Topgolf Callaway Brands Corp. ((MODG)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Topgolf Callaway Brands Corp. recently held its earnings call, revealing a robust financial performance that has led to an increase in full-year guidance. The sentiment during the call was predominantly positive, underpinned by strong results and strategic initiatives, despite some challenges such as tariffs and market declines in Asia.
Exceeding Revenue and EBITDA Expectations
The company reported that its total business surpassed expectations in both revenue and EBITDA. This growth was evident in both the Golf Equipment and Topgolf segments, driven by favorable market conditions and effective execution strategies.
Golf Equipment Segment Performance
In the third quarter, the Golf Equipment segment saw a 4% year-over-year revenue increase, reaching $305 million. This growth was fueled by a 4% rise in Golf Clubs and a 6% increase in Golf Balls, supported by positive market dynamics.
Topgolf Segment Growth
Topgolf’s third-quarter results exceeded guidance for both revenue and EBITDA, marking a transition to positive same venue sales of over 1%. The segment experienced a high-teens increase in traffic within the 1- to 2-bay segment.
Strong Cash Position and Lower Debt
The company reported an increase in available liquidity to $1.25 billion, attributed to increased cash from operations and reduced net CapEx. Net debt was lowered to $2.23 billion from $2.54 billion the previous year.
Increased Full Year Guidance
Reflecting the strong third-quarter results and an improved outlook, Topgolf Callaway Brands raised its full-year 2025 revenue guidance to between $3.90 billion and $3.94 billion, with adjusted EBITDA guidance increased to between $490 million and $510 million.
Impact of Tariffs
The company faced an incremental tariff expense of $12 million in the third quarter, with an anticipated total impact of approximately $40 million for the full year. The tariff impact is expected to grow significantly in the future.
Challenges in Asian Markets
The company noted challenging market conditions in Asia, with Japan experiencing a slight decline year-to-date and Korea seeing a low-teens decrease.
3-Plus Bay Business Decline
There were ongoing declines in the 3-plus bay business, although signs of stabilization were noted. The company plans to implement initiatives to enhance performance in this area.
Topgolf CEO Transition
The transition of the CEO at Topgolf affected the timing of strategic evaluations for separation processes, indicating a period of adjustment for the company.
Forward-Looking Guidance
During the third quarter of 2025, Topgolf Callaway Brands achieved a total revenue of $934 million, a 3% year-over-year increase, driven by growth in both the Golf Equipment and Topgolf segments. The company maintained an adjusted EBITDA of $115 million despite a $12 million tariff impact. With these results, the company raised its full-year revenue guidance to $3.90 billion to $3.94 billion and adjusted EBITDA guidance to $490 million to $510 million.
In conclusion, Topgolf Callaway Brands Corp.’s earnings call highlighted a strong financial performance, with increased revenue and EBITDA expectations, and a positive outlook for the future. While challenges such as tariffs and market declines in Asia persist, the company remains optimistic, driven by strategic initiatives and robust segment growth.
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