NASDAQ: RICK

During fiscal 2025, 2024, and 2023, consolidated revenues were $279.4 million, $295.6 million, and $293.8 million, respectively, generating diluted earnings per share of $1.23, $0.33, and $3.13, respectively.

The table below shows the number of Nightclubs and Bombshells open by state as of September 30, 2025:

NightclubsBombshellsTotal

Arizona1—1

Colorado617

Florida4—4

Illinois5—5

Indiana1—1

Kentucky1—1

Louisiana1—1

Maine1—1

Michigan1—1

Minnesota3—3

New York4—4

North Carolina2—2

Pennsylvania2—2

South Carolina1—1

Texas261036

591170

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Nightclubs Segment

Our Nightclubs subsidiaries operate our adult entertainment nightclubs through several brands that target many different demographics of customers by providing a unique, quality entertainment environment. Our clubs do business as Rick’s Cabaret, Jaguars Club, Tootsie’s Cabaret, XTC Cabaret, Club Onyx, Hoops Cabaret and Sports Bar, Scarlett’s Cabaret, Diamond Cabaret, Cheetah Gentlemen's Club, PT's Showclub, Playmates Club, Country Rock Cabaret, Temptations Adult Cabaret, Foxy’s Cabaret, Vivid Cabaret, Downtown Cabaret, Cabaret East, The Seville, Silver City Cabaret, Heartbreakers Gentlemen's Club, Kappa Men’s Club, Baby Dolls, and Chicas Locas. We also operate one dance club under the brand name Studio 80. In 2025, we acquired clubs doing business as Flight Club, Platinum West, and Platinum Plus.

We generate revenue from our nightclubs through the sale of alcoholic beverages, food, and merchandise items; service in the form of cover charge, licensing fees, and room rentals; and through other related means such as ATM commissions and vending income, among others.

During fiscal 2025, our Nightclub segment sales mix was 40% service revenue; 43% alcoholic beverages; and 17% food, merchandise, and other. Segment gross margin (revenues less cost of goods sold, divided by revenues) was approximately 88.6%. Our Nightclubs segment revenue decreased by approximately 0.6% and income from operations increased by 20.1% compared to the prior year. Same-stores sales for Nightclubs in 2025 was -2.1%.

For a list of our nightclub locations, refer to Item 2—“Properties.”

Bombshells Segment

Our Bombshells segment operates a restaurant and bar concept that sets itself apart with décor that pays homage to all branches of the U.S. military. Locations feature local DJs, large outdoor patios, and more than 75 state-of-the-art flat screen TVs for watching your favorite sports. All food and drink menu items have military names. Bombshell Girls, with their military-inspired uniforms, are a key attraction. Their mission, in addition to waitressing, is to interact with guests and generate a fun atmosphere. During fiscal 2025, we opened two Bombshells locations in Denver, Colorado and Lubbock, Texas and closed three locations in Austin, Houston, and Spring, Texas, and one food hall in Denver, Colorado.

During fiscal 2025, Bombshells sales mix was 52% alcoholic beverages and 48% food, merchandise, and other. Segment gross margin (revenues less cost of goods sold, divided by revenues) was approximately 76.1%. Bombshells segment revenue decreased by 29.2%, while income from operations improved to a $177,000 income from a $10.8 million loss in the prior year. Same-stores sales for Bombshells in 2025 was -13.6%.

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For a list of our Bombshells locations, refer to Item 2—“Properties.”

Other Segment

We group together all businesses not belonging to either Nightclubs and Bombshells as Other reportable segment. This is made up of several wholly-owned subsidiaries composed primarily of our Media Group and Drink Robust. Our Media Group is the leading business communications company serving the multibillion-dollar adult nightclubs industry and the adult retail products industry. It owns a national industry convention and trade show; two national industry trade publications; two national industry award shows; and more than a dozen industry and social media websites. Included in the Media Group is ED Publications, publishers of the bimonthly ED (Exotic Dancer) Magazine, the only national business magazine serving the 2,000 adult nightclubs of North America, which collectively have revenue in excess of $5 billion, according to the Association of Club Executives (an industry lobbying organization that was founded by ED Publications in 1999). In addition, ED Publications produces the bimonthly StorErotica Magazine, which is mailed to over 2,500 adult retail stores and lingerie boutiques across the US. ED Publications, founded in 1991, also produces the Annual ED EXPO, the only convention and tradeshow in the world for the multi-billion-dollar adult nightclub industry. The Media Group produces two nationally recognized industry award shows for the readers of both ED Magazine and StorErotica Magazine, and maintains several B-to-B and consumer websites for both industries. Drink Robust is licensed to sell Robust Energy Drink in the United States.

