Newton Golf Company, Inc. (NWTG)·Q2 2025 Earnings Summary

Executive Summary

• Q2 2025 delivered strong topline growth with revenue up 154% year over year to $2.07M and gross margin at 67.6%; however, the company remained loss-making, with net loss of $1.52M and diluted EPS of ($0.34) .
• Guidance was raised: full-year 2025 revenue now $7.0M–$7.5M (prior $6.5M–$7.0M), driven by demand momentum across Motion and Fast Motion shafts and deeper distribution relationships .
• Results vs Street: revenue materially beat consensus ($2.07M vs $1.54M), while EPS missed (–$0.34 vs –$0.12); coverage remains thin (1 estimate) — a setup for estimate revisions and stock narrative shifts around execution vs profitability* (Values retrieved from S&P Global).
• Key catalysts: accelerating tour adoption (50+ professionals), breakout Fast Motion launch, increased production capacity, and selective capital allocation (200K shares repurchased in Q2) .

What Went Well and What Went Wrong

What Went Well

• Fast Motion launch exceeded expectations, with strong Q2 and accelerating Q3-to-date unit sales (1,817 units in May–June; Q3 to date 2,211 units, ~$786K revenue), supporting mix quality and margin durability .
• Tour adoption broadened to 50+ professionals across PGA TOUR Champions, LPGA, and Korn Ferry, translating to consumer pull and fitter demand; CEO: “Our Q2 results highlight continued progress… growing adoption among tour professionals” .
• Guidance raised to $7.0M–$7.5M, signaling confidence in pipeline and channel expansion; CFO emphasized “meaningful top-line growth and maintained solid margins” .

What Went Wrong

• Profitability remains distant: operating expenses stepped up (SG&A $2.76M; total OpEx $2.91M), keeping EBIT margin deeply negative; EPS missed consensus despite revenue upside .
• Fulfillment delays drove customer perception issues; management acknowledged shipping backlogs and is building inventory to improve fulfillment speed .
• Financing overhang and capital needs: management criticized prior “toxic” financing, plans to utilize an ATM, and notes ~9 months cash runway — an investor concern until profitability and cash generation improve .

Financial Results

Values with asterisks retrieved from S&P Global.

Operating expense detail (quarterly):

Balance sheet/KPIs (quarterly):

Vs. estimates (Q2 2025):

Values with asterisks retrieved from S&P Global.

KPIs (commercial progress):

Guidance Changes

Management also reiterated a path to profitability in 2026 driven by revenue scale, fixed overhead leverage, and moderating brand marketing as a percent of sales .

Earnings Call Themes & Trends

Management Commentary

• CEO: “Our Q2 results highlight continued progress… with strong performance from our Motion and Fast Motion shafts, growing adoption among tour professionals, and expanding relationships with global distributors” .
• CFO: “We delivered meaningful top-line growth and maintained solid margins… confident in our ability to drive long-term value for shareholders” .
• CEO on profitability path: “As we increase volume, unit costs come down… we’ve been investing heavily in brand marketing… we’ll be able to ease off… those three factors are gonna get us to profitability… in 2026” .
• CEO on capacity: “Plant is running two shifts… can do about $25M… ability to go over to $45M by adding another shift and weekends” .
• CEO on pricing/tariffs: “We increased price on Motion from $275 to $300… didn’t see a blip… competition is $350–$400… we don’t pay tariffs; competitors do” .

Q&A Highlights

• Fast Motion trajectory: demand “far exceeded expectations,” accelerating into Q3; fairway wood version targeted around the PGA Show in January .
• Fulfillment/inventory: acknowledged delays post major promotions; building inventory to speed shipments .
• Capital and runway: ~9 months cash; likely ATM use; explicit avoidance of “toxic” financings; selective buyback (200K shares), no further planned repurchases .
• Distribution expansion: Club Champion rollout progressing; 200+ independent fitters; OEM upgrade shaft discussions .
• International: Japan fitters and marketing; Japan e-commerce launch; Korea shaft distribution under discussion .

Estimates Context

• Q2 2025 revenue beat: Actual $2.07M vs consensus $1.54M; Q2 EPS miss: Actual –$0.34 vs consensus –$0.12; coverage limited (1 estimate for both)*.
• Implications: Expect upward revenue estimate revisions, with EPS pressure near term given elevated SG&A for brand building and sales enablement; margin trajectory credible but requires scale realization before EPS inflects*.
  Values retrieved from S&P Global.

Key Takeaways for Investors

• Revenue momentum is real: 154% YoY in Q2, with strong gross margin (67.6%) and accelerating Fast Motion sell-through — a durable topline setup into H2 .
• Profitability still a 2026 story: deliberate brand investment and scaling OpEx will weigh on near-term EPS despite revenue beats; management articulated levers to inflect margins .
• Capacity and tariffs are structural advantages: scalable production to ~$45M revenue capacity and no tariffs vs peers support long-run gross margin resiliency .
• Guidance credibility improved: FY 2025 raised to $7.0M–$7.5M; watch Q3/Q4 execution to validate full-year range and set 2026 bar .
• Distribution breadth expanding: fitter networks, Club Champion rollout, Japan initiatives, and OEM conversations can compound demand and reduce DTC dependency risk .
• Capital framework: avoid dilutive structures, utilize ATM opportunistically; buyback optionality exists but not a near-term focus .
• Trading lens: Strong revenue surprise vs weak EPS may cause mixed reaction; near-term stock moves likely driven by H2 run-rate proof points (units, margin dollars, fulfillment) and further guidance updates .