAAP measures do not represent and should not be considered as alternatives to net income or cash flows from operations, as determined in accordance with GAAP, and our calculations thereof may not be comparable to similarly titled measures reported by other companies and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.
Although we use these non-GAAP measures to assess the operating performance of our business, they have significant limitations as an analytical tool because they exclude certain material costs. For example, Adjusted EBITDA does not take into account a number of significant items, including our interest expense and depreciation and amortization expense. In addition, Adjusted EBITDA excludes certain other costs that may be important in analyzing our GAAP results. Because Adjusted EBITDA does not account for these expenses, its utility as a measure of our operating performance has material limitations. Our calculations of Adjusted EBITDA adjust for these amounts because we believe they do not directly relate to the ongoing operations of the current business of our stores and therefore complicate the comparison of the underlying business between periods. Nevertheless, because of the limitations described above, management does not view Adjusted EBITDA, Credit Adjusted EBITDA or Store Operating Income Before Depreciation and Amortization in isolation and also uses other measures, such as revenues, gross margin, operating income and net income to measure operating performance.
Adjusted EBITDA
We define “Adjusted EBITDA” as net income, plus interest expense, net, loss on debt refinancing, provision for income taxes, depreciation and amortization expense, (gain) loss on property and equipment transactions, impairment of long-lived assets, share-based compensation, currency transaction (gains) losses, transaction and integration costs, system implementation costs and other items, net.
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DAVE & BUSTER’S ENTERTAINMENT, INC.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
(in millions, except per share amounts; unaudited)
Adjusted EBITDA is presented because we believe that it provides useful information to investors and analysts regarding our operating performance. By reporting Adjusted EBITDA, we provide a basis for comparison of our business operations between current, past and future periods by excluding items that we do not believe are indicative of our core operating performance.
Credit Adjusted EBITDA
We define “Credit Adjusted EBITDA” as net income plus certain items as defined at Adjusted EBITDA above, as well as certain other adjustments as defined in our Credit Agreement (see Liquidity and Capital Resources below for additional discussion and reconciliation). These other adjustments include (i) increases in entertainment revenue deferrals, (ii) the cost of new projects, including store pre-opening costs, and (iii) other costs and adjustments as permitted by the Credit Agreement. We believe the presentation of Credit Adjusted EBITDA is appropriate as the metric provides additional information to investors about the calculation of, and compliance with, certain financial covenants in the Credit Agreement.
Store Operating Income Before Depreciation and Amortization
We define “Store Operating Income Before Depreciation and Amortization” as operating income, plus depreciation and amortization expense, general and administrative expenses, pre-opening costs and other charges and gains. Store Operating Income Before Depreciation and Amortization allows for the evaluation of operating performance across stores of varying size and volume.
We believe that Store Operating Income Before Depreciation and Amortization is another useful measure in evaluating our operating performance because the metric removes the impact of general and administrative expenses, which are not incurred at the store level, and the costs of opening new stores, which are non-recurring at the store level, and thus enables the comparability of the operating performance of our stores for the periods presented. We also believe that Store Operating Income Before Depreciation and Amortization is a useful measure in evaluating our operating performance within the entertainment and dining industry because the metric permits the evaluation of store-level productivity, efficiency, and performance, and we use Store Operating Income Before Depreciation and Amortization as a means of evaluating store financial performance compared to our competitors. However, because the measure excludes significant items such as general and administrative expenses, pre-opening costs, and other charges and gains, as well as our interest expense, net, loss on debt refinancing and depreciation and amortization expense, which are important in evaluating our consolidated financial performance from period to period, the value of this measure is limited as a measure of our consolidated financial performance.
Presentation of Operating Results
We operate on a 52-week or 53-week fiscal year that ends on the Tuesday after the Monday closest to January 31. Each quarterly period reported has 13 weeks, except for 53-week fiscal years when the fourth quarter has 14 weeks. Fiscal 2026, which will end February 2, 2027 and fiscal 2025, which ended on February 3, 2026, both follow a 52-week calendar.
Store-Level Variability, Quarterly Fluctuations, Seasonality and Inflation
We operate stores of various sizes and experience significant store variability in volumes, operating results and net investment costs.
