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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form10-Q
☒Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended March 31, 2025
OR
☐Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period                      to                     
Commission file number 001-10962
Picture1.jpg
Topgolf Callaway Brands Corp.
(Exact name of registrant as specified in its charter)
Delaware 95-3797580
(State or other jurisdiction of
incorporation or organization)		 (I.R.S. Employer
Identification No.)
2180 Rutherford Road, Carlsbad, CA 92008
(760) 931-1771
(Address, including zip code, and telephone number, including area code, of principal executive offices)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading Symbol(s)Name of Each Exchange on which Registered
Common Stock, $0.01 par value per shareMODGThe New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes  ý    No  o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ý    No  o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer☒Accelerated filer☐
Non-accelerated filer☐Smaller reporting company☐
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ý
As of April 30, 2025, the number of shares outstanding of the Registrant’s common stock was 183,752,224.



Important Notice to Investors Regarding Forward-Looking Statements: This report contains “forward-looking statements” as defined under the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: “may,” “should,” “will,” “could,” “would,” “anticipate,” “plan,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” and similar references to future periods. Forward-looking statements include, among others, statements that relate to future plans, events, liquidity, financial results, performance, prospects or growth and scale opportunities including, but not limited to, statements relating to our plans to pursue a separation of our Topgolf International, Inc. (“Topgolf”) business and the anticipated benefits and other effects of the separation, the timing and method of the separation, the expected financial and operational performance of, and future opportunities for, each of the two independent companies following the separation, the leadership of each of the two independent companies following the separation, the completion of the sale of Callaway Germany HoldCo GmbH, which owns our Jack Wolfskin business (“Jack Wolfskin”), including the satisfaction of closing conditions and timing thereof, future industry and market conditions, strength and demand of our products and services, continued brand momentum, demand for golf and outdoor activities and apparel, continued investments in the business, increases in shareholder value, consumer trends and behavior, the expansion of our leadership position in off-course golf, the strength of our brands, product lines and e-commerce business, pending litigation, availability of capital under our credit facilities, the capital markets or other sources, our conservation and cost reduction efforts, expected leverage levels, future stock repurchases or dividends, compliance with debt covenants, estimated unrecognized stock compensation expense, projected capital expenditures and depreciation and amortization expense, projected cash flow generation, same venue sales growth, increased venue operating margins, Topgolf venue development, future contractual obligations, the realization of deferred tax assets, including loss and credit carryforwards, future income tax provision, the future impact of new accounting standards, the impacts of inflation and changes in foreign exchange rates, and future prospects and growth of our businesses, including TravisMathew, LLC (“TravisMathew”), OGIO International, Inc. (“OGIO”), Jack Wolfskin and Topgolf. These statements are based upon current information and our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. As a result of these uncertainties and because the information on which these forward-looking statements is based may ultimately prove to be incorrect, actual results may differ materially from those anticipated. Important factors that could cause actual results to differ include, among others, the following:
•certain risks and uncertainties, including changes in capital markets or economic conditions, particularly the uncertainty related to inflation, decreases in consumer demand and spending and any severe or prolonged economic downturn;
•our ability to successfully execute planned and potential transactions, including our planned separation of Topgolf and our sale of Jack Wolfskin, and the potential failure to realize the expected benefits of such transactions in the expected timeframes or at all;
•uncertainty in obtaining regulatory approvals in connection with the separation of Topgolf and/or the sale of Jack Wolfskin;
•our ability to satisfy the closing conditions to complete the separation of Topgolf and/or the sale of Jack Wolfskin on a timely basis, or at all;
•consumer acceptance of and demand for our products and services;
•future retailer purchasing activity, which can be significantly affected by adverse industry conditions and overall retail inventory levels;
•unfavorable changes in trade or other policies by the U.S. government or foreign governments, including restrictions on imports, increases in U.S. import tariffs, retaliatory tariffs imposed by other countries on U.S. imports, and the potential negative economic consequences thereof, including increased costs, unavailability of materials, inflation, decreased customer demand, an economic slowdown or general economic uncertainty;
•the level of promotional activity in the marketplace;
•future consumer discretionary purchasing activity, which can be significantly adversely affected by unfavorable economic or market conditions;
•future changes in foreign currency exchange rates and the degree of effectiveness of our hedging programs;
•our ability to manage international business risks;
•our ability to recognize operational synergies and scale opportunities across our supply chain and global business platform;
•adverse changes in the credit markets or continued compliance with the terms of our credit facilities;


2

•our ability to monetize our investments;
•our ability to successfully operate and, if applicable, expand the retail stores of TravisMathew and our Japan and Korea apparel businesses, and venue locations of the Topgolf and BigShots businesses;
•delays, difficulties or increased costs in the supply of components needed to manufacture our products or in manufacturing our products, including our dependence on a limited number of suppliers for some of our products;
•adverse weather conditions and seasonality;
•any rule changes or other actions taken by the United States Golf Association or other golf associations that could have an adverse impact upon demand or supply of our products;
•our ability to protect our intellectual property rights;
•a decrease in participation levels in golf;
•the effect of terrorist activity, armed conflict, the conflict between Russia and Ukraine or Israel and Hamas, natural disasters or pandemic diseases, on the economy generally, on the level of demand for our products or on our ability to manage our supply and delivery logistics in such an environment; and
•the general risks and uncertainties applicable to us and our business.
Investors should not place undue reliance on these forward-looking statements, which are based on current information and speak only as of the date hereof. We undertake no obligation to update any forward-looking statements to reflect new information or events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Investors should also be aware that while we from time to time communicate with securities analysts, it is against our policy to disclose to them any material non-public information or other confidential commercial information. Furthermore, we have a policy against distributing or confirming financial forecasts or projections issued by analysts and any reports issued by such analysts are not our responsibility. Investors should not assume that we agree with any report issued by any analyst or with any statements, projections, forecasts or opinions contained in any such report. For details concerning these and other risks and uncertainties, see our most recent Annual Report on Form 10-K, as well as our quarterly reports on Form 10-Q and current reports on Form 8-K subsequently filed with the Securities and Exchange Commission from time to time.


3

Company Trademarks: The following marks and phrases, among others, are our trademarks: #1 Irons in Golf, #1 Putter in Golf, #1 Putter on Tour, #1 Range Technology in Golf, 2-Ball, 2-Ball Fang, 2-Ball Jailbird, 2 Ball Putter Design, 360 Carbon Chassis, 360 Face Cup, 360 Fade, 3 Deep, Ai 10x, Ai 10x Face, Ai200, Ai300, AI One Cruiser, AI Smart Face, AI Smoke, Alcatraz, Alpha Convoy, Anamatic, Apex, Apex 21, Apex Ai200, Apex Ai300, Apex CB, Apex DCB, Apex MB, Apex Pro, Apex Smoke, Apex TCB, Apex Ti Fusion, Apex Tour, Apex UT, Apex UW, APW, Arm Lock, At Home Outdoors, B21, Backstryke, Batwing, Batwing Technology, Beachside Stealth, Big Bertha, Big Bertha Alpha, Big Bertha B21, Big Bertha Diablo, Big Bertha Diablo & Horned Shield Design, Big Bertha REVA, Biggest Big Bertha, Bigshots Golf, Bigshots Golf Stylized, Big T, Bird of Prey, Black Series, Black Series I, Block Party Stylized, Bogey Free, Broomstick, Callaway, Callaway #1 Irons in Golf, Callaway Customs, Callaway Edge, Callaway Elyte, Callaway Golf, Callaway Media Productions, Callaway Next, Callaway Opus, Callaway Opus Platinum, Callaway Paradym Night Mode, Callaway Reva, Callaway Superfast, Callaway Super Hybrid, Callaway Supersoft, Callaway Supersoft Splatter 360, Callaway X, Callaway XR, Capital, Catch it Clean, Cavity Back Design Pattern (X-14), CF16, C-Grind, Chev, Chev 18, Chevron Design, Chrome Soft, Chrome Soft X, Chrome Tour, Circle Patch Design, Cloud Collection, Cloud Hoodie, Cloud Polo, Cloud Waffle, Coastview, Come Play Around, Cuater, Cuater C logo, Cutwave Sole, CXR, Cyclone Aero Shape, Dawn Patrol, Demonstrably Superior And Pleasingly Different, Destinations by TravisMathew, DFX, Diablo Forged, Diablo Octane, Diablo Tour, Distance Fitting from Callaway, Distance that Defies Convention, Divine Line, Divine Nine, Double Wide, Driver Defender, Driving the Course to Modern Golf, DSPD, Dual Force, Dual Softfast Core, Eagle, Ecostride, Engage, Epic, Epic Flash, Epic Max, Epic Max LS, Epic Speed, Epic Star, ERC, E.R.C. Fusion Stylized, ERC II, ERC Soft, Exclusive Tartan Collection, Exo-Cage, Extended Season, Fairway+, Fairway14, FairwayC, Fateline, Favorite Track, Fibercloud, Fit Disc, Flash Face, Flash Face SS21, Flash Face SS22, Flexcontact, Flex Pod, FLX360, Force Optimizer, Fore Me, Forged 455, Forged X, Friday Ponte, Frost Delay, FT-3, FT-5, FT9, FT-I, FT IQ, FTIZ, FT Optiforce, FT Tour, Fusetech, Fusion, Fusion Zero, Gambit Pro, GBB, GBB Epic, Gems, Golf Ball on Tee Design, Golf Fusion, Golf Nerd, Gravity Core, Great Big Bertha, Griptac, Hawk Eye, Headliner, Heater Series, Heater Series – Pure Performance, Heavenwood, Hex Aerodynamics, Hexbite, Hex Black Tour, Hex Diablo, Hex Soft, Hex Tour Soft, High Energy Core & Orbit Design, Hightail, HX, HX Diablo, Hyper Dry, Hyper Elastic Softfast Core, Hyper-Lite, Hyperlite Zero, Hyper Speed Face Cup, Hyper X, I.D. Ball, I-Mix, It’s Golf. It’s Not Golf. It’s Topgolf., IZ Power Source, Jack Wolfskin, Jack Wolfskin & Paw Design, Jailbird, Jailbird Character Head Design, Jailbird Versa Striped Club Head Design, Jailbreak, Jailbreak AI Velocity Blades, Jailbreak Speed Frame, Jaws Full Toe, JAWS MD5, Jewel Jam, J Grind, Kings of Distance, Lag Putt, Leader in Modern Golf, Legacy, Legacy Featherweight, Life On Tour, Longer From Everywhere, Lowrider, Lowrider 2.0., Mack Daddy, Mack Daddy CB, Mack Daddy Forged, Made to Meet the Moment, Magna, Make Every Shot Your Best, MarXman, Mavrik, MD3 Milled, MD4 Tactical, Microguard, Microguard Ecosphere, Microhinge Face Insert, Mission:Ambition, Modern Golf, Modg, More Than Just a Pretty Trace, Moveknit, Night Mode, Number One Putter in Golf, Ody, Odyssey, Odyssey AI One, Odyssey AI One Cruiser, Odyssey Eleven, Odyssey Seven, OG, Ogio, Ogio Aero, Ogio Alpha, Ogio Forge, Ogio Fuse, Ogio Pace, Ogio Rise, Ogio Shadow, OGIO Stylized, OGIO XIX, Opening Shot, Open to Close, Opti-Color, Opti Dry, Opti Feel, OptiFit, Opti Fit, Opti Flex, Opti Grip, OptiTherm, Opti Vent, Opus, Opus Platinum, ORG 7, ORG 14, ORG 14M, ORG 15, O Stylized, Our Favorite Time of the Year, Oworks, Paradym, Paradym AI Smoke, Paradym Night Mode, Paw Design, Paw Squared Design, Playing Through, Powered by Toptracer, Power & Soft Feel for Slower Swing Speeds, Practice Green, ProType, PT Stylized, ·R·, Rainspann, R Ball, RCH, Red Ball, Renegade, Rig 9800, Rogue ST, ROGUE Stylized, Rossie, Rule 35, S2H2, Scenic Vista, Scoreline Pattern in White, See the Break, Shaft Shield, Shield Design with Black Background, Shield Design with White Background, Silencer, Skyloft Soft, SLED, Slice Stopper, SMALL BATCH Hand Holding Hammer Badge, Solaire, Solar Noon, Speed Cartridge, Speed Frame, Speed Step, Speed Tuned, Spin Gen Face Technology, Spin Machine, Square Way, SRT, Steelhead, Steelhead XR, Step Sole, Strata, Strata Boom, Stroke Lab, Sub Zero, Superhot, Sure-Out, Sweeter from Every Spot, Swing Suite, Swing Tech, Swirl Design, Swirl Design & ODYSSEY, Syntech, Tank, TA Winter, Tee It High, Thermal Bomber, The Sure Thing, TMove, Ti 340 Mini, Ti340 Mini Driver, TM Stylized, Toe Up, TopChip, TopContender, TopDrive, Topgolf, Topgolf Block Party, Topgolf Callaway Brands, Topgolf Coach, Topgolf Live, Topgolf Media, Topgolf Open, Topgolf Outfield Trade Dress, TopPressure, TopScore, TopScramble, TopShot, TopTracer, Toptracer Coach, TopTracer Range, Toulon, Toulon Garage, Tour Aero, Tour Authentic, Tour I, Tour IZ, Tour Tested, Trade In! Trade Up!, Training Aid, TravisMathew, Triforce, Tri Hot, Tri-Hot 5K, Triple Diamond Design, Triple Track Stripes Design, Trutrack, Truvis, Truvis Pattern, T Stylized, Tungsten Speed Cartridge, Tuttle, Versa, VFT, VTEC, Warbird, War Bird, Weather Series, Weather Spann, Wedgeducation, W-Grind, White Damascus, White Hot, White Hot Microhinge, White Hot OG, White Hot RX Stylized, White Hot Tour, White Hot XG, White Ice, White Trapezoid Design, Winter Rules, Winter Term, Woode, X1, X-12, X-14, X18,X-18, X-20, X-22, X-24, X460, X-ACT, X Forged, X Hot, X Hot Pro, XR16, XR OS, XR Speed, XR Stylized, X Series, X Series Jaws, X-Spann, X Stylized, X-Tech, XTT, Z Grind, Zinna.


4

TOPGOLF CALLAWAY BRANDS CORP.
INDEX

Item 1.
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.



5

PART I. FINANCIAL INFORMATION
Item 1.    Financial Statements (Unaudited)

TOPGOLF CALLAWAY BRANDS CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except share data)
(Unaudited)
March 31, 2025December 31, 2024
ASSETS
Current assets:
Cash and cash equivalents$317.0 $445.0 
Restricted cash— 0.7 
Accounts receivable, less allowance of $6.0 million and $8.9 million, respectively
372.2 175.7 
Inventories653.9 757.3 
Prepaid expenses62.9 61.7 
Other current assets149.5 160.3
Current assets held for sale (Note 18)
409.3 — 
Total current assets1,964.8 1,600.7 
Property, plant and equipment, net2,206.7 2,219.0 
Operating lease right-of-use assets, net1,268.8 1,339.2 
Trade names and trademarks1,110.2 1,303.9 
Other intangible assets, net53.7 68.7 
Goodwill619.0 620.2 
Other assets, net470.7 484.4 
Total assets$7,693.9 $7,636.1 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses$398.8 $451.3 
Accrued employee compensation and benefits108.6 113.4 
Asset-based credit facilities46.7 25.4 
Operating lease liabilities, short-term76.2 89.3 
Construction advances18.1 6.0 
Deferred revenue94.5 96.0 
Other current liabilities35.9 44.5 
Current liabilities held for sale (Note 18)
149.8 — 
Total current liabilities928.6 825.9 
Long-term debt, net
1,455.4 1,457.9 
Operating lease liabilities, long-term1,322.6 1,377.1 
Deemed landlord financing obligations1,210.9 1,194.8 
Deferred taxes, net2.2 24.9 
Other long-term liabilities347.6 347.8 
Commitments and contingencies (Note 11)
Shareholders’ equity:
Preferred stock, $0.01 par value, 3.0 million shares authorized, none issued and outstanding at both March 31, 2025 and December 31, 2024
— — 
Common stock, $0.01 par value, 360.0 million shares authorized, and 186.2 million shares issued at both March 31, 2025 and December 31, 2024
1.9 1.9 
Additional paid-in capital3,022.1 3,032.8 
Accumulated deficit(498.1)(500.2)
Accumulated other comprehensive loss(62.9)(76.0)
Less: Common stock held in treasury, at cost, 2.5 million and 3.1 million shares as of March 31, 2025 and December 31, 2024, respectively
(36.4)(50.8)
Total shareholders’ equity2,426.6 2,407.7 
Total liabilities and shareholders’ equity$7,693.9 $7,636.1 
The accompanying notes are an integral part of these condensed consolidated financial statements.


