Callaway Golf Co
For the period ended Jun 30, 2026. Filed Aug 4, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 4, 2026
CALY$16.83+5.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-08.
0000837465-26-000017
Item 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-04.
0000837465-26-000022
Item 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 104 previous paragraphs and 119 current paragraphs.
69 unchanged; 33 reworded; 14 added; 2 removed; 0 previous and 3 current paragraphs rearranged.
Tables are not compared: 10 previous and 11 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
We account for tariff refund claims as gain contingencies and recognize refunds when they are deemed realized or realizable. During the quarter ended June 30, 2026, we recognized $10.8 million of tariff refunds related to previously paid IEEPA tariffs, with the associated benefit recorded within cost of sales in our results of operations. Despite the recognition of these refunds, significant uncertainty remains regarding future U.S. trade policy, including the potential for additional tariffs under alternative statutory authorities, the outcome of ongoing legal proceedings, and the possibility of further changes to tariff rates, scope, duration and enforcement. The ultimate amount, if any, and timing of additional tariff refunds remain subject to ongoing legal, regulatory and administrative proceedings.
Current report
Net sales for the six months ended June 30, 2026 increased $69.7 million or 5.7% (5.5% on a constant currency basis) as compared to the six months ended June 30, 2025. Segment operating income increased $60.6 million or 25.0% driven by increases in both our Golf Equipment and Apparel, Gear and Other operating segments.
Current report
The $18.5 million (4.5%) increase in Golf Equipment net sales for the three months ended June 30, 2026 was primarily due to a 14.8% increase in golf ball sales driven by the continued success of the new Chrome family of golf balls and overall gains in market share, and a 1.2% increase in golf club sales primarily driven by continued sales momentum in fairway woods. These increases were partially offset by decreases in sales of lower-margin golf ball products related to SKU rationalization initiatives.
Current report
The $24.1 million increase in Golf Equipment segment operating income for the three months ended June 30, 2026 was primarily driven by the increase in net sales noted above, combined with improved gross margins resulting from favorable pricing, product mix, cost savings from gross margin initiatives and lower tariffs. These increases were partially offset by an increase in operating expenses of $4.2 million primarily due to the timing of advertising spend and cost-of-living adjustments.
Current report
The $6.7 million (3.6%) decrease in Apparel, Gear and Other net sales for the three months ended June 30, 2026 was primarily due to decreases in sales of Callaway soft goods due to timing of shipments and decreases in Asia from unfavorable foreign currency impacts, partially offset by an increase in sales of TravisMathew apparel products primarily related to higher direct-to-consumer sales.
Current report
The $4.1 million (14.0%)increase in segment operating income for the three months ended June 30, 2026 was primarily driven by higher gross margins from favorable pricing and cost savings from gross margin initiatives, which more than offset the decrease in net sales and the unfavorable impact of incremental tariffs. These increases were partially offset by an increase in operating expenses of $0.8 million due to slight increases related to timing in advertising spend.
Current report
During thesix months ended June 30, 2026, gross profit increased by$86.4 million (15.8%) as compared to the prior year period. Gross margin increased to 48.7% for the six months ended June 30, 2026 compared to 44.5% for the six months ended June 30, 2025. The improvement in gross margin was due to favorable pricing and product mix, cost savings from gross margin initiatives andthe receipt of $10.8 million of tariff refunds in the current period, partially offset by higher overall impacts of incremental tariffs compared to the prior year.
Current report
The $2.4 million (1.4%) increase in SG&A expenses for the three months ended June 30, 2026 was primarily due to a $2.9 million increase in advertising and promotional expenses driven largely by the timing of advertising spend and $1.5 million of impairment charges related to the planned closure of certain underperforming TravisMathew retail locations, partially offset by reduced employee costs from cost savings initiatives and lower tour expenses.
Current report
The $0.4 million (2.6%) increase in research and development expenses for the three months ended June 30, 2026 was primarily due to an increase in computer software costs and professional fees.
Current report
Interest income/expense
Current report
Other income/expense
Current report
The $1.8 million increase in other income (expense), net for the three months ended June 30, 2026 was primarily due to a $4.5 million favorable change in foreign currency transactions and hedging activity and $1.1 million of income from transition services provided to Topgolf, partially offset by a $2.3 million write-off of unamortized debt issuance costs in connection with the full repayment of the term loan and a $0.7 million decrease in dividend income on our money market accounts due to lower average balances resulting from funds being used for debt repayments and stock repurchases.