Our new stores typically open with sales volumes in excess of their expected long-term run-rate levels, which we refer to as a “honeymoon” effect. We traditionally expect our new store sales volumes in year two to be lower than our year one targets, and to grow in line with the rest of our comparable store base thereafter. As a result of the substantial revenues associated with each new store, the number and timing of new store openings will result in significant fluctuations in quarterly results.
New store operating margins (excluding pre-opening expenses) during the first year of operation may benefit from honeymoon sales leverage on occupancy, management labor and other fixed costs. This benefit is partially offset by normal inefficiencies in hourly labor and other costs associated with establishing a new store. In year two, operating margins may decline due to the loss of honeymoon sales leverage on fixed costs, which is partially offset by improvements in store operating efficiency.
Our operating results historically have fluctuated due to seasonal factors. Typically, we have higher revenues associated with the spring and year-end holidays, and sales and customer traffic during these periods are susceptible to the impact of severe, unfavorable or unseasonably mild weather. Our third quarter, which encompasses the back-to-school fall season, has historically had lower revenues as compared to other quarters.
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DAVE & BUSTER’S ENTERTAINMENT, INC.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
(in millions, except per share amounts; unaudited)
Economic and environmental conditions and changes in regulatory legislation could exert pressure on both supplier pricing and consumer spending related to entertainment and dining alternatives. There is no assurance that our cost of products will remain stable or that federal, state, or local minimum wage rates will not increase beyond amounts currently legislated. However, the effects of any supplier price increase or wage rate increases might be partially offset by selective price increases if competitively appropriate.
Three Months Ended May 5, 2026 (the “2026 period”) Compared to the Three Months Ended May 6, 2025 (the “2025 period”)
Results of operations
The following table sets forth selected data for the periods indicated. All information, except for Company-owned stores at the end of the period, is derived from the accompanying Consolidated Statements of Comprehensive Income.
| Three Months Ended | |||||||||||||||||||||||
| May 5, 2026 | May 6, 2025 | ||||||||||||||||||||||
| Entertainment revenues | $ | 345.1 | 61.7 | % | $ | 366.6 | 64.6 | % | |||||||||||||||
| Food and beverage revenues | 214.1 | 38.3 | % | 201.1 | 35.4 | % | |||||||||||||||||
| Total revenues | 559.2 | 100.0 | % | 567.7 | 100.0 | % | |||||||||||||||||
Cost of entertainment (1) | 27.4 | 7.9 | % | 30.6 | 8.3 | % | |||||||||||||||||
Cost of food and beverage (1) | 52.4 | 24.5 | % | 51.5 | 25.6 | % | |||||||||||||||||
| Total cost of products | 79.8 | 14.3 | % | 82.1 | 14.5 | % | |||||||||||||||||
| Operating payroll and benefits | 140.1 | 25.1 | % | 135.0 | 23.8 | % | |||||||||||||||||
Other store operating expenses | 186.7 | 33.4 | % | 188.4 | 33.2 | % | |||||||||||||||||
| General and administrative expenses | 27.5 | 4.9 | % | 24.4 | 4.3 | % | |||||||||||||||||
| Depreciation and amortization expenses | 70.9 | 12.7 | % | 63.2 | 11.1 | % | |||||||||||||||||
| Pre-opening costs | 5.4 | 1.0 | % | 6.1 | 1.1 | % | |||||||||||||||||
| Other charges and gains | 1.9 | 0.3 | % | 5.3 | 0.9 | % | |||||||||||||||||
| Total operating costs | 512.3 | 91.6 | % | 504.5 | 88.9 | % | |||||||||||||||||
| Operating income | 46.9 | 8.4 | % | 63.2 | 11.1 | % | |||||||||||||||||
| Interest expense, net | 36.9 | 6.6 | % | 36.8 | 6.5 | % | |||||||||||||||||
| Income before provision for income taxes | 10.0 | 1.8 | % | 26.4 | 4.7 | % | |||||||||||||||||
| Provision for income taxes | 4.3 | 0.8 | % | 4.7 | 0.8 | % | |||||||||||||||||
| Net income | $ | 5.7 | 1.0 | % | $ | 21.7 | 3.8 | % | |||||||||||||||
| Company-owned stores at end of period | 244 | 234 | |||||||||||||||||||||
(1)All percentages are expressed as a percentage of total revenues for the respective period presented, except cost of entertainment, which is expressed as a percentage of entertainment revenues, and cost of food and beverage, which is expressed as a percentage of food and beverage revenues.
