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YoY shift: Neutral
Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K. This filing is -0.01pp more bearish than last year's.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Tone shift by section
The two components the gauge averages: how Risk Factors and MD&A each shifted in net tone versus last year's 10-K. The headline above is their average, so a green needle over a soft section just means the other section carried it.
Risk Factors
+0.03pp
Flat
Net-tone change vs last year's 10-K.
MD&A
-0.05pp
Flat
Net-tone change vs last year's 10-K.
Per-snippet highlights
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
Language change vs prior 10-K
Risk Factors (Item 1A) - words with the biggest YoY frequency increase
Negative rising
adverse+5
restated+3
unable+1
exposed+1
unfavorable+1
Positive rising
effective+2
able+1
favorable+1
gain+1
beautiful+1
Risk Factors (Item 1A)
20,529 words
ITEM 1A. RISK FACTORS
Summary Risk Factors
Below is a summary of some of the principal risks that could adversely affect our business, operations and financial results:
Risks Related to Our Business and Industry
• A reduction in the number of rounds of golf played or in the number of golf participants could materially adversely affect our business, financial condition and results of operations.
• Unfavorable weather conditions may impact the number of playable days and rounds played in a given year.
• Consumer spending habits and macroeconomic and demographic factors may affect the number of rounds of golf played, the number of golf participants and related spending on our products.
• U.S. and foreign trade policies, including the assessment of tariffs and other impositions on imported goods, may have a material adverse effect on our business, financial condition and results of operations.
• Changes to the Rules of Golf with respect to equipment could materially adversely affect our business, financial condition and results of operations.
• We may not successfully manage the frequent introduction of new products or changing consumer preferences and quality and regulatory standards.
Language change vs prior 10-K
MD&A (Item 7) - words with the biggest YoY frequency increase
Negative rising
loss+4
restructuring+3
losses+2
bridge+2
volatility+1
Positive rising
benefit+4
gain+3
enhance+1
opportunities+1
MD&A (Item 7)
9,408 words
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion contains management’s discussion and analysis of our financial condition and results of operations and should be read together with “Item 1A – Risk Factors” and our audited consolidated financial statements and the notes thereto included elsewhere in this Annual Report. This discussion contains forward‑looking statements that reflect our plans, estimates and beliefs and involve numerous risks and uncertainties, including but not limited to those described in the “Risk Factors” section of this report. Actual results may differ materially from those contained in any forward‑looking statements. You should carefully read the “Special Note Regarding Forward‑Looking Statements” section of this report following the Table of Contents.
Overview
We are the global leader in the design, development, manufacture and distribution of performance-driven golf products, and these products are widely recognized for their quality excellence. Today, we are the steward of two of the most revered brands in golf—Titleist, one of golf’s leading performance equipment brands, and FootJoy, one of golf’s leading performance wearable brands.
Our target market is dedicated golfers, who are the cornerstone of the worldwide golf industry. These dedicated golfers are avid and skill-biased, prioritize performance and commit the time, effort and money to their game. We seek to leverage a pyramid of influence product and promotion strategy, whereby our products are the most played by the world’s players, creating aspirational appeal for a broad range of golfers who want to emulate the performance of the game’s players.
• Failure to successfullyinnovate and offer high-quality products may adversely affect our ability to compete in the market for our products.
• A significant disruption in the operations of our manufacturing, assembly or distribution facilities could materially adversely affect our business, financial condition and results of operations.
• Many of our raw materials and product components are provided by a sole or limited number of third-party suppliers and manufacturers, and the cost of our raw materials and product components could affect our operating results.
• A disruption in the operations of our suppliers could materially adversely affect our business, financial condition and results of operations.
• We may be involved in lawsuits to protect, defend or enforce our intellectual property rights, which could be expensive, time-consuming and unsuccessful.
• Our products may infringe the intellectual property rights of others, which may cause us to incur unexpected costs or prevent us from selling our products.
• We face intense competition in each of our markets and if we are unable to maintain a competitive advantage, loss of market share, sales or profitability may result.
• We may have limited opportunities for future growth in sales of certain of our products.
• A severe or prolonged economic downturn could adversely affect our customers’ financial conditions, levels of business activity and ability to pay their trade obligations.
• We depend on retailers and distributors to market and sell our products, and our failure to maintain and further develop our sales channels could materially adversely affect our business, financial condition and results of operations.