Current report
Net income from continuing operations and diluted earnings per share for thesix months ended June 30, 2026 were $150.7 million and$0.78 per share, respectively, as compared to net income from continuing operations and diluted earnings per share of $108.9 million and $0.56 per share, respectively, for the six months ended June 30, 2025. These increases were primarily driven by a $60.6 million increase in segment operating income combined with the recognition of $10.8 million related to the tariff refunds in the current quarter and a reduction in interest expense resulting from the full repayment of our term loan debt. These increases were partially offset by the loss recognized from our equity method investment in Topgolf and an increase in the income tax provision.
Current report
On a non-GAAP basis, excluding the items described in the table above, our net income from continuing operations and diluted earnings per share for thesix months ended June 30, 2026 would have been $185.6 million and$0.96 per share, respectively, as compared to net income from continuing operations and diluted earnings per share of $96.0 million and $0.50 per share, respectively, for the six months ended June 30, 2025. The increase in non-GAAP net income from continuing operations was primarily due to a $60.6 million increase in segment operating income combined with lower interest expense, partially offset by an increase in the income tax provision.
Removed paragraphs (2)
Previous report
Interest expense
Previous report
Other income
Reworded paragraphs (33)
Previous wording
In 2025, we executed a strategic realignment to focus on our core Golf Equipment and complementary soft goods businesses, which included the sale of Jack Wolfskin on May 31, 2025, for approximately $290.0 million and the sale of a 60% stake in our Topgolf and Toptracer business (“Topgolf”) based upon an equity value of approximately $1,100.0 million. The Topgolf transaction closed effective January 1, 2026, resulting in net proceeds to us of $818.8 million from the sale and related financing transactions, net of preliminary working capital adjustments and cash retained. Our remaining 40% interest in Topgolf is accounted for under the equity method.
Current wording
In 2025, we executed a strategic realignment to focus on our core Golf Equipment and complementary soft goods businesses, which included the sale of Jack Wolfskin on May 31, 2025, for approximately $290.0 million and the sale of a 60% stake in our Topgolf and Toptracer business (“Topgolf”) based upon an equity value of approximately $1,100.0 million. The Topgolf transaction closed effective January 1, 2026, resulting in net proceeds to us of $820.1 million from the sale and related financing transactions, net of preliminary working capital adjustments and cash retained. Our remaining 39.3% interest in Topgolf (following the sale by Topgolf of additional dilutive units in April 2026, which decreased our non-controlling interest) is accounted for under the equity method.
Previous wording
As a result of these divestitures, the operating results of Jack Wolfskin and Topgolf are reported in discontinued operations for all periods presented in this Form 10-Q. For more information, please refer to Note 3 of this Form 10-Q or our Annual Report on Form 10-K for the year ended December 31, 2025.
Current wording
As a result of these divestitures, the operating results of Jack Wolfskin and Topgolf are classified as discontinued operations for all periods presented, while our proportionate share of earnings and losses related to our remaining equity method investment in Topgolf is included in continuing operations. For more information, please refer to Note 3 of this Form 10-Q or our Annual Report on Form 10-K for the year ended December 31, 2025.
Previous wording
•Net income and diluted earnings per share from continuing operations excluding certain non-cash and non-recurring charges, as further detailed below, as well as the income (loss) from our equity method investment in Topgolf. In addition, for periods presented for fiscal year 2025, net income and diluted earnings per share from continuing operations were adjusted to include interest expense associated with term loan debt that was recognized as part of discontinued operations in order to show the full effect of consolidated interest expense from our corporate debt.
Current wording
•Net income and diluted earnings per share from continuing operations excluding certain non-cash and non-recurring items, as further detailed below, as well as the income (loss) from our equity method investment in Topgolf. In addition, for periods presented for fiscal year 2025, net income and diluted earnings per share from continuing operations were adjusted to include interest expense associated with term loan debt that was recognized as part of discontinued operations in order to show the full effect of consolidated interest expense from our corporate debt.
Previous wording
Our products are discretionary purchases, and demand may be adversely affected by changes in macroeconomic conditions that impact consumer discretionary spending. These conditions include, among other factors, inflationary pressures, interest rate environments, and changes in trade policies or tariffs. While we seek to mitigate the effects of such factors through monitoring consumer spending behavior and implementing strategic initiatives, prolonged or severe adverse economic conditions could negatively impact our operating results.
