Lucky Strike Entertainment - 10-Q quarterly report FY2025 Q3

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM 10-Q

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☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 30, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 001-40142

___________________________________

LUCKY STRIKE ENTERTAINMENT CORPORATION

(Exact name of registrant as specified in its charter)

___________________________________


Delaware									98-1632024
(State or other jurisdiction of incorporation or organization)									(I.R.S. Employer Identification No.)

7313 Bell Creek Road
Mechanicsville, Virginia									23111
(Address of Principal Executive Offices)									(Zip Code)

(804) 417-2000

Registrant's telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, par value $0.0001 per share	LUCK	The New York Stock Exchange

Securities registered pursuant to section 12(g) of the Act: None

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

The registrant had outstanding 81,685,637 shares of Class A common stock, 58,519,437 shares of Class B common stock, and 117,087 shares of Series A preferred stock as of April 30, 2025.

Table of Contents

Index to Notes

Table of Contents


		Page
Part I - Financial Information
Item 1.	Financial Statements	i
	Condensed Consolidated Balance Sheets (unaudited)	1
	Condensed Consolidated Statements of Operations (unaudited)	3
	Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited)	4
	Condensed Consolidated Statements of Changes in Temporary Equity and Stockholders’ (Deficit) Equity (unaudited)	5
	Condensed Consolidated Statements of Cash Flows (unaudited)	7
	Index for Notes to Condensed Consolidated Financial Statements (unaudited)	9
	Notes to Condensed Consolidated Financial Statements (unaudited)	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	34
Item 4.	Controls and Procedures	35

Part II - Other Information
Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 6.	Exhibits and Financial Statement Schedules	36

Signatures		37

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Index to Notes

Lucky Strike Entertainment Corporation

Condensed Consolidated Balance Sheets

(Amounts in thousands)

(Unaudited)

Item 1. Condensed Consolidated Financial Statements


	March 30, 2025		June 30, 2024
Assets
Current assets:
Cash and cash equivalents	$	79,088	$	66,972
Accounts and notes receivable, net	6,096		6,757
Inventories, net	15,683		13,171
Prepaid expenses and other current assets	27,519		25,316
Assets held-for-sale	—		1,746
Total current assets	128,386		113,962

Property and equipment, net	933,532		887,738
Operating lease right of use assets	583,094		559,168
Finance lease right of use assets, net	512,106		524,392
Intangible assets, net	44,653		47,051
Goodwill	841,550		833,888
Deferred income tax asset	117,660		112,106
Other assets	34,736		35,730
Total assets	$	3,195,717	$	3,114,035

Liabilities, Temporary Equity and Stockholders’ Deficit
Current liabilities:
Accounts payable and accrued expenses	$	154,740	$	135,784
Current maturities of long-term debt	10,227		9,163
Current obligations of operating lease liabilities	32,228		28,460
Other current liabilities	4,605		9,399
Total current liabilities	201,800		182,806

Long-term debt, net	1,273,231		1,129,523
Long-term obligations of operating lease liabilities	596,851		561,916
Long-term obligations of finance lease liabilities	682,169		680,213
Long-term financing obligations	447,099		440,875
Earnout liability	50,172		137,636
Other long-term liabilities	26,800		26,471
Deferred income tax liabilities	3,999		4,447
Total liabilities	3,282,121		3,163,887


Commitments and Contingencies (Note 9)

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Index to Notes


	March 30, 2025		June 30, 2024
Temporary Equity
Series A preferred stock	$	127,325	$	127,410

Stockholders’ Deficit
Class A common stock	11		11
Class B common stock	6		6
Additional paid-in capital	477,392		510,675
Treasury stock, at cost	(450,856)		(385,015)
Accumulated deficit	(238,465)		(303,159)
Accumulated other comprehensive (loss) income	(1,817)		220
Total stockholders’ deficit	(213,729)		(177,262)
Total liabilities, temporary equity and stockholders’ deficit	$	3,195,717	$	3,114,035

See accompanying notes to unaudited condensed consolidated financial statements.

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Index to Notes

Lucky Strike Entertainment Corporation

Condensed Consolidated Statements of Operations

(Amounts in thousands, except share and per share amounts)

(Unaudited)


	Three Months Ended				Nine Months Ended
	March 30, 2025		March 31, 2024		March 30, 2025		March 31, 2024
Revenues
Bowling	$	159,756	$	165,528	$	420,926	$	427,253
Food & beverage	120,452		118,032		319,393		304,137
Amusement & other	59,674		54,110		159,832		139,356
Total revenues	339,882		337,670		900,151		870,746

Costs and expenses
Location operating costs, excluding depreciation and amortization	92,568		86,766		261,490		238,976
Location payroll and benefit costs	75,617		78,645		213,929		219,441
Location food and beverage costs	27,627		27,178		71,382		67,783
Selling, general and administrative expenses, excluding depreciation and amortization	41,242		37,121		110,437		111,080
Depreciation and amortization	40,325		36,327		116,426		104,750
Loss on impairment and disposal of fixed assets, net	648		1,011		4,695		1,060
Other operating (income) expense, net	(330)		(390)		(212)		1,811
Total costs and expenses	277,697		266,658		778,147		744,901

Operating income	62,185		71,012		122,004		125,845

Other (income) expenses
Interest expense, net	49,414		46,890		146,879		130,575
Change in fair value of earnout liability	(18,886)		(8,868)		(87,489)		14,541
Other expense	17		3		817		66
Total other expense	30,545		38,025		60,207		145,182

Income (loss) before income tax expense (benefit)	31,640		32,987		61,797		(19,337)

Income tax expense (benefit)	18,348		9,141		(2,897)		2,067
Net income (loss)	13,292		23,846		64,694		(21,404)

Series A preferred stock dividends	(2,313)		(2,353)		(6,767)		(6,278)
Earnings allocated to Series A preferred stock	(712)		(1,430)		(3,662)		—
Net income (loss) attributable to common stockholders	$	10,267	$	20,063	$	54,265	$	(27,682)

Net income (loss) per share attributable to Class A and B common stockholders
Basic	$	0.07	$	0.14	$	0.38	$	(0.18)
Diluted	$	0.07	$	0.13	$	0.36	$	(0.18)
Weighted-average shares used in computing net income (loss) per share attributable to common stockholders
Basic	141,185,986		148,102,841		143,630,881		152,945,921
Diluted	147,606,436		157,874,876		150,982,706		152,945,921

See accompanying notes to unaudited condensed consolidated financial statements.

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Index to Notes

Lucky Strike Entertainment Corporation

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Amounts in thousands)

(Unaudited)


	Three Months Ended				Nine Months Ended
	March 30, 2025		March 31, 2024		March 30, 2025		March 31, 2024
Net income (loss)	$	13,292	$	23,846	$	64,694	$	(21,404)
Other comprehensive income (loss), net of income tax:
Unrealized (loss) gain on derivatives	(139)		765		(536)		(2,685)
Foreign currency translation adjustment	219		486		(1,501)		665
Other comprehensive income (loss)	80		1,251		(2,037)		(2,020)
Total comprehensive income (loss)	$	13,372	$	25,097	$	62,657	$	(23,424)

See accompanying notes to unaudited condensed consolidated financial statements.

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Index to Notes

Lucky Strike Entertainment Corporation

Condensed Consolidated Statements of Changes in Temporary Equity and Stockholders’ (Deficit) Equity

(Amounts in thousands, except share amounts)

(Unaudited)


	Series A preferred stock			Class A common Stock			Class B common Stock			Treasury stock			Additional Paid-in capital		Accumulated deficit		Accumulated other comprehensive income		Total stockholders’ equity (deficit)
	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount
Balance, July 2, 2023	136,373	$	144,329	107,666,301	$	11	60,819,437	$	6	11,312,302	$	(135,401)	$	506,112	$	(219,659)	$	4,152	$	155,221
Net income	—	—		—	—		—	—		—	—		—		18,219		—		18,219
Foreign currency translation adjustment	—	—		—	—		—	—		—	—		—		—		(487)		(487)
Unrealized loss on derivatives	—	—		—	—		—	—		—	—		—		—		(340)		(340)
Conversion of Class B common stock into Class A common stock	—	—		2,300,000	—		(2,300,000)	—		—	—		—		—		—		—
Share-based compensation	—	—		15,489	—		—	—		—	—		1,823		—		—		1,823
Repurchase of Class A common stock into Treasury stock	—	—		(12,131,185)	(1)		—	—		12,131,185	(132,662)		—		—		—		(132,663)
Balance, October 1, 2023	136,373	$	144,329	97,850,605	$	10	58,519,437	$	6	23,443,487	$	(268,063)	$	507,935	$	(201,440)	$	3,325	$	41,773
Net loss	—	—		—	—		—	—		—	—		—		(63,469)		—		(63,469)
Foreign currency translation adjustment	—	—		—	—		—	—		—	—		—		—		666		666
Unrealized loss on derivatives	—	—		—	—		—	—		—	—		—		—		(3,110)		(3,110)
Share-based compensation	—	—		330,846	—		—	—		—	—		4,099		—		—		4,099
Dividends on Series A preferred stock	—	—		—	—		—	—		—	—		(3,969)		—		—		(3,969)
Repurchase of Class A common stock into Treasury stock	—	—		(7,516,855)	(1)		—	—		7,516,855	(80,962)		—		—		—		(80,963)
Balance, December 31, 2023	136,373	$	144,329	90,664,596	$	9	58,519,437	$	6	30,960,342	$	(349,025)	$	508,065	$	(264,909)	$	881	$	(104,973)
Net income	—	—		—	—		—	—		—	—		—		23,846		—		23,846
Foreign currency translation adjustment	—	—		—	—		—	—		—	—		—		—		486		486
Unrealized gain on derivatives	—	—		—	—		—	—		—	—		—		—		765		765
Settlement of Series A preferred stock	(9,986)	(10,569)		752,497	—		—	—		—	—		9,737		81		—		9,818
Share-based compensation	—	—		64,137	—		—	—		—	—		3,549		—		—		3,549
Common stock dividend	—	—		—	—		—	—		—	—		(8,730)		—		—		(8,730)
Repurchase of Class A common stock into Treasury stock	—	—		(68,120)	—		—	—		68,120	(745)		—		—		—		(745)
Balance, March 31, 2024	126,387	$	133,760	91,413,110	$	9	58,519,437	$	6	31,028,462	$	(349,770)	$	512,621	$	(240,982)	$	2,132	$	(75,984)

