Lucky Strike Posts 6% Revenue Rise in Q4

Lucky Strike Entertainment (NYSE:LUCK), a major operator in the out-of-home entertainment sector, reported its fourth quarter and full year 2025 results on August 28, 2025. The release showed total revenue (GAAP) was $301.2 million for Q4 FY2025, up 6.1% from the year-earlier period (GAAP), exceeding the pace set earlier in the year and reflecting the continued boost from acquisitions and new builds. However, same-store revenue dropped 4.1%. The company posted a net loss of $74.7 million (GAAP), a wider deficit than the $62.2 million GAAP net loss recorded in Q4 FY2024. Adjusted EBITDA increased to $88.7 million, up 6.4% versus Q4 FY2024. Operating cash flow (GAAP) surged to $22.5 million from $6.7 million. Management issued guidance targeting total revenue growth of 5% to 9% and adjusted EBITDA (non-GAAP) between $375 million and $415 million for FY2026. The quarter showed a step-up in top-line momentum, though margin pressure and weaker results at established locations remained concerns.

Business Overview and Strategic Focus

Lucky Strike Entertainment operates hundreds of leisure and entertainment venues across North America, serving over 30 million customers each year. Its offerings span bowling alleys, amusement centers, water parks, and food and beverage services. The business draws on its diverse portfolio and well-located properties to attract groups, corporate events, and families seeking experiential entertainment outside the home.

Expansion has been a primary focus, with the company investing in both the acquisition of existing locations and the construction of new sites. Alongside growth in physical venues, leadership continues to support rebranding projects and the introduction of new customer programs such as the Summer Season Pass. Key success factors include the ability to drive repeat customer visits, integrate new acquisitions, and use technology to enhance operations and guest engagement.

Fourth Quarter 2025 Highlights: Performance and Trends

The quarter saw total revenue (GAAP) up by 6.1% versus Q4 FY2024. Bowling revenue (GAAP) declined slightly, while food and beverage revenue (GAAP) grew 7.8% and amusement and other revenue (GAAP) surged 20.6%.

While overall revenue was up, same-store revenue—a key non-GAAP measure showing performance at venues open at least a year—declined 4.1% compared to the same period last year. This trend of negative growth in mature locations echoes the challenges seen in previous quarters and indicates continued softness in established parts of the portfolio. Most of the overall growth thus came from acquisitions rather than organic growth at legacy venues.

Profitability metrics were mixed. Adjusted EBITDA, which excludes one-time items like restructuring costs and provides a clearer sense of operating profit, rose to $88.7 million versus $83.4 million in Q4 FY2024. Net loss (GAAP) widened to $74.7 million. Net cash provided by operating activities (GAAP) increased 234.0% versus Q4 FY2024, reaching $22.5 million, reflecting improved cash generation even as headline profits remained negative.

The quarter featured aggressive expansion efforts, including the addition of 14 new locations (10 by acquisition and four by new construction) in FY2025. Since the close of Q4 FY2025, another three family entertainment centers and two water parks were acquired, pushing the total venue count to 370 and Lucky Strike-branded venues to 55. The company aims to reach 100 branded locations by year-end. The Summer Season Pass program generated $13.4 million in sales at bowling centers, and $4.2 million at water parks and family entertainment centers. Management attributes much of the revenue momentum in June and July to this initiative, which also offers valuable customer data for future marketing.

Cost pressures persisted, with adjusted EBITDA margin falling to 29.5% and 30.6% for FY2025, compared to 31.3% in FY2024. Margin compression, particularly in periods with high acquisition activity, signals that new or recently absorbed sites can be less profitable initially. Management explained that it typically takes 12–18 months post-acquisition for new venues to reach company-wide target margins. The company's net debt balance increased to $1.26 billion, up from $1.09 billion as of Q4 FY2024, as capital spending on acquisitions and share repurchases continued. Liquidity remains healthy, with cash and access to revolving credit totaling $342 million.

The company paid out $72 million in share buybacks, and declared a quarterly cash dividend of $0.055 per share.

The rollout of the Summer Season Pass, which provides unlimited visits to qualified locations for the season, marked a significant push to build loyalty and keep traffic high during summer months.

Looking Forward: Guidance and Investor Focus

Management’s outlook anticipates total revenue of $1.26–$1.31 billion for FY2026, representing 5–9% growth over the prior year. Adjusted EBITDA is projected in the range of $375–$415 million, implying a modest improvement over the fiscal 2025 result. These targets rely on continued performance from new and acquired locations, and the full realization of contributions from recently launched programs such as the Summer Season Pass. Management noted that acquisitions typically take 12-18 months to deliver margin improvements to company averages, signaling that some near-term margin impact should be expected.

The company maintained its focus on driving operating cash flow and increasing free cash flow per share, even as leverage ratios have edged higher due to rapid expansion. Investors will likely keep a close eye on trends in same-store revenue, the speed of integration and profitability at new venues, and how effectively the company manages its capital allocation. Management announced a regular dividend of $0.055 per share for Q1 FY2026, reflecting an ongoing commitment to returning capital to shareholders.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.