6

TOPGOLF CALLAWAY BRANDS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
(Unaudited)

 Three Months Ended March 31,
 20252024
Net revenues:
Products$702.2 $726.1 
Services390.1 418.1 
Total net revenues1,092.3 1,144.2 
Costs and expenses:
Cost of products385.7 412.9 
Cost of services, excluding depreciation and amortization39.1 41.6 
Other venue expense321.2 323.4 
Selling, general and administrative expense257.9 273.0 
Research and development expense21.3 23.2 
Venue pre-opening costs0.6 3.2 
Total costs and expenses1,025.8 1,077.3 
Income from operations66.5 66.9 
Interest expense, net(58.0)(58.8)
Other income, net3.1 3.4 
Income before income taxes11.6 11.5 
Income tax provision9.5 5.0 
Net income$2.1 $6.5 
Earnings per common share:
Basic$0.01 $0.04 
Diluted$0.01 $0.04 
Weighted-average common shares outstanding:
Basic183.4 183.7 
Diluted183.5 184.4 

















The accompanying notes are an integral part of these condensed consolidated financial statements.


7

TOPGOLF CALLAWAY BRANDS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions)
(Unaudited)

Three Months Ended March 31,
 20252024
Net income$2.1 $6.5 
Other comprehensive income:
Change in derivative instruments(8.8)10.0 
Foreign currency translation adjustments18.2 (14.2)
Comprehensive income, before income tax11.5 2.3 
Income tax (benefit) provision on derivative instruments(3.7)0.4 
Comprehensive income$15.2 $1.9 



































The accompanying notes are an integral part of these condensed consolidated financial statements.


8



TOPGOLF CALLAWAY BRANDS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions) (Unaudited)
Three Months Ended March 31,
 20252024
Cash flows from operating activities:
Net income$2.1 $6.5 
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization69.1 65.4 
Non-cash interest on financing and deemed landlord financed leases14.3 13.1 
Loss on disposal of long-lived assets3.3 0.9 
Amortization of debt discount and issuance costs1.5 1.5 
Impairment loss on assets held for sale7.0 — 
Gain on lease termination incentive(12.0)— 
Deferred taxes, net5.3 5.4 
Share-based compensation7.0 13.1 
Unrealized net gains on hedging instruments and foreign currency(0.1)(2.8)
Loss on debt modification— 4.7 
Other0.6 — 
Change in assets and liabilities, net of impacts of business combinations:
Accounts receivable, net(210.2)(227.1)
Inventories35.2 79.3 
Leasing receivables(0.1)(0.9)
Other assets3.6 17.5 
Accounts payable and accrued expenses(8.8)(50.4)
Deferred revenue(0.4)(4.3)
Accrued employee compensation and benefits0.5 5.5 
Operating lease assets and liabilities, net2.5 3.8 
Income taxes receivable/payable, net(5.7)(4.9)
Other liabilities0.1 0.4 
Net cash used in operating activities(85.2)(73.3)
Cash flows from investing activities:
Capital expenditures(69.9)(65.4)
Business combinations, net of cash acquired— (23.3)
Other investing activities(0.1)(0.4)
Net cash used in investing activities(70.0)(89.1)
Cash flows from financing activities:
Repayments of long-term debt and DLF obligations(13.6)(12.0)
Borrowings on credit facilities, net19.9 — 
Debt issuance costs(0.4)(0.2)
Repayments of financing leases(1.4)(1.5)
Proceeds from lease financing23.9 27.2 
Acquisition of treasury stock(3.3)(6.2)
Net cash provided by financing activities25.1 7.3 
Effect of exchange rate changes on cash, cash equivalents and restricted cash2.5 (4.4)
Net decrease in cash, cash equivalents and restricted cash(127.6)(159.5)
Cash, cash equivalents and restricted cash at beginning of period450.3 398.8 
Cash, cash equivalents and restricted cash at end of period322.7 239.3 
Less: restricted cash (1)
(5.7)(5.4)
Cash and cash equivalents at end of period$317.0 $233.9 
Supplemental disclosures:
Cash paid for income taxes, net$10.4 $4.8 
Cash paid for interest$40.3 $42.9 
Non-cash investing and financing activities:
Issuance of treasury stock and common stock for compensatory stock awards released from restriction$17.7 $14.0 
Accrued capital expenditures$26.9 $34.9 
Financed additions of capital expenditures$0.8 $2.3 
(1) As of March 31, 2025, includes $5.5 million of restricted cash which is classified within current assets held for sale, as well as $0.2 million of long-term restricted cash included in other assets. As of March 31, 2024, includes $0.7 million of short-term restricted cash and $4.7 million of long-term restricted cash included in other assets.
The accompanying notes are an integral part of these condensed consolidated financial statements.


9
TOPGOLF CALLAWAY BRANDS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(In millions)
(Unaudited)

 Common StockAdditional Paid-in
Capital		Retained
Earnings		Accumulated
Other
Comprehensive
Loss		Treasury StockTotal Shareholders’ Equity
 SharesAmountSharesAmount
Balance at December 31, 2023
187.0 $1.9 $3,032.7 $947.5 $(47.5)(3.3)$(56.4)$3,878.2 
Acquisition of treasury stock— — — — — (0.4)(6.2)(6.2)
Exercise of stock options— — (0.1)— — — 0.1 — 
Compensatory awards released from restriction— — (14.0)— — 0.8 14.0 — 
Share-based compensation— — 13.1 — — — — 13.1 
Equity adjustment from foreign currency translation— — — — (14.2)— — (14.2)
Change in fair value of derivative instruments, net of tax— — — — 9.6 — — 9.6 
Net income— — — 6.5 — — — 6.5 
Balance at March 31, 2024
187.0 $1.9 $3,031.7 $954.0 $(52.1)(2.9)$(48.5)$3,887.0 


 Common StockAdditional
Paid-in
Capital		Accumulated DeficitAccumulated
Other
Comprehensive
Loss		Treasury StockTotal Shareholders’ Equity
 SharesAmountSharesAmount
Balance at December 31, 2024
186.2 $1.9 $3,032.8 $(500.2)$(76.0)(3.1)$(50.8)$2,407.7 
Acquisition of treasury stock— — — — — (0.5)(3.3)(3.3)
Compensatory awards released from restriction— — (17.7)— — 1.1 17.7 — 
Share-based compensation— — 7.0 — — — — 7.0 
Equity adjustment from foreign currency translation— — — — 18.2 — — 18.2 
Change in fair value of derivative instruments, net of tax— — — — (5.1)— — (5.1)
Net income— — — 2.1 — — — 2.1 
Balance at March 31, 2025
186.2 $1.9 $3,022.1 $(498.1)$(62.9)(2.5)$(36.4)$2,426.6 























The accompanying notes are an integral part of these condensed consolidated financial statements.


10




TOPGOLF CALLAWAY BRANDS CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1. The Company and Basis of Presentation
The Company
Topgolf Callaway Brands Corp. (together with its wholly-owned subsidiaries, referred to as “we,” “our,” “us,” the “Company,” or “Topgolf Callaway Brands” unless otherwise specified), a Delaware corporation, is a leading modern golf and active lifestyle company that provides world-class golf entertainment experiences, designs and manufactures premium golf equipment, and sells golf and active lifestyle apparel and other accessories through our family of brand names, which include Topgolf, Callaway Golf, Odyssey, TravisMathew, Jack Wolfskin, OGIO and Toptracer.
Our products and brands are reported under three operating segments: Topgolf, which includes the operations of our Company-owned and operated and franchised Topgolf venues and Toptracer ball-flight tracking technology (“Toptracer”); Golf Equipment, which includes the operations of our golf clubs and golf balls business under the Callaway Golf and Odyssey brand names; and Active Lifestyle, which includes the operations of our soft goods business marketed under the Callaway, TravisMathew, Jack Wolfskin and OGIO brand names.
In September 2024, following a strategic review of the Topgolf business, we announced that our Board of Directors intends to pursue a separation of our business into two independent companies: Callaway, a golf equipment company with a highly complementary Active Lifestyle business; and Topgolf, a pure-play venue-based golf entertainment business which we believe has potential for high growth. Our Board of Directors is committed to exploring all opportunities to execute the separation in a manner that enhances shareholder value, including possible options such as a spin-off, sale or other transaction. We expect to execute the separation in the second half of 2025. The transaction will be subject to general market conditions and other customary conditions, which may include receipt of regulatory approvals, compliance with applicable Securities and Exchange Commission requirements, execution of intercompany agreements, further due diligence as appropriate and final approval by our Board of Directors. There can be no assurance regarding the form and timing of the separation or its completion.
On April 10, 2025, we announced that we entered into a definitive agreement to sell 100% of the outstanding equity interests of Callaway Germany Holdco GmbH, which owns various entities that operate the Jack Wolfskin business, to Anca Holdco GmbH & Co. KG, a subsidiary of ANTA Sports Products Limited, for $290.0 million in cash, subject to adjustments for net working capital and other customary conditions (the “JW Sale”). We expect the transaction to close in the late second quarter or early third quarter of 2025, subject to the satisfaction of certain specified closing conditions, including the receipt of certain regulatory approvals. Consequently, the assets and liabilities of the Jack Wolfskin business are classified as held for sale in our condensed consolidated balance sheet as of March 31, 2025. See Note 18 for more information.
Basis of Presentation
We have prepared the accompanying condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and accounting principles generally accepted in the United States of America (“GAAP”). Pursuant to these rules and regulations, we have condensed or omitted certain information and disclosures that are normally included in our annual consolidated financial statements which are prepared in accordance with GAAP. In the opinion of management, these condensed consolidated financial statements include all normal and recurring adjustments necessary for the fair presentation of the financial position, results of operations and cash flows for the periods and dates presented. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the SEC on March 3, 2025. Interim operating results are not indicative of operating results that may be expected for the year ending December 31, 2025, or any other future periods.
We translate the financial statements of our foreign subsidiaries using end-of-period exchange rates for assets and liabilities and average exchange rates during each reporting period for results of operations. All intercompany balances and transactions have been eliminated during consolidation.


11




Note 2. Summary of Significant Accounting Policies
Our significant accounting policies are described in Note 2 to our audited consolidated financial statements for the year ended December 31, 2024, which are included in our Annual Report on Form 10-K which was filed with the SEC on March 3, 2025.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances at that time. We evaluate our estimates on an ongoing basis to ensure that these estimates appropriately reflect changes in our business or as new information becomes available. Actual results may differ from our estimates.
Recently Issued Accounting Standards
In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2024-04, “Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments” (“ASU 2024-04”), which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. ASU 2024-04 is effective for fiscal years beginning after December 15, 2025 on either a prospective or retrospective basis with early adoption permitted. We are in the process of evaluating the impact that ASU 2024-04 will have on our consolidated financial statements and related disclosures.
In November 2024, the FASB issued ASU No. 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” (“ASU 2024-03”), which requires disclosure, on an annual and interim basis, of specific information about cost and expense related items within the notes to our consolidated financial statements. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, on either a prospective or retrospective basis with early adoption permitted. We are in the process of evaluating the impact that ASU 2024-03 will have on our consolidated financial statements and related disclosures.


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Note 3. Revenue Recognition
We primarily recognize revenue from the sale of our products and the operation of our Topgolf venues. The following table presents our revenue disaggregated by operating and reportable segment and major category for the periods presented (in millions):
Three Months Ended March 31,
20252024
Topgolf:
Venues$380.1 $405.7 
Other business lines13.6 17.1 
Total Topgolf$393.7 $422.8 
Golf Equipment:
Golf clubs$340.0 $345.9 
Golf balls103.7 104.0 
Total Golf Equipment$443.7 $449.9 
Active Lifestyle:
Apparel$152.3 $159.6 
Gear, accessories & other102.6 111.9 
Total Active Lifestyle$254.9 $271.5 
Total Consolidated$1,092.3 $1,144.2 
Venue product sales at our Topgolf operating segment include the sale of golf clubs, golf balls, apparel, and gear and accessories. During the three months ended March 31, 2025 and 2024, venue product sales were $3.6 million and $4.7 million, respectively.
Product and Service Revenue
We sell our Golf Equipment products and Active Lifestyle products in the United States and internationally, with our principal international regions being Europe and Asia. Revenue for our Topgolf operating segment is predominately in the United States given that we have significantly more domestic venues than international venues. Revenue related to other business lines at Topgolf is primarily in the United States, in addition to certain regions within Europe and Asia.
The following table summarizes our revenue by major geographic region for the periods presented (in millions):
Three Months Ended March 31,
20252024
Revenue by Major Geographic Region:
United States$790.4 $829.0 
Europe130.1 141.4 
Asia128.8 127.6 
Rest of World43.0 46.2 
Total Consolidated$1,092.3 $1,144.2 


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Licensing, Royalty and Other Income
We have licensing and royalty income on non-cancelable sales-type leases and operating lease agreements for Toptracer installations and Swing Suite licensing agreements at our Topgolf operating segment (see Note 4), in addition to income from licensing agreements for apparel and soft good products in our Active Lifestyle operating segment. The following table summarizes these revenues by operating segment for the periods presented (in millions):
Three Months Ended March 31,
20252024
Topgolf$13.5 $12.7 
Active Lifestyle7.1 6.1 
Total$20.6 $18.8 
Deferred Revenue
Our deferred revenue balance includes short-term and long-term deferred revenue which consists primarily of revenue from the sale of gift cards, event deposits, loyalty points, memberships and prepaid sponsorships at Topgolf, virtual currency and game credits related to digital golf games, as well as upfront territory fees and upfront franchise fees received from international franchise partners.
The following table provides a reconciliation of activity related to our short-term deferred revenue balance for the periods presented (in millions):
Three Months Ended March 31,
20252024
Beginning Balance (1)
$96.0 $110.9 
Deferral of revenue139.8 146.0 
Revenue recognized(127.9)(138.7)
Breakage(12.2)(11.4)
Foreign currency translation and other
0.1 (0.1)
Reclassified to current liabilities held for sale(1.3)— 
Ending Balance$94.5 $106.7 
(1) Beginning balances for the three months ended March 31, 2025 and 2024 represent ending balances as of December 31, 2024 and 2023, respectively.
As of March 31, 2025 and December 31, 2024, our long-term deferred revenue balance was $6.8 million and $7.0 million, respectively, which is included in other long-term liabilities on our condensed consolidated balance sheets.
The following table summarizes the amount of the deferred revenue recognized during the three months ended March 31, 2025 and 2024 that were deferred as of December 31, 2024 and 2023, respectively (in millions):
Three Months Ended March 31,
20252024
Deferred revenue recognized from prior year ending balance (excluding breakage)$35.9 $33.4 
Variable Consideration
We recognize revenue based on the amount of consideration we expect to receive from customers for the sale of our products and services adjusted for estimates of variable consideration related to sales returns, discounts and allowances, sales promotions and sales programs, and price concessions that we offer. These estimates are based on the amounts earned or expected to be claimed by customers.


