Exchange: NYSE | Sector: Communication Services | Industry: Entertainment
Q2 2025
Published: Mar 31, 2025
Earnings Highlights
Revenue of $339.88M up 19.7% year-over-year
EPS of $0.07 increased by 117.1% from previous year
Gross margin of 42.4%
Net income of 13.29M
"Transcript not provided in data." - Management
Bowlero Corp (BOWL) QQ2 2025 Earnings Analysis: Revenue Growth, Positive Free Cash Flow, and Elevated Leverage in Bowling Entertainment
Executive Summary
Bowlero Corp reported a strong top-line performance in QQ2 2025, with revenue of $339.9 million, up 19.7% year-over-year and 13.3% quarter-over-quarter. Gross profit reached $144.1 million, yielding a gross margin of 42.4%, while EBITDA stood at $121.4 million and operating income at $62.2 million, translating to margins of 35.7% and 18.3% respectively. Net income was $13.3 million, or $0.07 per share, and free cash flow (FCF) was $61.1 million with operating cash flow of $86.6 million, supported by capital expenditures of $25.5 million. The company generated positive cash flow and meaningful margin expansion versus prior year, signaling improving operational leverage across its center network.
However, Bowlero continues to operate with a highly leveraged balance sheet. Total debt stands at $2.595 billion and net debt at $2.516 billion, while stockholders’ equity is negative at approximately $(86.4) million. Liquidity metrics show a current ratio of 0.64, quick ratio of 0.56, and cash ratio of 0.39, underscoring balance sheet risk amid elevated interest costs (interest expense of $49.4 million) and sizable long-term indebtedness. Despite robust FCF generation, the leverage burden may constrain near-term strategic flexibility and capex cadence. Management commentary (not provided in the data) would be critical to confirm any de-leveraging plans, capital allocation priorities, and longer-term growth initiatives.
Looking ahead, the QQ2 performance implies continued demand for Bowlero’s bowling entertainment format, with room to improve profitability through center optimization and cost discipline. The key questions for investors are: Can Bowlero accelerate deleveraging given 2025 FCF generation? How will refinancing efforts and capex plans influence balance sheet health? And how do Bowlero’s growth opportunities compare with peers in the entertainment and family recreation space as consumer spending evolves?
Key Performance Indicators
Revenue
339.88M
QoQ: 13.27% | YoY:19.73%
Gross Profit
144.07M
42.39% margin
QoQ: 16.86% | YoY:113.95%
Operating Income
62.19M
QoQ: 32.67% | YoY:138.09%
Net Income
13.29M
QoQ: -53.04% | YoY:121.38%
EPS
0.07
QoQ: -58.82% | YoY:117.07%
Revenue Trend
Margin Analysis
Key Insights
Revenue: $339.882 million in QQ2 2025, up 19.7% YoY and 13.3% QoQ. YoY growth reflects a stronger center network and higher guest demand.
Gross Profit: $144.070 million with a gross margin of 42.39% (0.4239), up from prior periods, indicating improved mix and pricing leverage.
EBITDA: $121.379 million with an EBITDA margin of 35.71% (0.3571), signaling strong cash-earnings generation from operations.
Net Income: $13.292 million, net margin 3.91% (0.0391); EPS $0.07 per share (undiluted and diluted).
Financial Highlights
Revenue and Profitability
- Revenue: $339.882 million in QQ2 2025, up 19.7% YoY and 13.3% QoQ. YoY growth reflects a stronger center network and higher guest demand.
- Gross Profit: $144.070 million with a gross margin of 42.39% (0.4239), up from prior periods, indicating improved mix and pricing leverage.
- EBITDA: $121.379 million with an EBITDA margin of 35.71% (0.3571), signaling strong cash-earnings generation from operations.
- Operating Income: $62.185 million, margin 18.30% (0.1830), reflecting operating leverage as revenues rise.
- Net Income: $13.292 million, net margin 3.91% (0.0391); EPS $0.07 per share (undiluted and diluted).
- Income tax, interest, and other: Interest expense $49.414 million; depreciation & amortization $40.325 million; total other expenses $(30.545) million.
Cash Flow and Efficiency
- Operating cash flow: $86.620 million; Capital expenditures: $(25.497) million; Free cash flow: $61.123 million (FCF margin ~18.0% of revenue).
- Net cash provided by operating activities, after working capital movements, supports deleveraging potential and funding for capex/strategic initiatives.
- Working capital dynamics show modest receivables and inventory levels, with negative cash conversion cycle (-6.98 days), aided by favorable payables timing.
Balance Sheet and Leverage
- Total assets: $3.1957 billion; total liabilities: $3.2821 billion; total debt: $2.5957 billion; net debt: $2.5156 billion.
- Stockholders’ equity: negative $(86.404) million, with goodwill of $886.203 million and intangible assets of $44.653 million, suggesting material intangible-based and goodwill carrying values.
