Dave & Buster's Enter reports sequential same store sales improvement, driven by Back to Basics strategy and new menu, with optimistic outlook for Q4 and beyond.

Improving our operations, refreshing our games offering, and revamping our remodels. This work bore fruits over the course of the third quarter as we saw sequential improvement in same store sales each month, with the final month of the quarter down only roughly 1%. We're also quite pleased with our Back to Basics new menu launch which helped contribute to positive same store sales for food and beverage during the quarter. We are laser focused on executing our Back to Basics plan, strengthening our culture, elevating the guest experience, and fully realizing the significant potential of our unique and iconic brand. After being here for about five months and fully immersing myself in the business, I am even more confident in our ability to dramatically improve operating results and drive meaningful value creation for our guests and our shareholders. I'll now provide an update on each of the pillars of Back to Basics which, as I mentioned, is already driving measurable improvements across the business. First, we have reconstructed our marketing strategy with a clearer, more disciplined approach to planning and execution. We have created a simplified marketing and promotional calendar which effectively communicates the attractiveness of our offerings such as the Eat & Play Combo which highlights our offerings across both food and beverage and games. We continue to improve and optimize leveraging data, our media mix and the flighting of our investment between television and digital. Organizational enhancements are empowering our marketing to function as a growth engine driving both guest acquisition and sales performance. We have built out a comprehensive revenue management team which among other things, testing games, promotions, creative marketing messages and other strategic components well ahead of the major launches. This process ensures that we make data driven decisions which has led to smoother execution and stronger results which we expect to continue in the remainder of 2025 and beyond. Second, we have made significant progress implementing our new food and beverage offerings. As we have discussed previously, the percentage of people who came into our stores to play games and then also ate food was significantly lower than in the past and it has been our goal to return that number to historical levels. Earlier this year, we made certain changes to the presentation of our existing menu while in parallel testing a new menu which included significantly more items and brought back numerous fan favorites. As previously discussed, the new menu test performed extremely well and we launched the new menu in October. It has delivered strong results and accelerated momentum in our food and beverage performance. This new menu, as well as a number of other food initiatives is driving higher average checks through an improved product mix and stronger volumes in its first month, creating additional momentum in Q4. We are pleased that during the quarter traffic in our dining rooms was up meaningfully up year over year with October same store food sales being the best month of the year, a trend that has only further improved in November. As we discussed earlier this year, we brought back the eat and play combo and we continue to see positive momentum from this promotion which we believe provides a highly compelling value to our guests. We've continued to improve this offering throughout the year and guest attachment to the Eat & Play Combo has improved significantly to a double digit percentage of our guests since the beginning of the year, demonstrating the attractiveness of the offering. We are continuing to optimize day parts and experiences such as refining our lunch offerings and and enhancing mobile and kiosk ordering to ensure our guests enjoy both convenience and craveable quality on every visit. Third, we are reinvigorating our field operations with comprehensive training programs designed to empower our teams to deliver exceptional guest experiences. By fostering a collaborative culture that receives strong support from our shared service center, we are reducing turnover, enhancing engagement and creating an environment where our people and our brand can truly thrive. We have high confidence that these initiatives are working as our guests are staying longer in our stores and spending more while continuing to provide high guest satisfaction. Fourth, regarding our games offering, we are focused on tightly aligning our marketing campaigns with high impact IP driven game launches. While we aren't ready to make an announcement, we are highly confident that our upcoming 2026 lineup has highly relevant cultural IPs which will maximize awareness, engagement and traffic. As previously discussed, we have renewed our focus on regularly introducing exciting new games which we were able to do in 2025 but which we will be able to do even more effectively in 2026. We have significantly improved our process and plan to introduce 10 new games throughout the year. We are confident that based on tests that are in the market that the games are highly marketable and will resonate well with our customers. We expect these games to drive significant repeat visitation based on data from robust customer tests. Additionally, we expect the rollout of Human Crane to all remaining locations along with its debut in Main Event to deliver an immediate and proven lift in sales in the coming months. Beyond our in house innovations, we are exploring powerful partnerships at the intersection of media sports technology, embracing the growing potential of location based entertainment to create experiences that are truly unmatched in our category. Finally, we have commenced our revamped remodel program. As mentioned last quarter, we've been focused on optimizing the remodel prototype to modernize and refresh the look and feel of the units at an appropriate cost. We have high confidence, we have found the right layout to increase traffic and overall productively and will generate highly attractive ROIs at reasonable cost. We have three new remodels under construction and plan to open six new remodels in the next five months. To further accelerate our momentum and our execution of all pillars of the Back to Basic Strategy, we are elevating our culture and people capabilities across the organization to strengthen our foundation for growth and success. With the recent addition of key new executives to our leadership team, including our Chief Strategy Officer Aldo, our Chief Growth and Partnership Officer Putnam Shin, and our Chief People Officer Devesh Sinha, we have significantly enhanced the depth and expertise of our leadership team. Aldo, Putnam and Devesh are highly quality, high quality executives who have tremendous capability and experience and their joining art teams highlight the power of D and B as an employer of choice. Aldo joins us from McKinsey. Putnam has experience with both Walt Disney and Merlin and Devesh comes from Yum Restaurants. As we build our support center capabilities, we are equally committed to our field. From launching industry leading GM incentives, investing in training programs, to simplifying tasks and initiatives for our team members, we are sending a message to the field that our success is closely tied to our execution and to our guest experience. By fostering a culture that is fun, collaborative and supported by the Shared Service center, we're reducing turnover, enhancing engagement and creating an environment where our people and our brand can truly thrive. With that, I would like to turn the call over to Darren to walk through the financial results of our third quarter.

