A：The decline in first quarter sales was attributed to several factors including a spring break calendar shift, elevated gas prices, geopolitical uncertainty, and meaningful softness in consumer sentiment.

A：The company views its ability to navigate through the current challenges as resilient, given its business model and expectations to continue improving and delivering positive results.

A：The company is implementing several new strategies such as a renewed focus on core elements like investment in games, F&B marketing, and operational excellence; a strengthened leadership team with key executive hires; and an emphasis on field operations and culture.

A：The strategic approach to marketing involves rebuilding the strategy with discipline, a simplified promotional calendar, data-driven media mix modeling, and optimized TV and digital balance. Initial tests have shown success and are expected to be rolled out nationally, although some tests were less successful, providing valuable lessons.

A：The food and beverage business has seen early wins with comparable sales growth and the return to a historically proven menu, strong eat and play combo execution, and positive F&B same store sales for 9 consecutive months.

A：The company's strategy regarding games involves reinvesting in new games to drive both new and repeat visitation and same store sales growth, with the recent rollout of 10 new games, the most since 2017, and plans to roll out at least five additional new games in the remainder of 2026.

A：The new lineup includes high energy competition, immersive gameplay, and hands-on skill challenges, with specific games like Hot Wheels, Ultimate Speedway, Icy Flush, Rush, John Vick, Continental Pursuit, Ordnance Hammer, and Perfect Pump. There are also IP collaborations with The Mandalorian, Grogu, and Stranger Things, as well as original concepts. Many of these games have become top revenue generators in their first weeks.

A：The World Cup is a major catalyst for the company's business, with a full 360-degree activation, new soccer-inspired arcade games, themed food and drinks, and the integration of World Cup tickets into human cranes. The 'hat trick watch experience' has attracted significant crowds for the opening games, building on the success of similar events during major events like the Super Bowl.

A：The company's ambition is to continue evolving its play, experience, and positioning.

A：The company is investing in training for teams to deliver exceptional guest experiences, a collaborative culture, and a shared service center to reduce turnover and support the growth of both employees and the brand.

A：The company's remodeling program is progressing well, with the new prototype driving a strong 7% comp up left and positive same store sales in the first quarter and year to date. The new remodels cost approximately half as much as the old ones but have a similar sales lift. The company has opened six remodels and plans to open two more, with encouraging early results.

A：The company is moving back to basics, restoring elements such as marketing and promotions, investments in games and entertainment, operational excellence, and store refreshes. They are taking direct feedback from guests, emphasizing the importance of games, innovation, and value, and have taken actions they believe are right, resulting in an improving underlying business.

A：The company is focused on strict capital expenditure discipline, minimum ROI thresholds, and generating significant free cash flow. Net CapEx for full year 2026 is targeted at no more than $200 million, with a commitment to ROI thresholds and eliminating inefficient capital use. They dynamically evaluate capital investment plans and continue to expect over $100 million in free cash flow for the year.

A：In the first quarter, the company generated total revenue of $559 million, net income of $16 million or $0.16 per diluted share, adjusted net income of $8 million or $0.22 per diluted share, and adjusted EBITDA of $123 million with an adjusted EBITDA margin of 22%. The company expects positive comp sales in the remainder of FY 26, leading to EBITDA growth and an improved margin profile.

A：Six new remodel prototypes have been completed, with an additional two scheduled to open in the coming months.

A：The projected number of new store remodels for FY 27 is 10 to 20 locations.

A：The company's strategy for international franchising is to see it as a driver of highly efficient growth, increasing the customer base around the world with minimal investment and risk, and they have secured agreements for over 30 additional international franchise stores in the coming years.

A：To address the issues with the brand and guest feedback, the company is focusing on going back to basics, restoring essential elements, and addressing issues directly with guest feedback on games, innovation, and value.

A：The focus regarding capital expenditure and financial discipline is on strict capital expenditure discipline, minimum ROI thresholds, and generating significant free cash flow. Net CapEx for full year Quest is targeted at no more than $100 million, with a commitment to strict ROI thresholds and eliminating inefficient use of capital.