Current wording
Our products are discretionary purchases, and demand may be adversely affected by changes in macroeconomic conditions that impact consumer discretionary spending. These conditions include, among other factors, inflationary pressures, interest rate environments, changes in trade policies or tariffs, and geopolitical tensions that may create an uncertain environment for global trade and contribute to volatility in commodity, energy, and other input costs. While we seek to mitigate the effects of such factors through monitoring consumer spending behavior and implementing strategic initiatives, prolonged or severe adverse economic conditions could negatively impact our operating results.
Previous wording
In 2025, the U.S. government implemented reciprocal tariffs affecting many countries in which we do business, increasing costs for our products, components, and raw materials, a significant portion of which are sourced from outside the United States, including Asia and other regions, which may adversely affect product availability, pricing, and demand. The U.S. government has subsequently announced and rescinded various tariffs, contributing to continued uncertainty regarding their economic impact. On February 20, 2026, the United States Supreme Court struck down certain tariffs previously imposed under the International Emergency Economic Powers Act of 1977. The ruling did not address potential refunds of tariffs previously assessed under that authority, and as of March 31, 2026, we have not recognized an asset related to any potential refund. Following the ruling, additional tariffs were imposed under a separate authority, further contributing to uncertainty regarding tariff levels, duration, and related costs.
Current wording
In 2025, the U.S. government implemented reciprocal tariffs affecting many countries in which we do business, increasing costs for our products, components, and raw materials, a significant portion of which are sourced from outside the United States, including Asia and other regions, which may adversely affect product availability, pricing, and demand. On February 20, 2026, the United States Supreme Court struck down certain tariffs previously imposed under the International Emergency Economic Powers Act of 1977 (“IEEPA”). As a result, we filed approximately $49.5 million of refund claims related to previously paid IEEPA tariffs, subject to applicable eligibility, filing, and recovery requirements.
Previous wording
A significant portion of our operations is conducted outside the United States in currencies other than the U.S. dollar. We use foreign currency forward contracts to partially mitigate the short‑term effects of exchange rate fluctuations on our financial results; however, these instruments do not eliminate currency impacts or address long‑term exposure. Foreign currency fluctuations affect our results primarily through the translation of foreign‑currency‑denominated results into U.S. dollars and mark‑to‑market adjustments on certain intercompany balances and foreign currency forward contracts. For thethree months ended March 31, 2026, foreign currency fluctuations had afavorable impact of$7.6 million on international net revenues.
Current wording
A significant portion of our operations is conducted outside the United States in currencies other than the U.S. dollar. We use foreign currency forward contracts to partially mitigate the short‑term effects of exchange rate fluctuations on our financial results; however, these instruments do not eliminate currency impacts or address long‑term exposure. Foreign currency fluctuations affect our results primarily through the translation of foreign‑currency‑denominated results into U.S. dollars and mark‑to‑market adjustments on certain intercompany balances and foreign currency forward contracts. For the three andsix months ended June 30, 2026, foreign currency fluctuations had an unfavorable impact of$5.1 million and afavorable impact of$2.5 million, respectively, on international net revenues.
Previous wording
Net sales for the three months ended March 31, 2026 increased $57.9 million or 9.2% (8.0% on a constant currency basis) as compared to the three months ended March 31, 2025. Segment operating income increased $32.4 million or 23.6% driven by increases in both our Golf Equipment and Apparel, Gear and Other operating segments.
Current wording
Net sales for the three months ended June 30, 2026 increased $11.8 million or 2.0% (2.8% on a constant currency basis) as compared to the three months ended June 30, 2025. Segment operating income increased $28.2 million or 26.7% driven by increases in both our Golf Equipment and Apparel, Gear and Other operating segments.
Previous wording
The $42.3 million (9.5%) increase in Golf Equipment net sales for the three months ended March 31, 2026 was primarily due to an 11.9% increase in golf club sales due to improved launch execution, strong reception of new product launches, and strong overall market demand, combined with a 1.6% increase in golf ball sales driven by the successful launch of the new Chrome Tour ball, partially offset by SKU rationalization initiatives related to lower margin ball products.
Current wording
The $60.8 million (7.1%) increase in Golf Equipment net sales for the six months ended June 30, 2026 was due to a 6.8% increase in golf club sales driven by strong reception of new product launches, combined with an 8.1% increase in golf ball sales driven by the successful launch of the new Chrome family of golf balls and overall gains in market share, partially offset by lower sales of lower margin golf ball products related to SKU rationalization initiatives.