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The following table provides a reconciliation of the activity related to our short-term sales program incentives for the periods presented (in millions):
Three Months Ended March 31,
20252024
Beginning Balance$19.8 $16.5 
Additions 19.2 16.4 
Credits issued (14.3)(10.0)
Reclassified to current assets held for sale(1.9)— 
Foreign currency translation and other
0.2 (0.3)
Ending Balance$23.0 $22.6 
Our provision for the sales return liability fluctuates with the seasonality of the business. Actual sales returns are more heavily weighted toward the second half of the year as the golf season comes to an end. The following table provides a reconciliation of the activity related to our sales return reserve for the periods presented (in millions):
Three Months Ended March 31,
20252024
Beginning Balance$67.7 $55.9 
Provision62.3 65.6 
Sales returns(40.0)(42.6)
Reclassified as current assets held for sale(5.7)— 
Ending Balance$84.3 $78.9 
As of March 31, 2025 and December 31, 2024, the cost recovery of inventory associated with the sales return liability was $38.4 million and $30.4 million, respectively, and is included in other current assets on our condensed consolidated balance sheets. As of March 31, 2025 and December 31, 2024, the accrued rebate liability associated with our sales program was $16.4 million and $30.2 million, respectively, which are included in accounts payable and accrued expenses on our condensed consolidated balance sheets.


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Note 4. Leases
Sales-Type Leases
We enter into non-cancellable license agreements primarily related to Toptracer and Swing Suite of which certain of these agreements are classified as sales-type leases. Revenue from sales-type leases is included in service revenues within the condensed consolidated statements of operations and consists of the following for the periods presented (in millions):
Three Months Ended March 31,
20252024
Sales-type lease selling price(1)
$9.3 $7.5 
Cost of underlying assets(2.9)(2.0)
Operating profit$6.4 $5.5 
Interest income$1.9 $1.7 
Total revenue attributable to sales-type leases$11.2 $9.2 
(1) Selling price is equal to the present value of lease payments over the non-cancellable term of the licensing agreement.
Leasing receivables related to our net investment in sales-type leases are as follows (in millions):
Balance Sheet LocationMarch 31, 2025December 31, 2024
Leasing receivables, net—short-termOther current assets$36.0 $33.9 
Leasing receivables, net—long-termOther assets73.2 71.2 
Total leasing receivables$109.2 $105.1 
Net maturities of sales-type lease receivables for the next five years and thereafter as of March 31, 2025 are as follows (in millions):
Remainder of 2025$34.7 
202632.0 
202725.2 
202818.0 
202910.5 
Thereafter3.6 
Total future lease proceeds124.0 
Less: imputed interest14.8 
Total$109.2 


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Operating Leases, Financing Leases and DLF Obligations
Supplemental balance sheet information related to our operating and financing right-of-use (“ROU”) assets and lease liabilities and deemed landlord financing (“DLF”) assets and obligations, excluding ROU assets and lease liabilities held for sale as of March 31, 2025 (see Note 18), is as follows (in millions):
Balance Sheet LocationMarch 31, 2025December 31, 2024
Assets
Operating lease ROU assets, netOperating lease ROU assets, net$1,268.8 $1,339.2 
Financing lease ROU assets, net
Other assets, net
$260.4 $261.4 
Liabilities
Current
Operating lease liabilities, short-termOperating lease liabilities, short-term$76.2 $89.3 
Financing lease liabilities, short-termAccounts payable and accrued expenses$1.4 $1.4 
DLF obligations, short-termAccounts payable and accrued expenses$1.0 $1.0 
Non-current
Operating lease liabilities, long-termOperating lease liabilities, long-term$1,322.6 $1,377.1 
Financing lease liabilities, long-termOther long-term liabilities $303.7 $301.9 
DLF obligations, long-termDeemed landlord financing obligations$1,210.9 $1,194.8 
Lease Termination Incentive
During the three months ended March 31, 2025, we signed an agreement with the landlord of our Japanese subsidiary’s headquarters to terminate a lease prior to its original end date in exchange for a cash incentive of 1,800.0 million Yen (approximately $12.0 million). As a result, we recognized a $12.0 million gain on lease termination, which was recorded within selling, general and administrative expenses on our condensed consolidated statement of operations.
Leases Under Construction
Our minimum capital commitment for leases under construction, net of reimbursements from third-party real estate financing partners, was approximately $63.0 million as of March 31, 2025. As we are actively involved in the construction of these properties, we recorded $69.2 million in construction costs within property, plant and equipment and $18.1 million in construction advances from the landlords in connection with these properties as of March 31, 2025. We determine the lease classification for these properties at the end of the construction period. Upon lease commencement, the initial base term of these leases is normally 20 years, with most having options to extend for additional terms of up to 20 years. As of March 31, 2025, we had $838.9 million of future lease obligations related to seven venues subject to non-cancellable leases that have been signed but have not yet commenced.


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The components of lease expense included in our condensed consolidated statement of operations for the periods presented below are as follows for the periods presented (in millions):
Three Months Ended March 31,
20252024
Operating lease costs:$45.1 $45.1 
Financing lease costs:
Amortization of ROU assets2.0 1.9 
Interest on lease liabilities4.7 4.3 
Total financing lease costs6.7 6.2 
DLF obligation costs:
Depreciation of DLF assets11.3 9.0 
Interest on DLF obligations27.7 24.0 
Total DLF obligation costs39.0 33.0 
Variable lease costs2.4 3.5 
Total lease costs$93.2 $87.8 

Other information related to leases (in millions):
Three Months Ended March 31,
Supplemental Cash Flows Information20252024
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$42.0 $41.1 
Operating cash flows from finance leases$2.7 $2.2 
Operating cash flows from DLF obligations$15.5 $13.0 
Financing cash flows from finance leases$1.4 $1.5 
Financing cash flows from DLF obligations$8.8 $6.6 
Lease liabilities arising from new ROU assets:
Operating leases$15.2 $19.0 
Financing leases$— $0.1 
DLF obligations$12.9 $30.6 
March 31, 2025December 31, 2024
Weighted-average remaining lease term (years):
Operating leases15.315.2
Financing leases36.036.2
DLF obligations36.336.8
Weighted-average discount rate:
Operating leases5.9 %5.8 %
Financing leases6.5 %6.5 %
DLF obligations9.3 %9.4 %


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As of March 31, 2025, our future minimum lease obligations were as follows (in millions):
Operating LeasesFinancing Leases
DLF Obligations(1)
Total
Remainder of 2025$103.3 $11.0 $62.5 $176.8 
2026151.9 18.1 99.1 269.1 
2027152.2 18.2 100.4 270.8 
2028152.1 18.7 102.6 273.4 
2029151.8 19.2 105.0 276.0 
Thereafter1,524.0 805.6 4,471.6 6,801.2 
Total future lease payments2,235.3 890.8 4,941.2 8,067.3 
Less: imputed interest836.5 585.7 3,729.3 5,151.5 
Total$1,398.8 $305.1 $1,211.9 $2,915.8 
(1) Future lease payments for DLF Obligations include approximately $12.5 million of reimbursements which we expect to receive from third-party financing partners that were not yet received as of March 31, 2025. Imputed interest includes approximately $63.0 million related to these unfunded DLF Obligations as of March 31, 2025.
Note 5. Financing Arrangements
Our credit facilities and long-term debt obligations are summarized as follows (in millions, except interest rates):
March 31,December 31,
Maturity DateInterest Rate20252024
Short-Term Credit Facilities
2023 ABL Credit Facility
March 16, 20285.59%$— $— 
2025 Japan ABL Credit FacilityJanuary 21, 20281.41%46.7 — 
2022 Japan ABL Credit FacilityJanuary 25, 20251.21%— 25.4 
Total Principal Amount$46.7 $25.4 
Unamortized Debt Issuance Costs$3.5 $3.4 
Balance Sheet Location
ABL Credit FacilitiesAsset-based credit facilities$46.7 $25.4 
Unamortized Debt Issuance Costs - CurrentPrepaid expenses$1.2 $1.1 
Unamortized Debt Issuance Costs - Non-currentOther long-term assets$2.3 $2.3 
March 31,December 31,
Maturity DateInterest Rate20252024
Long-Term Debt and Credit Facilities
2023 Term Loan BMarch 16, 20307.32%$1,175.0 $1,178.1 
Convertible NotesMay 1, 20262.75%258.3 258.3 
Equipment NotesJuly 24, 2025 - December 21, 2027
2.36% - 5.93%
10.2 11.7 
Mortgage LoansJuly 1, 2033 - July 29, 2036
9.75% - 11.31%
44.2 44.3 
Financed Tenant ImprovementsFebruary 1, 2035
8.00% - 10.00%
3.8 3.1 
Total Principal Amount$1,491.5 $1,495.5 
Less: Unamortized Debt Issuance Costs21.1 22.3 
Total Debt, net of Unamortized Debt Issuance Costs$1,470.4 $1,473.2 
Balance Sheet Location
Long-Term Debt - CurrentOther current liabilities$15.0 $15.3 
Long-Term Debt - Non-currentLong-term debt1,455.4 1,457.9 
Total Debt, net of Unamortized Debt Issuance Costs$1,470.4 $1,473.2 
Total interest and amortization expense related to our credit facilities and long-term debt obligations, which is included in “Interest expense, net” in our condensed consolidated statement of operations, is summarized as follows (in millions):
Three Months Ended March 31,
20252024
Short-Term Credit Facilities
2025 Japan ABL Credit Facility$0.1 $— 
2023 ABL Credit Facility0.3 0.6 
2022 Japan ABL Credit Facility— 0.1 
Total$0.4 $0.7 
Long-Term Debt and Credit Facilities
2023 Term Loan B$22.4 $28.5 
Convertible Notes1.8 1.8 
Equipment Notes0.1 0.2 
Financed Tenant Improvements0.1 0.1 
Mortgage Loans1.1 1.2 
Total$25.5 $31.8 
Short-Term Credit Facilities and Available Liquidity
2023 Asset-Based Revolving Credit Facility
We have a senior secured asset-based revolving credit facility (as amended, the “2023 ABL Credit Facility”) with Bank of America, N.A. and other lenders, which provides for senior secured asset-based revolving credit facilities in an original aggregate principal amount of up to $525.0 million and consists of U.S., Canadian, German, and U.K./Dutch facilities, in each case, subject to borrowing base availability under the applicable facility. Amounts outstanding under the 2023 ABL Credit Facility are secured by a first priority lien on certain of our assets and certain of the assets of our subsidiaries in the United States, Germany, Canada, the Netherlands, and the United Kingdom (other than certain excluded subsidiaries) and a second-priority lien on substantially all of our and such subsidiaries’ other assets (in each case, other than certain excluded assets).
The 2023 ABL Credit Facility includes customary affirmative and negative covenants, including among other things, restrictions on the incurrence of additional debt, liens, dividends and other restricted payments, asset sales, investments, mergers, acquisitions and affiliate transactions, as well as customary events of default. We are also subject to compliance with a 1.0:1.0 minimum fixed charge coverage ratio during certain specified periods in which our borrowing base availability falls below 10.0% of the maximum aggregate principal amount of the facility. The interest rate applicable to outstanding borrowings under the 2023 ABL Credit Facility may fluctuate depending on our “Availability Ratio,” as defined in the loan and security agreement governing the 2023 ABL Credit Facility, and any unused portions of the 2023 ABL Credit Facility are subject to a monthly fee of 0.25% per annum.
On April 9, 2025, we entered into an amendment to the 2023 ABL Credit Facility in order to, among other things, (a) permit the release of Jack Wolfskin Ausrüstung Für Draussen GmbH & Co. KGaA, as a borrower and a guarantor under the 2023 ABL Credit Facility, upon the consummation of the JW Sale, (b) permit the reallocation of a portion of the revolving commitments under the 2023 ABL Credit Facility, in an aggregate principal amount of $20.0 million, from the German facility thereunder (the “German Facility”) to the U.S. facility thereunder, and (c) permit the termination of the remainder of the German Facility, in each case, subject to certain customary closing conditions.
2025 Japan ABL Credit Facility
In January 2025, our Japan subsidiary entered into a new 3-year asset-based revolving credit facility (the “2025 Japan ABL Credit Facility”) with the Mizuho Bank, Ltd., which provides a line of credit to our Japan subsidiary of up to 9.0 billion Yen (or approximately $60.0 million using the exchange rate in effect as of March 31, 2025), is subject to borrowing base availability under the facility and is secured by certain assets, including eligible inventory and accounts receivable of our Japan subsidiary which are subject to certain restrictions and covenants related to certain pledged assets and financial performance metrics. The interest rate applicable to outstanding borrowings under the 2025 Japan ABL Credit Facility is subject to an effective interest rate equal to the Tokyo Interbank Offered Rate (TIBOR) plus 0.70%.
2022 Japan ABL Credit Facility
We had an asset-based revolving credit facility (the “2022 Japan ABL Credit Facility”) with the Bank of Tokyo-Mitsubishi UFJ, which provided a line of credit to our Japan subsidiary of up to 6.0 billion Yen (or approximately $38.7 million using the exchange rate in effect as of January 31, 2025), was subject to borrowing base availability under the facility and was secured by certain assets, including eligible inventory and accounts receivable of our Japan subsidiary which were subject to certain restrictions and covenants related to certain pledged assets and financial performance metrics. The interest rate applicable to outstanding borrowings under the 2022 Japan ABL Credit Facility was subject to an effective interest rate equal to the TIBOR plus 0.80%. The 2022 Japan ABL Credit Facility matured and was repaid in full on January 25, 2025.
Consolidated Available Liquidity
Consolidated available liquidity is comprised of cash on hand and amounts available under our U.S. and Japan ABL credit facilities, less outstanding letters of credit and outstanding borrowings. Our average availability and weighted-average interest rate under our 2023 ABL Credit Facility and 2025 Japan ABL Credit Facility, as well as our consolidated available liquidity were as follows for the periods presented (in millions except interest rates):
(in millions, except interest rates)March 31, 2025
2023 ABL Credit Facility
Average availability$412.0 
Weighted-average interest rate5.19 %
2025 Japan ABL Credit Facility
Average availability$13.0 
Weighted-average interest rate1.12 %
Consolidated Available Liquidity$805.0 
Long-Term Debt and Credit Facilities
2023 Term Loan B
We have a senior secured term loan B facility (as amended, the “2023 Term Loan B”) with Bank of America, N.A. and other lenders in an original aggregate principal amount of $1,250.0 million, which was issued net of an original issuance discount of $12.5 million. In March 2024, we entered into an amendment to the 2023 Term Loan B (the “First Amendment”) in order to, among other things, decrease the interest rate applicable to the outstanding term loans thereunder. The interest rate on outstanding borrowings under the 2023 Term Loan B are, at our option, a rate per annum equal to: (a) a term SOFR-based rate (“Term SOFR”) (subject to a 0% floor) plus an applicable margin of 2.75% or 3.00%, depending on our applicable debt rating, as defined in the credit agreement governing the 2023 Term Loan B; or (b) a base rate equal to the sum of (i) the greater of (A) the greater of the federal funds rate and the overnight bank funding rate published by the Federal Reserve Bank of New York, plus 0.50%, (B) Term SOFR for a one-month interest period plus 1.0% (and subject to a 1% floor), (C) the prime rate announced by Bank of America from time to time, and (D) 1.0%, plus (ii) an applicable margin of 1.75% or 2.00%, depending on our applicable debt rating.
The First Amendment was accounted for as a partial debt modification and partial debt extinguishment, which resulted in a non-cash loss of $4.7 million related to the write-off of unamortized debt issuance costs and original issuance discounts for prior lenders under our 2023 Term Loan B who did not participate in the First Amendment. This non-cash loss was recognized in other income (expense), net in our condensed consolidated statement of operations during the three months ended March 31, 2024. Additionally, we also incurred $1.1 million of fees related to the transaction, of which $0.2 million were recognized as deferred debt issuance costs and $0.9 million were recognized as selling, general and administrative expense during the three months ended March 31, 2024.
The 2023 Term Loan B includes customary affirmative and negative covenants, including among other things, restrictions on the incurrence of additional debt, liens, dividends and other restricted payments, asset sales, investments, mergers, acquisitions and affiliate transactions, as well as customary events of default. The 2023 Term Loan B is not subject to any financial covenants and, subject to certain customary exceptions, is guaranteed by certain of our direct and indirect wholly-owned U.S. subsidiaries and secured by substantially all of our assets and the assets of each such subsidiary guarantor, with priority of the liens securing the 2023 Term Loan B and the liens securing the 2023 ABL Credit Facility subject to the terms of a customary intercreditor agreement.
Convertible Notes
We have convertible senior notes issued in May 2020 (the “Convertible Notes”) which are structurally subordinated to all existing and future indebtedness and other liabilities and (to the extent we are not a holder thereof) preferred equity, if any, of our subsidiaries. The Convertible Notes are convertible into shares of our common stock at an initial conversion rate of 56.8 shares per $1,000 of principal, or an initial conversion price of $17.62 per share, and interest is payable on the Convertible Notes semi-annually in arrears on May 1 and November 1 of each year. As of May 6, 2023, we have the option to settle all or part of the Convertible Notes through cash settlement, physical settlement, or combination settlement at our election, subject to certain stipulations. Additionally, all or any portion of the Convertible Notes may be converted at the conversion rate and at the holders’ option on or after February 1, 2026 until the close of business on the second trading day immediately prior to the maturity date, and upon the occurrence of certain contingent conversion events. The Convertible Notes mature on May 1, 2026, unless earlier redeemed or repurchased by the Company or converted.
Capped Call
In connection with the pricing of the Convertible Notes, we entered into privately negotiated capped call transactions with certain counterparties (“Capped Calls”). The Capped Calls cover the aggregate number of shares of our common stock that initially underlie the Convertible Notes, and are generally expected to reduce potential dilution and/or offset any cash payments we are required to make related to any conversion of the Convertible Notes. The Capped Calls, which each have an exercise price of $17.62 per share, are subject to certain adjustments and each have a cap price of $26.57 per share. The initial cost of the Capped Calls was a reduction to additional paid-in-capital on our condensed consolidated balance sheets.
Equipment Notes
We have long-term financing agreements (the “Equipment Notes”) with various lenders which we use to invest in certain facilities and information technology equipment. The loans are secured by the relative underlying equipment.
Mortgage Loans
We have three mortgage loans related to our Topgolf venues which are secured by the assets of each respective venue and require either monthly (i) principal and interest payments or (ii) interest-only payments until their maturity dates. For loans requiring monthly interest-only payments, the entire unpaid principal balance and any unpaid accrued interest is due on the maturity date thereof.
Aggregate Amount of Long-Term Debt Maturities
The following table presents our combined aggregate amount of maturities for our long-term debt over the next five years and thereafter as of March 31, 2025.
(in millions)
Remainder of 2025$13.9 
2026276.4 
202715.6 
202813.8 
202913.9 
Thereafter1,157.9 
Total aggregate amount of maturities$1,491.5 
Less: Unamortized debt issuance costs21.1 
Total aggregate amount of maturities, net of unamortized debt issuance costs$1,470.4 
As of March 31, 2025, we were in compliance with all fixed charge coverage ratios and all other covenants and reporting requirements under the terms of our long-term debt and credit facilities mentioned above, as applicable.
Note 6. Earnings Per Common Share
The following table summarizes the computation of basic and diluted earnings per common share for the periods presented (in millions, except per share data):
Three Months Ended March 31,
 20252024
Earnings per common share—basic
Net income$2.1 $6.5 
Weighted-average common shares outstanding—basic183.4 183.7 
Earnings per common share—basic$0.01 $0.04 
Earnings per common share—diluted
Net income$2.1 $6.5 
Weighted-average common shares outstanding—basic183.4 183.7 
Outstanding options, restricted stock units and performance share units0.1 0.7 
Weighted-average common shares outstanding—diluted183.5 184.4 
Earnings per common share—diluted$0.01 $0.04 
Anti-Dilutive Options and Restricted Stock Units
For the three months ended March 31, 2025 and 2024, approximately 17.9 million and 17.1 million securities outstanding, respectively, comprised of shares subject to conversion from the Convertible Notes, stock options and restricted stock units, were excluded from the calculation of diluted earnings per common share as they would be anti-dilutive.