- Liquidity: cash and equivalents $79.088 million; current ratio 0.636; quick ratio 0.558; cash ratio 0.392, indicating tight near-term liquidity against current liabilities ($201.8 million).
- Leverage and coverage: Debt ratio 0.812; interest coverage 1.258x; total debt to capitalization 1.034x, underscoring a heavily indebted capital structure with limited cushion for earnings volatility.
Valuation and Market Position
- Price-to-sales around 4.05x and price-to-earnings around 25.92x, with enterprise value multiple around 32.08x, indicating a premium for Bowlero’s growth potential but elevated risk given leverage and negative equity.
- Efficiency metrics such as asset turnover 0.106 and fixed asset turnover 0.168 reflect a capital-intensive business with scale advantages yet modest asset productivity relative to peers.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
339.88M
19.73%
13.27%
Gross Profit
144.07M
113.95%
16.86%
Operating Income
62.19M
138.09%
32.67%
Net Income
13.29M
121.38%
-53.04%
EPS
0.07
117.07%
-58.82%
Key Financial Ratios
currentRatio
0.64
grossProfitMargin
42.4%
operatingProfitMargin
18.3%
netProfitMargin
3.91%
returnOnAssets
0.42%
returnOnEquity
-15.4%
debtEquityRatio
-30.03
operatingCashFlowPerShare
$0.61
freeCashFlowPerShare
$0.43
dividendPayoutRatio
62.8%
priceToBookRatio
-15.95
priceEarningsRatio
25.92
Net Income vs. Revenue
Expense Breakdown
Management Commentary
No earnings call transcript data were provided in the input. As a result, specific management quotes or themes from the QQ2 2025 call cannot be cited. If the transcript is supplied, highlights would be grouped by themes (strategy, operations, market conditions) and tied to implications for the outlook and execution.
Transcript not provided in data.
— Management
Transcript not provided in data.
— Management
Forward Guidance
There is no explicit forward guidance in the provided data for QQ2 2025. The analysisatively infers that Bowlero’s near-term trajectory hinges on deleveraging, continued positive free cash flow generation, and capital allocation discipline. Investors should monitor: (1) debt refinancing activity and maturity profile to assess potential relief from interest and principal pressures; (2) center-level profitability trends, including same-store sales, occupancy, and cost control; (3) capex plans for center refurbishment or expansion and their impact on cash flow; (4) working capital dynamics and seasonality; (5) competitive dynamics in the entertainment and family recreation space (e.g., Dave & Buster’s-type peers) and any cross-channel monetization opportunities.
Overall, the near-term outlook depends on Bowlero’s ability to sustain FCF generation while reducing leverage and protecting cash flows against macro swings in discretionary spending. A tighter financial profile would improve resilience and support a more favorable funding environment for capital allocation initiatives.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
BOWL Focus
42.39%
18.30%
-15.40%
25.92%
GOLF
54.40%
15.50%
8.27%
13.74%
HPK
35.50%
31.70%
1.89%
14.78%
LTH
36.00%
16.80%
2.23%
17.38%
MODG
63.20%
8.90%
1.58%
11.08%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Bottom-line confidence rests on Bowlero’s ability to sustain positive free cash flow while aggressively reducing leverage. The QQ2 2025 results show resilient revenue growth and EBITDA generation, but the debt burden and negative equity pose material structural risks. If Bowlero can execute a disciplined deleveraging plan, maintain center-level profitability, and optimize capital allocation (favoring debt reduction over buybacks in tighter liquidity scenarios), the investment case could improve. Investors should closely monitor refinancing timelines, debt maturities, and any updates on center modernization plans, as these factors will determine the sustainability of cash flows and the trajectory of the balance sheet through 2025 and beyond.
Key Investment Factors
Growth Potential
Potential to grow EBITDA through center optimization, pricing discipline, and menu/FBF enhancements; potential incremental openings or refurbishments that improve guest experience and throughput; free cash flow generation provides a path to deleverage over time.
Profitability Risk
High enterprise leverage with net debt of approximately $2.516 billion versus EBITDA of $121.4 million implies a very high leverage multiple and exposure to interest rate and cyclicality risk. Negative equity elevates balance sheet risk. Liquidity is restrained (current ratio 0.64). Revenue is discretionary-consumer-driven and may be sensitive to macro volatility; refinancing risk remains a near-term overhang.
Financial Position
Solid FCF generation ($61.1M) and operating cash flow ($86.6M) support deleveraging potential, but the balance sheet remains debt-heavy with long-term obligations and minimal equity backing. Capex cadence and capital allocation (stock buybacks and modest dividends) should be carefully balanced with deleveraging objectives.
SWOT Analysis
Strengths
Large, established bowling entertainment network with scale (center footprint historically ~317 centers; QQ2 2025 results reflect a mature platform).