Darren, thank you Tarun and good evening everyone. Our financial foundation remains strong, supported by a business model that consistently generates high returns, healthy unit level performance, disciplined cost management and meaningful free cash flow. Both leadership and the Board remain sharply focused on executing our priorities to drive same store sales growth and generate significant cash flow. We have clear operational levers at our disposal and we are confident in our ability to further enhance performance and deliver long term shareholder value. Turning to a more detailed review of our financials, in our third quarter of fiscal 2025, comparable store sales decreased 4% versus the prior year period. We are encouraged by the improving monthly trend throughout the third quarter with relative strength in the final month of October down approximately 1% versus the prior year period. We are also encouraged by a continuation of these improved trends throughout November. During the third quarter we generated revenue of 448 million, a net loss of 42 million or $1.22 per diluted share. Adjusted net loss of 39 million or $1.14 per diluted share and adjusted EBITDA of 59 million, resulting in an adjusted EBITDA margin of 13%. As a reminder, reconciliations of all non GAAP financial measures can be found in today's press release. We generated 58 million in operating cash flow during the third quarter, ending the quarter with 14 million in cash and $442 million in total liquidity. Combined with the availability under our $650 million revolving credit facility net of $14 million in outstanding letters of credit on the expense side, we see meaningful opportunities to further optimize our cost structure. In recent weeks, we have focused on enhancing our internal cost management processes and we have also launched a comprehensive initiative to identify material efficiencies across the business. We are confident these efforts will support continued margin expansion and we look forward to sharing updates on our progress in future quarters. Year to date in 2025 we have invested a total of $268 million in capital additions on a gross basis, or approximately $155 million on a net basis when factoring in payments from landlords. Details of this can be found in the table in our 10Q filing. We are making increasing progress converting our strong operating cash flow to free cash flow through more strict management on capital spending by eliminating inefficient spend. As a reminder, we are committed to demonstrating our ability to generate free cash flow while continuing to invest in double digit new store growth, new games, other high ROI initiatives, and a more diligent remodel program. Our new store development continues to deliver strong returns and we have a solid pipeline of upcoming store openings. In the third quarter we opened one domestic D&B store in Spokane, Washington and three new domestic Main Event stores in Taylor, Michigan, Norman, Oklahoma and Greensboro, North Carolina. This takes our new store openings year to date to nine on our path to 11 new domestic store openings and one relocation in fiscal 2025. In line with our previously communicated expectations for the year with the opening of our third international franchise location in the Manila, Philippines in October, we expect four more international openings over the next six months. As a reminder, we have secured agreements for over 35 additional stores in the coming years. We see international franchising as a driver of highly efficient incremental growth, monetizing our brand around the world with minimal investment and risk. As Tarun mentioned, we kicked off construction of our latest remodel prototype at 3D&B stores at the beginning of November that we are excited to launch in their respective markets in early 2026. We believe this new prototype will maximize the impactful elements of our Successful story models while eliminating previously ineffective spend for a high return outcome. And we look forward to updating you on the progress in this area and with that operator, please open the line for questions.