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Index to Notes


	Series A preferred stock			Class A common Stock			Class B common Stock			Treasury stock			Additional Paid-in capital		Accumulated deficit		Accumulated other comprehensive (loss) income		Total stockholders’ deficit
	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount
Balance, June 30, 2024	120,387	$	127,410	88,854,487	$	11	58,519,437	$	6	34,071,295	$	(385,015)	$	510,675	$	(303,159)	$	220	(177,262)
Net income	—	—		—	—		—	—		—	—		—		23,095		—		23,095
Foreign currency translation adjustment	—	—		—	—		—	—		—	—		—		—		(985)		(985)
Unrealized loss on derivatives	—	—		—	—		—	—		—	—		—		—		(709)		(709)
Settlement of Series A preferred stock	(3,300)	(3,492)		269,886	—		—	—		—	—		3,492		—		—		3,492
Share-based compensation	—	—		26,656	—		—	—		—	—		4,314		—		—		4,314
Cash dividends	—	—		—	—		—	—		—	—		(8,552)		—		—		(8,552)
Repurchase of Class A common stock into Treasury stock	—	—		(702,194)	—		—	—		702,194	(7,720)		—		—		—		(7,720)
Balance, September 29, 2024	117,087	$	123,918	88,448,835	$	11	58,519,437	$	6	34,773,489	$	(392,735)	$	509,929	$	(280,064)	$	(1,474)	$	(164,327)
Net income	—	—		—	—		—	—		—	—		—		28,307		—		28,307
Foreign currency translation adjustment	—	—		—	—		—	—		—	—		—		—		(735)		(735)
Unrealized gain on derivatives	—	—		—	—		—	—		—	—		—		—		312		312
Share-based compensation	—	—		317,374	—		—	—		—	—		3,374		—		—		3,374
Cash dividends	—	—		—	—		—	—		—	—		(8,473)		—		—		(8,473)
Repurchase of Class A common stock into Treasury stock	—	—		(3,334,976)	—		—	—		3,334,976	(38,116)		—		—		—		(38,116)
Balance, December 29, 2024	117,087	$	123,918	85,431,233	$	11	58,519,437	$	6	38,108,465	$	(430,851)	$	504,830	$	(251,757)	$	(1,897)	$	(179,658)
Net income	—	—		—	—		—	—		—	—		—		13,292		—		13,292
Foreign currency translation adjustment	—	—		—	—		—	—		—	—		—		—		219		219
Unrealized loss on derivatives	—	—		—	—		—	—		—	—		—		—		(139)		(139)
Share-based compensation	—	—		761,718	—		—	—		—	—		564		—		—		564
Settlement of equity awards	—	—		(1,747,434)	—		—	—		—	—		(16,244)		—		—		(16,244)
Cash dividends	—	—		—	—		—	—		—	—		(8,351)		—		—		(8,351)
Accrual of paid-in-kind dividends on Series A preferred stock	—	3,407		—	—		—	—		—	—		(3,407)		—		—		(3,407)
Repurchase of Class A common stock into Treasury stock	—	—		(1,943,340)	—		—	—		1,943,340	(20,005)		—		—		—		(20,005)
Balance, March 30, 2025	117,087	$	127,325	82,502,177	$	11	58,519,437	$	6	40,051,805	$	(450,856)	$	477,392	$	(238,465)	$	(1,817)	$	(213,729)

See accompanying notes to unaudited condensed consolidated financial statements.

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Index to Notes

Lucky Strike Entertainment Corporation

Condensed Consolidated Statements of Cash Flows

(Amounts in thousands)

(Unaudited)


	Nine Months Ended
	March 30, 2025		March 31, 2024
Operating activities
Net income (loss)	$	64,694	$	(21,404)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	116,426		104,750
Loss on impairment and disposal of fixed assets, net	4,695		1,060
Income from equity method investment	(226)		(518)
Amortization of deferred financing costs	2,844		2,703
Non-cash interest expense on finance lease obligation	8,166		6,778
Reduction of operating lease right of use assets	27,136		25,642
Non-cash portion of gain on lease modification	(144)		(499)
Deferred income taxes	(3,905)		1,828
Share-based compensation	17,955		9,743
Distributions from equity method investments	201		240
Change in fair value of earnout liability	(87,489)		14,541
Changes in assets and liabilities, net of business acquisitions:
Accounts receivable and notes receivable, net	1,205		(2,580)
Inventories	(2,009)		(2,477)
Prepaids, other current assets and other assets	(2,815)		(6,082)
Accounts payable and accrued expenses	23,837		32,664
Operating lease liabilities	(8,914)		(19,665)
Other current liabilities	(6,962)		(126)
Other long-term liabilities	72		1,500
Net cash provided by operating activities	154,767		148,098

Investing activities
Purchases of property and equipment	(117,502)		(147,063)
Purchases of intangible assets	—		(259)
Proceeds from sale of property and equipment	1,655		—
Proceeds from sale of intangibles	—		65
Acquisitions, net of cash acquired	(50,565)		(138,703)
Net cash used in investing activities	(166,412)		(285,960)

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Index to Notes


	Nine Months Ended
	March 30, 2025		March 31, 2024
Financing activities
Repurchase of Class A common stock into Treasury stock	$	(65,147)	$	(219,412)
Proceeds from share issuance	1,288		1,274
Payments for tax withholdings on share-based compensation	(6,155)		(1,469)
Payment of cash dividends	(25,375)		(12,699)
Payment of long-term debt	(6,891)		(9,640)
Proceeds from Incremental Term Loan	150,000		—
Payment on finance leases	(2,236)		(4,745)
Proceeds on finance leases	417		—
Settlement of Series A preferred stock	—		(751)
Settlement of equity awards	(21,053)		—
Proceeds from Revolver draws	110,000		175,000
Payoff from Revolver draws	(110,000)		(175,000)
Proceeds from sale-leaseback financing	—		408,510
Payment of deferred financing costs	(923)		(6,781)
Net cash provided by financing activities	23,925		154,287

Effect of exchange rates on cash	(164)		371

Net increase in cash and cash equivalents	12,116		16,796
Cash and cash equivalents at beginning of period	66,972		195,633
Cash and cash equivalents at end of period	$	79,088	$	212,429

See accompanying notes to unaudited condensed consolidated financial statements.

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Index to Notes

Lucky Strike Entertainment Corporation

Table of Contents

Index to Notes

Lucky Strike Entertainment Corporation

Notes to Condensed Consolidated Financial Statements

(In thousands, except share and per share data)

(Unaudited)

(1) Description of Business and Significant Accounting Policies

Lucky Strike Entertainment Corporation, a Delaware corporation, and its subsidiaries (referred to herein as, the “Company”, “Lucky Strike Entertainment”, “Lucky Strike”, “we,” “us” and “our”) is one of the world’s premier operators of location-based entertainment. Effective December 12, 2024, the company changed its name from Bowlero Corporation to Lucky Strike Entertainment Corporation and its stock ticker symbol changed from NYSE: BOWL to NYSE: LUCK, further emphasizing the brand’s evolution and commitment to offering a broader range of entertainment experiences, expanding beyond traditional bowling and positioning Lucky Strike Entertainment as a premier entertainment destination.

The Company operates location-based entertainment venues under different brand names. Our AMF and Bowl America branded locations are traditional bowling centers, while the Bowlero and Lucky Strike branded locations offer a more upscale entertainment concept with lounge seating, enhanced food and beverage offerings, and more robust customer service for individuals and group events. Additionally, within the brands, there exists a spectrum where some AMF branded locations are more upscale and some Bowlero branded locations are more traditional. The Company also operates other forms of location-based entertainment, such as Octane Raceway, Raging Waves water park, and Boomers Parks (inclusive of Big Kahuna’s water park). All of our locations, regardless of branding, are managed in a fully integrated and consistent basis because all of our locations are in the same business of operating location-based entertainment.

Basis of Presentation: The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with GAAP have been condensed or omitted. In the opinion of management, these financial statements contain all adjustments, consisting of normal recurring accruals, necessary to present fairly the financial position, results of operations and cash flows for the periods indicated. Our quarterly financial data should be read in conjunction with the audited financial statements and notes included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2024.

Change in Presentation: In the first quarter of fiscal year 2025, the Company made a change to its condensed consolidated statements of operations presentation in order to enhance our disclosures by disaggregating previously combined revenues and costs of revenues, reclassifying depreciation and amortization to be a separate financial statement line item, and reclassifying certain amounts to selling, general, and administrative expenses. The change in presentation will enhance the comparability of our financial statements with industry peers and present a more detailed picture of our operations. Certain prior period amounts in the condensed consolidated statements of operations have been reclassified to conform with the current period presentation. The reclassifications made had no impact to revenue, income (loss) from operations, net income (loss), earnings (loss) per share, retained earnings or other components of equity or net assets.

Principles of Consolidation: The condensed consolidated financial statements and related notes include the accounts of Lucky Strike and the subsidiaries it controls. Control is determined based on ownership rights or, when applicable, based on whether the Company is considered to be the primary beneficiary of a variable interest entity. We use the equity method to account for investments in which we have the ability to exercise significant influence over the investee’s operating and financial policies, or in which we hold a partnership or limited liability company interest in an entity with specific ownership accounts, unless we have virtually no influence over the investee’s operating and financial policies. All significant intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates: The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the balance sheets, statements of operations and accompanying notes. Significant estimates made by management include, but are not limited to, cash flow projections; the fair value of assets and liabilities in acquisitions; derivatives with hedge accounting; share-based compensation; depreciation and impairment of long-lived assets; carrying amount and recoverability analyses of property and equipment, assets held for sale, goodwill and other intangible assets; valuation of deferred tax assets and liabilities and income tax uncertainties; and reserves for litigation, claims and self-insurance costs. Actual results could differ from those estimates.

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Index to Notes

Fair-value Estimates: We have various financial instruments included in our financial statements. Financial instruments are carried in our financial statements at either cost or fair value. We estimate fair value of assets and liabilities using the following hierarchy using the highest level possible:

Level 1: Quoted prices in active markets that are accessible at the measurement date for identical assets and liabilities.

Level 2: Observable prices that are based on inputs not quoted on active markets, but are corroborated by market data.

Level 3: Unobservable inputs are used when little or no market data is available.

Cash and Cash Equivalents: The Company considers all highly liquid investments with a maturity date of three months or less when purchased to be cash equivalents. The Company accepts a range of debit and credit cards, and these transactions are generally transmitted to a bank for reimbursement within 24 hours. The payments due from the banks for these debit and credit card transactions are generally received, or settled, within 24 to 48 hours of the transmission date. The Company considers all debit and credit card transactions that settle in less than seven days to be cash equivalents.

Equity Method Investments: The aggregate carrying amounts of our equity method investments was $25,860 and $25,848 as of March 30, 2025 and June 30, 2024, respectively, and are included as a component of Other Assets in our accompanying condensed consolidated balance sheets. Substantially all of our equity method investments consist of a limited partner interest in a subsidiary of VICI Properties Inc. (“VICI”). Equity method investments are adjusted to recognize (1) our share, based on percentage ownership or other contractual basis, of the investee’s net income or loss after the date of investment, (2) additional contributions made or distributions received, (3) amortization of the recorded investment that exceeds our share of the book value of the investee’s net assets, and (4) impairments resulting from other-than-temporary declines in fair value. Cash distributions received from our equity method investments are considered returns on investment and presented within operating activities in the condensed consolidated statement of cash flows to the extent of cumulative equity in net income of the investee. Additional distributions in excess of cumulative equity are considered returns of our investment and are presented as investing activities.

Derivatives: We are exposed to interest rate risk. To manage this risk, we entered into interest rate collar derivative transactions associated with a portion of our outstanding debt. The interest rate collars, which are designated for accounting purposes as cash flow hedges, establish a cap and floor on the Secured Overnight Financing Rate (SOFR). The Company's interest rate collars expire on March 31, 2026.

