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Newton Golf Company, Inc. (NWTG)·Q3 2025 Earnings Summary

Executive Summary

  • Record quarter: revenue grew 113% year over year to $2.58 million with gross margin at 67%, supported by accelerating Fast Motion shaft adoption and expanding tour usage .
  • Revenue beat vs consensus while EPS missed: Q3 revenue $2.58 million vs consensus $2.38 million*; EPS -$0.34 vs consensus -$0.19* (only 1 estimate), reflecting heavier Q3 marketing and professional services spend to scale systems and tour presence .
  • Guidance: Full-year 2025 revenue guidance reaffirmed at $7.0–$7.5 million after being raised last quarter; management targets lower OpEx as a % of revenue and highlighted OEM integration discussions for 2026 .
  • Liquidity and capital: Cash declined to $2.55 million; company established a $10 million ATM program and emphasized disciplined, opportunistic usage to avoid significant dilution .
  • Stock reaction catalyst: Management acknowledged investor concerns about the path to profitability and indicated this contributed to the stock’s decline on results day .

Consensus estimates marked with * retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

  • “Q3 2025 delivered another quarter of strong execution and accelerating adoption of Newton shaft technology. Revenue grew 113% year-over-year, gross margin remained strong at 67%, and demand continues to broaden across all channels.” — Greg Campbell, CEO .
  • Fast Motion achieved the strongest launch in company history; Q3 Fast Motion sales were up more than 300% from Q2, validating product-market fit and manufacturing scale-up .
  • Tour adoption accelerating: more than 60 professionals gaming Newton shafts across PGA TOUR Champions, LPGA, and Korn Ferry Tours, improving brand credibility and consumer demand .

What Went Wrong

  • Net loss widened given higher OpEx: Q3 net loss was $1.58 million (press release) vs $1.6 million (transcript rounding), driven by increased marketing and professional services tied to ERP and controls .
  • Cash & equivalents declined to $2.55 million from $4.0 million in Q2, necessitating an ATM program (up to $10 million) to preserve flexibility while mitigating dilution .
  • Putters show weaker DTC conversion; management paused putter ad spend due to low conversion and will focus retail try-and-buy at Club Champion before reconsidering advertising .

Financial Results

Headline Financials vs Prior Periods and Prior Year

MetricQ3 2024Q2 2025Q3 2025
Revenue ($USD Millions)$1.21 $2.07 $2.58
Gross Profit ($USD Millions)n/a$1.40 $1.73
Gross Margin %n/a67.6% 67.0%
Operating Expenses ($USD Millions)n/a$2.91 $3.20
Net Income (Loss) ($USD Millions)$(1.06) $(1.52) $(1.58)
Diluted EPS ($USD)$(21.79) $(0.34) $(0.34)
Cash & Equivalents ($USD Millions)n/a$4.00 $2.55

Note: Q3 2025 net loss reported as $1.58 million in the 8-K and $1.6 million in the call; EPS -$0.34 is consistent across both .

Actual vs Wall Street Consensus (Q3 2025)

MetricConsensusActualResult
Revenue ($USD Millions)$2.38*$2.58 Beat
EPS ($USD)-$0.19*-$0.34 Miss

Consensus estimates marked with * retrieved from S&P Global.

KPIs and Operating Metrics

KPIQ2 2025Q3 2025Notes
Tour Pros Using Newton Shafts50+ >60 Growing validation on Champions/LPGA/Korn Ferry
DTC Revenue Mix~92% ~90% DTC drives premium margins
Production Capacity (shafts/quarter)>10k ~20k Ramped St. Joseph facility
Fast Motion Momentum2,211 units; >$786k by early Q3 Q3 sales >300% vs Q2 Strongest shaft launch in company history

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2025$6.5–$7.0 million (prior to Q2) $7.0–$7.5 million (reaffirmed) Raised in Q2; Maintained in Q3
Operating Expenses as % of Revenue2026 trajectoryn/a“Lower OpEx as % of revenue” strategic priority Qualitative target
OEM Integration Timing2026n/aDiscussions underway; targeting 1H 2026 integration New milestone signal
Capital ProgramOngoingShelf $25M previously filed $10M ATM established (Oct 2025), opportunistic usage Liquidity flexibility

