Topgolf Callaway Brands Corp.

Previous wording

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.

Current wording

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. If the spin-off is the ultimate shareholder value maximizing path, it will mostly likely occur in 2026, after we have a new CEO is in place. However, there can be no assurance regarding the ultimate timing, terms, or form of the separation, or that the separation will ultimately occur.

Previous wording

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.

Current wording

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 will allow investors to have the opportunity to support and invest in each business on the basis of its distinct qualities.

Previous wording

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.

Current wording

On May 31, 2025, we completed the sale of 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, adjusted for net working capital and other customary conditions.

Previous wording

•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.

Current wording

•Net income and diluted earnings per share excluding the non-cash amortization 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.

Previous wording

•Net income and diluted earnings per share excluding certain non-cash and non-recurring charges, as further detailed below.

Current wording

•Net income and diluted earnings per share excluding certain non-cash and non-recurring charges, as further detailed in “Net Income, Diluted Earnings Per Share and Reconciliation of Non-GAAP Measures” below.

Previous wording

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.

Current wording

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, OGIO and Toptracer. Our products and brands are reported under our Topgolf, Golf Equipment and Active Lifestyle operating segments.

Previous wording

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.

Current wording

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 June 30, 2025, we had 101 Company-owned and operated venues, including 97 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.

Previous wording

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.

Current wording

Our Topgolf operating segment also includes our Toptracer ball-flight tracking technology, which 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.

Previous wording

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.

Current wording

Operating results for our Topgolf operating segment fluctuate from quarter to quarter due to seasonal factors. Historically, our venues experience nominally 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.

Previous wording

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.

Current wording

Our Active Lifestyle operating segment is comprised of Callaway Golf, TravisMathew, 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. 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 May 31, 2025, we completed the sale of the Jack Wolfskin business, which included a full line of premium outdoor apparel, gear and accessories. The results of operations associated with Jack Wolfskin were included within our Active Lifestyle operating segment through the date of the sale.

Previous wording

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.

Current wording

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.

Previous wording

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.

Current wording

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 and services 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.

Previous wording

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.

Current wording

Throughout 2025, the U.S. government has announced and rescinded multiple tariffs on multiple 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.

Previous wording

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 thethree months ended March 31, 2025, foreign currency fluctuations had anunfavorable impact of $8.9 million on international net revenues.

Current wording

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 andsix months ended June 30, 2025, foreign currency fluctuations had afavorable impact of $8.6 million andan unfavorable impact of$0.3 million, respectively, on international net revenues.

Previous wording

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.

Current wording

Net revenues for the six months ended June 30, 2025 decreased $99.2 million or 4.3% (4.3% on a constant currency basis) as compared to the six months ended June 30, 2024. The decrease was primarily driven by the right-sizing activities and the sale of the Jack Wolfskin business, a decrease in Topgolf same venue sales, and a decrease in Golf Equipment net revenues. Segment operating income increased $14.6 million or 5.7% due to increases in our Golf Equipment and Active Lifestyle operating segments, partially offset by a decline in our Topgolf operating segment.

Previous wording

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.

Current wording

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, 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 operations are largely concentrated in the United States.

Previous wording

During the three months ended March 31, 2025, net revenues in the United States decreased$38.6 million (4.7%) compared tothe 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 andoperated venues at Topgolf.

Current wording

During the three months ended June 30, 2025, net revenues in the United States decreased$29.1 million (3.3%) compared tothe three months ended June 30, 2024 due to a decrease in Topgolf same venue sales and a decrease in sales of golf equipment. These decreases were partially offset by incremental revenues from the opening of new Company-owned andoperated venues at Topgolf.

Previous wording

During the three months ended March 31, 2025, net revenues in Europe decreased$11.3 million (8.0%) compared tothe three months ended March 31, 2024, primarily due to the right-sizing of the Jack Wolfskin business.

Current wording

During the three and six months ended June 30, 2025, net revenues in Europe decreased$8.8 million (7.7%) and$20.1 million (7.9%), respectively, compared tothe three and six months ended June 30, 2024, primarily due to the impact of the sale of the Jack Wolfskin business on May 31, 2025 and the right-sizing of the Jack Wolfskin business prior to the sale in the first quarter of 2025, partially offset by increases in sales of Golf Equipment.

