Q1 2025 Topgolf Callaway Brands Corp Earnings Call

May 12, 2025

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Katina methodology: I would now let's turn the conference over to Katina methodology, as Vice President Investor Relations. Please go ahead.

Katina methodology: Good afternoon, and welcome to top golf Callaway brands first quarter earnings conference call and Katina <unk>, Vice President of Investor Relations and corporate Communications joining me on today's call are chip Brewer, our president and Chief Executive Officer, Brian Lynch, Our Chief Financial Officer, and Chief Legal Officer, and Artie Starrs, Chief Executive officer of topical.

Katina methodology: Earlier today, the company issued a press release announcing its first quarter 2025 financial results our earnings presentation as well as earnings press release are both available on our Investor Relations website under the financial results tab.

Katina methodology: 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.

Speaker Change: Station. 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. Burke.

Burke: Thank you Katina and good afternoon, everyone and thank you for joining our call today <unk>.

Katina methodology: Starting on slide four Q.

Katina methodology: Q1 was a strong quarter for our company as we met or beat expectations in all segments of our business.

Katina methodology: We're particularly pleased with the margin improvement in our products business as.

Katina methodology: As well as the consumers' response to recent initiatives a top golf.

Unknown Executive: Participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.

Katina methodology: On the strategic front, we were pleased to announce an agreement to sell Jack will skin to onto sports.

Katina methodology: Transaction that will enable greater business focus as well as provide further financial flexibility as we move forward on our strategic process for top golf.

Unknown Executive: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on your telephone keypad. To draw your question, please press star then 2.

Katina methodology: Before I go into the segment results I'll provide some comments on tariffs and their impact on us both in the near and long term.

Unknown Executive: Please note, this event is being recorded.

Chip Brewer: Starting on slide four. Q1 was a strong quarter for our company as we met or beat expectations in all segments of our business. I was particularly pleased with the margin improvement in our products business, as well as the consumer's response to recent initiatives at Topgolf. On the strategic front, we were pleased to announce an agreement to sell Jack Wolfskin to Anta Sports, a transaction that will enable greater business focus as well as provide further financial flexibility as we move forward on our strategic process for Topgolf.

Q1 was a strong quarter for our company as we met or beat expectations in all segments of our business.

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

Katina methodology: Needless to say, it's tough to predict the exact impact at this point as we can't be sure what the final rates will be.

Katina Metzidakis: Good afternoon and welcome to Topgolf Callaway Brands first quarter earnings conference call. I'm Katina Metzidakis, Vice President of Investor Relations and Corporate Communications.

I was particularly pleased with the margin improvement in our products business as.

As well as the consumers' response to recent initiatives a top golf.

Katina methodology: During our last call, we forecast approximately a $5 million impact based on what we knew at that time.

Katina Metzidakis: Joining me on today's call are Chip Brewer, our President and Chief Executive Officer, Brian Lynch, our Chief Financial Officer and Chief Legal Officer, and Artie Starrs, Chief Executive Officer at Topgolf.

On the strategic front, we were pleased to announce an agreement to sell Jack will skin to onto sports.

Katina methodology: As of this call and assuming current rates of approximately 10% for all countries of origin other than Mexico, Canada, and China. This year's unmitigated impact would be approximately $25 million.

Transaction that will enable greater business focus as well as provide further financial flexibility as we move forward on our strategic process for top golf.

Katina Metzidakis: Earlier today, the company issued a press release announcing its first quarter 2025 financial results. Our earnings presentation, as well as 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.

Chip Brewer: Before I go into the segment results, I'll provide some comments on tariffs and their impact on us both in the near and long term. Needless to say, it's tough to predict the exact impact at this point, as we can't be sure what the final rates will be. During our last call, we forecast approximately a $5 million impact based on what we knew at that time. As of this call, and assuming current rates of approximately 10% for all countries of origin other than Mexico, Canada, and China, this year's unmitigated impact would be approximately $25 million, an increase of $20 million versus our last call.

Katina methodology: An increase of $20 million versus our last call.

Before I go into the segment results I'll provide some comments on tariffs and their impact on us both in the near and long term.

Katina methodology: Looking forward. If these are the final rates, we believe we will be able to mitigate some portion by further optimizing operations and accelerating cost reduction and margin programs. We then believe we will have the ability to pass the balance on with only a minor impact to demand.

Needless to say, it's tough to predict the exact impact at this point as we can't be sure what the final rates will be.

Katina Metzidakis: 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.

During our last call, we forecast approximately a $5 million impact based on what we knew at that time.

Katina methodology: Land.

Katina methodology: We believe we are benefiting from having been proactive on cost and margin initiatives over the last 12 months and then accelerating them further recently.

As of this call and assuming current rates of approximately 10% for all countries of origin other than Mexico, Canada, and China. This year's unmitigated impact would be approximately $25 million.

Chip Brewer: With that, I'd like to turn the call over to Mr. Brewer. Thank you, Katina. Good afternoon, everyone, and thank you for joining our call today.

Katina methodology: As well as from the scale brand strength and capabilities of our organization.

An increase of $20 million versus our last call.

Katina methodology: Having said this we will be watching the economy, and resulting demand side closely.

Chip Brewer: Looking forward, if these are the final rates, we believe we will be able to mitigate some portion by further optimizing operations and accelerating cost reduction and margin programs. We then believe we will have the ability to pass the balance on with only a minor impact to demand. We believe we are benefiting from having been proactive on cost and margin initiatives over the last 12 months. and then accelerating them further recently. as well as from the scale, brand strength and capabilities of our organization. Having said this, we'll be watching the economy and resulting demand side closer.

Looking forward. If these are the final rates, we believe we will be able to mitigate some portion by further optimizing operations and accelerating cost reduction and margin programs. We then believe we will have the ability to pass the balance on with only a minor impact to demand.

Katina methodology: As the risk of a further slowing of consumer activity has certainly gone up.

Katina methodology: And to be clear my primary concern is on the demand side.

Chip Brewer: On the strategic front, we were pleased to announce an agreement to sell Jack Wolfskin to Anta Sports, a transaction that will enable greater business focus as well as provide further financial flexibility as we move forward on our strategic process for Topgolf. Before I go into the segment results, I'll provide some comments on tariffs and their impact on us both in the near and long term. Needless to say, it's tough to predict the exact impact at this point, as we can't be sure what the final rates will be. During our last call, we forecast approximately a $5 million impact based on what we knew at that time.

Katina methodology: And that outcome isn't unknowable at this point.

Katina methodology: Fortunately as previously communicated and shown in slide 14 of our presentation.

Land.

We believe we are benefiting from having been proactive on cost and margin initiatives over the last 12 months and then accelerating them further recently.

Katina methodology: It's worth reminding ourselves that golf equipment has not historically been sensitive to mild recessions.

Katina methodology: Continuing on the U S tariff front.

As well as from the scale brand strength and capabilities of our organization.

Katina methodology: Vietnam is our primary countries of origin for both golf clubs and Travis Matthew or apparel.

Having said this we will be watching the economy, and resulting demand side closely.

Katina methodology: However, we also sourced goods from Taiwan, several other <unk> countries, Peru, Bangladesh and others.

Chip Brewer: as the risk of a further slowing of consumer activity has certainly gone up. And to be clear, my primary concern is on the demand side. And that outcome is an unknowable at this point.

As the risk of a further slowing of consumer activity has certainly gone up.

And to be clear my primary concern is on the demand side.

Katina methodology: Fortunately, we source very little from mainland China for sale into the U S.

And that outcome isn't unknowable at this point.

Chip Brewer: As of this call, and assuming current rates of approximately 10% for all countries of origin other than Mexico, Canada, and China, this year's unmitigated impact would be approximately $25 million, an increase of $20 million versus our last call. Looking forward, if these are the final rates, we believe we will be able to mitigate some portion by further optimizing operations and accelerating cost reduction and margin programs. We then believe we will have the ability to pass the balance on with only a minor impact to demand. We believe we are benefiting from having been proactive on cost and margin initiatives over the last 12 months.

Katina methodology: For the North American market, we assemble our custom golf clubs in Mexico.

Chip Brewer: Fortunately, as previously communicated and shown in slide 14 of our presentation, it's worth reminding ourselves that golf equipment has not historically been sensitive to mild recession. Continuing on the U.S. terror front. Vietnam is our primary country of origin for both golf clubs and Travis Matthew Apparel. However, we also source goods from Taiwan, several other ASEAN countries. Peru, Bangladesh, and others. Fortunately, we source very little from mainland China for sale into the US. For the North American market, we assemble our custom golf clubs in Mexico. But even at a 25% US tariff, the cost impact is small since it is a value added tax.

Fortunately as previously communicated and shown in slide 14 of our presentation.

Katina methodology: But even at a 25% U S tariff the cost impact is small since it is a value added tax.

It's worth reminding ourselves that golf equipment has not historically been sensitive to mild recessions.

Katina methodology: And the assembly is not a significant expense.

Continuing on the U S tariff front.

Katina methodology: On the ball side I would expect those of us that are scaled and full manufacturing capabilities in the U S to be better position long term.

Vietnam is our primary country of origin for both golf clubs and Travis Matthew apparel.

However, we also sourced goods from Taiwan, several other <unk> countries, Peru, Bangladesh and others.

Katina methodology: And it is also worth mentioning that recent exchange rate movements appear to be tied to the recent tariff policy.

Fortunately, we source very little from mainland China for sale into the U S.

Katina methodology: And a weaker dollar is decidedly positive for us as approximately 40% of our products business is outside of the U S.

For the North American market, we assemble our custom golf clubs in Mexico.

Katina methodology: Now turning to our segment performance, starting with golf equipment.

Chip Brewer: and then accelerating them further recently. as well as from the scale, brand strength and capabilities of our organization. Having said this, we'll be watching the economy and resulting demand side closer. as the risk of a further slowing of consumer activity has certainly gone up. And to be clear, my primary concern is on the demand side. And that outcome is an unknowable at this point.

But even at a 25% U S tariff the cost impact is small since it is a value added tax.

Katina methodology: With revenues and operating margins were ahead of expectations and feedback on our product remains strong.

Chip Brewer: and the assembly is not a significant expense. On the ball side, I'd expect those of us that it has scaled and full manufacturing capabilities in the US to be better positioned long term. And it is also worth mentioning that recent exchange rate movements appear to be tied to the recent tariff policy. and a weaker dollar is decidedly positive for us. as approximately 40% of our products business is outside of the U.S.

And the assembly is not a significant expense.

Katina methodology: And the driver category alone.

On the ball side I would expect those of us that are scaled and full manufacturing capabilities in the U S to be better position long term.

Katina methodology: <unk> was awarded 15 out of 15 stars on the U S Golf Digest Hot list was named today's golfers expert choice in the UK.

And it is also worth mentioning that recent exchange rate movements appear to be tied to the recent tariff policy.

Katina methodology: And our elite Triple Diamond model was named Golf's buys most wanted to driver.

Katina methodology: Turning to Q1 results our operating margins are benefiting from cost reduction and margin initiatives that we put into place over the last 12 months.

And a weaker dollar is decidedly positive for us as approximately 40% of our products business is outside of the U S.

Katina methodology: Segment op.

Now turning to our segment performance, starting with golf equipment.

Katina methodology: Opex also benefited from a lease termination incentive.

Chip Brewer: Continuing on the U.S. tariff front. Vietnam is our primary country of origin for both golf clubs and Travis Matthew Apparel. However, we also source goods from Taiwan, several other ASEAN countries. Peru, Bangladesh, and others. Fortunately, we source very little from mainland China for sale into the US. For the North American market, we assemble our custom golf clubs in Mexico. But even at a 25% U.S. tariff, the cost impact is small since it is a value added tax. and the assembly is not a significant expense.

With revenues and operating margins were ahead of expectations and feedback on our product remains strong.

Brian Lynch: Our Japan subsidiary, which Brian will give you more color on during his comments.

Speaker Change: U S rounds played were up three 8% in March but down a little year to date simply reflecting the weather and.

And the driver category alone.

<unk> was awarded 15 out of 15 stars on the U S Golf Digest Hot list was named today's golfers expert choice in the UK.

Speaker Change: And overall demand in key global markets remained good through Q1.

And our lead Triple Diamond model was named Golf's buys most wanted to driver.

Speaker Change: As expected our market shares are down a little this year, reflecting a more competitive launch cadence, but I continue to feel good about the golf equipment segment, our brand and our outlook.

Chip Brewer: Turning to Q1 results, our operating margins are benefiting from cost reduction and margin initiatives that we put into place over the last 12 months.

Turning to Q1 results our operating margins are benefiting from cost reduction and margin initiatives that we put into place over the last 12 months.

Chip Brewer: Segment Opex also benefited from a lease termination incentive in our Japan subsidiary, which Brian will give you more color on during his comments. US rounds played were up 3.8% in March, but down a little year to date, simply reflecting the weather and overall demand in key global markets remain good through Q1. As expected, our market shares are down a little this year, reflecting a more competitive launch cadence.

Speaker Change: In the active lifestyle segment, there is little new to report from an operational basis.

Segment op.

Opex also benefited from a lease termination incentive in our Japan subsidiary, which Brian will give you more color on during his comments.

Speaker Change: Based on customer feedback market conditions remained challenging in Q1 down mid to high single digits, which was a continuation of last year's trends.

Chip Brewer: On the ball side, I'd expect those of us that have a scaled and full manufacturing capabilities in the US to be better positioned long term. And it is also worth mentioning that recent exchange rate movements appear to be tied to the recent tariff policy. and a weaker dollar is decidedly positive for us. as approximately 40% of our products business is outside of the U.S.

U S rounds played were up three 8% in March but down a little year to date simply reflecting the weather and.

Speaker Change: Revenues in this segment were down in the quarter, primarily due to lower sales at Jack Wilson, Europe, which was largely anticipated and planned for.

And overall demand in key global markets remained good through Q1.

Speaker Change: Segment operating margins are up year over year, reflecting our cost reduction and margin initiatives.

As expected our market shares are down a little this year, reflecting a more competitive launch cadence, but I continue to feel good about the golf equipment segment, our brand and our outlook.

Chip Brewer: But I continue to feel good about the golf equipment segment, our brand, and our outlet.

Speaker Change: The biggest news in this segment is the agreement to sell the Jack <unk> brand later this quarter or early next and.

Chip Brewer: Now turning to our segment performance. starting with golf equipment. Both revenues and operating margins were ahead of expectations, and feedback on our product remained strong. In the driver category alone, Elite was awarded 15 out of 15 stars on the U.S. Golf Digest Hot List. was named today's golfer's expert choice in the UK, and our elite triple diamond model was named Golf Spy's Most Wanted Driver.

Chip Brewer: In the Active Lifestyles segment, there's little new to report from an operational basis. Based on customer feedback, market conditions remain challenging in Q1. Down mid to high single digit. which was a continuation of last year's trend.

Speaker Change: And I'd like to think that Jack's Wolfson team for their work, while a part of the top golf Callaway family.

In the active lifestyle segment, there is little new to report from an operational basis.

Based on customer feedback market conditions remained challenging in Q1 down mid to high single digits, which was a continuation of last year's trends.

Speaker Change: In particular, the efforts to right size and reposition the business over the last year.

Speaker Change: I think the proposed transaction is a good outcome for all involved and I wish the Jack <unk> team success going forward.

Chip Brewer: Revenues in this segment were down in the quarter, primarily due to lower sales at Jack Wolf's in Europe, which was largely anticipated and planned for. Segment operating margins are up year-over-year, reflecting our cost reduction and margin initiative.

Revenues in this segment were down in the quarter, primarily due to lower sales at Jack Wilson, Europe, which was largely anticipated and planned for <unk>.

Speaker Change: Turning to soft golf are same venue sales were down approximately 12% for the quarter within the guidance range. We provided during our last call, but towards the higher end.

Chip Brewer: Turning to Q1 results, our operating margins are benefiting from cost reduction and margin initiatives that we put into place over the last 12 months. Segment Opex also benefited from a lease termination incentive in our Japan subsidiary, which Brian will give you more color on during his comments. US rounds played were up 3.8% in March, but down a little year to date, simply reflecting the weather and overall demand in key global markets remain good through Q1. As expected, our market shares are down a little this year, reflecting a more competitive launch cadence. But I continue to feel good about the golf equipment segment, our brand, and our outlet.

Segment operating margins are up year over year, reflecting our cost reduction and margin initiatives.

Chip Brewer: The biggest news in the segment is the agreement to sell the Jack Wolfskin brand later this quarter or early next. And I'd like to thank the Jax Wolfskin team for their work while a part of the Topgolf Callaway family. In particular, the efforts to right size and reposition the business over the last year. I think the proposed transaction is a good outcome for all involved, and I wish the Jack Wilson team success going forward.

The biggest news in this segment is the agreement to sell the Jack <unk> brand later this quarter or early next.

Speaker Change: Importantly, we saw positive results from two key initiatives that started in mid March Sunday Fund day, and top golf nights.

And I'd like to think that Jack's wolfson team for their work well.

Speaker Change: Sunday Fund day was especially impactful driving more than 20% improvements in same day traffic.

Part of the top golf Callaway family.

In particular, the efforts to right size and reposition the business over the last year.

Speaker Change: Stepping back to look at the Big picture.

Speaker Change: From a positioning perspective top golf continues to enjoy an enviable consumer position.

I think the proposed transaction is a good outcome for all involved and I wish the Jack <unk> team success going forward.

Speaker Change: Both golf and experiences like top golf remain on trend with consumers.

Chip Brewer: Turning to Topgolf, our same venue sales were down approximately 12% for the quarter within the guidance range we provided during our last call, but towards the higher end. Importantly, we saw positive results from two key initiatives that started in mid-March. Sunday Funday and Topgolf Night. Sunday Funday was especially impactful, driving more than 20% improvements in same-day traffic. Stepping back to look at the big picture, from a positioning perspective, Topgolf continues to enjoy an enviable consumer position. Both golf and experiences like Topgolf remain on trend with consumers. and Topgolf appeals to a wide audience, not just golfers, but society at large, with an average income of approximately $100,000 per year.

Turning to soft golf are same venue sales were down approximately 12% for the quarter.

Speaker Change: And top golf Appeals to a wide audience, not just golfers, but society at large with an average income of approximately $100000 per year.

Within the guidance range, we provided during our last call, but towards the higher end.

Chip Brewer: In the Active Lifestyles segment, there's little new to report from an operational basis. Based on customer feedback, market conditions remain challenging in Q1, down mid to high single digit. which was a continuation of last year's trend.

Importantly, we saw positive results from two key initiatives that started in mid March Sunday Fund day, and top golf nights SUNS.

Speaker Change: Top golf also has a significant defensive moat.

Speaker Change: Hi venue returns and the demonstrated ability to drive further improvement in venue margins.

Sunday Fund day was especially impactful driving more than 20% improvements in same day traffic.

Speaker Change: And consumers continue to enjoy the experience.

Stepping back to look at the Big picture.

Speaker Change: As shown on slide 15, and using external data our funds scores remain high and consumer feedback on the experience remains definitively positive both in absolute terms and relative to our competitive set.

From a positioning perspective top golf continues to enjoy an enviable consumer position.

With golf and experiences like top golf remain on trend with consumers.

And top golf Appeals to a wide audience, not just golfers, but society at large with an average income of approximately $100000 per year.

Chip Brewer: The biggest news in the segment is the agreement to sell the Jack Wolfskin brand later this quarter or early next. And I'd like to thank the Jacks Wolfskin team for their work while a part of the Topgolf Callaway family. In particular, the efforts to right size and reposition the business over the last year.

Speaker Change: But over the last 18 months as the mid income consumers become more stretched top golf has begun to be perceived as relatively expensive.

Chip Brewer: Topgolf also has a significant defensive moat, high venue returns, and the demonstrated ability to drive further improvement in venue margins. and consumers continue to enjoy the experience. As shown on slide 15, and using external data, our fund scores remain high and consumer feedback on the experience remains definitively positive, both in absolute terms and relative to our competitive set. But over the last 18 months, as the mid-income consumer has become more stretched. Topgolf has begun to be perceived as relatively expensive. And in a slowing consumer environment, this is a significant but.

Top golf also has a significant defensive moat.

Speaker Change: And in a slowing consumer environment. This is a significant part.

Hi venue returns and the demonstrated ability to drive further improvement in venue margins.

Speaker Change: As a result to better drive long term same venue sales through economic cycles. We have made the strategic decision to reset the positioning while at the same time, continuing our efforts to drive efficiency as well as continually improving and refreshing the experience.

Chip Brewer: I think the proposed transaction is a good outcome for all involved, and I wish the Jack Wilson team success going forward.

And consumers continue to enjoy the experience.

As shown on slide 15, and using external data our funds scores remain high and consumer feedback on the experience remains definitively positive.

Chip Brewer: Turning to Topgolf, our same venue sales were down approximately 12% for the quarter within the guidance range we provided during our last call, but towards the higher end.

Speaker Change: Although we will remain a premium brand and experience we have done extensive analysis and have a definitive plan to change our value perception and to do so while protecting and growing long term profitability.

Both in absolute terms and relative to our competitive set.

Chip Brewer: Importantly, we saw positive results from two key initiatives that started in mid-March. Sunday Funday and Topgolf Night. Sunday Funday was especially impactful, driving more than 20% improvements in same-day traffic. Stepping back to look at the big picture from a positioning perspective, Topgolf continues to enjoy an enviable consumer position. Both golf and experiences like Topgolf remain on trend with consumers. and Topgolf appeals to a wide audience, not just golfers, but society at large, with an average income of approximately $100,000 per year. Topgolf also has a significant defensive moat, high venue returns, and the demonstrated ability to drive further improvement in venue margins.

But over the last 18 months as the middle income consumers become more stretched top golf has begun to be perceived as relatively expensive.

Speaker Change: Sunday Fund day in top golf nights are two excellent examples of key initiatives towards this end.

And in a slowing consumer environment. This is a significant bot.

Chip Brewer: As a result, to better drive long-term same-venue sales through economic cycles, we have made the strategic decision to reset the positioning, while at the same time continuing our efforts to drive efficiency, as well as continually improving and refreshing the experience. Although we will remain a premium brand and experience. We have done extensive analysis and have a definitive plan to change our value perception. and to do so while protecting and growing long term profitability. Sunday Funday and Topgolf nights are two excellent examples of key initiatives towards this end. and Artie will share others with you as well.

Speaker Change: And <unk> will share others with you as well.

As a result to better drive long term same venue sales through economic cycles. We have made the strategic decision to reset the positioning while at the same time, continuing our efforts to drive efficiency as well as continually improving and refreshing the experience.

Speaker Change: Let me be clear.

Speaker Change: We view this as a big change with significant upside one that will be particularly important as top golf transitions to a separate independent company.

Speaker Change: As we change the consumers value perception on top golf.

Although we will remain a premium brand and experience we have done extensive analysis and have a definitive plan to change our value perception and to do so while protecting and growing long term profitability.

Speaker Change: We will open ourselves up for both more new and repeat customers throughout inevitable economic cycles.

Speaker Change: We can and we will do this while also driving an improved experience and long term margin growth.

Sunday Fund day in top golf nights are two excellent examples of key initiatives towards this end.

Speaker Change: With these new initiatives, we expect to see meaningful and nearly immediate progress on traffic.

Chip Brewer: and consumers continue to enjoy the experience. As shown on slide 15, and using external data, our fund scores remain high and consumer feedback on the experience remains definitively positive, both in absolute terms and relative to our competitive set. But over the last 18 months, as the mid-income consumer has become more stretched. Topgolf has begun to be perceived as relatively expensive. And in a slowing consumer environment, this is a significant but.

And already will share others with you as well.

Chip Brewer: Let me be clear. We view this as a big change with significant upside, one that will be particularly important as Topgolf transitions to a separate independent company. As we change the consumer's value perception on Topgolf, we will open ourselves up for both more new and repeat customers throughout inevitable economic cycles. We can and we will do this while also driving an improved experience and long-term margin growth. With these new initiatives, we expect to see meaningful and nearly immediate progress on track. And we have. They will have a positive but lesser impact on same venue sales, as part of the traffic growth will be offset by a higher mix of value oriented daytime price.

Speaker Change: And we have.

Let me be clear.

Speaker Change: They will have a positive but lesser impact on same venue sales as part of the traffic growth will be offset by a higher mix of value oriented daytime pricing.

We view this as a big change with significant upside one that will be particularly important as top golf transitions to a separate independent company.

As we change the consumers value perception on top golf.

Speaker Change: In the near term these initiatives will temporarily pressure venue margins.

We will open ourselves up for both more new and repeat customers throughout inevitable economic cycles.

Speaker Change: Fortunately, we believe we can offset most of this impact in the short to mid term and are maintaining our full year EBITDA guidance for top golf.

We can and we will do this while also driving an improved experience and long term margin growth.

Speaker Change: Long term, we continue to see upside in venue level margins.

With these new initiatives, we expect to see meaningful and nearly immediate progress on traffic.

Speaker Change: Already we will give you more color on all of this including more specificity on the initiatives during his comments.

And we have.

Speaker Change: Turning to top golfs balance of the year same venue sales and revenue guidance given.

They will have a positive but lesser impact on the same venue sales as part of the traffic growth will be offset by a higher mix of value oriented daytime pricing.

Speaker Change: Given the slow start to the year and economic uncertainty.

Speaker Change: We're revising the revenue in the same menu sales guidance to down 6% to 12%.

Chip Brewer: In the near term, these initiatives will temporarily pressure venue margins. Fortunately, we believe we can offset most of this impact in the short to midterm and are maintaining our full-year EBITDA guidance for Topgolf. Long term, we continue to see upside in venue level margins.

In the near term these initiatives will temporarily pressure venue margins.

Speaker Change: For Q2, specifically, we expect a similar range of down 7% to down 12%.

Fortunately, we believe we can offset most of this impact in the short to midterm and are maintaining our full year EBITDA guidance for top golf.

Speaker Change: Now switching to the top golf process.

Speaker Change: We remain 100% committed and active in the process. We are still evaluating both the spin and the sale and we continue to work towards a solution in the second half of this year.

Long term, we continue to see upside in venue level margins.

Chip Brewer: and Artie will share others with you as well.

Chip Brewer: Artie will give you more color on all of this, including more specificity on the initiatives during his comments.

Chip Brewer: Let me be clear. We view this as a big change with significant upside, one that will be particularly important as Topgolf transitions to a separate independent company. As we change the consumer's value perception on Topgolf, we will open ourselves up for both more new and repeat customers throughout inevitable economic cycles. We can and we will do this while also driving an improved experience and long-term margin growth. With these new initiatives, we expect to see meaningful and nearly immediate progress on track. And we have. They will have a positive but lesser impact on the same venue sales as part of the traffic growth will be offset by a higher mix of value oriented daytime price.

Speaker Change: <unk> will give you more color on all of this including more specificity on the initiatives during his comments.

However, a lot has changed since we initially announced our intention to separate last September.

Chip Brewer: Turning the Topgolf Balance of the Year, Same Venue Sales and Revenue Guidance. Given the slow start to the year and economic uncertainty, we are revising the revenue and same-venue sales guidance to down 6 to 12 percent. For Q2 specifically, we expect a similar range of down 7% to down 12%.

Speaker Change: Turning to top golfs balance of the year same venue sales and revenue guidance given.

Speaker Change: As a result, if we spin to avoid remain co having too higher leverage the capital structure. We are now planning for top golf will be different than what we previously communicated.

Speaker Change: Given the slow start to the year and economic uncertainty.

Speaker Change: We're revising the revenue in the same venue sales guidance to down 6% to 12%.

Speaker Change: For Q2, specifically, we expect a similar range of down 7% to down 12%.

Speaker Change: Having said this in the spin scenario, we remain 100% committed to positioning both remain co and top golf in strong financial positions with manageable leverage ratios and promising futures.

Speaker Change: Now switching to the top golf process.

Speaker Change: We remain 100% committed and active in the process. We are still evaluating both the spin and the sale and we continue to work towards a solution in the second half of this year.

Speaker Change: Brian will give more color on this during his comments.

Speaker Change: Finally, turning to our full year total company guidance, thanks to our strong first quarter confidence in our operating abilities and some help on the revenue side the foreign exchange.

Chip Brewer: However, a lot has changed since we initially announced our intention to separate last September. As a result, if we spin to avoid RemainCo having too high a leverage, the capital structure we are now planning for Topgolf will be different than what we previously communicated. Having said this, in the spin scenario, we remain 100% committed to positioning both RemainCo and Topgolf in strong financial positions.

Speaker Change: However, a lot has changed since we initially announced our intention to separate last September.

As a result, if we spin to avoid remain co having too higher leverage the capital structure. We are now planning for top golf will be different than what we previously communicated.

Speaker Change: We are pleased to be able to hold our financial guidance other than the impact of the now planned sale of Jack Wolfe skin.

Speaker Change: This guidance assumes the impact of current tariffs net of actions.

Speaker Change: Having said this in the spin scenario, we remain a 100% committed to positioning both remain co and top golf in strong financial positions with manageable leverage ratios and promising futures.

Speaker Change: The guidance does not assume further tariff escalation or an economic recession.

Chip Brewer: Long term, we continue to see upside in venue level margins.

Chip Brewer: Artie will give you more color on all of this, including more specificity on the initiatives during his comments.