Previous wording
The $15.8 million increase in Golf Equipment segment operating income for the three months ended March 31, 2026 was primarily driven by the increase in net sales noted above, combined with improved gross margins resulting from favorable pricing and cost savings from gross margin initiatives, which more than offset the unfavorable impact of approximately $12.0 million from incremental tariffs. In addition, operating expenses increased $8.1 million primarily due to the recognition of an $8.2 million lease termination incentive gain in the first quarter of 2025 that did not recur.
Current wording
The $39.9 million increase in Golf Equipment segment operating income for the six months ended June 30, 2026 was primarily driven by the increase in net sales noted above, combined with improved gross margins resulting from favorable pricing, product mix, and cost savings from gross margin initiatives, which more than offset the unfavorable impact of incremental tariffs. These increases were partially offset by an increase in operating expenses of $12.4 million primarily due to the recognition of an $8.2 million lease termination incentive gain in the first quarter of 2025 that did not recur combined with an increase in employee costs due to cost-of-living adjustments.
Previous wording
The $15.6 million (8.4%) increase in Apparel, Gear and Other net sales for the three months ended March 31, 2026, was primarily due to increases in sales of Callaway soft goods and TravisMathew apparel products related to strong overall market demand and improved direct-to-consumer sales in the TravisMathew business.
Current wording
The $8.9 million (2.4%) increase in Apparel, Gear and Other net sales for the six months ended June 30, 2026 was primarily due to increases in sales of TravisMathew apparel products related to strong overall market demand and higher direct-to-consumer sales, combined with increased sales of Callaway soft goods.
Previous wording
The $16.6 million (46.9%)increase in segment operating income for the three months ended March 31, 2026 was primarily driven by the increase in net sales and higher gross margins from favorable pricing and cost savings from gross margin initiatives, which more than offset the unfavorable impact of approximately $3.4 million from incremental tariffs. In addition, operating expenses increased $2.8 million due to the recognition of a $3.8 million lease termination incentive gain in the first quarter of 2025 that did not recur.
Current wording
The $20.7 million (32.0%)increase in segment operating income for the six months ended June 30, 2026 was primarily driven by the increase in net sales and higher gross margins from favorable pricing and cost savings from gross margin initiatives, which more than offset the unfavorable impact of incremental tariffs. These increases were partially offset by an increase in operating expenses of $3.6 million due to the recognition of a $3.8 million lease termination incentive gain in the first quarter of 2025 that did not recur.
Previous wording
The$32.7 million (7.9%) increase in net sales for the three months ended March 31, 2026 was primarily due to higher sales volumes of golf clubs combined with higher TravisMathew sales.
Current wording
The$13.6 million (3.4%) increase in net sales for the three months ended June 30, 2026 was primarily due to higher sales volumes of golf equipment combined with higher TravisMathew sales, partially offset by a decrease in sales of OGIO products. The$46.3 million (5.7%) increase in net sales for the six months ended June 30, 2026 was primarily due to higher golf equipment and TravisMathew sales.
Previous wording
The$18.9 million (29.4%) increase in net sales for the three months ended March 31, 2026 was primarily due to increases in golf equipment product sales.
Current wording
The$0.2 million (0.3%) increase in net sales for the three months ended June 30, 2026 was primarily due to increases in golf equipment product sales. The$19.1 million (14.8%) increase in net sales for the six months ended June 30, 2026 was primarily due to increases in golf equipment product sales from strong demand combined with the favorable impact of changes in foreign currency.
Previous wording
The$3.2 million (3.0%) decrease in net sales for three months ended March 31, 2026 wasprimarily due to unfavorable foreign currency impacts and soft demand in the Korea apparel market.
Current wording
The$1.6 million (1.7%) decrease in net sales for three months ended June 30, 2026 wasprimarily due to unfavorable foreign currency impacts. On a constant currency basis, net sales increased $5.8 million (6.3%) during the three months ended June 30, 2026 primarily due to the success of new product launches. The$4.8 million (2.4%) decrease in net sales for six months ended June 30, 2026 was also primarily due to unfavorable foreign currency impacts. On a constant currency basis, net sales increased $5.0 million (2.5%) during the six months ended June 30, 2026 due to the success of new product launches.
