Executive Summary / Key Takeaways

• TryHard Holdings Limited (THH) is strategically positioning itself as a premier lifestyle entertainment company in Japan, capitalizing on the nation's growing tourism and entertainment market through a diverse portfolio spanning event curation, club management, venue sub-leasing, and restaurant operations.
• The company's core investment thesis hinges on its asset-light operating model, deep industry expertise, and a commitment to leveraging state-of-the-art technology, including virtual and augmented reality, to create unique, multi-sensory immersive experiences that differentiate it in a competitive landscape.
• While THH demonstrated robust revenue growth of 14.9% in 2024, reaching JPY 3,461.20 million, and a 7.8% increase in its dominant consultancy and management segment, the company experienced a significant decline in net income to JPY 15.1 million in 2025, primarily due to strategic investments in market expansion events, a restaurant closure, and a reclassification in its sub-leasing segment.
• The recent Nasdaq listing in August 2025 and the capital raised are crucial for funding strategic initiatives, including collaborations with advertising companies, expansion of self-produced events, and potential international market entry, aiming to accelerate growth and enhance brand recognition.
• Key risks include intense competition, regulatory changes, economic volatility impacting discretionary spending, and the need for effective internal controls, which the company is actively addressing through remediation efforts.

The Pulse of Japanese Entertainment: TryHard's Vision and Strategic Foundation

TryHard Holdings Limited (NASDAQ:THH) is carving out a distinctive niche in Japan's vibrant and evolving lifestyle entertainment industry. Founded in 2013 by Rakuyo Otsuki and Yoichi Hiraoka, the company has grown from its roots in nightclub operations to a diversified entity with four principal business segments: event curation, consultancy and management services for entertainment venues, sub-leasing of such venues, and the ownership and operation of restaurants. This integrated approach allows THH to offer comprehensive, multi-sensory experiences that resonate with a broad audience, from locals to international tourists.

The company's overarching strategy is to be at the cutting edge of entertainment by introducing state-of-the-art technology, immersive storytelling, and bespoke experiences. This vision is particularly pertinent in Japan, where the tourism industry is projected to grow at a Compound Annual Growth Rate (CAGR) of 3.80% from $210 billion in 2024 to $245 billion in 2028, driven by an expanding middle class seeking unique experiences. Globally, the lifestyle entertainment market is anticipated to grow at a 7% CAGR, with the Asia Pacific region leading at 7.50% CAGR, underscoring a significant market opportunity for THH's expansion.

Central to TryHard's competitive advantage is its asset-light operating model. This strategy minimizes capital expenditures, maximizes scalability, and reduces risk, allowing the company to focus resources on delivering high-quality events and projects. This model offers benefits such as reduced upfront costs, lower fixed expenses, increased flexibility to adapt to market changes, and improved profitability by avoiding asset obsolescence. The company also emphasizes a robust supply chain ecosystem, fostering collaboration with partners and suppliers to streamline operations and enhance service quality.

Technological Edge: Crafting Immersive Futures

TryHard Holdings is committed to digital transformation, leveraging technology to enhance customer engagement and create immersive experiences. The company actively explores and implements digital technologies such as virtual reality (VR) and augmented reality (AR) to elevate event experiences. While specific quantifiable metrics on the impact of these technologies are not publicly detailed, the strategic intent is clear: to differentiate THH's offerings through unique, multi-sensory environments that captivate audiences and foster memorable connections.

Furthermore, THH employs digital marketing strategies, including search engine optimization (SEO) and pay-per-click (PPC) advertising, to bolster its online presence and reach target audiences more effectively. The company also utilizes data-driven insights to optimize its operations and marketing efforts, aiming for greater efficiency and customer satisfaction. The "so what" for investors is that this technological roadmap is designed to build a competitive moat, potentially leading to higher average selling prices (ASPs) for events, increased attendance, and improved margins through optimized operational and marketing spend. This focus on innovation is crucial for maintaining relevance and attracting a diverse clientele in a rapidly evolving entertainment landscape.

Financial Performance: A Mixed Picture of Growth and Strategic Adjustments

TryHard Holdings has demonstrated a dynamic financial trajectory, reflecting both growth in core segments and the impact of strategic adjustments. For the year ended June 30, 2024, total revenue increased by 14.9% to JPY 3,461.20 million, up from JPY 3,011.60 million in 2023. This growth was primarily fueled by strong demand in the consultancy and management and event curation segments. Net income saw a substantial increase of 317% in 2024, reaching JPY 137.4 million, compared to JPY 33.0 million in 2023.

However, the year ended June 30, 2025, presented a more complex picture. Total revenues increased modestly by 2.2% to JPY 3,538.90 million. Net income, however, declined significantly by 89% to JPY 15.1 million. This reduction was primarily attributable to several factors: losses incurred on specific event curation projects aimed at expanding market presence, the closure of a restaurant, and a substantial revenue decrease in the sub-leasing segment due to a lease reclassification and early termination damages. Gross profit margin also compressed from 22.6% in 2024 to 19.8% in 2025, while operating expenses increased by 22.5% to JPY 774.53 million, driven by higher advertising, marketing, and staff-related costs to support business expansion.