Chip Brewer: Manageable Leverage Ratios and Promising Futures.

Speaker Change: This is clearly going to be an interesting year, but based on what we know at present, we remain well positioned to hit our full year numbers built.

Brian Lynch: Brian will give more color on this during his comments.

Speaker Change: Ryan will give more color on this during his comments.

Chip Brewer: Finally, turning to our full year total company guidance. Thanks to our strong first quarter, confidence in our operating abilities, and some help on the revenue side via foreign exchange. We are pleased to be able to hold our financial guidance other than the impact of the now planned sale of Jack Wilson. This guidance assumes the impact of current tariffs net of action. The guidance does not assume further tariff escalation or an economic recession. This is clearly going to be an interesting year. But based on what we know at present, we remain well positioned to hit our full year number.

Speaker Change: Build on our core strengths and unlocked value via our strategic processes.

Speaker Change: We remain excited and optimistic.

RD: Rd over to you for more in depth view of top golf and then to Brian for CFO comments.

Speaker Change: We are pleased to be able to hold our financial guidance other than the impact of the now planned sale of Jack Welch skin.

Speaker Change: Thanks Chip.

Speaker Change: I'd like to share our performance for each of our key focus areas along with what to expect for Q2 2025 and balance of year, starting with same venue sales.

Speaker Change: This guidance assumes the impact of current tariffs net of actions.

Chip Brewer: Now switching to the Topgolf Process. We remain 100% committed and active in the process. We are still evaluating both a spin and a sail, and we continue to work towards a solution in the second half of this year.

Speaker Change: The guidance does not assume further tariff escalation or an economic recession.

Speaker Change: As chip mentioned top Golfs Q1, same venue sales were down 12% and in line with our guidance.

Speaker Change: This is clearly going to be an interesting year, but based on what we know at present, we remain well positioned to hit our full year numbers built.

Speaker Change: Postpaid corporate events were down 13% and the one to two bay business was down 12%.

Chip Brewer: build on our core strengths and unlock value via our strategic process.

Speaker Change: Build on our core strengths and unlocked value via our strategic processes.

Speaker Change: One to two day traffic was down 8% and average spend per visit was down 4%.

Chip Brewer: We remain excited and optimistic.

Speaker Change: We remain excited and optimistic.

Speaker Change: And while same venue sales were challenged in Q1, we have made substantial progress in the focus areas more compelling and accessible value new and relevant experiences for our players and a streamlined corporate structure.

Arthur Starrs: Artie, over to you for a more in-depth view of Topgolf, and then to Brian for CFO comments. Thanks, Chip. I'd like to share our performance for each of our key focus areas along with what to expect for Q2 2025 and balance of year starting with same venue sales. As Chip mentioned, Topgolf's Q1 same-venue sales were down 12% and in line with our guidance. 3 Plus Bay corporate events were down 13% and the 1 to 2 Bay business was down 12%. One to two bay traffic was down 8% and average spend per visit was down 4%.

Speaker Change: Already over to you for more in depth view of top golf and then to Brian for CFO comments.

Brian: Thanks Chip.

Chip: I'd like to share our performance for each of our key focus areas along with what to expect for Q2 2025 and balance of year, starting with same venue sales.

Speaker Change: Our number one priority is to drive traffic growth and improve value perception, which.

Chip Brewer: Manageable Leverage Ratios and Promising Futures.

Speaker Change: Which we believe is key as we navigate the current environment and for the long term health of the brand.

Chip: As chip mentioned top Golfs Q1 same venue sales were down 12% in line with our guidance.

Brian Lynch: Brian will give more color on this during his comments.

Speaker Change: Overall traffic in the second quarter through April is approximately flat year over year with one to two day traffic up low single digits.

Chip Brewer: Finally, turning to our full year total company guidance. Thanks to our strong first quarter, confidence in our operating abilities, and some help on the revenue side via foreign exchange. We are pleased to be able to hold our financial guidance other than the impact of the now planned sale of Jack Wolfson. This guidance assumes the impact of current tariffs net of action. The guidance does not assume further tariff escalation or an economic recession. This is clearly going to be an interesting year. But based on what we know at present, we remain well positioned to hit our full year number.

Chip: <unk> Bay corporate events were down 13% and the 1% to two bay business was down 12%.

Chip: One to two bay traffic was down 8% and average spend per visit was down 4%.

Speaker Change: We can directly attribute this to specific new offers and meaningful improvement in our price value consumer metrics.

Arthur Starrs: And while same venue sales were challenged in Q1, we have made substantial progress in the focus areas. More compelling and accessible value, new and relevant experiences for our players, and a streamlined corporate structure. Our number one priority is to drive traffic growth and improve value perception, which we believe is key as we navigate the current environment and for the long term health of the brand. Overall traffic in the second quarter through April is approximately flat year over year, with one to two bay traffic up low single digit. We can directly attribute this to specific new offers and meaningful improvement in our price value consumer metric.

Chip: And while same venue sales were challenged in Q1, we have made substantial progress in the focus areas more compelling and accessible value new and relevant experiences for our players and our streamlined corporate structure.

Speaker Change: I will cover in more detail the specific initiatives driving these results, but first I'd like to comment on the consumer and our events business.

Speaker Change: As we enter Q2 on the macro front, we are clearly seeing a price sensitive consumer.

Chip: Our number one priority is to drive traffic growth and improve value perception, which.

Speaker Change: While traffic was positive in April same venue sales were down approximately 10% with three plus paid down 17% and one to two bay down 8%.

Which we believe is key as we navigate the current environment and for the long term health of the brand.

Chip: Overall traffic in the second quarter through April is approximately flat year over year with one to two day traffic up low single digits.

Chip Brewer: build on our core strengths and unlock value via our strategic processes. We remain excited and optimistic.

Speaker Change: We continue to see players manage their spend which we are addressing with targeted food and beverage offerings, which cater to group's social occasions.

Chip: We can directly attribute this to specific new offers and meaningful improvement in our price value consumer metrics.

Speaker Change: In addition, our events business is pressured as corporate spending on team outings and entertainment has reduced.

Artie Starrs: Artie, over to you for a more in-depth view of Topgolf, and then to Brian for CFO comments. Thanks, Chip. I'd like to share our performance for each of our key focus areas along with what to expect for Q2 2025 and balance of year starting with same venue sales. As Chip mentioned, Topgolf's Q1 same-venue sales were down 12% and in line with our guidance. Three plus Bay corporate events were down 13% and the one to two Bay business was down 12%. One to two bay traffic was down 8% and average spend per visit was down 4%.

Arthur Starrs: I'll cover in more detail the specific initiatives driving these results, but first I'd like to comment on the consumer and our events business. As we enter Q2 on the macro fund, we are clearly seeing a price sensitive consumer. While traffic was positive in April, same-venue sales were down approximately 10%, with 3 plus bay down 17%, and 1 to 2 bay down 8%. We continue to see players manage their spend, which we are addressing with targeted food and beverage offerings, which cater to group social occasions. In addition, our events business is pressured as corporate spending on team outings and entertainment has reduced.

Speaker Change: It's clear that our corporate events business is going to be challenged in the near term and we have modified our operating structure accordingly.

Chip: I will cover in more detail the specific initiatives driving these results, but first I'd like to comment on the consumer and our events business.

Speaker Change: Lead volumes are down significantly, but we are providing more flexibility on rate and time for event planners, which has led to increased conversion rates.

Chip: As we enter Q2 on the macro front, we are clearly seeing a price sensitive consumer.

Chip: While traffic was positive in April same venue sales were down approximately 10% with three plus paid down 17% and 1% to two bay down 8%.

Speaker Change: This softer outlook for our three postpaid business as contemplated in our revised 2025 same venue sales guidance.

Speaker Change: A bright spot as an increase in youth events, where our team has done a fantastic job of marketing to use organizations.

Chip: We continue to see players manage their spend which we are addressing with targeted food and beverage offerings, which cater to group's social occasions.

Speaker Change: These events provide great brand exposure to our core audience.

Artie Starrs: And while same venue sales were challenged in Q1, we have made substantial progress in the focus areas. More compelling and accessible value, new and relevant experiences for our players, and a streamlined corporate structure. Our number one priority is to drive traffic growth and improve value perception, which we believe is key as we navigate the current environment and for the long term health of the brand. Overall traffic in the second quarter through April is approximately flat year over year, with one to two bay traffic up low single digit. We can directly attribute this to specific new offers and meaningful improvement in our price value consumer metric.

Speaker Change: Overall top golf events remain in outstanding and differentiated offering we are confident in our competitive position.

Chip: In addition, our events business is pressured as corporate spending on team outings and entertainment has reduced.

Arthur Starrs: It's clear that our corporate events business is going to be challenged in the near term. And we have modified our operating structure accordingly. Lead volumes are down significantly, but we are providing more flexibility on rate and time for event planners, which has led to increased conversion rates. This softer outlook for our three plus pay business is contemplated in our revised 2025 Same Venue Sales Guide. A bright spot is an increase in youth events where our team has done a fantastic job of marketing to youth organizations. These events provide great brand exposure to a core audience.

Chip: It is clear that our corporate events business is going to be challenged in the near term and we have modified our operating structure accordingly.

Speaker Change: As I mentioned, one to two day traffic through April has improved significantly average spend per visit was down high single digits, driven roughly equally by the removal of booking fees, which we believe is absolutely the right thing to do for the consumer as well as the increased mix of our value offers and low lower alcohol attachment.

Chip: Lead volumes are down significantly, but we are providing more flexibility on rate and time for event planners, which has led to increased conversion rates.

Chip: This softer outlook for our three postpaid business as contemplated in our revised 2025 same venue sales guidance.

Rates.

Speaker Change: I am, particularly excited about the player response and brand impact of two key new initiatives, which chip mentioned earlier.

A bright spot as an increase in youth events, where our team has done a fantastic job of marketing to use organizations. These events provide great brand exposure to our core audience.

Speaker Change: Sunday Fund day in top golf nights.

Speaker Change: Sunday funded promotes an appealing family oriented message has outperformed the balance of the portfolio by low single digits on weekly sales year over year and high single digits on traffic.

Arthur Starrs: Overall, Topgolf events remain an outstanding and differentiated offering. We are confident in our competitive position. As I mentioned, one to two day traffic through April has improved significantly. Average spend per visit is down high single digits, driven roughly equally by the removal of booking fees, which we believe is absolutely the right thing to do for the consumer, as well as the increased mix of our value offers and lower alcohol attachment. I'm particularly excited about the player response and brand impact of two key new initiatives, which Chip mentioned earlier, Sunday Funday and Topgolf Night. Sunday Funday promotes an appealing family-oriented message and has outperformed the balance of the portfolio by low single digits on weekly sales year over year and high single digits on traffic.

Chip: Overall top golf events remain in outstanding and differentiated offering we are confident in our competitive position.

Artie Starrs: I'll cover in more detail the specific initiatives driving these results, but first I'd like to comment on the consumer and our events business. As we enter Q2 on the macro fund, we are clearly seeing a price sensitive consumer. While traffic was positive in April, same venue sales were down approximately 10% with 3 plus bay down 17% and 1 to 2 bay down 8%. We continue to see players manage their spend, which we are addressing with targeted food and beverage offerings, which cater to group social occasions. In addition, our events business is pressured as corporate spending on team outings and entertainment has reduced.

Chip: As I mentioned, one to two day traffic through April has improved significantly.

Speaker Change: We have rolled this offer out to 80% of our venues.

Chip: Average spend per visit was down high single digits, driven roughly equally by the removal of booking fees, which we believe is absolutely the right thing to do for the consumer as well as the increased mix of our value offers and low lower alcohol attachment rates.

Speaker Change: <unk> is having a smaller but still positive impact on sales and traffic and is focused on appealing to the younger late night portion of our audience driving late night utilization and adding energy and fund and the hours following peak Friday and Saturday evenings.

Chip: I am, particularly excited about the player response and brand impact of two key new initiatives, which chip mentioned earlier.

Speaker Change: Our venue teams are doing an extraordinary job executing on these offerings with fund scores continuing to improve year over year.

Chip: Sunday Fund day in top golf nights.

Speaker Change: Leveraging the learnings from Sunday funding and half price Tuesday in April we began testing expanded value offerings from Monday through Thursday.

Chip: Sunday funded promotes an appealing family oriented message has outperformed the balance of the portfolio by low single digits on weekly sales year over year and high single digits on traffic.

Artie Starrs: It's clear that our corporate events business is going to be challenged in the near term. And we have modified our operating structure accordingly. Lead volumes are down significantly, but we are providing more flexibility on rate and time for event planners, which has led to increased conversion rates. This softer outlook for our three plus pay business is contemplated in our revised 2025 Same Venue Sales Guide.

Speaker Change: Currently we are in 40 venues and while early we are encouraged with the results and promising sales and traffic readings to date.

Arthur Starrs: We have rolled this offer out to 80% of our venues. Topgolf Nights is having a smaller but still positive impact on sales and traffic, and is focused on appealing to the younger late-night portion of our audience, driving late-night utilization and adding energy and fun in the hours following peak Friday and Saturday evenings. Our venue teams are doing an extraordinary job executing on these offerings, with fund scores continuing to improve year over year. Leveraging the learnings from Sunday Funday and Half Price Tuesday, in April, we began testing expanded value offerings from Monday through Thursday. Currently, we are in 40 venues, and while early, we are encouraged with the results and promising sales and traffic readings to date.

Chip: We have rolled this offer out to 80% of our venues.

Chip: <unk> is having a smaller but still positive impact on sales and traffic and is focused on appealing to the younger late night portion of our audience driving late night utilization and adding energy and fund and the hours following peak Friday and Saturday evenings.

Speaker Change: With this increased traffic we've added a funding themes appetizer optimized for groups of four or more in.

Speaker Change: In addition, with more walk in players, we're making sure the top golf is providing a great experience not only in the base, but also at our bar areas with new five dollar drops in $6 Margarita is available in most markets.

Artie Starrs: A bright spot is an increase in youth events where our team has done a fantastic job of marketing to youth organizations. These events provide great brand exposure to a core audience.

Chip: Our vending teams are doing an extraordinary job of executing on these offerings with fund scores continuing to improve year over year.

Artie Starrs: Overall, Topgolf events remain an outstanding and differentiated offering, and we are confident in our competitive position. As I mentioned, one- to two-day traffic through April has improved significantly. Average spend per visit is down high single digits, driven roughly equally by the removal of booking fees, which we believe is absolutely the right thing to do for the consumer, as well as the increased mix of our value offers and lower alcohol attachment.

Speaker Change: Early results are very encouraging and average spend per visit and overall attachment.

Chip: Leveraging the learnings from Sunday funding and half price Tuesday in April we began testing expanded value offerings for Monday through Thursday.

Speaker Change: These investments in expanded value alongside the softness in three plus pay events will impact our venue margins in the near term.

Speaker Change: As a result, we are updating our outlook for EBITDAR margin and now expect an approximate 100 to 200 basis point decline year over year to approximately 32%.

Chip: Currently we are in 40 venues and while early we are encouraged with the results and promising sales and traffic readings to date.

Arthur Starrs: With this increased traffic, we've added a Funday Faves appetizer optimized for groups of four or more. In addition, with more walk-in players, we're making sure that Topgolf is providing a great experience not only in the bays, but also at our bar areas with new $5 drafts and $6 margaritas available in most markets. The early results are very encouraging in average spend per visit and overall attachment. These investments and expanded value alongside the softness and 3 plus Bay events will impact our venue margins in the near term. As a result, we are updating our outlook for EBITDAR margin and now expect an approximate 100 to 200 basis point decline year over year to approximately 32%.

Chip: With this increased traffic we've added a funding themes appetizer optimized for groups of four more in.

Speaker Change: However, we are holding our full year adjusted EBITDA guidance as we are managing our corporate expenses to help support these investments.

Artie Starrs: I'm particularly excited about the player response and brand impact of two key new initiatives, which Chip mentioned earlier, Sunday Funday and Topgolf Night. Sunday Funday promotes an appealing family-oriented message and has outperformed the balance of the portfolio by low single digits on weekly sales year over year and high single digits on traffic. We have rolled this offer out to 80% of our venues. Topgolf Nights is having a smaller but still positive impact on sales and traffic and is focused on appealing to the younger late-night portion of our audience, driving late-night utilization and adding energy and fun in the hours following peak Friday and Saturday evenings.

Chip: In addition, with more walk in players, we're making sure the top golf is providing a great experience not only in the base, but also at our bar areas with new $5 dropped from $6 Margarita is available in most markets.

Speaker Change: We will see significant long term margin opportunity for our venues and have proven our ability to grow these margins.

Speaker Change: This year, we continue to test optimize and rollout changes to our labor model, which will drive efficiencies and position venues to grow EBITDAR over the long term.

Chip: Early results are very encouraging and average spend per visit and overall attachment.

Chip: These investments in expanded value alongside the softness in three plus day events will impact our venue margins in the near term.

Speaker Change: We are choosing to invest in these traffic and brand driving initiatives, while still ensuring we provide a great player experience, we are well known for.

Chip: As a result, we are updating our outlook for EBITDAR margin and now expect an approximate 100 to 200 basis point decline year over year to approximately 32%.

Speaker Change: Alongside these offers we've continued to make enhancements to the experience. In addition to our 120 minute reservation, we've now rolled out 90% and 60 minute reservations to drive utilization and meet players' needs.

Arthur Starrs: However, we are holding our full year adjusted EBITDA guidance as we are managing our corporate expenses to help support these investments. We will see significant long term margin opportunity for our venues and have proven our ability to grow these This year, we continue to test, optimize, and roll out changes to our labor model, which will drive efficiencies and position venues to grow EVADAR over the long term. We are choosing to invest in these traffic and brand driving initiatives while still ensuring we provide the great player experience we are well known for. Alongside these offers, we've continued to make enhancements to the experience.

Chip: However, we are holding our full year adjusted EBITDA guidance as we are managing our corporate expenses to help support these investments.

Artie Starrs: Our venue teams are doing an extraordinary job executing on these offerings, with fund scores continuing to improve year over year.

Speaker Change: We're able to flex the inventory of these shorter reservation times for peak demand periods.

Chip: We will see significant long term margin opportunity for our venues and have proven our ability to grow these margins.

Speaker Change: This does three things that are wins for our players and our business.

Artie Starrs: Leveraging the learnings from Sunday Funday and Half Price Tuesday, in April, we began testing expanded value offerings from Monday through Thursday. Currently, we are in 40 venues, and while early, we are encouraged with the results and promising sales and traffic readings to date. With this increased traffic, we've added a Funday Faves appetizer, optimized for groups of four or more. In addition, with more walk-in players, we're making sure that Topgolf is providing a great experience not only in the base, but also at our bar areas with new $5 drafts and $6 margaritas available in most markets.

Chip: This year, we continue to test optimize and rollout changes to our labor model, which will drive efficiencies and position venues to grow EBITDAR over the long term.

Speaker Change: One meets a shorter timeframe need for some groups number two expands the inventory we have in a day and creates the opportunity for an extra turn of ebay and.

Chip: We are choosing to invest in these traffic and brand driving initiatives, while still ensuring we provide the great player experience, we are well known for.

Speaker Change: And number three optimizes F&B spend per visit.

Speaker Change: Approximately a third of our players are already selecting 90 minute reservations.

Chip: Alongside these offers we've continued to make enhancements to the experience. In addition to our 120 minute reservation, we've now rolled out 90% and 60 minute reservations to drive utilization and meet players' needs.

Speaker Change: Given the success of our 90 minute reservation. We've also rolled out 60 minute reservations targeting late night occasions and are encouraged by the early player response.

Arthur Starrs: In addition to our 120-minute reservation, we've now rolled out 90- and 60-minute reservations to drive utilization and meet players' needs. We're able to flex the inventory of these shorter reservation times for peak demand periods. This does three things that are wins for our players and our business. Number one, meets a shorter timeframe need for some groups. Number two, expands the inventory we have in a day and creates the opportunity for an extra turn of a bay. And number three, optimizes F&B spend per visit. Approximately a third of our players are already selecting 90 minute reservations.

Speaker Change: It meets a post dinner need for a group made up for the private suite like top golf experience within our base is unique and fun.

Chip: We're able to flex the inventory of these shorter reservation times for peak demand periods.

Artie Starrs: The early results are very encouraging in average spend per visit and overall attachment.

Chip: This does three things that are wins for our players and our business.

Speaker Change: To further enhance the player and playmaker experience, we've begun our rollout of the toast point of sale system.

Artie Starrs: These investments and expanded value alongside the softness and three plus bay events will impact our venue margins in the near term. As a result, we are updating our outlook for EBITDAR margin and now expect an approximate 100 to 200 basis point decline year over year to approximately 32%. However, we are holding our full year adjusted EBITDA guidance as we are managing our corporate expenses to help support these investments.

Chip: One meets a shorter timeframe need for some groups number two expand the inventory we have in a day and creates the opportunity for an extra turn of ebay and.

Speaker Change: We're in three markets, so far and on track to have approximately half of our venues on toast by year end.

Speaker Change: Toast will allow our bay hosted service more base accelerate speed of service and overtime provide comprehensive mobile order and pay capability.

Chip: And number three optimizes F&B spend per visit.

Chip: Approximately a third of our players are already selecting 90 minute reservations.

Speaker Change: Early signs from our team's indicate significant enthusiasm for ease of training and improved service times. We are very excited about the long term impact this will have on the business.

Arthur Starrs: Given the success of our 90-minute reservation, we've also rolled out 60-minute reservations targeting late-night occasions and are encouraged by the early player response. It meets a post-dinner need for a group meetup where the private suite-like Topgolf experience within our bays is unique and fun. To further enhance the player and playmaker experience, we've begun our rollout of the Toast Point of Sale system. We're in three markets so far and on track to have approximately half of our venues on toast by year end. Toast will allow our bay hosts to service more bays, accelerate speed of service, and over time provide comprehensive mobile order and pay capability.

Chip: Given the success of our 90 minute reservation. We've also rolled out 60 minute reservations targeting late night occasions and are encouraged by the early player response.

Artie Starrs: We will see significant long-term margin opportunity for our venues and have proven our ability to grow these.

Speaker Change: This summer we have exciting marketing experience plans beyond the value offering expansion I've detailed.

Chip: It meets a post dinner need for a group made up for the private suite like top golf experience within our base is unique and fun.

Artie Starrs: This year, we continue to test, optimize, and roll out changes to our labor model, which will drive efficiencies and position venues to grow EVADAR over the long term. We are choosing to invest in these traffic and brand driving initiatives while still ensuring we provide the great player experience we are well known for.

Speaker Change: We're rolling out two new games, which will target social groups and competitive sports fans. We've also launched a summer fund pass outstanding family oriented value that addresses our players' needs in a moment.

Chip: To further enhance the player and playmaker experience, we've begun our rollout of the <unk> point of sale system.

Chip: We're in three markets, so far and on track to have approximately half of our venues on toast by year end.

Speaker Change: What sets top golf apart is that we enjoy best in class brand regard and player experience metrics holding the number one spot for fun and atmosphere.

Chip: Toast will allow our bay hosted service more base accelerate speed of service and overtime provide comprehensive mobile order and pay capability.

Artie Starrs: Alongside these offers, we've continued to make enhancements to the experience. In addition to our 120-minute reservation, we've now rolled out 90- and 60-minute reservations to drive utilization and meet players' needs. We're able to flex the inventory of these shorter reservation times for peak demand periods.

Speaker Change: As we reset the brand positioning on value, we will appeal to both new and repeat consumers. Thus.

Arthur Starrs: Early signs from our teams indicate significant enthusiasm for ease of training and improved service times. We are very excited about the long term impact this will have on the business. This summer, we have exciting marketing experience plans beyond the value offering expansion I've detailed. We're rolling out two new games which will target social groups and competitive sports fans. We've also launched a Summer Fun Pass, outstanding family-oriented value that addresses our players' needs in the moment. What sets Topgolf apart is that we enjoy best in class brand regard and player experience metrics, holding the number one spot for fun and atmosphere.

Chip: Early signs from our team's indicate significant enthusiasm for ease of training and improved service times. We are very excited about the long term impact this will have on the business.

Speaker Change: Thus setting up better same venue sales through this economic cycle.

Speaker Change: In closing I'm very enthusiastic about the success of our new initiatives.

Chip: This summer we have exciting marketing experience plans beyond the value offering expansion I have detailed.

Artie Starrs: This does three things that are wins for our players and our business. Number one, meets a shorter time frame need for some groups. Number two, expands the inventory we have in a day and creates the opportunity for an extra turn of a bay. And number three, optimizes F&B spend per visit. Approximately a third of our players are already selecting 90-minute reservations. Given the success of our 90-minute reservation, we've also rolled out 60-minute reservations targeting late-night occasions and are encouraged by the early player response. It meets a post-dinner need for a group meetup where the private suite-like Topgolf experience within our bays is unique and fun.

Speaker Change: We're already having in the exciting launches we have for the summer and the fall.

Chip: We're rolling out two new games, which will target social groups and competitive sports fans. We've also launched a summer fund pass outstanding family oriented value that addresses our players' needs in a moment.

Speaker Change: I believe this has the potential to be an incredibly important inflection point for top golf and set the brand for a successful future as an independent company.

Brian Lynch: Thank you and over to you Brian.

Chip: What sets top golf apart is that we enjoy best in class brand regard and player experience metrics holding the number one spot for fun and atmosphere.

Brian Lynch: Thank you Aarti and good afternoon, everyone.

Brian Lynch: Jumping into our Q1 results consolidated revenues of 1.09 billion.

Arthur Starrs: As we reset the brand positioning on value, we will appeal to both new and repeat consumers, thus setting up better same-venue sales through this economic cycle. In closing, I'm very enthusiastic about the success of our new initiatives. are already having and the exciting launches we have for the summer and the fall. I believe this has the potential to be an incredibly important inflection point for Topgolf and set the brand for a successful future as an independent company.

Chip: As we reset the brand positioning on value, we will appeal to both new and repeat consumers. Thus.

Brian Lynch: Decreased 5% year over year.

Brian Lynch: This result was better than expected and was primarily due to the decrease in top golf same venue sales the.

Chip: Thus setting up better same venue sales through this economic cycle.

Brian Lynch: The right sizing of the Jack <unk> business.

Chip: In closing I'm very enthusiastic about the success of our new initiatives.

Brian Lynch: An unfavorable foreign currency rates.

Artie Starrs: To further enhance the player and playmaker experience, we've begun our rollout of the Toast point of sale system. We're in three markets so far and on track to have approximately half of our venues on toast by year end. Toast will allow our bay hosts to service more bays, accelerate speed of service, and over time provide comprehensive mobile order and pay capability. Early signs from our teams indicate significant enthusiasm for ease of training and improved service times. We are very excited about the long-term impact this will have on the business.

Chip: We're already having in the exciting launches we have for the summer and the fall.

Brian Lynch: Q1, adjusted EBITDA of $167 million increased four.

Chip: I believe this has the potential to be an incredibly important inflection point for top golf and set the brand for a successful future as an independent company.

Brian Lynch: <unk>, 4%, primarily due to increased profitability in the golf equipment and active lifestyle segments.

The majority of this improvement was driven by an improved gross margins and Opex reductions.

Brian Lynch: Thank you, and over to you, Brian.

Brian: Thank you and over to you Brian.

Brian Lynch: Thank you, Artie, and good afternoon, everyone. Jumping into our Q1 results, consolidated revenues of $1.09 billion decreased 5% year-over-year. This result was better than expected and was primarily due to the decrease in Topgolf same menu sales, the right sizing of the Jack Wolfskin business.

Brian: Thank you Aarti and good afternoon, everyone.

Brian Lynch: The segment also benefited from our planned $12 million incentive to terminate early our leaf for our Japan headquarters.

Brian: Jumping into our Q1 results consolidated revenues of $1.09 billion.

Brian: Decreased 5% year over year.

Brian Lynch: Approximately two thirds of the incentive impacted the golf equipment segment, and one third affected the active lifestyle segment.

Brian: This result was better than expected and was primarily due to the decrease in top golf same venue sales the.

Artie Starrs: This summer, we have exciting marketing experience plans beyond the value offering expansion I've detailed. We're rolling out two new games, which will target social groups and competitive sports fans. We've also launched a Summer Fun Pass, outstanding family-oriented value that addresses our players' needs in the moment.

Brian: The right sizing of the Jack <unk> business.

Brian Lynch: Both segments will incur some incremental expense in subsequent quarters for the relocation of the Japan headquarters.

Brian Lynch: and Unfavorable Foreign Currency Rates. Q1 Adjusted EBITDA of $167 million increased 4% primarily due to increased profitability in the golf equipment and active lifestyle segment. The majority of this improvement was driven by improved gross margins and OPEX reduction. The segment's also benefited from a planned $12 million incentive to terminate early our lease for our Japan headquarters. Approximately two-thirds of the incentive impacted the golf equipment segment, and one-third affected the active lifestyle segment.

Brian: An unfavorable foreign currency rates.

Brian: Q1, adjusted EBITDA of $167 million increased 4%, primarily due to increased profitability in the golf equipment and active lifestyle segments.

Brian Lynch: Moving to segment performance.

Brian Lynch: At top golf Q1 revenue decreased 7% year over year due to the decline in same venue sales and the sale of the World Golf Tour business in December 2024.

