Topgolf Callaway Brands Corp. (MODG) Q4 2024 Earnings Call Transcript

For the period ending December 31, 2024

February 24, 2025 5:00 p.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good day, and welcome to the Topgolf Callaway Brands' Fourth Quarter 2024 Conference Call. All participants will be in listen-only mode. [Operator instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Katina Metzidakis, Investor Relations. Please go ahead.

Katina Metzidakis

Good afternoon and welcome to Topgolf Callaway Brands' fourth quarter earnings conference call. I'm Katina Metzidakis, Vice President of Investor Relations and Corporate Communications. Joining me on today's call are Chip Brewer, our President and Chief Executive Officer; and Brian Lynch, our Chief Financial Officer and Chief Legal Officer; and Artie Starrs, Chief Executive Officer of Topgolf.

Earlier today, the company issued a press release announcing its fourth quarter and full year 2024 financial results. Our earnings presentation as well as our earnings press release are both available on our Investor Relations website under the Financial Results tab. Aside from revenue, the financial numbers reported and discussed on today's call are non-GAAP measures. We identify these non-GAAP measures in the presentation and reconcile the measures to the corresponding GAAP measures in accordance with Regulation G. Please note that this call will include forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from management's current expectations. Please review the safe harbor statements contained in the presentation and the press release for a more complete description.

With that, I'd like to turn the call over to Mr. Brewer.

Chip Brewer

Thank you, Katina. Good afternoon everyone and thank you for joining our call today. Starting on Slide 4, Q4 was a strong quarter for our company as both our Golf Equipment business and TravisMathew delivered year-over-year growth on the top and bottom line and Topgolf delivered better than expected same venue sales on improving traffic trends as well as record Q4 venue level margins. For the full year, Golf Equipment delivered another year of excellent brand performance maintaining its leadership position in U.S. golf club market share and driving record share in golf ball.

In Active Lifestyle, TravisMathew delivered another strong brand and financial year while the team at Jack Wolfskin right sized their business, so it is now positioned for profitability going forward. At Topgolf, despite top line pressure, they delivered $337 million in EBITDA and approximately 34% venue level EBITDA margins, which were flat versus 2023 and up 500 basis points versus 2019. Topgolf also impressively delivered over $100 million in free cash flow. Additionally, our total company free cash flow of $203 million was also above expectations, thus further strengthening our financial position, a point Brian will cover in more detail during his comments.