The consultancy and management segment remains a cornerstone of THH's operations, with revenue increasing by 14.3% to JPY 2,480.30 million in 2025. This growth was largely due to the opening of three new clubs, contributing approximately JPY 176.2 million, and effective marketing efforts. The segment maintained a relatively stable gross margin of 26.2% in 2025 through effective cost management. In contrast, the event curation segment's gross margin decreased to 6.0% in 2025, reflecting strategic investments in brand recognition. The restaurant segment, despite a revenue decline, saw its negative gross margin improve from -58.2% in 2024 to -30.2% in 2025, a 28% reduction attributed to proactive cost optimization strategies.

Liquidity and Capital Allocation

Historically, TryHard's liquidity has been supported by operational cash flow, equity contributions, and borrowings. As of June 30, 2025, the company reported cash and cash equivalents of JPY 13.35 million, a notable decrease from JPY 94.05 million in 2024. The company utilized JPY 197.48 million in cash from operating activities in 2025, compared to generating JPY 142.91 million in 2024. Current liabilities of JPY 1.27 billion exceeded current assets of JPY 1.25 billion as of June 30, 2025, indicating a tight current liquidity position.

Management, however, believes that existing cash, anticipated cash from financings, and the net proceeds of approximately US$2.2 million from its August 2025 IPO will be sufficient to meet anticipated cash needs for at least the next 12 months. The IPO proceeds are earmarked for business development, marketing, strategic acquisitions, joint ventures, and general working capital, signaling a clear intent to fund growth initiatives.

Competitive Landscape and Strategic Positioning

The nightclub and event production industry in Japan is highly fragmented and intensely competitive, characterized by low barriers to entry for new players. Competitors must constantly innovate with unique concepts and talent to stand out in dynamic urban centers like Tokyo and Osaka. TryHard Holdings faces competition from global players like Live Nation Entertainment (LYV) and Eventbrite (EB), as well as venue management specialists such as ASM Global.

Compared to Live Nation, THH operates on a more specialized, regional scale within Japan, focusing on comprehensive, end-to-end services and culturally tailored events. While Live Nation boasts a broader global reach and integrated ticketing systems, THH's strength lies in its operational flexibility for diverse event types and personalized consultancy. Against Eventbrite, a platform-focused ticketing and promotion company, THH offers a more integrated suite of on-the-ground services, including hospitality and venue management, which can provide greater efficiency for comprehensive physical events. However, Eventbrite's digital platform offers superior speed for ticketing and promotion. When juxtaposed with ASM Global, a major venue management entity, THH's sub-leasing and restaurant operations offer a more versatile, client-centric approach, emphasizing customization over large-scale infrastructure management.

THH's competitive advantages, or moats, include its strong brand recognition in Japan for customized event services, proprietary expertise in integrated management, and unique distribution channels facilitated by its sub-leasing model. These strengths enable THH to differentiate itself, potentially leading to enhanced customer loyalty and stronger gross margins in its niche segments. However, its regional focus presents a vulnerability, potentially limiting global market share and exposing it to higher operational costs compared to digitally agile competitors.

Outlook and Risks

TryHard Holdings is optimistic about its future prospects, driven by several strategic growth initiatives. The company plans to expand its consultancy and management segment through collaborations with advertising companies, aiming to secure long-term club partnerships and broaden its footprint. Significant growth is also anticipated from the expansion of self-produced events, which are expected to generate higher revenue and enhance brand recognition. THH is also exploring opportunities to enhance its sub-leasing and restaurant segments, focusing on optimizing revenue streams, driving operational efficiencies, and exploring potential geographic expansion into international markets like the United States, China, and Southeast Asia.

Despite this optimistic outlook, several risks warrant investor attention. The demand for events and entertainment is inherently unpredictable and sensitive to economic conditions, consumer preferences, and external factors like public health concerns. The company also faces stringent regulations in the nightlife industry, operational liabilities, and risks associated with lease agreements and real estate market fluctuations. Reliance on key entertainers and management personnel, economic volatility, and rising costs for labor and materials could also impact profitability. Furthermore, as a newly public U.S. company, THH faces increased compliance costs and its executive officers lack prior experience in operating a U.S. public company. A material weakness in internal controls related to financial reporting personnel has been identified, though the company is actively implementing remediation measures. The concentration of voting power with Mr. Otsuki (approximately 70.48%) and the potential for extreme stock price volatility due to a relatively small public float are also significant considerations for investors.

Conclusion

TryHard Holdings Limited is embarking on a transformative journey, leveraging its established presence in Japan's lifestyle entertainment sector and a strategic vision for growth. The company's commitment to immersive, technology-enhanced experiences, coupled with an asset-light model and robust strategic partnerships, positions it to capitalize on the burgeoning demand for entertainment both domestically and internationally. While recent financial performance indicates the impact of strategic investments and operational adjustments, management's clear roadmap for expansion and focus on operational efficiencies underscore a forward-looking approach. Investors should weigh the significant growth opportunities in Japan's entertainment and tourism markets against the inherent competitive pressures and operational risks, particularly the need for successful execution of its technological and expansion strategies to drive long-term value.