Artie Starrs: What sets Topgolf apart is that we enjoy best-in-class brand regard and player experience metrics, holding the number one spot for fun and atmosphere. As we reset the brand positioning on value, we will appeal to both new and repeat consumers, thus setting up better same-venue sales through this economic cycle. In closing, I'm very enthusiastic about the success of our new initiatives. are already having and the exciting launches we have for the summer and the fall.

Brian: The majority of this improvement was driven by an improved gross margins and Opex reductions.

Brian Lynch: Partially offset by revenue from new venues.

Brian: The segment also benefited from our planned $12 million incentive to terminate early our lease for our Japan headquarters.

Brian Lynch: Top golf Q1, operating income decreased $15 million to a $12 million loss.

Brian: Approximately two thirds of the incentive impacted the golf equipment segment, and one third affected the active lifestyle segment.

Brian Lynch: While adjusted EBITDA decreased $16 million year over year to $44 million.

Brian Lynch: These declines were primarily due to lower same venue sales performance.

Brian Lynch: Both segments will incur some incremental expense in subsequent quarters for the relocation of the Japan headquarters.

Brian: Both segments will incur some incremental expense in subsequent quarters for the relocation of the Japan headquarters.

Brian Lynch: Partially offset by ongoing cost reduction efforts.

Artie Starrs: I believe this has the potential to be an incredibly important inflection point for Topgolf and set the brand for a successful future as an independent company.

Brian Lynch: Moving to the golf equipment segment.

Brian: Moving to segment performance.

Brian Lynch: Q1 revenue decreased 1% to $444 million year over year and was approximately flat on a constant currency basis, despite a more competitive launch environment.

Brian: At top golf Q1 revenue decreased 7% year over year due to the decline in same menu sales and the sale of the World Golf Tour business in December 2024.

Brian Lynch: Thank you, and over to you, Brian.

Brian: Partially offset by revenue from new venues.

Brian Lynch: Golf equipment operating income increased 24% to $102 million.

Brian Lynch: Topgolf Q1 operating income decreased $15 million to a $12 million loss while adjusted EBITDA decreased $16 million year-over-year to $44 million. These declines were primarily due to lower same-venue sales performance. Partially offset by ongoing cost reduction efforts.

Brian: Top golf Q1, operating income decreased $15 million to a $12 million loss.

Brian Lynch: The $20 million increase was due to improved gross margins the.

Brian: While adjusted EBITDA decreased $16 million year over year to $44 million.

Brian Lynch: The impact of the lease termination incentive.

Brian Lynch: The Right Sizing of the Jack Wolfskin Bisque. and Unfavorable Foreign Currency Rates. Q1 Adjusted EBITDA of $167 million increased 4% primarily due to increased profitability in the golf equipment and active lifestyle segment. The majority of this improvement was driven by improved gross margins and OPEX reduction. The segments also benefited from a planned $12 million incentive to terminate early our lease for our Japan headquarters. Approximately two-thirds of the incentive impacted the golf equipment segment, and one-third affected the active lifestyle segment. Both segments will incur some incremental expense in subsequent quarters for the relocation of the Japan headquarters.

Brian Lynch: Other cost savings.

Brian Lynch: And our active lifestyle segment, Q1 revenue decreased $17 million year over year to $255 million.

Brian: These declines were primarily due to lower same day, new sales performance.

Brian: Partially offset by ongoing cost reduction efforts.

Brian: Uh huh.

Brian Lynch: This decrease was due to the planned right sizing of the Jack <unk> business in Europe.

Brian Lynch: Moving to the golf equipment segment. Q1 revenue decreased 1% to $444 million year over year and was approximately flat on a constant currency basis, despite a more competitive launch environment. golf equipment operating income increased 24% to $102 million. The $20 million increase was due to improved gross margins. the impact of the lease termination incentive and other cost savings.

Brian: Moving to the golf equipment segment.

Brian: Q1 revenue decreased 1% to $444 million year over year and was approximately flat on a constant currency basis, despite a more competitive launch environment.

Brian Lynch: Operating income increased $6 million to $31 million.

Brian Lynch: Primarily driven by cost savings of Jack will skin and gross margin improvement for the total segment.

Brian: Golf equipment operating income increased 24% to $102 million.

Brian Lynch: Switching gears to balance sheet and liquidity, our available liquidity, which is comprised of cash on hand, and incremental borrowing capacity under our credit facilities.

The $20 million increase was due to improved gross margins the.

Brian: The impact of the lease termination incentive.

Brian Lynch: <unk> continued to strengthen.

Brian: Other cost savings.

Brian Lynch: As of March 31, 2025.

Brian Lynch: In our active lifestyle segment, Q1 revenue decreased $17 million year over year to $255 million. This decrease is due to the planned right sizing of the Jack Wolfskin business in Europe. Operating income increased $6 million to $31 million. primarily driven by cost savings at Jack Wolfskin and gross margin improvement for the total segment.

Brian: And our active lifestyle segment, Q1 revenue decreased $17 million year over year to $255 million.

Brian Lynch: Our available liquidity increased $85 million to $805 million due to increased cash compared to first quarter 2024.

Brian Lynch: Moving to segment performance.

Brian Lynch: At Topgolf, Q1 revenue decreased 7% year over year due to the decline in same menu sales and the sale of the World Golf Tour business in December 2024. partially offset by revenue from new venues. Topgolf Q1 operating income decreased $15 million to a $12 million loss, while adjusted EBITDA decreased $16 million year-over-year to $44 million. These declines were primarily due to lower same-venue sales performance. partially offset by ongoing cost reduction.

Brian: This decrease was due to the planned right sizing of the Jack <unk> business in Europe.

Brian Lynch: At quarter end net debt was $2 $74 billion.

Brian: Operating income increased $6 million to $31 million.

Brian Lynch: Including $258 million in convertible debt up slightly from $2 $68 billion last year due.

Brian: Primarily driven by cost savings that Jack will skin and gross margin improvement for the total segment.

Brian Lynch: Due to increased venue financing, partially offset by a $50 million discretionary paydown of our term loan b.

Brian Lynch: Pushing gears to balance sheet and liquidity, our available liquidity, which is comprised of cash on hand and incremental borrowing capacity under our credit facilities. continue to strengthen. As of March 31, 2025, our available liquidity increased $85 million to $805 million due to increased cash compared to first quarter 2024. At quarter end, net debt was $2.74 billion, including $258 million in convertible debt, up slightly from $2.68 billion last year due to increased venue financing, partially offset by a $50 million discretionary pay down of our Term Loan B. Excluding venue financing debt, which is essentially capitalized rent related to our Topgolf venues.

Brian: Switching gears to balance sheet and liquidity, our available liquidity, which was comprised of cash on hand, and incremental borrowing capacity under our credit facilities.

Brian Lynch: Excluding venue financing debt, which is essentially a capitalized rent related to our top golf venues, but.

Brian: Continued to strengthen.

Brian Lynch: But including the convertible debt.

Brian: As of March 31, 2025.

Brian Lynch: <unk> adjusted net debt was $1 2 billion.

Brian: Our available liquidity increased $85 million to $805 million due to increased cash compared to first quarter 2024.

Brian Lynch: Moving to the golf equipment segment. Q1 revenue decreased 1% to $444 million year over year, and was approximately flat on a constant currency basis, despite a more competitive launch environment. golf equipment operating income increased 24% to $102 million. The $20 million increase was due to improved gross margins. the impact of the lease termination incentive and other cost savings.

Brian Lynch: Down $159 million year over year as a result of the increased cash and debt paydowns.

Brian Lynch: Net debt leverage, including the convertible debt rose to four six times from four five times driven by higher venue financing.

Brian: At quarter end net debt was $2 $74 billion.

Brian: Including $258 million in convertible debt up slightly from $2 $68 billion last year.

Brian Lynch: However, REIT adjusted net leverage which includes rent interest payments improved to two five times from two seven times.

Brian: Due to increased venue financing.

Brian: Offset by a $50 million discretionary paydown of our term loan b.

Brian Lynch: We are comfortable with these leverage levels.

Brian: Excluding venue financing debt, which is essentially a capitalized rent related to our top golf venues, but.

Brian Lynch: Our inventory balance decreased $49 million versus the end of Q1 2000 $24 million to $654 million at the end of Q1 2025.

Brian Lynch: But including the convertible debt, our readjusted net debt was $1.22 billion, down $159 million year over year as a result of the increased cash and debt pay down. Net debt leverage, including the convertible debt, rose to 4.6 times from 4.5 times, driven by higher venue finance. However, readjusted net leverage, which includes rent interest payments, improved to 2.5 times from 2.7 times. We are comfortable at this leverage level. Our inventory balance decreased $49 million versus the end of Q1 2024 to $654 million at the end of Q1 2025. due to the $75 million accounting reclassification of Jack Wolfskin Inventory to Current Assets Held for Sale.

Brian: But including the convertible debt.

Brian: We're a REIT adjusted net debt was $1 2 billion.

Jack: Due to the $75 million accounting reclassification, Jack will skin inventory to current assets held for sale.

Brian: Down $159 million year over year as a result of the increased cash and debt paydowns.

Jack: Before moving to guidance I want to provide a further update on our strategic initiatives.

Brian: Net debt leverage, including the convertible debt rose to four six times from four five times driven by higher venue financing.

First the sale of our Jack <unk> business remains on track.

Jack: We have submitted our regulatory approval applications and are taking other application actions in preparation for closing.

Brian Lynch: Pushing gears to balance sheet and liquidity, our available liquidity, which is comprised of cash on hand, and incremental borrowing capacity under our credit facility. continue to strengthen. As of March 31, 2025, our available liquidity increased $85 million to $805 million due to increased cash compared to first quarter 2024. At quarter end, net debt was $2.74 billion, including $258 million in convertible debt, up slightly from $2.68 billion last year due to increased venue financing, partially offset by a $50 million discretionary pay down of our Term Loan B. Excluding venue financing debt, which is essentially capitalized rent related to our Topgolf venues.

Brian: However, REIT adjusted net leverage which includes rent interest payments improved to two five times from two seven times.

Jack: We still expect this to close in late second quarter or early third quarter.

Brian: We are comfortable with these leverage levels.

Brian: Our inventory balance decreased $49 million versus the end of Q1 2000 $24 million to $654 million at the end of Q1 2025.

Jack: With regard to top golf, we continue to believe that separating top gun from our core business will create value for our shareholders.

Jack: As a result, we are actively pursuing various alternatives to affect the separation.

Brian: Due to the $75 million accounting reclassification of Jack will skin inventory to current assets held for sale.

Jack: <unk>, a sale a spin or other transaction.

Jack: At this point, we are still targeting the second half of the year to effectuate the separation with Q4 being more likely than Q3.

Brian Lynch: Before moving to guidance, I want to provide a further update on our strategic initiative. First, the sale of our Jack Wolfskin business remains on track. We have submitted our regulatory approval applications and are taking other applications actions in preparation for closing. We still expect this to close in late second quarter or early third quarter. With regard to Topgolf, we continue to believe that separating Topgolf from our core business will create value for our shareholders. As a result, we are actively pursuing various alternatives to effective separation. including a sale, a spin, or other transactions. At this point we are still targeting the second half of the year to effectuate the separation with Q4 being more likely than Q3.

Brian: Before moving to guidance I want to provide a further update on our strategic initiatives.

Jack: However conditions have changed a lot since we first announced our intention to separate the top golf business last September.

Brian: First the sale of our Jack <unk> business remains on track.

Brian: We have submitted our regulatory approval applications and are taking other application actions in preparation for closing.

Jack: We are therefore reassessing how much debt in cash each company would be capitalized with post separation to ensure that both companies have sufficient liquidity and are in a strong financial position and a spin scenario.

Brian: We still expect this to close in late second quarter or early third quarter.

Brian: With regard to top golf, we continue to believe that separating top golf from our core business will create value for our shareholders.

Jack: In the case of the core business. This means having a clear path to be at approximately three times or less leverage in a reasonable amount of time and in the case of top golf. This means having no more than modest funded debt leverage.

Brian: As a result, we are actively pursuing various alternatives to affect the separation.

Brian: <unk>, a sale a spin or other transaction.

Brian: At this point, we are still targeting the second half of the year to effectuate the separation with Q4 being more likely than Q3.

Jack: All in all our original objective remains the same to unlock the value of both businesses minimize execution risk and create two strong well capitalized companies with compelling futures.

Brian Lynch: However, conditions have changed a lot since we first announced our intentions to separate the Topgolf business last September. We are therefore reassessing how much debt and cash each company would be capitalized with post-separation to ensure that both companies have sufficient liquidity and are in a strong financial position in a spin scenario. In the case of the core business, this means having a clear path to be at approximately three times or less leverage in a reasonable amount of time. And in the case of Topgolf, this means having no more than modest funded debt leverage. All in all, our original objective remains the same, to unlock the value of both businesses, minimize execution risk, and create two strong, well capitalized companies with compelling future.

Brian: However conditions have changed a lot since we first announced our intention to separate the top golf business last September.

Jack: Now turning to the balance of the year outlook.

Brian: We are therefore reassessing how much debt in cash each company would be capitalized with post separation to ensure that both companies have sufficient liquidity and are in a strong financial position and a spin scenario.

Jack: As a reminder, our Q2 and full year guidance continues to include the full financial impact of the Jack <unk> business.

Brian Lynch: Our inventory balance decreased $49 million versus the end of Q1 2024 to $654 million at the end of Q1 2025. Due to the $75 million accounting reclassification of Jack Wolfskin Inventory to current assets held for sale.

Jack: Assuming the sale closes in late Q2 early Q3 as expected the guidance will automatically be adjusted to exclude the Jack will skin results for the balance of the year as of the closing date.

Brian: In the case of the core business. This means having a clear path to be at approximately three times or less leverage in a reasonable amount of time and in the case of top golf. This means having no more than modest funded debt leverage.

Jack: While we are not updating our guidance for the Jack <unk> business at this time.

Jack: We have provided in our earnings release today, the amount of planned revenue and adjusted EBITDA attributable to the Jack <unk> business and our budget this year, including estimates for the first half.

Brian: All in all our original objective remains the same to unlock the value of both businesses minimize execution risk and create two strong well capitalized companies with compelling futures.

Brian Lynch: We still expect this to close in late second quarter or early third quarter.

Jack: Given current conditions and trends, we are revising our top golf same venue sales guidance from down mid single digits to down 6% to 12%.

Brian Lynch: Now turning to the Balance of the Year Outlook. As a reminder, our Q2 and full year guidance continues to include the full financial impact of the Jack Wolfskin business. Assuming this sale closes in late Q2 or early Q3 as expected, the guidance will automatically be adjusted to exclude the Jack Wolfskin results for the balance of the year as of the closing date. While we are not updating our guidance for the Jack Wolfskin business at this time. We have provided in our earnings release today the amount of planned revenue and adjusted EBITDA attributable to the Jack Wolfskin business in our budget this year, including estimates for the first half.

Brian: Now turning to the balance of the year outlook.

Brian: As a reminder, our Q2 and full year guidance continues to include the full financial impact of the Jack <unk> business.

Brian Lynch: With regard to Topgolf, we continue to believe that separating Topgolf from our core business will create value for our shareholders. As a result, we are actively pursuing various alternatives to effect the separation. including a sale, a spin, or other transactions.

Jack: As a result, we are also lowering our full year top golf revenue estimates to $1 680 billion to.

Brian: Assuming the sale closes in late Q2 early Q3 as expected.

Jack: <unk> to $1 79 zero billion.

Brian: The guidance will automatically be adjusted to exclude the <unk> results for the balance of the year as of the closing date.

Jack: Which was $45 million lower than previous guidance.

Brian Lynch: At this point, we are still targeting the second half of the year to effectuate the separation with Q4 being more likely than Q3. However, conditions have changed a lot since we first announced our intentions to separate the Topgolf business last September. We are therefore reassessing how much debt and cash each company would be capitalized with post-separation to ensure that both companies have sufficient liquidity and are in a strong financial position in a spin scenario. In the case of the core business, this means having a clear path to be at approximately three times or less leverage in a reasonable amount of time.

Jack: However, we are maintaining our adjusted EBITDA guidance for top golf of $240 million to $300 million.

While we are not updating our guidance for the Jack <unk> business at this time.

Brian: We have provided in our earnings release today, the amount of planned revenue and adjusted EBITDA attributable to the Jack <unk> business and our budget per share, including estimates for the first half.

Jack: As our cost savings initiatives are offsetting the expected decrease in revenue.

Jack: We are reiterating our consolidated full year revenue guidance of 4.0 billion to $4 $85 billion.

Brian Lynch: Given current conditions and trends, we're revising our Topgolf same menu sales guidance from down mid single digits to down 6 to 12%. As a result, we are also lowering our full-year Topgolf revenue estimates to $1.680 billion to $1.790 billion, which is $45 million lower than previous guidance. However, we are maintaining our adjusted EBITDA guidance for Topgolf of $240 to $300 million as our cost savings initiatives are offsetting the expected decrease in revenue. We are reiterating our consolidated full year revenue guidance of $4.0 billion to $4.185 billion. However, in light of the decrease in Topgolf revenue estimates, we are currently tracking below the midpoint of this guidance.

Brian: Given current conditions and trends, we are revising our top golf same venue sales guidance from down mid single digits to down 6% to 12%.

Jack: However in light of the decrease in top golf revenue estimates. We are currently tracking below the midpoint of this guidance.

Brian: As a result, we are also lowering our full year top golf revenue estimates to $1 680 billion.

Jack: We are also reiterating our adjusted EBITDA guidance of $415 million to $505 million.

Brian Lynch: And in the case of Topgolf, this means having no more than modest funded debt leverage.

Brian: 21790 billion.

Jack: Both the revenue and adjusted EBITDA estimates are subject to adjustment for the expected sale of the Jack <unk> business.

Brian: Which was $45 million lower than previous guidance.

Brian Lynch: All in all, our original objective remains the same to unlock the value of both businesses, minimize execution risk, and create two strong, well capitalized companies with compelling future.

Brian: However, we are maintaining our adjusted EBITDA guidance for top golf of $240 million to $300 million as our cost savings initiatives are offsetting the expected decrease in revenue.

Jack: We were able to maintain our consolidated guidance. Despite the current macroeconomic headwinds because of our strong start to the year.

Jack: Proving foreign currency rates and the actions, we have taken and continue to take to reduce costs and mitigate the estimated $25 million.

Brian: We are reiterating our consolidated full year revenue guidance of 4.0 billion to $4 85 billion.

Jack: Impact of the current tariffs.

Jack: This guidance does not assume further tariff escalation or a meaningful worsening of economic conditions.

Brian: However in light of the decrease in top golf revenue estimates. We are currently tracking below the midpoint of this guidance.

In addition, our guidance today is based upon recent FX rates, but our revenue in particular is highly sensitive to fluctuations in such rates.

Brian Lynch: We are also reiterating our adjusted EBITDA guidance of $415 million to $505 million. Both the revenue and adjusted EBITDA estimates are subject to adjustment for the expected sale of the Jack Wolfskin business. We were able to maintain our consolidated guidance despite the current macroeconomic headwinds because of our strong start to the year, improving foreign currency rates, and the actions we have taken and continue to take to reduce costs and mitigate the estimated $25 million impact of the current tariff. This guidance does not assume further tariff escalation or a meaningful worsening of economic conditions. In addition, our guidance today is based upon recent FX rates, but our revenue in particular is highly sensitive to fluctuations in such rates.

Brian: We are also reiterating our adjusted EBITDA guidance of $415 million to $505 million.

Brian: Both the revenue and adjusted EBITDA estimates are subject to adjustment for the expected sale of the Jack <unk> business.

Jack: Regarding free cash flow, we continue to expect to be free cash flow positive at both the total company and a top golf in 2025.

Brian: We were able to maintain our consolidated guidance. Despite the current macroeconomic headwinds because of our strong start to the year, improving foreign currency rates and the actions we have taken and continue to take to reduce costs and mitigate the estimated $25 million impact of the current tariffs.

Jack: Now turning to Q2.

Jack: In Q2, we are forecasting consolidated revenue of 1.075 billion.

Brian Lynch: Given current conditions and trends, we're revising our Topgolf same-venue sales guidance from down mid-single digits to down 6% to 12%. As a result, we are also lowering our full year Topgolf revenue estimates to $1.680 billion to $1.790 billion, which is $45 million lower than previous guidance. However, we are maintaining our adjusted EBITDA guidance for Topgolf of $240 to $300 million as our cost savings initiatives are offsetting the expected decrease in revenue.

2111 5 billion.

Jack: Versus 1.158 billion in Q2 2024.

Brian: This guidance does not assume further tariff escalation or meaningful worsening of economic conditions.

Jack: This year over year decrease was due to a more competitive launch environment and.

Jack: And shift in shipment timing in the golf equipment business.

Brian: In addition, our guidance today is based upon recent FX rates, but our revenue in particular is highly sensitive to fluctuations in such rates.

Jack: The continued impact from the right sizing of the Jack <unk> business.

Jack: The negative impact from the sale of the <unk> gaming business in December 2024, as well as a projected decline in same venue sales.

Brian Lynch: Regarding free cash flow, we continue to expect to be free cash flow positive at both the Total Company and at Topgolf in 2025.

Brian: Regarding free cash flow, we continue to expect to be free cash flow positive at both the total company and a top golf in 2025.

Jack: We estimate adjusted EBITDA to be in the range of 139% to $159 million.

Brian Lynch: Now turning to Q2. In Q2, we are forecasting consolidated revenue of $1.075 billion to $1.115 billion versus $1.158 billion in Q2 2024. This year-over-year decrease is due to a more competitive launch environment and shift in shipment timing in the golf equipment business. The Continued Impact from the Right Sizing of the Jack Wolfskin Vista. The negative impact from the sale of the WGT gaming business in December 2024, as well as a projected decline in same venue sales. We estimate Adjusted EBITDA to be in the range of $139 to $159 million. compared to $206 million in the prior year.

Brian: Now turning to Q2.

Jack: Compared to $206 million in the prior year.

Brian Lynch: We are reiterating our consolidated full year revenue guidance of $4.0 billion to $4.185 billion. However, in light of the decrease in Topgolf revenue estimates, we are currently tracking below the midpoint of this guidance. We are also reiterating our adjusted EBITDA guidance of $415 million to $505 million. Both the revenue and adjusted EBITDA estimates are subject to adjustment for the expected sale of the Jack Wolfskin business. We were able to maintain our consolidated guidance despite the current macroeconomic headwinds because of our strong start to the year, improving foreign currency rates, and the actions we have taken and continue to take to reduce costs and mitigate the estimated $25 million impact of the current tariff.

Brian: In Q2, we are forecasting consolidated revenue of 1.0 75 billion.

Jack: This decrease was due to the projected decrease in revenue and then an approximate $22 million impact from increased FX hedging losses incremental tariffs and the sale of <unk>.

Brian: 2111 5 billion.

Brian: Versus 115 8 billion in Q2 2024.

Brian: This year over year decrease was due to a more competitive launch environment.

Jack: In summary, given the tariff volatility and softening consumer.

Brian: And shift in shipment timing in the golf equipment business.

Jack: Visibility is limited, but we are providing our best estimates today.

Brian: The continued impact from the right sizing of the Jack <unk> business.

Jack: Fortunately, we were proactive in our gross margin and cost reduction initiatives.

Brian: The negative impact from the sale of the <unk> gaming business in December 2024, as well as a projected decline in same venue sales.

Jack: Along with improving FX rates are offsetting much of the impact of these macroeconomic headwinds.

Brian: We estimate adjusted EBITDA to be in the range of 139% to $159 million.

Jack: Importantly, we are well positioned in terms of our available liquidity for our business and the planned separation of top golf.

Brian: Compared to $206 million in the prior year.

Jack: In the meantime, we are managing that which is within our control, including managing discretionary spending and rationalizing any capital investments.

Brian Lynch: This decrease is due to the projected decrease in revenue and then an approximate $22 million impact from increased FX hedging losses, incremental tariffs, and the sale of WGT. In summary, given the tariff volatility and softening consumer, visibility is limited, but we are providing our best estimates today. Fortunately, we were proactive in our gross margin and cost reduction initiatives, which along with improving FX rates are offsetting much of the impact of these macroeconomic headwinds. Importantly, we are well positioned in terms of our available liquidity for our business and the planned separation of top In the meantime, we are managing that which is within our control, including managing discretionary spending and rationalizing any capital investment.

Brian: This decrease is due to the projected decrease in revenue and then an approximate $22 million impact from increased FX hedging losses incremental tariffs and the sale of its <unk>.

Brian Lynch: This guidance does not assume further tariff escalation or a meaningful worsening of economic conditions. In addition, our guidance today is based upon recent FX rates, but our revenue in particular is highly sensitive to fluctuations in such rates.

Jack: Overall, we feel good about our start to the year and believe we are well positioned not only to navigate the short term volatility and emerge a stronger company.

Brian: In summary, given the tariff volatility and softening consumer.

Brian: Visibility is limited, but we are providing our best estimates today.

Jack: But also create shareholder value as we do so.

Brian Lynch: Regarding free cash flow, we continue to expect to be free cash flow positive at both the Total Company and at Topgolf in 2025.

Brian: Fortunately, we were proactive in our gross margin and cost reduction initiatives, which along with improving FX rates are offsetting much of the impact of these macroeconomic headwinds.

Jack: With that said I would now like to turn the call back over to the operator for Q&A.

Speaker Change: We will now begin the question and answer session.

Brian Lynch: Now turning to Q2. In Q2, we are forecasting consolidated revenue of $1.075 billion to $1.115 billion versus $1.158 billion in Q2 2024. This year-over-year decrease is due to a more competitive launch environment and shift in shipment timing in the golf equipment business. The continued impact from the right sizing of the Jack Wolfskin business. The negative impact from the sale of the WGT gaming business in December 2024, as well as a projected decline in same venue sales. We estimate Adjusted EBITDA to be in the range of $139 to $159 million. compared to $206 million in the prior year.

Jack: To ask a question you May press Star then one on your telephone keypad.

Brian: Importantly, we are well positioned in terms of our available liquidity for our business and the planned separation of top golf.

Speaker Change: If you are using a speakerphone please pick up your handset before pressing the keys.

Brian: In the meantime, we are managing that which is within our control, including managing discretionary spending and rationalizing any capital investments.

Speaker Change: To withdraw your question. Please press Star then two.

Speaker Change: At this time, we will pause momentarily to assemble our roster.

Brian Lynch: Overall, we feel good about our start to the year and believe we are well-positioned not only to navigate this short-term volatility and emerge a stronger company, but also create a shareholder value as we do so.

Brian: Overall, we feel good about our start to the year and believe we are well positioned not only to navigate the short term volatility and emerge a stronger company.

Speaker Change: Our first question today is from Matthew boss with Jpmorgan. Please go ahead.

Brian: But also create a shareholder value as we do so.

Matthew Boss: Great. Thanks, and appreciate all the all the color.

Operator: With that said, I would now like to turn the call back over to the operator for Q&A. We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the key. To withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster.

Brian: With that said I would now like to turn the call back over to the operator for Q&A.

Speaker Change: So.

Speaker Change: Maybe chip on the core golf equipment business any change in the industry backdrop that you've seen so far for the segments can you touch on sell through rates maybe on some of the key recent launches are just any change to your organic outlook for this year in that segment.

Brian: We will now begin the question and answer session.

Brian: To ask a question you May press Star then one on your telephone keypad.

Brian Lynch: This decrease is due to the projected decrease in revenue and then an approximate $22 million impact from increased FX hedging losses, incremental tariffs, and the sale of WGT.

Brian: If you were using a speakerphone please pick up your handset before pressing the keys.

Brian: To withdraw your question. Please press Star then two.

Matthew Boss: Hey, Matt.

Speaker Change: <unk>.

Speaker Change: The short answer is no no not really.

Brian: At this time, we will pause momentarily to assemble our roster.

Brian Lynch: In summary, given the tariff volatility and softening consumer, visibility is limited, but we are providing our best estimates today. Fortunately, we were proactive in our gross margin and cost reduction initiatives, which along with improving FX rates are offsetting much of the impact of these macroeconomic headwinds. Importantly, we are well positioned in terms of our available liquidity for our business and the planned separation of top In the meantime, we are managing that which is within our control, including managing discretionary spending and rationalizing any capital investment.

Speaker Change: Golf consumer remains strong the markets remain.

Speaker Change: Solid.

Matthew Boss: Our first question today is from Matthew Boss with J.P. Morgan. Please go ahead. Great, thanks and appreciate all the all the color.

Speaker Change: Our first question today is from Matthew boss with Jpmorgan. Please go ahead.

Speaker Change: And the outlook remains.

Matthew Boss: Great. Thanks, and appreciate all the all the color.

Speaker Change: Positive with no material change so.

Chip Brewer: So, maybe Chip, on the core golf equipment business, any change in the industry backdrop that you've seen so far for the segment? Can you touch on sell-through rates, maybe on some of the key recent launches, or just any change to your organic outlook for this year in that segment? Hey, Matt. The short answer is no, no, not really. The golf consumer remains strong, the markets remain solid. uh... you know the uh... and the outlook remains uh... uh... added positive with no material change so uh... uh... golf business has been on a good roll it remains that way uh...

Brian: So.

Speaker Change: Golf business has been on a good roll it remains that way.