For financial derivative instruments that are designated as a cash flow hedge for accounting purposes, the effective portion of the gain or loss on the financial derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same line item associated with the forecasted transaction, and in the same period or periods during which the forecasted transaction affects earnings. Gains and losses on the financial derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings.

The interest rate collar agreements effectively modified our exposure to interest rate risk by converting a portion of our interest payments on floating rate debt to include a cap and floor, thus reducing the impact of interest rate changes on future interest expense. See Note 7 - Debt for more information.

Net Income (loss) Per Share Attributable to Common Stockholders: We compute net income (loss) per share of Class A common stock and Class B common stock under the two-class method. Holders of Class A common stock and Class B common stock have equal rights to the earnings of the Company. Our participating securities include the Series A preferred stock that have a non-forfeitable right to dividends in the event that a dividend is paid on common stock, but do not participate in losses, and thus are not included in a two-class method in periods of loss. In periods where the Company reports a net loss, all potentially dilutive securities are excluded from the calculation of the diluted net loss per share attributable to common stockholders as their effect is antidilutive and accordingly, basic and diluted net loss per share attributable to common stockholders will be the same. Dilutive securities include Series A preferred stock, earnouts, stock options, and restricted stock units (“RSUs”). See Note 14 - Net Income (Loss) Per Share.

Emerging Growth Company Status: The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as modified by the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements.

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Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with those of another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult because of the potential differences in accounting standards used.

Recently Issued Accounting Standards: In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (“Topic 280”) Improvements to Reportable Segment Disclosures, which requires public entities, including those with a single reportable segment, to provide all the disclosures required by this standard and all existing segment disclosures required by Topic 280 on an interim and annual basis, including new requirements to disclose significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”), which is our chief executive officer (“CEO”) and included within the reported measure(s) of a segment's profit or loss, the amount and composition of any other segment items, the title and position of the CODM, and how the CODM uses the reported measure(s) of a segment's profit or loss to assess performance and decide how to allocate resources. Further, it requires that all annual disclosures about a reportable segment’s profit or loss and assets currently required by Topic 280 be provided in interim periods. ASU 2023-07 is effective for annual periods beginning after December 15, 2023, and interim periods beginning after December 15, 2024, applied retrospectively. We will adopt the standard in our fiscal year 2025 annual financial statements. The adoption of the standard will impact certain segment reporting disclosures in the Notes to the Consolidated Financial Statements.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (“Topic 740”): Improvements to Income Tax Disclosures, which includes amendments that further enhance income tax disclosures through the standardization and disaggregation of rate reconciliation categories and income taxes paid in both domestic and foreign jurisdictions. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 and is to be applied prospectively, with early adoption and retrospective application permitted. We are currently evaluating the impact of this standard to our consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement–Reporting Comprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires the disaggregation of certain expenses in the notes of the financials, to provide enhanced transparency into the expense captions presented on the face of the income statement. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027 and may be applied either prospectively or retrospectively. We are currently evaluating the impact of this standard to our consolidated financial statements.

(2) Business Acquisitions

Acquisitions: The Company continually evaluates potential acquisitions, which can be either business combinations or asset purchases, that strategically fit within the Company’s overall growth strategy in order to expand our market share in key geographic areas and to improve our ability to leverage our fixed costs.

2025 Business Acquisitions: For business combinations, the Company allocates the consideration transferred to the identifiable assets acquired and liabilities assumed based on their preliminary estimated fair values as of the acquisition date. We estimate the fair values of the assets acquired and liabilities assumed using valuation techniques, such as the income, cost and market approaches. During the nine months ended March 30, 2025, the Company had three acquisitions in which we acquired nine locations for a total consideration of $50,565. The Company is still in the process of finalizing its valuation analyses for the acquisitions. The remaining fair value estimates include working capital, intangibles, property and equipment, and operating lease assets and liabilities. If necessary, for business combinations, we will continue to refine our estimates throughout the permitted measurement period, which may result in corresponding offsets to goodwill. We expect to finalize the valuations as soon as possible, but no later than one year after the respective acquisition dates.

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The following table summarizes the preliminary purchase price allocations for the fair values of the identifiable assets acquired and liabilities assumed, components of consideration transferred and the transactional related expenses during the nine months ended March 30, 2025 using the acquisition method of accounting:


Identifiable assets acquired and liabilities assumed	Total
Current assets	$	3,512
Assets held for sale (1)	16,318
Property and equipment	42,633
Operating lease ROU	44,748
Identifiable intangible assets	3,132
Goodwill	7,589
Deferred income tax asset	1,458
Other assets	633
Total assets acquired	$	120,023

Current liabilities	$	(7,817)
Liabilities held for sale (1)	(15,698)
Operating lease liabilities	(44,860)
Other liabilities	(1,083)
Total liabilities assumed	(69,458)
Total fair value, net of cash of $422	$	50,565

Components of consideration transferred
Cash	$	50,565

Total	$	50,565

(1)Certain acquired assets and assumed liabilities were designated as held for sale as of the acquisition date and sold during the nine months ended March 30, 2025.

(3) Goodwill and Other Intangible Assets

Goodwill:

The changes in the carrying amount of goodwill for the nine months ended March 30, 2025:


Balance as of June 30, 2024	$	833,888
Goodwill resulting from acquisitions during fiscal year 2025	7,589
Adjustments to preliminary fair values for prior year acquisitions	73
Balance as of March 30, 2025	$	841,550

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Intangible Assets:


	March 30, 2025						June 30, 2024
	Gross carrying amount		Accumulated amortization		Net carrying amount		Gross carrying amount		Accumulated amortization		Net carrying amount
Finite-lived intangible assets:
AMF trade name	$	—	$	—	$	—	$	9,900	$	(9,900)	$	—
Bowlero trade name	14,870		(4,178)		10,692		14,870		(614)		14,256
Other acquisition trade names	2,510		(1,496)		1,014		3,460		(2,276)		1,184
Customer relationships	4,285		(3,376)		909		24,185		(22,808)		1,377
Management contracts	300		(288)		12		1,800		(1,763)		37
Non-compete agreements	3,694		(2,104)		1,590		4,364		(2,395)		1,969
PBA member, sponsor & media relationships	1,200		(623)		577		1,400		(739)		661
Other intangible assets	754		(495)		259		921		(542)		379
	27,613		(12,560)		15,053		60,900		(41,037)		19,863
Indefinite-lived intangible assets:
Liquor licenses	12,830		—		12,830		12,418		—		12,418
Lucky Strike trade name	8,360		—		8,360		8,360		—		8,360
Other trade names	8,410		—		8,410		6,410		—		6,410
	29,600		—		29,600		27,188		—		27,188
	$	57,213	$	(12,560)	$	44,653	$	88,088	$	(41,037)	$	47,051

The following table shows amortization expense for finite-lived intangible assets for each reporting period:


	Three Months Ended				Nine Months Ended
	March 30, 2025		March 31, 2024		March 30, 2025		March 31, 2024
Amortization expense	$	1,774	$	1,774	$	5,528	$	5,315

(4) Property and Equipment

As of March 30, 2025 and June 30, 2024, property and equipment consists of:


	March 30, 2025		June 30, 2024
Land(1)	$	120,239	$	108,442
Building and leasehold improvements	741,640		663,537
Equipment, software, furniture, and fixtures	665,092		630,280
Construction in progress	30,443		55,343
	1,557,414		1,457,602
Accumulated depreciation	(623,882)		(569,864)
Property and equipment, net of accumulated depreciation	$	933,532	$	887,738

(1) Includes the 66 acres of land adjacent to Raging Waves water park that was purchased on December 16, 2024 for $9,400.

The following table shows depreciation expense related to property and equipment for each reporting period:


	Three Months Ended				Nine Months Ended
	March 30, 2025		March 31, 2024		March 30, 2025		March 31, 2024
Depreciation expense	$	34,184	$	30,162	$	97,817	$	86,554

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(5) Leases

The Company leases various assets under non-cancellable operating and finance leases. These assets include location-based entertainment venues, office space, vehicles, and equipment.

Most of our leases contain payments for some or all of the following: base rent, contingent rent, common area maintenance, insurance, real-estate taxes, and other operating expenses. Rental payments are subject to escalation depending on future changes in designated indices or based on pre-determined amounts agreed upon at lease inception.

The following table summarizes the components of the net lease cost for each reporting period:


		Three Months Ended				Nine Months Ended
Lease Costs:	Location on Condensed Consolidated Statements of Operations	March 30, 2025		March 31, 2024		March 30, 2025		March 31, 2024
Operating Lease Costs: (1)
Operating lease costs associated with master leases for locations	Primarily Location operating costs	$	4,427	$	4,428	$	13,283	$	13,284
Operating lease costs associated with non-master leases for locations	Primarily Location operating costs	15,970		14,027		46,266		38,121
Percentage rental costs for locations (2)	Primarily Location operating costs	1,760		1,854		4,817		5,240
Equipment and other operating lease costs (3)	Primarily Location operating costs	2,402		2,048		3,310		5,912
Total Operating Lease Costs:		24,559		22,357		67,676		62,557

Finance Lease Costs:
Amortization of right-of-use assets	Depreciation and amortization	4,367		4,391		13,081		12,881
Interest expense	Interest expense, net	12,427		12,462		37,214		36,950
Total Finance Lease Costs:		16,794		16,853		50,295		49,831

Financing Obligation Costs:
Interest expense	Interest expense, net	10,210		10,022		30,488		18,266
Total Financing Obligation Costs:		10,210		10,022		30,488		18,266

Other Costs, Net:
Variable occupancy costs (4)	Primarily Location operating costs	13,095		14,751		51,452		43,909
Gains from modifications to operating leases	Other operating (income) expense, net	(144)		—		(144)		(499)
Other lease costs (5)	Primarily Location operating costs	213		2,011		482		5,532
Sublease income (6)	Revenues - Amusement & other	(1,163)		(1,302)		(3,563)		(3,930)
Total Other Costs, Net		12,001		15,460		$	48,227	$	45,012

Total Lease Costs, Net		$	63,564	$	64,692	$	196,686	$	175,666

(1)Operating lease costs includes both cash and non-cash expenses for operating leases. The operating lease costs associated with our locations are recognized evenly over the lease term, therefore, the timing of the expense may differ from the timing of actual cash payments. Cash payments and lease costs can differ due to (a) the timing of cash payments relative to the level expense, (b)

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non-cash adjustments as a result of purchase accounting, and (c) various other non-cash adjustments to lease costs. Please see the table below for cash paid for amounts included within our lease liabilities.

(2)Percentage rental costs for our locations primarily represents leases where we pay an extra rental amount based on a percentage of revenue in excess of predetermined revenue thresholds.

(3)Equipment and other operating lease costs primarily represents operating leases costs for equipment leases, common area maintenance charges, rent relief from the impacts of COVID-19, and other variable lease costs for operating leases where the lease payments escalate based on an index or rate.

(4)Variable occupancy costs primarily represents utilities, property insurance, and real estate taxes.