Previous wording

During the three months ended March 31, 2025, net revenues in Asia increased$1.2 million (0.9%) compared tothe three months ended March 31, 2024, primarily due to anincrease in sales in the Jack Wolfskin business in China, partially offset bycontinued 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.

Current wording

During the three and six months ended June 30, 2025, net revenues in Asia decreased$9.3 million (8.5%) and$8.1 million (3.4%), respectively, compared tothe three and sixmonths ended June 30, 2024, primarily due to continued soft market conditions in the golf equipment and apparel markets in Korea, partially offset byincreases in sales of Jack Wolfskin products in China prior to the sale of the Jack Wolfskin business.

Previous wording

During the three months ended March 31, 2025, net revenues in Rest of World decreased by$3.2 million (6.9%) compared tothe three months ended March 31, 2024 primarily due to a decrease in sales of golf equipment and soft good products in Canada and Australia.

Current wording

During the three and six months ended June 30, 2025, net revenues in Rest of World decreased by$0.1 million (0.2%) and$3.3 million (3.7%), respectively, compared tothe three and sixmonths ended June 30, 2024.

Previous wording

Forthe three months ended March 31, 2025, foreign currency exchange rates had anunfavorable impact of$8.9 million on international net revenues.

Current wording

Forthe three and six months ended June 30, 2025, foreign currency exchange rates had afavorable impact of$8.6 million and an unfavorable impact of$0.3 million, respectively, on international net revenues.

Previous wording

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 thethree 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.

Current wording

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 and six months ended June 30, 2025, cost of products decreased $20.9 million (5.6%) and$48.1 million (6.1%), respectively, compared to thethree and six months ended June 30, 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.

Previous wording

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.

Current wording

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 and six months ended June 30, 2025, cost of services decreased $0.3 million (0.6%) and $2.8 million (3.0%), respectively, compared to the three and six months ended June 30, 2024, primarily due to the decline in sales year-over-year.

Previous wording

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 tothe three months ended March 31, 2024, primarily due tooperational efficiencies in the venues, partially offset by incremental costs from the addition of new Company-owned and operated Topgolf venues since March 31, 2024.

Current wording

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 and six months ended June 30, 2025, other venue expenses decreased $3.0 million (0.9%) and$5.2 million (0.8%), respectively, compared tothe three and sixmonths ended June 30, 2024, primarily due tooperational efficiencies in the venues, partially offset by incremental costs from the addition of new Company-owned and operated Topgolf venues since June 30, 2024.

Previous wording

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 tothe 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.

Current wording

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 and six months ended June 30, 2025, SG&A expenses decreased $17.7 million (6.8%) and $32.8 million (6.2%), respectively, compared tothe three and six months ended June 30, 2024.

Previous wording

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 thethree months ended March 31, 2024, primarily due toreduced employee costs as a result of selling the WGT business in the fourth quarter of 2024 and reduced headcount from our restructuring initiatives.

Current wording

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 and six months ended June 30, 2025, research and development expenses decreased $7.2 million (26.7%) and$9.1 million (18.1%), respectively, compared to thethree and sixmonths ended June 30, 2024, primarily due toreduced employee costs as a result of the sale of the WGT business in the fourth quarter of 2024, reduced headcount from our restructuring initiatives and asset impairment charges in the prior year period related to the abandonment of the Shankstars media game.

Previous wording

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 tothe three months ended March 31, 2024 due to fewer planned venue openings in 2025.

Current wording

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 and six months ended June 30, 2025, venue pre-opening costs decreased $1.0 million (35.7%) and $3.6 million (60.0%), respectively, compared tothe three and six months ended June 30, 2024 due to fewer planned venue openings in 2025.

Previous wording

Interest expense, net increased $0.8 million (1.4%) during the three months ended March 31, 2025 as compared tothe 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.

Current wording

Interest expense, net increased $1.7 million (3.0%) and $0.9 million (0.8%), respectively, during the three and six months ended June 30, 2025 as compared tothe three and sixmonths ended June 30, 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 lower outstanding balances during the first half of 2025 compared to the same period in 2024, combined with the impact from the debt repricing that took place during the first quarter of 2024.

Previous wording

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.

Current wording

Other income, net decreased $19.4 million during the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, primarily due to an increase in net losses on foreign currency transactions, the loss on thesale of the Jack Wolfskin business recorded during the current period, and the impact of dividend income in the prior year from our investment in Full Swing that did not recur, partially offset by the receipt of dividends in our money market accounts.