Previous wording
The $9.5 million (22.4%) increase compared tothe three months ended March 31, 2026 was primarily due to higher golf equipment sales in Canada and Australia.
Current wording
The $0.4 million (0.9%) decrease forthe three months ended June 30, 2026 was primarily due to lower golf equipment sales in Canada, partially offset by increases in other rest-of-world regions. The $9.1 million (10.7%) increase forthe six months ended June 30, 2026 was primarily due to higher golf equipment sales in Canada and Australia.
Previous wording
During thethree months ended March 31, 2026, gross profit increased by$43.1 million (15.2%) as compared to the prior year period. Gross profit as a percent of net sales (“gross margin”) increased to 47.5% for the three months ended March 31, 2026 compared to 45.0% for the three months ended March 31, 2025. The improvement in gross margin was due to favorable pricing combined with cost savings from gross margin initiatives, which more than offset the unfavorable impacts of incremental tariffs.
Current wording
During thethree months ended June 30, 2026, gross profit increased by$43.3 million (16.4%) as compared to the prior year period. Gross profit as a percent of net sales (“gross margin”) increased to 50.1% for the three months ended June 30, 2026 compared to 43.9% for the three months ended June 30, 2025. The improvement in gross margin was due to favorable pricing and product mix, cost savings from gross margin initiatives, and the receipt of $10.8 million of tariff refunds in the current period.
Previous wording
The $8.7 million (5.3%) increase in SG&A expenses forthe three months ended March 31, 2026 was primarily due to a $12.0 million gain recognized from a lease termination incentive in the first quarter of 2025, which did not recur in 2026, combined with an increase inemployee costs primarily related to cost of living and sales commissions increases, partially offset by lower advertising spend due to the timing of planned advertising activities.
Current wording
The $11.1 million (3.3%) increase in SG&A expenses forthe six months ended June 30, 2026 was primarily due to a $12.0 million gain recognized from a lease termination incentive in the first quarter of 2025, which did not recur in 2026, combined with impairment charges on retail assets at TravisMathew, losses on asset disposals, and higher legal costs, partially offset by lower advertising spend due to the timing of planned advertising activities, decreased tour expenses, and a decrease in depreciation and amortization.
Previous wording
The $0.7 million (4.4%) decrease in research and development expenses for the three months ended March 31, 2026 was primarily due to a decline in depreciation expense combined with cost savings initiatives.
Current wording
The $0.3 million (1.0%) decrease in research and development expenses for the six months ended June 30, 2026 was primarily due to cost savings initiatives.
Previous wording
The $9.1 million (61.1%) decrease in interest expense, net for the three months ended March 31, 2026 was primarily due to lower interest expense on our term loan as a result of the partial repayment on January 2, 2026 in connection with completion of the sale of Topgolf.
Current wording
The decreases in interest expense, net for the three and six months ended June 30, 2026 were primarily due to lower interest expense on our term loan as a result of the partial repayment on January 2, 2026 in connection with completion of the sale of Topgolf and its full repayment on May 29, 2026.
Previous wording
The $0.5 million (20.8%) increase in other income for the three months ended March 31, 2026 was primarily due to a $4.3 million remeasurement gain on our investment in Five Iron Golf, $2.1 million of higher dividend income on our money market accounts and $1.2 million of income from transition services provided to Topgolf, partially offset by a $7.5 million write-off of unamortized debt issuance fees in connection with the partial repayment of the term loan mentioned above.
Current wording
The $2.3 million (115.0%) increase in other income (expense), net for the six months ended June 30, 2026 was primarily due to a $5.0 million favorable change in foreign currency transactions and hedging activity, a $4.3 million remeasurement gain on our investment in Five Iron Golf, $2.3 million of income from transition services provided to Topgolf, and $1.3 million of higher dividend income on our money market accounts due to higher average balances for the year-to-date period, partially offset by a $9.8 million write-off of unamortized debt issuance costs in connection with the repayment of the term loan mentioned above.
Previous wording
The $27.7 million loss during the three months ended March 31, 2026 represents ourproportionate share of Topgolf’s net losses following the completion of the sale of the business effective January 1, 2026.
Current wording
The $1.0 million and $28.7 million loss during the three and six months ended June 30, 2026, respectively, represents ourproportionate share of Topgolf’s net losses following the completion of the sale of a majority interest in the business effective January 1, 2026.