(5)Other lease costs primarily includes short-term lease costs and other variable payments for various equipment leases.

(6)Sublease income primarily represents short-term leases with pro-shops and various retail tenants.

Cash paid for amounts included in the measurement of lease liabilities for the nine months ended March 30, 2025:


	Nine Months Ended
	March 30, 2025		March 31, 2024
Cash paid for amounts included in the measurement of lease liabilities (1)

Operating leases:
Operating cash flows paid for operating leases	$	48,230	$	48,664
Total cash paid for operating lease liabilities	48,230		48,664

Finance leases:
Operating cash flows paid for interest portion of finance leases	35,190		33,804
Financing cash flows paid for principal portion of finance leases	2,236		4,727
Total cash paid for finance lease liabilities	37,426		38,531

Financing Obligations:
Operating cash flows paid for interest portion of financing obligations	24,264		14,627
Financing cash flows paid for principal portion of finance obligations	—		19
Total cash paid for financing obligations:	24,264		14,646

Total cash amounts paid that are included in the measurement of lease liabilities: (2)	$	109,920	$	101,841

(1)This table includes cash paid for amounts included in the measurement of our lease liabilities. Since the lease liability only includes amounts that are contractually fixed, this table excludes cash paid for amounts that are variable in nature, such as utilities, common area maintenance, property insurance, real estate taxes, and percentage rent.

(2)For the period ended March 30, 2025, total cash amounts within the above table include deferred repayments of $2,013 for operating leases and $4,341 for finance leases. For the period ended March 31, 2024, total cash amounts within the above table include deferred repayments of $3,215 for operating leases and $6,934 for finance leases. As of March 30, 2025, there were no deferred payments remaining.

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Supplemental balance sheet information related to leases as of March 30, 2025:


	Condensed Consolidated Balance Sheets Location	March 30, 2025		June 30, 2024
Operating leases:
ROU Assets, net	Operating lease ROU assets, net	$	583,094	$	559,168
Lease liabilities, Short-term	Operating lease liabilities, ST	32,228		28,460
Lease liabilities, Long-term	Operating lease liabilities, LT	596,851		561,916

Finance leases:
ROU Assets, net	Finance lease ROU assets, net	512,106		524,392
Lease liabilities, Short-term	Other current liabilities	778		1,954
Lease liabilities, Long-term	Finance lease liabilities, LT	682,169		680,213

Financing Obligations:
Financing obligation, long-term	Long-term financing obligations	447,099		440,875

Lease incentive receivables from landlords of $6,505 and $15,311 as of March 30, 2025 and June 30, 2024, respectively, are reflected as a reduction of the operating and finance lease liability. The Company received $8,389 from landlords for lease incentives on operating leases and $417 for lease incentives on finance leases during the nine months ended March 30, 2025. Lease incentives for operating leases are all recorded as operating cash inflows within the change in operating lease liabilities within our condensed consolidated statement of cash flows. The lease incentives received for finance leases are recorded as cash inflows for financing activities.

(6) Accounts Payable and Accrued Expenses

As of March 30, 2025 and June 30, 2024, accounts payable and accrued expenses consist of:


	March 30, 2025		June 30, 2024
Accounts payable	$	34,379	$	50,457
Customer deposits	30,717		14,006
Taxes and licenses	16,519		17,840
Compensation	14,890		13,768
Deferred revenue	14,664		15,976
Insurance	10,460		7,401
Interest	9,000		1,113
Utilities	4,387		5,475
Professional fees	4,054		4,090
Other	15,670		5,658
Total accounts payable and accrued expenses	$	154,740	$	135,784

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(7) Debt

The following table summarizes the Company’s debt structure as of March 30, 2025 and June 30, 2024:


	March 30, 2025		June 30, 2024
First Lien Credit Facility Term Loan (Maturing February 8, 2028 and bearing variable rate interest; 7.82% and 8.80% at March 30, 2025 and June 30, 2024, respectively)	$	1,282,370	$	1,138,500
Other Equipment Loans	12,938		13,700
	1,295,308		1,152,200
Less:
Unamortized financing costs	(11,850)		(13,514)
Current portion of unamortized financing costs	3,866		3,361
Current maturities of long-term debt	(14,093)		(12,524)
Total long-term debt	$	1,273,231	$	1,129,523

Term Loan: Under the Company’s First Lien Credit Agreement, as amended (the “First Lien Credit Agreement”), the Company has made term loans consisting of $1,150,000 of aggregate initial principal amount of debt outstanding (the “Term Loan”). The Term Loan matures on February 8, 2028 and is repaid on a quarterly basis in principal payments of $2,875, which began on September 29, 2023. The Term Loan bears interest at a rate per annum equal to the Adjusted Term SOFR plus 3.50%. Interest is due on the last day of the interest period. The interest period, as agreed upon between the Company and its lender, can be either one, three, or six months in length. As of March 30, 2025, the interest period is one month.

On December 17, 2024, the Company entered into a Twelfth Amendment (the “Twelfth Amendment”) to the First Lien Credit Agreement. The Twelfth Amendment provided for an incremental term loan in the amount of $150,000. In addition, the Twelfth Amendment increased the quarterly principal payments beginning on December 31, 2024 from $2,875 to $3,255. Proceeds from the Twelfth Amendment were used to repay all amounts outstanding on the Revolver and for general corporate purposes. The Company accounted for this transaction as a debt modification, which was not substantial. Therefore, the Company did not incur any gain or loss relating to the modification.

Revolver: Under the First Lien Credit Agreement, the Company has access to a senior secured revolving credit facility (the “Revolver”). As of March 30, 2025, the Revolver commitment is $335,000, which was increased by $50,000 in connection with the Company entering into an Eleventh Amendment to the First Lien Credit Agreement on August 23, 2024. Any outstanding balance on the Revolver is due on December 15, 2026. Interest on borrowings under the Revolver is based on the Adjusted Term SOFR.

First Lien Credit Agreement Covenants: Obligations owed under the First Lien Credit Agreement are secured by a first priority security interest on substantially all assets of Lucky Strike. and the guarantor subsidiaries. The First Lien Credit Agreement contains customary events of default, restrictions on indebtedness, liens, investments, asset dispositions, dividends and affirmative and negative covenants. The Company is subject to a financial covenant requiring that the First Lien Leverage Ratio (as defined in the First Lien Credit Agreement) not exceed 6.00:1.00 as of the end of any fiscal quarter if amounts outstanding on the Revolver exceed an amount equal to 35% of the aggregate Revolver commitment (subject to certain exclusions) at the end of such fiscal quarter. In addition, payment of borrowings under the Revolver may be accelerated if there is an event of default, and Lucky Strike would no longer be permitted to borrow additional funds under the Revolver while a default or event of default were outstanding.

Letters of Credit: Outstanding standby letters of credit as of March 30, 2025 and June 30, 2024 totaled $22,422 and $15,834, respectively, and are guaranteed by JP Morgan Chase Bank, N.A. The available amount of the Revolver is reduced by the outstanding standby letters of credit.

Other Equipment Loan: On August 19, 2022, the Company entered into an equipment loan agreement for a principal amount of $15,350 with JP Morgan Chase Bank, N.A.. The loan matures August 19, 2029 and bears a fixed interest rate of 6.24%. The loan is repaid on a monthly basis in fixed payments of $153 plus a final payment at maturity. The loan obligation is secured by a lien on the equipment.

Covenant Compliance: The Company was in compliance with all debt covenants as of March 30, 2025.

Interest rate collars: The Company entered into two interest rate collars effective as of March 31, 2023 for an aggregate notional amount of our Term Loan of $800,000. The collar hedging strategy stabilizes interest rate fluctuations by setting both a floor and a cap. The hedge transactions have a trade and hedge designation date of April 4, 2023. The

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hedge transactions, each for a notional amount of $400,000, provide for interest rate collars. The interest rate collars establish a floor on SOFR of 0.9429% and 0.9355%, respectively, and a cap on SOFR of 5.50%. The interest rate collars have a maturity date of March 31, 2026.

The fair value of the collar agreements as of March 30, 2025 and June 30, 2024 was a liability of $39 and an asset of $696, respectively, and is included within the condensed consolidated balance sheets.

Since SOFR was within the collar cap and floor rates, there was no interest impact on the condensed consolidated statement of operations.

(8) Income Taxes

The Company uses the estimated annual effective tax rate method for calculating its tax provision in interim periods, which represents the Company's best estimate of the effective tax rate expected for the full year. Certain items, including those deemed to be unusual, infrequent or that cannot be reliably estimated (discrete items), are excluded from the estimated annual effective tax rate, and the related tax expense or benefit is reported in the same period as the related item. The Company’s effective tax rate for the nine months ended March 30, 2025 was (5)%, which differs from the US federal statutory rate of 21% primarily due to the change in fair value of the earnout liability, permanent differences, and other discrete tax items. The Company’s effective tax rate for the nine months ended March 31, 2024 was (11)%, which differs from the US federal statutory rate of 21% due to the change in fair value of the earnout liability, permanent differences, and items associated with the VICI Transaction, which are treated as discrete tax items.

(9) Commitments and Contingencies

From time to time, we are involved in various inquiries, investigations, claims, lawsuits and other legal proceedings that are incidental to the conduct of our business. These matters typically involve claims from customers, employees or other third parties involved in operational issues common to the retail, restaurant and entertainment industries. Such matters typically represent actions with respect to contracts, intellectual property, taxation, employment, employee benefits, personal injuries and other matters. A number of such claims may exist at any given time and there are currently a number of claims and legal proceedings pending against us. While it is not feasible to predict the outcome of all claims and legal proceedings and exposures with certainty, management believes that their ultimate disposition should not have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

(10) Earnouts

There were 11,418,357 unvested earnout shares outstanding as of March 30, 2025 and June 30, 2024.

The outstanding unvested earnout shares will vest if the closing share price of Lucky Strike’s Class A common stock equals or exceeds $17.50 per share for any 10 trading days within any consecutive 20 trading day period that occurs from December 15, 2021 through December 15, 2026.

All but 41,364 earnout shares are classified as a liability and changes in the fair value of the earnout shares are recognized in the statement of operations. Those earnout shares not classified as a liability are classified as equity compensation to employees and recognized as compensation expense on a straight-line basis over the expected term or upon the contingency being met.

See Note 11 - Fair Value of Financial Instruments for a summary of changes in the estimated fair value of the earnout shares for the period ended March 30, 2025 and March 31, 2024.

(11) Fair Value of Financial Instruments

Debt

The fair value and carrying value of our debt as of March 30, 2025 and June 30, 2024 are as follows:


	March 30, 2025		June 30, 2024
Carrying value	$	1,295,308	$	1,152,200
Fair value	1,290,499		1,152,200

The fair value of our debt is estimated based on trading levels of lenders buying and selling their participation levels of funding (Level 2).

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There were no transfers in or out of any of the levels of the valuation hierarchy during the nine months ended March 30, 2025 and the fiscal year ended June 30, 2024.