Previous wording

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 forthe 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.

Current wording

The provision for income tax increased $23.5 million to $13.8 million for the three months ended June 30, 2025, compared to a benefit of $9.7 million forthe three months ended June 30, 2024. As a percentage of pre-tax income, our effective tax rate for the three months ended June 30, 2025 increased to 40.6% compared to (18.5)% in the comparable period of 2024. The increase in our effective tax rate for the three months ended June 30, 2025 was primarily associated with the change in forecasted book income year-over-year and the associated mix of domestic and foreign earnings in addition to the impact associated with the sale of the Jack Wolfskin business. Our effective tax rate for the three months ended June 30, 2024 was impacted due to forecasted U.S. tax credits the Company had accrued year to date.

Previous wording

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.

Current wording

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 June 30, 2025 would have been $45.6 million and $0.24 per share, respectively, compared to $83.1 million and $0.42 per share, respectively, for the same period in 2024. The decrease in non-GAAP net income for the three months ended June 30, 2025 was primarily due to an increase in the provision for income taxes combined with increased foreign currency hedging losses, partially offset by the increase in segment operating income discussed above.

Previous wording

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.

Current wording

On a GAAP basis, net income decreased to $22.4 million for thesix months ended June 30, 2025 compared to $68.6 million for thesix months ended June 30, 2024. Diluted earnings per share was$0.12 per share for thesix months ended June 30, 2025 as compared to$0.36 for the same period in 2024. The $46.2 million decrease in net income for thesix months ended June 30, 2025 was mainly due to a $28.0 million increase in the income tax provision combined with the recognition of the loss on sale associated with thesale of the Jack Wolfskin business, charges associated with our planned separation from Topgolf and increased foreign currency hedging losses. These decreases were partially offset by increases in segment operating income in the Golf Equipment and Active Lifestyle segments, which were driven by lower operating costs due to cost savings initiatives, higher gross margins, and a gain recognized from a lease termination incentive in the first quarter of 2025.

Previous wording

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.

Current wording

Our cash and cash equivalents, including restricted cash, increased $233.5 million to $683.8 million at June 30, 2025 from $450.3 million at December 31, 2024. The increase in cash and cash equivalents was primarily related to cash provided by investing activities of $140.3 million driven by net proceeds received from the sale of the Jack Wolfskin business, cash provided by financing activities of $43.8 million, and cash provided by operating activities of $41.7 million. During the six months ended June 30, 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 cash on hand and existing sources of capital are adequate to fund our future operations, as necessary. For further information related to our financing arrangements, see Note 6 “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.

Previous wording

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.

Current wording

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 have historically been 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 June 30, 2025, our consolidated net accounts receivable increased to $338.0 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 June 30, 2025 decreased $52.4 million compared to June 30, 2024, primarily due to decreased net sales combined with the impact of the sale of the Jack Wolfskin business.

Previous wording

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.

Current wording

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 historically started to increase during the second quarter and continue to increase into the third and fourth quarters primarily due to the seasonal nature of the 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 June 30, 2025, our inventory decreased $148.4 million to $608.9 million, compared to December 31, 2024, which reflects our seasonality in addition to the impact from the sale of the Jack Wolfskin business. Our inventory decreased $38.2 million as of June 30, 2025, compared to June 30, 2024, due to the sale of the Jack Wolfskin business, which more than offset the increase in Golf Equipment inventory due to year-over-year timing differences and the normalization of ball inventory due to a supplier factory fire in 2024.

Previous wording

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).

Current wording

Our ability to generate sufficient positive cash flows from operations is subject to many risks and uncertainties, including future economic trends and conditions, tariffs, 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).

Previous wording

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.

Current wording

As of June 30, 2025, we had $1,161.7 million in cash and availability under our credit facilities, which is an increase of $377.9 million compared to June 30, 2024. Information about our credit facilities and long-term debt is presented in Note 6 “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.

Previous wording

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.

Current wording

As of June 30, 2025, approximately 13% 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.

Previous wording

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.

Current wording

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 six months ended June 30, 2025 was not material to our financial position, results of operations or cash flows.

Previous wording

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 approxim ately $155.0 million, comprised of $60.0 million for our core business and $95.0 million for the Topgolf business.

Current wording

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 approxim ately $165.0 million, comprised of $50.0 million for our core business and $115.0 million for the Topgolf business.