Exchange: NYSE | Sector: Communication Services | Industry: Entertainment
Q4 2024
Published: Sep 5, 2024
Earnings Highlights
Revenue of $283.87M down 22.9% year-over-year
EPS of $-0.41 decreased by 7.1% from previous year
Gross margin of 23.7%
Net income of -62.18M
"Bowling is a very good enduring business. We've spent a lot of money to build really wonderful centers that are the best product available. They're easily accessible, they're in your community, and it's still a very good value. Bowling is an absolutely fantastic business." - Thomas Shannon
Bowlero Corp (BOWL) QQ4 2024 Earnings Review: Expanding Beyond Bowling with Season Passes, Raging Waves, and M&A Optionality in Location-Based Entertainment
Executive Summary
Bowlero reported strong sequential improvements in Q4 2024, delivering total revenue ex-service fee of $283.0 million and adjusted EBITDA of $83.4 million, up 20.2% and 29% respectively year over year. Same-store sales (SSS) rose 6.9% in the quarter, with April-June all posting positive SSS, underscoring the durability of Bowlero’s location-based entertainment model. Management attributes part of the gain to targeted initiatives in operations, product mix, and guest value propositions, including the Summer Season Pass, upgraded amusements, and enhanced food & beverage (F&B) offerings. The acquisition of Raging Waves (May 2024) demonstrated the potential for non-bowling assets to contribute meaningfully to revenue and EBITDA in a seasonal park format, although weather in Chicago moderated near-term results. Bowlero signaled a disciplined capital allocation stance for FY2025, guiding mid-single digits to 10% total revenue growth with 32-34% EBITDA margins, and a reduced CapEx plan of approximately $154 million. The company remains active on the M&A front, having increased revolver capacity to $335 million to support a broader deal environment, while acknowledging that the FY25 outlook excludes announced or unannounced M&A. Management guided to roughly 50% operating leverage in FY2025, aided by comped wage provisions and COVID-related costs, and reiterated a focus on growing EBITDA through center-level efficiency, tighter procurement, and higher attachment from F&B and amusements. The strategic takeaway is Bowlero’s pivot toward a diversified, higher-attach location-based entertainment platform with substantial upside from new builds, brand evolution (Lucky Strike rebranding), and expansion of non-bowling assets, while maintaining a conservative stance on pricing and a measured approach to financing activity.
Key Performance Indicators
Revenue
283.87M
QoQ: -8.34% | YoY:-22.94%
Gross Profit
67.34M
23.72% margin
QoQ: 27.72% | YoY:-23.06%
Operating Income
26.12M
QoQ: -50.43% | YoY:-81.77%
Net Income
-62.18M
QoQ: 137.14% | YoY:-3.15%
EPS
-0.41
QoQ: 131.71% | YoY:-7.14%
Revenue Trend
Margin Analysis
Key Insights
Revenue (ex-service fee): $283.9 million in Q4 2024, up 20.2% YoY; total growth driven by higher attendance, events, and improved mix
Same-store sales: +6.9% in Q4, with Apr–Jun all positive; mid-to-high single-digit trajectory expected to continue in FY2025
Adjusted EBITDA: $83.4 million in Q4 2024, up 29% YoY; implied adjusted EBITDA margin around 29.2% on ex-service revenue; management projects FY2025 EBITDA margin of 32–34%
Net income / EPS: -$62.2 million / -$0.41 per share in Q4 2024 GAAP terms; reflects non-cash D&A, interest expense, and non-operating items; adjusted metrics provide a stronger operating picture
Capex: FY2024 CapEx $193 million; FY2025 expected CapEx of ~$154 million (growth $50m, new builds $45m, maintenance $44m, rebranding $15m)
Financial Highlights