Items Measured at Fair Value on a Recurring Basis

The Company holds certain assets and liabilities that are required to be measured at fair value on a recurring basis. The following table is a summary of fair value measurements and hierarchy level as of March 30, 2025 and June 30, 2024:


	March 30, 2025
	Level 1		Level 2		Level 3		Total
Interest rate collars	$	—	$	39	$	—	$	39
Earnout shares	—		—		50,172		50,172
Total liabilities	$	—	$	39	$	50,172	$	50,211


	June 30, 2024
	Level 1		Level 2		Level 3		Total
Interest rate collars	$	—	$	696	$	—	$	696
Total assets	$	—	$	696	$	—	$	696

Earnout shares	$	—	$	—	$	137,636	$	137,636
Total liabilities	$	—	$	—	$	137,636	$	137,636

The fair value of earnout shares was estimated using a Monte Carlo simulation model (level 3 inputs). The key inputs into the Monte Carlo simulation as of March 30, 2025 were as follows:


	Earnout
Expected term in years	1.71
Expected volatility	50%
Risk-free interest rate	3.93%
Stock price	$	9.91
Dividend yield	2.22%

The following table sets forth a summary of changes in the estimated fair value of the Company's Level 3 Earnout liability for the three and nine months ended March 30, 2025 and March 31, 2024:


	Three Months Ended				Nine Months Ended
	March 30, 2025		March 31, 2024		March 30, 2025		March 31, 2024
Balance as of beginning of period	$	69,058	$	135,478	$	137,636	$	112,040
Issuances	—		49		25		78
Changes in fair value	(18,886)		(8,868)		(87,489)		14,541
Balance as of end of period	$	50,172	$	126,659	$	50,172	$	126,659

Other Financial Instruments

Other financial instruments include cash and cash equivalents, accounts and notes receivable, accounts payable and accrued expenses. The financial statement carrying amounts of these items approximate the fair value due to their short duration.

(12) Common Stock, Preferred Stock and Stockholders’ Equity

The Company is authorized to issue three classes of stock to be designated, respectively, Class A common stock, Class B common stock (together with Class A common stock, the “Common Stock”) and Series A preferred stock (the

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“Preferred Stock”). The total number of shares of capital stock which the Company shall have authority to issue is 2,400,000,000, divided into the following:

Class A common stock:

•Authorized: 2,000,000,000 shares, with a par value of $0.0001 per share as of March 30, 2025 and June 30, 2024.

•Issued and Outstanding: 82,502,177 shares (inclusive of 1,582,805 shares contingent on certain stock price thresholds but excluding 40,051,805 shares held in treasury) as of March 30, 2025 and 88,854,487 shares (inclusive of 1,584,805 shares contingent on certain stock price thresholds but excluding 34,071,295 shares held in treasury) as of June 30, 2024.

Class B common stock:

•Authorized: 200,000,000 shares, with a par value of $0.0001 per share as of March 30, 2025 and June 30, 2024.

•Issued and Outstanding: 58,519,437 shares as of March 30, 2025 and June 30, 2024.

Preferred Stock:

•Authorized: 200,000,000 shares, with a par value of $0.0001 per share as of March 30, 2025 and June 30, 2024.

•Issued and Outstanding: 117,087 and 120,387 shares as of March 30, 2025 and June 30, 2024, respectively.

Series A Preferred Stock

Dividends accumulate on a cumulative basis on a 360-day year commencing from the issue date. The dividend rate is fixed at 5.5% per annum on a liquidation preference of $1,000 per share. Payment dates are June 30 and December 31 of each year with a record date of June 15 for the June 30 payment date and December 15 for the December 31 payment date. Declared dividends will be paid in cash if the Company declares the dividend to be paid in cash. If the Company does not pay all or any portion of the dividends that have accumulated as of any payment date, then the dollar amount of the dividends not paid in cash will be added to the liquidation preference and deemed to be declared and paid in-kind. For the nine months ended March 30, 2025, accumulated dividends in the amount of $3,407 were added to the liquidation preference and deemed to be declared and paid in-kind. For the nine months ended March 30, 2025, dividends in the amount of $5,159 were accumulated on the Preferred Stock.

During the nine months ended March 30, 2025, 3,300 shares of Series A Preferred Stock were converted into 269,886 shares of Class A Common Stock. All of the shares of converted Series A Preferred Stock were then cancelled in accordance with the Preferred Stock Certificate of Designations.

Stock Dividend

Common stock dividends paid during the nine months ended March 30, 2025 is as follows:

Declaration Date

Record Date

Payment Date

Amount (1)

August 5, 2024

August 23, 2024

September 6, 2024

8,552

November 4, 2024

November 22, 2024

December 6, 2024

8,411

February 5, 2025

February 21, 2025

March 7, 2025

8,320

25,283

(1)Amounts include dividends paid to holders of Series A preferred stock on an as-converted basis. The amounts do not reflect amounts paid for accrued dividends on previously unvested share-based awards or amounts accrued for currently unvested share-based awards.

On May 8, 2025, the Company’s Board of Directors declared a regular quarterly cash dividend of $0.055 per share of common stock, which will be paid on June 6, 2025, to stockholders of record on May 23, 2025.

Share Repurchase Program

On February 7, 2022, the Company announced that its Board of Directors authorized a share repurchase program providing for repurchases of up to $200,000 of the Company’s outstanding Class A common stock through February 3, 2024. On each of May 15, 2023, September 6, 2023 and February 2, 2024, the Board of Directors authorized a replenishment of then-remaining balance of the share repurchase program to $200,000, which in aggregate increased the total amount that has been authorized under the share repurchase program to approximately $551,518. On February 2, 2024, the Board of Directors extended the share repurchase program indefinitely. Treasury stock purchases are stated at

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cost and presented as a reduction of equity on the condensed consolidated balance sheets. Repurchases of shares are made in accordance with applicable securities laws and may be made from time to time in the open market or by negotiated transactions. The amount and timing of repurchases are based on a variety of factors, including stock price, regulatory limitations, debt agreement limitations, and other market and economic factors. The share repurchase program does not require the Company to repurchase any specific number of shares, and the Company may terminate the repurchase program at any time.

As of March 30, 2025, the remaining balance of the repurchase program was $99,215. For the nine months ended March 30, 2025, 5,980,510 shares of Class A common stock were repurchased for a total of $65,147, for an average purchase price per share of $10.89.

(13) Share-Based Compensation

The Company has two stock plans: the Lucky Strike Entertainment Corporation 2021 Omnibus Incentive Plan (“2021 Plan”) and the Lucky Strike Entertainment Corporation Employee Stock Purchase Plan (“ESPP”). These stock incentive plans are designed to attract and retain key personnel by providing them the opportunity to acquire an equity interest in the Company and align the interest of key personnel with those of the Company’s stockholders.

As of March 30, 2025 and June 30, 2024, the total compensation cost not yet recognized is as follows:


	Award Plan	March 30, 2025		June 30, 2024
Stock options	2021 Plan	$	13,968	$	19,416
Service based RSUs	2021 Plan	6,150		5,395
Market and service based RSUs	2021 Plan	6,801		502
Earnout RSUs	2021 Plan	111		168
ESPP	ESPP	396		319
Total unrecognized compensation cost		$	27,426	$	25,800

Share-based compensation recognized in the condensed consolidated statements of operations for the periods ended March 30, 2025 and March 31, 2024 is as follows:


		Three Months Ended				Nine Months Ended
	Award Plan	March 30, 2025		March 31, 2024		March 30, 2025		March 31, 2024
Stock options	2021 Plan	$	2,063	$	2,759	$	7,588	$	5,923
Service based RSUs	2021 Plan	1,089		1,136		3,466		2,999
Market and service based RSUs	2021 Plan	684		105		1,328		416
Earnout RSUs	2021 Plan	16		6		40		41
Other stock-based awards & settlements(1)	2021 Plan	4,809		—		5,249		—
ESPP	ESPP	127		137		284		364
Total share-based compensation expense		$	8,788	$	4,143	$	17,955	$	9,743

(1) Consists of the impact of the $21,053 cash settlement of 1,747,434 shares of Class A common stock and 773,753 stock options as part of an employment separation agreement with a long-time executive and Director of the Company during the period ended March 30, 2025, which resulted in an equity charge of $16,244 within Additional paid-in capital and share-based compensation expense within Selling, general, and administrative expenses of $4,809. The settled Class A common stock and stock options were then cancelled.

The Company did not have any recognized income tax benefits, net of valuation allowances, related to our share-based compensation plans.

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(14) Net Income (Loss) Per Share

The computations of basic and diluted net income (loss) per share of Class A common stock and Class B common stock are as follows:


	Three Months Ended - Basic
	March 30, 2025						March 31, 2024
	Class A		Class B		Total		Class A		Class B		Total
Numerator
Net income allocated to common stockholders	$	6,011	$	4,256	$	10,267	$	12,136	$	7,927	$	20,063

Denominator
Weighted-average shares outstanding	82,666,549		58,519,437		141,185,986		89,583,404		58,519,437		148,102,841

Net income per share, basic	$	0.07	$	0.07	$	0.07	$	0.14	$	0.14	$	0.14


	Three Months Ended - Diluted
	March 30, 2025						March 31, 2024
	Class A		Class B		Total		Class A		Class B		Total
Numerator
Net income allocated to common stockholders	$	6,011	$	4,256	$	10,267	$	12,136	$	7,927	$	20,063

Denominator
Weighted-average shares outstanding	82,666,549		58,519,437		141,185,986		89,583,404		58,519,437		148,102,841
Impact of incremental shares	1,250,628		5,169,822		6,420,450		2,790,839		6,981,196		9,772,035
Total	83,917,177		63,689,259		147,606,436		92,374,243		65,500,633		157,874,876

Net income per share, diluted	$	0.07	$	0.07	$	0.07	$	0.13	$	0.12	$	0.13


	Nine Months Ended - Basic
	March 30, 2025						March 31, 2024
	Class A		Class B		Total		Class A		Class B		Total
Numerator
Net income (loss) allocated to common stockholders	$	32,156	$	22,109	$	54,265	$	(16,955)	$	(10,727)	$	(27,682)

Denominator
Weighted-average shares outstanding	85,111,444		58,519,437		143,630,881		93,676,667		59,269,254		152,945,921

Net income (loss) per share, basic	$	0.38	$	0.38	$	0.38	$	(0.18)	$	(0.18)	$	(0.18)

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	Nine Months Ended - Diluted
	March 30, 2025						March 31, 2024
	Class A		Class B		Total		Class A		Class B		Total
Numerator
Net income (loss) allocated to common stockholders	$	32,156	$	22,109	$	54,265	$	(16,955)	$	(10,727)	$	(27,682)

Denominator
Weighted-average shares outstanding	85,111,444		58,519,437		143,630,881		93,676,667		59,269,254		152,945,921
Impact of incremental shares	1,295,413		6,056,412		7,351,825		*		*		*
Total	86,406,857		64,575,849		150,982,706		93,676,667		59,269,254		152,945,921

Net income (loss) per share, diluted	$	0.37	$	0.34	$	0.36	$	(0.18)	$	(0.18)	$	(0.18)

Anti-dilutive shares excluded from diluted calculation*											19,510,238

*The impact of potentially dilutive convertible Preferred Stock, service based RSUs, market and service based RSUs, stock options, and purchases of shares under our ESPP were excluded from the diluted per share calculations because they would have been antidilutive.

