Financial Data and Key Metrics Changes - Consolidated revenues for Q3 2025 were $934 million, a 3% increase year-over-year, driven by growth in both Topgolf and golf equipment segments [23][24] - Q3 adjusted EBITDA was $115 million, a decrease of $4 million year-over-year, primarily due to $12 million in incremental tariffs [23][24] - Net debt decreased to $2.23 billion from $2.54 billion year-over-year, attributed to increased cash [25][26] Business Line Data and Key Metrics Changes - Golf equipment segment revenue increased 4% year-over-year to $305 million, with golf clubs up 4% and golf balls up 6% [24] - Active lifestyle segment revenue was approximately flat at $156 million, with operating income down due to tariffs [12][24] - Topgolf revenue increased 4% to $472 million, driven by the addition of six new venues and a 1% increase in same-venue sales [24][27] Market Data and Key Metrics Changes - The US golf market is up 2% year-to-date, with mid-single-digit growth in sell-through reports [7][8] - Participation in golf remains strong, with rounds played up 1.4% year-to-date [8] - Market share in golf balls reached an all-time high of 22.6% in August across both on- and off-course channels [8] Company Strategy and Development Direction - The company is focused on delivering "demonstrably superior and pleasingly different" products to enhance pricing power and market share [10][14] - Continued emphasis on value initiatives at Topgolf, including new pricing strategies and marketing optimization [15][16] - The company is committed to the separation of Topgolf and is actively evaluating strategic alternatives [20][62] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strategic direction and raised full-year guidance based on strong Q3 performance [5][20] - The company anticipates ongoing challenges from tariffs but is implementing cost management initiatives to mitigate impacts [13][31] - Positive trends in consumer engagement and traffic growth at Topgolf are expected to continue into Q4 [15][60] Other Important Information - The company implemented a reduction in force of about 300 positions to manage costs effectively [13] - New venues for Topgolf are on track, with four openings planned for the year [19] - The company is optimistic about the impact of new technology and innovations on product performance [9][10] Q&A Session Summary Question: Pricing power on golf equipment due to strong demand - Management indicated that pricing power is dependent on product differentiation and will consider strategic pricing adjustments to mitigate tariff impacts [34][36] Question: Trends in Topgolf visitation and food and beverage sales - Management reported strong traffic growth and positive trends in food and beverage sales, driven by new offerings and value initiatives [37][41] Question: Sell-through trends and consumer behavior changes - Management noted strong sell-through trends and consumer engagement, with a positive outlook for the golf segment [44][46] Question: Visibility on corporate event bookings for Q4 - Management has reasonable visibility on corporate event bookings, with over half booked 30 days out [76] Question: Update on CEO search and its impact on separation timing - Management is encouraged by the quality of candidates for the CEO position and is confident in the existing team's performance during the transition [88][90] Question: Expectations for tariffs in 2026 - Management indicated that if current tariff rates hold, the impact could be more than double that of 2025 [90]

Financial Data and Key Metrics Changes - Consolidated revenues for Q2 2025 were $1,110 million, representing a 4% year-over-year decrease, primarily due to decreased revenue in the Active Lifestyle segment [29] - Q2 adjusted EBITDA was $196 million, a 5% year-over-year decrease, mainly due to decreased revenue and incremental tariffs [30] - The company raised its full-year revenue guidance to a range of $3,800 million to $3,920 million, reflecting an increase of over $30 million at the midpoint compared to prior guidance [35] Business Line Data and Key Metrics Changes - Golf equipment revenue for Q2 was approximately flat year-over-year at $412 million, exceeding expectations [30] - Active Lifestyle segment revenue decreased by $36 million year-over-year to $214 million, primarily due to the sale of Jack Wolfskin and soft market conditions [31] - Topgolf Q2 revenue decreased by 2% year-over-year, primarily due to a 6% decline in same venue sales, partially offset by higher revenue from new venues [32] Market Data and Key Metrics Changes - Market conditions in the U.S. for golf equipment remain healthy, with rounds played approximately flat on a playable hour adjusted basis [8] - Conditions in the UK and Northern Europe markets are strong, while Asia and Central Europe are softer year-over-year [9] - The athleisure category in the Active Lifestyle segment is down mid to high single digits during Q2 [11] Company Strategy and Development Direction - The company closed the sale of Jack Wolfskin, enabling greater business focus and financial flexibility for Topgolf [4] - The company is committed to ongoing cost reduction and margin improvement initiatives, which have been beneficial in the current operating environment [6] - The strategic process for Topgolf is ongoing, with both a spin and sale being evaluated, although a spin is now impractical for the second half of the year [15][80] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the golf equipment segment, citing healthy consumer engagement and upcoming product launches [10] - The company is optimistic about the improving trends in same venue sales at Topgolf, driven by value initiatives and enhanced customer experience [12][39] - Management acknowledged the challenges posed by tariffs, increasing the estimated impact from $25 million to $40 million for the year [5][45] Other Important Information - The company reported an increase in available liquidity to $1,160 million as of June 30, 2025, primarily due to cash proceeds from the sale of Jack Wolfskin [32] - Net debt decreased to $2,390 million, down from $2,620 million year-over-year, reflecting improved cash balances [33] - The company expects to be free cash flow positive at both the total company and Topgolf in 2025 [38] Q&A Session Summary Question: Can you talk about the robust process regarding the spin and sale of Topgolf? - Management confirmed that the strategic direction remains unchanged, with only the timing of a potential spin being affected due to leadership changes [42][80] Question: What is the current health of the golf industry and drivers of the improving golf equipment business? - Management noted that the golf equipment business remains healthy, with consumer engagement strong and sell-through up low single digits [49] Question: What were the biggest contributors to the value initiatives at Topgolf? - Management highlighted the success of the Sunday Fun Pass and other value offerings, which significantly increased traffic and improved customer perception [57] Question: Can you provide an update on cost reduction efforts and labor efficiency initiatives? - Management indicated that teams have executed well on cost reduction, with improvements in labor efficiency and service speed contributing to stable margins [66] Question: How is the TravisMathew business trending? - Management reported that while the athleisure market is down, the women's category within TravisMathew continues to perform well [72]

Core Insights - Topgolf aims to provide affordable and enjoyable golfing experiences for all players, enhancing accessibility during uncertain economic times [1] - The company is implementing various promotional offers to attract customers, including discounted game play and affordable food and beverage options [1][2] Promotions and Offers - **Half-Off Golf**: 50% discount on golf from Monday to Thursday during summer, starting June 9, applicable at all U.S. venues except Myrtle Beach [2] - **Sunday Funday**: Family-friendly game play priced between $30-$40 per hour, with special food offerings like the Funday Faves Platter [3] - **Topgolf Nights**: Game play available for $30-$40 per hour from 10 p.m. to close on Fridays and Saturdays [4] - **Summer Fun Pass**: An all-access pass for $250 allowing unlimited game play for the passholder and five friends, with additional discounts on food and beverages [5] Menu and Experience Enhancements - Introduction of summer-themed menu items, including frozen cocktails and novelty cold treats, with market-dependent pricing for beers and margaritas [6] - A new in-venue experience inspired by Marvel Studios' "The Fantastic Four," available from June 30 to September 15, offering a free treat for groups [7] Advertising and Brand Positioning - Launch of the "You're Better Off at Topgolf" advertising campaign on June 9, emphasizing the balance of value and premium experiences [8][9] - Topgolf positions itself as a leader in modern golf entertainment, leveraging technology and a diverse range of offerings to attract a wide audience [11][12]