A：The financial highlights for the first quarter include total revenue of $559 million, net income of $16 million or 16 cents per diluted share, adjusted net income of $8 million or 22 cents per diluted share, and adjusted EBITDA of $123 million with an adjusted EBITDA margin of 22%.

A：The company plans to improve margins over time by continuing improvements in cost management, further improving internal processes and controls around costs, and identifying material cost savings across all aspects of the business.

A：The improvement in free cash flow from Q1 FY 25 to Q1 FY 26 was an $84 million improvement, going from a negative $59 million to a positive $25 million.

A：The investments in the first quarter were approximately $71 million in CapEx on a net basis, and the company focused on generating meaningful free cash flow while continuing to invest in new store growth, new games, and a revised remodel program.

A：The factors that give the company confidence include the internal strategy, execution, the conversion of strong operating cash flow to free cash flow through capital spending discipline, and the expected comp store sales growth coupled with the net CapEx investment limits.

A：The company has managed its margins well by focusing on cost of sales and labor improvements, including cost reduction on cost of sales and margin enhancements from new menu items, as well as driving more attach rates. It has also been effective with labor scheduling at key times to deliver guest experience and F&B offerings.

A：Strategies to create durable revenue include investing in a strong organization with an outstanding leader and a team that leverages a massive database for reaching out to corporates and institutions. These efforts are aimed at converting guest experiences into recurring visits.

A：The company executed a full 360 activation for the World Cup, including soccer-inspired games, tournament-themed food and drinks, a ticketed event, human crane with free tickets to the World Cup, influencer-driven watch content, and offering experiences like a 40 ft wall and value promotions.

A：In Q4, the lower end consumer experienced the most pressure, but the company has focused on value offers such as revamping game rates, half price games, and play combos to attract lower income consumers without over discounting and risking cannibalization of the business.

A：The strategies promoted to attract a lower end consumer include offering an entree for Ed, where customers can buy any denomination of power card and attach food and beverages to it, allowing for customization and targeting a broader consumer base.

A：Guests have advised the company to elevate its games and food and beverage offerings. The company has responded by investing heavily in new games, particularly in the last 30 days, and has seen a significant increase in cash flow and growth in the FNB business as a result. Guests also indicated a market craving for value, which the company has addressed by promoting half-off games and a new version of EPC that has tested very well, slated for a launch in the next 30 days.

A：The company learned that it cannot swing too heavily in one direction regarding media spend, needing to cater to consumers who consume media in different ways. It previously invested all money in television and then digital, but has since returned to a more balanced approach. Data-based media planning and investment have been implemented, focusing on testing different target audiences, channels, and investment levels in linear and CTV. This has helped in learning more effectively and deploying media investments more wisely.

A：The company is now using a structured, disciplined approach to messaging with a primary focus on promoting 'Ed new games' to inform every guest about new games with exciting IP partnerships on Dave and Buster's arcade. The secondary message emphasizes experiences like watching the World Cup soccer on large screens, enjoying great food and beverage, and playing competitive games during breaks. This structured approach aims to be more disciplined and consumer-focused, creating messaging based on what consumers want and using data to define the best media channels for investment.

A：The company is prioritizing the same store sales growth in its core business, and any new unit growth will be handled with a responsible capital deployment, focusing on supreme confidence in the returns from new investments. CapEx decisions are being made by carefully considering the potential returns and being risk-averse regarding new store investments. The allocation of capital is crucial, and the company is reallocating it to its core business to allow for more discrimination in choosing sites for new stores. Darren notes that the company continues to focus on the same core business while considering new store growth and capital reallocation.

A：The company's highest priority is to drive same store sales growth in core stores, and core business priorities take precedence. New unit growth is still considered, but only when there is supreme confidence in the returns from the investment. The company is being cautious with new CapEx deployment. The finite amount of CapEx is a fixed budget that needs to be allocated judiciously between different priorities, and Darren and the team are very focused on this figure.

A：The company's guidance for the remainder of fiscal 2026 suggests an expectation of positive same store sales starting from today through the balance of the year.

A：While there is a focus on new games when installing and promoting them to drive traffic, the gameplay is not exclusively focused on the new games. It is implied that there is a broader focus on gameplay that includes the new games but also encompasses other aspects of the arcade experience.