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Note 7. Goodwill and Intangible Assets
Changes in the carrying amount of goodwill by operating and reportable segment are as follows (in millions):
 Golf EquipmentActive LifestyleTotal
Balance at December 31, 2024$530.3 $89.9 $620.2 
Reclassified to assets held for sale(1)
— (1.7)(1.7)
Foreign currency translation and other0.4 0.1 0.5 
Balance at March 31, 2025$530.7 $88.3 $619.0 
(1) Represents goodwill associated with the Jack Wolfskin business classified as held for sale as of March 31, 2025 (see Note 18).
Goodwill is net of accumulated impairment losses of $1,500.8 million, which were recorded prior to December 31, 2024 in the Topgolf and Active Lifestyle segments.
Intangible assets by major asset class are as follows (in millions, except useful life amounts):
Indefinite-lived:Amortizing:
 Trade names and TrademarksLiquor LicensesPatentsCustomer/ Distributor Relationships and OtherDeveloped TechnologyTotal
Useful Life (Years)NANA
2-16
1-10
10
Gross as of December 31, 2024$1,338.7 $10.7 $32.5 $75.4 $63.4 $1,520.7 
Reclassified to assets held for sale (1)
(202.3)— — (41.5)— (243.8)
Gross as of March 31, 2025$1,136.4 $10.7 $32.5 $33.9 $63.4 $1,276.9 
Accumulated amortization— — (32.0)(49.3)(27.0)$(108.3)
Reclassified to assets held for sale (1)
— — — 27.7 — 27.7 
Foreign currency and other(26.2)— 0.1 (3.9)(2.4)(32.4)
Net book value, March 31, 2025
$1,110.2 $10.7 $0.6 $8.4 $34.0 $1,163.9 
Gross as of December 31, 2024$1,338.7 $10.7 $32.5 $75.4 $63.4 $1,520.7 
Accumulated amortization— — (32.0)(48.1)(25.5)(105.6)
Foreign currency and other(34.8)— — (4.5)(3.2)(42.5)
Net book value, December 31, 2024
$1,303.9 $10.7 $0.5 $22.8 $34.7 $1,372.6 
(1) Represents intangible assets associated with the Jack Wolfskin business classified as held for sale as of March 31, 2025 (see Note 18).
For the three months ended March 31, 2025 and 2024, we recognized amortization expense of $2.7 million and $3.0 million, respectively, related to acquired intangible assets, and is included in selling, general and administrative expenses in the condensed consolidated statements of operations.
As of March 31, 2025, intangible asset amortization expense is expected to be incurred for the periods presented as follows (in millions):
Remainder of 2025$5.3 
20267.0 
20276.7 
20286.4 
20296.3 
Thereafter9.9 
Total$41.6 



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Note 8. Investments
Investment in Full Swing
We have an ownership interest of less than 20.0% in Full Swing Golf Holdings, LLC (“Full Swing”), owners of multi-sport indoor virtualization and simulation technology. The investment is accounted for at cost less impairments, and adjusted for observable changes in fair value. At both March 31, 2025 and December 31, 2024, the carrying value of our investment in Full Swing was $9.3 million, and is included in other assets, net on our condensed consolidated balance sheets.
Investment in Five Iron Golf
We have an ownership interest of less than 20.0% in preferred shares of The Range NYC, LLC (“Five Iron Golf”), an urban indoor golf experience company which hosts a golf simulation technology and serves food and beverage. The investment is accounted for at cost less impairments, and is adjusted for observable changes in fair value. At both March 31, 2025 and December 31, 2024, the carrying value of our investment in Five Iron Golf was $33.9 million, and is included in other assets, net on our condensed consolidated balance sheets.
Other Investments
In addition to the investments above, as of March 31, 2025 and December 31, 2024, we had other miscellaneous equity investments of approximately $5.4 million and $5.2 million, respectively, which are classified as other assets, net on our condensed consolidated balance sheets. The investments are accounted for at cost less impairments, and are adjusted for observable changes in fair value.


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Note 9. Selected Financial Data
Selected financial data as of the dates presented below is as follows and as of March 31, 2025, excludes assets and liabilities held for sale (see Note 18) (in millions, except useful life data):
March 31, 2025December 31, 2024
Inventories:
Finished goods$492.3 $597.1 
Work in process1.7 0.9 
Raw materials154.2 152.0 
Food and beverage5.7 7.3 
Total inventories$653.9 $757.3 
March 31, 2025December 31, 2024
Other current assets:
Credit card and other receivables$49.0 $61.6 
Sales return reserve cost recovery asset38.4 30.4 
Taxes receivable8.9 11.4 
Leasing receivables36.0 33.9 
Other17.2 23.0 
Total other current assets$149.5 $160.3 
Estimated Useful LifeMarch 31, 2025December 31, 2024
Property, plant and equipment, net:
Land$207.0 $207.0 
Buildings and leasehold improvements
3 - 40 years
1,890.8 1,877.1 
Machinery and equipment
2 - 10 years
286.8 316.6 
Furniture, computer hardware and equipment
3 - 5 years
406.2 432.2 
Internal-use software
3 - 5 years
152.8 151.2 
Production molds
2 - 5 years
11.0 10.9 
Construction-in-process132.8 102.5 
Total property, plant, and equipment, gross3,087.4 3,097.5 
Less: Accumulated depreciation880.7 878.5 
Total property, plant, and equipment, net$2,206.7 $2,219.0 
Depreciation expense is recognized in cost of products, other venue expenses, research and development expenses, and selling, general and administrative expenses on the condensed consolidated statement of operations, consistent with the use of the underlying asset. For the three months ended March 31, 2025 and 2024, we recorded total depreciation expense of $66.4 million and $62.4 million, respectively, in our condensed consolidated statements of operations.
(in millions)March 31, 2025December 31, 2024
Accounts payable and accrued expenses:
Accounts payable$135.6 $96.4 
Accrued expenses160.7 185.1 
Accrued inventory102.5 169.8 
Total accounts payable and accrued expenses$398.8 $451.3 


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Note 10. Income Taxes
We calculate our interim income tax provision in accordance with ASC Topic 270, “Interim Reporting,” and ASC Topic 740, “Accounting for Income Taxes.” At the end of each interim period, we estimate our annual effective tax rate and apply that rate to our ordinary quarterly earnings to calculate the tax related to ordinary income. The tax effects for other items that are excluded from ordinary income are discretely calculated and recognized in the period in which they occur.
We recorded an income tax provision of $9.5 million and $5.0 million for the three months ended March 31, 2025 and 2024, respectively. As a percentage of pre-tax income, our effective tax rate was 81.6% and 43.3% for the three months ended March 31, 2025 and 2024, respectively. In the three months ended March 31, 2025, the primary difference between the statutory rate and the effective rate is due to matters reported discretely in the quarter primarily associated with stock compensation adjustments and the estimated loss on assets held for sale related to our Jack Wolfskin business, which we expect will not be deductible for income tax purposes. In the three months ended March 31, 2024, the primary difference between the statutory rate and the effective rate is due to tax adjustments related to stock-based compensation and the establishment of valuation allowances on certain deferred tax assets.
As of March 31, 2025, the gross liability for income taxes associated with uncertain tax positions was $27.7 million. Of this amount, $15.9 million would benefit our condensed consolidated financial statements and effective income tax rate if favorably settled. We recognize interest and penalties related to income tax matters in income tax expense.
Note 11. Commitments & Contingencies
Legal Matters
We are subject to routine legal claims, proceedings, and investigations associated with the normal conduct of our business activities, including commercial disputes and employment matters. We also receive from time-to-time information claiming that products we sell infringe or may infringe patent, trademark or other intellectual property rights of third parties. One or more such claims of potential infringement could lead to litigation, the need to obtain licenses, the need to alter a product to avoid infringement, a settlement or judgment, or some other action or material loss, which could adversely affect our overall ability to protect our product designs and ultimately limit our future success in the marketplace. Additionally, we are occasionally subject to non-routine claims, proceedings or investigations.
We regularly assess such matters to determine the degree of probability that we will incur a material loss as a result of such matters, as well as the range of possible loss. An estimated loss contingency is accrued in our financial statements if it is probable we will incur a loss, and the amount of the loss can be reasonably estimated. Historically, the claims, proceedings, and investigations brought against us, individually and in the aggregate, have not had a material adverse effect on our condensed consolidated results of operations, cash flows or financial position. While it is not possible to predict the outcome of the pending actions, and, as with any litigation, it is possible that some of these actions could be decided unfavorably, we do not believe that the matters currently pending against us will have a material adverse effect on our business, condensed consolidated results of operations, cash flows or financial position.
Commitments
During the normal course of business, we enter into agreements to purchase goods and services, including commitments for endorsement agreements with professional athletes and other endorsers, consulting and service agreements, intellectual property licensing agreements pursuant to which we are required to pay royalty fees, and signed retail lease agreements of which we have not taken possession as of quarter-end. The amounts listed below approximate the minimum future commitments we are obligated to pay under these agreements. The actual amounts paid under some of the agreements may be higher or lower than these amounts due to the variable nature of these obligations.


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As of March 31, 2025, the minimum obligation we are required to pay under these agreements over the next five years and thereafter is as follows (in millions):
Remainder of 2025$58.1 
202642.5 
202722.0 
20289.6 
20291.3 
Thereafter8.1 
Total$141.6 
Our minimum capital commitment related to lease agreements for Topgolf venues under construction, net of amount reimbursed by third-party real estate financing partners, of $63.0 million is not reflected in this total. These commitments are generally outstanding for periods less than a year. See Note 4 for further information.
Other Contingent Contractual Obligations
During the normal course of business, we have made certain indemnities, commitments and guarantees under which we may be required to make payments in relation to certain transactions. The duration of these indemnities, commitments and guarantees varies, and in certain cases, may be indefinite and the majority of these indemnities, commitments and guarantees do not provide for any limitation on the maximum amount of future payments we could be obligated to make. Historically, costs incurred to settle claims related to indemnities have not been material to our financial position, results of operations or cash flows. In addition, we believe the likelihood is remote that payments under the commitments and guarantees described above will have a material effect on our condensed consolidated financial statements. The fair value of indemnities, commitments and guarantees that we issued during the three months ended, and as of, March 31, 2025, were not material to our financial position, results of operations, or cash flows.
Note 12. Share-Based Compensation
Share-Based Awards Granted
We granted the following awards under our stock compensation plans during the periods presented (in millions, except per share data):
Three Months Ended March 31,
20252024
Shares GrantedWeighted-average grant date fair value per shareShares GrantedWeighted-average grant date fair value per share
Restricted stock units2.2 $6.17 1.0 $13.30 
Performance based restricted share unit awards1.7 $8.57 1.0 $19.01 
Total 3.9 2.0 



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Share-Based Compensation Expense
Share-based compensation expense by award-type, net of estimated forfeitures, recognized in the condensed consolidated statement of operations for the periods presented was (in millions):
Three Months Ended March 31,
20252024
Restricted stock units$3.1 $4.8 
Performance based restricted share unit awards 3.9 8.3 
Cash-settled restricted stock— 1.1 
Share-based compensation expense, before tax7.0 14.2 
Income tax benefit(1.7)(3.4)
Share-based compensation expense, after tax$5.3 $10.8 
Share-based compensation, net of estimated forfeitures, recognized in the condensed consolidated statement of operations for the periods presented was (in millions):
Three Months Ended March 31,
20252024
Cost of products$0.4 $0.5 
Selling, general and administrative expense6.0 12.4 
Research and development expense0.1 0.5 
Other venue expense0.5 0.8 
Share-based compensation expense, before tax7.0 14.2 
Income tax benefit(1.7)(3.4)
Share-based compensation expense, after tax$5.3 $10.8 
Note 13. Fair Value of Financial Instruments
Fair Value Measurements
We measure our financial assets and liabilities at fair value on a recurring basis using a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Authoritative guidance establishes three levels of the fair value hierarchy as follows:
Level 1: Quoted market prices in active markets for identical assets or liabilities;
Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and
Level 3: Fair value measurements derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
The carrying amounts of cash and cash equivalents, money market funds, accounts receivable, accounts payable and accrued expenses and certain other short-term liabilities approximate fair value due to their high liquidity and short-term nature, and are therefore categorized within Level 1 of the fair value hierarchy.
Our money market funds accrue dividends, which are reinvested in the funds, and are reflected in the carrying values of the funds. As of March 31, 2025 and December 31, 2024, the carrying value of our money market funds was $174.5 million and $304.1 million, respectively, which is included in cash and cash equivalents on our condensed consolidated balance sheets. During the three months ended March 31, 2025 and March 31, 2024, we recognized $2.5 million and $1.7 million, respectively, of dividend income on our money market funds. Dividend income is included in other income, net in the condensed consolidated statements of operations.
Hedging instruments are re-measured on a recurring basis using pricing models, broker quotes, daily market foreign currency rates, and interest rate curves as applicable (see Note 14) and are therefore categorized within Level 2 of the fair value hierarchy.