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OUR STRATEGY

Our overall objective is to create value for our shareholders by developing and operating profitable businesses in the hospitality and related space. We strive to achieve that by providing an attractive price-value entertainment, dining experience, and top-notch service; by attracting and retaining quality personnel; and by focusing on unit-level operating performance.

In December 2024, we launched our five-year Back-to-Basics strategy where we focus on improving performance of existing clubs and Bombshells units to fuel our capital allocation priorities. For the allocation of our free cash flow, we currently divide it among club acquisitions (investing), share buybacks (financing), and dividends (financing). Our financial targets by fiscal 2029 are to achieve:

•Total revenues of $400 million

•Free cash flow of $75 million

•Shares outstanding of 7.5 million

Over a five-year period from fiscal 2020 through fiscal 2025, our income from operations increased at a compound annual growth rate (“CAGR”) of 62%, which was mainly caused by increasing revenue at a CAGR of 16% and decreasing impairment of assets at a CAGR of 13%. Excluding noncash and certain nonrecurring items, our non-GAAP diluted earnings per share improved at a CAGR of 33%. Net cash provided by operating activities improved by 26% and free cash flow also improved by 28% CAGR for the same period. We have steadily increased our quarterly dividend payments from $0.03 in fiscal 2016 to $0.07 in fiscal 2025. See discussions of our non-GAAP financial measures starting on page 45.

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During 2022, we achieved our highest financial performance in terms of profitability and cash flow due to government stimulus prompted by the pandemic and the fact that our restaurants and clubs were among the first to open and resume business operations. Compared to our record net income in 2022, our 2025 net income decreased by 77%. But for the same time period, our net cash from operating activities only decreased by 23%. We are managing this by carefully evaluating our Bombshells program in view of recent performance trends. Currently, we have one location that is under construction and do not plan to add anymore locations after that.

COMPETITION

The adult entertainment and the restaurant/sports bar businesses are highly competitive with respect to price, service and location. All of our nightclubs compete with a number of locally owned adult clubs, some of whose brands may have name recognition that equals that of ours. The names “Rick’s” and “Rick’s Cabaret,” “Tootsie’s Cabaret,” “XTC Cabaret,” “Scarlett’s,” “Silver City,” “Club Onyx,” “Downtown Cabaret,” “Temptations,” “The Seville,” “Jaguars,” “Hoops Cabaret,” “Foxy’s Cabaret,” "Studio 80," “Country Rock Cabaret,” “PT’s,” “Diamond Cabaret,” “Baby Dolls Saloon," "Baby Dolls," "Chicas Locas," "Rick's Rewards," and "Venice Cabaret" are proprietary. In the restaurant/sports bar business, “Bombshells” is also proprietary. We believe that the combination of our existing brand name recognition and the distinctive entertainment environment that we have created allows us to compete effectively in the industry and within the cities where we operate. Although we believe that we are well positioned to compete successfully, there can be no assurance that we will be able to maintain our high level of name recognition and prestige within the marketplace.

GOVERNMENTAL REGULATIONS

We are subject to various federal, state and local laws affecting our business activities. Particularly in Texas, the authority to issue a permit to sell alcoholic beverages is governed by the Texas Alcoholic Beverage Commission (“TABC”), which has the authority, in its discretion, to issue the appropriate permits. We presently hold a Mixed Beverage Permit and a Late Hour Permit at numerous Texas locations. Colorado, Minnesota, North Carolina, Louisiana, Arizona, Pennsylvania, Florida, New York, Kentucky, Maine, Indiana, and Illinois have similar laws that may limit the availability of a permit to sell alcoholic beverages or that may provide for suspension or revocation of a permit to sell alcoholic beverages in certain circumstances. It is our policy, prior to expanding into any new market, to take steps to ensure compliance with all licensing and regulatory requirements for the sale of alcoholic beverages, as well as the sale of food.

