RCI Files 10-Q, Reports 1Q26 Results, Hosts X Spaces Call at 4: 30 PM ET Today

Published: 2026-05-07 16:06:06 ET RICK

Published on 05/07/2026 at 04:06 pm EDT

RCI Hospitality Holdings, Inc. (Nasdaq: RICK) today filed its Form 10-Q and reported results for the fiscal 2026 first quarter ended December 31, 2025.

Summary Financials (in millions, except EPS)

1Q26

1Q25

Total revenues

$70.8

$71.5

EPS

$(0.57)

$1.01

Non-GAAP EPS1

$0.74

$0.80

Net cash provided by operating activities

$7.8

$13.3

Free cash flow1

$6.7

$12.1

Net income (loss) attributable to RCIHH common stockholders

$(4.7)

$9.0

Adjusted EBITDA1

$15.7

Weighted average shares used in computing EPS – basic and diluted

8.30

8.92

1 See “Non-GAAP Financial Measures” below.

Summary (Comparisons are to year-ago periods unless indicated otherwise)

Travis Reese, Interim President and CEO, said: "The year‑over‑year decline in net income primarily reflects pre-tax operating and non-operating items of $10.1 million in net charges in 1Q26 and $3.2 million in net gains in 1Q25."

"As previously reported, total nightclub sales were stable, with contributions from new venues offsetting same‑store performance and the closure of underperforming locations, while new Bombshells sports bars-restaurants offset most same‑store declines. Despite sales headwinds tied to customer uncertainty during the U.S. government shutdown in October and November, higher‑margin club service revenues increased 6.7% year over year.”

"In line with our 5-Year Capital Allocation Plan, we have bought back more than one million shares in FY26 to date as of May 1, 2026, resulting in approximately 7,651,500 shares outstanding."

X Spaces Conference Call at 4:30 PM ET Today

1Q26 Results (Comparisons are to year-ago periods unless indicated otherwise)

Nightclubs segment: Revenues of $62.3 million increased by 0.9%. Sales primarily reflected $4.9 million from five newly acquired and reopened clubs and $56.9 million from the 52 same-store clubs. Two small Texas clubs closed during the quarter.2 By revenue type, service increased 6.7%; food, merchandise and other increased 1.8%; and alcoholic beverages declined 4.6%.

Other charges, net of $0.2 million (mainly impairments offset by favorable settlement of a lawsuit and gain on insurance) compared to other gains, net of $0.8 million (mainly a gain on insurance).

Operating income was $18.7 million (30.0% of segment revenues) compared to $20.9 million (33.8%). Non-GAAP operating income, which excludes other net charges and gains, was $19.5 million (31.3% of segment revenues) compared to $20.6 million (33.4%).

Bombshells segment: Revenues of $8.4 million declined 12.6%. Sales reflected $1.8 million from two newly opened locations, $6.6 million from the nine same-store locations, and the absence of $1.2 million from four underperforming locations divested/closed in 1Q25.2

Operating loss was $139,000 (-1.7% of segment revenues) compared to income of $1.9 million (20.3%), which included a gain on sale of a location of $1.3 million. Non-GAAP operating loss, which excludes other net charges (mainly impairments), was $110,000 (-1.3% of segment revenues) compared to income of $616,000 (6.4%), which excludes the gain on sale.

Corporate segment: Expenses totaled $7.4 million (10.4% of total revenues) compared to $8.8 million (12.3%). Most of the year over year change reflected lower insurance costs partially offset by higher accounting and professional fees in the current year due to delayed filing of our annual report and year end audit. Non-GAAP expenses totaled $7.0 million (9.9% of total revenues) compared to $8.4 million (11.8%).

Impairments and other charges, net within consolidated operations totaled $0.2 million compared to net gains of $2.2 million. 1Q26 also included a non-operating charge of $9.9 million compared to a non-operating gain of $1.0 million.

Income tax expense was $1.5 million compared to $1.8 million.

Weighted average shares outstanding of 8.30 million declined 7.0% due to share buybacks.