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2025)Current Period (Q3 2025)Trend
AI/Technology & Product InnovationFast Motion launch; physics-led design; strong ROAS on shafts Fast Motion sales up >300% QoQ; robot testing showed tighter dispersion vs peers Improving product validation
Supply Chain & TariffsMade in USA; no toxic financings; ERP (NetSuite) investments Made in USA; competitor tariffs in China/Vietnam; back-office modernization continues Advantage vs peers; systems scaling
Retail & Channel MixClub Champion ramp; DTC dominant (~92%) DTC ~90%; pursuing Golf Galaxy/PGA Superstore/Dick’s; OEM and international expanding Diversifying channels
Regional ExpansionJapan site planned; fitters growing; Korea distributor discussions Japan e-commerce launched; 50 large retail stores; Korea/Europe discussions progressing Accelerating international
Regulatory/Macro (USGA/R&A Ball)Outlook discussed; rule change an innovation catalyst Rule changes (2028–2030) expected to drive new equipment cycles, supportive tailwind Structural demand tailwind
R&D Execution & CapacityCapacity build; new SKUs forthcoming (fairway/hybrid) ~20k shafts/quarter; 3 new premium shaft lines in development for 2026 Scaling production and pipeline

Management Commentary

  • “We are executing against a clear plan: expand Newton’s tour presence, scale our professional club fitter and retail footprint, deepen OEM engagement, and accelerate product innovation.” — Greg Campbell .
  • “Q3 2025 provided record topline growth. Revenue increased 113% year-over-year and gross margin remained strong at 67%… Full-year revenue guidance reaffirmed at $7 million to $7.5 million.” — Jeff Clayborne .
  • “We are 100% made in the USA, so there are no tariffs for us, but tariffs do impact our competitors.” — Greg Campbell .
  • “We have no intention… to dilute our existing investors… At these levels, no. We’re not interested in raising significant amounts of capital because we’re not burning a tremendous amount of money.” — Jeff Clayborne on ATM usage .
  • “Japan represents approximately 11.4 million active golfers… we expect Japan to be a meaningful contributor to revenue growth in 2026.” — Management on Japan launch .

Q&A Highlights

  • Channel strategy: DTC remains the core (about 90% of Q3 revenue); active discussions with Golf Galaxy, PGA Superstore, and Dick’s; Club Champion retail footprint remains key; OEM integration path targeted for 2026 with significant volume potential .
  • Tariffs and competitive dynamics: Newton’s USA manufacturing avoids tariffs; leading competitors manufacturing in China/Vietnam face tariff exposure .
  • Path to profitability: Management expects improving gross margins with scale, lower marketing as % of revenue over time, and operating leverage from ERP/process improvements; noted investor concerns driving stock pressure .
  • Capacity and product: Production reached ~20k shafts/quarter; Fast Motion lighter feel favored across flexes; robot testing showed tighter dispersion and lower spin at high launch angles vs peers .
  • Marketing and influencers: Engaged Out of the Box Capital to broaden brand awareness; paused putter advertising due to low DTC conversion; plans for retail try-and-buy and later reevaluate ad spend .

Estimates Context

  • Q3 2025: Revenue beat (Actual $2.58 million vs Consensus $2.38 million*), EPS missed (Actual -$0.34 vs Consensus -$0.19*) amid higher OpEx from marketing and professional services initiatives .
  • FY 2025: Consensus revenue $7.44 million* sits near the top of reaffirmed guidance ($7.0–$7.5 million), suggesting limited room for upward revisions unless Q4 outperforms; EPS consensus at -$1.25* reflects continued investment and scaling costs.
  • Coverage is thin (single estimate), increasing potential volatility around reported results and updates.
    Consensus estimates marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Topline momentum intact: consecutive quarters of strong growth with Q3 revenue +113% YoY and GM at 67% — trend supported by Fast Motion adoption and tour validation .
  • Narrative driver: Revenue beat vs consensus but EPS miss; near term stock reaction appears sensitive to profitability trajectory and dilution risk — management emphasized measured ATM usage to minimize dilution .
  • 2026 optionality: OEM integration discussions and 3 new premium shaft lines create potential step-up in volume and brand reach; regulatory ball changes may catalyze equipment cycles .
  • Channel diversification: Expect DTC mix to moderate as retail, OEM, and international expand (Japan e-commerce launched; Korea/Europe discussions ongoing), potentially smoothing seasonality and marketing spend intensity .
  • Operating leverage path: ERP and back-office modernization, capacity ramp (~20k shafts/quarter), and scale effects should support margin expansion and lower OpEx as % revenue over time .
  • Execution watch items: Putters require retail-first strategy; monitor conversion lift and retail rollout; watch Q4 order visibility relative to guidance .
  • Trading setup: Near term, beats on revenue and international traction vs EPS/OpEx sensitivity and dilution fears likely drive volatility; catalysts include OEM announcements, retail partnerships, and continued tour wins .