Brian: Maybe chip on the core golf equipment business any change in the industry backdrop that you've seen so far for the segments can you touch on sell through rates maybe on some of the key recent launches are just any change to your organic outlook for this year in that segment.

Speaker Change: And we feel good about the outlook there.

Speaker Change: Great and then maybe already as a follow up so on the value reset at top golf I guess, maybe similar question how much do you attribute the softening that you've cited to macro relative to competition.

Matt: Hey, Matt.

Brian Lynch: Overall, we feel good about our start to the year and believe we are well positioned not only to navigate this short term volatility and emerge a stronger company, but also create a shareholder value as we do so.

Brian: <unk>.

Brian: The short answer is no not really.

Speaker Change: And just maybe how best to consider the timeline to scale the value initiatives or any feedback that you've seen from tests that you've initiated to date.

Brian: Golf consumer remains strong the markets remain.

Brian: Solid.

Unknown Executive: With that said, I would now like to turn the call back over to the operator for Q&A. We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the key. To withdraw your question, please press Star then 2.

Speaker Change: Sure.

Speaker Change: Well I think on the on the macro front the most direct impact.

Brian: And the outlook remains.

Brian: Positive with no material change so.

Speaker Change: We saw since last earnings would be on the event side.

Brian: Golf business has been on a good roll it remains that way and.

Speaker Change: So we're clearly seeing corporate spending pressure.

Chip Brewer: and we feel good about uh... the outlook there Great.

We feel good about the outlook there.

Speaker Change: Thats pretty direct in macro I think.

Arthur Starrs: And then maybe, Artie, as a follow-up, so on the value reset at Topgolf, I guess maybe a similar question. How much do you attribute the softening that you've cited to macro relative to competition? And just maybe how best to consider the timeline to scale the value initiatives or any feedback that you've seen from tests that you've initiated to date? Sure. Well, I think on the macro front, the most direct impact we saw since last earnings would be on the event side. So we're clearly seeing corporate spending pressure, and that's pretty direct and macro. I think the brand's been around for a while, and we're very confident that the events business is super competitive.

Speaker Change: The brand has been around for a while.

Speaker Change: We're very confident that the events businesses.

Unknown Executive: At this time, we will pause momentarily to assemble our roster.

Speaker Change: Super competitive in.

Speaker Change: Experience and feedback we get on to this great. It's just the environment for event spending from corporates in particular.

Speaker Change: And just maybe how best to consider the timeline to scale the value initiatives or any feedback that you've seen from tests that you've initiated to date.

Matthew Boss: Our first question today is from Matthew Boss with J.P. Morgan. Please go ahead. Great, thanks, and appreciate all the color.

Speaker Change: Is pressured.

Speaker Change: The consumers definitely price sensitive.

Speaker Change: I wouldn't say that it's materially different today than it was 45 to 90 days ago.

Speaker Change: Sure.

Chip Brewer: So, maybe Chip, on the core golf equipment business, any change in the industry backdrop that you've seen so far for the segment? Can you touch on sell-through rates, maybe on some of the key recent launches, or just any change to your organic outlook for this year in that segment? Hey, Matt. The short answer is no, no, not really. The golf consumer remains strong, the markets remain solid. and the outlook remains positive with no material change. So golf business has been on a good roll. It remains that way, and we feel good about the outlook there.

Speaker Change: Well I think on the on the macro front the most direct impact.

Speaker Change: But what I'm excited about is the immediate response I think the traffic numbers kind of.

Speaker Change: Since last earnings would be on the event side.

Speaker Change: So, we're clearly seeing corporate spending pressure and thats pretty direct in macro I think.

Speaker Change: Speak for themselves, we're certainly investing in it with with value and doing right.

Speaker Change: By the consumer in this environment, but the.

Speaker Change: The brand has been around for a while and.

Speaker Change: The immediate response is probably what.

Speaker Change: We're very confident that the events business is <unk>.

Speaker Change: I am probably most enthusiastic on this concept of it not only being compelling but accessible. This is an environment, where you've got to give value to we have to give value to our players when they can use it so.

Speaker Change: <unk> competitive in.

Arthur Starrs: The experience and feedback we get on it is great, it's just the environment for event spending from corporates in particular is pressured. The consumer is definitely price sensitive. I wouldn't say that it's materially different today than it was 45 to 90 days ago. But what I'm excited about is the immediate response. I think the traffic numbers kind of speak for themselves. We're certainly investing in it with value and doing right by the consumer in this environment. But the immediate response is probably what I'm probably most enthusiastic on, and this concept of it not only being compelling but accessible.

Speaker Change: Experience and feedback we get onto this great. It's just the environment for event spending from corporates in particular.

Speaker Change: Is pressured.

Speaker Change: I think last time, we talked a little bit about the shoulder time periods. This is we're hitting we're hitting the bull's eye Sunday Fund days.

Speaker Change: The consumer is definitely price sensitive.

Speaker Change: I wouldn't say that it's materially different today than it was 45 to 90 days ago.

Speaker Change: I think a perfect example of one at a time when families can use it and need it and theyre showing up.

Speaker Change: But what I'm excited about is the immediate response I think the traffic numbers kind of speak.

Speaker Change: In terms of the rollout timing, we're moving very quickly I think were moving faster than we had intimated last time.

Speaker Change: Speak for themselves, we're certainly investing in it with with value and doing right.

Artie Starrs: Great, and then maybe Artie as a follow up.

Speaker Change: So we have Sunday fund a it's active in every event and every venue 80% of the venues have value attached to it.

Artie Starrs: So on the value reset at Topgolf, I guess maybe similar question, how much do you attribute the softening that you've cited to macro relative to competition? And just maybe how best to consider the timeline to scale the value initiatives, or any feedback that you've seen from tests that you've initiated to date? Sure. Well, I think on the on the macro front, the most direct impact, you know, we we saw since last earnings would be on the event side. So we're clearly seeing, you know, corporate spending pressure. And that's pretty direct and macro. I think the brand's been around for a while.

Speaker Change: By the consumer in this environment, but.

Speaker Change: The immediate response is probably what.

Speaker Change: Golf nights is an approximately half the portfolio now.

Arthur Starrs: This is an environment where you've got to give value to – we have to give value to our players when they can use it. So – I think last time we talked a little bit about the shoulder time period, this is we're hitting the bullseye. Sunday Funday is I think a perfect example of when it's a time when families can use it and need it and they're showing up. In terms of the rollout timing, we're moving very quickly. I think we're moving faster than we had intimated last time. So we have Sunday Funday, it's active in every venue, 80% of the venues have value attached to it.

Speaker Change: And the early week value, which back to this concept of being compelling and accessible.

Speaker Change: It becomes more accessible.

Speaker Change: Kids get out of school will be monitoring that very closely as we get are in the middle of college graduation period right now and then.

Speaker Change: I think last time, we talked a little bit about the shoulder time periods. This is we're hitting we're hitting the bull's eye Sunday Fund days.

Speaker Change: I think a perfect example of.

Speaker Change: Schools start getting out of school across our portfolio here in the coming weeks, so we'll be ready to activate it as we as we see it perform but were pleased so far.

Speaker Change: At the time when families can use it and need it and theyre showing up.

Speaker Change: In terms of the rollout timing, we're moving very quickly I think we're moving.

Speaker Change: That's great color best of luck.

Speaker Change: Then we had intimated last time.

Speaker Change: Thank you.

Artie Starrs: And we're very confident that the events business is a super competitive and the The experience and feedback we get on it is great, it's just the environment for event spending from corporates in particular is pressured. The consumer is definitely price sensitive. I wouldn't say that it's materially different today than it was 45 to 90 days ago. But what I'm excited about is the immediate response. I think the traffic numbers kind of speak for themselves. We're certainly investing in it with value and doing right by the consumer in this environment. But the immediate response is probably what I'm probably most enthusiastic on in this concept of it not only being compelling but accessible.

Speaker Change: So we have Sunday Monday, it's active in every event and every venue.

Michael Swartz: The next question is from Michael Swartz with <unk> Securities. Please go ahead.

Speaker Change: 80% of the venues have value attached to it.

Michael Swartz: Hey, good evening guys.

Arthur Starrs: Topgolf Nights is in approximately half the portfolio now. And the early week value, which back to this concept of being compelling and accessible, becomes more accessible as kids get out of school. We'll be monitoring that very closely as we get, we're in the middle of college graduation period right now, and then schools start getting out of school across our portfolio here in the coming weeks. So we'll be ready to activate it as we see it perform, but we're pleased so far.

Michael Swartz: Maybe just a follow up to matt's questions around the value repositioning at top golf, but maybe from a cost perspective.

Speaker Change: Top golf nights is an approximately half the portfolio now.

Speaker Change: And the early week value, which back to this concept of being compelling and accessible.

Michael Swartz: How do you plan to manage the venue level.

Speaker Change: It becomes more accessible.

Michael Swartz: Cost structure going forward I think you talked about venue level margins coming down a bit in the near term, but how do we think about that longer term.

Speaker Change: Kids get out of school will be monitoring that very closely as we get are in the middle of college graduation period right now and then.

Speaker Change: Schools start getting out of school across our portfolio here in the coming weeks, so we'll be ready to activate it as we as we see it perform but were pleased so far.

Michael Swartz: Yes so.

Michael Swartz: We remain extremely confident I think the last few years, we've grown venue margins.

Unknown Executive: Great caller.

Unknown Executive: Best of luck.

Speaker Change: Great color best of luck.

Michael Swartz: <unk> sales environment, so I'm as bullish as I've ever been on the long term.

Speaker Change: Thank you.

Michael Swartz: The next question is from Michael Swartz with Truist Securities. Please go ahead. Hey, good evening, guys.

Michael Swartz: Your next question is from Michael Swartz with <unk> Securities. Please go ahead.

Michael Swartz: EBITDAR margin outlook for top golf.

Artie Starrs: This is an environment where you've got to give value to, we have to give value to our players when they can use it. I think last time we talked a little bit about the shoulder time period, this is, we're hitting the bullseye. Sunday Funday is, I think, a perfect example of when, it's a time when families can use it and need it and they're showing up.

Michael Swartz: Hey, good evening guys.

Arthur Starrs: Maybe just a follow-up to Matt's questions around the value repositioning at Topgolf, but maybe from a cost perspective. How do you plan to manage the venue-level cost structure going forward? I think you talked about venue-level margins coming down a bit in the near term, but how do we think about that longer term? Yeah, so we, we remain extremely confident. I think, you know, the last few years, we've grown venue margins and, you know, various, you know, sales environment. So I'm, I'm as bullish as I've, as I've ever been on the long term EBITDA margin outlook for Topgolf.

Michael Swartz: I think I will just restate, what we've said before we think they can be north of 35%.

Michael Swartz: Maybe just a follow up to matt's questions around the value repositioning it at top golf, but maybe from a cost perspective.

Michael Swartz: We're choosing to invest in value at this point in time.

Michael Swartz: How do you plan to manage the venue level.

Michael Swartz: We're not going to compromise the player experience we view this.

Michael Swartz: Cost structure going forward I think you talked about venue level margins coming down a bit in the near term, but how do we think about that longer term.

Michael Swartz: This environment is a time that we can acquire customers, we can acquire players and we're seeing.

Artie Starrs: In terms of the rollout timing, we're moving very quickly. I think we're moving faster than we had intimated last time. So we have Sunday Funday, it's active in every venue, 80% of the venues have value attached to it. Topgolf Nights is in approximately half the portfolio now. And the early week value, which back to this concept of being compelling and accessible, becomes more accessible as kids get out of school. We'll be monitoring that very closely as we get, we're in the middle of college graduation period right now, and then schools start getting out of school across our portfolio here in the coming weeks.

Michael Swartz: New players and repeat players respond to the offer and when this environment subsides, we'll be in a fantastic position I view, the investments and improvements we've made.

Michael Swartz: Yes so.

Michael Swartz: We remain extremely confident I think the last few years, we've grown venue margins.

Michael Swartz: <unk> sales environment, so I'm as bullish as I've ever been on the long term.

Michael Swartz: And venue level performance.

Michael Swartz: As appropriate.

Michael Swartz: EBITDAR margin outlook for top golf.

Michael Swartz: And.

Arthur Starrs: You know, and I think what I'll just restate, we've said before, we think they can be north of 35%. We're choosing to invest in value at this point in time, and we're not going to compromise the player experience. We view this... You know, this environment is a time that we can acquire customers. We can acquire players and we're seeing new players and repeat players respond to the offer. And when this environment subsides, we'll be in a fantastic position. I view the investments and improvements we've made in venue level performance as appropriate. And. relevant for us to be investing value at this moment.

Michael Swartz: Relevant for us to be investing value at this moment.

Michael Swartz: I think I'll just restate, what we've said before we think they can be north of 35%.

Michael Swartz: Some of the specific things we have done we've obviously taken.

Michael Swartz: We're choosing to invest in value at this point in time, and we're not going to compromise the player experience we view this.

Michael Swartz: A fair amount of cost out of our corporate overhead.

Michael Swartz: Some areas of the business that are.

Michael Swartz: <unk>.

Michael Swartz: Outside of the venues.

Michael Swartz: This environment at the time that we can acquire customers, we can acquire players and we're seeing.

Artie Starrs: So we'll be ready to activate it as we see it perform, but we're pleased so far. Great caller.

Michael Swartz: Inside the venues I'd, just say the efficiency metrics. We just continue to every couple of quarters, we rollout another iteration of our labor model when you change demand.

Michael Swartz: New players and repeat players respond to the offer and when this environment subsides, we'll be in a fantastic.

Unknown Executive: Best of luck.

Michael Swartz: The next question is from Michael Swartz with Truist Securities. Please go ahead. Hey, good evening, guys.

Michael Swartz: When when people are coming in more on Sunday Monday through Thursday.

Michael Swartz: Position I view, the investments and improvements we've made.

Michael Swartz: And venue level performance.

Michael Swartz: At night Friday, and Saturday. It gives you an opportunity to kind of refresh those models and our teams are just responding really well so.

Michael Swartz: Maybe just to follow up to Matt's questions around the value repositioning at Topgolf, but maybe from a cost perspective, how do you plan to manage the venue level cost structure going forward? I think you talked about venue level margins coming down a bit in the near term, but how do we think about that longer term? Yeah, so we, we remain extremely confident. I think, you know, the last few years, we've grown venue margins and, you know, various, you know, sales environment. So I'm, I'm as bullish as I've, as I've ever been on the long term EBITDA margin outlook for Topgolf.

Michael Swartz: As appropriate.

Michael Swartz: And <unk>.

Michael Swartz: Relevant for us to be investing value at this moment.

Michael Swartz: This continues to be very optimistic about.

Arthur Starrs: Some of the specific things we have done, we've obviously taken a fair amount of cost out of our corporate overhead and some areas of the business that are... outside of the venues. Inside the venues, I'd just say the efficiency metrics, we just continue to, every couple quarters, we roll out another iteration of our labor model. When you change demand, when people are coming in more on Sunday, Monday through Thursday, late night, Friday and Saturday, it gives you an opportunity to kind of refresh those models and our teams are just responding really well.

Michael Swartz: Some of the specific things we have done we've obviously taken.

Michael Swartz: <unk> margins in the long term, but we are investing in the near term and value.

Michael Swartz: A fair amount of cost out of our corporate overhead and some areas of the business that are.

Speaker Change: Okay. That's great color. Thank you and then just sticking on top golf, maybe give us a feel for the cadence of the quarter and just wondering was there any impact from the from the Easter shift to the later Easter into the second quarter.

Michael Swartz: <unk>.

Michael Swartz: Outside of the venues <unk>.

Michael Swartz: <unk> the venues I'd, just say the efficiency metrics.

Michael Swartz: Continue to every couple of quarters, we rollout another iteration of our labor model when you change demand.

Speaker Change: Yes, there is definitely a shift it kind of goes both ways for us where Easter week ends up not being much of an events week.

Michael Swartz: When when people are coming in more on Sunday Monday through Thursday late.

Speaker Change: Flip side is as you get some kids are out of school and the brakes are a little bit different. So it did shifted a little bit, but I wouldn't I wouldn't say that it was material in terms of.

Michael Swartz: Late night Friday, and Saturday. It gives you an opportunity to kind of refresh.

Artie Starrs: You know, and I think what I'll just restate, we've said before, we think they can be north of 35%.

Those models and our teams are just responding really well so.

Unknown Executive: So just continue to be very optimistic about venue margins in the long term, but we are investing in the near term in value. Okay, that's great color. Thank you.

Artie Starrs: We're choosing to invest in value at this point in time, and we're not going to compromise the player experience. We view this... you know, this environment is a time that we can acquire customers, we can acquire players, and we're seeing new players and repeat players respond to the offer. And when this environment subsides, we'll be in a fantastic position. I view the investments and improvements we've made in venue level performance as, you know, appropriate. relevant for us to be investing value at this moment.

Michael Swartz: Just continue to be very optimistic about that.

Speaker Change: Month to month or informing our guidance.

Michael Swartz: Margins in the long term, but we are investing in the near term and value.

Speaker Change: As I mentioned.

Speaker Change: We're pleased with the pick up in the.

Michael Swartz: Okay. That's great color. Thank you and then just sticking on top golf, maybe give us some feel for the cadence of the quarter and just wondering was there any impact from the from the Easter shift to the later Easter into the second quarter.

Speaker Change: The walk in side of the business in April and events have softened and that informs the guidance we put forward for Q2.

Arthur Starrs: And just sticking on Topgolf, maybe give us a feel for the cadence of the quarter. And just wondering, was there any impact from the Easter shift to the later Easter into the second quarter? Yeah, there's definitely a shift that kind of goes both ways for us, where Easter week ends up not being much of an events week. The flip side is, is it you get some, you know, kids are out of school and the breaks are a little bit different. So it did shift it a little bit, but I wouldn't, I wouldn't say that it was material in terms of month to month or informing our guidance.

Speaker Change: Okay, great. Thank you.

Speaker Change: The next question is from Megan Clap with Morgan Stanley. Please go ahead.

Michael Swartz: Yes, there is definitely a shift it kind of goes both ways for us where Easter week ends up not being much of an events week.

Speaker Change: Hi, good evening. Thanks, so much I wanted to ask a little bit about the cost savings that you've talked about I think chip and Brian you both mentioned that proactive cost savings are.

Michael Swartz: The flip side is as you get some kids are out of school and the brakes are a little bit different. So it did shifted a little bit, but I wouldn't I wouldn't say that it was material in terms of.

Artie Starrs: Some of the specific things we have done, we've obviously taken a fair amount of cost out of our corporate overhead and some areas of the business that are... You know, outside of the venues, you know, inside the venues, I just say the efficiency metrics, we just continue to, you know, every couple quarters, we roll out another iteration of our labor model. When you change demand, when when people are coming in more on Sunday, Monday through Thursday, late night, Friday and Saturday, it gives you an opportunity to kind of refresh those models and our teams are just responding really well.

Speaker Change: Positioning you to be able to hold the guidance today. Despite some.

Speaker Change: Despite the tariffs and the reduction in top golf revenue.

Michael Swartz: Month to month or informing our guidance.

Unknown Executive: You know, as I mentioned, we're pleased with the pickup and the walk-in side of the business in April and events have softened and that informs the guidance we put forward for Q2. Okay, great. Thank you.

Speaker Change: We think about the cost savings.

Michael Swartz: As I mentioned, we're pleased with the pick up.

Speaker Change: We have done is it just coming in better than you anticipated or are there incremental cost savings you've identified and if it is that ladder could you maybe just expand a bit more on the products versus top golf side, what some of those cost savings are thank you.

Michael Swartz: The walk in side of the business.

Michael Swartz: <unk> and events have softened and that informs the guidance we put forward for Q2.

Michael Swartz: Okay, great. Thank you.

Megan Clapp: The next question is from Megan Clapp with Morgan Stanley, please go ahead. I wanted to ask a little bit about the cost savings that you've talked about. I think Chip and Brian, you both mentioned that proactive cost savings are positioning you to be able to hold the guidance today despite the tariffs and the reduction in Topgolf revenue. When we think about the cost savings, what you've done, is it just coming in better than you anticipated or are there incremental cost savings you've identified? If it is that latter, could you maybe just expand a bit more on the products versus Topgolf side, what some of those cost savings are?

Megan Clap: The next question is from Megan Clap with Morgan Stanley. Please go ahead.

Speaker Change: Sure Megan I'll take a cut at it.

Speaker Change: Hi, good evening. Thanks, so much I wanted to ask a little bit about the cost savings that you've talked about I think Chuck and Brian you both mentioned that proactive cost savings are.

Speaker Change: It is a little bit of both so we were aggressive at going after.

Artie Starrs: So just continue to be very optimistic about venue margins in the long term, but we you know, we are investing in the near term in value. Okay, that's great color. Thank you.

Speaker Change: Cost and efficiency improvements.

Speaker Change: Turning you to be able to hold the guidance today. Despite some.

Speaker Change: Starting.

Speaker Change: This time last year and accelerating through the year and then as we saw the.

Speaker Change: Despite the tariffs and a reduction in top golf revenue.

Artie Starrs: And just sticking on Topgolf, maybe give us a feel for the cadence of the quarter. And just wondering, was there any impact from the Easter shift to the later Easter into the second quarter? Yeah, there's definitely a shift that kind of goes both ways for us, where Easter week ends up not being much of an events week. The flip side is is it, you get some kids are out of school and the breaks are a little bit different so it did shift it a little bit but I wouldn't, I wouldn't say that it was material in terms of month to month or informing our guidance.

Speaker Change: Think about the <unk>.

Speaker Change: Cost savings.

Speaker Change: Conditions.

Speaker Change: What you've done is it just coming in better than you anticipated or are there incremental cost savings you've identified and if it is that ladder could you maybe just expand a bit more on the products versus top golf side, what some of those cost savings are.

Speaker Change: Flashing more risk, which we clearly did going into this year as we saw FX headwinds and.

Speaker Change: Sure.

Speaker Change: Announced policy changes.

Speaker Change: That were <unk>.

Speaker Change: Likely to be impactful.

Speaker Change: Accelerated our efforts to manage those costs and improve efficiency and it's really across all areas of the business already.

Speaker Change: Yes.

Brian Lynch: Sure, Megan, I'll take a cut at it. It's a little bit of both. So, you know, we were aggressive at going after cost and efficiency improvements, really starting, you know, this time last year and accelerating through the year. And then as we saw the, you know, conditions flashing more risk, which we clearly did going into this year, as we saw FX headwinds and, you know, announced policy changes that were likely to be impactful. We've accelerated our efforts to manage those costs and improve efficiency. And it's really across all areas of the business. Artie can speak to Topgolf, but they did meaningful reductions in the corporate overhead, portions of which were last year, but then accelerated significantly this year.

Megan Clap: Sure Megan I'll take a cut at it.

Speaker Change: It's.

Speaker Change: It's a little bit of both so we were aggressive at going after cost and efficiency improvements.

Speaker Change: Speak to top golf, but they did meaningful.

Speaker Change: Reductions in corporate overhead.

Artie Starrs: You know, as I mentioned, we're pleased with the pickup and the walk in side of the business and in April and events have have softened and that informs the guidance we put forward for for Q2. Okay, great. Thank you.

Speaker Change: Really starting.

Speaker Change: Portions of which were last year, but then accelerated significantly this year.

Speaker Change: This time last year and accelerating through the year and then as we solve the.

Speaker Change: We have done the same here at the corporate side of.

Speaker Change: Conditions.

Speaker Change: Flashing more risk, which we clearly did going into this year as we saw FX headwinds and.

Speaker Change: Top golf Callaway.

Speaker Change: We are driving further efficiencies in the operation side of the business.

Megan Clapp: The next question is from Megan Clapp with Morgan Stanley. Please go ahead. I wanted to ask a little bit about the cost savings that you've talked about. I think Chip and Brian, you both mentioned that proactive cost savings are positioning you to be able to hold the guidance today, despite the tariffs and the reduction in Topgolf revenue. When we think about the cost savings, what you've done, is it just coming in better than you anticipated, or are there incremental cost savings you've identified? If it is that latter, could you maybe just expand a bit more on the products versus Topgolf side, what some of those cost savings are?

Speaker Change: Announced policy changes.

Speaker Change: So.

Speaker Change: That were.

Speaker Change: There's quite a bit going on on all fronts there.

Speaker Change: Likely to be impactful.

Speaker Change: We've accelerated our efforts to manage those costs and improve efficiency and it's really across all areas of the business already.

Speaker Change: But the fact that we had had that those wheels in motion already.

Speaker Change: And then just could continue and accelerate them I think has benefited the business a great deal and allowed us to.

Speaker Change: Speak to top golf, but they did meaningful.

Speaker Change: Reductions in corporate overhead.

Speaker Change: That plus our strong start to the year has allowed us to.

Speaker Change: Portions of which were last year, but then accelerated significantly this year.

Speaker Change: Hold our current position.

Brian Lynch: We have done the same here at the corporate side of Topgolf Callaway. We are driving further efficiencies in the operations side of the business. So, there's, you know, quite a bit going on on all fronts there, but the fact that we had had that, those wheels in motion already, and then just could continue and accelerate them, I think has benefited the business a great deal and allowed us to You know, that plus a strong start to the year has allowed us to, you know, hold our current position. Great, that's helpful.

Speaker Change: We have done the same here.

Speaker Change: Great. That's helpful. And then maybe just a follow up.

Speaker Change: At the corporate side of.

Speaker Change: Very helpful commentary on on and off.

Speaker Change: Top golf Callaway.

Speaker Change: On the spin and how you think about leverage for both businesses Wonder. If you had previously said that top golf would be funded with I think it was approximately $200 million in cash as part of the separation plan I wondered if you could maybe give us an update on that number in particular and whether your view on the on the cash level has.

Speaker Change: We're driving further efficiencies in the operation side of the business.

Brian Lynch: Sure, Megan, I'll take a cut at it. It's a little bit of both. So, you know, we were aggressive at going after costs and efficiency improvements, really starting, you know, this time last year and accelerating through the year. And then as we saw the, you know, conditions flashing more risk, which we clearly did going into this year, as we saw FX headwinds and, you know, announced policy changes that were likely to be impactful. We've accelerated our efforts to manage those costs and improve efficiency. And it's really across all areas of the business. Artie can speak to Topgolf, but they did meaningful reductions in the corporate overhead, portions of which were last year, but then accelerated significantly this year.

Speaker Change: So.

Speaker Change: There is.

Speaker Change: A bit going on on all fronts there.

Speaker Change: But the fact that we had had that those wheels in motion already.

Speaker Change: And then just could continue and accelerate them I think has benefited the business a great deal and allowed us to.

Speaker Change: Jed I'll, just just given how much the macro how it's changed thank you.

Brian Lynch: Hi, Brian.

Speaker Change: That plus our strong start to the year has allowed us to.

Speaker Change: You are correct. We did say originally that we our plan at that time was too.

Speaker Change: Hold our current position.

Speaker Change: Great. That's helpful. And then maybe just a follow up.

Brian Lynch: And then maybe just a follow up. Very helpful commentary on on an update on the spin and how you think about leverage for both Wondered, you had previously said that Topgolf would be funded with I think it was approximately 200 million in cash as part of the separation plan. Wondered if you could maybe give us an update on on that number in particular and whether your view on the on the cash level has changed at all just just given how much the the macro. Hi Meg, it's Brian. You're correct. We did say originally that we are in plan at that time was to have no funded debt, just the venue liabilities with Topgolf and give them 200 million in cash.

Speaker Change: Very helpful commentary on on and off.

Speaker Change: On the spin and how you think about leverage for both businesses' wondered you had previously said that top golf would be funded with I think it was approximately $200 million in cash as part of the separation plan I Wonder if.

Speaker Change: And while we're not ready to give specifics I will say that we would expect to give them less cash at this point and probably a modest amount of debt was shaken easily handle and this is all designed to make sure that.

Speaker Change: If you could maybe give us an update on that number in particular and whether your view on the on the cash level has changed at all just given how much the macro has changed thank you.

Speaker Change: Both businesses are set up and that the remain co was not too overly levered.

Matthew Boss: Okay, Great that's super helpful. Thanks, Brian.

Speaker Change: Hi, Brian.

Speaker Change: The next question is from Lucas Hudson with Bank of America. Please go ahead.

Speaker Change: You are correct. We did say originally that we our plan at that time was too.

Lucas Hudson: Hi, Thanks for taking my question.

Speaker Change: Have no funded debt just the venue liabilities with top golf and give them $200 million in cash, but a lot has changed since then that the whole environment has changed and so we are reassessing the capital structure and while we're not ready to give specifics I will say that we would expect to give them less cash at this point and probably a modest amount of debt.

Speaker Change: Much of the top golf same venue sales reduction was the result of April trends versus a more cautious outlook in three and <unk> from a softer consumer.

Brian Lynch: But a lot has changed since then, the whole environment has changed. And so we're reassessing the capital structure. And while we're not ready to give specifics, I will say that we would expect to give them less cash at this point, and probably a modest amount of debt, which they can easily handle. And this is all designed to make sure that both businesses are set up and that the main co is not too overly leveraged. Okay, great. That's super helpful. Thanks, Brian.

Lucas Hudson: Yes. Thanks this is already.

Speaker Change: I would say that.

Speaker Change: The primary thing that drove it is just the view on events. So.