Debt of $256.4 million at December 31, 2025 increased 8.8% from $235.8 million at September 30, 2025, primarily reflecting seller-financing from the previously-announced ADW transaction. Compared to a year ago, debt increased 8.9%.

See our January 13, 2026 news release on 1Q26 sales for more details.

Non-GAAP Financial Measures

In addition to our financial information presented in accordance with GAAP, management uses certain non-GAAP financial measures, within the meaning of the SEC Regulation G, to clarify and enhance understanding of past performance and prospects for the future. Generally, a non-GAAP financial measure is a numerical measure of a company’s operating performance, financial position or cash flows that excludes or includes amounts that are included in or excluded from the most directly comparable measure calculated and presented in accordance with GAAP. We monitor non-GAAP financial measures because it describes the operating performance of the Company and helps management and investors gauge our ability to generate cash flow, excluding (or including) some items that management believes are not representative of the ongoing business operations of the Company, but are included in (or excluded from) the most directly comparable measures calculated and presented in accordance with GAAP. Relative to each of the non-GAAP financial measures, we further set forth our rationale as follows:

Non-GAAP Operating Income and Non-GAAP Operating Margin. We calculate non-GAAP operating income and non-GAAP operating margin by excluding the following items from income from operations and operating margin: (a) amortization of intangibles, (b) impairment of assets, (c) settlement of lawsuits, net of recoveries, (d) gains or losses on sale of businesses and assets, (e) gains or losses on insurance, and (f) stock-based compensation. We believe that excluding these items assists investors in evaluating period-over-period changes in our operating income and operating margin without the impact of items that are not a result of our day-to-day business and operations.

Non-GAAP Net Income and Non-GAAP Net Income per Diluted Share. We calculate non-GAAP net income and non-GAAP net income per diluted share by excluding or including certain items to net income or loss attributable to RCIHH common stockholders and diluted earnings per share. Adjustment items are: (a) amortization of intangibles, (b) impairment of assets, (c) settlement of lawsuits, net of recoveries, (d) gains or losses on sale of businesses and assets, (e) gains or losses on insurance, (f) stock-based compensation, (g) premium on stock repurchase, (h) gains or losses on lease termination, and (i) the income tax effect of the above-described adjustments. Included in the income tax effect of the above adjustments is the net effect of the non-GAAP provision for income taxes, calculated at approximately 22.8% and 17.7% effective tax rate of the pre-tax non-GAAP income before taxes for the three months ended December 31, 2025, and 2024, respectively, and the GAAP income tax expense (benefit). We believe that excluding and including such items help management and investors better understand our operating activities.

Adjusted EBITDA. We calculate adjusted EBITDA by excluding the following items from net income or loss attributable to RCIHH common stockholders: (a) depreciation and amortization, (b) income tax expense, (c) net interest expense, (d) impairment of assets, (e) settlement of lawsuits, net of recoveries, (f) gains or losses on sale of businesses and assets, (g) gains or losses on insurance, (h) stock-based compensation, (i) premium on stock repurchase, and (j) gains or losses on lease termination. We believe that adjusting for such items helps management and investors better understand our operating activities. Adjusted EBITDA provides a core operational performance measurement that compares results without the need to adjust for federal, state and local taxes which have considerable variation between domestic jurisdictions. The results are, therefore, without consideration of financing alternatives of capital employed. We use adjusted EBITDA as one guideline to assess our unleveraged performance return on our investments. Adjusted EBITDA is also the target benchmark for our acquisitions of nightclubs.

We also use certain non-GAAP cash flow measures such as free cash flow. Free cash flow is derived from net cash provided by operating activities less maintenance capital expenditures. We use free cash flow as the baseline for the implementation of our capital allocation strategy.

Accounting Standards Update (ASU) 2023-07

The Company has adopted Accounting Standards Update (ASU) 2023-07, which requires enhanced reportable segment disclosures. As a result, certain prior-year segment information has been recast.