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DAVE & BUSTER’S ENTERTAINMENT, INC.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
(in millions, except per share amounts; unaudited)
Reconciliations of Non-GAAP Financial Measures
Adjusted EBITDA
The following table reconciles Net income to Adjusted EBITDA for the periods indicated:
| Three Months Ended | |||||||||||||||||||||||
| May 5, 2026 | May 6, 2025 | ||||||||||||||||||||||
Net income(1) | $ | 5.7 | 1.0 | % | $ | 21.7 | 3.8 | % | |||||||||||||||
| Interest expense, net | 36.9 | 36.8 | |||||||||||||||||||||
| Provision for income taxes | 4.3 | 4.7 | |||||||||||||||||||||
| Depreciation and amortization expense | 70.9 | 63.2 | |||||||||||||||||||||
Share-based compensation(2) | 2.5 | 3.0 | |||||||||||||||||||||
Transaction and integration costs(3) | — | 0.2 | |||||||||||||||||||||
System implementation costs(4) | — | 1.5 | |||||||||||||||||||||
Other items, net(5) | 2.9 | 5.0 | |||||||||||||||||||||
Adjusted EBITDA, a non-GAAP measure (1) | $ | 123.2 | 22.0 | % | $ | 136.1 | 24.0 | % | |||||||||||||||
(1)All percentages are expressed as a percentage of total revenues for the respective period presented.
(2)Non-cash share-based compensation expense, net of forfeitures, recorded in General and administrative expenses on the Consolidated Statements of Comprehensive Income.
(3)Transaction and integration costs related to the acquisition and integration of Main Event recorded in Other charges and gains on the Consolidated Statements of Comprehensive Income.
(4)System implementation costs represent expenses incurred related to the development of new enterprise resource planning, human capital management and inventory software for our stores and store support teams. These charges are recorded in Other charges and gains on the Consolidated Statements of Comprehensive Income.
(5)The amount related to the 2026 first-quarter period ended May 5, 2026 consisted primarily of $1.9 loss on property and equipment transactions and $0.8 of severance costs. The amount for the 2025 period primarily consisted of a $3.8 loss on property and equipment transaction, $0.9 of discretionary retention incentives, and $0.3 of severance costs. Discretionary retention incentives and severance costs are included in General and administrative expenses on the Consolidated Statements of Comprehensive Income. (Gain) loss on property and equipment transactions is included in Other charges and gains on the Consolidated Statements of Comprehensive Income.
Store Operating Income Before Depreciation and Amortization
The following table reconciles Operating income to Store Operating Income Before Depreciation and Amortization for the periods indicated:
| Three Months Ended | |||||||||||||||||||||||
| May 5, 2026 | May 6, 2025 | ||||||||||||||||||||||
Operating income (1) | $ | 46.9 | 8.4 | % | $ | 63.2 | 11.1 | % | |||||||||||||||
| General and administrative expenses | 27.5 | 24.4 | |||||||||||||||||||||
| Depreciation and amortization expense | 70.9 | 63.2 | |||||||||||||||||||||
| Pre-opening costs | 5.4 | 6.1 | |||||||||||||||||||||
| Other charges and gains | 1.9 | 5.3 | |||||||||||||||||||||
Store Operating Income Before Depreciation and Amortization, a non-GAAP measure (1) | $ | 152.6 | 27.3 | % | $ | 162.2 | 28.6 | % | |||||||||||||||
(1)All percentages are expressed as a percentage of total revenues for the respective period presented.