The impact from incremental shares for our diluted per share calculations are as follows:


	Three Months Ended
	March 30, 2025			March 31, 2024
	Class A	Class B	Total	Class A	Class B	Total
Service based RSUs	661,886	—	661,886	708,275	—	708,275
Market and service based RSUs	510,861	—	510,861	205,425	—	205,425
Stock options	30,381	5,169,822	5,200,203	1,841,167	6,981,196	8,822,363
ESPP	47,500	—	47,500	35,972	—	35,972
Series A Preferred Stock	—	—	—	—	—	—
Total	1,250,628	5,169,822	6,420,450	2,790,839	6,981,196	9,772,035


	Nine Months Ended
	March 30, 2025			March 31, 2024
	Class A	Class B	Total	Class A	Class B	Total
Service based RSUs	661,886	—	661,886	708,275	—	708,275
Market and service based RSUs	510,861	—	510,861	205,460	—	205,460
Stock options	75,166	6,056,412	6,131,578	1,583,505	6,004,213	7,587,718
ESPP	47,500	—	47,500	35,972	—	35,972
Series A Preferred Stock	—	—	—	10,972,813	—	10,972,813
Total	1,295,413	6,056,412	7,351,825	13,506,025	6,004,213	19,510,238

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(15) Supplemental Cash Flow Information


	March 30, 2025		March 31, 2024
Cash paid during the period for:
Interest (1)	$	129,066	$	127,067
Income taxes, net of refunds	1,848		3,118
Noncash investing and financing transactions:
Capital expenditures in accounts payable	14,476		25,640
Change in fair value of interest rate swap, net of tax	(536)		(3,655)
Excise tax	693		2,075

(1) Includes cash paid for the interest portion on finance leases and financing obligations. See Note 5 - Leases for supplementary information relating to leasing transactions.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

This discussion should be read in conjunction with Lucky Strikes Entertainment’s unaudited condensed 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 the fiscal year ended June 30, 2024 as filed with the Securities and Exchange Commission (“SEC”) on September 5, 2024. This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described under the heading “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2024. Actual results may differ materially from those contained in any forward-looking statements. All period references are to our fiscal periods unless otherwise indicated. Unless the context otherwise requires, references in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” to “we,” “us,” “our,” the “Company,” and “Lucky Strike” are intended to mean the business and operations of Lucky Strike Entertainment and its consolidated subsidiaries. All financial information in this section is presented in thousands, unless otherwise noted, except share and per share amounts.

Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements regarding, among other things, the plans, strategies and prospects, both business and financial of Lucky Strike. These statements are based on the beliefs and assumptions of our management. Although we believe that our plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, we cannot assure you that it will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Generally, statements that are not historical facts, including statements concerning possible or assumed future actions, business strategies, events or results of operations, are forward-looking statements. The words “anticipates,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predicts,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this Quarterly Report on Form 10-Q include, but are not limited to, statements about our business strategy, financial projections, anticipated growth and market opportunities.

These forward-looking statements are based on information available as of the date of this Quarterly Report on Form 10-Q, and current expectations, forecasts and assumptions, and involve a number of risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

In addition, statements that we “believe,” and similar statements reflect only our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and these statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

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As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Factors that could cause our actual results to differ include those described under the heading “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2024.

Overview

Lucky Strike Entertainment is one of the world’s premier operators of location-based entertainment. The Company operates traditional bowling locations and more upscale entertainment concepts with lounge seating, arcades, enhanced food and beverage offerings, and more robust customer service for individuals and group events, as well as hosting and overseeing professional and non-professional bowling tournaments and related broadcasting. The Company also operates other forms of location-based entertainment, such as Octane Raceway, Raging Waves water park, and Boomers Parks (inclusive of Big Kahuna’s water park).

The Company remains focused on creating long-term shareholder value through continued organic growth, the conversion and upgrading of locations to more upscale entertainment concepts offering a broader range of offerings, the opening of new locations and acquisitions.

Recent Developments

Lucky Strike’s results for the nine months ended March 30, 2025 exhibited the expected total revenue growth and shift of focus to internal initiatives while also increasing liquidity in anticipation of what we believe will be an increased acquisition environment during the 2025 fiscal year. To highlight the Company’s recent activity during the nine months ended March 30, 2025:

•We reported total revenue growth of 3%.

•We rebranded the Company from Bowlero to Lucky Strike Entertainment.

•We completed and opened four newly-built Lucky Strike locations in prime markets.

•We completed the acquisitions of Boomers Parks, Spectrum Entertainment Complex, and Adventure Park to further enhance our location-based entertainment offerings. We also signed a definitive agreement to acquire Shipwreck Island water park, which closed in April.

•We acquired 66 acres of land adjacent to Raging Waves water park for further expansion.

•We increased our term loan by $150,000.

Trends

There are a number of factors that could materially affect our future profitability, including changing economic conditions with the resulting impact on our sales, profitability, and capital spending, changes in our debt levels and applicable interest rates, and increasing prices of labor and inventory, which includes food and beverage costs. Additionally, sales and results of operations could be impacted by acquisitions and restructuring projects. Restructuring can include various projects, including closure of locations not performing well, cost reductions through staffing reductions, and optimizing and allocating resources to improve profitability.

Our operating results fluctuate seasonally and may also be affected by calendar shifts of holiday or seasonal periods. We typically generate our highest sales volumes during the third quarter of each fiscal year due to the timing of leagues, holidays and changing weather conditions. School operating schedules, holidays and weather conditions may also affect our sales volumes in some operating regions differently than others. Because of the seasonality of our business, results for any quarter are not necessarily indicative of the results that may be achieved for our full fiscal year.

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Presentation of Results of Operations

The Company reports on a fiscal year, with each quarter generally comprised of one 5-week period and two 4-week periods.

Results of Operations

Three Months Ended March 30, 2025 Compared to the Three Months Ended March 31, 2024

Analysis of Consolidated Statement of Operations. The following table displays certain items from our condensed consolidated statements of operations for the periods presented below:


	Three Months Ended
	March 30, 2025		%(1)		March 31, 2024		%(1)		Change		% Change
Revenues
Bowling	$	159,756	47	%	$	165,528	49	%	$	(5,772)	(3)	%
Food & beverage	120,452		35	%	118,032		35	%	2,420		2	%
Amusement & other	59,674		18	%	54,110		16	%	5,564		10	%
Total revenues	339,882		100	%	337,670		100	%	2,212		1	%

Costs and expenses
Location operating costs, excluding depreciation and amortization	92,568		27	%	86,766		26	%	5,802		7	%
Location payroll and benefit costs	75,617		22	%	78,645		23	%	(3,028)		(4)	%
Location food and beverage costs	27,627		8	%	27,178		8	%	449		2	%
Selling, general and administrative expenses, excluding depreciation and amortization	41,242		12	%	37,121		11	%	4,121		11	%
Depreciation and amortization	40,325		12	%	36,327		11	%	3,998		11	%
Loss on impairment and disposal of fixed assets, net	648		—	%	1,011		—	%	(363)		(36)	%
Other operating income, net	(330)		—	%	(390)		—	%	(60)		(15)	%
Total costs and expenses	277,697		82	%	266,658		79	%	11,039		4	%

Operating income	62,185		18	%	71,012		21	%	(8,827)		(12)	%

Other (income) expenses
Interest expense, net	49,414		15	%	46,890		14	%	2,524		5	%
Change in fair value of earnout liability	(18,886)		(6)	%	(8,868)		(3)	%	(10,018)		*
Other expense	17		—	%	3		—	%	14		*
Total other expense	30,545		9	%	38,025		11	%	(7,480)		(20)	%

Income before income tax expense	31,640		9	%	32,987		10	%	(1,347)		(4)	%

Income tax expense	18,348		5	%	9,141		3	%	9,207		*
Net income	$	13,292	4	%	$	23,846	7	%	(10,554)		(44)	%

___________

(1) Percent calculated as a percentage of revenues and may not total due to rounding.

*Represents a change equal to or in excess of 100% or one that is not meaningful.

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Revenues: For the quarter ended March 30, 2025, revenues totaled $339,882 and represented a slight increase of $2,212, or 1%, over the same period of last fiscal year. The slight increase is primarily attributable to an increase in revenue from newly acquired or leased locations, which was partially offset by a decline in revenues on a same-store basis.

The following table summarizes our revenues on a same-store-basis for the quarter ended March 30, 2025 as compared to the corresponding period last fiscal year:


	Three Months Ended
(in thousands)	March 30, 2025		March 31, 2024		Change		% Change
Revenues on a same-store basis (1)	$	313,309	$	331,984	$	(18,675)	(6)	%
Revenues for media, new and closed locations	25,937		4,416		21,521		*
Service fee revenue (2)	636		1,270		(634)		(50)	%
Total revenues	$	339,882	$	337,670	$	2,212	1	%

(1) Revenues from 348 locations are included in the same-store comparable location base for the comparison in the above table. In our previously filed Form 10-Q for the three months ended March 31, 2024, revenues from 322 locations were included in the same-store revenue.

(2) Service fee revenue is a mandatory gratuity passed through to the employee, which is a non-contributor to earnings and is being phased out across our locations.

*Represents a change equal to or in excess of 100% or one that is not meaningful.

Same-store revenues includes revenue from locations that are open in periods presented (open in both the current period and the prior period being reported) and excludes revenues from locations that are not open in periods presented such as acquired new locations or locations closed for upgrades, renovations or other such reasons, as well as media revenues and service fee revenues. The decrease in same-store revenues during the quarter ended March 30, 2025 was primarily attributable to a reduction in our corporate event business relative to the same period of last fiscal year.

Location operating costs: Location operating costs primarily consist of rent, utilities, insurance, repairs & maintenance, property taxes, supplies, marketing, and other costs associated with Company locations. Location operating costs include both fixed and variable components and therefore do not directly correlate with revenue.

Location operating costs increased $5,802, or 7%. Increases in costs were in various areas including advertising, property taxes, insurance, and utilities. The increase in costs was mainly attributable to location count growth from acquisitions and lease agreements. For instance, Raging Waves water park and Boomers Parks location operating costs contributed $4,300 to the increase. The increase in costs were partially offset by cost management initiatives, which resulted in a $1,900 decrease in repairs and maintenance expense. Location operating costs as a percent of revenues increased from 26% during the third quarter of fiscal 2024 to 27% during the third quarter of fiscal 2025, mainly due to the aforementioned location count growth and fixed costs.

Location payroll and benefit costs: Location payroll and benefit costs consist of employee costs that directly support location operations. Location payroll and benefit costs decreased $3,028, or 4%. The decrease in location payroll and benefit costs reflects the impact of the ongoing staffing optimization initiative. This is further illustrated by the decrease as a percent of revenues from 23% during the third quarter of fiscal 2024 to 22% during the third quarter of fiscal 2025. The decrease driven by staffing optimization was partially offset by location count growth. For instance, Raging Waves water park and Boomers Parks added $2,400 of location payroll and benefit costs.