About RCI Hospitality Holdings, Inc. (Nasdaq: RICK) (X: @RCIHHinc)

With more than 60 locations, RCI Hospitality Holdings, Inc., through its subsidiaries, is the country’s leading company in adult nightclubs and sports bars-restaurants. See all our brands at www.rcihospitality.com.

Forward-Looking Statements

This press release may contain forward-looking statements that involve a number of risks and uncertainties that could cause the Company's actual results to differ materially from those indicated, including, but not limited to, the risks and uncertainties associated with (i) operating and managing an adult entertainment or restaurant business, (ii) the business climates in cities where it operates, (iii) the success or lack thereof in launching and building the Company's businesses, (iv) cyber security, (v) conditions relevant to real estate transactions, (vi) numerous other factors such as laws governing the operation of adult entertainment or restaurant businesses, competition and dependence on key personnel, and (vii) our ability to regain and maintain compliance with the filing requirements of the SEC and the Nasdaq Stock Market. For more detailed discussion of such factors and certain risks and uncertainties, see RCI's annual report on Form 10-K for the year ended September 30, 2025, as well as its other filings with the U.S. Securities and Exchange Commission. The Company has no obligation to update or revise the forward-looking statements to reflect the occurrence of future events or circumstances.

RCI HOSPITALITY HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share, number of shares, and percentage data)

Three Months Ended

December 31, 2025

December 31, 2024

Amount

% of Revenue

Amount

% of Revenue

Revenues

Sales of alcoholic beverages

30,139

42.6

32,188

45.0

Sales of food and merchandise

9,966

14.1

10,106

14.1

Service revenues

25,811

36.4

24,181

33.8

Other

4,912

6.9

5,008

7.0

Total revenues

70,828

100.0

71,483

100.0

Operating expenses

Cost of goods sold

Alcoholic beverages sold

5,511

18.3

5,846

18.2

Food and merchandise sold

3,629

36.4

3,563

35.3

Service and other

101

0.3

0.2

Total cost of goods sold (exclusive of items shown below)

9,241

13.0

9,481

13.3

Salaries and wages

21,443

30.3

20,564

28.8

Selling, general and administrative

24,704

34.9

26,207

36.7

Depreciation and amortization

4,187

5.9

3,569

5.0

Impairments and other charges (gains), net

217

0.3

(2,244

)

(3.1

Total operating expenses

59,792

84.4

57,577

80.5

Income from operations

11,036

15.6

13,906

19.5

Other income (expenses)

Interest expense

(4,350

)

(6.1

(4,152

)

(5.8

Interest income

0.1

179

0.3

Premium on stock repurchase

(9,885

)

(14.0

—

Gain on lease termination

—

0.0

979

1.4

Income (loss) before income taxes

(3,100

)

(4.4

10,912

15.3

Income tax expense

1,549

2.2

1,847

2.6

Net income (loss)

(4,649

)

(6.6

9,065

12.7

Net income attributable to noncontrolling interests

(85

)

(0.1

(41

)

(0.1

Net income (loss) attributable to RCIHH common shareholders

(4,734

)

(6.7

9,024

12.6

Earnings (loss) per share

Basic and diluted

(0.57

)

1.01

Weighted average shares used in computing earnings (loss) per share

Basic and diluted

8,295,880

8,920,774

RCI HOSPITALITY HOLDINGS, INC.

SEGMENT INFORMATION

(in thousands)

Three Months Ended

December 31, 2025

December 31, 2024

Revenues

Nightclubs

62,309

61,724

Bombshells

8,381

9,587

Other

138

172

70,828

71,483

Income (loss) from operations

Nightclubs

18,722

20,853

Bombshells

(139

)

1,945

Other

(150

)

(103

)

Corporate

(7,397

)

(8,789

)

11,036

13,906

RCI HOSPITALITY HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Three Months Ended

December 31, 2025

December 31, 2024

CASH FLOWS FROM OPERATING ACTIVITIES

Net income (loss)

(4,649

)