19
DAVE & BUSTER’S ENTERTAINMENT, INC.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
(in millions, except per share amounts; unaudited)
Results of Operations
Revenues - Selected revenue data and store data for the periods indicated are as follows:
| Three Months Ended | ||||||||||||||||||||||||||||
| May 5, 2026 | May 6, 2025 | Change | ||||||||||||||||||||||||||
| Comparable store revenues | $ | 512.3 | $ | 541.5 | $ | (29.2) | ||||||||||||||||||||||
| Noncomparable store revenues | 37.2 | 19.1 | 18.1 | |||||||||||||||||||||||||
Other noncomparable revenues (1) | 9.7 | 7.1 | 2.6 | |||||||||||||||||||||||||
| Total revenues | $ | 559.2 | $ | 567.7 | $ | (8.5) | ||||||||||||||||||||||
| Comparable store operating weeks | 2,912 | 2,912 | — | |||||||||||||||||||||||||
| Noncomparable store operating weeks | 247 | 106 | 141 | |||||||||||||||||||||||||
| Total store operating weeks | 3,159 | 3,018 | 141 | |||||||||||||||||||||||||
(1)Includes changes in deferred entertainment revenues, gift card deferrals and certain other revenues not associated with stores.
The table below represents our revenue mix for the fiscal periods indicated:
| Three Months Ended | |||||||||||||||||||||||
| May 5, 2026 | May 6, 2025 | ||||||||||||||||||||||
| Entertainment revenues | $ | 345.1 | 61.7 | % | $ | 366.6 | 64.6 | % | |||||||||||||||
| Food revenues | 148.6 | 26.6 | % | 137.5 | 24.2 | % | |||||||||||||||||
| Beverage revenues | 65.5 | 11.7 | % | 63.6 | 11.2 | % | |||||||||||||||||
| $ | 559.2 | 100.0 | % | $ | 567.7 | 100.0 | % | ||||||||||||||||
Total revenues for the 2026 period decreased $8.5, or 1.5%, to $559.2 compared to $567.7 for the 2025 period. The decrease in revenue was primarily related to a $29.2 decrease in comparable store sales, partially offset by an $18.1 increase in noncomparable store revenues, and an increase of $2.6 in other noncomparable revenues. The decrease in comparable store revenues was due to a reduction in walk-in business relative to the prior year period. The change in other noncomparable revenues reflects breakage on unredeemed game play credits, tickets and gift cards corresponding to guest utilization patterns over time. See Revenue Recognition at Note 1 to the unaudited consolidated financial statements for a discussion of revenue recognition associated with game play credits, tickets and gift cards.
Cost of products - The total cost of products was $79.8 for the 2026 period and $82.1 for the 2025 period. The total cost of products as a percentage of total revenues decreased to 14.3% for the 2026 period compared to 14.5% for the 2025 period. The decrease in total cost of products as a percentage of total revenues was associated with declines in both entertainment and food and beverage cost of sales, partially offset by a higher food and beverage revenue mix.
Cost of entertainment decreased to $27.4 in the 2026 period compared to $30.6 in the 2025 period. The cost of entertainment, as a percentage of entertainment revenues, decreased to 7.9% for the 2026 period from 8.3% in the 2025 period. The decrease was primarily attributable to vendor cost savings and lower redemptions due to ticket payout adjustments and redemption center pricing changes, partially offset by continued tariff cost pressure.
Cost of food and beverage products increased to $52.4 for the 2026 period compared to $51.5 for the 2025 period. Cost of food and beverage products as a percentage of food and beverage revenues decreased to 24.5% for the 2026 period from 25.6% for the 2025 period. The increase cost was due to higher food and beverage revenue associated with eat-and-play combo enhancements driving higher food attach rates. The decline as a percentage of food and beverage revenues was due to higher check growth associated with menu enhancements made in the second half of fiscal 2025.
20
DAVE & BUSTER’S ENTERTAINMENT, INC.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
(in millions, except per share amounts; unaudited)
Operating payroll and benefits
Total operating payroll and benefits increased to $140.1 in the 2026 period compared to $135.0 in the 2025 period. The increase was primarily due to a $5.3M increase associated with noncomparable stores. The total cost of operating payroll and benefits as a percentage of total revenues for 2026 was 25.1% compared to 23.8% in 2025. The increase was primarily due to sales deleveraging.