Location food & beverage costs: Location food & beverage costs increased $449, or 2%. The increase in location food & beverage costs is mainly attributable to increased food & beverage revenue as compared to the third quarter of fiscal 2024.

Selling, general and administrative expenses (“SG&A”): SG&A expenses increased $4,121 or 11%. The increase is attributable to share-based compensation expense, which contributed approximately $4,600 to the increase in SG&A expenses. The increase in share-based compensation expense is primarily due to the non-recurring settlement of equity awards related to the retirement of a long-time executive of the Company, which resulted in an additional $4,809 of share-based compensation expense. Excluding the impact of the non-recurring settlement of equity awards, SG&A expenses would have decreased as a result of ongoing cost management initiatives at corporate. For instance, professional fees and SG&A labor decreased approximately $1,100 and $400, respectively.

Depreciation and amortization: Depreciation and amortization increased $3,998 or 11%. The increase in depreciation and amortization reflects the added depreciable assets, finite-lived intangible assets, and finance leases through acquisitions and capital expenditures.

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Interest expense, net: Interest expense primarily relates to interest on debt, finance leases, and financing obligations. Interest expense increased $2,524, or 5%. The higher interest expense is primarily attributable to the $150,000 incremental term loan obtained in the second quarter of fiscal 2025 coupled with lower interest income as compared to the third quarter of fiscal 2024.

Change in fair value of earnouts: The impact on the statement of operations during the quarter ended March 30, 2025 is due to the decrease in the fair value of the earnouts, which mainly reflects the decrease in the Company’s stock price in the current quarter.

Income Taxes: Income tax expense and deferred tax assets and liabilities reflect management’s assessment of the Company’s tax position. The effective tax rate of 58% for the quarter ended March 30, 2025 was primarily attributed to the change in fair value of the earnout liability, and permanent differences.

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Nine Months Ended March 30, 2025 Compared to the Nine Months Ended March 31, 2024

Analysis of Consolidated Statement of Operations. The following table displays certain items from our condensed consolidated statements of operations for the periods presented below:


	Nine Months Ended
	March 30, 2025		%(1)		March 31, 2024		%(1)		Change		% Change
Revenues
Bowling	$	420,926	47	%	$	427,253	49	%	$	(6,327)	(1)	%
Food & beverage	319,393		35	%	304,137		35	%	15,256		5	%
Amusement & other	159,832		18	%	139,356		16	%	20,476		15	%
Total revenues	900,151		100	%	870,746		100	%	29,405		3	%

Costs and expenses
Location operating costs, excluding depreciation and amortization	261,490		29	%	238,976		27	%	22,514		9	%
Location payroll and benefit costs	213,929		24	%	219,441		25	%	(5,512)		(3)	%
Location food and beverage costs	71,382		8	%	67,783		8	%	3,599		5	%
Selling, general and administrative expenses, excluding depreciation and amortization	110,437		12	%	111,080		13	%	(643)		(1)	%
Depreciation and amortization	116,426		13	%	104,750		12	%	11,676		11	%
Loss on impairment and disposal of fixed assets, net	4,695		1	%	1,060		—	%	3,635		*
Other operating (income) expense, net	(212)		—	%	1,811		—	%	(2,023)		*
Total costs and expenses	778,147		86	%	744,901		86	%	33,246		4	%

Operating income	122,004		14	%	125,845		14	%	(3,841)		(3)	%

Other (income) expenses
Interest expense, net	146,879		16	%	130,575		15	%	16,304		12	%
Change in fair value of earnout liability	(87,489)		(10)	%	14,541		2	%	(102,030)		*
Other expense	817		—	%	66		—	%	751		*
Total other expense	60,207		7	%	145,182		17	%	(84,975)		(59)	%

Income (loss) before income tax (benefit) expense	61,797		7	%	(19,337)		(2)	%	81,134		*

Income tax (benefit) expense	(2,897)		—	%	2,067		—	%	(4,964)		*
Net income (loss)	$	64,694	7	%	$	(21,404)	(2)	%	86,098		*

___________

(1) Percent calculated as a percentage of revenues and may not total due to rounding.

*Represents a change equal to or in excess of 100% or one that is not meaningful.

Revenues: For the nine months ended March 30, 2025, revenues totaled $900,151 and represented an increase of $29,405, or 3%, over the same period of last fiscal year. The increase in revenues is primarily attributable to revenue from newly acquired or leased locations, which was partially offset by a decline in revenues on a same-store basis.

The following table summarizes our revenues on a same-store-basis for nine months ended March 30, 2025 as compared to the corresponding period last fiscal year:

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	Nine Months Ended
(in thousands)	March 30, 2025		March 31, 2024		Change		% Change
Revenues on a same-store basis (1)	$	757,225	$	786,890	$	(29,665)	(4)	%
Revenues for media, new and closed locations	141,096		79,333		61,763		78	%
Service fee revenue (2)	1,830		4,523		(2,693)		(60)	%
Total revenues	$	900,151	$	870,746	$	29,405	3	%

(1) Revenues from 327 locations are included in the same-store comparable location base for the comparison in the above table. In our previously filed 10-Q for the nine months ended March 31, 2024, revenues from 311 locations were included in the same-store revenue.

(2) Service fee revenue is a mandatory gratuity passed through to the employee, which is a non-contributor to earnings and is being phased out across our locations.

*Represents a change equal to or in excess of 100% or one that is not meaningful.

The decrease in same-store revenues during the nine months ended March 30, 2025 was primarily attributable to a reduction in our corporate event business relative to the same period of last fiscal year.

Location operating costs: Location operating costs increased $22,514, or 9%. Increases in costs were in most areas and include amusement costs, advertising, rent, property taxes, and utilities. The increase in costs was mainly attributable to location count growth from acquisitions and lease agreements. For instance, Raging Waves water park and Boomers Parks location operating costs contributed $10,600 to the increase. The increase in costs were partially offset by cost management initiatives with reductions noted in supplies and repairs and maintenance of $2,200 and $3,500, respectively. Location operating costs as a percent of revenues increased from 27% during the third quarter of fiscal 2024 to 29% during the third quarter of fiscal 2025, mainly due to the aforementioned location count growth and fixed costs.

Location payroll and benefit costs: Location payroll and benefit costs decreased $5,512, or 3%. The decrease in location payroll and benefit costs reflects the impact of the ongoing staffing optimization initiative. This is further illustrated by the decrease as a percent of revenues from 25% during the third quarter of fiscal 2024 to 24% during the third quarter of fiscal 2025. The decrease driven by staffing optimization was partially offset by location count growth. For instance, Raging Waves water park and Boomers Parks added $6,300 of location payroll and benefit costs.

Location food & beverage costs: Location food & beverage costs increased $3,599, or 5%. The increase in location food & beverage costs is mainly attributable to increased food & beverage revenue as compared to the third quarter of fiscal 2024.

Selling, general and administrative expenses (“SG&A”): SG&A expenses decreased $643 or 1%. The decrease is mainly attributable to a decrease in professional fees, which contributed approximately $10,000 to the decrease in SG&A expenses. This was partially offset by an increase in share-based compensation expense, which increased approximately $8,200. The decrease in professional fees is mainly attributable to less acquisition activity as compared to the same period of the prior year and cost management initiatives at corporate. The cost management initiatives at corporate also resulted in a decrease in SG&A labor of approximately $900. The increase in share-based compensation expense is primarily due to the non-recurring settlement of equity awards related to the retirement of a long-time executive of the Company, which resulted in an additional $4,809 of share-based compensation expense. This was coupled with less forfeiture activity as compared to the same period of fiscal 2024 and an increase in share-based awards granted thus far in fiscal 2025.

Depreciation and amortization: Depreciation and amortization increased $11,676 or 11%. The increase in depreciation and amortization reflects the added depreciable assets, finite-lived intangible assets, and finance leases through acquisitions and capital expenditures.

Interest expense, net: Interest expense increased $16,304, or 12%. The higher interest expense is primarily the result of an added financing obligation within the second quarter of fiscal 2024, the $150,000 incremental term loan obtained in the second quarter of fiscal 2025, and lower interest income as compared to the third quarter of fiscal 2024.

Change in fair value of earnouts: The impact on the statement of operations during nine months ended March 30, 2025 is due to the decrease in the fair value of the earnouts, which mainly reflects the decrease in the Company’s stock price in the current quarter.

Income Taxes: Income tax expense and deferred tax assets and liabilities reflect management’s assessment of the Company’s tax position. The effective tax rate of (5)% for nine months ended March 30, 2025 was primarily attributed to the change in fair value of the earnout liability, permanent differences, and other discrete tax items.

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Non-GAAP measure

Adjusted EBITDA is a non-GAAP financial measure that is not in accordance with, or an alternative to, measures prepared in accordance with GAAP. The Company believes certain financial measures which meet the definition of non-GAAP financial measures provide important supplemental information. The Company considers Adjusted EBITDA as an important financial measure because it provides a financial measure of the quality of the Company’s earnings. Other companies may calculate Adjusted EBITDA differently than we do, which might limit its usefulness as a comparative measure. Adjusted EBITDA is used by management in addition to and in conjunction with the results presented in accordance with GAAP. We have presented Adjusted EBITDA solely as a supplemental disclosure because we believe it allows for a more complete analysis of results of operations and assists investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance, such as Interest Expense, Income Taxes, Depreciation and Amortization, Impairment Charges, Share-based Compensation, EBITDA from Closed Locations, Foreign Currency Exchange Loss (Gain), Asset Disposition Loss (Gain), Transactional and other advisory costs, Changes in the value of earnouts, and Other. Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP.

Refer to notes below for additional details concerning the respective items for Adjusted EBITDA.

The following table provides a reconciliation from net income to Adjusted EBITDA for each reporting period:


	Three Months Ended				Nine Months Ended
	March 30, 2025		March 31, 2024		March 30, 2025		March 31, 2024
Net income (loss)	$	13,292	$	23,846	$	64,694	$	(21,404)
Adjustments:
Interest expense	49,414		49,177		146,879		136,321
Income tax expense (benefit)	18,348		9,141		(2,897)		2,067
Depreciation and amortization	40,741		36,765		117,751		106,298
Loss on impairment, disposals, and other charges, net	648		1,011		4,695		1,060
Share-based compensation (1)	8,788		4,143		17,955		9,743
Closed location EBITDA (2)	251		2,159		3,645		6,778
Transactional and other advisory costs (3)	4,485		3,813		11,764		17,146
Changes in the value of earnouts (4)	(18,886)		(8,868)		(87,489)		14,541
Other, net (5)	179		1,619		1,963		5,516
Adjusted EBITDA	$	117,260	$	122,806	$	278,960	$	278,066

Notes to Adjusted EBITDA:

(1)Includes the non-recurring settlement of equity awards related to the retirement of a long-time executive of the Company during the period ended March 30, 2025, which resulted in an additional $4,809 of share-based compensation expense.

(2)The closed location adjustment is to remove EBITDA for closed locations. Closed locations are those locations that are closed for a variety of reasons, including permanent closure, newly acquired or built locations prior to opening, locations closed for renovation or rebranding and conversion. If a location is not open on the last day of the reporting period, it will be considered closed for that reporting period. If the location is closed on the first day of the reporting period for permanent closure, the location will be considered closed for that reporting period.