• Our business and results of operations are subject to seasonality and product launch cycles, which could result in fluctuations in our operating results and stock price.
• We have significant international operations and are exposed to risks associated with doing business globally.
• We rely on complex information systems to manage our manufacturing, distribution, sales, finance, accounting and other functions. If our information systems fail to perform these functions adequately or if we experience an interruption in our operations, including a breach in cybersecurity, our business, financial condition and results of operations could be materially adversely affected.
• Cybersecurity risks could disrupt our operations and negatively impact our reputation.
• Our current senior management team and other key employees are critical to our success and if we are unable to attract and/or retain key employees and hire qualified management, technical and manufacturing personnel, our ability to compete could be harmed.
• Our business could be materially adversely affected as a result of the risks associated with acquisitions and investments.
Risks Related to Our Indebtedness
• A high degree of leverage could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or in our industry, expose us to interest rate risk to the extent of our variable rate debt, and prevent us from meeting our obligations under our indebtedness.
• Servicing our indebtedness requires a significant amount of cash. Our ability to generate sufficient cash depends on many factors, some of which are not within our control.
• We and our subsidiaries may be able to incur significant amounts of debt, which could exacerbate the risks associated with current indebtedness.
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• The credit agreement that governs our multi-currency revolving credit facility contains restrictions that limit our flexibility in operating our business.
Risks Related to Ownership of Our Common Stock
• The interests of Magnus Holdings Co., Ltd. (“Magnus”) and its affiliates and any of their successors or transferees may conflict with other holders of our common stock.
• We are a “controlled company” under New York Stock Exchange (“NYSE”) rules and, as a result, we qualify for and may elect to rely upon exemptions from certain corporate governance requirements that would otherwise provide protection to our shareholders.
For a more complete discussion of the material risks facing our business, see below. You should carefully consider each of the following risk factors, as well as the other information in this Annual Report, including our consolidated financial statements and the related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” Item 7 of Part II to this report. If any of the following risks actually occurs, our business, financial condition and results of operations could be materially adversely affected. In that event, the market price of our common stock could decline significantly and you could lose all or part of your investment. The risks described below are not the only risks we face. Additional risks we are not presently aware of or that we currently believe are immaterial could also materially adversely affect our business, financial condition and results of operations.
Risks Related to Our Business and Industry
A reduction in the number of rounds of golf played or in the number of golf participants could materially adversely affect our business, financial condition and results of operations.
We generate substantially all of our sales from the sale of golf‑related products, including golf balls, golf clubs, golf shoes, golf gloves, golf gear and golf apparel. The demand for golf‑related products in general, and golf balls in particular, is directly related to the number of golf participants and the number of rounds of golf played by these participants. If golf participation or the number of rounds of golf played declines, sales of our products may be adversely impacted, which could materially adversely affect our business, financial condition and results of operations.
Unfavorable weather conditions may impact the number of playable days and rounds played in a given year.
Weather conditions in most parts of the world, including our primary geographic markets, generally restrict golf from being played year‑round, with many of our on‑course retail customers closed during the cold weather months and, to a lesser extent, during the hot weather months. Unfavorable weather conditions in our major markets, such as a particularly long winter, a cold and wet spring, or an extremely hot summer, would impact the number of playable days and rounds played in a given year and decrease the amount spent by golfers and golf retailers on our products, particularly consumable products such as golf balls and golf gloves. In addition, unfavorable weather conditions and natural disasters can adversely affect the number of custom club fitting and trial events that we can perform during our key selling periods. Unusual or severe weather events throughout the year, such as storms or droughts or other water shortages, can negatively affect golf rounds played both during such events and afterward. Consequently, sustained adverse weather conditions, especially during the warm weather months, could impact our sales, which could materially adversely affect our business, financial condition and results of operations. Adverse weather conditions may have a greater impact on us than on other golf equipment companies as we have a large percentage of consumable products in our product portfolio, and the purchase of consumable products is generally more dependent on the number of rounds played in a given year.
Consumer spending habits and macroeconomic factors may affect the number of rounds of golf played and related spending on golf products.