Speaker Change: Shaken easily handle and this is all designed to make sure that.

Speaker Change: Events in the quarter and then as we look out this quarter that that really is what drove the bulk of it.

Speaker Change: Both businesses are set up and that the remain co is not too overly levered.

Speaker Change: When we look at our one or walk in one and two bed business.

Speaker Change: Okay, Great that's super helpful. Thanks, Brian.

Speaker Change: We're seeing improved traffic trends are obviously investing in value and getting some SPV.

Lucas Hudson: The next question is from Lucas Hudson with Bank of America, please go ahead. Hi, thanks for taking my question. How much of the Topgolf same venue sales reduction was the result of April trends versus a more cautious outlook in 3&4Q from a softer consumer?

Lucas Hudson: The next question is from Lucas Hudson with Bank of America. Please go ahead.

Megan Clapp: Great, that's helpful. And then maybe just a follow up. Very helpful commentary on on an update on the spin and how you think about leverage for both Wondered, you had previously said that Topgolf would be funded with, I think it was approximately $200 million in cash as part of the separation plan, wondered if you could maybe give us an update on that number in particular and whether your view on the cash level has changed at all, just given how much the macro.

Speaker Change: Down year over year from that but its primarily three plus payments.

Hi, Thanks for taking my question how much of the top golf same venue sales reduction was the result of April trends versus a more cautious outlook in three and <unk> from a software consumer.

Speaker Change: Got it and then just staying on top golf venue sales regarding <unk> guide.

Speaker Change: Could you just talk about what you have to do to hit the top or bottom end of the guide.

Arthur Starrs: Yeah, thanks. This is Artie. I would say that the primary thing that drove it is is just the view on events. So The events in the quarter, and then as we look out this quarter, that really is what drove the bulk of it. When we look at our walk-in and one- and two-day business... you know, we're seeing improved traffic trends. We're obviously investing in value and getting some SPV. down year-over-year from that, but it's primarily three-plus payoff.

Lucas Hudson: Yes. Thanks this is already.

Lucas Hudson: I would say that the primary thing that drove it is just the view on events.

Speaker Change: Yes, I think it's.

Speaker Change: An extension in my prior comment I think that the.

Lucas Hudson: <unk>.

Lucas Hudson: Events in the quarter and then as we look out this quarter that that really.

Speaker Change: The range of the guide contemplates.

Lucas Hudson: What drove the bulk of it.

Speaker Change: The midpoint contemplates what we're currently seeing.

Brian Lynch: Hi Meg, it's Brian. You're correct. We did say originally that we are in plan at that time was to have no funded debt, just the venue liabilities with Topgolf, and give them $200 million in cash. But a lot has changed since then. The whole environment has changed. And so we're reassessing the capital structure. And while we're not ready to give specifics, I will say that we would expect to give them less cash at this point, and probably a modest amount of debt, which they can easily handle. And this is all designed to make sure that both businesses are set up and that the RemainCo is not too overly leveraged.

Lucas Hudson: When we look at our one or walk in one and two bed business.

And if three plus day events were to come in worse than we currently expect then that would inform the sort of the lower end of the worsening of the guide.

Lucas Hudson: We're seeing improved traffic trends are obviously investing in value and getting some SPV.

Lucas Hudson: Down year over year from that but its primarily three plus payables.

Speaker Change: Got it thanks for the color and good luck going forward.

Arthur Starrs: Got it.

Arthur Starrs: And then just staying on Topgolf, same venue as Sales, regarding 2Q Guide, could you just talk about what you have to do to hit the top or the bottom end of the guide? Yeah, I think it's an extension of my prior comment. I think the The range of the guide contemplates, the midpoint contemplates what we're currently seeing. And if, you know, three plus bay events were to come in worse than we currently expect, then, you know, that would inform the sort of the lower end or the worst end of the game.

Lucas Hudson: Got it and then just staying on top golf same venue sales regarding <unk> guide.

Speaker Change: Thank you.

Speaker Change: The next question is from JP <unk> with Roth Capital Partners. Please go ahead.

Lucas Hudson: Could you just talk about what you have to do to hit the top or the bottom end of the guide.

Speaker Change: Great Hi, guys. Thanks for taking my questions today.

JP: Just again kind of thinking about the the value reset at top golf in.

Lucas Hudson: Yes, I think it's.

Lucas Hudson: An extension in my prior comment I think.

Speaker Change: Our risks.

Lucas Hudson: The.

Speaker Change: Being overly reductive I I'm just curious like is there a way that you're thinking about how much you're effectively trying to kind of reduce price, we've always spoken about sort of a.

Lucas Hudson: The range of the guide contemplates.

Megan Clapp: Okay, great. That's super helpful. Thanks, Brian.

Lucas Hudson: The midpoint contemplates what we're currently seeing.

Lucas Hudson: The next question is from Lucas Hudson with Bank of America. Please go ahead. Hi, thanks for taking my question.

Lucas Hudson: And if three plus day events were to come in worse than we currently expect then that would inform the sort of the lower end of the worsening of the guide.

Speaker Change: Our weighted average in terms of hourly price per Bay is there just kind of a high level way that you guys think like we need to be 10% to 20% lower.

Artie Starrs: How much of the Topgolf same-venue sales reduction was the result of April trends versus a more cautious outlook in 3&4Q from a softer consumer? Yeah, thanks.

Unknown Executive: Got it. Thanks for the color and good luck going forward.

Lucas Hudson: Got it thanks for the color and good luck going forward. Thank.

Unknown Executive: Thank you.

Lucas Hudson: Thank you.

Speaker Change: Yes.

Joe Altobello: The next question is from J.P. Wallum with Roth Capital Partners. Please go ahead. Great. Hi, guys. Thanks for taking my questions today.

Speaker Change: The next question is from JP <unk> with Roth Capital Partners. Please go ahead.

Artie Starrs: This is Artie. I would say that the primary thing that drove it is is just the view on events. So The events in the quarter, and then as we look out this quarter, that really is what drove the bulk of it. When we look at our walk-in and one- and two-bay business... You know, we're seeing improved traffic trends. We're obviously investing in value and getting some SPV. down year-over-year from that, but it's primarily three-plus pay-a-week.

Speaker Change: Yes, I think it differs and hopefully with the detail. We've given you were trying to be very methodical about this by venue by market by region.

Speaker Change: Great Hi, guys. Thanks for taking my.

Speaker Change: Questions today.

Joe Altobello: Just again, kind of thinking about the value reset at Topgolf and, you know, at risk of being overly reductive, I'm just curious, like, is there a way that you're thinking about how much you're effectively trying to kind of reduce price? If I was thinking about sort of a you know, a weighted average in terms of hourly price per bay, is there just kind of a high level way that you guys think like, we need to be 10 to 20% lower? Yeah, I think it differs. And hopefully with the detail we've given you, we're trying to be very methodical about this by venue, by market, by region.

Speaker Change: Just again kind of thinking about the the value reset at top golf in.

Speaker Change: And then there is also a day and week part component to it so.

Speaker Change: There are risks.

Speaker Change: The data doesn't suggest like a crude percentage.

Speaker Change: Being overly reductive I I'm just curious like is there a way that you're thinking about how much you're effectively trying to kind of reduce price. We've always told you about sort of a.

Speaker Change: The data suggests that there are certain times of the week and certain times of the day that we have an absolute right to win and if we have a more compelling price point, we can drive traffic and we're seeing that.

Speaker Change: Our weighted average in terms of hourly price per Bay is there just kind of a high level way that you guys think like we need to be 10% to 20% lower.

Artie Starrs: Got it.

Artie Starrs: And then just staying on Topgolf, same in your sales, regarding 2Q Guide, could you just talk about what you have to do to hit the top or the bottom end of the guide? Yeah, I think it's an extension of my prior comment. I think the The range of the guide contemplates, the midpoint contemplates what we're currently seeing. And if, you know, three plus bay events were to come in worse than we currently expect, then, you know, that would inform the sort of the lower end or the worst end of the game. Thanks for the color and good luck going forward.

Speaker Change: So.

Speaker Change: Embedded the breakdown provided in the script sort of a third a third a third across the booking fees alcohol attachment we think is.

Speaker Change: Yes.

Speaker Change: Yes, I think it differs and hopefully with the detail. We've given you were trying to be very methodical about this by venue by market by region.

Speaker Change: Something thats just price sensitivity of the consumer and then a third coming from value that's probably the best guidance I could give you across the whole.

Arthur Starrs: And then there's also a day and week part component to it. So the data doesn't suggest like a crude percentage. The data suggests that there are certain times of the week and certain times of the day that we have an absolute right to win. And if we have a more compelling price point, we can drive traffic and we're seeing So, you know, embedded the breakdown I provided in the script sort of a third, a third, a third across, you know, the booking fees, you know, alcohol attachment, we think is You know something that's a just price sensitivity of the consumer and then a third coming from value That's probably the best guidance I could give you across the whole revenue structure, if you want to call it that.

Speaker Change: And then there is also a day and week part component to it so.

Speaker Change: Revenue structure, if you want to call it that.

Speaker Change: The data doesn't suggest like a crude percentage.

Speaker Change: What I might say is if you look at Sunday and you look at top golf nights, depending upon the venue that could be 15% to 20% of venues volume in a given week and if you think about.

Speaker Change: The data suggests that there are certain times of the week and certain times of the day that we have an absolute right to win and if we have a more compelling price point.

Speaker Change: We can drive traffic and we're seeing that.

Unknown Executive: Thank you.

Speaker Change: Gameplay being approximately half of our revenue stream.

Speaker Change: So.

Joseph Altobello: The next question is from J.P. Wallum with Roth Capital Partners. Please go ahead. Great. Hi, guys. Thanks for taking my questions today.

Speaker Change: Embedded the breakdown provided in the script sort of a third a third a third across the booking fees alcohol attachment we think is.

Speaker Change: And then the price that we put into market could be 30 or 40% off of that.

Speaker Change: It kind of gets close to that third a third a third a shared is the overall breakdown.

Joseph Altobello: Just again, kind of thinking about the value reset at Topgolf and, you know, at risk of being overly reductive, I'm just curious, like, is there a way that you're thinking about how much you're effectively trying to kind of reduce price? If I was thinking about sort of a you know, a weighted average in terms of hourly price per bay. Is there just kind of a high level way that you guys think like, we need to be 10 to 20% lower? Yeah, I think it differs. And hopefully with the detail we've given you, we're trying to be very methodical about this by venue, by market, by region.

Speaker Change: If something Thats just price sensitivity of the consumer and then a third coming from value is probably the best guidance I could give you across the whole.

Speaker Change: Okay very helpful.

Speaker Change: And then just one more.

Speaker Change: Maybe more on a kind of high level basis here, but we've heard from a kind of a few different companies maybe.

Speaker Change: Revenue structure, if you want to call it that.

Arthur Starrs: What I might say is if you look at Sunday and you look at Topgolf nights, depending upon the venue, that could be 15 to 20 percent of a venue's volume in a given week. And if you think about gameplay being approximately half of our revenue stream, and then the price that we put into market could be 30 or 40 percent off of that, it kind of gets close to that third, a third, a third I shared as the overall breakdown.

Speaker Change: What I might say.

Speaker Change: If you look at Sunday, and you look at top golf nights, depending upon the venue that could be 15% to 20% of a venues volume in a given week and if you think about.

Speaker Change: Surprises about less impact from tariffs and understand that that's a moving target every single day, but I guess the one thing that is pretty repetitive is price being somewhat of a lever and ideally not one that anyone wants to pull but definitely a lever that could help offset.

Speaker Change: Gameplay being approximately half of our revenue stream.

Speaker Change: And then the price that we put into market could be 30 or 40% off of that.

Speaker Change: And so.

Speaker Change: As we think about kind of the back half of the year and into next year. How much do you guys worry that you could see a good amount of price increases across the industry and then might kind of slow some demand headed into next year.

Speaker Change: It kind of gets close to that third a third a third a shared is the overall breakdown.

Artie Starrs: And then there's also a day and week part component to it. So the data doesn't suggest like a crude percentage. The data suggests that there are certain times of the week and certain times of the day that we have an absolute right to win. And if we have a more compelling price point, we can drive traffic and we're seeing So, you know, embedded the breakdown I provided in the script sort of a third, a third, a third across, you know, the booking fees, you know, alcohol attachment, we think is You know something that's a just price sensitivity of the consumer and then a third coming from value That's probably the best guidance I could give you across the whole revenue structure, if you want to call it that.

Chip Brewer: Okay, very helpful. And then just one more, you know, Chip, maybe more on a kind of high level basis here, but we've heard from kind of a few different companies, maybe pleasant surprises about, you know, less impact from tariffs and understand that that's a moving target every single day. But I guess the one thing that is pretty repetitive is, you know, price being somewhat of a lever and ideally not one that anyone wants to pull, but definitely a lever that could help offset. And so, you know, as we think about kind of the back half of the year and into next year, how much do you guys worry that, you know, you could see a good amount of price increases across the industry, and it might kind of slow some demand headed into next year?

Speaker Change: Okay very helpful.

Speaker Change: And then just one more.

Speaker Change: Maybe more on a kind of a high level basis here, but we've heard from a kind of a few different companies may be.

Speaker Change: Yes, J P. Obviously, that's something that we give quite a bit of thought to and.

Speaker Change: Surprises about less impacts from tariffs and understand that Thats, a moving target every single day, but I guess, the one thing that is pretty repetitive.

Speaker Change: We.

Speaker Change: Have three different segments of business in all three of those segments have a unique and different positions as they relate to the consumer. So if you look at our.

Price being somewhat of a lever and ideally not one that anyone wants to pull but definitely a lever that could help offset them. So yes.

Speaker Change: Golf equipment.

Speaker Change: Business.

We do not we both we think we have the ability to take price there in other words, the elasticity of demand to price isn't particularly high if we deliver a.

Speaker Change: We see about kind of the back half of the year and into next year, how much do you guys worry that.

Speaker Change: Could see a good amount of price increases across the industry and then might kind of slow some demand headed into next year.

Artie Starrs: What I might say is, if you look at Sunday and you look at Topgolf nights, depending upon the venue, that could be 15 to 20% of a venue's volume in a given week. And if you think about, you know, gameplay being approximately half of our revenue stream, and then the price that we put into market could be 30 or 40% off of that, it kind of gets close to that third, a third, a third, I share it as the overall breakdown.

Speaker Change: Pleasingly different demonstrably superior product.

Chip Brewer: Yeah, JP, obviously, that's something that we give quite a bit of thought to and You know, we have three different segments of business, and all three of those segments have a unique and different positions as they relate to the consumer. So if you look at our golf equipment business, we think we have the ability to take price there. In other words, the elasticity of demand to price isn't particularly high. If we deliver a pleasingly different, demonstrably superior product and have to raise price a little bit, it is proven over time that the consumer will generally accept that price with minimal impact to demand.

Speaker Change: And have to raise price a little bit it has proven over time that the consumer will generally accept that price with minimal impact to demand.

Speaker Change: Yes, J P. Obviously, that's something that we have quite a bit of thought to and.

Speaker Change: We.

Speaker Change: I have three different segments of business in all three of those segments have a unique and different positions as they relate to the consumer. So if you look at our.

Speaker Change: And.

Speaker Change: So we're in a fortunate position there. It's also a relatively wealthy consumer that's highly passionate.

Speaker Change: Golf equipment.

Speaker Change: In the active lifestyle.

Speaker Change: <unk>.

Speaker Change: While category, it's a little less.

Speaker Change: We do not we both we think we have the ability to take price there in other words, the elasticity of demand to price isn't particularly high if we deliver.

Speaker Change: Clear than that it's a little more sensitive to price than golf equipment, but not overly sensitive way again are in.

Speaker Change: <unk>.

Speaker Change: Premium category with Travis Matthew being that.

Speaker Change: Pleasingly different demonstrably superior product.

Speaker Change: Anchor brand remaining in that category in addition to Callaway.

Speaker Change: And have to raise price a little bit it has proven over time that the consumer will generally accept that price with minimal impact to demand.

Speaker Change: So not highly sensitive but not as potentially.

Speaker Change: In elastic as the golf equipment business and then are these business at top golf.

Chip Brewer: And So, you know, we're in a fortunate position there. It's also a relatively wealthy consumer that's highly passionate. In the active lifestyle category, it's a little less clear than that. It's a little more sensitive to price than golf equipment, but not overly sensitive. We again are in a premium category with Travis Matthew being the anchor brand remaining in that category in addition to Callaway. So, not highly sensitive, but not as potentially inelastic as the golf equipment business.

Speaker Change: And.

Speaker Change: So we're in a fortunate position there. It's also a relatively wealthy consumer that's highly passionate.

Speaker Change: That consumer is roughly $100000 a year consumer on average.

Speaker Change: In the active lifestyle.

Speaker Change: And value position.

Speaker Change: Lifestyle category, it's a little less.

Speaker Change: Positioning there and proposition is turning out to be fairly relevant for us and.

Speaker Change: Clear than that it's a little more sensitive to price than golf equipment, but not overly sensitive way again <unk>.

Speaker Change: We're taking the appropriate steps there, but in the product side of our business.

Chip Brewer: Yeah, JP, obviously, that's something that we give quite a bit of thought to and You know, we have three different segments of business and all three of those segments have a unique and different positions as they relate to the consumer. So if you look at our golf equipment business, you know, we do not, we both, we think we have the ability to take price there. In other words, the elasticity of demand to price isn't particularly high. If we deliver a pleasingly different, demonstrably superior product, and have to raise price a little bit, it is proven over time that the consumer will generally accept that price with minimal impact to demand.

Speaker Change: We think were relatively well positioned and as you could tell we also have the.

Speaker Change: Premium category with Travis Matthew being the <unk>.

Speaker Change: The ops team has done a nice job we're not high.

Speaker Change: <unk> brand remaining in that category in addition to Callaway.

Really in China in any meaningful or noticeable manner.

Speaker Change: So not highly sensitive but not as potentially.

Speaker Change: And so the tariff impact isn't as big as it is for some others.

Speaker Change: In elastic as the golf equipment business, and then <unk> business at top golf.

Chip Brewer: And then Artie's business at Topgolf. You know, that consumer is roughly $100,000 a year consumer on average. And, you know, value pres positioning there and proposition is turning out to be fairly relevant for us. And, you know, we're taking the appropriate steps there. But in the product side of our business, We think we're relatively well positioned, and as you could tell, we also have, you know, the ops team has done a nice job. We're not really in China in any meaningful or noticeable manner, and so the tariff impact isn't as big as it is for some others, plus our ability to manage through the process is certainly, we think, higher and proven.

Speaker Change: Plus our ability to manage through the process is certainly we think higher and proven.

Speaker Change: That consumer is roughly $100000 a year consumer on average.

Speaker Change: And value position.

Speaker Change: Understood I appreciate the color and best of luck.

Speaker Change: Positioning there and proposition is turning out to be fairly relevant for us and.

Speaker Change: Thank you.

Speaker Change: Your next question is from Casey Alexander with Compass point. Please go ahead.

Speaker Change: We're taking the appropriate steps there, but in the product side of our business.

Casey Alexander: Hi, good afternoon, I only have a couple of questions first of all.

Speaker Change: We think were relatively well positioned and as you could tell we also have the.

Speaker Change: Chip do you get the sense that some.

Speaker Change: The ops team has done a nice job we're not high.

Speaker Change: Some of the strong results in the golf equipment division or from orders.

Speaker Change: Really in China in any meaningful or noticeable manner.

Chip Brewer: So, you know, we're in a fortunate position there. It's also a relatively wealthy consumer that's highly passionate. In the active lifestyle category, it's a little less clear than that. It's a little more sensitive to price than golf equipment, but not overly sensitive. We, again, are in a premium category with Travis Matthew being the anchor brand remaining in that category in addition to Callaway. So not highly sensitive, but not as potentially inelastic as the golf equipment business. And then Artie's business at Topgolf. you know, that consumer is roughly $100,000 a year consumer on average. And, you know, value positioning there and proposition is turning out to be fairly relevant for us.

Speaker Change: Pulling through early and kind of front running the tariff regime.

Speaker Change: And so the tariff impact isn't as big as it is for some others.

Speaker Change: We did not see that in golf equipment now.

Speaker Change: Plus our ability to manage through the process is certainly we think higher and proven.

Speaker Change: Not from our customer base.

Speaker Change: Okay.

Speaker Change: That's fine great secondly.

Unknown Executive: Understood. Appreciate the color and best of luck. Thank you.

Speaker Change: Understood I appreciate the color and best of luck.

Speaker Change: It sounds like the value proposition is driven towards the one bay the 1% to two bay.

Speaker Change: Thank you.

Casey Alexander: The next question is from Casey Alexander with Compass Point, please go ahead. Hi, good afternoon. I only have a couple of questions. First of all, Chip, did you get the sense that, you know, some of the strong results in the golf equipment division were from orders pulling through early and kind of front running the tariff regime. We did not see that in golf equipment, no. Not from our customer base. Okay, um, that's fine. Great.

Speaker Change: Your next question is from Casey Alexander with Compass point. Please go ahead.

Casey Alexander: Hi, good afternoon, I only have a couple of questions first of all.

Speaker Change: And yet I heard a couple of times that a lot of the softness is in the three plus Bay is there also a value orientation program driven towards the events business or are you thinking of the events business as something thats temporary corporations will come back and it's still.

Speaker Change: Chip do you get the sense that some.

Speaker Change: Some of the strong results in the golf equipment division or from orders.

Speaker Change: Pulling through early and kind of front running the tariff regime.

Speaker Change: Our high touch premium product.

Speaker Change: We did not see that in golf equipment now.

Casey Alexander: Yes, good question Casey I think with.

Speaker Change: Not from our customer base.

Speaker Change: What we're doing on the events side is we're offering more kind of local regional flexibility.

Speaker Change: Okay.

Chip Brewer: And, you know, we're taking the appropriate steps there. But in the product side of our business. We think we're relatively well positioned, and as you could tell, we also have, you know, the ops team has done a nice job. We're not really in China in any meaningful or noticeable manner, and so the tariff impact isn't as big as it is for some others, plus our ability to manage through the process is certainly, we think, higher and proven. Understood.

Speaker Change: That's fine great secondly.

Arthur Starrs: Secondly, um, It sounds like the value proposition is driven towards the one bay, the one to two bay. And yet, I heard a couple times that a lot of the softness is in the three plus Bay. Is there also a value orientation program driven towards the events business? Or are you thinking of the events business as you know, something that's temporary corporations will come back and it's still a high touch premium product?

Speaker Change: It sounds like the value proposition is driven towards the one bay the 1% to two bay.

Speaker Change: Just in the direct direct sales channel so you wouldn't necessarily see it on the.

The rate card so to speak.

Speaker Change: But we're trying to win every sale thats out there and giving our teams the flexibility and incentives.

Speaker Change: To do that.

Speaker Change: But we agree with you. We think we have we have a great product and it is a premium product thats good value too.

Speaker Change: How you approach it in the market via advertising presentation on the website is just a little bit different than the than the player facing business sort of one and two bay business.

Speaker Change: High touch premium product.

Arthur Starrs: Yeah, good question, Casey. I think what what we're doing on the event side is we're offering more kind of local regional flexibility, just in the direct, direct sales channel. So you wouldn't necessarily see it on the rate card, so to speak. But we're, you know, we're trying to win every sale that's out there and giving our teams the flexibility and incentive. to do that. But we agree with you, we think we have, we have a great product. And it is a premium product, it's good value too. But how you approach it in the market via advertising presentation on the website is just a little bit different than the than the player facing business or the one and two base.

Speaker Change: Yes. Good question Casey I think with what we're doing on the events side is we're offering more kind of local regional flexibility.

Unknown Executive: Appreciate the color and best of luck. Thank you.

Casey Alexander: Yes Casey.

Casey Alexander: If I understand what youre, saying and it's on our call by call basis, and the sales Rep has the ability to compete with.

Casey Alexander: The next question is from Casey Alexander with Compass Point. Please go ahead. Hi, good afternoon. I only have a couple of questions. First of all, Chip, did you get the sense that, you know, some of the strong results in the golf equipment division were from orders pulling through early and kind of front running the tariff regime. We did not see that in golf equipment, no. Not from our customer base. Okay, um, that's fine. Great.

Speaker Change: Just in the direct direct sales channel so you wouldn't necessarily see it on the.

Casey Alexander: If it's bolero whoever youre competing with.

Casey Alexander: That's right and I'd say, it's on the it's a little bit more than our call by call basis, where we will have like a day of week, where we will have a specific promotion that we're trying to push through through the events channel, but it's a bit more market by market versus quote unquote across the entire portfolio at X price.

Speaker Change: The rate card so to speak.

Speaker Change: But we're trying to win every sale thats out there and giving our teams the flexibility and incentives.

Speaker Change: To do that.

Speaker Change: But we agree with you. We think we have we have a great product and it is a premium product that's good value too.

Speaker Change: But how you approach it in the market via advertising presentation on the website is just a little bit different than.

Speaker Change: Sorry to interrupt you chip.

Casey Alexander: Okay Casey.

Casey Alexander: This is probably something you already know but.

Casey Alexander: And the player facing business or the one and two bay business, Yes, Casey if.

Casey Alexander: The events business isn't as sensitive to price as the consumer channel is right what's going on right now in many cases, just corporations are pulling back on all discretionary spending and if somebody came in and said Hey, chip I can get a great event, but it's going to be.

Artie Starrs: Secondly, um, It sounds like the value proposition is driven towards the one bay, the one to two bay. And yet, I heard a couple times that a lot of the softness is in the three plus Bay. Is there also a value orientation program driven towards the events business? Or are you thinking of the events business as you know, something that's temporary corporations will come back and it's still a high touch premium product?

Arthur Starrs: If I understand what you're saying, then it's on a call-by-call basis and the sales rep has the ability to compete with, you know, if it's Bolero or whoever you're competing That's right. And I'd say it's on a it's a little bit more than a call by call basis where we'll have like a day of week where we'll have a specific promotion that we're trying to push through through the events channel. But it's a bit more market by market versus, quote unquote, across the entire portfolio at X price.

Casey Alexander: If I understand what youre, saying and it's on our call by call basis, and the sales Rep has the ability to compete with.

Casey Alexander: Bolero or whoever you are competing with.

Casey Alexander: That's right and I'd say, it's on the it's a little bit more than our call by call basis, where we'll have like a day of week, where we will have a specific promotion that we're trying to push through through the events channel, but it's a bit more market by market versus quote unquote across the entire portfolio at X price.

Casey Alexander: 10% off what do you think.

Casey Alexander: The answer is still no.

Casey Alexander: And.

Casey Alexander: So we're finding that the consumer is responding.

Casey Alexander: Very clearly to the.

Chip Brewer: Sorry to interrupt. No, that's okay, Casey. And this is probably something you already know. But the events business isn't as sensitive to price as the consumer channel is, right? What's going on right now, in many cases, is just corporations are pulling back on all discretionary spending. And, you know, if somebody came in and said, Hey, you know, Chip, I can get a great event, but it's gonna be, you know, 10% off, what do you think? The answer is still no. And so we're finding that the consumer is responding very clearly to the quality of the product we're putting out at Topgolf, combined with good value.

Speaker Change: Okay, sorry to interrupt you chip.

Artie Starrs: Yeah, good question, Casey. I think what what we're doing on the event side is we're offering more kind of local regional flexibility, just in the direct, direct sales channel. So you wouldn't necessarily see it on the rate card, so to speak. But we're, you know, we're trying to win every sale that's out there and giving our teams the flexibility and incentive. to do that. But we agree with you, we think we have, we have a great product. And it is a premium product, it's good value too. But how you approach it in the market via advertising presentation on the website is just a little bit different than the player facing business or the one and two baby.

Casey Alexander: The quality of the product, we're putting out at top golf combined with good value.

Speaker Change: Okay. Casey this is probably something you already know that the.

Casey Alexander: And the events is just less responsive to that it'll turnaround with overall.

Casey Alexander: The events business isn't as sensitive to price as the consumer channel is right what's going on right now in many cases.

Casey Alexander: Corporate confidence more than it will respond to.

Casey Alexander: <unk>, but we are providing some.

Speaker Change: <unk> are pulling back on all discretionary spending and if somebody came in and said Hey, chip I can get a great event, but it's going to be 10% off what do you think.

Casey Alexander: It sounds to me like it's time to have a no tariff pricing top golf.

Casey Alexander: Yes.

Casey Alexander: There are no tariffs at top golf Casey.

Casey Alexander: The answer is still no.

Casey Alexander: Alright, thank you.

Speaker Change: And.

Casey Alexander: Thank you.

Speaker Change: Next question is from Noah <unk> with Keybanc capital markets. Please go ahead alright.

Speaker Change: So we're finding that the consumer is responding.

Noah: Alright, Thanks for taking my questions I guess nice margin improvement on the equipment side.

Speaker Change: Very clearly to the.

Speaker Change: The quality of the product, we're putting out at top golf combined with good value.

Artie Starrs: If I understand what you're saying, then it's on a call-by-call basis and the sales rep has the ability to compete with, you know, if it's Bolero or whoever you're competing That's right. And I'd say it's on a it's a little bit more than a call by call basis where we'll have like a day of week where we'll have a specific promotion that we're trying to push through through the events channel. But it's a bit more market by market versus, quote unquote, across the entire portfolio at X price. Sorry to interrupt. No, that's okay, Casey. And this is probably something you already know.