(3)The adjustment for transaction costs and other advisory costs is to remove charges incurred in connection with any transaction, including mergers, acquisitions, refinancing, amendment or modification to indebtedness, dispositions and costs in connection with an initial public offering, in each case, regardless of whether consummated.

(4)The adjustment for changes in the value of earnouts is to remove of the impact of the revaluation of the earnouts. Changes in the fair value of the earnout liability is recognized in the statement of operations. Decreases in the liability will have a favorable impact on the statement of operations and increases in the liability will have an unfavorable impact.

(5)Other includes the following related to transactions that do not represent ongoing or frequently recurring activities as part of the Company’s operations: (i) non-routine expenses, net of recoveries for matters outside the normal course of business, (ii) costs incurred that have been expensed associated with obtaining an equity method investment in a subsidiary of VICI, (iii) severance expense, and (iv) other individually de minimis expenses. Certain prior year amounts have been reclassified to conform to current year presentation.

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Liquidity and Capital Resources

We manage our liquidity through assessing available cash-on-hand, our ability to generate cash and our ability to borrow or otherwise raise capital to fund operating, investing and financing activities.

A core tenet of our long-term strategy is to grow the size and scale of the Company in order to improve our operating profit margins through leveraging our fixed costs. As such, one of the Company’s known cash requirements is for capital expenditures related to the construction of new locations and upgrading and converting existing locations. We believe our financial position, generation of cash, available cash-on-hand, existing credit facility, and access to potentially obtain additional financing from sale-lease-back transactions or other sources will provide sufficient capital resources to fund our operational requirements, capital expenditures, and material short and long-term commitments for the foreseeable future. We also plan to use available cash-on-hand to fund our share repurchase program, which was implemented as a method to return value to our shareholders. However, there are a number of factors that may hinder our ability to access these capital resources, including but not limited to our degree of leverage, and potential borrowing restrictions imposed by our lenders. See “Risk Factors” included in our previously filed Annual Report on Form 10-K for the fiscal year ended June 30, 2024 for further information.

At March 30, 2025, we had approximately $79,088 of available cash and cash equivalents.

Nine Months Ended March 30, 2025 Compared to the Nine Months Ended March 31, 2024

The following compares the primary categories of the condensed consolidated statements of cash flows for the period ended March 30, 2025 and March 31, 2024:


	Nine Months Ended				$ Change		% Change
(in thousands)	March 30, 2025		March 31, 2024
Net cash provided by operating activities	$	154,767	$	148,098	$	6,669	5	%
Net cash used in investing activities	(166,412)		(285,960)		119,548		42	%
Net cash provided by financing activities	23,925		154,287		(130,362)		(84)	%
Effect of exchange rate changes on cash	(164)		371		(535)		*
Net change in cash and cash equivalents	$	12,116	$	16,796	$	(4,680)	(28)	%

_________

*Represents a change equal to or in excess of 100% or one that is not meaningful.

Operating activities provided $154,767 as compared to $148,098 during the same period of the prior fiscal year. The increase in cash provided by operating activities primarily reflects an increase in revenues and lease incentive receipts partially offset by higher interest expense.

Investing activities used $166,412 as compared to $285,960 during the same period of the prior fiscal year. The decrease in cash used in investing activities mainly reflects a reduction in capital expenditures and less acquisition activity as compared to the same period of the prior year. This was partially offset by the purchase of 66 acres of land adjacent to Raging Waves water park for $9,400.

Financing activities provided $23,925 as compared to $154,287 during the same period of the prior fiscal year. The decrease in cash provided by financing activities primarily reflects the proceeds from the transaction with VICI during the same period of the prior year, increased cash dividends, and the settlement of equity awards during the nine months ended March 30, 2025. This was partially offset by less share buyback activity as compared to the same period of the prior year and the impact of the $150,000 incremental term loan.

Our contractual obligations primarily include, but are not limited to, debt service, self-insurance liabilities, and leasing arrangements. We believe our sources of liquidity, namely available cash on hand, positive operating cash flows, and access to capital markets will continue to be adequate to meet our contractual obligations, as well as fund working capital, planned capital expenditures, location acquisitions, and execute purchases under our share repurchase program.

Critical Accounting Estimates

Our critical accounting estimates are discussed in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our fiscal year 2024 Form 10-K under “Critical Accounting Estimates.” There have been no significant changes in our critical accounting estimates during the quarter ended March 30, 2025.

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Recently Issued Accounting Standards

See Note 1 - Description of Business and Significant Accounting Policies of the notes to Condensed Consolidated Financial Statements of this Quarterly Report on Form 10-Q for information regarding new accounting pronouncements.

Emerging Growth Company Accounting Election

We are currently an emerging growth company, as defined in the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risk from changes in, among other things, interest rates, credit risk, labor costs, health insurance claims and foreign currency exchange rates, which could impact its results of operations and financial condition. We attempt to address our exposure to these risks through our normal operating and financing activities.

Interest Rate Risk

Under our term and revolving credit facilities, we are exposed to a certain level of interest rate risk. Interest on the principal amount of our borrowings under our revolving credit facility loan accrues at the Adjusted Term Secured Overnight Financing Rate or the Alternate Base Rate, as further described in the credit agreement governing our term and revolving credit facilities. An increase or decrease of 1.0% in the effective interest rate would cause an increase or decrease to interest expense of approximately $12,824 over a twelve month period on our outstanding debt without considering the impact of hedging. The Company entered into two hedging transactions effective as of March 31, 2023 for an aggregate notional amount of our Term Loan of $800,000. The hedge transactions have a trade and hedge designation date of April 4, 2023. The hedge transactions, each for a notional amount of $400,000, provide for interest rate collars. The interest rate collars establish a floor on SOFR of 0.9429% and 0.9355%, respectively, and a cap on SOFR of 5.50%. The interest rate collars have a maturity date of March 31, 2026.

Credit Risk

Financial instruments that potentially subject us to significant concentrations of credit risk consist of cash and temporary investments. We are exposed to credit losses in the event of non-performance by counter parties to our financial instruments. We place cash and temporary investments with various high-quality financial institutions. Although we do not obtain collateral or other security to secure these obligations, we periodically monitor the third-party depository institutions that hold our cash and cash equivalents. Our emphasis is primarily on safety and liquidity of principal and secondarily on maximizing yield on those funds.

Commodity Price Risk

We are exposed to market price fluctuation in food, beverage, supplies and other costs such as energy. Given the historical volatility of certain of our food product prices, including proteins, produce, dairy products, and cooking oil, these fluctuations can materially impact our food costs. While our purchasing commitments partially mitigate the risk of such fluctuations, there is no assurance that supply and demand factors such as disease or inclement weather will not cause the prices of the commodities used in our food operations to fluctuate. Additionally, the cost of purchased materials may be influenced by tariffs and other trade regulations which are outside of our control. To the extent that we do not pass along cost increases to our customers, our results of operations may be adversely affected.

Inflation

We experience inflation related to our purchase of certain products that we need to operate our business. This price volatility could potentially have a material impact on our financial condition and/or our results of operations. In order to mitigate price volatility, we monitor price fluctuations and may adjust our prices accordingly, however, our ability to recover higher costs through increased pricing may be limited by the competitive environment in which we operate.

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Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in our reports filed pursuant to the Exchange Act is properly and timely reported and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures are effective as of March 30, 2025.

Changes in Internal Control Over Financial Reporting

There were no changes to our internal control over financial reporting practices or processes that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting during our third quarter ended March 30, 2025.

Part II

Item 1. Legal Proceedings

For a description of all material pending legal proceedings, see Note 9 - Commitments and Contingencies of the notes to Condensed Consolidated Financial Statements of this Quarterly Report on Form 10-Q.

Item 1A. Risk Factors

There have been no material changes to our risk factors contained in Part I. Item IA. “Risk Factors” of our Annual Report on Form 10-K for the year ended June 30, 2024.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

The following table provides information regarding purchases of our securities made by us for the quarter ended March 30, 2025.


(in thousands, except share and per share amounts)	Total Number of Class A Shares Purchased	Average Price Paid per Class A Share*		Total Number of Shares Purchased as Part of Publicly Announced Programs	Dollar Value of Shares That May Yet Be Purchased Under The Publicly Announced Repurchase Program*
December 30, 2024 to February 2, 2025	1,733,144	$	10.26	1,733,144	$	101,154
February 3, 2025 to March 2, 2025	500	10.44		500	101,149
March 3, 2025 to March 30, 2025 (1)	1,957,130	11.29		209,696	99,215
Total	3,690,774	$	10.81	1,943,340

*The average price paid per share and dollar value of shares that may yet be purchased under the plan includes any commissions paid to repurchase stock (but excludes any excise taxes).

(1) The company repurchased 1,747,434 shares of Class A common stock as part of an employment separation agreement at a purchase price of $11.54 per share. This repurchase was not part of the Company’s Publicly Announced Repurchase Program. Therefore, this repurchase is included in the Total Number of Class A Shares Purchased and Average Price Paid per Class A Share above, but is excluded from the Total Number of Shares Purchased as Part of Publicly Announced Programs and Dollar Value of Shares That May Yet Be Purchased Under The Publicly Announced Repurchase Program above.

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Item 6. Exhibits


Exhibit No.						Description
10.1+						Amend ment to Employment Agreement, dated May 7 , 2025, by and between Lucky Strike Entertainment Corporation and Robert Lavan.
31.1+						Certification of the Principal Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a).
31.2+						Certification of the Principal Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a).
32.1+						Certification of the Principal Executive Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350.
32.2+						Certification of the Principal Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350.
101.INS						XBRL Instance Document
101.SCH						XBRL Taxonomy Extension Schema Document
101.CAL						XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF						XBRL Taxonomy Extension Definition Linkbase Document
101.LAB						XBRL Taxonomy Extension Label Linkbase Document
101.PRE						XBRL Taxonomy Extension Presentation Linkbase
104						Cover Page Interactive Data File (embedded within the Inline iXBRL document).

____________

+ Filed herewith.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


		LUCKY STRIKE ENTERTAINMENT CORPORATION

Date:	May 8, 2025	By:	/s/ Robert M. Lavan
		Name:	Robert M. Lavan
		Title:	Chief Financial Officer
			(Principal Financial Officer)

Lucky Strike Entertainment - 10-Q quarterly report FY2025 Q3

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		Page
Note 1	Description of Business and Significant Accounting Policies	10
Note 2	Business Acquisitions	12
Note 3	Goodwill and Other Intangible Assets	13
Note 4	Property and Equipment	14
Note 5	Leases	15
Note 6	Accounts Payable and Accrued Expenses	17
Note 7	Debt	18
Note 8	Income Taxes	19
Note 9	Commitments and Contingencies	19
Note 10	Earnouts	19
Note 11	Fair Value of Financial Instruments	19
Note 12	Common Stock, Preferred Stock and Stockholders’ Equity	20
Note 13	Share-Based Compensation	22
Note 14	Net Income (Loss) Per Share	23
Note 15	Supplemental Cash Flow Information	25