Our products are recreational in nature and are therefore discretionary purchases for consumers. Consumers are generally more willing to make discretionary purchases of golf products when economic conditions are favorable and when consumers feel confident and prosperous. Discretionary spending on golf and the golf products we sell is affected by consumer spending habits and many macroeconomic factors, including general business conditions, stock market prices and volatility, corporate spending, housing prices, inflation, interest rates, the availability of consumer credit, taxes and consumer confidence in future economic conditions. Consumers may reduce or postpone purchases of our products as a result of shifts in consumer spending habits as well as during periods when economic uncertainty increases, disposable income is lower, or during periods of actual or perceived unfavorable economic conditions. A future significant or prolongeddecline in general economic conditions or uncertainties regarding future economic prospects that adversely affects consumer discretionary spending, whether in the United States or in our international markets, could result in reduced sales of our products, which could materially adversely affect our business, financial condition and results of operations.
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Demographic factors may affect the number of golf participants and related spending on our products.
Golf is a recreational activity that requires both time and financial resources, and different generations and socioeconomic and ethnic groups use their leisure time and discretionary funds in different ways. Golf participation among younger generations and certain socioeconomic and ethnic groups may not prove to be as popular as it is among older generations. A decline in golf participation or the number of rounds of golf played due to factors such as demographic changes or lack of interest in the sport among young people or certain socioeconomic and ethnic groups could reduce sales of our products and materially adversely affect our business, financial condition and results of operations.
U.S. and foreign trade policies, including the assessment of tariffs and other impositions on imported goods, may have a material adverse effect on our business, financial condition and results of operations.
During 2025, the U.S. government announced the imposition of significant tariff measures, including a baseline tariff of 10% on most products imported into the United States, as well as individualized tariffs on products imported from select trading partners, including Canada, China, Mexico, Thailand and Vietnam. As a result, we are incurring incremental tariff costs in connection with importing raw materials, component parts and finished goods. The U.S. government has also announced and rescinded multiple tariffs on several foreign jurisdictions, which has increased uncertainty regarding the ultimate effect of the tariffs on economic conditions. These actions are impacting bilateral trade relations, with many U.S. trading partners imposing or publicly considering retaliatory tariffs on U.S. imports. The tariff policy environment has been and is expected to continue to be dynamic, and the ultimate impact of any tariffs will depend on the magnitude and duration of the tariffs imposed and the countries impacted. If we are unable to mitigate tariff-related risks through supply chain adjustments, pricing strategies, sourcing arrangements or other measures, our business, financial condition and results of operations could be materially adversely affected.
Additionally, U.S. policy changes and uncertainty about such changes may increase market volatility and currency exchange rate fluctuations. As part of our foreign currency exchange rate hedging strategy, we have and expect to continue to execute forward contracts to protect againstadverse changes in foreign currency exchange rates and to mitigate foreign currency transaction risk. However, our hedging activities may not be sufficient to offset the adverse financial impact resulting from unfavorable movement in foreign currency exchange rates, which could materially adversely affect our business, financial condition and results of operations. See also “—Our operations are conducted worldwide and our results of operations are subject to currency transaction and translation risks that could materially adversely affect our business, financial condition and results of operations” and “—We have significant international operations and are exposed to risks associated with doing business globally.”
Changes to the Rules of Golf with respect to equipment could materially adversely affect our business, financial condition and results of operations.
Golf’s most regulated categories are golf balls and golf clubs. We seek to have our golf ball and golf club products conform with the Rules of Golf because these rules are generally followed by golfers, both professional and amateur. The Rules of Golf set testing standards and establish limitations for the design and performance of golf balls and golf clubs. Historically, the Rules of Golf have regulated golf ball size, weight, spherical symmetry, initial velocity and overall distance. The Governing Bodies have also focused on golf club regulations, including limiting wedge and iron groove size, the size and spring‑like effect of driver faces and club head moment of inertia. In the future, existing Rules of Golf may be altered in ways that may adversely affect the sales of our current or future products.
On December 6, 2023, the Governing Bodies issued the ODS Notice and the Driver Notice. The ODS Notice announced proposed changes to the ODS testing method intended to reduce the distance that conforming golf balls will travel when struck by golfers, while the Driver Notice announced a proposed modification to the conformance testing process for drivers, which may result in an enhanced testing protocol. See “Business – Regulation – Rules of Golf,” Item 1 of Part I to this report, for further discussion of recent and proposed changes to the Rules of Golf, including the ODS Notice and the Driver Notice. The outcomes of the ODS Notice and the Driver Notice and the impact of any implementation thereof or any other potential changes to the Rules of Golf are uncertain at this time.