9,065

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization

4,187

3,569

Impairment of assets

1,163

—

Deferred income tax benefit

—

(389

)

Loss (gain) on sale of businesses and assets

(1,463

)

Amortization and writeoff of debt discount and issuance costs

137

Credit loss expense on notes receivable

—

Gain on insurance

(141

)

(1,150

)

Noncash lease expense

734

658

Stock-based compensation

392

470

Premium on stock repurchase

9,885

—

Changes in operating assets and liabilities:

Receivables

(354

)

2,373

Inventories

)

Prepaid expenses, other current, and other assets

(2,822

)

(598

)

Accounts payable, accrued, and other liabilities

(846

)

750

Net cash provided by operating activities

7,816

13,344

CASH FLOWS FROM INVESTING ACTIVITIES

Proceeds from sale of businesses and assets

600

129

Proceeds from insurance

138

1,150

Proceeds from notes receivable

Payments for property and equipment and intangible assets

(2,331

)

(5,754

)

Net cash used in investing activities

(1,543

)

(4,404

)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from debt obligations

2,253

2,963

Payments on debt obligations

(4,952

)

(5,694

)

Purchase of treasury stock

(9,831

)

(3,218

)

Payment of dividends

(545

)

(623

)

Payment of loan origination costs

(40

)

—

Investment from noncontrolling partner

1,800

—

Payments to noncontrolling interests

(36

)

—

Net cash used in financing activities

(11,351

)

(6,572

)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

(5,078

)

2,368

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

33,709

32,350

CASH AND CASH EQUIVALENTS AT END OF PERIOD

28,631

34,718

RCI HOSPITALITY HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands)

December 31, 2025

September 30, 2025

December 31, 2024

ASSETS

Current assets

Cash and cash equivalents

28,631

33,709

34,718

Receivables, net

4,221

3,940

3,519

Inventories

4,832

4,857

4,640

Prepaid expenses and other current assets

7,820

4,968

4,226

Assets held for sale

4,463

3,394

—

Total current assets

49,967

50,868

47,103

Property and equipment, net

276,333

279,027

282,621

Operating lease right-of-use assets, net

25,053

25,781

25,573

Notes receivable, net of current portion

3,797

3,849

4,103

Goodwill

62,242

62,725

61,911

Intangibles, net

170,164

171,948

162,881

Other assets

2,706

2,737

2,026

Total assets

590,262

596,935

586,218

LIABILITIES AND EQUITY

Current liabilities

Accounts payable

4,499

5,836

5,010

Accrued liabilities

33,928

32,607

20,514

Current portion of debt obligations, net

34,431

21,198

17,788

Current portion of operating lease liabilities

3,386

3,314

3,008

Total current liabilities

76,244

62,955

46,320

Deferred tax liability, net

21,689

22,304

Debt, net of current portion and debt discount and issuance costs

221,997

214,583

217,741

Operating lease liabilities, net of current portion

26,442

27,320

27,471

Other long-term liabilities

8,214

9,509

3,611

Total liabilities

354,586

336,056

317,447

Commitments and contingencies

Equity

Preferred stock

—

Common stock

Additional paid-in capital

29,144

50,908

58,731

Retained earnings

204,037

210,106

210,160

Total RCIHH stockholders' equity

233,259

261,101

268,980

Noncontrolling interests

2,417

(222

)

(209

)

Total equity

235,676

260,879

268,771

Total liabilities and equity

590,262

596,935

586,218

RCI HOSPITALITY HOLDINGS, INC.