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The following table summarizes the valuation of our foreign currency forward contracts and interest rate hedge agreements (see Note 14) that are measured at fair value on a recurring basis and are classified within Level 2 of the fair value hierarchy as of the periods presented below (in millions):
Level 2 Fair Value
March 31, 2025
Foreign currency forward contracts—asset position$1.8 
Foreign currency forward contracts—liability position(9.0)
Interest rate hedge agreements—asset position2.7 
Total$(4.5)
December 31, 2024
Foreign currency forward contracts—asset position$5.7 
Foreign currency forward contracts—liability position(1.0)
Interest rate hedge agreements—asset position7.8
Total$12.5 
There were no transfers of financial instruments between the levels of the fair value hierarchy during the three months ended March 31, 2025 and 2024.
Disclosures about the Fair Value of Financial Instruments
The table below presents information about the fair value of our financial assets and liabilities, and is provided for comparative purposes only relative to the carrying values recognized in the condensed consolidated balance sheets as of the periods presented below (in millions):
 March 31, 2025December 31, 2024
Measurement LevelCarrying
Value		Fair
Value		Carrying
Value		Fair 
Value
2025 Japan ABL Credit FacilityLevel 2$46.7 $46.7 $— $— 
2022 Japan ABL Credit FacilityLevel 2$— $— $25.4 $25.4 
2023 Term Loan BLevel 2$1,175.0 $1,167.7 $1,178.1 $1,175.2 
Convertible NotesLevel 2$258.3 $250.9 $258.3 $250.1 
Equipment NotesLevel 2$10.2 $9.4 $11.7 $10.7 
Mortgage LoansLevel 2$44.2 $51.1 $44.3 $53.0 
Non-recurring Fair Value Measurements
We measure certain long-lived assets, goodwill, non-amortizing intangible assets and investments at fair value on a non-recurring basis, at least annually or more frequently if impairment indicators are present. During the three months ended March 31, 2025, we determined that our Jack Wolfskin business met the criteria to be classified as held for sale (see Note 18) and upon designation, we recorded a $7.0 million impairment within selling, general and administrative expenses on the condensed consolidated statement of operations to write down the assets and related liabilities to their estimated fair value reduced for the costs to dispose of the assets. The estimate of fair value used to determine the loss was derived using the estimated proceeds of $290.0 million from the sale and unobservable inputs which were categorized within Level 3 of the fair value hierarchy. We did not recognize any impairment charges during the three months ended March 31, 2024.
Note 14. Derivatives and Hedging
We use designated cash flow hedges and non-designated hedges in the form of foreign currency forward contracts as part of our strategy to manage the exposure to fluctuations in foreign currency exchange rates and to mitigate the impact of foreign currency translation on transactions that are denominated in the local currencies in the various international regions in which we do business. We also use interest rate swap contracts to mitigate the impact of variable interest rates on our long-term debt.


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We only use foreign currency forward contracts and interest rate swap contracts to meet our objectives of minimizing variability in our operating results which may arise from changes in foreign exchange rates and interest rates, and we do not enter into either of these types of contracts for speculative purposes. We utilize counterparties for our derivative instruments that we believe are creditworthy at the time we enter into the transactions, and we closely monitor the credit ratings of these counterparties.
The following table summarizes the fair value of our derivative instruments as well as the location of the asset and/or liability on the condensed consolidated balance sheets as of the periods presented below (in millions):
Balance Sheet LocationFair Value of
Asset Derivatives
March 31, 2025December 31, 2024
Derivatives designated as cash flow hedging instruments:
Foreign currency forward contractsOther current assets$0.4 $0.1 
Interest rate swap contractOther current assets2.2 3.0 
Interest rate swap contract
Other assets, net
0.5 4.8 
Total$3.1 $7.9 
Derivatives not designated as hedging instruments:
Foreign currency forward contractsOther current assets1.4 5.6 
Total asset position$4.5 $13.5 
Balance Sheet LocationFair Value of
Liability Derivatives
March 31, 2025December 31, 2024
Derivatives designated as cash flow hedging instruments:
Foreign currency forward contractsAccounts payable and accrued expenses$3.5 $0.8 
Derivatives not designated as hedging instruments:
Foreign currency forward contractsAccounts payable and accrued expenses5.5 0.2 
Total liability position$9.0 $1.0 
Our derivative instruments are subject to a master netting agreement with each respective counterparty bank and are therefore net settled at their maturity date. Although we have the legal right of offset under the master netting agreements, we have elected not to present these contracts on a net settlement amount basis, and therefore present these contracts on a gross basis on the accompanying condensed consolidated balance sheets as of March 31, 2025 and consolidated balance sheets as of December 31, 2024.
Cash Flow Hedging Instruments
Foreign Currency Forward Contracts
We use foreign currency derivatives designated as qualifying cash flow hedging instruments, including foreign currency forward contracts to help mitigate our foreign currency exposure from intercompany sales of inventory and intercompany expense reimbursements to our foreign subsidiaries. These contracts generally mature within 12 months to 15 months from their inception. As of March 31, 2025 and December 31, 2024, the notional amounts of our foreign currency forward contracts designated as cash flow hedge instruments was $105.6 million and $9.4 million, respectively.
Interest Rate Swap Contracts
We use interest rate swaps designated as a cash flow hedge to mitigate the risk of changes in interest rates associated with our variable-rate long-term debt.


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In April 2023, we entered into interest rate swaps designated as cash flow hedges in order to mitigate the risk of interest rate fluctuations associated with our 2023 Term Loan B as well as any of our other variable-rate debt. Over the life of the 2023 Term Loan B, we will receive variable interest payments from the counterparty lenders in exchange for our fixed interest rate payments which are made at a weighted-average rate of 3.36% across our interest rate swap contracts, without exchange of the underlying notional amount, which was $400.0 million as of both March 31, 2025 and December 31, 2024.
The following tables summarize the net effect of all cash flow hedges for each of our derivative contracts on the condensed consolidated financial statements for the periods presented (in millions):
(Loss)/Gain Recognized in Other Comprehensive Income
Three Months Ended March 31,
Derivatives designated as cash flow hedging instruments20252024
Foreign currency forward contracts$(2.6)$4.8 
Interest rate swap contracts(4.1)9.2 
Total$(6.7)$14.0 
Gain Reclassified from Other Comprehensive Income into Earnings
Three Months Ended March 31,
Derivatives designated as cash flow hedging instrumentsStatement of Operations Location20252024
Foreign currency forward contractsCost of Products$0.9 $1.3 
Interest rate swap contractsInterest Expense1.2 2.7 
Total$2.1 $4.0 
For the three months ended March 31, 2025, $0.8 million of net gains related to the amortization of forward points were released from accumulated other comprehensive income and recognized in cost of products. Based on the current valuation of our foreign currency forward contracts, we expect to release net losses of $4.1 million related to our foreign currency forward contracts from accumulated other comprehensive income into earnings over the course of the next 12 months.
Foreign Currency Forward Contracts Not Designated as Hedging Instruments
We use foreign currency forward contracts that are not designated as qualifying cash flow hedging instruments to mitigate the exposure to fluctuations in foreign currency exchange rates due to the remeasurement of certain balance sheet payables and receivables denominated in foreign currencies, as well as gains and losses resulting from the translation of the operating results of our international subsidiaries into U.S. dollars for financial reporting purposes. These contracts generally mature within 12 months from inception. As of March 31, 2025 and December 31, 2024, the notional amounts of our foreign currency forward contracts used to mitigate the exposures discussed above were approximately $330.9 million and $203.0 million, respectively.
The following table summarizes the location of net gains for each type of our derivative contracts recognized in the condensed consolidated statements of operations for the periods presented (in millions):
Location of Net (Loss)/Gain Recognized in Income on Derivative InstrumentsNet (Loss)/Gain Recognized in Income on 
Derivative Instruments
Derivatives not designated as hedging instrumentsThree Months Ended March 31,
20252024
Foreign currency forward contractsOther income, net$(9.9)$17.6 
During the three months ended March 31, 2025 and 2024, we recognized net foreign currency transaction gains of $10.7 million and losses of $11.4 million, respectively, in other income (expense), net.


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Note 15. Accumulated Other Comprehensive Loss
The following table details the amounts reclassified from accumulated other comprehensive loss and foreign currency translation adjustments for the three months ended March 31, 2025 (in millions):
Derivative InstrumentsForeign Currency TranslationTotal
Accumulated other comprehensive loss, December 31, 2024, after tax
$7.0 $(83.0)$(76.0)
Change in derivative instruments(6.7)— (6.7)
Net gains reclassified to cost of products(0.9)— (0.9)
Net gains reclassified to interest expense(1.2)— (1.2)
Income tax impact on derivative instruments3.7 — 3.7 
Foreign currency translation adjustments— 18.2 18.2 
Accumulated other comprehensive loss, March 31, 2025, after tax
$1.9 $(64.8)$(62.9)
Note 16. Segment Information
Our operating segments are based on how the Chief Executive Officer as the designated Chief Operating Decision Maker (“CODM”) makes decisions about assessing performance and allocating resources. The CODM primarily evaluates segment performance using segment operating income (loss), which is calculated by taking total segment revenues less segment operating expenses. Segment operating expenses include operating expenses directly attributable to the segment as well as certain shared corporate administration services and other costs which are allocated to the reportable segments. Segment operating expenses exclude certain non-recurring items and other costs, such as interest expense, interest income, taxes and non-allocated corporate expenses. Our CODM evaluates the profitability of each reportable segment based on segment operating income (loss) because it provides insight to operational leverage and other key operational metrics for each segment. Segment operating income (loss) is also used in the annual budget and forecasting process, and budget-to-actual and forecast-to-actual variances are considered when determining the appropriate allocation of company resources to each of our segments. The CODM does not evaluate a measure of assets when assessing segment performance.
We have three operating and reportable segments:
•Topgolf, which is primarily comprised of service revenues and expenses from our Company-owned and operated Topgolf venues, Toptracer ball-flight tracking technology, and WGT digital golf game, which was sold in December 2024;
•Golf Equipment, which is comprised of product revenues and expenses that encompass golf club and golf ball products, including Callaway Golf-branded woods, hybrids, irons, wedges, Odyssey putters, including Toulon Design putters by Odyssey, packaged sets, Callaway Golf and Strata-branded golf balls and sales of pre-owned golf clubs; and
•Active Lifestyle, which is comprised of product revenues and expenses for the Jack Wolfskin outdoor apparel, gear and accessories business, the TravisMathew golf and lifestyle apparel and accessories business, the Callaway soft goods business and the OGIO business, which consists of golf apparel and accessories (including golf bags), and storage gear for sport and personal use. This segment also includes royalties from licensing of our trademarks and service marks for various soft goods products.
There were no significant intersegment transactions during the three months ended March 31, 2025 or 2024.
The following table contains information utilized by the CODM to evaluate our operating segments for the periods presented below (in millions):


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Three Months Ended March 31,
20252024
Topgolf:
Service and product revenue$393.7 $422.8 
Less:
Cost of products and services, excluding depreciation and amortization41.1 44.4 
Other venue expense320.0 321.6 
Selling, general and administrative expense39.9 46.3 
Research and development expense4.0 4.4 
Venue pre-opening costs0.6 3.2 
Segment operating (loss) income
$(11.9)$2.9 
Golf Equipment:
Product revenue$443.7 $449.9 
Less:
Cost of products247.0 263.6 
Selling, general and administrative expense82.4 90.8 
Research and development expense12.7 13.4 
Segment operating income$101.6 $82.1 
Active Lifestyle:
Product revenue$254.9 $271.5 
Less:
Cost of products136.5 — 146.6 
Selling, general and administrative expense83.5 94.8 
Research and development expense4.3 5.4 
Segment operating income$30.6 $24.7 
Total segment operating income$120.3 $109.7 
Reconciling items:
Unallocated other corporate expenses (1)
(53.8)(42.8)
Total operating income 66.5 66.9 
Interest expense, net(58.0)(58.8)
Other income, net3.1 3.4 
Total income before income taxes$11.6 $11.5 
Supplementary Data:
Depreciation and amortization:
Topgolf$55.0 $52.4 
Golf Equipment5.2 4.8 
Active Lifestyle8.9 8.2 
Total depreciation and amortization$69.1 $65.4 
(1) Unallocated other corporate expenses include corporate general and administrative expenses not utilized by management in determining segment profitability, including the amortization of acquired intangible assets, restructuring and reorganization charges, and other non-recurring costs associated with our planned separation of Topgolf, the sale of the Jack Wolfskin business, debt modifications, the integration of new IT systems stemming from acquisitions, and cybersecurity costs.
We market our products in the United States and internationally, with our principal international markets being Asia and Europe. The tables below contain information about the geographical areas in which we operate. Net revenues are attributed to the location to which the product was shipped. Long-lived assets are based on location of domicile.


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Three Months Ended March 31,
20252024
(in millions)
Net Revenues:
United States$790.4 $829.0 
Europe130.1 141.4 
Asia128.8 127.6 
Rest of World43.0 46.2 
Total Net Revenues$1,092.3 $1,144.2 
March 31, 2025December 31, 2024
(in millions)
Long-Lived Assets:
United States$2,108.4 $2,112.5 
Europe82.2 84.9 
Asia10.2 16.4 
Rest of World5.9 5.2 
Total Long-Lived Assets$2,206.7 $2,219.0 
Note 17. Restructuring Plans and Separation Costs
Restructuring Plans
2023 Restructuring Plan
During 2023, we initiated a reorganization and restructuring plan, which was completed in December 2024, in order to improve the organizational structure of and increase operational efficiencies for certain businesses and functions within our Active Lifestyle and Topgolf operating segments. There were no costs incurred pursuant to the 2023 Restructuring Plan during the three months ended March 31, 2025. A negligible amount of costs were incurred pursuant to the 2023 Restructuring Plan during the three months ended March 31, 2024.
The following table summarizes the restructuring liability that is included in accounts payable and accrued expenses, accrued employee compensation and benefits, and other current liabilities on the condensed consolidated balance sheets as of the periods presented below (in millions):
 Employee termination costsPP&E disposalsLegal & other costsTotal
Balance at December 31, 2024$10.2 $0.4 $3.2 $13.8 
Payments(8.1)(0.3)(1.7)(10.1)
Balance at March 31, 2025$2.1 $0.1 $1.5 $3.7 
The remaining $3.7 million total restructuring balance at March 31, 2025 is associated with the Jack Wolfskin business and is included in current liabilities held for sale on the condensed consolidated balance sheet.
Transformation Plan
In connection with the September 2024 announcement of our intended separation of the Topgolf business, we initiated a plan which is intended to optimize organizational efficiencies and decrease operating costs under the separate business structures that are anticipated after the separation (the “Transformation Plan”). For the three months ended March 31, 2025, costs incurred under the Transformation Plan were primarily related to employee termination and severance costs and the disposal of property, plant and equipment. We expect to incur a total of approximately $20.0 million to $30.0 million in costs related to the Transformation Plan, which we expect to be completed in conjunction with the timing of the separation.