Noah: I'm wondering if you could kind of talk a bit about the drivers there and how youre thinking about equipment margins. This year in general thanks.

Chip Brewer: And the events is just less responsive to that it'll turn around with overall corporate confidence, more than it will respond to value, but we are providing some.

Speaker Change: And the events is just less responsive to that it'll turnaround with overall.

Noah: Yes. Thank you we appreciate it we were.

Speaker Change: Corporate confidence more than it will respond to.

Noah: Really pleased with that as well so we saw improvement in Opex, but particular, we saw improvement in the gross margin. So gross margin was up.

Speaker Change: Value, but we are providing some.

Casey Alexander: Sounds to me like it's time to have a no tariff pricing night at Topgolf. Yeah, there you go. There are no tariffs at Topgolf, Casey. All right, thank you.

Speaker Change: It sounds to me like it's time to have a no tariff pricing top golf.

Speaker Change: Yes.

Noah: A.

Casey Alexander: There are no tariffs at top golf Casey.

Noah: A couple of hundred basis points year over year and.

Speaker Change: Alright, thank you.

Speaker Change: Thank you.

Noah Zatzkin: The next question is from Noah Zatzkin with KeyBank Capital Markets. Please go ahead. Hi, thanks for taking my questions. I guess, nice margin improvement on the equipment side.

Noah: We were pleased with that it's coming from multiple areas and these initiatives that we put in place over the last.

Speaker Change: Next question is from Noah <unk> with Keybanc capital markets. Please go ahead.

Noah: Thanks for taking my questions I guess nice margin improvement on the equipment side. So I was just wondering if you could kind of talk a bit about the drivers there and how youre thinking about equipment margins this year in general.

Noah: Sure.

Artie Starrs: But the events business isn't as sensitive to price as the consumer channel is, right? What's going on right now, in many cases, is just corporations are pulling back on all discretionary spending. And, you know, if somebody came in and said, Hey, you know, Chip, I can get a great event, but it's gonna be, you know, 10% off, what do you think? The answer is still no. And so we're finding that the consumer is responding very clearly to the quality of the product we're putting out at Topgolf, combined with good value. And the events is just less responsive to that it'll turn around with overall corporate confidence, more than it will respond to value, but we are providing some.

Noah: Several quarters in terms of improving.

Brian Lynch: So I was I was wondering if you could kind of talk a bit about the drivers there, and how you're thinking about equipment margins this year in general. Yeah, thank you, Noah. We appreciate it. We were really pleased with that as well. So we saw improvement in OPEX, but particularly we saw improvement in the gross margin. So gross margin was up couple hundred basis points year over year. And, you know, we were pleased with that it's coming from multiple areas, and these initiatives that we put in place over the last several quarters in terms of improving our yields.

Noah: Our yields.

Noah: Great.

Noah: Operating efficiency working on the mix et cetera. It comes from.

Speaker Change: Yes.

Speaker Change: Yes. Thank you. We appreciate it we were really pleased with that as well. So we saw improvement in Opex, but particular, we saw improvement in the gross margin. So gross margin was up.

Noah: Lots of different areas, but it's starting to.

Noah: Manifest itself to having said that the tariff impact that we will experience and we will mitigate portions of it but we will have some level of tariff impact that will obviously start to manifest itself.

Speaker Change: A couple of hundred basis points year over year.

Speaker Change: And.

Speaker Change: We were pleased with that it's coming from multiple areas.

Noah: Increasingly through the year and was did not have any significant impact in in Q1.

Speaker Change: These initiatives that we put in place over the last.

Several quarters in terms of improving.

Noah: Great and maybe just one on kind of the industry any sense of maybe how retail or the consumer behavior on the equipment side.

Speaker Change: Our yields.

Brian Lynch: freight, operating efficiency, working on the mix, etc. It comes from lots of different areas, but it's starting to manifest itself.

Speaker Change: <unk>.

Speaker Change: Operating efficiency working on the mix et cetera. It comes from.

Noah: In April.

Noah: And any sense of kind of the promo level that's out there right now.

Casey Alexander: Sounds to me like it's time to have a no tariff pricing night at Topgolf. Yeah, there we go. There are no tariffs at Topgolf, Casey. All right, thank you.

Speaker Change: Lots of different areas, but it's starting to.

Brian Lynch: Now having said that, the tariff impact that we will experience, and we will mitigate portions of it, but we will have some level of tariff impact, that will obviously start to manifest itself increasingly through the year, and did not have any significant impact in Great.

No.

Speaker Change: Manifests itself to having said that the tariff impact that we will experience and we will mitigate portions of it but we will have some level of tariff impact that will obviously start to manifest itself.

Noah: No real change.

Noah: The golf consumer remained solid and fully engaged and.

Noah Zatzkin: The next question is from Noah Zatzkin with KeyBank Capital Markets. Please go ahead. Hi, thanks for taking my questions. I guess, nice margin improvement on the equipment side.

Speaker Change: Promotional activity is.

Speaker Change: Either consistent with how it normally is or maybe even a little bit better.

Speaker Change: Increasingly through the year and was did not have any significant impact in in Q1.

Brian Lynch: So I was I was wondering if you could kind of talk a bit about the drivers there, and how you're thinking about equipment margins this year in general. Yeah, thank you, Noah. We appreciate it. We were really pleased with that as well. So we saw improvement in OPEX, but particularly we saw improvement in the gross margin. So gross margin was up couple hundred basis points year over year. And, you know, we were pleased with that it's coming from multiple areas. And these initiatives that we put in place over the last several quarters in terms of improving our yields.

Speaker Change: Thank you.

Speaker Change: The next question is from Joe <unk> with Raymond James. Please go ahead.

Brian Lynch: Maybe just one on kind of the industry. Any sense of maybe how retail or the consumer behaved on the equipment side in April? And any sense of kind of the promo level that's out there right now? Thank you. You know, no real change. You know, the golf consumer remains solid and fully engaged and promotional activity is either consistent with how it normally is or maybe even a little bit better. Thank you.

Speaker Change: Great and maybe just one on kind of the industry any sense of maybe how retail or the consumer behavior on the equipment side.

Speaker Change: Thanks, Hey, guys. Good afternoon, just a quick question on top you mentioned youre, taking out a lot a lot of corporate cost here in the same time, you are prepping that business for potentially a sale or spin.

Speaker Change: In April and any sense of kind of the promo level that's out there right now thanks.

Speaker Change: No.

Speaker Change: With the spinoff turnkey requiring additional infrastructure, how do you balance the need to take out costs with the need to maybe build up some of the capabilities.

Speaker Change: No real change.

Speaker Change: The golf consumer remained solid and fully engaged and.

Speaker Change: Promotional activity is.

And that puts US ahead of the spin and does that impact your decision on a sale or spin at all.

Speaker Change: Either consistent with how it normally is or maybe even a little bit better.

Speaker Change: Casey I think that we are.

Speaker Change: Thank you.

Speaker Change: Sorry, Joe Joe Joe I think we are open to whatever.

Speaker Change: Thank you.

Joe Altobello: The next question is from Joe Altobello with Raymond James. Please go ahead. Thanks. Hey, guys. Good afternoon. Just a quick question on Topgolf.

Speaker Change: The next question is from Joe <unk> with Raymond James. Please go ahead.

Brian Lynch: freight, operating efficiency, working on the mix, et cetera. It comes from lots of different areas, but it's starting to manifest itself.

Speaker Change: Creates the most shareholder value. So we ran I think spin or sale, we will explore that and do whatever creates the most.

Joe: Thanks, Hey, guys. Good afternoon, just a quick question on top you mentioned youre, taking out a lot a lot of corporate cost here.

Joe Altobello: You mentioned you're taking out a lot of corporate costs here, and at the same time, you're prepping that business for potentially a sale or spin with a spinoff potentially requiring additional infrastructures. How do you balance the need to take out costs with the need to maybe build up some of the capabilities in that business ahead of the spin? And does that impact your decision on a sale or spin at all? Okay, I think that we are. I mean, Joe, Joe, Joe, I think we are open to whatever Creates the most shareholder value. So when you're analyzing spin or sell we will explore that and do whatever creates the most We are continuing to do the cost reductions, which are, as Chip mentioned, which are funding a lot of the initiatives we have out there now, and balancing that with, which is not that much incremental cost we're going to have to add for Topgolf to go stand out.

Speaker Change: We are continuing to do the cost reductions, which are as chip mentioned, which are funding a lot of the initiatives. We have out there now and balancing that with which is not that much incremental costs, we're going to have to add.

Brian Lynch: Now, having said that, the tariff impact that we will experience, and we will mitigate portions of it, but we will have some level of tariff impact that will obviously start to manifest itself increasingly through the year, and did not have any significant impact in Great.

Speaker Change: Tom you are prepping that business for potentially a sale or spin.

Speaker Change: With the spinoff company, requiring additional infrastructure, how do you balance the need to take out costs with the need to maybe build up some of the capabilities in.

Speaker Change: For a tough comp to gross.

Speaker Change: Stand alone.

Speaker Change: Okay, and just maybe a quick follow up just to clarify with tariffs to $25 million does your guide assume you mitigate pretty much all of that.

In that business ahead of the spin and does that impact your decision on a sale or spin at all.

Brian Lynch: Maybe just one on kind of the industry. Any sense of maybe how retail or the consumer behaved on the equipment side in April? And any sense of kind of the promo level that's out there right now? Thank you. You know, no real change. You know, the the golf consumer remains solid and fully engaged and promotional activity is either consistent with how it normally is or maybe even a little bit better. Thank you.

Casey Alexander: Casey I think that we are.

Speaker Change: We don't specify how much we mitigate.

Speaker Change: I mean, sorry, Joe Joe Joe I think we are open to whatever.

Speaker Change: That.

Speaker Change: But it is all included in our guidance does that makes sense.

Speaker Change: Creates the most shareholder value. So we ran I think spin or sale, we will explore that and do whatever creates the most.

Speaker Change: Yes. It does thank you.

Unidentified: This concludes our question and answer session I would like to turn the conference back over to chip Brewer for any closing remarks.

Chip Brewer: Alright, well I want to thank everybody for joining us today.

Chip Brewer: Enjoy the rest of your spring and into the summer I Hope you get out and play some golf maybe visit top golf, we look forward to updating you further on our next call, which will be end of the summer. Thank you.

Speaker Change: For tough comps.

Speaker Change: Stand alone.

Brian Lynch: Okay, and just maybe a quick follow up, just to clarify in the Paris, the 25 million, does your guide assume that you mitigate pretty much all of that? We don't specify how much we mitigate of that, but it is all included in our guidance. Does that make sense? Oh, Yes, it does. Thank you.

Speaker Change: Okay, and just maybe a quick follow up just to clarify on the Paris. The $25 million does your guide assume you mitigate pretty much all of that.

Chip Brewer: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

Joe Altobello: The next question is from Joe Altobello with Raymond James. Please go ahead. Thanks. Hey, guys. Good afternoon.

Speaker Change: We don't specify how much we mitigate.

Joe Altobello: Just a quick question on Topgolf. You mentioned you're taking out a lot of corporate costs here. And at the same time, you're prepping that business for potentially a sale or spin with the spinoff potentially requiring additional infrastructures. How do you balance the need to take out costs with the need to maybe build up some of the capabilities in that business ahead of a spin? And does that impact your decision on a sale or spin at all? Okay, I think that we are. I mean, Joe, Joe, Joe, I think we are open to whatever Creates the most shareholder value.

Speaker Change: But it is all included in our guidance does that makes sense.

Speaker Change: Yes. It does thank you.

Operator: This concludes our question and answer session.

Speaker Change: This concludes our question and answer session I would like to turn the conference back over to chip Brewer for any closing remarks.

Chip Brewer: I would like to turn the conference back over to Chip Brewer for any closing remarks. All right. Well, I want to thank everybody for joining us today. Enjoy the rest of your spring and into the summer. I hope you get out and play some golf, maybe visit Topgolf. We look forward to updating you further on our next call, which will be end of the summer.

Chip Brewer: Alright, well I want to thank everybody for joining us today.

Chip Brewer: Enjoy the rest of your spring and into the summer I Hope you get out and play some golf maybe visit top golf.

Chip Brewer: Look forward to updating you further on our next call, which will be end of the summer. Thank you.

Operator: Thank you.

Operator: The conference is now concluded.

Chip Brewer: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

Operator: Thank you for attending today's presentation.

Operator: You may now disconnect.

Chip Brewer: So when you're analyzing spin or sell we will explore that and do whatever creates the most We are continuing to do the cost reductions, which are, as Chip mentioned, which are funding a lot of the initiatives we have out there now, and balancing that with, which is not that much incremental cost we're going to have to add for Topgolf.

Chip Brewer: [music].

Unknown Executive: special thanks to Thanks for Watching!

Unknown Executive: This concludes our question and answer session.

Chip Brewer: I would like to turn the conference back over to Chip Brewer for any closing remarks. All right, well, I want to thank everybody for joining us today. Enjoy the rest of your spring and into the summer. I hope you get out and play some golf, maybe visit Topgolf. We look forward to updating you further on our next call, which will be end of the summer. Thank you.

Unknown Executive: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Chip Brewer: Okay.

Chip Brewer: Yeah.

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Operator: Goodbye. Good afternoon, and welcome to the Topgolf Callaway Brands first quarter 2025 earnings conference call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then 1 on your telephone keypad. To draw your question, please press star then 2. Please note, this event is being recorded.

Speaker Change: [music].

Speaker Change: Should you need assistance. Please signal a conference specialist by pressing the Starkey followed by zero.

Speaker Change: After today's presentation there'll be an opportunity to ask questions.

Speaker Change: To ask a question you May press Star then one on your telephone keypad to withdraw your question. Please press Star then two.

Speaker Change: Please note this event is being recorded.

Katina Metzidakis: I would now like to turn the conference over to Katina Metzidakis, Vice President, Investor Relations. Please go ahead. Good afternoon, and welcome to Topgolf Callaway Brands first 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, Brian Lynch, our Chief Financial Officer and Chief Legal Officer, and Artie Starrs, Chief Executive Officer at Topgolf. Earlier today, the company issued a press release announcing its first quarter 2025 financial results. Our earnings presentation, as well as earnings press release, are both available on our Investor Relations website under the Financial Results tab.

Katina: I'd now like to turn the conference over to Katina met the Dockers Vice President Investor Relations. Please go ahead.

Katina met: Good afternoon, and welcome to the top golf Callaway brands first quarter earnings Conference call I'm Katina messed. It all gets vice President of Investor Relations and corporate Communications joining me on today's call are chip Brewer, our president and Chief Executive Officer, Brian Lynch, Our Chief Financial Officer, and Chief Legal Officer, and Artie Starrs, Chief Executive Officer, It's topical.

Katina met: Earlier today, the company issued a press release announcing its first quarter 2025 financial results our earnings presentation as well as earnings press release are both available on our Investor Relations website under the financial results tab.

Chip Brewer: 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. Thank you, Katina. Good afternoon, everyone, and thank you for joining our call today.

Katina met: 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.

Katina met: Patients. 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. Burke.

Burke: Thank you Katina and good afternoon, everyone and thank you for joining our call today.

Katina met: Starting on slide four.

Katina met: Q1 was a strong quarter for our company as we met or beat expectations in all segments of our business.

Katina met: I was particularly pleased with the margin improvement in our products business as well as the consumers' response to recent initiatives a top golf.

Katina met: On the strategic front, we were pleased to announce an agreement to sell Jack will skin to onto sports.

Katina met: Transaction that will enable greater business focus as well as provide further financial flexibility as we move forward on our strategic process for top golf.

Katina met: Before I go into the segment results I'll provide some comments on tariffs and their impact on us both in the near and long term.

Chip Brewer: Needless to say, it's tough to predict the exact impact at this point, as we can't be sure what the final rates will be. During our last call, we forecast approximately a $5 million impact based on what we knew at that time. As of this call, and assuming current rates of approximately 10% for all countries of origin other than Mexico, Canada, and China, this year's unmitigated impact would be approximately $25 million, an increase of $20 million versus our last call. Looking forward, if these are the final rates, we believe we will be able to mitigate some portion by further optimizing operations and accelerating cost reduction and margin programs. We then believe we will have the ability to pass the balance on with only a minor impact to demand.

Katina met: Needless to say, it's tough to predict the exact impact at this point as we can't be sure what the final rates will be.

Katina met: During our last call, we forecast approximately a $5 million impact based on what we knew at that time.

Katina met: As of this call and assuming current rates of approximately 10% for all countries of origin other than Mexico, Canada, and China. This year's unmitigated impact would be approximately $25 million, an increase of $20 million versus our last call.

Katina met: Looking forward. If these are the final rates, we believe we will be able to mitigate some portion by further optimizing operations and accelerating cost reduction and margin programs. We then believe we will have the ability to pass the balance on with only a minor impact.

Speaker Change: Jack to demand.

Chip Brewer: We believe we are benefiting from having been proactive on costs and margin initiatives over the last 12 months. and then accelerating them further recently. as well as from the scale, brand strength and capabilities of our organization. Having said this, we'll be watching the economy and resulting demand side close. as the risk of a further slowing of consumer activity has certainly gone up. And to be clear, my primary concern is on the demand side. And that outcome is an unknowable at this point. Fortunately, as previously communicated and shown in slide 14 of our presentation, it's worth reminding ourselves that golf equipment has not historically been sensitive to mild recession.

Speaker Change: We believe we are benefiting from having been proactive on cost and margin initiatives over the last 12 months and then accelerating them further recently.

Speaker Change: As well as from the scale brand strength and capabilities of our organization.

Speaker Change: Having said this we will be watching the economy, and resulting demand side closely.

Speaker Change: As the risk of a further slowing of consumer activity has certainly gone up.

Speaker Change: And to be clear my primary concern is on the demand side.

Speaker Change: And that outcome isn't unknowable at this point.

Speaker Change: Fortunately as previously communicated and shown in slide 14 of our presentation.

Speaker Change: It's worth reminding ourselves that golf equipment has not historically been sensitive to mild recessions.

Chip Brewer: Continuing on the US tariff front. Vietnam is our primary country of origin for both golf clubs and Travis Matthew Apparel. However, we also source goods from Taiwan, several other ASEAN countries. Peru, Bangladesh, and others. Fortunately, we source very little from mainland China for sale into the US. For the North American market, we assemble our custom golf clubs in Mexico. But even at a 25% US tariff, the cost impact is small since it is a value added tax. and the assembly is not a significant expense. On the ball side, I'd expect those of us that have a scaled and full manufacturing capabilities in the US to be better positioned long term.

Speaker Change: Continuing on the U S tariff front.

Speaker Change: Vietnam is our primary countries of origin for both golf clubs and Travis Matthew or apparel.

Speaker Change: However, we also sourced goods from Taiwan, several other <unk> countries, Peru, Bangladesh and others.

Speaker Change: Fortunately, we source very little from mainland China for sale into the U S.

Speaker Change: For the North American market, we assemble our custom golf clubs in Mexico.

Speaker Change: But even at a 25% U S tariff the cost impact is small since it is a value added tax.

Speaker Change: And the assembly is not a significant expense.

Speaker Change: On the ball side I would expect those of us that it is scaled in full manufacturing capabilities in the U S to be better position long term.

Chip Brewer: And it is also worth mentioning that recent exchange rate movements appear to be tied to the recent tariff policy. and a weaker dollar is decidedly positive for us. as approximately 40% of our products business is outside of the U.S.

Speaker Change: And it is also worth mentioning that recent exchange rate movements appear to be tied to the recent tariff policy.

And a weaker dollar is decidedly positive for us as approximately 40% of our products business is outside of the U S.

Chip Brewer: Now turning to our segment performer. starting with golf equipment. Both revenues and operating margins were ahead of expectations, and feedback on our product remained strong. In the driver category alone, Elite was awarded 15 out of 15 stars on the U.S. Golf Digest Hot List. was named today's golfer's expert choice in the UK, and our elite triple diamond model was named Golf Spy's Most Wanted Driver. Turning to Q1 results, our operating margins are benefiting from cost reduction and margin initiatives that we put into place over the last 12 months. Segment Opex also benefited from a lease termination incentive in our Japan subsidiary, which Brian will give you more color on during his comments.

Speaker Change: Now turning to our segment performance, starting with golf equipment both.

Speaker Change: With revenues and operating margins were ahead of expectations and feedback on our product remains strong.

Speaker Change: And the driver category alone Elite was awarded 15 out of 15 stars on the U S Golf Digest Hot list was named today's golfers expert choice in the UK.

Speaker Change: And our lead Triple Diamond model was named Golf's buys most wanted to driver.

Turning to Q1 results our operating margins are benefiting from cost reduction and margin initiatives that we put into place over the last 12 months.

Speaker Change: Segment op.

Speaker Change: Opex also benefited from a lease termination incentive in our Japan subsidiary, which Brian will give you more color on during his comments.

Chip Brewer: US rounds played were up 3.8% in March, but down a little year to date, simply reflecting the weather and overall demand in key global markets remain good through Q1. As expected, our market shares are down a little this year, reflecting a more competitive launch cadence. But I continue to feel good about the golf equipment segment, our brand, and our outlet.

Speaker Change: U S rounds played were up three 8% in March but down a little year to date simply reflecting the weather and.

Speaker Change: And overall demand in key global markets remained good through Q1.

Chip Brewer: In the Active Lifestyles segment, there's little new to report from an operational base. Based on customer feedback, market conditions remain challenging in Q1, down mid to high single digits. which was a continuation of last year's trend. Revenues in this segment were down in the quarter, primarily due to lower sales at Jack Wilson Europe, which was largely anticipated and planned for. Segment operating margins are up year over year reflecting our cost reduction and margin initiative. The biggest news in the segment is the agreement to sell the Jack Wolfskin brand later this quarter or early next. And I'd like to thank the Jax Wolfskin team for their work while a part of the Topgolf Callaway family.

Speaker Change: In the active lifestyle segment, there is little new to report from an operational basis.

Speaker Change: Based on customer feedback market conditions remained challenging in Q1 down mid to high single digits, which was a continuation of last year's trends.

Speaker Change: Revenues in this segment were down in the quarter, primarily due to lower sales at Jack will skin, Europe, which was largely anticipated and planned for.

Speaker Change: Segment operating margins are up year over year, reflecting our cost reduction and margin initiatives.

Speaker Change: The biggest news in this segment is the agreement to sell the Jack <unk> brand later this quarter or early next.

Speaker Change: And I'd like to think that Jack's wolfson team for their work well.

Speaker Change: Part of the top golf Callaway family.

Chip Brewer: In particular, the efforts to right size and reposition the business over the last year. I think the proposed transaction is a good outcome for all involved, and I wish the Jack Wilson team success going forward. Turning to Topgolf, our same venue sales were down approximately 12% for the quarter within the guidance range we provided during our last call, but towards the higher end. Importantly, we saw positive results from two key initiatives that started in mid-March. Sunday Funday and Topgolf Night. Sunday Funday was especially impactful, driving more than 20% improvements in same-day traffic. Stepping back to look at the big picture, from a positioning perspective, Topgolf continues to enjoy an enviable consumer position.

Speaker Change: In particular, the efforts to right size and reposition the business over the last year.

Speaker Change: I think the proposed transaction is a good outcome for all involved and I wish the Jack <unk> team success going forward.

Speaker Change: Turning to soft golf are same venue sales were down approximately 12% for the quarter.

Speaker Change: Within the guidance range, we provided during our last call, but towards the higher end.

Speaker Change: Importantly, we saw positive results from two key initiatives that started in mid March Sunday Fund day, and top golf nights SUNS.

Speaker Change: Sunday Fun day was especially impactful driving more than 20% improvements in same day traffic.

Speaker Change: Stepping back to look at the Big picture.

Speaker Change: From a positioning perspective top golf continues to enjoy an enviable consumer position.

Chip Brewer: Both golf and experiences like Topgolf remain on trend with consumers. and Topgolf appeals to a wide audience, not just golfers, but society at large, with an average income of approximately $100,000 per year. Topgolf also has a significant defensive moat, high venue returns, and the demonstrated ability to drive further improvement in venue margins. and consumers continue to enjoy the experience. As shown on slide 15, and using external data, our fund scores remain high and consumer feedback on the experience remains definitively positive, both in absolute terms and relative to our competitive set. But over the last 18 months, as the mid-income consumer has become more stretched.

Speaker Change: Both golf and experiences like top golf remain on trend with consumers.

Speaker Change: And top golf Appeals to a wide audience, not just golfers, but society at large with an average income of approximately $100000 per year.

Speaker Change: Top golf also has a significant defensive moat.

Speaker Change: Hi venue returns and the demonstrated ability to drive further improvement in venue margins.

Speaker Change: And consumers continue to enjoy the experience as shown on slide 15, and using external data our funds scores remain high and consumer feedback on the experience remains definitively positive.

Speaker Change: In absolute terms and relative to our competitive set.

Speaker Change: But over the last 18 months as the middle income consumers become more stretched top golf has begun to be perceived as relatively expensive.

Chip Brewer: Topgolf has begun to be perceived as relatively expensive. And in a slowing consumer environment, this is a significant but. As a result, to better drive long-term same-venue sales through economic cycles, we have made the strategic decision to reset the positioning, while at the same time continuing our efforts to drive efficiency, as well as continually improving and refreshing the experience. Although we will remain a premium brand and experience. We have done extensive analysis and have a definitive plan to change our value perception. and to do so while protecting and growing long term profitability. Sunday Funday and Topgolf nights are two excellent examples of key initiatives towards this end.

Speaker Change: And in a slowing consumer environment. This is a significant bot.

Speaker Change: Sunday Fund day in top golf nights are two excellent examples of key initiatives towards this end.

Chip Brewer: and Artie will share others with you as well. Let me be clear. We view this as a big change with significant upside, one that will be particularly important as Topgolf transitions to a separate independent company. As we change the consumer's value perception on Topgolf, we will open ourselves up for both more new and repeat customers throughout inevitable economic cycles. We can and we will do this while also driving an improved experience and long-term margin growth. With these new initiatives, we expect to see meaningful and nearly immediate progress on track. And we have. They will have a positive but lesser impact on same venue sales, as part of the traffic growth will be offset by a higher mix of value oriented daytime price.

And already will share others with you as well.

Speaker Change: Let me be clear.

Speaker Change: We view this as a big change with significant upside one that will be particularly important as top golf transitions to a separate independent company.

Speaker Change: As we change the consumers value perception on top golf.

Speaker Change: We will open ourselves up for both more new and repeat customers throughout inevitable economic cycles.

Speaker Change: We can and we will do this while also driving an improved experience and long term margin growth.

Speaker Change: With these new initiatives, we expect to see meaningful and nearly immediate progress on traffic.

Speaker Change: And we have.

Speaker Change: They will have a positive but lesser impact on same venue sales as part of the traffic growth will be offset by a higher mix of value oriented daytime pricing.

Chip Brewer: In the near term, these initiatives will temporarily pressure venue margins. Fortunately, we believe we can offset most of this impact in the short to midterm and are maintaining our full-year IVID.gov guidance for Topgolf. Long term, we continue to see upside in venue level margins. Artie will give you more color on all of this, including more specificity on the initiatives during his comments.

Speaker Change: In the near term these initiatives will temporarily pressure venue margins.

Speaker Change: Fortunately, we believe we can offset most of this impact in the short to midterm and are maintaining our full year EBITDA guidance for top golf.

Speaker Change: Long term, we continue to see upside in venue level margins.

Speaker Change: <unk> will give you more color on all of this including more specificity on the initiatives during his comments.

Turning to top golfs balance of the year same venue sales and revenue guidance given.

Speaker Change: Given the slow start to the year and economic uncertainty.

Speaker Change: We're revising the revenue in the same venue sales guidance to down 6% to 12%.

Speaker Change: For Q2, specifically, we expect a similar range of down 7% to down 12%.

Chip Brewer: Now switching to the Topgolf Process. We remain 100% committed and active in the process. We are still evaluating both the spin and the sail, and we continue to work towards a solution in the second half of this year. However, a lot has changed since we initially announced our intention to separate last September. As a result, if we spin to avoid RemainCo having too high a leverage, the capital structure we are now planning for Topgolf will be different than what we previously communicated. Having said this, in the spin scenario, we remain 100% committed to positioning both RemainCo and Topgolf in strong financial positions.

Speaker Change: Now switching to the top golf process.

Speaker Change: We remain 100% committed and active in the process. We are still evaluating both the spin and the sale and we continue to work towards a solution in the second half of this year.

However, a lot has changed since we initially announced our intention to separate last September.

Chip Brewer: Manageable Leverage Ratios and Promising Futures. Brian will give more color on this during his comment.

Speaker Change: Ryan will give more color on this during his comments.

Chip Brewer: Finally, turning to our full year total company guidance. Thanks for our strong first quarter, confidence in our operating abilities, and some help on the revenue side via foreign exchange. We are pleased to be able to hold our financial guidance other than the impact of the now planned sale of Jack Wilson. This guidance assumes the impact of current tariffs, net of action. The guidance does not assume further tariff escalation or an economic recession. This is clearly going to be an interesting year. But based on what we know at present, we remain well positioned to hit our full year number.

Speaker Change: We are pleased to be able to hold our financial guidance other than the impact of the now planned sale of Jack Welch skin.