Other store operating expenses
Other store operating expenses decreased to $186.7 in the 2026 period compared to $188.4 in the 2025 period. Other store operating expense as a percentage of total revenues increased to 33.4% in the 2026 period compared to 33.2% in the 2025 period. The increase was primarily due to sales deleveraging.
General and administrative expenses
General and administrative expenses increased to $27.5 in the 2026 period compared to $24.4 in the 2025 period, and as a percentage of total revenues were 4.9% in the 2026 period compared to 4.3% in the 2025. The increase in general and administrative expenses in 2026 was driven primarily by higher employee related costs, consulting and legal expenses.
Depreciation and amortization expense
Depreciation and amortization expense increased to $70.9 in the 2026 period from $63.2 in the 2025 period, primarily due to new store openings, store remodels and new amusement offerings.
Pre-opening costs
Pre-opening costs decreased to $5.4 in the 2026 period compared to $6.1 in the 2025 period. This decrease was primarily due to the timing of costs in our pipeline of new stores for the respective periods.
Other charges and gains
Other charges and gains decreased to $1.9 in the 2026 period compared to $5.3 in the 2025 period primarily due to a decrease in the write off of certain assets and a decrease in system implementation costs.
Interest expense, net
Interest expense, net increased slightly to $36.9 in the 2026 period compared to $36.8 in the 2025 period due primarily to incremental interest expense associated with sale-leaseback transactions, in addition to lower balances on our Credit Facility and lower weighted average effective interest rates of 7.9% during the period, compared to 8.6% in the prior year. See further discussion of the Company's debt activity and failed sale-leaseback transaction at Note 4 and Note 3, respectively, to the unaudited consolidated financial statements.
21
DAVE & BUSTER’S ENTERTAINMENT, INC.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
(in millions, except per share amounts; unaudited)
Provision for income taxes
The effective tax rate for the 2026 period was 43.0%, compared to 17.8% for the 2025 period. The effective tax rate increase for the 2026 period in comparison to the 2025 period was primarily due to the estimated annual effective tax rate applied in the interim provision calculation, which increased the relative impact of state income taxes, tax credits, permanent items and discrete tax items on the quarter’s tax rate.
Liquidity and Capital Resources
Credit Facility
In fiscal 2022, the Company entered into a senior secured credit agreement (as amended periodically, the “Credit Agreement”) including a revolving credit facility (the “Revolving Credit Facility”) and a term loan facility (together with the Revolving Credit Facility, the “Credit Facility”). On November 1, 2024, D&B Inc. entered into an amendment with its banking syndicate that amended the Credit Facility (the “Fourth Amendment”). The Fourth Amendment, among other things, increased term loans to an aggregate principal amount of $700.0 (the “Incremental Term B Loans”) with a maturity date of November 1, 2031, and increased the Revolving Credit Facility by $150.0 to a total of $650.0 and extended the maturity date of November 1, 2029. The proceeds from the Incremental Term B Loans were primarily used to redeem $440.0 of outstanding senior secured notes, and to pay down $200.0 of the principal on term loans outstanding under the Credit Facility (the “Existing Term B Loans”).
In December 2025, D&B Inc., Dave & Buster’s Holdings, Inc. (“D&B Holdings”), the lenders party thereto and Deutsche Bank AG New York Branch, as administrative agent, entered into the Fifth Amendment to the Credit Agreement (the “Fifth Amendment”),
The Fifth Amendment among other things:
•provides for an increase in the maximum permitted net total leverage ratio of D&B Inc. and its restricted subsidiaries from 3.50:1.00 to 4.00:1.00 as of the end of each fiscal quarter when applicable to test the net total leverage ratio and
•increases the margin applicable to the revolving loans to, in the case of SOFR loans, 3.25% per annum and, in the case of ABR loans, 2.25% per annum.