Previous wording
The $5.5 million increase in income tax expense for the three months ended March 31, 2026 was primarily due to higher pre‑tax earnings. As a percentage of pre-tax income, our effective tax rate for the three months ended March 31, 2026 increased to 30.4% compared to 30.0% in the comparable period of 2025.
Current wording
The $21.7 million and $27.2 million increases in income tax expense for the three and six months ended June 30, 2026, respectively, were primarily due to higher pre‑tax earnings, as well as the tax impacts from our investment in Topgolf. As a percentage of pre-tax income, our effective tax rate for the three months ended June 30, 2026 increased to 31.5% compared to 22.4% in the comparable period of 2025. As a percentage of pre-tax income, our effective tax rate for the six months ended June 30, 2026 increased to 30.9% compared to 27.0% in the comparable period of 2025. The increases in our effective tax rate for the three and six months ended June 30, 2026, respectively, were primarily due to impacts of valuation allowances related to our investment in Topgolf combined with our global mix of earnings.
Previous wording
Net income from continuing operations and diluted earnings per share for thethree months ended March 31, 2026 were $74.9 million and$0.38 per share, respectively, as compared to net income from continuing operations and diluted earnings per share of $63.4 million and $0.33 per share, respectively, for the three months ended March 31, 2025. These increases were primarily driven by a $32.4 million increase in segment operating income, in addition to lower interest expense. These increases were partially offset by the loss recognized from our equity method investment in Topgolf.
Current wording
Net income from continuing operations and diluted earnings per share for thethree months ended June 30, 2026 were $75.8 million and$0.40 per share, respectively, as compared to net income from continuing operations and diluted earnings per share of $45.5 million and $0.24 per share, respectively, for the three months ended June 30, 2025. These increases were primarily driven by a $28.2 million increase in segment operating income combined with the recognition of $10.8 million related to the tariff refunds in the current quarter and a reduction in interest expense resulting from the full repayment of our term loan debt. These increases were partially offset by an increase in the income tax provision and the loss recognized from our equity method investment in Topgolf.
Previous wording
On a non-GAAP basis, excluding the items described in the table above, our net income from continuing operations and diluted earnings per share for thethree months ended March 31, 2026 would have been $111.8 million and$0.56 per share, respectively, as compared to net income from continuing operations and diluted earnings per share of $57.1 million and $0.30 per share, respectively, for the three months ended March 31, 2025. The increase in non-GAAP net income from continuing operations was primarily due to a $32.4 million increase in segment operating income and lower interest expense.
Current wording
On a non-GAAP basis, excluding the items described in the table above, our net income from continuing operations and diluted earnings per share for thethree months ended June 30, 2026 would have been $73.8 million and$0.39 per share, respectively, as compared to net income from continuing operations and diluted earnings per share of $38.9 million and $0.20 per share, respectively, for the three months ended June 30, 2025. The increase in non-GAAP net income from continuing operations was primarily due to a $28.2 million increase in segment operating income combined with lower interest expense, partially offset by an increase in the income tax provision.
Previous wording
Income of $18.2 million from discontinued operations, net of tax, for the three months ended March 31, 2026 was primarily related to the recognition of an income tax benefit in connection with the sale of Topgolf effective on January 1, 2026, partially offset by transaction costs directly related to the completion of the sale. The $61.3 million loss from discontinued operations, net of tax for the three months ended March 31, 2025 was due to net operating losses of both Topgolf and Jack Wolfskin during the period.
Current wording
Loss of $0.6 million from discontinued operations, net of tax, for the three months ended June 30, 2026 was related to the settlement of certain indemnification obligations and other costs directly related to our divestitures of Topgolf and Jack Wolfskin. Income of $17.6 million, net of tax from discontinued operations for the six months ended June 30, 2026, was primarily related to the recognition of an income tax benefit in connection with the sale of Topgolf effective on January 1, 2026, partially offset by transaction costs directly related to the completion of the sale as well as the settlement of certain indemnification obligations. The $25.2 million and $86.5 million loss from discontinued operations, net of tax for the three and six months ended June 30, 2025, respectively, was due to net operating losses of both Topgolf and Jack Wolfskin during the period.
Previous wording
Our cash and cash equivalents decreased $404.0 million to $499.5 million at March 31, 2026 as compared to December 31, 2025 and decreased $182.5 million compared to March 31, 2025. These decreases were primarily driven by cash used in financing activities from continuing operations, largely reflecting the partial repayment of our term loan in January 2026, which was funded by cash proceeds from the sale of Topgolf and cash on hand. In addition, cash used in operating activities from continuing operations increased, which primarily reflects working capital changes associated with normal seasonal fluctuations and the performance of the business. 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.