Ladies and gentlemen, at this time we will begin that question and answer session. If you'd like to ask a question, please press star and then one using a touch tone telephone. If you are using a speakerphone, we do ask that you please pick up your handset before pressing the keys to withdraw your questions. You may press star and two, once again, that is star and then one to join the question queue. We'll pause momentarily to assemble the roster. And our first question comes from Eric Wood from Texas Capital Securities. Please go ahead with your question.

Thank you. Good afternoon. Just a couple questions. I guess first off, with the marketing messages that you've been kind of switching and kind of trialing recently, can you talk about what you found has been resonating with the consumer? Is it a consumer that's still primarily driven by promotional offers, discounting and the like, or are you seeing one that can be motivated by, you know, more kind of top of mind awareness marketing?

That's a great question, Eric. What is really working right now is. Like smart value offers. And. These are not necessarily discounts, but just packages that are put as a combo offer that allows our guests to appreciate and enjoy both our games and our entertainment, our games, entertainment and our food and beverage offering. And if that is seen as compelling value, that's attractive to them. So as I mentioned, one of the things that we have done differently in this quarter and we will institutionalize as a process going forward is that we test everything with consumers and this value messaging resonated with them. And so we kind of launched this in. November and we are seeing a lot of traction for this message.

Perfect. Follow up question on that. You're marketing obviously a combo food and beverage and game you talked about. The food and beverage comps have been positive again for kind of the second consecutive quarter at least. Maybe talk about what you're seeing as those consumers go into the Midway. Are you seeing more or less time from what you can monitor spent in the Midway or more or less being spent per consumer? Any kind of trends there you can talk to?

Yeah, Eric, I've kind of spent now like five months in the company and I've spent a lot of time in our Midway. I think one of the things that we acknowledged in the last call was that we hadn't invested in the right level of innovation in the games area in our arcade and that's something that we're beginning to do. We've launched a number of games in 2025 and. Moving into 2026. Actually we already have a pipeline of more than 10 games that are associated with strong IPs and we've tested all of them. So they are kind of lined up for launches in 2026. So I am really excited about. The next year as far as our games business is concerned. In addition, we are seeing a lot of interest and excitement around the human crane. And these are now in about 70% of our Dave and Buster stores. By the end of this year we'll complete rollout across the system and then they'll be launched in main event in the first quarter of next year. And as I said, these are incredible games. People absolutely love them. There's a strong TikTok or Instagram value to them and we are seeing less than a year kind of return on investment on these games. So yeah, that would be kind of my response. And I'll add one thing to that just in terms of spend within the Midway, we're continuing to see very healthy spend and in fact our guests are spending a bit more and they are spending more time in the Midway as well. So. We continue to see very healthy spending from the consumer there.

Perfect. Thank you both.

Our next question comes from Andrew Strelczyk from BMO Capital Markets. Please go ahead with your question.

Jan for Andrew. Thanks for taking the question. Given Dave and Buster's high brand awareness, are refinements to the marketing media mix enough to change consumer perception or are you evaluating increased marketing investment to broaden reach and reinforce the updated value in experiencing messaging? Thank you.

So you know Andrew. It'S absolutely true that we have very strong brand awareness. I think. As far as the media planning and flighting is concerned, all we are saying is that it should be more data driven. And how do we invest in the right mix as far as linear television, connected television and digital investments are concerned. And you know reach is going to be important, absolutely critical. But I think in addition to reach. I think our learning is that we need to invest equal amounts of money in converting those into real customers. So it's really kind of now using. You know, a high level of science and system and process to invest versus kind of more guesswork that you know and impulse as far as media investment is concerned. Got it. That was helpful.

Thank you. And then one quick follow up. You've mentioned a refined remodel prototype coming soon that should deliver stronger results at a reasonable cost. What have been the biggest learnings as you finalized that format and is the aggregate remodel outperformance. You've called that at roughly 700 basis points above the system, still holding directionally. Thank you.

So. You know, both Darren and I can take this question. So first of all, yes, we're still seeing a 700 basis point kind of impact, you know, positive impact of remodels. I think our biggest learning is that, you know, you know, remodels work and that's kind of almost fundamental kind of truth. Right. That you need to refresh your assets to ensure that your guests have the right experience. Our learning was that we had kind of over invested. Capital in areas that did not really impact guest experience. And kind of, it was kind of wasted investment. And through again consumer insight work, we have now found like the areas where there is direct correlation between our investment and guest experience and therefore encourage repeat visits. And we are focusing on that now. So you know, we kind of save, we are saving significant amount of capital now in our remodels. And as Darren said, that's kind of like a general message that we just will be far more responsible with our capex and general cost management. We will continue to invest. We have the capital to invest, but we will use it purposefully and meaningfully.

