Callaway Golf Company (CALY) Q3 2024 earnings summary

Executive summary

• Q3 2024 consolidated revenues and Adjusted EBITDA exceeded expectations despite a challenging macroeconomic environment, but both declined year-over-year.

• The company maintained #1 U.S. market share in golf clubs and achieved record share in golf balls.

• Available liquidity increased to $863 million, up $129 million year-over-year.

• The company reaffirmed positive Adjusted Free Cash Flow for 2024 and is actively pursuing the separation of Topgolf, targeting completion in the second half of 2025.

• Q3 2024 net revenues decreased 2.7% year-over-year to $1,012.9 million, with a net loss of $3.6 million versus net income of $29.7 million in Q3 2023.

Financial highlights

• Q3 2024 net revenues were $1,012.9 million, down 2.7% year-over-year, mainly due to an 11.1% decline in Active Lifestyle, partially offset by 1.2% growth at Topgolf.

• Q3 Adjusted EBITDA was $119.8 million, down 26.6% year-over-year but ahead of expectations.

• Q3 GAAP net loss was $3.6 million; non-GAAP net income was $4.3 million, down from $35.8 million last year.

• Cash from operating activities for the first nine months increased $111 million (49%) year-over-year; Adjusted Free Cash Flow for the nine months was $200.2 million, up from $26.3 million.

• Inventory decreased $70.1 million year-over-year to $666 million; available liquidity rose to $863 million.

Outlook and guidance

• Full-year 2024 revenue guidance lowered to approximately $4.2 billion, the low end of prior guidance.

• Adjusted EBITDA guidance set at $560–$570 million; free cash flow outlook reduced to $115 million for the year.

• Topgolf annual revenue guidance maintained at approximately $1.79 billion; Adjusted EBITDA guidance raised to approximately $315 million.

• Q4 2024 net revenues expected at ~$885 million, Adjusted EBITDA at $74–$84 million.

• Non-GAAP diluted EPS for 2024 expected in the range of $0.08–$0.13.