NON-GAAP FINANCIAL MEASURES

(in thousands, except per share, number of shares, and percentage data)

Three Months Ended

December 31, 2025

December 31, 2024

Reconciliation of GAAP net income (loss) to Adjusted EBITDA

Net income (loss) attributable to RCIHH common stockholders

(4,734

)

9,024

Income tax expense

1,549

1,847

Interest expense, net

4,251

3,973

Depreciation and amortization

4,187

3,569

Impairment of assets

1,163

—

Settlement of lawsuits

(802

)

179

Loss (gain) on sale of businesses and assets

(1,406

)

Gain on insurance

(177

)

(1,017

)

Stock-based compensation

392

470

Premium on stock repurchase

9,885

—

Gain on lease termination

—

(979

)

Adjusted EBITDA

15,747

15,660

Reconciliation of GAAP net income (loss) to non-GAAP net income

Net income (loss) attributable to RCIHH common stockholders

(4,734

)

9,024

Amortization of intangibles

615

580

Impairment of assets

1,163

—

Settlement of lawsuits

(802

)

179

Stock-based compensation

392

470

Loss (gain) on sale of businesses and assets

(1,406

)

Gain on insurance

(177

)

(1,017

)

Premium on stock repurchase

9,885

—

Gain on lease termination

—

(979

)

Net income tax effect

(261

)

310

Non-GAAP net income

6,114

7,161

Reconciliation of GAAP diluted earnings (loss) per share to non-GAAP diluted earnings per share

Diluted shares

8,295,880

8,920,774

GAAP diluted earnings (loss) per share

(0.57

)

1.01

Amortization of intangibles

0.07

Impairment of assets

0.14

—

Settlement of lawsuits

(0.10

)

0.02

Stock-based compensation

0.05

Loss (gain) on sale of businesses and assets

0.00

(0.16

)

Gain on insurance

(0.02

)

(0.11

)

Premium on stock repurchase

1.19

—

Gain on lease termination

—

(0.11

)

Net income tax effect

(0.03

)

0.03

Non-GAAP diluted earnings per share

0.74

0.80

Three Months Ended

December 31, 2025

December 31, 2024

Reconciliation of GAAP operating income to non-GAAP operating income

Income from operations

11,036

13,906

Amortization of intangibles

615

580

Impairment of assets

1,163

—

Settlement of lawsuits

(802

)

179

Stock-based compensation

392

470

Loss (gain) on sale of businesses and assets

(1,406

)

Gain on insurance

(177

)

(1,017

)

Non-GAAP operating income

12,260

12,712

Reconciliation of GAAP operating margin to non-GAAP operating margin

GAAP operating margin

15.6

19.5

Amortization of intangibles

0.9

0.8

Impairment of assets

1.6

—

Settlement of lawsuits

(1.1

0.3

Stock-based compensation

0.6

0.7

Loss (gain) on sale of businesses and assets

0.0

(2.0

Gain on insurance

(0.2

(1.4

Non-GAAP operating margin

17.3

17.8

Reconciliation of net cash provided by operating activities to free cash flow

Net cash provided by operating activities

7,816

13,344

Less: Maintenance capital expenditures

1,136

1,276

Free cash flow

6,680

12,068

RCI HOSPITALITY HOLDINGS, INC.

NON-GAAP SEGMENT INFORMATION

($ in thousands)

Three Months Ended December 31, 2025

Three Months Ended December 31, 2024

Nightclubs

Bombshells

Other

Corporate

Total

Nightclubs

Bombshells

Other

Corporate

Total

Income (loss) from operations

18,722

(139

)

(150

)

(7,397

)

11,036

20,853

1,945

(103

)

(8,789

)

13,906

Amortization of intangibles

613

—

615

574

—

580

Impairment of assets

1,163

—

1,163

—

Settlement of lawsuits

(827

)

—

(802

)

179

—

179

Stock-based compensation

—

392

—

470

Loss (gain) on sale of businesses and assets

—

(1,330

)

—

(92

)

(1,406

)

Gain on insurance

(177

)

—

(177

)

(1,017

)

—

(1,017

)

Non-GAAP operating income (loss)

19,516

(110

)

(150

)

(6,996

)

12,260

20,605

616

(103

)

(8,406

)

12,712

GAAP operating margin

30.0

(1.7

(108.7

(10.4

15.6

33.8

20.3

(59.9

(12.3

19.5

Non-GAAP operating margin

31.3

(1.3

(108.7

(9.9

17.3

33.4

6.4

(59.9

(11.8

17.8

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