Great. Very helpful. Thank you.

And our next question comes from Sharon Zakfia from William Blair. Please go ahead with your question.

Hi. Thanks for taking the question. It sounds like the food is doing tremendously and is to bolster trends. I'm curious, as you look throughout the October quarter, did you see entertainment comps as well improve as the quarter progressed?

We did. Hey, Sharon, we did see improvement on the entertainment line as well. And obviously. You know, we believe we've got a lot more to leverage. You know, we, you know, we've been talking about our F and B and menu for a while for a few quarters now. And so we're really proud of the performance that we're seeing there. And so now that focus on the entertainment side is something that we anticipate. You know, seeing some good returns there as well. But we have, we did see sequential improvement in that line.

Thank you. And then I know you mentioned continued improved trends in November. Should I think about that as being similar to October? Just curious on that. And then unit level margins. I mean, there's been pressure there for a while. Obviously the sales have been pressured. What kind of comp do you think you need to get expansion on that line?

Yeah. So to your first question. Yes. Interpret that to say November is performing similar to October. Look in terms of. What type of same store sales look, we get to flat and positive same store sales growth, we can manage and expand margins. It's, you know, while, you know, I think you'll see in Q3, you know, we were able to manage our margins relatively well despite the 4% same store sales decline. We believe there's a lot more opportunity to reiterate what I mentioned. We're very focused on a number of margin enhancement initiatives right now. But. Look, we can grow margins with comps flattish and so that's obviously what we're focused on.

Thank you.

Once again, if you would like to ask a question, please press star. And then one, to withdraw your questions you may press Star. And two, our next question comes from Brian Beccaro from Raymond James. Please go ahead with your question.

Hi. Thanks and good evening. So you noted the comps improved through the quarter. Obviously I wanted to ask just the two year stack, it does look like it decelerated sequentially versus the second quarter. So maybe you could just kind of elaborate on how you view the underlying trend and then did I hear correctly, Darren? You said the November comp similar to October, so down around 1%. I just wanted to clarify that that was the total comp.

Yep, yep, that's right, Brian. Yeah, no, you're absolutely right. From a two year stack perspective, I think it's that there was some deceleration and that was largely driven by. The. Softer start to the quarter relative to where we ended. But if you look at it from a two year or a three year perspective. You see a little deceleration on that front. But. We continue to see those sequential trends in the areas that we're focused on which really give us a lot of optimism around. You know, being focused on the areas that can really drive that same store sales growth as we go through the quarter and into FY26.

Okay, thank you. And then just a quick follow up. I'm curious just how the walk in versus corporate events business performed in the third quarter and just heading into the important holiday season. Could you give us a sense of how holiday bookings look or just broadly how you expect the corporate piece to perform? Kind of thinking year on year through the fourth quarter. Thanks very much.

Yep. Yeah. So for the quarter, our special events was mid single digit growth year over year and we're very pleased with the performance that the team has executed on there. You know, as a reminder, we, you know, have effectively completed the rollout of in store sales managers which has really helped us drive even stronger performance in those locations. And as we look at pacing for the balance of the quarter, which is obviously an important time for us, we're pleased with where we are and anticipate continued year over year growth in Q4. So we feel good about where we're going to end the year.

Very helpful. Thank you.

And ladies and gentlemen, with that, we'll be concluding today's question and answer session. I'd like to turn the floor back over to Tarun Lal for closing remarks.

Thank you operator and thank you all for joining in. Closing, Dave & Buster's is in the midst of an exciting chapter one. Fueled by innovation, a renewed guest first mindset and the passion of our incredible teams, we're sharpening execution and elevating every part of the experience. From marketing and menu quality to operational excellence and games innovation. The results are already taking shape, reflecting the power of our iconic brand and the effectiveness of our back to basics strategy. With growing momentum and significant untapped potential, we are confidently positioning Dave and Buster's for sustained growth in same store sales and cash flow and meaningful value creation for our guests and our shareholders. I look forward to speaking with you again soon. Have a great evening. Thank you.

And with that, we'll conclude today's conference call with you. Thank you for attending today's presentation. You may now disconnect your lines.