If the Governing Bodies adopted one or more changes to the Rules of Golf, including the changes proposed by the ODS Notice and the Driver Notice, and caused one or more of our current or future products to be nonconforming, sales of such products could be impacted. Future changes to the Rules of Golf could also require us to expend additional time and resources, including on R&D and raw materials, in order to design, develop and manufacture new products that conform to such rules. Any of the foregoing could materially adversely affect our business, financial condition and results of operations.
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We may not successfully manage the frequent introduction of new products or satisfy changing consumer preferences and quality and regulatory standards.
The golf equipment and golf wear industries are subject to constantly and rapidly changing consumer demands based, in large part, on performance benefits. Our golf ball and golf club products generally have launch cycles of two years, and our sales in a particular year are affected by when we launch such products. We generally introduce new product offerings and styles in our golf wear and gear businesses each year and at different times during the year. Factors driving these short product launch cycles include the rapid introduction of competitive products and consumer demands for the latest technology, style or fashion. In this marketplace, a substantial portion of our annual sales are generated each year by new products.
These marketplace conditions raise a number of issues that we must successfully manage. For example, we must properly anticipate consumer preferences and design products that meet those preferences, while also complying with significant restrictions imposed by the Rules of Golf, or our new products may not achieve sufficient market success to compensate for the usual decline in sales experienced by products already in the market. Second, our R&D and supply chain groups face constant pressures to design, develop, source and supply new products – many of which incorporate new or otherwise untested technology, suppliers or inputs – that perform better than their predecessors while maintaining quality control and the authenticity of our brands. Third, for new products to generate equivalent or greater sales than their predecessors, they must either maintain the same or higher sales levels with the same or higher pricing, or exceed the performance of their predecessors in one or both of those areas. Fourth, the relatively short window of opportunity for launching and selling new products requires great precision in forecasting demand and ensuring that supplies are ready and delivered during the critical selling periods. Finally, the rapid changeover in products creates a need to monitor and manage the closeout of older products both at retail and in our own inventory. If we do not successfully manage the frequent introduction of new products or satisfy consumer demand, it could adversely affect our business, financial condition and results of operations.
Failure to successfullyinnovate and offer high-quality products may adversely affect our ability to compete in the markets for our products.
Technical innovation and quality control in the design and manufacturing processes of our products is essential to our commercial success. R&D plays a key role in technical innovation. We rely upon experts in various fields to develop and test cutting-edge performance products. If we fail to continue technical innovation in our products, consumer demand for our products could decline, and if we experience problems with the quality of our products, we may incur substantial expense to remedy the problems, any of which could materially adversely affect our business, financial condition and results of operations.
A significant disruption in the operations of our manufacturing, assembly or distribution facilities could materially adversely affect our business, financial condition and results of operations.
We rely on manufacturing facilities in the United States, Thailand and Vietnam, certain of which constitute our sole or primary manufacturing facility for a particular product category. For example, the majority of our golf gloves are manufactured at our facility in Thailand, and substantially all of our FootJoy footwear is manufactured at a third-party owned facility in Vietnam. We also rely on assembly and distribution facilities in many of our major markets. Because substantially all of our products are manufactured, assembled in and distributed from a few locations, our operations could be interrupted by events beyond our control, including:
• power loss or network connectivity or telecommunications failure or downtime;
• equipment failure;
• human error or accidents;
• sabotage or vandalism;
• physical or electronic security breaches;
• floods, fires, earthquakes, hurricanes, tornadoes, tsunamis or other natural disasters;
• political or socioeconomic unrest;
• labor difficulties, including work stoppages, slowdowns, labor shortages or excessive turnover;
• water damage or water shortage;
• government orders and regulations;
• pandemics and other health and safety issues; and
• terrorism.
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Our manufacturing, assembly and distribution capacity is also dependent on the performance of services by third parties, including vendors, landlords and logistics and transportation providers. Our manufacturing, assembly and distribution networks include computer processes, software and automated equipment that may be subject to a number of risks related to cybersecurity, software and hardware malfunctions, electronic or power interruptions or other system failures. If we encounter problems with our manufacturing, assembly and distribution facilities and networks, our ability to meet customer expectations, manage inventory, avoid errors, complete sales and achieve objectives for operating efficiencies could be harmed, which could materially adversely affect our business, financial condition and results of operations. Moreover, our business interruption insurance may not adequately protect us from the adverse effects that could result from significant disruptions to our manufacturing, assembly and distribution facilities and networks, such as the long‑term loss of customers or an erosion of our brand image.