In addition to various regulatory requirements affecting the sale of alcoholic beverages, in many cities where we operate, the location of an adult entertainment cabaret is subject to restriction by city, county or other governmental ordinance. The prohibitions deal generally with distance from schools, churches and other sexually oriented businesses, and contain restrictions based on the percentage of residences within the immediate vicinity of the sexually oriented business. The granting of a sexually oriented business permit is not subject to discretion; the permit must be granted if the proposed operation satisfies the requirements of the ordinance. In all states where we operate, management believes we are in compliance with applicable city, county, state or other local laws governing the sale of alcohol and sexually oriented businesses.

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TRADEMARKS

Our rights to the trade names “RCI Hospitality Holdings, Inc.,” “Rick’s,” “Rick’s Cabaret,” “Tootsie’s Cabaret,” “Club Onyx,” “XTC Cabaret,” “Temptations,” “Jaguars,” “Downtown Cabaret,” “Cabaret East,” “Bombshells Restaurant and Bar,” “Vee Lounge,” “Mile High Men’s Club,” “Country Rock Cabaret,” “PT’s,” and “Diamond Cabaret” are established under common law, based upon our substantial and continuous use of these trade names in interstate commerce, some of which have been in use at least as early as 1987. We have registered our service mark, “RICK’S AND STARS DESIGN,” and the “BOMBSHELLS RESTAURANT & BAR” logo design with the United States Patent and Trademark Office. We have also obtained service mark registrations from the Patent and Trademark Office for “RICK’S AND STARS DESIGN” logo, “RCI HOSPITALITY HOLDINGS, INC.,” “RICK’S,” “RICK’S CABARET,” “CLUB ONYX,” “XTC CABARET,” “SCARLETT’S CABARET,” “SILVER CITY CABARET,” “BOMBSHELLS RESTAURANT AND BAR,” “THE SEVILLE CLUB,” “DOWN IN TEXAS SALOON,” “HOOPS CABARET,” “VEE LOUNGE,” “STUDIO 80,” “FOXY’S CABARET,” “EXOTIC DANCER,” “TOYS FOR TATAS,” “LA BOHEME GENTLEMAN'S CLUB,” “MILE HIGH MEN’S CLUB,” “MHMC logo,” “AFTER DARK,” “COUNTRY ROCK CABARET,” “PT’S,” “DIAMOND CABARET,” “CABARET ROYALE,” “BABY DOLLS SALOON,” “BABY DOLLS TOPLESS SALOON,” “BABY DOLLS,” “JAGUARS," and “BOMBSHELLS OFFICER’S CLUB” are registered through service mark registrations issued by the United States Patent and Trademark Office. As of this date, we have pending registration applications for the names “TOOTSIES CABARET,” “RICK'S REWARDS,” “VENICE CABARET,” “CHERRY CREEK FOOD HALL AND BREWERY,” and “THE MANSION.” We also own the rights to numerous trade names associated with our media division. There can be no assurance that these steps we have taken to protect our service marks will be adequate to deter misappropriation of our protected intellectual property rights.

EMPLOYEES AND INDEPENDENT CONTRACTORS

Our people are employed by the parent company or by its subsidiaries. Executive officers are employed by the registrant (parent company); shared services personnel and managers responsible for multiple clubs or restaurants are employed by RCI Internet Services, Inc. and SWR Consulting, Inc.; and the rest are employed by the individual operating entities. As of September 30, 2025, we had the following employees:

Operations

ManagersNon-ManagersCorporateTotal

Hourly602,87482,942

Salaried3654988502

4252,923963,444

Additionally, as of September 30, 2025, we had independent contractor entertainers who are self-employed and conduct business at our locations on a non-exclusive basis. Our entertainers at Rick’s Cabaret in Minneapolis, Minnesota and at Jaguars Club in Phoenix, Arizona may elect to act as commissioned employees. All employees and independent contractors sign arbitration non-class-action participation agreements, where allowed by federal and state laws. None of our employees are represented by a union. We consider our employee relations to be good.

We believe that the adult entertainment industry standard of treating entertainers as independent contractors provides us with safe harbor protection to preclude payroll tax assessment. We have prepared plans that we believe will protect our profitability in the event that the sexually oriented business industry is required in all states to convert entertainers, who are now independent contractors, into employees. See related discussion in “Risk Factors” below.

AVAILABLE INFORMATION

Our corporate website address is www.rcihospitality.com. Upon written request, we make available free of charge our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and all amendments to those reports as soon as reasonably practicable after such material is electronically filed with the SEC under the Securities Exchange Act of 1934, as amended (www.sec.gov). Information contained in the corporate website shall not be construed as part of this Form 10-K.

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