- Revenue (ex-service fee): $283.9 million in Q4 2024, up 20.2% YoY; total growth driven by higher attendance, events, and improved mix
- Same-store sales: +6.9% in Q4, with Apr–Jun all positive; mid-to-high single-digit trajectory expected to continue in FY2025
- Adjusted EBITDA: $83.4 million in Q4 2024, up 29% YoY; implied adjusted EBITDA margin around 29.2% on ex-service revenue; management projects FY2025 EBITDA margin of 32–34%
- Net income / EPS: -$62.2 million / -$0.41 per share in Q4 2024 GAAP terms; reflects non-cash D&A, interest expense, and non-operating items; adjusted metrics provide a stronger operating picture
- Capex: FY2024 CapEx $193 million; FY2025 expected CapEx of ~$154 million (growth $50m, new builds $45m, maintenance $44m, rebranding $15m)
- Raging Waves (Yorkville, IL): Q4’24 contributed $3.5 million revenue and $2.0 million EBITDA in June; integration of non-bowling amusements shows meaningful leverage potential
- Liquidity & leverage: End of quarter liquidity $386 million (no revolver debt drawn); cash $67 million; net debt approximately $1.10 billion; bank facility net leverage ~2.6x; revolver capacity increased to $335 million
- Guidance: FY2025 total revenue growth target mid-single digits to 10%; low-to-mid single-digit SSS; EBITDA margin target 32–34%; no pricing increases assumed in guidance; M&A activity could raise upside beyond the base range
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
283.87M
-22.94%
-8.34%
Gross Profit
67.34M
-23.06%
27.72%
Operating Income
26.12M
-81.77%
-50.43%
Net Income
-62.18M
-3.15%
137.14%
EPS
-0.41
-7.14%
131.71%
Key Financial Ratios
currentRatio
0.62
grossProfitMargin
23.7%
operatingProfitMargin
-12.1%
netProfitMargin
-21.9%
returnOnAssets
-2%
returnOnEquity
124.7%
debtEquityRatio
-57.21
operatingCashFlowPerShare
$0.05
freeCashFlowPerShare
$-0.29
dividendPayoutRatio
-19.7%
priceToBookRatio
-40.55
priceEarningsRatio
-8.13
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Theme: Strategy and portfolio expansion
- Tom Shannon, Bowlero Founder & CEO: Bowling is a durable, high-margin business with best-in-class centers; Bowlero aims to deploy capital into bowling through new builds, acquisitions, and upgrades, while expanding beyond bowling into broader location-based entertainment.
Theme: Operational improvements and guest value
- Lev Ekster, President: Summer Season Pass was revamped and sold over $8.5 million with 1.6 million redemptions; pass holders exhibited stronger attachment and higher NPS, signaling market share gains and enhanced customer satisfaction. The company is rolling out refreshed F&B menus, improved amusements, and tablets for servers to boost efficiency and guest experience.
Theme: Financial performance and outlook
- Bobby Lavan, CFO: Q4 2024 adjusted EBITDA of $83.4 million (+29% YoY) on $283.9 million ex-service fee revenue; commentary notes that service fee revenue is pass-through; 2025 guide contemplates mid-single digits to 10% revenue growth, 32–34% EBITDA margins, and approximately $154 million in CapEx. The company targets ~50% operating leverage in FY25 and notes that M&A could lift results above the baseline. Raging Waves contribution of $3.5 million revenue and $2 million EBITDA is highlighted as a proof-point of non-bowling asset upside.
Bowling is a very good enduring business. We've spent a lot of money to build really wonderful centers that are the best product available. They're easily accessible, they're in your community, and it's still a very good value. Bowling is an absolutely fantastic business.
— Thomas Shannon
We sold over $8.5 million with the summer season passes. The pass was redeemed 1.6 million times, proving a clear value proposition and strong guest engagement.
