Topgolf Callaway Brands Delivers Strong Q4 2024 Performance

The sporting/entertainment company outpaced expectations, with a 27% surge

Carlsbad-based Topgolf Callaway Brands Corp. (NYSE: MODG) capped off 2024 with a solid fourth quarter, reporting 3% consolidated net revenue growth and a remarkable 45% increase in adjusted EBITDA to $101.4 million. The company also delivered a 27% surge in adjusted free cash flow, reaching $203 million. These results exceeded expectations, reinforcing the brand’s leadership in golf equipment and lifestyle apparel while highlighting strong operational performance across its diverse portfolio.

“We are pleased with our strong finish to the year,” said Chip Brewer, President and CEO. “Our Q4 results reflect continued strength in our Golf Equipment business, a robust finish for Topgolf, and successful operational efficiencies at Travis Mathew and Jack Wolfskin. As we move into 2025, our focus remains on improving same venue sales at Topgolf, launching innovative products and driving operational excellence. While we face some short-term headwinds, we are confident in our long-term strategy and ability to deliver significant shareholder value.”

Fourth Quarter 2024 Financial Highlights

• Consolidated Net Revenue Growth: 3%
• Adjusted EBITDA: $101.4 million (45% YoY increase)
• Operating Cash Flow: $382 million (5% YoY increase)
• Adjusted Free Cash Flow: $203 million (27% YoY increase)

However, the company’s GAAP net results included a $1.5 million non-cash impairment charge related to Topgolf’s goodwill and intangible assets, leading to a GAAP net loss of $1.5 million.

Segment Performance Overview

Topgolf

• Revenue: $439 million (flat YoY)
• Same Venue Sales: -8% (better than expected due to improving traffic trends)
• Segment Operating Income: $26.9 million (16.5% increase)
• Adjusted EBITDA: $83.5 million (14.1% increase)
• New Venues Opened: 2 (compared to 9 in Q4 2023)
• Key Driver: Revenue growth from additional venues and record-high Q4 venue-level margins

Golf Equipment

• Revenue: $224.8 million ($25.4 million YoY increase)
• Key Growth Areas: Success of Callaway golf clubs and Chrome family golf balls
• New Product Impact: Ai-ONE Square 2 Square Odyssey putters launched in Q4
• Operating Loss Reduction: Improved by $17.2 million, reducing seasonal Q4 loss to $2.7 million

Active Lifestyle

• Revenue: $260.6 million (0.7% YoY increase)
• Key Brands Driving Growth: TravisMathew
• Operating Income: Increased $3.4 million due to revenue growth and cost savings from Jack Wolfskin’s reorganization

Market Leadership & Strategic Priorities for 2025

• Callaway Maintains U.S. Market Leadership: No. 1 in total golf clubs for the third consecutive year and 9th time in the last 10 years
• Record U.S. Market Share in Golf Balls
• Focus on Same Venue Sales Growth at Topgolf: Implementing initiatives to boost traffic and engagement
• Expanding Product Innovation: New launches expected across golf equipment and lifestyle apparel
• Navigating Short-Term Challenges: Addressing foreign currency fluctuations and cost pressures

Looking Ahead

Despite some macroeconomic challenges, Topgolf Callaway Brands remains confident in its market-leading position, operational strength and ability to drive long-term growth. By leveraging brand strength, strategic investments and operational efficiencies, the company aims to enhance shareholder value and sustain momentum into 2025.