Many of our raw materials and product components are provided by a sole or limited number of third‑party suppliers and manufacturers, and the cost of our raw materials and product components could affect our operating results.
We rely on a sole or limited number of third‑party suppliers and manufacturers for many of our raw materials and components in our golf balls, golf clubs, golf gloves, golf shoes and certain of our other products. We also use specialized and geographically limited sources for certain of the raw materials used to make our golf gloves and other products. Many of these materials are customized for us and some of our products require specially developed manufacturing techniques and processes which make it difficult to identify and utilize alternative suppliers quickly. If we were to experience any delay or interruption in such supplies, we may not be able to find adequate alternative suppliers at a reasonable cost or without significant disruption to our business. We continue to be exposed to price increases and availability risks with respect to certain materials and components used by us, our suppliers and our manufacturers, including polybutadiene, zinc diacrylate, urethane and ionomers for the manufacturing of our golf balls, tungsten, titanium and steel for the manufacturing of our golf clubs, leather and synthetic fabrics for the manufacturing of our golf shoes, golf gloves, golf gear and golf apparel, and resin and other petroleum‑based materials for a number of our products. Any significant supply chain disruptions, price fluctuations or shortages in raw materials or components, including the costs to transport such materials or components of our products, the uncertainty of currency fluctuations against the U.S. dollar, increases in labor rates, trade duties or tariffs, and/or the introduction of new and expensive raw materials could materially adversely affect our business, financial condition and results of operations.
A disruption in the operations of our suppliers could materially adversely affect our business, financial condition and results of operations.
Our ability to continue selecting reliable suppliers who provide timely deliveries of quality materials and components will impact our success in meeting customer demand for timely delivery of quality products. If we experience significantly increased demand, or if, for any reason, we need to replace an existing manufacturer or supplier, there can be no assurance that additional supplies of raw materials or additional manufacturing capacity will be available when required on terms that are acceptable to us, or at all, or that any new supplier or manufacturer would allocate sufficient capacity to us in order to meet our requirements. Furthermore, the ability of third‑party suppliers to timely deliver raw materials or components may be affected by events beyond their control, such as work stoppages or slowdowns, transportation issues, changes in trade or tariff laws, or significant weather and health conditions, and there can be no assurance that our suppliers and manufacturers will continue to provide raw materials and components that are consistent with our standards and that comply with all applicable laws and regulations. We have occasionally received, and may in the future receive, shipments of supplies or components that fail to conform to our quality control standards, and we have in the past and may again in the future experience supply chain disruptions and related shortages of various raw materials. In addition, while we do not control our suppliers or their labor practices, negative publicity regarding the management of facilities, production methods employed or materials used by any of our suppliers could adversely affect our reputation and may force us to seek alternative suppliers. If any of the foregoing were to occur, unless we obtain replacement supplies or components in a timely manner, we risk the loss of sales resulting from the inability to manufacture our products and could incur related increased administrative and shipping costs.
In addition, should we decide to transition existing manufacturing between third‑party manufacturers or to transition existing in‑house manufacturing to third‑party manufacturers, such as the transition of our footwear manufacturing to a third-party owned facility in Vietnam, the risk of a supply chain disruption could increase. Even if we are able to expand existing or find new manufacturing sources, we may encounter delays in production and added costs as a result of the time it takes to train our suppliers and manufacturers in our methods, products and quality control standards. Any material delays, interruption or increased costs in the supply of raw materials or components of our products could impact our ability to meet customer demand, which could negatively impact our brands and materially adversely affect our business, financial condition and results of operations.
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Our operations are conducted worldwide and our results of operations are subject to currency transaction and translation risks that could materially adversely affect our business, financial condition and results of operations.