Both the Existing Term B Loans and the Incremental Term B Loans bear interest at Term SOFR or ABR (each, as defined in the amended Credit Agreement) plus (i) in the case of Term SOFR loans, 3.25% per annum and (ii) in the case of ABR loans, 2.25% per annum. Borrowings under the Revolving Credit Facility bear interest subject to a pricing grid based on net total leverage, at Term SOFR plus a spread ranging from 2.50% to 3.25% per annum or ABR plus a spread ranging from 1.50% to 2.25% per annum. Unused commitments under the Revolving Credit Facility incur initial commitment fees of 0.30% to 0.50%. Additionally, the interest rate margin applicable to the Existing Term B Loans and loans outstanding under the Revolving Credit Facility would be subject to an additional 0.25% step-down if a rating of B1/B+ or higher from Moody’s and S&P is achieved (which will step up if such rating is subsequently not maintained).
A portion of the Revolving Credit Facility not to exceed $35.0 is available for the issuance of letters of credit. As of May 5, 2026, we had letters of credit outstanding of $20.5 and an unused commitment balance of $479.5 under the Revolving Credit Facility. The Credit Facility may be increased through incremental facilities, by an amount equal to the greater of (i) $400.0 and (ii) 0.75 times trailing 12-month Adjusted EBITDA, as defined in the Credit Agreement, plus additional amounts subject to compliance with applicable leverage ratio and/or interest coverage ratio requirements.
Sale-leaseback transactions
The Company has entered into sale and master lease agreements (a “sale leaseback”) with unrelated third parties. Under these agreements, the Company has sold certain store properties, including land, buildings and certain improvements and then leased the assets back through the sale-leaseback transactions.
The sale-leaseback transactions were accounted for as failed sale leasebacks based on GAAP under ASC 842, Leases. As a result, the store property assets remained on the Consolidated Balance Sheet at their historical net book value and are depreciated over the remaining term of the applicable master lease. Financing liabilities were recognized in the amount of the proceeds received, net of certain transactions costs. The Company does not recognize rent expense related to the leased assets. Instead, monthly rent payments under the applicable master lease agreement are recorded as interest expense and a reduction of the outstanding liability.
Refer to Note 3 to the unaudited consolidated financial statements for further discussion of these transactions.
22
DAVE & BUSTER’S ENTERTAINMENT, INC.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
(in millions, except per share amounts; unaudited)
Interest expense
The following table sets forth our recorded interest expense, net for the periods presented:
| Three Months Ended | ||||||||||||||||||||||
| May 5, 2026 | May 6, 2025 | |||||||||||||||||||||
| Interest expense on debt | $ | 29.3 | $ | 31.9 | ||||||||||||||||||
| Amortization of debt issue discounts and issuance costs | 2.3 | 2.4 | ||||||||||||||||||||
Interest expense on sale-leaseback transactions (1) | 7.1 | 4.6 | ||||||||||||||||||||
Interest expense on finance leases (1) | 0.6 | — | ||||||||||||||||||||
| Interest income | (0.8) | (0.4) | ||||||||||||||||||||
| Capitalized interest | (1.6) | (1.7) | ||||||||||||||||||||
| Total interest expense, net | $ | 36.9 | $ | 36.8 | ||||||||||||||||||
(1) See discussion of failed sale-leaseback transactions and finance leases at Note 3 to the unaudited consolidated financial statements.
Credit Adjusted EBITDA and Net Total Leverage Ratio.
Credit Adjusted EBITDA, a non-GAAP measure, represents net loss plus certain items as defined at Adjusted EBITDA at Non-GAAP Financial Measures above, as well as certain other adjustments as defined in our Credit Agreement. These other adjustments include (i) entertainment revenue deferrals, (ii) the cost of new projects, including store pre-opening costs, (iii) business optimization expenses and other restructuring costs, and (iv) other costs and adjustments as permitted by the Credit Agreements. The following table reconciles Net income to Credit Adjusted EBITDA, as defined in our Credit Agreement for the period indicated:
| Trailing Four Quarters Ended May 5, 2026 | |||||
| Net loss | $ | (64.7) | |||
| Interest expense, net | 154.1 | ||||
| Loss on debt refinancing | — | ||||
| Provision for income taxes | (19.6) | ||||
| Depreciation and amortization expense | 287.1 | ||||
Share-based compensation (1) | 19.1 | ||||
Transaction and integration costs (2) | 0.5 | ||||
System implementation costs (3) | 1.8 | ||||
Loss on property and equipment transactions and impairments (4) | 35.0 | ||||
Other items, net (5) | 10.4 | ||||
Pre-opening costs (6) | 18.4 | ||||
Credit Facility specific items, net (7) | 19.8 | ||||
| Credit Adjusted EBITDA, a non-GAAP measure | $ | 461.9 | |||
23
DAVE & BUSTER’S ENTERTAINMENT, INC.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
(in millions, except per share amounts; unaudited)
(1)See discussion of share-based compensation at Adjusted EBITDA above.
