Topgolf Callaway Brands (MODG) - 2025 Q1 - Quarterly Results

Financial Performance - Q1 consolidated Net Revenue was $1,092 million, a decrease of 4.5% year-over-year, but better than expected [4] - Adjusted EBITDA for Q1 increased 4.0% to $167.3 million, driven by improved profitability in the Golf Equipment and Active Lifestyle segments [9] - The Company reaffirmed its full year Revenue and Adjusted EBITDA guidance, maintaining estimates of $4.000 - $4.185 billion for consolidated net revenues [21] - Total net revenues for Q1 2025 were $1,092.3 million, a decrease of 4.5% compared to $1,144.2 million in Q1 2024 [38] - Net income for Q1 2025 was $2.1 million, a decline from $6.5 million in Q1 2024, resulting in earnings per share of $0.01 [38] - Total segment operating income increased by 9.7% to $120.3 million compared to $109.7 million in the previous year [42] - Adjusted EBITDA for the twelve months ended December 31, 2024, was $600.2 million, with a quarterly adjusted EBITDA of $206.2 million for the quarter ended June 30, 2024 [47] Segment Performance - Segment operating income for Golf Equipment rose 23.8% to $101.6 million, attributed to improved gross margins and cost savings initiatives [11] - Topgolf segment revenue decreased 6.9% to $393.7 million, with same venue sales down 12% [10] - The Topgolf segment reported a significant operating loss of $11.9 million compared to an operating income of $2.9 million in the prior year [42] - Golf Equipment segment operating income increased by 23.8% to $101.6 million from $82.1 million in 2024 [42] - Topgolf Adjusted Segment EBITDA for the quarter ended March 31, 2025, was $43.9 million, while for the twelve months ended December 31, 2024, it was $337.2 million [47] Liquidity and Assets - Available liquidity increased by 12% year-over-year to $805 million, strengthening the Company's financial position [4] - Total current assets increased to $1,964.8 million from $1,600.7 million, driven by higher accounts receivable and current assets held for sale [35] - The company reported a decrease in cash and cash equivalents to $317.0 million from $445.0 million [35] Future Outlook - Q2 revenue outlook projects a range of $1.075 - $1.115 billion, reflecting a competitive launch environment and the impact of the Jack Wolfskin business rightsizing [22] - The Company anticipates a decline in same venue sales for Topgolf in the range of down 7% to down 12% for Q2 [17] Business Strategy - The Company plans to sell the Jack Wolfskin business, which is expected to enhance balance sheet and liquidity [3] - The company is planning to separate the Topgolf business and expects to realize benefits from the sale of the Jack Wolfskin business [31] - Management highlighted ongoing investments in the business and the potential impact of foreign currency fluctuations on future performance [31] Costs and Charges - The company incurred impairment charges of $1,452.0 million related to goodwill and trade name for the quarter ended December 31, 2024 [47] - The company reported a restructuring and reorganization charge of $24.5 million for the quarter ended March 31, 2024 [47] - The company faced costs related to a cybersecurity incident in 2023, impacting financial results [47]