For the year ended December 31, 2025, $1,035.4 million of our net sales were generated in regions outside of the United States. Substantially all net sales from regions outside of the United States were generated in the applicable local currency, which include, but are not limited to, the Japanese yen, the Korean won, the British pound sterling, the euro and the Canadian dollar. In contrast, substantially all of our purchases of inventory, raw materials and components in these regions are made in U.S. dollars. As a result, we are exposed to transaction risk attributable to fluctuations in currency exchange rates, which can impact the gross profit of our international subsidiaries. In addition, because substantially all of the operating expenses incurred by our international subsidiaries are denominated in foreign currencies, we are exposed to currency translation risk when we translate the financial results of our consolidated subsidiaries from their local currency into U.S. dollars. Fluctuations in foreign currency exchange rates may positively or negatively affect our reported financial results and can significantly affect period‑over‑period comparisons. A strengthening of the U.S. dollar relative to our foreign currencies could materially adversely affect our business, financial condition and results of operations.
We have entered and expect to continue entering into various foreign exchange forward contracts to protect againstadverse changes in foreign exchange rates and attempt to mitigate foreign currency transaction risk. Our hedging activities can reduce, but not eliminate, the effects of foreign currency transaction risk on our financial results. The extent to which our hedging activities mitigate foreign currency transaction risks varies based upon many factors, including the timing, value and volume of transactions being hedged, accuracy of sales forecasts, volatility of currency markets, the availability of hedging instruments and limitations on the duration of such hedging instruments. Because these hedging activities are designed to reduce volatility, they not only reduce the negative impact of a stronger U.S. dollar but could also reduce the positive impact of a weaker U.S. dollar. We are also exposed to credit risk from the counterparties to our hedging activities and market conditions could cause such counterparties to experience financial difficulties. As a result, our efforts to hedge these exposures could prove unsuccessful and, furthermore, our ability to engage in additional hedging activities may decrease or become more costly.
Failure to adequately enforce and protect our intellectual property rights could materially adversely affect our business, financial condition and results of operations.
We own numerous patents, trademarks, trade secrets, copyrights and other intellectual property and hold licenses to intellectual property owned by others, which in the aggregate are important to our business. We rely on a combination of patent, trademark, copyright and trade secret laws in our core geographic markets and other jurisdictions to protect the innovations, brands, proprietary trade secrets and know‑how related to certain aspects of our business. Certain of our intellectual property rights, such as patents, are time‑limited, and the technology underlying our patents can be used by any third party, including competitors, once the applicable patent terms expire.
We seek to protect our confidential proprietary information, in part, by entering into confidentiality and invention assignment agreements with our employees, consultants, contractors, suppliers and others. While these agreements are designed to protect our proprietary information, we cannot be certain that such agreements have been entered into with all relevant parties, and we cannot be certain that our trade secrets and other confidential proprietary information will not be disclosed or that competitors will not otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques. We also seek to preserve the integrity and confidentiality of our proprietary information by maintaining physical security of our premises and physical and electronic security of our information technology systems, but it is possible that these security measures could be breached. If these physical and electronic security measures fail, or if we are otherwise unable to prevent disclosure to third parties of our material proprietary and confidential know‑how and trade secrets, our ability to establish or maintain a competitive advantage in our markets may be adversely affected.
We selectively and strategically pursue patent, trademark and trade secret protection in our core geographic markets, but our strategy has been to not perfect certain patent and trademark rights in some countries. For example, we focus primarily on securing patent protection in those countries where the majority of our golf ball and golf club industry production takes place. Accordingly, we may not be able to prevent others, including competitors, from practicing our patented inventions, including by manufacturing and selling competing products, in those countries where we have not obtained patent protection. Further, the laws and law enforcement practices of some foreign countries do not protect proprietary rights and intellectual property rights to the same extent or in the same manner as the laws of the United States, and in some foreign countries third‑party manufacturers may be able to manufacture and sell imitation products and diminish the value of our brands as well as infringe our rights, despite our efforts to prevent such activity.
The golf ball and golf club industries, in particular, have been characterized by widespread imitation of popular ball and club designs. We have an active program of monitoring, investigating and enforcing our proprietary rights against companies and individuals who market or manufacture counterfeits and “knockoff” products. We assert our rights against
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infringers of our patents, trademarks, trade dress and copyrights. However, these efforts may be expensive, time‑consuming, divert management’s attention, and ultimately may not be successful in reducing sales of golf products by these infringers. The failure to prevent or limit such infringers or imitators could adversely affect our reputation and sales. Additionally, other golf ball and golf club manufacturers may be able to produce successful golf balls or golf clubs which imitate our designs without infringing any of our patents, trademarks, trade dress or copyrights, which could limit our ability to maintain a competitive advantage in our marketplace.