(2)See discussion of transaction and integration costs at Adjusted EBITDA above.
(3)See discussion of system implementation costs at Adjusted EBITDA above.
(4)Consists of store asset impairments and loss on property and equipment disposals.
(5)Primarily consists of discretionary retention incentives, severance costs, (gain) loss on property and equipment transactions and certain third-party consulting fees. The third-party consulting fees are not part of our ongoing operations and were incurred in association with a change in leadership to execute discrete, project-based strategic initiatives aimed at analyzing and summarizing growth opportunities and cost reductions for the Company. The transformative nature, narrow scope, and limited duration of these incremental consulting fees are not reflective of the ordinary course expenses incurred to operate our business. Third-party consulting fees, discretionary retention incentives and severance costs are included in General and administrative expenses on the Consolidated Statements of Comprehensive Income.
(6)Represents costs incurred, primarily consisting of occupancy and payroll related expenses, associated with the opening of new stores. These costs are considered a “cost of new projects” as defined in our Credit Facility.
(7)Represents other adjustments allowed under our Credit Agreement in the determination of Net Total Leverage Ratio including (i) amortization of software costs, (ii) executive search fees, (iii) public company costs, (iv) estimated impact of remodels to financial performance, (v) the proforma impact of certain leases that were reclassified as finance leases during fiscal 2025 and (vi) the pro forma impact of certain implemented cost saving initiatives.
The following table provides the Net Total Leverage Ratio calculation, as defined in our Credit Agreement as of and for the period indicated:
| As of, and for the Trailing Four Quarters Ended May 5, 2026 | |||||
| Credit Adjusted EBITDA (a) | $ | 461.9 | |||
Total debt (1) | $ | 1,535.3 | |||
| Less: Cash and cash equivalents | (19.6) | ||||
| Add: Outstanding letters of credit | 20.5 | ||||
| Net debt (b) | $ | 1,536.2 | |||
| Net Total Leverage Ratio (b / a) | 3.3 | ||||
Recent insider activity
| Date | Insider | Role | Action | Shares | Price | Value |
|---|---|---|---|---|---|---|
| 2026-04-17 | Klohn Steve | SVP Chief Information Officer | Sell | -6,989 | $14.69 | -$102,668 |
Source: SEC Form 4 filings.
Next expected filings
- ~2026-09-20 10-Q expected by 2026-09-23 (in 88 days)
- ~2026-12-14 10-Q expected by 2026-12-17 (in 173 days)
- ~2027-03-30 10-K expected by 2027-04-01 (in 279 days)
- ~2027-06-20 10-Q expected by 2027-06-23 (in 361 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-06-15 8-K Earnings Release; Financial Statements and Exhibits
- 2026-06-15 10-Q Quarterly Report
- 2026-05-06 DEF 14A Proxy Statement
- 2026-05-01 8-K Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits
- 2026-03-31 10-K Annual Report
- 2026-03-31 8-K Earnings Release; Financial Statements and Exhibits
- 2025-12-09 10-Q Quarterly Report
- 2025-12-09 8-K Earnings Release; Financial Statements and Exhibits
- 2025-10-27 8-K Officer/Director Change; Financial Statements and Exhibits
- 2025-09-15 10-Q Quarterly Report
- 2025-09-15 8-K Earnings Release; Financial Statements and Exhibits
- 2025-07-15 8-K Officer/Director Change; Other Events; Financial Statements and Exhibits
- 2025-06-20 8-K Officer/Director Change; Shareholder Vote Results; Financial Statements and Exhibits
- 2025-06-13 8-K Officer/Director Change; Financial Statements and Exhibits
- 2025-06-10 10-Q Quarterly Report