Current wording
Our cash and cash equivalents decreased $625.1 million to $278.1 million at June 30, 2026 as compared to December 31, 2025 and decreased $405.4 million compared to June 30, 2025. These decreases were primarily driven by cash used in financing activities from continuing operations, largely reflecting the full repayment of our term loan during the period, which was funded by cash proceeds from the sale of Topgolf and cash on hand. We also used cash in financing activities to repurchase shares of our common stock pursuant to our stock repurchase program. In addition, cash provided by operating activities from continuing operations increased due to the strong performance of the business. 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. With respect to our Apparel, Gear and Other business, accounts receivable balances for our TravisMathew and OGIO businesses are more evenly distributed throughout the year while accounts receivable balances for our Callaway soft good brand are subject to the same general seasonality as our Golf Equipment business. As of March 31, 2026, our consolidated net accounts receivable increased to $393.8 million from $123.2 million at December 31, 2025. The increase primarily reflects the seasonality of Golf Equipment net sales in the first quarter. Net accounts receivable as of March 31, 2026 increased $33.6 million compared to March 31, 2025, primarily due to higher net sales.
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. With respect to our Apparel, Gear and Other business, accounts receivable balances for our TravisMathew and OGIO businesses are more evenly distributed throughout the year while accounts receivable balances for our Callaway soft good brand are subject to the same general seasonality as our Golf Equipment business. As of June 30, 2026, our consolidated net accounts receivable increased to $315.7 million from $123.2 million at December 31, 2025. The increase primarily reflects the seasonality of Golf Equipment net sales in the first and second quarters. Net accounts receivable as of June 30, 2026 decreased $15.9 million compared to June 30, 2025, primarily due to lower net sales in the latter half of the second quarter of 2026 combined with improved cash collections.
Previous wording
Our inventory balance fluctuates throughout the year as a result of the general seasonality of our Golf Equipment 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. With respect to our Apparel, Gear and Other business, inventory levels are generally less affected by seasonality due to the diversification of product offerings for these brands. As of March 31, 2026, our inventory decreased $28.9 million to $596.4 million, compared to December 31, 2025, which reflects our seasonality. Our inventory decreased $15.3 million as of March 31, 2026, compared to March 31, 2025, primarily due to higher net sales.
Current wording
Our inventory balance fluctuates throughout the year as a result of the general seasonality of our Golf Equipment 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. With respect to our Apparel, Gear and Other business, inventory levels are generally less affected by seasonality due to the diversification of product offerings for these brands. As of June 30, 2026, our inventory decreased $107.1 million to $518.2 million, compared to December 31, 2025, which reflects our seasonality. Our inventory decreased $49.7 million as of June 30, 2026, compared to June 30, 2025, primarily due to higher net sales in the current period.
Previous wording
As of March 31, 2026, we had $996.0 million in combined cash and availability under our credit facilities, which is an increase of $223.7 million compared to March 31, 2025. 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.
Current wording
As of June 30, 2026, we had $774.7 million in combined cash and availability under our credit facilities, which is a decrease of $386.6 million compared to June 30, 2025 following the full repayment of our Term Loan B in May 2026 and repurchases of shares of our common stock pursuant to our stock repurchase program. 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, 2026, 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.
Current wording
As of June 30, 2026, approximately 26% 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, 2026 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, 2026 was not material to our financial position, results of operations or cash flows.
Previous wording
Total estimated capital expenditures for the year ending December 31, 2026, are expected to be approxim ately $35.0 million to $40.0 million.
Current wording
Total estimated capital expenditures for the year ending December 31, 2026, are expected to be approxim ately $40.0 million.
Previous wording
For the three months ended March 31, 2026, 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, 2025, filed with the SEC on February 27, 2026.
Current wording
For the six months ended June 30, 2026, 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, 2025, filed with the SEC on February 27, 2026.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
The following table presents a reconciliation of our GAAP results for the six months ended June 30, 2026 and 2025 to our non-GAAP results for the same periods (in millions, except per share information):
Current report — wording carried from elsewhere
GAAP net income from continuing operations
Current report — wording carried from elsewhere
Non-GAAP net income from continuing operations