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The following table summarizes costs related to the restructuring plan recognized within selling, general and administrative expenses in the condensed consolidated statement of operations for the periods presented below (in millions):
Three Months Ended March 31,
2025
Employee termination & severance$4.4 
PP&E disposals3.3 
Total restructuring$7.7 
The following table summarizes the restructuring liability that is included in accounts payable and accrued expenses, accrued employee compensation and benefits, and other current liabilities on the condensed consolidated balance sheets as of the periods presented below (in millions):
 Employee Termination costsPP&E disposalsLegal & other costsTotal
Balance at December 31, 2024$0.6 $— $0.1 $0.7 
Additions4.4 3.3 — 7.7 
Payments(3.9)— (0.1)(4.0)
Non-cash adjustments— (3.3)— (3.3)
Balance at March 31, 2025$1.1 $— $— $1.1 
As of March 31, 2025, we incurred $9.1 million in total costs related to the Transformation Plan, of which $1.4 million was incurred during the fourth quarter of 2024. Of the $9.1 million in total costs incurred, $1.6 million and $7.5 million were associated with our corporate functions and Topgolf business, respectively.
Separation Costs
In addition to the restructuring costs noted above, during the three months ended March 31, 2025, we recognized $2.6 million and $1.1 million of consulting, legal, accounting and other costs in connection with the planned separation of Topgolf and the sale of Jack Wolfskin, respectively, which are primarily included within selling, general and administrative expenses in the condensed consolidated statement of operations.
Costs incurred related to restructuring plans and planned separations are excluded from the measurement of segment profitability for internal and external reporting purposes, and are included in Reconciling Items. See Note 16 for further information.
Note 18. Assets and Liabilities Held for Sale
We classify assets and related liabilities as held for sale when the following conditions are met: (i) management has committed to a plan to sell the net assets, (ii) the net assets are available for immediate sale, (iii) there is an active program to locate a buyer, (iv) the sale and transfer of the net assets is probable within one year, (v) the net assets are being actively marketed for sale at a price that is reasonable in relation to the current fair value, and (vi) it is unlikely that significant changes will be made to the plan to sell the net assets. Upon designation as held for sale, we record the assets and related liabilities at the lower of their carrying value or their estimated fair value, reduced for the costs to dispose of the assets and related liabilities, which we determined using the estimated proceeds from the sale. This designation resulted in a $7.0 million impairment which is associated with our corporate function and is included within selling, general and administrative expense in our condensed consolidated statement of operations.


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During the first quarter of 2025, we determined that our Jack Wolfskin business, which is within our Active Lifestyle operating segment, met the criteria to be classified as held for sale, and therefore we have reclassified the related assets and liabilities as held for sale on the condensed consolidated balance sheet. We expect the transaction to close towards the end of the second quarter or early third quarter of 2025, subject to the satisfaction of certain specified closing conditions, including the receipt of certain regulatory approvals. The following is a summary of the major categories of assets and liabilities that have been classified as assets and liabilities held for sale on the condensed consolidated balance sheet as of the period presented below (in millions):
March 31, 2025
Current assets held for sale
Total restricted cash$5.5 
Accounts receivables, less allowance of 3.3 million
17.0 
Inventories75.3 
Other current assets16.5 
Property, plant and equipment, net11.4 
Operating lease right-of-use assets, net64.4 
Trade names and trademarks202.3 
Other intangible assets, net13.8 
Goodwill1.7 
Other assets1.4 
Total current assets held for sale$409.3 
Current liabilities held for sale
Accounts payable and accrued expenses$45.6 
Accrued employee compensation and benefits6.2 
Operating lease liabilities, short-term15.6 
Deferred revenue1.3 
Operating lease liabilities, long-term50.1 
Deferred taxes, net23.6 
Other liabilities7.4 
Total current liabilities held for sale$149.8 
We determined that the proposed sale of the Jack Wolfskin business would not represent a strategic shift that had or will have a major effect on the condensed consolidated statement of operations, and therefore results were not classified as discontinued operations.
Note 19. Subsequent Event
On April 10, 2025, we announced that we entered into a definitive agreement to sell 100% of the outstanding equity interests of Callaway Germany Holdco GmbH, which owns various entities that operate the Jack Wolfskin business, to Anca Holdco GmbH & Co. KG, a subsidiary of ANTA Sports Products Limited, for $290.0 million in cash, subject to adjustments for net working capital and other customary conditions. We expect the JW Sale to close in the late second quarter or early third quarter of 2025, subject to the satisfaction of certain specified closing conditions, including the receipt of certain regulatory approvals.

In connection with the foregoing, we entered into an amendment to the 2023 ABL Credit Facility on April 9, 2025, in order to, among other things, (a) permit the release of Jack Wolfskin Ausrüstung Für Draussen GmbH & Co. KGaA, as a borrower and a guarantor under the 2023 ABL Credit Facility, upon the consummation of the JW Sale, (b) permit the reallocation of a portion of the revolving commitments under the 2023 ABL Credit Facility, in an aggregate principal amount of $20 million, from the German Facility thereunder to the U.S. facility thereunder (the “German Facility Reallocation”), and (c) permit the termination of the remainder of the German Facility (the “German Facility Termination”), in each case, subject to certain customary closing conditions.


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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with the condensed consolidated financial statements and related notes that appear elsewhere in this report, and the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the SEC on March 3, 2025. Interim operating results are not indicative of operating results that may be expected for the year ending December 31, 2025, or any other future periods. See “Important Notice to Investors Regarding Forward-Looking Statements” on page 2 of this report. References to the “Company,” “Topgolf Callaway Brands,” “we,” “our,” or “us” in this report refer to Topgolf Callaway Brands Corp., together with our wholly-owned subsidiaries.
Intent to Separate into Two Independent Companies
In September 2024, we announced a strategic plan to pursue a separation of our business into two independent companies: Callaway, a leader in golf equipment with a highly complementary Active Lifestyle business; and Topgolf, a pure-play venue-based golf entertainment business which we believe has potential for high growth. Our Board of Directors is committed to exploring all opportunities to execute the separation in a manner that maximizes shareholder value, including possible options such as a spin-off, sale, or other transaction. We expect to complete the separation of Topgolf in the second half of 2025, but there can be no assurance regarding the ultimate timing, terms, or form of the separation, or that the separation will ultimately occur.
We believe that creating two companies will result in material benefits to the stand-alone businesses that will maximize shareholder value, including enhanced strategic focus, optimized capital allocation, simplified operating structure and a distinct investment thesis for each company that would allow investors to have the opportunity to support and invest in each business on the basis of its distinct qualities.
Sale of Jack Wolfskin
On April 10, 2025, we announced that we entered into a definitive agreement to sell 100% of the outstanding equity interests of Callaway Germany Holdco GmbH, which owns various entities that operate the Jack Wolfskin business, to Anca Holdco GmbH & Co. KG, a subsidiary of ANTA Sports Products Limited, for $290.0 million in cash, subject to adjustments for net working capital and other customary conditions. We expect for the transaction to close in the late second quarter or early third quarter of 2025, subject to the satisfaction of certain specified closing conditions, including the receipt of certain regulatory approvals.
Discussion of Non-GAAP Measures
In addition to the financial results contained in this report, which have been prepared and presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”), we have also included supplemental information concerning our financial results on a non-GAAP basis. This non-GAAP information includes the following:
•A constant currency measure on net revenues in order to demonstrate the impact of foreign currency fluctuations on these results. This information represents an estimate for comparative purposes and is calculated by taking current period local currency results and translating them into U.S. dollars based on the foreign currency exchange rates for the applicable comparable prior period.
•Net income and diluted earnings per share excluding the non-cash amortization of purchase accounting adjustments associated with acquired intangible assets, including acquired customer and distributor relationships and acquired developed technology related to our merger with Topgolf, acquisitions of Jack Wolfskin, TravisMathew and OGIO, and distribution rights in the Korea apparel market (collectively, the “Acquisitions”). While the amortization of these assets is excluded from our calculation of non-GAAP net income, the revenue, operating costs and associated acquired assets that contribute to the revenue generation associated with these acquired companies is reflected in our calculation of non-GAAP net income.
•Net income and diluted earnings per share excluding certain non-cash and non-recurring charges, as further detailed below.
•Same venue sales, which is defined as sales for the comparable Topgolf venue base, which includes Company-owned and operated venues with 24 or more full fiscal months of operations as of the year of comparison.


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We have included information in this report to reconcile non-GAAP information for the periods presented to the most directly comparable GAAP information. Non-GAAP information in this report should not be considered in isolation or as a substitute for any measure derived in accordance with GAAP and may also be inconsistent with the manner in which similar measures are derived or used by other companies. We use such non-GAAP information for financial and operational decision-making purposes and as a means to evaluate the underlying performance of our business and/or in forecasting our business. We believe that the presentation of such non-GAAP information, when considered in conjunction with the most directly comparable GAAP information, provides additional useful information for investors in their assessment of the underlying performance of our business.
Operating Segments and Seasonality
We are a technology-enabled modern golf company offering golf entertainment, golf equipment, and apparel under our portfolio of global brands which includes Topgolf, Callaway Golf, Odyssey, TravisMathew, Jack Wolfskin, OGIO and Toptracer. Our products and brands are reported under our Topgolf, Golf Equipment, and Active Lifestyle operating segments.
Topgolf
Our Topgolf operating segment is primarily comprised of Company-owned and operated domestic and international Topgolf venues, which are equipped with technology-enabled hitting bays, multiple bars, dining areas and event spaces. Our Company-owned and operated venues also offer advertising partnerships to corporate sponsors to feature their names and logos at Topgolf venues and on other media platforms. Revenue from Company-owned and operated venues is primarily derived from the sale of food and beverage, gameplay, and events. As of March 31, 2025, we had 100 Company-owned and operated venues, including 96 Topgolf venues throughout the United States, and four Company-operated venues in the United Kingdom. In addition to our Company-owned and operated venues, we also have eight international franchised Topgolf venues from which we receive royalties.
Our Topgolf operating segment also includes other business lines comprised of our Toptracer ball-flight tracking technology as well Topgolf Media. Toptracer ball-flight tracking technology is used by independent driving ranges and during televised golf broadcasts, as well as in many of our Company-owned and operated and franchised Topgolf venues in order to enhance the Topgolf gaming experience.
Operating results for our Topgolf operating segment fluctuate from quarter to quarter due to seasonal factors. Historically, our venues experience higher second and third quarter revenues associated with the spring and summer, while the first and fourth quarters have historically had lower revenues, with the first quarter being the lowest, due to cooler temperatures and fewer corporate events. Adverse weather may impact the results of operations of Topgolf, especially during peak season.
Revenue growth and profitability related to our Topgolf venues are also impacted by the opening of new venues and growth at existing venues measured by same venue sales, which is a key performance indicator used within our industry and is indicative of acceptance of our initiatives as well as local economic and consumer trends.
Golf Equipment
Our Golf Equipment operating segment is comprised of Callaway Golf-branded woods, hybrids, irons, wedges, Odyssey putters, packaged sets, and Callaway Golf and Strata-branded golf balls, as well as the sale of pre-owned golf clubs. Our golf equipment products are designed to be technologically advanced for golfers of all skill levels, from beginner to professional.


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Operating results for our Golf Equipment segment fluctuate due to seasonal factors, as the game of golf is primarily played on a seasonal basis in most of the regions where we conduct business. Weather conditions generally restrict golf from being played throughout the entire year, with the exception of a few markets, resulting in many of our on-course customers closing during the cold weather months. In general, we launch new products for the new golf season during the first quarter of the year. This initial sell-in period typically continues into the second quarter, while third-quarter sales are generally dependent on reorders and may also include smaller new product launches. Fourth-quarter sales are generally less than the other quarters due to the end of the golf season in many of our key regions. In addition to this seasonality, our golf equipment sales may also be impacted by other factors, including the timing of new product introductions. As a result of these factors, a majority of our Golf Equipment sales, and most, if not all, of the profitability from our Golf Equipment operating segment generally occurs during the first half of the year.
Active Lifestyle
Our Active Lifestyle operating segment is comprised of Callaway Golf, TravisMathew, Jack Wolfskin and OGIO soft goods products. The Callaway Golf soft goods brand offers a full line of premium golf apparel, footwear, gear and accessories. TravisMathew offers a full line of premium golf and lifestyle apparel as well as footwear and accessories. Under the Jack Wolfskin brand, we offer a full line of premium outdoor apparel, gear and accessories. The OGIO brand offers a full line of premium personal storage gear for sport and personal use and accessories. On certain soft goods products, we receive royalties from the licensing of our trademarks and service marks. On April 10, 2025, we announced that we entered into a definitive agreement to sell our Jack Wolfskin business, as discussed above.
Sales of Callaway Golf-branded golf apparel and accessories generally follow the same seasonality as golf equipment, and are therefore generally higher during the first half of the year. Sales of TravisMathew-branded products are more evenly spread throughout the year as the product line is generally lifestyle focused and not dependent on the seasonality of golf, while Jack Wolfskin-branded product sales are higher during the second half of the year due to sales of its outerwear product lines which are more in demand during the cold-weather months.
For further information about our segments, see Note 16 “Segment Information” in the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q.
Current Economic Conditions
Macroeconomic Factors
Our products and services are considered to be non-essential items and are therefore discretionary purchases for consumers. In addition, our Topgolf venues business also depends on corporate discretionary spending relative to its leisure and entertainment-based offerings. As a result, demand for our products could be impacted by downturns in the economy and the corresponding impact on discretionary consumer and corporate spending. Macroeconomic factors including sustained inflation and high interest rates continue to put downward pressure on consumer and corporate discretionary spending. While we generally try to mitigate the impact of such macroeconomic factors by closely monitoring changes in consumer retail spending behavior and through the implementation of various strategic initiatives, the persistence of these trends may have an adverse impact on our operating results depending on the severity and length of the changes.


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Tariffs
In April 2025, the U.S. government announced a 10% baseline tariff on all countries and individualized reciprocal higher tariffs on the countries with which the U.S. has the largest trade deficits. These actions, as well as retaliatory tariffs imposed by other countries on U.S. exports, have led to significant volatility and uncertainty in global markets. The U.S. government has also announced and rescinded multiple tariffs on several foreign jurisdictions, which has increased uncertainty regarding the ultimate effect of tariffs on economic conditions. Increases in tariffs, as well as current uncertainties about tariff levels levied by the U.S. and other governments, may increase the costs for, and impact the availability of, our products, product components and raw materials, a significant amount of which we source from outside of the United States, including Vietnam, Taiwan, Mexico, Bangladesh and other regions. Further, retaliatory tariffs may increase the costs of selling our products in foreign jurisdictions. As a result of tariff costs, we may need to raise our prices to pass costs on to customers, which may not be possible, or may decrease customer demand for our products. The near- and long-term impacts from these tariffs on our business are difficult to predict and depend on the amount, duration, scope and nature of the increases. We are currently assessing the impact of these higher proposed tariffs on our business and are looking for ways to mitigate these higher costs, including continuing to optimize operations and accelerating existing cost reduction and margin improvement programs. Nonetheless, the increases in U.S. and other countries’ tariffs could have a material adverse effect on our financial condition and results of operations, including as a result of higher inflation in the markets in which we operate, an economic slowdown or general economic uncertainty.
Foreign Currency
A significant portion of our business is conducted outside of the United States in currencies other than the U.S. dollar. Therefore, we enter into foreign currency forward contracts to mitigate the effects that changes in foreign currency rates may have on our financial results. While these foreign currency forward contracts can mitigate the effects of changes in foreign currency rates in the short-term, they do not eliminate those effects, which can be significant, and they do not mitigate their effects over the long-term. These effects include (i) the translation and remeasurement of results denominated in foreign currency into U.S. dollars for reporting purposes, (ii) the mark-to-market adjustments of certain intercompany balance sheet accounts denominated in foreign currencies and (iii) the mark-to-market adjustments of our foreign currency forward contracts. In general, our overall financial results are affected positively by a weaker U.S. dollar and negatively by a stronger U.S. dollar as compared to the foreign currencies in which we conduct our business. For the three months ended March 31, 2025, foreign currency fluctuations had an unfavorable impact of $8.9 million on international net revenues.
Inflation
Sustained inflationary pressure partially contributed to the increase in the cost of our products as well as operating costs. While we were able to partially offset these inflationary pressures by increasing the price of our products and services and through cost management initiatives, the length and severity of these conditions are unpredictable, and could be further exacerbated by the proposed increase in tariffs as discussed above. Should conditions persist and/or worsen, such inflationary pressures may have a further adverse effect on our operating results. Further, we may not be able to offset these increased costs through price increases. As a result, our cash flows and results of operations could be adversely affected.