Speaker Change: This guidance assumes the impact of current tariffs net of actions.

Speaker Change: The guidance does not assume further tariff escalation or an economic recession.

Speaker Change: This is clearly going to be an interesting year, but based on what we know at present, we remain well positioned to hit our full year numbers built.

Chip Brewer: build on our core strengths and unlock value via our strategic process. We remain excited and optimistic.

Speaker Change: Build on our core strengths and unlocked value via our strategic processes.

Speaker Change: We remain excited and optimistic.

Arthur Starrs: Artie, over to you for a more in-depth view of Topgolf, and then to Brian for CFO comments. Thanks, Chip. I'd like to share our performance for each of our key focus areas, along with what to expect for Q2 2025 and balance of year starting with same venue sales. As Chip mentioned, Topgolf's Q1 same-venue sales were down 12% and in line with our guidance. 3 Plus Bay corporate events were down 13% and the 1 to 2 Bay business was down 12%. One to two bay traffic was down 8% and average spend per visit was down 4%.

Speaker Change: Rd over to you for more in depth view of top golf and then to Brian for CFO comments.

Speaker Change: Thanks Chip.

Speaker Change: I'd like to share our performance for each of our key focus areas along with what to expect for Q2 2025 and balance of year, starting with same venue sales.

Speaker Change: As chip mentioned top Golfs Q1, same venue sales were down 12% and in line with our guidance.

Speaker Change: <unk> plus pay corporate events were down 13% and the 1% to two bay business was down 12%.

Speaker Change: One to two bay traffic was down 8% and average spend per visit was down 4%.

Speaker Change: Our number one priority is to drive traffic growth and improve value perception, which.

Speaker Change: Which we believe is key as we navigate the current environment and for the long term health of the brand.

Speaker Change: Overall traffic in the second quarter through April is approximately flat year over year with one to two day traffic up low single digits.

Speaker Change: We can directly attribute this to specific new offers and meaningful improvement in our price value consumer metrics.

Arthur Starrs: I'll cover in more detail the specific initiatives driving these results, but first I'd like to comment on the consumer and our events business. As we enter Q2 on the macro fund, we are clearly seeing a price sensitive consumer. While traffic was positive in April, same-venue sales were down approximately 10% with 3 plus bay down 17% and 1 to 2 bay down 8%. We continue to see players manage their spend, which we are addressing with targeted food and beverage offerings, which cater to group social occasions. In addition, our events business is pressured as corporate spending on team outings and entertainment has reduced.

Speaker Change: I will cover in more detail the specific initiatives driving these results, but first I'd like to comment on the consumer and our events business.

Speaker Change: As we enter Q2 on the macro front, we are clearly seeing a price sensitive consumer.

Speaker Change: While traffic was positive in April same venue sales were down approximately 10% with three plus paid down 17% and 1% to two bay down 8%.

We continue to see players manage their spend which we are addressing with targeted food and beverage offerings, which cater to group's social occasions.

Speaker Change: In addition, our events business is pressured as corporate spending on team outings and entertainment has reduced.

Speaker Change: It is clear that our corporate events business is going to be challenged in the near term and we have modified our operating structure accordingly.

Speaker Change: Lead volumes are down significantly, but we are providing more flexibility on rate and time for event planners, which has led to increased conversion rates.

Speaker Change: This softer outlook for our three plus pay business is contemplated in our revised 2025 same venue sales guidance.

Speaker Change: A bright spot as an increase in youth events, where our team has done a fantastic job of marketing to use organizations.

Speaker Change: These events provide great brand exposure to our core audience.

Speaker Change: Overall top golf events remain in outstanding and differentiated offering we are confident in our competitive position.

Speaker Change: As I mentioned, one to two day traffic through April has improved significantly.

Speaker Change: Average spend per visit is down high single digits, driven roughly equally by the removal of booking fees, which we believe is absolutely the right thing to do for the consumer as well as the increased mix of our value offers and low lower alcohol attachment rates.

Speaker Change: I am, particularly excited about the player response and brand impact of two key new initiatives, which chip mentioned earlier.

Sunday Fun day, and top golf nights.

Arthur Starrs: We have rolled this offer out to 80% of our venues. Topgolf Nights is having a smaller but still positive impact on sales and traffic and is focused on appealing to the younger late-night portion of our audience, driving late-night utilization and adding energy and fun in the hours following peak Friday and Saturday evenings. Our venue teams are doing an extraordinary job executing on these offerings, with fund scores continuing to improve year over year. Leveraging the learnings from Sunday Funday and Half Price Tuesday, in April, we began testing expanded value offerings from Monday through Thursday. Currently, we are in 40 venues, and while early, we are encouraged with the results and promising sales and traffic readings to date.

We have rolled this offer out to 80% of our venues.

Speaker Change: Top golf nights, as having a smaller but still positive impact on sales and traffic.

Speaker Change: And is focused on appealing to the younger late night portion of our audience driving late night utilization and adding energy and funds and the hours following peak Friday and Saturday evenings.

Speaker Change: Our venue teams are doing an extraordinary job executing on these offerings with fund scores continuing to improve year over year.

Speaker Change: Leveraging the learnings from Sunday funded and half price Tuesday in April we began testing expanded value offerings from Monday through Thursday.

Speaker Change: Currently we are in 40 venues and while early we are encouraged with the results and promising sales and traffic readings to date.

Arthur Starrs: With this increased traffic, we've added a Funday Faves appetizer, optimized for groups of four or more. In addition, with more walk-in players, we're making sure that Topgolf is providing a great experience not only in the bays, but also at our bar areas with new $5 drafts and $6 margaritas available in most markets. The early results are very encouraging in average spend per visit and overall attachment. These investments and expanded value alongside the softness and three plus Bay events will impact our venue margins in the near term. As a result, we are updating our outlook for EBITDAR margin and now expect an approximate 100 to 200 basis point decline year over year to approximately 32%.

Speaker Change: With this increased traffic we've added a funding faves appetizer optimized for groups of four or more.

Speaker Change: In addition, with more walk in players, we're making sure that top golf is providing a great experience not only in the base, but also at our bar areas with new $5 dropped from $6 Margarita is available in most markets.

Speaker Change: The early results are very encouraging and average spend per visit and overall attachment.

Speaker Change: These investments in expanded value alongside the softness in three plus day events will impact our venue margins in the near term.

Speaker Change: As a result, we are updating our outlook for EBITDAR margin and now expect an approximate 100 to 200 basis point decline year over year to approximately 32% How's.

Speaker Change: However, we are holding our full year adjusted EBITDA guidance as we are managing our corporate expenses to help support these investments.

Speaker Change: We will see significant long term margin opportunity for our venues and have proven our ability to grow these margins.

Speaker Change: This year, we continue to test optimize and rollout changes to our labor model, which will drive efficiencies and position venues to grow EBITDAR over the long term.

Speaker Change: We are choosing to invest in these traffic and brand driving initiatives, while still ensuring we provide the great player experience, we are well known for.

Speaker Change: We're able to flex the inventory of these shorter reservation times for peak demand periods.

Speaker Change: This does three things that are wins for our players and our business.

Speaker Change: Number one meets a shorter timeframe need for some groups number two expand the inventory we have in a day and creates the opportunity for an extra turn of ebay.

Speaker Change: And number three optimizes F&B spend per visit.

Speaker Change: Approximately a third of our players are already selecting 90 minute reservations.

Arthur Starrs: Given the success of our 90-minute reservation, we've also rolled out 60-minute reservations targeting late-night occasions and are encouraged by the early player response. It meets a post-dinner need for a group meetup where the private suite-like Topgolf experience within our bays is unique and fun. To further enhance the player and playmaker experience, we've begun our rollout of the Toast Point of Sale system. We're in three markets so far and on track to have approximately half of our venues on toast by year end. Toast will allow our Bay hosts to service more bays, accelerate speed of service, and over time provide comprehensive mobile order and pay capability.

Speaker Change: Given the success of our 90 minute reservation. We've also rolled out 60 minute reservations targeting late night occasions and are encouraged by the early player response.

Speaker Change: It meets a post dinner need for our group meet up where the private suite like top golf experience within our base is unique and fun.

Speaker Change: To further enhance the player and playmaker experience, we've begun our rollout of the <unk> point of sale system.

Speaker Change: We're in three markets, so far and on track to have approximately half of our venues on toast by year end.

Speaker Change: Toast will allow our bay hosted service more base accelerate speed of service and overtime provide comprehensive mobile order and pay capability.

Arthur Starrs: This summer, we have exciting marketing experience plans beyond the value offering expansion I've detailed. We're rolling out two new games, which will target social groups and competitive sports fans. We've also launched a Summer Fun Pass, outstanding family-oriented value that addresses our players' needs in the moment. What sets Topgolf apart is that we enjoy best-in-class brand regard and player experience metrics, holding the number one spot for fun and atmosphere. As we reset the brand positioning on value, we will appeal to both new and repeat consumers, thus setting up better same-venue sales through this economic cycle. In closing, I'm very enthusiastic about the success of our new initiatives.

Speaker Change: This summer, we have exciting marketing and experienced plants beyond the value offering expansion I have detailed.

Speaker Change: Which sets top golf apart is that we enjoy best in class brand regard and player experience metrics holding the number one spot for fun and atmosphere.

Speaker Change: As we reset the brand positioning on value, we will appeal to both new and repeat consumers. Thus.

Thus setting up better same venue sales through this economic cycle.

Speaker Change: In closing I'm very enthusiastic about the success of our new initiatives.

Arthur Starrs: are already having and the exciting launches we have for the summer and the fall. I believe this has the potential to be an incredibly important inflection point for Topgolf and set the brand for a successful future as an independent company.

Speaker Change: We're already having in the exciting launches we have for the summer and the fall.

Speaker Change: I believe this has the potential to be an incredibly important inflection point for top golf and set the brand for a successful future as an independent company.

Brian Lynch: Thank you, and over to you, Brian. Thank you, Artie, and good afternoon, everyone. Jumping into our Q1 results, consolidated revenues of $1.09 billion decreased 5% year-over-year. This result was better than expected and was primarily due to the decrease in Topgolf same menu sales, the right sizing of the Jack Wolfskin business. and Unfavorable Foreign Currency Rates. Q1 Adjusted EBITDA of $167 million increased 4% primarily due to increased profitability in the golf equipment and active lifestyle segment. The majority of this improvement was driven by improved gross margins and OpEx reduction. The segment's also benefited from a planned $12 million incentive to terminate early our lease for our Japan headquarters.

Speaker Change: Thank you and over to you Brian.

Brian: Thank you Aarti and good afternoon, everyone.

Brian: Jumping into our Q1 results consolidated revenues of $1.09 billion.

Brian: Decreased 5% year over year.

Brian: This result was better than expected and was primarily due to the decrease in top golf same venue sales the.

Brian: The right sizing of the Jack <unk> business.

Brian: An unfavorable foreign currency rates.

Brian: Q1, adjusted EBITDA of $167 million increased 4%, primarily due to increased profitability in the golf equipment and active lifestyle segments.

Brian: The majority of this improvement was driven by an improved gross margins and Opex reductions.

Brian: The segment also benefited from our planned $12 million incentive to terminate early our lease for our Japan headquarters.

Brian Lynch: Approximately two-thirds of the incentive impacted the golf equipment segment, and one-third affected the active lifestyle segment. Both segments will incur some incremental expense in subsequent quarters for the relocation of the Japan headquarters.

Brian: Approximately two thirds of the incentive impacted the golf equipment segment, and one third effected the active lifestyle segment.

Brian: Both segments will incur some incremental expense in subsequent quarters for the relocation of the Japan headquarters.

Brian Lynch: Moving to segment performance. At Topgolf, Q1 revenue decreased 7% year over year due to the decline in same menu sales and the sale of the World Golf Tour business in December 2024. partially offset by revenue from new venues. Topgolf Q1 operating income decreased $15 million to a $12 million loss while adjusted EBITDA decreased $16 million year-over-year to $44 million. These declines were primarily due to lower same-venue sales performance. Partially offset by ongoing cost reduction efforts. Moving to the golf equipment segment. Q1 revenue decreased 1% to $444 million year over year, and was approximately flat on a constant currency basis, despite a more competitive launch environment.

Brian: Moving to segment performance.

At top golf Q1 revenue decreased 7% year over year due to the decline in same venue sales and the sale of the World Golf Tour business in December 2024.

Brian: Partially offset by revenue from new venues.

Brian: Top golf Q1, operating income decreased $15 million to a $12 million loss.

Brian: While adjusted EBITDA decreased $16 million year over year to $44 million.

Brian: These declines were primarily due to lower same day, new sales performance.

Brian: Partially offset by ongoing cost reduction efforts.

Brian: Moving to the golf equipment segment.

Brian: Q1 revenue decreased 1% to $444 million year over year and was approximately flat on a constant currency basis, despite a more competitive launch environment.

Brian Lynch: golf equipment operating income increased 24% to $102 million. The $20 million increase was due to improved gross margins. the impact of the lease termination incentive, and other cost savings. In our active lifestyle segment, Q1 revenue decreased $17 million year over year to $255 million. This decrease is due to the planned right sizing of the Jack Wolfskin business in Europe. Operating income increased $6 million to $31 million. primarily driven by cost savings at Jack Wolfskin and gross margin improvement for the total segment. Pushing gears to balance sheet and liquidity, our available liquidity, which is comprised of cash on hand and incremental borrowing capacity under our credit facilities.

Brian: Golf equipment operating income increased 24% to $102 million.

Brian: The $20 million increase was due to improved gross margins the.

Brian: The impact of the lease termination incentive.

Brian: Other cost savings.

Brian: And our active lifestyle segment, Q1 revenue decreased $17 million year over year to $255 million.

Brian: This decrease was due to the planned right sizing of the Jack <unk> business in Europe.

Brian: Operating income increased $6 million to $31 million.

Brian: Primarily driven by cost savings that Jack will skin and gross margin improvement for the total segment.

Brian: Switching gears to balance sheet and liquidity, our available liquidity, which was comprised of cash on hand, and incremental borrowing capacity under our credit facilities.

Brian Lynch: continue to strengthen. As of March 31, 2025, our available liquidity increased $85 million to $805 million due to increased cash compared to first quarter 2024. At quarter end, net debt was $2.74 billion, including $258 million in convertible debt, up slightly from $2.68 billion last year due to increased venue financing, partially offset by a $50 million discretionary pay down of our Term Loan B. Excluding venue financing debt, which is essentially capitalized rent related to our Topgolf venues. But including the convertible debt, our readjusted net debt was $1.22 billion, down $159 million year over year, as a result of the increased cash and debt paydown.

Brian: Continued to strengthen.

Brian: As of March 31, 2025.

Brian: Our available liquidity increased $85 million to.

Brian: Two $805 million due to increased cash compared to first quarter 2024.

Brian: At quarter end net debt was $2 74 billion.

Brian: Including $258 million in convertible debt.

Brian: Up slightly from $2 $68 billion last year.

Brian: Due to increased venue financing, partially offset by a $50 million discretionary paydown of our term loan b.

Brian: Excluding venue financing debt, which is essentially a capitalized rent related to our top golf venues, but.

Brian: But including the convertible debt.

Brian: We're a REIT adjusted net debt was $1 2 billion.

Brian: Down $159 million year over year as a result of the increased cash and debt paydowns.

Brian Lynch: Net debt leverage, including the convertible debt, rose to 4.6 times from 4.5 times, driven by higher venue finance. However, readjusted net leverage, which includes rent interest payments, improved to 2.5 times from 2.7 times. We are comfortable at this leverage level. Our inventory balance decreased $49 million versus the end of Q1 2024 to $654 million at the end of Q1 2025. Due to the $75 million accounting reclassification of Jack Wolfskin Inventory to current assets held for sale.

Brian: Net debt leverage, including the convertible debt rose to four six times from four five times driven by higher venue financing.

Brian: However, REIT adjusted net leverage which includes rent interest payments improved to two five times from two seven times.

Brian: We are comfortable with these leverage levels.

Brian: Our inventory balance decreased $49 million versus the end of Q1 2000 $24 million to $654 million at the end of Q1 2025.

Jack: Due to the $75 million accounting reclassification, Jack will skin inventory to current assets held for sale.

Brian Lynch: Before moving to guidance, I want to provide a further update on our strategic initiative. First, the sale of our Jack Wolfskin business remains on track. We have submitted our regulatory approval applications and are taking other applications actions in preparation for closing. We still expect this to close in late second quarter or early third quarter. With regard to Topgolf, we continue to believe that separating Topgolf from our core business will create value for our shareholders. As a result, we are actively pursuing various alternatives to effective separation. including a sale, a spin, or other transaction. At this point we are still targeting the second half of the year to effectuate the separation with Q4 being more likely than Q3.

Jack: Before moving to guidance I want to provide a further update on our strategic initiatives.

Jack: First the sale of our Jack <unk> business remains on track.

Jack: We have submitted our regulatory approval applications and are taking other application actions in preparation for closing.

Jack: We still expect this to close in late second quarter or early third quarter.

Jack: With regard to top golf, we continue to believe that separating <unk> from our core business will create value for our shareholders.

Jack: As a result, we are actively pursuing various alternatives to affect the separation.

Jack: <unk>, a sale a spin or other transaction.

Jack: At this point, we are still targeting the second half of the year to effectuate the separation with Q4 being more likely than Q3.

However conditions have changed a lot since we first announced our intention to separate the top golf business last September.

Jack: All in all our original objective remains the same to unlock the value of both businesses minimize execution risk and create two strong well capitalized companies with compelling futures.

Jack: Now turning to the balance of the year outlook.

Jack: As a reminder, our Q2 and full year guidance continues to include the full financial impact of the Jack <unk> business.

Jack: Assuming the sale closes in late Q2 early Q3 as expected.

Jack: The guidance will automatically be adjusted to exclude the Jack will skin results for the balance of the year as of the closing date.

Jack: While we are not updating our guidance for the Jack <unk> business at this time.

Jack: We have provided in our earnings release today, the amount of planned revenue and adjusted EBITDA attributable to the Jack <unk> business and our budget to share including estimates for the first half.

Brian Lynch: Given current conditions and trends, we are revising our Topgolf same-menu sales guidance from down mid-single digits to down 6 to 12 percent. As a result, we are also lowering our full-year Topgolf revenue estimates to $1.680 billion to $1.790 billion, which is $45 million lower than previous guidance. However, we are maintaining our adjusted EBITDA guidance for Topgolf of $240 to $300 million as our cost savings initiatives are offsetting the expected decrease in revenue. We are reiterating our consolidated full year revenue guidance of $4.0 billion to $4.185 billion. However, in light of the decrease in Topgolf revenue estimates, we are currently tracking below the midpoint of this guidance.

Jack: Given current conditions and trends, we are revising our top golf same venue sales guidance from down mid single digits to down 6% to 12%.

Jack: As a result, we are also lowering our full year top golf revenue estimates to one 680 billion to.

Jack: Two $1 79 zero billion.

Jack: Which was $45 million lower than previous guidance.

Jack: However, we are maintaining our adjusted EBITDA guidance for top golf of $240 million to $300 million as our cost savings initiatives are offsetting the expected decrease in revenue.

Jack: We are reiterating our consolidated full year revenue guidance of 4.0 billion to $4 85 billion.

Jack: However in light of the decrease in top golf revenue estimates. We are currently tracking below the midpoint of this guidance.

Jack: We are also reiterating our adjusted EBITDA guidance of $415 million to $505 million.

Jack: Both the revenue and adjusted EBITDA estimates are subject to adjustment for the expected sale of the Jack <unk> business.

Jack: We were able to maintain our consolidated guidance. Despite the current macroeconomic headwinds because of our strong start to the year, improving foreign currency rates and the actions we have taken and continue to take to reduce costs and mitigate the estimated $25 million impact of the current tariffs.

Jack: This guidance does not assume further tariff escalation or a meaningful worsening of economic conditions.

Jack: In addition, our guidance today is based upon recent FX rates, but our revenue in particular is highly sensitive to fluctuations in such rates.

Brian Lynch: Regarding free cash flow, we continue to expect to be free cash flow positive at both the Total Company and at Topgolf in 2025.

Jack: Regarding free cash flow, we continue to expect to be free cash flow positive at both the total company and a top golf in 2025.

Brian Lynch: Now turning to Q2. In Q2, we are forecasting consolidated revenue of $1.075 billion to $1.115 billion versus $1.158 billion in Q2 2024. This year-over-year decrease is due to a more competitive launch environment and shift in shipment timing in the golf equipment business. The continued impact from the right sizing of the Jack Wolfskin business. The negative impact from the sale of the WGT gaming business in December 2024, as well as a projected decline in same venue sales. We estimate Adjusted EBITDA to be in the range of $139 to $159 million. compared to $206 million in the prior year.

Jack: Now turning to Q2.

Jack: In Q2, we are forecasting consolidated revenue of 1.0 75 billion.

Jack: 2111 5 billion.

Jack: Versus 115 8 billion in Q2 2024.

Jack: This year over year decrease was due to a more competitive launch environment.

Jack: And shift in shipment timing in the golf equipment business.

Jack: The continued impact from the right sizing of the Jack <unk> business.

Jack: The negative impact from the sale of the <unk> gaming business in December 2024, as well as a projected decline in same venue sales.

Jack: We estimate adjusted EBITDA to be in the range of 139% to $159 million.

Jack: Compared to $206 million in the prior year.

Brian Lynch: This decrease is due to the projected decrease in revenue and then an approximate $22 million impact from increased FX hedging losses, incremental tariffs, and the sale of WGT. In summary, given the TAVR volatility and softening consumer, visibility is limited, but we are providing our best estimates today. Fortunately, we were proactive in our gross margin and cost reduction initiatives, which along with improving FX rates are offsetting much of the impact of these macroeconomic headwinds. Importantly, we are well positioned in terms of our available liquidity for our business and the planned separation of top In the meantime, we are managing that which is within our control, including managing discretionary spending and rationalizing any capital investment.

Jack: This decrease was due to the projected decrease in revenue and then an approximate $22 million impact from increased FX hedging losses incremental tariffs and the sale of its <unk>.

Jack: In summary, given the tariff volatility and softening consumer.

Jack: Visibility is limited, but we are providing our best estimates today.

Jack: Fortunately, we were proactive in our gross margin and cost reduction initiatives.

Jack: Which along with improving FX rates are offsetting much of the impact of these macroeconomic headwinds.

Jack: Importantly, we are well positioned in terms of our available liquidity for our business and the planned separation of top golf.

Jack: In the meantime, we are managing that which is within our control, including managing discretionary spending and rationalizing any capital investments.

Brian Lynch: Overall, we feel good about our start to the year and believe we are well positioned not only to navigate this short-term volatility and emerge a stronger company, but also create a shareholder value as we do so.

Jack: Overall, we feel good about our start to the year and believe we are well positioned not only to navigate the short term volatility and emerge a stronger company.

Jack: But also create a shareholder value as we do so.

Operator: With that said, I would now like to turn the call back over to the operator for Q&A.

Jack: With that said I would now like to turn the call back over to the operator for Q&A.

Operator: We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the key. To withdraw your question, please press Star then 2.

Speaker Change: We will now begin the question and answer session.

Speaker Change: To ask a question you May press Star then one on your telephone keypad.

If youre using a speakerphone please pick up your handset before pressing the keys.

To withdraw your question. Please press Star then two.

Operator: At this time, we will pause momentarily to assemble our roster. Our first question today is from Matthew Boss with J.P. Morgan, please go ahead. Great, thanks and appreciate all the all the color. So, maybe Chip, on the core golf equipment business, any change in the industry backdrop that you've seen so far for the segment? Can you touch on sell-through rates, maybe on some of the key recent launches, or just any change to your organic outlook for this year in that segment? Hey, Matt. The short answer is no, no, not really. The golf consumer remains strong, the markets remain solid.

Speaker Change: At this time, we will pause momentarily to assemble our roster.

Operator: Our first question today is from Matthew boss with Jpmorgan. Please go ahead.

Matthew Boss: Great. Thanks, and appreciate all the all the color.

Operator: So.

Operator: Maybe chip on the core golf equipment business any change in the industry backdrop that you've seen so far for the segments can you touch on sell through rates maybe on some of the key recent launches are just any change to your organic outlook for this year in that segment.

Matt: Hey, Matt.

Operator: <unk>.

Operator: The short answer is no not really.

Operator: Golf consumer remains strong the markets remain.

Operator: Solid.

Matthew Boss: uh... you know the uh... and the outlook remains uh... uh... added positive with no material change so uh... uh... golf business has been on a good roll it remains that way uh... and we feel good about uh... the outlook there Great. And then maybe, Artie, as a follow-up, so on the value reset at Topgolf, I guess maybe a similar question. How much do you attribute the softening that you've cited to macro relative to competition, and just maybe how best to consider the timeline to scale the value initiatives, or any feedback that you've seen from tests that you've initiated to date?

And the outlook remains.

Operator: Positive with no material change so.

Operator: Golf business has been on a good roll it remains that way and.

Operator: We feel good about the outlook there.

And just maybe how best to consider the timeline to scale the value initiatives or any feedback that you've seen from tests that you've initiated to date.

Arthur Starrs: Sure. Well, I think on the macro front, the most direct impact we saw since last earnings would be on the event side. So we're clearly seeing corporate spending pressure, and that's pretty direct and macro. I think the brand's been around for a while, and we're very confident that the events business is super competitive. The experience and feedback we get on it is great, it's just the environment for event spending from corporates in particular is pressured. The consumer is definitely price sensitive. I wouldn't say that it's materially different today than it was 45 to 90 days ago.

Speaker Change: Sure.

Speaker Change: Well I think on the on the macro front the most direct impact.

Speaker Change: Since last earnings would be on the event side.

Speaker Change: So, we're clearly seeing corporate spending pressure and thats pretty direct in macro I think the.

Speaker Change: The brand has been around for a while and.

Speaker Change: We're very confident that the events business is super competitive and.

Speaker Change: Experience and feedback we get on to this great. It's just the environment for event spending from corporates in particular.

Speaker Change: Is pressured.

Speaker Change: The consumer is definitely price sensitive.

Speaker Change: I wouldn't say that it's materially different today than it was 45 to 90 days ago.

Arthur Starrs: But what I'm excited about is the immediate response. I think the traffic numbers kind of speak for themselves. We're certainly investing in it with value and doing right by the consumer in this environment. But the immediate response is probably what I'm probably most enthusiastic on in this concept of it not only being compelling but accessible. This is an environment where you've got to give value to, we have to give value to our players when they can use it. I think last time we talked a little bit about the shoulder time period. This is we're hitting the bullseye.

Speaker Change: But what I'm excited about is the immediate response I think the traffic numbers.

Speaker Change: Speak for themselves, we're certainly investing in it with with value and doing right.

Speaker Change: By the consumer in this environment, but.

Speaker Change: The immediate response is probably what I am probably most enthusiastic on this concept of it not only being compelling but accessible. This is an environment, where you've got to give value to we have to give value to our players when they can use it so.

Speaker Change: I think last time, we talked a little bit about the shoulder time periods. This is we're hitting we're hitting the bull's eye Sunday Fund days.

Arthur Starrs: Sunday Funday is, I think, a perfect example of when it's a time when families can use it and need it and they're showing up. In terms of the rollout timing, we're moving very quickly. I think we're moving, you know, faster than we had intimated last time. So we have Sunday Funday, it's active in every venue, 80% of the venues have value attached to it. Topgolf Nights is in approximately half the portfolio now. And the early week value, which back to this concept of being compelling and accessible, becomes more accessible as kids get out of school.

Speaker Change: I think a perfect example of.

Speaker Change: At the time when families can use it and need it and theyre showing up.

Speaker Change: In terms of the rollout timing, we're moving very quickly I think were moving faster than we had intimated last time.

Speaker Change: So we have Sunday Monday, it's active in every event and every venue.

Speaker Change: 80% of the venues have value attached to it.

Speaker Change: Top golf nights is an approximately half the portfolio now.

Speaker Change: And the early week value, which back to this concept of being compelling and accessible.

Speaker Change: Becomes more accessible.

Arthur Starrs: We'll be monitoring that very closely as we get, we're in the middle of college graduation period right now, and then schools start getting out of school across our portfolio here in the coming weeks. So we'll be ready to activate it as we see it perform, but we're pleased so far. Great caller. Best of luck. The next question is from Michael Swartz with Truist Securities. Please go ahead. Hey, good evening guys. Maybe just to follow up to Matt's questions around the value repositioning at Topgolf, but maybe from a cost perspective, how do you plan to manage the venue level cost structure going forward?

Speaker Change: Kids get out of school will be monitoring that very closely as we get are in the middle of college graduation period right now and then.

Speaker Change: Schools start getting out of school across our portfolio here in the coming weeks, so we'll be ready to activate it as we as we see it perform but were pleased so far.

Speaker Change: Great color best of luck.

Speaker Change: Thank you.

Speaker Change: The next question is from Michael Swartz with <unk> Securities. Please go ahead.

Michael Swartz: Hey, good evening guys.

Speaker Change: Maybe just a follow up to matt's questions around the value repositioning at top golf, but maybe from a cost perspective.

Speaker Change: How do you plan to manage the venue level.

Speaker Change: Cost structure.

