Newton Golf's Q3 2025: Contradictions Emerge on Mainstream Retail Expansion and Shaft Demand, Production Capacity

Date of Call: None provided

Financials Results

• Revenue: $2.6M in Q3, up 113% year-over-year (Q3 2024: $1.2M); YTD revenue $5.9M, up 147% YOY
• EPS: -$0.34 per share in Q3, compared to -$21.79 per share in Q3 2024
• Gross Margin: 67% in Q3 (steady); nine-month gross margin 68%; gross profit up 115% YOY for the quarter and 166% YOY for nine months

Guidance:

• Reaffirming full-year 2025 revenue guidance of $7.0M–$7.5M.
• Strong year-to-date performance and order visibility support momentum into Q4.
• Expect continued operating leverage and improved operating efficiency as volumes scale into 2026.
• Target OEM conversations to progress in 1H 2026 with potential OEM sales by July 2026 (not guaranteed).
• Established an ATM program up to $10M for opportunistic capital access to support growth.

Business Commentary:

* Record Revenue and Growth: - Newton Golf Company reported record net revenue of $2.5 million for Q3 2025, reflecting 113% year-over-year growth. - The growth was driven by robust product demand, continued market penetration, and effective pricing strategies.

• Operational Efficiency and Margin Improvement:
• The company maintained a gross margin of 67%, reflecting process refinements and improved throughput at its St. Joe, Missouri facility.

• This was attributed to the successful scaling of production capacity and enhanced quality control measures.

• Tour Adoption and Brand visibility:

• More than 60 professionals on PGA Tour Champions, LPGA, and Korn Ferry Tours are gaming Newton shafts.

• The increased recognition and validation from elite players have contributed to rising consumer interest and market potential.

• Product Launch Success:

• The Fast Motion shaft, launched earlier in the year, has experienced more than 300% quarter-over-quarter increase in cumulative unit sales.
• This rapid uptake in sales reflects strong market receptivity and the company's ability to scale manufacturing efficiently to meet demand.

Sentiment Analysis:

Overall Tone: Positive

• Management described Q3 as a "record quarter," reporting $2.6M revenue (+113% YOY) and a 67% gross margin, highlighted accelerating tour adoption and 300% quarterly growth in Fast Motion unit sales, and reaffirmed full-year guidance while noting improving operational scale and an ATM for opportunistic capital.

Q&A:

• Question from Submitted Email (Not provided): How close are you to expanding into more mainstream retail channels such as Golf Galaxy, PGA Superstore, or Dick’s Sporting Goods? Is this still a strategic goal?
  Response: Yes — retail expansion is strategic. Currently DTC ~90% of revenue; retail primarily Club Champion (~135 stores); actively in discussions with Golf Galaxy, PGA Superstore, Dick’s and smaller chains; retail lowers gross margin but net margins may be comparable due to reduced paid media spend.

• Question from Submitted Email (Not provided): Is there any line of sight on OEM integration timing and how will that affect gross margins?
  Response: OEM discussions are ongoing with a target in 1H 2026 and possible sales by July 2026; OEM margins expected to sit between retail and DTC but could bring materially larger volumes.

• Question from Live Attendee (Not provided): Have tariffs impacted the business at all?
  Response: No — all shafts are made in the U.S., so Newton is not subject to tariffs; competitors manufacturing in China/Vietnam are affected.

• Question from Anonymous Attendee (Not provided): Is there a path to profitability?
  Response: Yes — management expects operating leverage as revenue grows: higher volumes lower unit costs, gross margins should improve (goal in the 70s), and marketing spend as a percentage of revenue will decline, driving a path to profitability.

• Question from Submitted Email (Not provided): What specific measurements back your claim that the shafts provide measurable performance proof? Have you tested on a robotic arm against top competitors like Fujikura?
  Response: Yes — robot testing versus Fujikura and others showed tighter dispersion on off-center shots and lower spin at higher launch angles; tour launch monitor data corroborates lower spin and tighter dispersion leading to improved distance and consistency.

• Question from Submitted Email (Not provided): How much production capacity was added? Can you quantify that in terms of dollar capacity?
  Response: Shaft production ramped to ~20,000 shafts per quarter (from <10k in Q1 and ~10k in Q2); ramp required additional labor and new processes for the Fast Motion SKU; no dollar-per-capacity figure provided.

• Question from Submitted Email (Not provided): What do you assess the probability is that your shafts will be offered as an OEM option by July 2026?
  Response: CEO characterized the probability as 'good' given current discussions, but emphasized no guarantees — the OEM evaluation and approval process must complete and customer demand must follow.

• Question from Live Attendee (Not provided): How much of the ATM do you plan to use?
  Response: ATM established for up to $10M to provide flexible capital access; management has no current intent to raise significant dilutive capital at current levels and will use proceeds opportunistically to support growth and liquidity.

• Question from Submitted Email (Not provided): Any plans to accelerate penetration of younger, online-focused golfers via influencer sponsorships?
  Response: Yes — engaged Out of the Box Capital (~Nov 1) to activate more affordable influencer channels focused on awareness (not stock promotion) to reach younger/high-net-worth online golf consumers.

• Question from Submitted Email (Not provided): Any comments on the putter market and did you increase ad spend for putters?
  Response: No incremental ad spend for putters — ads drive traffic but low conversion; putters sell better in retail (about 30 Club Champion stores now); ad spend is focused on shafts which deliver ~4x ROAS.

Contradiction Point 1

Expansion into Mainstream Retail Channels

It involves the company's strategy for expanding into mainstream retail channels, which is crucial for market penetration and sales growth.

How close are you to expanding into mainstream retail channels like Golf Galaxy, PGA Superstore, or Dick's Sporting Goods? Is this still a strategic goal? - Colin (Call Moderator, Newton Golf Company)

2025Q3: Strategic goal to expand into mainstream retail channels... Currently focused on direct-to-consumer... In discussions with Golf Galaxy, PGA Superstore, Dick's, and other smaller stores. - Greg Campbell(CEO)

Are there plans for Newton to leverage its shaft technology in irons by introducing a new line with adaptive plug-and-play shaft options? - Jeff, CFO, Newton Golf

2025Q2: Our goal is to be on every club in the bag... We plan to introduce fast motion versions of those fairway wood shafts soon. - Greg Campbell(CEO)

Contradiction Point 2

Growth in Shaft Demand and Production Capacity

It touches on the demand and production capacity for the company's shafts, which are critical for meeting market demand and maintaining competitive positioning.

What production capacity was added in dollar terms? - Anonymous Attendee

2025Q3: Production capacity increased to 20,000 shafts per quarter... Significant increase driven by Fast Motion shafts demand. - Greg Campbell(CEO)

How did the FastMotion shaft launch perform compared to expectations in terms of demand, adoption, and tour momentum? - Jeff, CFO, Newton Golf

2025Q2: The fast motion shaft was introduced on April 29, so in the second quarter, we only had two months of sales of that shaft, but it far exceeded our expectations. - Greg Campbell(CEO)