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Results of Operations
Net Revenues and Operating Segment Results (in millions, except percentages)

Net revenues for the three months ended March 31, 2025 decreased $51.9 million or 4.5% (3.8% on a constant currency basis) as compared to the three months ended March 31, 2024. The decrease was primarily due to a decrease in Topgolf same venue sales, the impact of right-sizing the Jack Wolfskin business and unfavorable foreign currency exchange rates. Segment operating income increased $10.6 million or 9.7% driven by increases in our Golf Equipment and Active Lifestyle operating segments, partially offset by a decline in our Topgolf operating segment.
Three Months Ended March 31,Growth/(Decline)
Non-GAAP Constant Currency Growth vs. 2024(1)
20252024DollarsPercentPercent
Net revenues:
Venues$380.1 $405.7 $(25.6)(6.3)%(6.3)%
Other business lines13.6 17.1 (3.5)(20.5)%(19.9)%
Topgolf393.7 422.8 (29.1)(6.9)%(6.8)%
Golf clubs340.0 345.9 (5.9)(1.7)%(0.5)%
Golf balls103.7 104.0 (0.3)(0.3)%0.6%
Golf Equipment443.7 449.9 (6.2)(1.4)%(0.3)%
Apparel152.3 159.6 (7.3)(4.6)%(3.2)%
Gear, accessories, & other102.6 111.9 (9.3)(8.3)%(6.9)%
Active Lifestyle254.9 271.5 (16.6)(6.1)%(4.7)%
Total net revenues$1,092.3 $1,144.2 $(51.9)(4.5)%(3.8)%
Segment operating income:
Topgolf$(11.9)$2.9 $(14.8)(510.3)%
Golf Equipment101.6 82.1 19.5 23.8 %
Active Lifestyle30.6 24.7 5.9 23.9 %
Total segment operating income120.3 109.7 10.6 9.7 %
Unallocated other corporate expenses(2)
(53.8)(42.8)(11.0)25.7 %
Total operating income66.5 66.9 (0.4)(0.6)%
Interest expense, net(58.0)(58.8)0.8 (1.4)%
Other income, net3.1 3.4 (0.3)(8.8)%
Total income before income taxes$11.6 $11.5 $0.1 0.9 %
(1) Calculated by applying 2024 exchange rates to 2025 reported sales in regions outside the United States.
(2) Unallocated other corporate expenses items include corporate general and administrative expenses not utilized by management in determining segment profitability, including non-cash amortization expense of intangible assets in connection with the acquisitions and non-recurring costs as discussed above.
Topgolf
During the three months ended March 31, 2025, Topgolf net revenues decreased $29.1 million (6.9%) and segment operating income decreased $14.8 million compared to the same period in 2024. The decrease in Topgolf net revenues was primarily due to a decline in same venue sales due to softer walk-in traffic and a weaker events business, partially offset by the opening of new Company-owned and operated venues since the first quarter of 2024. The decrease in segment operating income for the three months ended March 31, 2025 was primarily due to the decrease in net revenues discussed above, partially offset by lower operational costs from ongoing cost reduction initiatives, management of labor costs and other operational efficiencies.


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Golf Equipment
During the three months ended March 31, 2025, Golf Equipment net revenues decreased $6.2 million (1.4%) and segment operating income increased $19.5 million (23.8%) compared to the same period in 2024. The decrease in net revenues was primarily due to a more competitive launch environment resulting from all four of the large equipment manufacturers launching a full new woods lineup in the first quarter, as expected. The increase in segment operating income was primarily due to higher gross margins as a result of favorable pricing and product mix, combined with a decline in operating expenses due to the recognition of a gain related to a lease termination incentive in the first quarter of 2025.
Active Lifestyle
During the three months ended March 31, 2025, Active Lifestyle net revenues decreased $16.6 million (6.1%) and segment operating income increased $5.9 million (23.9%) compared to the same period in 2024. The decrease in net revenues was primarily due to a decline in Jack Wolfskin wholesale revenue combined with the impact from certain retail store closures resulting from the planned rightsizing of the business in Europe, partially offset by continued growth in China. The increase in segment operating income was primarily due to overall operational leverage improvements from cost reduction efforts combined with the recognition of a gain related to a lease termination incentive gain in the first quarter of 2025, both of which more than offset the decrease in revenue.

Net revenues by major geographic region for the periods presented below were as follows (in millions, except percentages):
 Three Months Ended March 31,Growth/(Decline)
Non-GAAP Constant Currency Growth vs. 2024
20252024DollarsPercentPercent
Net revenues:
United States$790.4 $829.0 $(38.6)(4.7)%(4.7)%
Europe130.1 141.4 (11.3)(8.0)%(6.0)%
Asia128.8 127.6 1.2 0.9 %4.0 %
Rest of World43.0 46.2 (3.2)(6.9)%(2.2)%
Total net revenues$1,092.3 $1,144.2 $(51.9)(4.5)%(3.8)%
Net revenues from our Topgolf operations are primarily concentrated in the United States and Europe, with the United States being our principal market. We sell our Golf Equipment products and Callaway Golf and OGIO Active Lifestyle products in the United States and internationally, with our principal international regions being Europe and Asia. Active Lifestyle revenues from our TravisMathew and Jack Wolfskin operations are largely concentrated in the United States and Europe, respectively.
United States
During the three months ended March 31, 2025, net revenues in the United States decreased $38.6 million (4.7%) compared to the three months ended March 31, 2024 due to decreases in same venue sales at Topgolf and the expected decrease in sales of golf equipment. These decreases were partially offset by incremental revenues from the opening of new Company-owned and operated venues at Topgolf.
Europe
During the three months ended March 31, 2025, net revenues in Europe decreased $11.3 million (8.0%) compared to the three months ended March 31, 2024, primarily due to the right-sizing of the Jack Wolfskin business.


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Asia
During the three months ended March 31, 2025, net revenues in Asia increased $1.2 million (0.9%) compared to the three months ended March 31, 2024, primarily due to an increase in sales in the Jack Wolfskin business in China, partially offset by continued soft market conditions in the golf equipment and apparel markets in Korea combined with the impact of unfavorable foreign currency exchange rates in Japan and Korea.
Rest of World
During the three months ended March 31, 2025, net revenues in Rest of World decreased by $3.2 million (6.9%) compared to the three months ended March 31, 2024 primarily due to a decrease in sales of golf equipment and soft good products in Canada and Australia.
Foreign Currency
For the three months ended March 31, 2025, foreign currency exchange rates had an unfavorable impact of $8.9 million on international net revenues.
Costs and Expenses (in millions, except percentages)
Three Months Ended March 31,Growth/(Decline)
20252024AmountPercent
Costs and expenses:
Cost of products$385.7 $412.9 $(27.2)(6.6)%
Cost of services, excluding depreciation and amortization39.1 41.6 (2.5)(6.0)%
Other venue expense321.2 323.4 (2.2)(0.7)%
Selling, general and administrative expense257.9 273.0 (15.1)(5.5)%
Research and development expense21.3 23.2 (1.9)(8.2)%
Venue pre-opening costs0.6 3.2 (2.6)(81.3)%
Total costs and expenses$1,025.8 $1,077.3 $(51.5)(4.8)%
Cost of Products
Cost of products is variable in nature and fluctuates relative to sales volumes. Cost of products includes raw materials and component costs, direct labor and manufacturing overhead, inbound freight, duties and shipping charges, depreciation and amortization, and retail merchandise costs for products sold in retail shops within Topgolf venue facilities. During the three months ended March 31, 2025, cost of products decreased $27.2 million (6.6%) compared to the three months ended March 31, 2024. The decreases were primarily due to a decline in sales in our Active Lifestyle operating segment, partially offset by lower product costs in the Golf Equipment operating segment.
Cost of Services, excluding Depreciation and Amortization
Cost of services, excluding depreciation and amortization (“cost of services”), primarily includes the cost of food and beverages sold in our Topgolf venues and certain costs associated with Topgolf’s Toptracer license agreements that are primarily classified as sales-type leases. Food and beverage costs are variable in nature, fluctuate relative to sales volume, and are impacted by product mix and commodity pricing. Cost of services excludes employee costs as well as depreciation and amortization. During the three months ended March 31, 2025, cost of services decreased $2.5 million (6.0%) compared to the three months ended March 31, 2024, primarily due to the decline in sales year-over-year.
Other Venue Expense
Other venue expenses primarily consist of depreciation and amortization, venue employee costs, rent, utilities, marketing and other costs associated with Topgolf venues. During the three months ended March 31, 2025, other venue expenses decreased $2.2 million (0.7%) compared to the three months ended March 31, 2024, primarily due to operational efficiencies in the venues, partially offset by incremental costs from the addition of new Company-owned and operated Topgolf venues since March 31, 2024.


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Selling, General and Administrative Expense
Selling, general and administrative (“SG&A”) expenses primarily consist of non-venue employee costs, advertising and promotional expense, legal and professional fees, tour expenses, travel expenses, building and rent expenses, depreciation charges (excluding those related to manufacturing, distribution and venue operations), amortization and other miscellaneous expenses. During the three months ended March 31, 2025, SG&A expenses decreased $15.1 million (5.5%) compared to the three months ended March 31, 2024, primarily related to a $12.1 million gain recognized from a lease termination incentive in the first quarter of 2025, in addition to lower employee benefits and payroll-related costs due to a decrease in corporate headcount, and a decrease in selling and marketing costs primarily related to cost reduction efforts. These decreases were partially offset by the recognition of a $7.0 million impairment loss on assets held for sale associated with our Jack Wolfskin business.
Research and Development Expense
Research and development expenses are comprised of costs to design, develop, test or improve our products and technology, and primarily include employee costs of personnel engaged in research and development activities, research costs and depreciation expense. During the three months ended March 31, 2025, research and development expenses decreased $1.9 million (8.2%) compared to the three months ended March 31, 2024, primarily due to reduced employee costs as a result of selling the WGT business in the fourth quarter of 2024 and reduced headcount from our restructuring initiatives.
Venue Pre-Opening Costs
Venue pre-opening costs are primarily related to the costs associated with activities prior to the opening of new Company-owned and operated Topgolf venues, and consist of, but are not limited to, labor, rent and occupancy costs, and travel and marketing expenses. These costs fluctuate based on the planned timing, size and location of new venues. During the three months ended March 31, 2025, venue pre-opening costs decreased $2.6 million (81.3%) compared to the three months ended March 31, 2024 due to fewer planned venue openings in 2025.
Other Income and Expense (in millions, except percentages)
Three Months Ended March 31,Growth/(Decline)
20252024DollarsPercent
Other income and expenses:
Interest expense, net$(58.0)$(58.8)$0.8 (1.4)%
Other income, net3.1 3.4 (0.3)(8.8)%
Total other expense, net$(54.9)$(55.4)$0.5 (0.9)%
Interest expense, net increased $0.8 million (1.4%) during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily due to an increase in venue financing interest as the result of the addition of new Topgolf venues, partially offset by decreased interest expense on our term loan as a result of the debt repricing that took place during the first quarter of 2024, combined with lower outstanding balances.
Other income, net decreased $0.3 million (8.8%) during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily due to an increase in net losses on foreign currency transactions, a loss on debt repricing recognized in the first quarter of 2024 that did not recur, and the receipt of dividends in our money market accounts.
Income Taxes
The provision for income tax increased $4.5 million to $9.5 million for the three months ended March 31, 2025, compared to $5.0 million for the three months ended March 31, 2024. As a percentage of pre-tax income, our effective tax rate for the three months ended March 31, 2025 increased to 81.6% compared to 43.3% in the comparable period of 2024. The increase in our effective tax rate for the three months ended March 31, 2025 was primarily associated with stock compensation adjustments and the estimated loss on assets held for sale related to our Jack Wolfskin business, which we expect will not be deductible for income tax purposes. Our effective tax rate for the three months ended March 31, 2024 was impacted due to tax adjustments related to stock-based compensation and the establishment of valuation allowances on certain deferred tax assets.


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Net Income, Diluted Earnings Per Share and Reconciliation of Non-GAAP Measures
The following table presents a reconciliation of our GAAP results for the three months ended March 31, 2025 and 2024 to our non-GAAP results for the same periods (in millions, except per share information):
Three Months Ended March 31, 2025Three Months Ended March 31, 2024
Net Income
Diluted Earnings per share (3)
Net Income
Diluted Earnings per share (3)
GAAP$2.1 $0.01 $6.5 $0.04 
Less: Non-cash amortization of acquired intangibles (1)
(2.2)(0.01)(2.2)(0.01)
Less: Non-recurring items (2)
(16.0)(0.09)(5.7)(0.03)
Non-GAAP$20.3 $0.11 $14.4 $0.08 
GAAP and Non-GAAP diluted weighted-average shares outstanding183.5 184.4 
(1) Includes the amortization of acquired intangible assets, including customer and distributor relationships, reacquired distribution rights and acquired developed technology related to our Acquisitions. While the amortization of acquired intangible assets is excluded from our calculation of non-GAAP net income, the revenue, operating costs and acquired assets that contribute to the revenue generation for these acquired companies is reflected in our calculation of non-GAAP net income. The non-cash depreciation and amortization associated with purchase accounting adjustments stemming from the Acquisitions is excluded from our non-GAAP adjustments. Prior period amounts have been recast in order to conform with the current period presentation. For the three months ended March 31, 2024, non-cash depreciation and amortization related to these purchase accounting adjustments was $1.9 million.
(2) For 2025, amounts primarily include a $7.0 million impairment charge on assets held for sale and $1.1 million of additional costs related to the planned sale of the Jack Wolfskin business, $7.7 million of restructuring and reorganization charges consisting of employee termination and severance costs and disposals of property, plant and equipment related to the Transformation Plan and $2.6 million of consulting, legal and accounting costs in connection with the planned separation of Topgolf. For 2024, amounts primarily include $5.7 million in total charges associated with our 2024 debt repricing, which include the write-off of certain deferred costs, in addition to IT costs related to a 2023 cybersecurity incident and acquisition-related IT integration and implementation costs.
(3) Diluted earnings per share is calculated using the if-converted method, which excludes interest expense related to the Convertible Notes from the calculation of net income in periods where income is reported. During the three months ended March 31, 2025 and 2024, Non-GAAP diluted weighted-average shares outstanding exclude the impact of the Convertible Notes, which were anti-dilutive for the period.
On a GAAP basis, net income decreased to $2.1 million for the three months ended March 31, 2025 compared to $6.5 million for the three months ended March 31, 2024. Diluted earnings per share was $0.01 per share for the three months ended March 31, 2025 as compared to $0.04 for the same period in 2024. The $4.4 million decrease in net income for the three months ending March 31, 2025 was mainly due to a $4.5 million increase in the income tax provision combined with additional charges related to our corporate functions, which were associated with the planned sale of our Jack Wolfskin business and our separation from Topgolf, as well as an increase in restructuring charges. These decreases were partially offset by increases in segment operating income, primarily in the Golf Equipment and Active Lifestyle segments, which were driven by cost savings, higher gross margins, and a gain recognized from a lease termination incentive in the first quarter of 2025.
On a non-GAAP basis, excluding the items described in the table above, our net income and diluted earnings per share for the three months ended March 31, 2025 would have been $20.3 million and $0.11 per share, respectively, compared to $14.4 million and $0.08 per share, respectively, for the same period in 2024. The increase in non-GAAP net income for the three months ended March 31, 2025 was primarily due to an increase in segment operating income as discussed above, partially offset by an increase in the provision for income taxes.