Arthur Starrs: I think you talked about venue level margins coming down a bit in the near term, but how do we think about that longer term? Yeah, so we, we remain extremely confident. I think, you know, the last few years, we've grown venue margins and, you know, various, you know, sales environment. So I'm, I'm as bullish as I've, as I've ever been on the long term EBITDA margin outlook for Topgolf. You know, and I think what I'll just restate, we've said before, we think they can be north of 35%. We're choosing to invest in value at this point in time, and we're not going to compromise the player experience.

Speaker Change: Going forward I think you talked about venue level margins coming down a bit in the near term, but how do we think about that longer term.

Speaker Change: Yes, so we remain extremely confident I think the last few years, we've grown venue margins in various sales environment. So.

Speaker Change: As bullish as I've ever been on the long term.

Speaker Change: EBITDAR margin outlook for top golf.

Speaker Change: I think I'll just restate, what we've said before we think they can be north of 35%.

Speaker Change: We're choosing to invest in value at this point in time, and we're not going to compromise the player experience we view this.

Arthur Starrs: You know, this environment is a time that we can acquire customers. We can acquire players and we're seeing new players and repeat players respond to the offer. And when this environment subsides, we'll be in a fantastic position. I view the investments and improvements we've made in venue level performance as appropriate. And. relevant for us to be investing value at this moment. Some of the specific things we have done, we've obviously taken a fair amount of cost out of our corporate overhead and some areas of the business that are... You know, outside of the venues, you know, inside the venues, I just say the efficiency metrics, we just continue to, you know, every couple quarters, we roll out another iteration of our labor model, when you change demand, when when people are coming in more on Sunday, Monday through Thursday, late night, Friday and Saturday, it gives you an opportunity to kind of refresh those models, and our teams are just responding really well.

Speaker Change: This environment is a time that we can acquire customers, we can acquire players and we're seeing.

Speaker Change: New players and repeat players respond to the offer.

Speaker Change: And when this environment subsides will be fantastic.

Speaker Change: Fantastic position I view, the investments and improvements we've made.

Speaker Change: And venue level performance.

Speaker Change: As appropriate.

Speaker Change: And <unk>.

Speaker Change: Relevant for us to be investing value at this moment.

Speaker Change: Some of the specific things we have done we've obviously taken.

Speaker Change: A fair amount of cost out of our corporate overhead and some areas of the business that are.

Speaker Change: <unk>.

Speaker Change: Outside of the venues <unk>.

Speaker Change: <unk> the venues I'd, just say the efficiency metrics. We just continue to every couple of quarters, we rollout another iteration of our labor model when you change demand.

Speaker Change: When people are coming in more on Sunday Monday through Thursday late.

Late night Friday, and Saturday. It gives you an opportunity to kind of refresh.

Speaker Change: Those models and our teams are just responding really well so.

Arthur Starrs: So just continue to be very optimistic about venue margins in the long term, but we you know, we are investing in the near term in value. Okay, that's that's great color. Thank you. And just sticking on Topgolf, maybe give us a feel for the cadence of the quarter. And just wondering, was there any impact from the from the Easter shift to the later Easter into the second quarter? Yeah, there's definitely a shift that kind of goes both ways for us, where Easter week ends up not being much of an events week. The flip side is, is it you get some, you know, kids are out of school and the breaks are a little bit different.

Speaker Change: This continues to be very optimistic about <unk>.

Speaker Change: Venue margins in the long term, but we are investing in the near term and value.

Speaker Change: Yes, there is definitely a shift it kind of goes both ways for us where Easter week ends up not being much of an events week.

Speaker Change: <unk> flip side is as you.

Speaker Change: <unk> got some kids are out of school and the brakes are a little bit different so did shifted a little bit, but I wouldn't I wouldn't say that it was material in terms of.

Arthur Starrs: So it did shift it a little bit, but I wouldn't, I wouldn't say that it was material in terms of month to month or informing our guidance. You know, as I mentioned, we're pleased with the pickup and the walk-in side of the business in April and events have softened and that informs the guidance we put forward for Q2. Okay, great. Thank you. The next question is from Megan Clapp with Morgan Stanley. Please go ahead. I wanted to ask a little bit about the cost savings that you've talked about. I think Chip and Brian, you both mentioned that proactive cost savings are positioning you to be able to hold the guidance today despite some, you know, despite the tariffs and the reduction in Topgolf revenue.

Speaker Change: Month to month or informing our guidance.

Speaker Change: As I mentioned, we're pleased with the pick up in the.

Speaker Change: The walk in side of the business in April and events have softened and that informs the guidance we put forward for Q2.

Speaker Change: Okay, great. Thank you.

Speaker Change: The next question is from Megan Clap with Morgan Stanley. Please go ahead.

Speaker Change: Hi, good evening. Thanks, so much I wanted to ask a little bit about the cost savings that you've talked about I think Brian you. Both mentioned that proactive cost savings are positioning you to be able to hold the guidance today. Despite some.

Speaker Change: Quite the tariffs and the reduction in top golf revenue.

Megan Clapp: When we think about the cost savings, has, what you've done, is it just coming in better than you anticipated or are there incremental cost savings you've identified? And if it is that latter, could you maybe just expand a bit more on the products versus Topgolf side, what some of those cost savings are? Sure, Megan, I'll take a cut at it. It's a little bit of both. So, you know, we were aggressive at going after cost and efficiency improvements, really starting, you know, this time last year and accelerating through the year. And then as we saw the, you know, conditions flashing more risk, which we clearly did going into this year, as we saw FX headwinds and, you know, announced policy changes that were likely to be impactful.

Speaker Change: When we think about the cost savings.

You've done is it just coming in better than you anticipated or are there incremental cost savings you've identified and if it is that ladder could you maybe just expand a bit more on the products first top golf side, what some of those cost savings are thank you.

Chip Brewer: Sure Megan I'll take a cut at it.

Speaker Change: It's.

Speaker Change: It is a little bit of both so.

We're aggressive at going after.

Speaker Change: Cost and efficiency improvements.

Speaker Change: Starting.

Speaker Change: This time last year and accelerating through the year and then as we solve the.

Speaker Change: Conditions.

Speaker Change: Flashing more risk, which we clearly did going into this year as we saw FX headwinds and.

Speaker Change: Announced policy changes.

Speaker Change: That were <unk>.

Speaker Change: Likely to be impactful.

Brian Lynch: We've accelerated our efforts to manage those costs and improve efficiency. And it's really across all areas of the business. Artie can speak to Topgolf, but they did meaningful reductions in the corporate overhead, portions of which were last year, but then accelerated significantly this year. We have done the same here at the corporate side of Topgolf Callaway. We are driving further efficiencies in the operations side of the business. So, there's, you know, quite a bit going on on all fronts there, but the fact that we had had that, those wheels in motion already, and then just could continue and accelerate them, I think has benefited the business a great deal and allowed us to You know, that plus a strong start to the year has allowed us to, you know, hold our current position.

Speaker Change: Accelerated our efforts to manage those costs and improve efficiency.

Speaker Change: Across all areas of the business already.

Speaker Change: Speak to top golf, but they did meaningful.

Speaker Change: Reductions in corporate overhead.

Speaker Change: Portions of which were last year, but then accelerated significantly this year.

Speaker Change: We have done the same here at the corporate side of.

Speaker Change: Top golf Callaway.

Speaker Change: We are driving further efficiencies in the operation side of the business.

Speaker Change: So.

Speaker Change: There's quite a bit going on on all fronts there.

Speaker Change: But the fact that we had had that those wheels in motion already.

Speaker Change: And then just could continue and accelerate them I think has benefited the business a great deal and that allowed us to.

Speaker Change: That plus our strong start to the year has allowed us to.

Speaker Change: Hold our current position.

Brian Lynch: Great, that's helpful. And then maybe just a follow up. Very helpful commentary on on an update on the spin and how you think about leverage for both Wondered, you had previously said that Topgolf would be funded with, I think it was approximately $200 million in cash as part of the separation plan. Wondered if you could maybe give us an update on that number in particular and whether your view on the cash level has changed at all, just given how much the macro. Hi Meg, it's Brian. You're correct. We did say originally that we are in plan at that time was to have no funded debt, just the venue liabilities with Topgolf and give them $200 million in cash.

Speaker Change: Great. That's helpful. And then maybe just a follow up.

Speaker Change: Very helpful commentary on on and off.

Speaker Change: On the spin and how you think about leverage for both businesses Wonder you had previously said that top golf would be funded with I think it was approximately $200 million in cash as part of the separation plan I wondered if you could maybe give us an update on that number in particular and whether your view on the cash level has.

Speaker Change: <unk> <unk> at all just given how much the macro has changed thank you.

Speaker Change: Hi, Brian.

Speaker Change: You are correct. We did say originally that we our plan at that time was too.

Brian Lynch: But a lot has changed since then. The whole environment has changed. And so we're reassessing the capital structure. And while we're not ready to give specifics, I will say that we would expect to give them less cash at this point, and probably a modest amount of debt, which they can easily handle. And this is all designed to make sure that both businesses are set up and that the RemainCo is not too overly leveraged. Okay, great. That's super helpful. Thanks, Brian. The next question is from Lucas Hudson with Bank of America, please go ahead. Hi, thanks for taking my question.

Speaker Change: Both businesses are set up and that the remain co is not too overly levered.

Speaker Change: Okay, Great that's super helpful. Thanks, Brian.

Lucas Hudson: The next question is from Lucas Hudson with Bank of America. Please go ahead.

Lucas Hudson: Hi, Thanks for taking my question how much of the top golf same venue sales reduction was the result of April trends versus a more cautious outlook in three and <unk> from a softer consumer.

Lucas Hudson: How much of the Topgolf same venue sales reduction was the result of April trends versus a more cautious outlook in 3&4Q from a softer consumer? Yeah, thanks. This is Artie. I would say that the primary thing that drove it is is just the view on events. So The events in the quarter, and then as we look out this quarter, that really is what drove the bulk of it. When we look at our walk-in and one- and two-day business... You know, we're seeing improved traffic trends, we're obviously investing in value and getting some SPV. down year-over-year from that, but it's primarily three-plus payoffs.

Lucas Hudson: Yes. Thanks this is already.

Lucas Hudson: I would say that the primary thing that drove it is just the view on events. So.

Lucas Hudson: Events in the quarter and then as we look out this quarter that that really.

Lucas Hudson: What drove the bulk of it.

Lucas Hudson: When we look at our one or walk in one and two day business.

Lucas Hudson: We're seeing improved traffic trends are obviously investing in value and getting some SPV.

Lucas Hudson: Down year over year from that but its primarily three plus payloads.

Arthur Starrs: Got it. And then just staying on Topgolf, same in your sales regarding 2Q Guide, um, could you just talk about what you have to do to hit the top or the bottom end of the guide? Yeah, I think it's an extension of my prior comment. I think the The range of the guide contemplates, the midpoint contemplates what we're currently seeing. And if, you know, three plus bay events were to come in worse than we currently expect, then, you know, that would inform the sort of the lower end or the worst end of the game. Thanks for the color and good luck going forward.

Lucas Hudson: Got it and then just staying on top golf same venue sales regarding <unk> guide.

Lucas Hudson: Could you just talk about what you have to do to hit the top or bottom end of the guide.

Lucas Hudson: Yes, I think it's an.

Lucas Hudson: An extension in my prior comment I think.

Lucas Hudson: <unk>.

Lucas Hudson: Sure.

Lucas Hudson: The range of the guide contemplates.

Lucas Hudson: The midpoint contemplates what we're currently seeing.

Lucas Hudson: And if three plus bay events were to come in worse than we currently expect then that would inform the sort of the lower end of the worsening of the guide.

Speaker Change: Got it thanks for the color and good luck going forward.

Lucas Hudson: Thank you.

Arthur Starrs: The next question is from J.P. Wallum with Roth Capital Partners. Please go ahead. Great. Hi, guys. Thanks for taking my questions today. Just again, kind of thinking about the value reset at Topgolf, and, you know, at risk of being overly reductive, I'm just curious, like, is there a way that you're thinking about how much you're effectively trying to kind of reduce price? If I was thinking about sort of a you know, a weighted average in terms of hourly price per bay, is there just kind of a high level way that you guys think like, we need to be 10 to 20% lower?

Speaker Change: The next question is from JP <unk> with Roth Capital Partners. Please go ahead.

Speaker Change: Great Hi, guys. Thanks for taking my questions today.

Speaker Change: Just again kind of thinking about the value reset at top golf in.

Speaker Change: Our risk.

Speaker Change: Our weighted average in terms of hourly price per Bay is there just kind of a high level way that you guys think like we need to be 10% to 20% lower.

Yes.

Arthur Starrs: Yeah, I think it differs. And hopefully, with the detail we've given you, we're trying to be very methodical about this by venue, by market, by region. And then there's also a day and week part component to it. So the data doesn't suggest like a crude percentage. The data suggests that there are certain times of the week and certain times of the day that we have an absolute right to win. And if we have a more compelling price point, we can drive traffic and we're seeing So, you know, embedded, the breakdown I provided in the script, sort of a third, a third, a third across, you know, the booking fees, you know, alcohol attachment we think is You know something that's a just price sensitivity of the consumer and then a third coming from value That's probably the best guidance I could give you across the whole revenue structure, if you want to call it that.

Speaker Change: Yes, I think it differs and hopefully with the detail. We've given you were trying to be very methodical about this by venue by market by region.

Speaker Change: And then there is also a day and week four components to it so.

Speaker Change: The data doesn't suggest like a crude percentage.

Speaker Change: So.

Speaker Change: Embedded the breakdown provided in the script sort of a third a third a third across the booking fees alcohol attachment we think is.

Speaker Change: Something thats just price sensitivity of the consumer and then a third coming from value that's probably the best guidance I could give you across the whole.

Speaker Change: Revenue structure, if you want to call it that.

Arthur Starrs: What I might say is if you look at Sunday and you look at Topgolf nights, depending upon the venue, that could be 15 to 20% of a venue's volume in a given week. And if you think about gameplay being approximately half of our revenue stream, and then the price that we put into market could be 30 or 40% off of that. It kind of gets close to that third, a third, a third I shared as the overall breakdown. Okay, very helpful. And then just one more, you know, Chip, maybe more on a kind of high level basis here, but we've heard from kind of a few different companies, maybe pleasant surprises about, you know, less impact from tariffs and understand that that's a moving target every single day.

Speaker Change: Gameplay being approximately half of our revenue stream.

Speaker Change: And then the price that we put into market could be 30 or 40% off of that.

It kind of gets close to that third a third a third a shared is the overall breakdown.

Speaker Change: Okay very helpful.

Speaker Change: And then just one more.

Speaker Change: Maybe more on a kind of high level basis here, but.

Speaker Change: We've heard from a kind of a few different companies may be pleasant surprises about.

Speaker Change: Less impact from tariffs and understand that that's a moving target every single day, but I guess the one thing that is pretty repetitive is price being somewhat of a lever.

Chip Brewer: But I guess the one thing that is pretty repetitive is, you know, price being somewhat of a lever and ideally not one that anyone wants to pull, but definitely a lever that could help offset. And so, you know, as we think about kind of the back half of the year and into next year, how much do you guys worry that, you know, you could see a good amount of price increases across the industry, and it might kind of slow some demand headed into next year? Yeah, JP, obviously, that's something that we give quite a bit of thought to and You know, we we have three different segments of business and all three of those segments have a unique and different positions as they relate to the consumer.

Speaker Change: Ideally not one that anyone wants to pull but definitely a lever that could help offset and so as.

Speaker Change: Yes, J P. Obviously, that's something that we have quite a bit of thought to and.

Speaker Change: We.

Speaker Change: Have three different segments of business in all three of those segments have a unique and different positions as they relate to the consumer. So if you look at our.

Chip Brewer: So if you look at our golf equipment business, you know, we do not we both we think we have the ability to take price there. In other words, the elasticity of demand to price isn't particularly high. If we deliver a pleasingly different demonstrably superior product, and have to raise price a little bit, it is proven over time that the consumer will generally accept that price with minimal impact to demand. So we're in a fortunate position there. It's also a relatively wealthy consumer that's highly passionate. In the active lifestyle category, it's a little less clear than that.

Speaker Change: Golf equipment.

Speaker Change: Business.

Speaker Change: We do not we think we have the ability to take price there in other words, the elasticity of demand to price isn't particularly high if we deliver a.

Speaker Change: Pleasingly different demonstrably superior product.

Speaker Change: And have to raise price a little bit it has proven over time that the consumer will generally accept that price with minimal impact to demand.

Speaker Change: And.

Speaker Change: So we're in a fortunate position there. It's also a relatively wealthy consumer that's highly passionate.

Speaker Change: In the active lifestyle.

Speaker Change: Oil category, it's a little less.

Chip Brewer: It's a little more sensitive to price than golf equipment, but not overly sensitive. We again are in a premium category with Travis Matthew being the anchor brand remaining in that category in addition to Callaway. So not highly sensitive, but not as potentially inelastic as the golf equipment business. And then Artie's business at Topgolf. You know, that consumer is roughly $100,000 a year consumer on average, and, you know, value positioning there and proposition is turning out to be fairly relevant for us. And, you know, we're taking the appropriate steps there. But in the product side of our business.

Speaker Change: Clear than that it's a little more sensitive to price than golf equipment, but not overly sensitive way again <unk>.

Speaker Change: Premium category with Travis Matthew being that.

Speaker Change: <unk> brand remaining in that category in addition to Callaway.

Speaker Change: So not highly sensitive but not as potentially.

Speaker Change: In elastic as the golf equipment business and then are these business at top golf.

Speaker Change: That consumer is roughly $100000 a year consumer on average.

Speaker Change: And value.

Speaker Change: Positioning there and proposition is turning out to be fairly relevant for us and.

Speaker Change: We're taking the appropriate steps there, but in the product side of our business.

Chip Brewer: We think we're relatively well positioned, and as you could tell, we also have, you know, the ops team has done a nice job. We're not really in China in any meaningful or noticeable manner, and so the tariff impact isn't as big as it is for some others, plus our ability to manage through the process is certainly, we think, higher and proven. Understood. Appreciate the color and best of luck. Thank you. The next question is from Casey Alexander with Compass Point. Please go ahead. Hi, good afternoon. I only have a couple of questions. First of all, Chip, did you get the sense that, you know, some of the strong results in the golf equipment division were from orders pulling through early and kind of front running the tariff regime.

Speaker Change: We think were relatively well positioned and as you could tell we also have.

Speaker Change: The ops team has done a nice job we're not high.

Speaker Change: Really in China in any meaningful or noticeable manner.

Speaker Change: And so the tariff impact isn't as big as it is for some others.

Speaker Change: Plus our ability to manage through the process is certainly we think higher and proven.

Speaker Change: Understood appreciate the color and best of luck.

Speaker Change: Thank you.

Speaker Change: The next question is from Casey Alexander with Compass point. Please go ahead.

Casey Alexander: Hi, good afternoon, I only have a couple of questions.

Speaker Change: First of all.

Speaker Change: Chip.

Speaker Change: You get the sense that.

Speaker Change: Some of the strong results in the golf equipment division or from orders.

Speaker Change: <unk> through early and kind of front running the tariff regime.

Chip Brewer: We did not see that in golf equipment, no. Not from our customer base. Okay, um, that's fine. Great. Secondly, um, It sounds like the value proposition is driven towards the one bay, the one to two bay. And yet, I heard a couple times that a lot of the softness is in the three plus Bay. Is there also a value orientation program driven towards the events business? Or are you thinking of the events business as, you know, something that's temporary corporations will come back and it's still a high touch premium product? Yeah, good question, Casey. I think what what we're doing on the event side is we're offering more kind of local regional flexibility, just in the direct, direct sales channel.

Speaker Change: We did not see that in golf equipment now.

Speaker Change: Not from our customer base.

Speaker Change: Okay.

Speaker Change: That's fine great secondly.

Speaker Change: It sounds like the value proposition is driven towards.

Speaker Change: The one bay the one to two bay.

Speaker Change: <unk>.

And yet I heard a couple of times that a lot of the softness is in the three plus Bay is there also a value orientation program driven towards the events business or are you thinking of the events business as something thats temporary corporations will come back and it's still a high touch <unk>.

Speaker Change: <unk> product.

Casey Alexander: Yes, good question Casey I think.

Casey Alexander: What we're doing on the events side is we're offering more kind of local regional flexibility.

Casey Alexander: And the direct.

Arthur Starrs: So you wouldn't necessarily see it on the rate card, so to speak. But we're, you know, we're trying to win every sale that's out there and giving our teams the flexibility and incentive. to do that. But we agree with you, we think we have, we have a great product. And it is a premium product, it's good value too. But how you approach it in the market via advertising presentation on the website is just a little bit different than the player facing business or the one and two by two. If I understand what you're saying, then it's on a call-by-call basis and the sales rep has the ability to compete with, you know, if it's Bolero or whoever you're competing That's right.

Casey Alexander: Direct sales channel so you wouldn't necessarily see it on the.

Casey Alexander: The rate card so to speak.

Casey Alexander: But we're trying to win every sale thats out there and giving our teams the flexibility and incentives.

Casey Alexander: To do that.

Casey Alexander: But we agree with you. We think we have we have a great product and it is a premium product thats good value too.

Casey Alexander: But how you approach it in the market via advertising presentation on the website is just a little bit different than the than the player facing business to the one and two by business.

Casey Alexander: Yes Casey.

If I understand what youre, saying and it's on our call by call basis, and the sales Rep has the ability to compete with if its bolero whoever youre competing with.

Chip Brewer: And I say it's on a it's a little bit more than a call by call basis where we'll have like a day of week where we'll have a specific promotion that we're trying to push through through the events channel. But it's a bit more market by market versus quote unquote, across the entire portfolio at x price. Sorry to interrupt. No, that's okay, Casey. And this is probably something you already know. But the events business isn't as sensitive to price as the consumer channel is, right? What's going on right now, in many cases, is just corporations are pulling back on all discretionary spending.

Casey Alexander: That's right and I'd say, it's on the it's a little bit more than our call by call basis, where we will have a day of week, where we will have a specific promotion that we're trying to push through through the events channel, but it's a bit more market by market versus quote unquote across the entire portfolio at X price.

Speaker Change: Okay, sorry to interrupt you chip.

Casey Alexander: Okay Casey.

Speaker Change: This is probably something you already know but.

The events business isn't as sensitive to price as the consumer channel is right what's going on right now in many cases.

Speaker Change: Corporations are pulling back on all discretionary spending and if somebody came in and said Hey, chip I can get a great event, but it's going to be 10% off what do you think the.

Chip Brewer: And, you know, if somebody came in and said, Hey, you know, Chip, I can get a great event, but it's going to be, you know, 10% off, what do you think? The answer is still no. And so we're finding that the consumer is responding very clearly to the quality of the product we're putting out at Topgolf combined with good value. And the event is just less responsive to that. It'll turn around with overall corporate confidence more than it will respond to value, but we are providing some. Sounds to me like it's time to have a no tariff pricing night at Topgolf.

Speaker Change: The answer is still no.

Speaker Change: And.

Speaker Change: So we're finding that the consumer is responding.

Speaker Change: Very clearly too.

Speaker Change: The quality of the product, we're putting out at top golf combined with good value.

Speaker Change: And the events is just less responsive to that it'll turnaround with overall.

Speaker Change: Corporate confidence more than it will respond to.

Speaker Change: <unk>, but we are providing some.

Speaker Change: It sounds to me like it's time to have a no tariff pricing night at top golf.

Casey Alexander: Yeah, there we go. There are no tariffs at Topgolf, Casey. All right, thank you. The next question is from Noah Zatzkin with KeyBank Capital Markets. Please go ahead. Hi, thanks for taking my questions. I guess, nice margin improvement on the equipment side. So I was I was wondering if you could kind of talk a bit about the drivers there, and how you're thinking about equipment margins this year in general. Yeah, thank you, Noah. We appreciate it. We were really pleased with that as well. So we saw improvement in OPEX, but particularly, we saw improvement in the gross margin.

Speaker Change: Yes.

Casey Alexander: There are no tariffs at top golf Casey.

Speaker Change: Alright, thank you.

Speaker Change: Thank you.

Speaker Change: Next question is from Noah <unk> with Keybanc capital markets. Please go ahead.

Speaker Change: Thanks for taking my questions I guess nice margin improvement on the equipment side. So I was wondering if you could kind of talk a bit about the drivers there and how youre thinking about equipment margins. This year in general thanks.

Speaker Change: Yeah.

Speaker Change: Yes. Thank you we appreciate it we were.

Speaker Change: Really pleased with that as well so we saw improvement in Opex, but particular, we saw improvement in the gross margin. So gross margin was up.

Brian Lynch: So gross margin was up couple hundred basis points year over year. And, you know, we were pleased with that it's coming from multiple areas, and these initiatives that we put in place over the last several quarters in terms of improving our yields. freight, operating efficiency, working on the mix, et cetera. It comes from lots of different areas, but it's starting to manifest itself. Now, having said that, the tariff impact that we will experience, and we will mitigate portions of it, but we will have some level of tariff impact that will obviously start to manifest itself increasingly through the year, and did not have any significant impact in Great, maybe just one on kind of the industry, any sense of maybe how retail or the consumer behaved on the equipment side in April, and any sense of kind of the promo level that's out there right now?

Speaker Change: A.

Speaker Change: A couple of hundred basis points year over year and.

Speaker Change: We were pleased with that it's coming from multiple areas and these initiatives that we put in place over the last.

Speaker Change: Sure.

Speaker Change: Several quarters in terms of improving.

Speaker Change: Our yields.

Speaker Change: Great.

Speaker Change: Operating efficiency working on the mix et cetera. It comes from.

Speaker Change: Lots of different areas, but it's starting to match.

Speaker Change: Manifest itself, having said that the tariff impact that we will experience and we will mitigate portions of it but we will have some level of tariff impact that will obviously start to manifest itself.

Speaker Change: Increasingly through the year and was did not have any significant impact in in Q1.

Speaker Change: Great and maybe just one on kind of the industry any sense of maybe how retail or the consumer behavior on the equipment side.

Speaker Change: In April.

Speaker Change: Any sense of kind of the promo level that's out there right now.

Joe Altobello: Thanks. You know, no real change. You know, the the golf consumer remains solid and fully engaged and promotional activity is either consistent with how it normally is or maybe even a little bit better. Thank you. The next question is from Joe Altobello with Raymond James, please go ahead. Thanks. Hey, guys. Good afternoon. Just a quick question on Topgolf. You mentioned you're taking out a lot of corporate costs here, and at the same time, you're prepping that business for potentially a sale or spin with the spinoff potentially requiring additional infrastructures. How do you balance the need to take out costs with the need to maybe build up some of the capabilities in that business ahead of the spin?

Speaker Change: No.

Speaker Change: No real change.

Speaker Change: The golf consumer remains solid and fully engaged and.

Speaker Change: Promotional activity is.

Speaker Change: Either consistent with how it normally is or maybe even a little bit better.

Speaker Change: Thank you.

Speaker Change: The next question is from Joe <unk> with Raymond James. Please go ahead.

Speaker Change: Thanks, Hey, guys. Good afternoon, just a quick question on top you mentioned youre, taking out a lot a lot of corporate cost here.

Speaker Change: Tom you are prepping that business for potentially a sale or spin.

Speaker Change: With the spinoff turnkey requiring additional infrastructure, how do you balance the need to take out costs with the need to maybe build up some of the capabilities.

Speaker Change: And that was the head of a spin and does that impact your decision on a sale or spin at all.

Chip Brewer: And does that impact your decision on a sale or spin at all? Okay, I think that we are. I mean, Joe, Joe, Joe, I think we are open to whatever Creates the most shareholder value. So when you're analyzing spin or sell we will explore that and do whatever creates the most We are continuing to do the cost reductions, which are, as Chip mentioned, which are funding a lot of the initiatives we have out there now, and balancing that with, but there's not that much incremental cost we're going to have to add for Topgolf to go stand.

Speaker Change: Okay. So I think that we are.

Speaker Change: Okay.

Speaker Change: Sorry, Joe Joe Joe I think we are open to whatever.

Speaker Change: Creates the most shareholder value. So we ran I think spin or sale, we will explore that and do whatever creates the most.

Speaker Change: For tough comps.

Speaker Change: Standalone.

Brian Lynch: Okay, and just maybe a quick follow up, just to clarify in the Paris, the $25 million, does your guide assume that you mitigate pretty much all of that? We don't specify how much we mitigate of that, but it is all included in our guidance. Does that make sense? Yes, it does. Thank you.

Speaker Change: Okay, and then just maybe a quick follow up just to clarify with tariffs to $25 million does your guide assume that you mitigate pretty much all of that.

Speaker Change: We don't specify how much we mitigate that.

Speaker Change: But it is all included in our guidance does that makes sense.

Speaker Change: Yes. It does thank you.

Operator: This concludes our question and answer session.

Speaker Change: This concludes our question and answer session I would like to turn the conference back over to chip Brewer for any closing remarks.

Chip Brewer: Alright, well I want to thank everybody for joining us today.

Chip Brewer: Enjoy the rest of your spring and into the summer I Hope you get out and play some golf maybe visit top golf.

Chip Brewer: Look forward to updating you further on our next call, which will be end of the summer. Thank you.

Operator: The conference is now concluded.

Chip Brewer: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

Operator: Thank you for attending today's presentation. You may now disconnect.

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