— Lev Ekster
Forward Guidance
Bowlero issued FY2025 guidance: total revenue growth in the mid-single digits to 10%, with low-to-mid single-digit same-store sales (SSS) growth. EBITDA margins are expected to be in the 32%–34% range. CapEx for FY25 is planned at approximately $154 million (growth CapEx $50m, new builds $45m, maintenance $44m, and $15m for rebranding Bowlero centers to Lucky Strike). The company does not bake in pricing increases into the FY25 guidance and expects operating leverage to be around 50% as it absorbs comp wage adjustments from March 2023 and other one-time COVID costs. Management notes that M&A activity could meaningfully impact results beyond the base plan, given higher capital availability (revolver increased to $335m). Key indicators to monitor include: omni-channel online bookings growth (>30–40% in certain periods), F&B attachment as a driver of center-level profitability, the pace of new builds (four centers currently under construction with larger-scale contributions than typical acquisitions), season-pass demand (Fall Season Pass expansion), and the performance of non-bowling amusements (e.g., Raging Waves) across different geographies and weather patterns.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
BOWL Focus
23.72%
-12.10%
1.25%
-8.13%
GOLF
50.00%
-5.64%
-3.10%
-38.20%
HPK
38.40%
35.50%
6.12%
4.73%
LTH
30.80%
8.28%
1.05%
31.27%
MODG
65.50%
-0.81%
-1.99%
-8.57%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Bowlero presents a multi-pronged growth thesis anchored in a diversified location-based entertainment platform. The core bowling business remains resilient with high-margin economics when fully realized at the center level, supported by a data-driven operating culture and a focus on guest value. The FY2025 guidance of mid-single digits to 10% revenue growth and 32–34% EBITDA margins reflects a disciplined step-down of a portion of the $193 million annual CapEx in FY24 toward a more targeted $154 million in FY25, while maintaining strategic investments in new builds (four marquee centers in the near term) and non-bowling assets (Lucky Strike branding, Raging Waves). The expansion into non-bowling amusements provides diversification and a potential offset to bowling volatility, though it introduces weather and park-operations risk. Bowlero’s financial position remains solid, with $386 million in liquidity and a net leverage of ~2.6x, enabling further M&A activity if attractive opportunities arise (revolver capacity increased to $335 million). The key monitoring points for investors will be: the cadence and profitability of new builds versus acquisitions, the ramp of F&B and amusements attachment (which has shown meaningful uplift in Q4 and at Raging Waves), the consistency of online bookings growth, and the realization of operating leverage to approach the lower end of the 32–34% EBITDA margin target. If Bowlero can sustain positive SSOs, maintain strong event-driven per-customer spend, and execute on scaleable capital projects while controlling costs, the stock could benefit from multiple expansion and higher cash generative capability, anchored by a healthier Opex/CAPEX balance and improving free cash flow trajectory over time.
Key Investment Factors
Growth Potential
Growth drivers include (1) four marquee new-build centers opening in late 2024 (Beverly Hills, Denver area) with expected revenue contributions of $7.5–$8 million per center, (2) Lucky Strike rebranding and expansion (CapEx allocated $15 million for rebranding in FY25), (3) non-bowling amusements like Raging Waves with liquidation of synergies and extension into other parks, and (4) a robust season-pass program that expands wallet share (Summer Season Pass exceeded $8.5 million in sales with 1.6 million redemptions) and potentially a Fall Season Pass on the horizon; management targets double-digit ROIC with high EBITDA leverage from estimated 50% operating leverage in FY25.
Profitability Risk
Key risks include macro consumer weakness, inflationary pressure on labor and procurement costs, weather dependence affecting seasonal venues (e.g., Chicago area for Raging Waves), execution risk from accelerating capital program, reliance on M&A to drive growth (if M&A slows, base growth could be constrained), and potential competition from alternative entertainment formats; also, the shift to Lucky Strike branding and rebranding costs pose near-term margin headwinds.
Financial Position
Liquidity remains ample at ~$386 million (cash ~ $67 million; revolver undrawn). Net debt ~$1.10 billion with a bank facility net leverage ~2.6x. CapEx discipline is evident with FY25 capex targeted at ~$154 million (lower than FY24) to finance growth via new builds and rebranding while maintaining maintenance spend. Bowlero’s balance sheet supports a meaningful M&A vector given elevated revolver capacity (up to $335 million).
SWOT Analysis
Strengths
Best-in-class, high-quality centers with strong brand equity (Bowling core)
History of disciplined capital deployment into center upgrades, expansions, and acquisitions
High-margin bowling operations (management cites near 50% EBITDA margins for bowling) with strong event-driven revenue potential
Season passes and online booking capabilities driving wallet share and attendance
Raging Waves non-bowling amusement asset provides diversification and weather-hedge potential
Weaknesses
Dependency on a capital-intensive growth model requiring ongoing CapEx and large-scale reinvestment
Near-term margin headwinds from amortization of Lucky Strike integration and one-time costs (D&A, streamlining SG&A)
Seasonality and weather risk in non-bowling amusements (e.g., Raging Waves in Chicago area)
Complex branding transition (Lucky Strike rebranding) may cause execution risk and near-term capex dilution
Opportunities
Expansion through four marquee new builds with higher per-center revenue contribution
Lucky Strike branding expansion and rebranding opportunities across centers
Expansion of non-bowling amusements and enhanced F&B offerings to lift attach rates
Season passes (Summer, Fall) to stabilize traffic during slower months and insulate from weather
Threats
Macro consumer weakness and discretionary spending pressure
Interest rate and financing environment affecting M&A activity
Competition from other entertainment formats (e.g., dining, cinema, other aggregates)
Operational risk from rapid capex deployment and integration of new assets