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Financial Condition
Our cash and cash equivalents, including restricted cash, decreased $127.6 million to $322.7 million at March 31, 2025 from $450.3 million at December 31, 2024. The seasonal decrease in cash and cash equivalents was primarily related to cash used in operating activities of $85.2 million and cash used in investing activities of $70.0 million, partially offset by cash provided by financing activities of $25.1 million. During the three months ended March 31, 2025, we used our cash and cash equivalents in addition to proceeds received from lease financings to fund operations and purchase capital expenditures. We believe that our existing funds and existing sources of capital are adequate to fund our future operations, as necessary. For further information related to our financing arrangements, see Note 5 “Financing Arrangements” in the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 and “Liquidity and Capital Resources” in Part I, Item 2 of this Form 10-Q.
Our accounts receivable balance fluctuates throughout the year as a result of the general seasonality of our business, and is also affected by the timing of new product launches. With respect to our Golf Equipment business, accounts receivable are generally the highest during the first and second quarters during the seasonal peak in the golf industry, and generally decline significantly during the third and fourth quarters as a result of an increase in cash collections combined with lower seasonal sales. Our Active Lifestyle accounts receivable balances are generally higher during the third and fourth quarters, primarily due to the seasonal concentration of sales for the Jack Wolfskin business during the fall and winter seasons. Our Topgolf venue business primarily records revenue and collects payment at point-of-sale, and therefore, Topgolf’s accounts receivable balance is lower than our other business segments and primarily consists of media partnership receivables. As of March 31, 2025, our consolidated net accounts receivable increased to $372.2 million from $175.7 million at December 31, 2024. The increase primarily reflects the seasonality of our golf equipment sales. Net accounts receivable as of March 31, 2025 decreased $51.7 million compared to March 31, 2024, primarily due to decreased net sales as well as $17.0 million of Jack Wolfskin accounts receivable which has been reported as part of our current assets held for sale.
Our inventory balance fluctuates throughout the year as a result of the general seasonality of certain operating segments within our business, and is also affected by the timing of new product launches. With respect to our Golf Equipment business, the buildup of inventory generally begins during the fourth quarter and continues into the first quarter and beginning of the second quarter in order to meet increased demand during the golf season. Inventory levels are also impacted by the timing of new product launches as well as the success of new products. Active Lifestyle inventory levels start to increase during the second quarter and continue to increase into the third and fourth quarters primarily due to the seasonal nature of our Jack Wolfskin business, whose products are significantly geared towards the fall and winter seasons. Topgolf is primarily a service-based business which maintains lower inventory balances than our other business segments, primarily consisting of food and beverages as well as retail merchandise and Toptracer inventory. As of March 31, 2025, our inventory decreased $103.4 million to $653.9 million, compared to December 31, 2024. Our inventory decreased $49.0 million as of March 31, 2025, compared to March 31, 2024. The decrease compared to December 31, 2024 and March 31, 2024 was primarily due to the $75.3 million reclassification of Jack Wolfskin inventory to assets held for sale.
Liquidity and Capital Resources
Our principal sources of liquidity consist of our existing cash and cash equivalent balances, funds expected to be generated from operations and available funds from our credit facilities. Based on our current cash balances, estimates of funds expected to be generated from operations, and the current and projected availability under current credit facilities, we believe we will be able to finance current and planned operating requirements, capital expenditures, required debt repayments and contractual obligations and commercial commitments for at least the next 12 months from the issuance date of this Form 10-Q.
Our ability to generate sufficient positive cash flows from operations is subject to many risks and uncertainties, including future economic trends and conditions, demand for our products, supply chain challenges, price inflation, foreign currency exchange rates, and other risks and uncertainties applicable to us and our business (see “Risk Factors” contained in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024).


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On March 19, 2024 we entered into an amendment to the 2023 Term Loan B in order to decrease the interest rate and future interest expense on the 2023 Term Loan B. As of March 31, 2025, we had $805.0 million in cash and availability under our credit facilities, which is an increase of $85.3 million compared to March 31, 2024. Information about our credit facilities and long-term debt is presented in Note 5 “Financing Arrangements” in the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q, which is incorporated herein by this reference.
As of March 31, 2025, approximately 44% of our cash was held in regions outside of the United States. We continue to maintain our indefinite reinvestment assertion with respect to most jurisdictions in which we operate because of local cash requirements to operate our business. If we were to repatriate cash to the United States outside of settling intercompany balances, we may need to pay incremental foreign withholding taxes which, subject to certain limitations, generate foreign tax credits for use against our U.S. tax liability, if any. Additionally, we may need to pay certain state income taxes.


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Significant Cash Obligations
We plan to utilize our liquidity (as described above) and our cash flows from business operations to fund our material cash requirements. The table below summarizes certain significant cash obligations as of March 31, 2025 that will affect our future liquidity (in millions).
 Payments Due By Period
TotalRemainder of 20252026 - 20272028 - 2029Thereafter
Long-term debt(1)
$1,491.5 $13.9 $292.0 $27.7 $1,157.9 
Interest payments relating to long-term debt(2)
484.3 75.1 185.3 178.6 45.3 
Finance leases, including imputed interest(3)
890.8 11.0 36.3 37.9 805.6 
Operating leases, including imputed interest(4)
2,235.3 103.3 304.1 303.9 1,524.0 
DLF obligations(5)
4,941.2 62.5 199.5 207.6 4,471.6 
Minimum lease payments for leases signed but not yet commenced(6)
851.6 1.5 36.5 36.8 776.8 
Capital commitments(7)
63.0 54.0 9.0 — — 
Unconditional purchase obligations(8)
128.9 58.0 62.4 8.5 — 
Uncertain tax contingencies(9)
11.9 1.9 1.1 0.1 8.8 
Total$11,098.5 $381.2 $1,126.2 $801.1 $8,790.0 
(1) Excludes unamortized debt discounts, unamortized debt issuance costs, and fair value adjustments. For further details, see Note 5 “Financing Arrangements” in the Notes to the Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q.
(2) Long-term debt may have fixed or variable interest rates. For further details, see Note 5 “Financing Arrangements” in the Notes to the Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q.
(3) Represents future minimum payments under financing leases. For further details, see Note 4 “Leases” in the Notes to the Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q.
(4) Represents commitments for minimum lease payments under non-cancellable operating leases. For further details, see Note 4 “Leases” in the Notes to the Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q.
(5) Represents DLF obligations, including extension periods, in connection with the construction of Topgolf venues. For further details, see Note 4 “Leases” in the Notes to the Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q.
(6) Represents future minimum lease payments under lease agreements that have not yet commenced as of March 31, 2025, in relation to future Topgolf facilities and TravisMathew retail stores. For further discussion, see Note 4 “Leases” in the Notes to the Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q.
(7) Represents capital expenditure commitments under lease agreements for Topgolf venues under construction that have been signed as of March 31, 2025.
(8) During the normal course of business, we enter into agreements to purchase goods and services, including commitments for endorsement agreements with professional athletes and other endorsers, consulting and service agreements, and intellectual property licensing agreements pursuant to which we are required to pay royalty fees. The amounts listed above approximate the minimum purchase obligations we are obligated to pay under these agreements over the next five years and thereafter as of March 31, 2025. The actual amounts paid under some of the agreements may be higher or lower than these amounts. In addition, we also enter into unconditional purchase obligations with various vendors and suppliers of goods and services during the normal course of business through purchase orders or other documentation or that are undocumented except for an invoice. For further details, see Note 11 “Commitments & Contingencies” in the Notes to the Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q.
(9) Amounts represent current and non-current portions of uncertain income tax positions as recorded on our Condensed Consolidated Balance Sheets as of March 31, 2025. Amounts exclude uncertain income tax positions that we would be able to offset against deferred taxes. For further discussion, see Note 10 "Income Taxes" in the Notes to the Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q.
During the normal course of business, we have made certain indemnities, commitments and guarantees under which we may be required to make payments in relation to certain transactions. These include (i) intellectual property indemnities to our customers and licensees in connection with the use, sale and/or license of our products or trademarks, (ii) indemnities to various lessors in connection with facility leases for certain claims arising from such facilities or leases, (iii) indemnities to vendors and service providers pertaining to the goods or services provided to us or based on the negligence or willful misconduct, and (iv) indemnities involving the accuracy of representations and warranties in certain contracts. In addition, we have made contractual commitments to each of our officers and certain other employees providing for severance payments upon the termination of employment. We have also issued guarantees in the form of a standby letter of credit primarily as security for contingent liabilities under certain workers’ compensation insurance policies.


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The duration of these indemnities, commitments and guarantees varies, and in certain cases may be indefinite. The majority of these indemnities, commitments and guarantees do not provide for any limitation on the maximum amount of future payments we could be obligated to make. Historically, costs incurred to settle claims related to indemnities have not been material to our financial position, results of operations or cash flows. In addition, we believe the likelihood is remote that payments under the commitments and guarantees described above will have a material effect on our financial condition. The fair value of indemnities, commitments and guarantees that we issued during the three months ended March 31, 2025 was not material to our financial position, results of operations or cash flows.
In addition to the contractual obligations listed above, our liquidity could also be adversely affected by an unfavorable outcome with respect to claims and litigation that we are subject to from time to time (see Note 11 “Commitments & Contingencies” in the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 and “Legal Proceedings” in Part II, Item 1 of this Form 10-Q).
We have no material off-balance sheet arrangements.
Capital Expenditures
Total estimated capital expenditures, net of reimbursements by third party real estate financing partners, for the year ending December 31, 2025, are expected to be approximately $155.0 million, comprised of $60.0 million for our core business and $95.0 million for the Topgolf business.
Critical Accounting Estimates
For the three months ended March 31, 2025, there have been no material changes to our critical accounting estimates from the information reported in our Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on March 3, 2025.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
We use derivative financial instruments to mitigate our exposure to changes in foreign currency exchange rates and interest rates. Transactions involving these financial instruments are with creditworthy banks, primarily banks that are party to our credit facilities (see Note 5 “Financing Arrangements” and Note 14 “Derivatives and Hedging” in the Notes to Condensed Consolidated Financial Statements in Part 1, Item 1 of this Form 10-Q). The use of these instruments exposes us to market and credit risk which may at times be concentrated with certain counterparties, although counterparty nonperformance is not anticipated.
Foreign Currency Fluctuations
Information about our foreign currency hedging activities is set forth in Note 14 “Derivatives and Hedging” in the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1, of this Form 10-Q, which is incorporated herein by this reference.
As part of our risk management procedure, a sensitivity analysis model is used to measure the potential loss in future earnings of market-sensitive instruments resulting from one or more selected hypothetical changes in interest rates or foreign currency values. The sensitivity analysis model quantifies the estimated potential effect of unfavorable movements of 10% in foreign currencies to which we were exposed at March 31, 2025 through our foreign currency forward contracts.
At March 31, 2025, the estimated loss from our foreign currency forward contracts, calculated using the sensitivity analysis model described above, was $44.9 million. We believe that such a hypothetical loss from our foreign currency forward contracts would be partially offset by increases in the value of the underlying transactions being hedged.
The sensitivity analysis model is a risk analysis tool and does not purport to represent actual losses in earnings that we will incur, nor does it consider the potential effect of favorable changes in market rates. It also does not represent the maximum possible loss that may occur. Actual future gains and losses will differ from those estimated because of changes or differences in market rates and interrelationships, hedging instruments and hedge percentages, timing and other factors.


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Interest Rate Fluctuations
We are exposed to interest rate risk from our credit facilities and long-term borrowing commitments. Outstanding borrowings under these credit facilities and long-term borrowing commitments accrue interest as described in Note 5 “Financing Arrangements” in the Notes to Condensed Consolidated Financial Statements in Part I, Item 1, and in “Liquidity and Capital Resources” in Part I, Item 2 of this Form 10-Q. Our long-term borrowing commitments are subject to interest rate fluctuations, which could be material to our cash flows and results of operations. In order to mitigate this risk, we enter into interest rate swap contracts as part of our interest rate risk management strategy. Information about our interest rate hedges is provided in Note 14 “Derivatives and Hedging” in the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q. In order to determine the impact of unfavorable changes in interest rates on our cash flows and results of operations, we performed a sensitivity analysis as part of our risk management procedures. The sensitivity analysis quantified that the incremental expense incurred by a 10% increase in interest rates would be $4.0 million over the 12-month period ended on March 31, 2025.
Inflation
The continued increase in inflation partially contributed to the increase in the cost of our products and services as well as our operating costs. If the cost of our products, employee costs, or other costs continue to be subject to significant inflationary pressures, such inflationary pressures may have an adverse effect on our ability to maintain current levels of gross margin and selling, general and administrative expenses. Further, we may not be able to offset these increased costs through price increases. As a result, our inability to quickly respond to inflation could harm our cash flows and results of operations in the future.
Item 4.    Controls and Procedures
Disclosure Controls and Procedures.
We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness, as of March 31, 2025, of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of March 31, 2025.
Changes in Internal Control over Financial Reporting.
There were no changes in our internal controls over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting during the three months ended March 31, 2025.
Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.



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PART II. OTHER INFORMATION
Item 1.    Legal Proceedings
The information set forth in Note 11 “Commitments & Contingencies” in the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1, of this Form 10-Q, is incorporated herein by this reference. 
Item 1A. Risk Factors
Certain Factors Affecting Topgolf Callaway Brands
We have included in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024, a description of certain risks and uncertainties that could affect our business, future performance or financial condition (the “Risk Factors”). Investors should consider the Risk Factors prior to making an investment decision with respect to our stock. There are no material changes from the disclosure provided in the Form 10-K for the year ended December 31, 2024 with respect to the Risk Factors.
Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds
Stock Purchases
In May 2022, our Board of Directors authorized a $100.0 million share repurchase program (the “2022 Repurchase Program”) under which we are authorized to repurchase shares of our common stock in the open market or in private transactions, subject to our assessment of market conditions and repurchase opportunities. We will assess market conditions, buying opportunities and other factors from time to time and will make strategic repurchases as appropriate. The repurchases will be made in compliance with Rule 10b-18 under the Exchange Act, subject to market conditions, applicable legal requirements and other factors, and the repurchases will be made consistent with the terms of our credit facilities, which define the amount of stock that can be repurchased. The repurchase program does not require us to acquire a specific number of shares and it will remain in effect until completed or until terminated by the Board of Directors. During the first quarter of 2025, we did not repurchase any shares of our common stock under the 2022 Repurchase Program.
The following table summarizes our purchases during the first quarter of 2025 and includes amounts repurchased under the 2022 Repurchase Program and shares withheld to satisfy payroll tax withholding obligations in connection with the vesting and settlement of employee restricted stock unit awards and performance share unit awards. Our repurchases of shares of common stock are recorded at cost and result in a reduction of shareholders’ equity.
Three Months Ended March 31, 2025
Total Number
of Shares
Purchased
Weighted
Average Price
Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced ProgramMaximum Dollar Value that May Yet Be Purchased Under the Program
January 1, 2025 - January 31, 2025— $— — $35,528,182 
February 1, 2025 - February 28, 2025240,688 7.56 — 35,528,182 
March 1, 2025 - March 31, 2025231,582 6.31 — 35,528,182 
Total472,270 $7.02 — $35,528,182 
During the first quarter of 2025, we repurchased 0.5 million shares of our common stock at an average cost per share of $6.95, for a total cost of $3.3 million, which were related to shares withheld to satisfy payroll tax withholding obligations as described above.
Item 3.    Defaults upon Senior Securities
None.
Item 4.    Mine Safety Disclosures
None


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Item 5.    Other Information
During the three months ended March 31, 2025, none of our officers or directors adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non Rule 10b5-1 trading arrangement.”



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Item 6.    Exhibits
2.1 
3.1 
3.2 
10.1 
31.1 
31.2 
32.1 
101.1 XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.2 XBRL Taxonomy Extension Schema Document †
101.3 XBRL Taxonomy Extension Calculation Linkbase Document †
101.4 XBRL Taxonomy Extension Definition Linkbase Document †
101.5 XBRL Taxonomy Extension Label Linkbase Document †
101.6 XBRL Taxonomy Extension Presentation Linkbase Document †
104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) †
(†) Included with this Report.


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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
TOPGOLF CALLAWAY BRANDS CORP.
By:/s/  Jennifer Thomas
Jennifer Thomas
Senior Vice President and
Chief Accounting Officer
Date: May 12, 2025


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