If we fail to obtain enforceable patents, trademarks and trade secrets, fail to maintain our existing patent, trademark and trade secret rights, or fail to prevent substantial unauthorized use of our patents, trademarks and trade secrets, we risk the loss of our intellectual property rights and competitive advantages we have developed, which may result in lost sales. Accordingly, we devote substantial resources to the establishment and protection of our patents, trademarks and trade secrets or know‑how, and we continuously evaluate the utility of our existing intellectual property and the new registration of additional trademarks and patents, as appropriate. However, we cannot guarantee that we will have adequate resources to continue to effectively establish, maintain and enforce our intellectual property rights. We also cannot guarantee that any of our pending applications will be approved by the applicable governmental authorities. Moreover, even if the applications will be registered during the registration process, third parties may seek to oppose, limit, or otherwise challenge these applications or registrations.
We may be involved in lawsuits to protect, defend or enforce our intellectual property rights, which could be expensive, time consuming and unsuccessful.
Our success depends in part on our ability to protect our patents, trademarks and trade secrets from unauthorized use by others. To counter infringement or unauthorized use, we may file infringement or misappropriationclaims, which can be expensive and time‑consuming and could materially adversely affect our business, financial condition and results of operations, even if successful. Any claims that we assert against perceived infringers could also provoke these parties to assert counterclaimsalleging that we infringe or misappropriate their intellectual property rights or that we have engaged in anti‑competitive conduct. Moreover, our involvement in litigationagainst third parties asserting infringement of our intellectual property rights presents some risk that our intellectual property rights could be challenged and invalidated. In addition, in an infringement proceeding, whether initiated by us or another party, a court may refuse to stop the other party in such infringement proceeding from using the technology or mark at issue. An adverse result in any litigation or defense proceedings, including proceedings at the patent and trademark offices, could put one or more of our patents, trademarks or trade secrets at risk of being invalidated, held unenforceable or interpreted narrowly, and could put any of our patent or trademark applications at risk of not being issued as a registered patent or trademark, any of which could materially adversely affect our business, financial condition and results of operations.
Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential proprietary information could be compromised by disclosure during this type of litigation. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could materially adversely affect the price of our common stock.
Our products may infringe the intellectual property rights of others, which may cause us to incur unexpected costs or prevent us from selling our products.
From time to time, third parties have challenged our patents, trademark rights and branding practices, or asserted intellectual property rights that relate to our products and product features. We cannot assure you that our actions taken to establish and protect our technology and brands will be adequate to prevent others from seeking to block sales of our products or to obtain monetary damages, based on allegedviolation of their patents, trademarks or other proprietary rights. We may be required to defend such claims in the future, which, whether or not meritorious, could result in substantial costs and diversion of resources and could materially adversely affect our business, financial condition and results of operations.
If we are found to infringe a third party’s intellectual property rights, we could be forced, including by court order, to cease developing, manufacturing or commercializing the infringing product. Alternatively, we may be required to obtain a license from such a third party in order to use the infringing technology and continue developing, manufacturing or marketing such technology. In such a case, license agreements may require us to pay royalties and other fees that could be significant, or we may not be able to obtain any required license on commercially reasonable terms or at all. Even if we were able to obtain a license, it could be non‑exclusive, thereby giving our competitors access to the same technologies licensed to us. A finding of infringement could prevent us from commercializing our products or force us to cease some of our business operations, or to redesign or rename some of our products to avoid future infringement liability. In addition, we could be found liable for monetary damages, including treble damages and attorneys’ fees, if we are found to have willfullyinfringed a patent. Claims
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that we have misappropriated the confidential information or trade secrets of third parties could also materially adversely affect our business, financial condition and results of operations. See also “—We may be involved in lawsuits to protect, defend or enforce our intellectual property rights, which could be expensive, time consuming and unsuccessful.” Any of the foregoing could cause us to incur significant costs and prevent us from manufacturing or selling certain of our products.
Changes to patent laws could adversely affect our ability to protect our intellectual property.
Patent reform legislation may increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, thereby negatively impacting our ability to protect our intellectual property which could materially adversely affect our business, financial condition and results of operations. In addition, the U.S. Supreme Court and the U.S. Court of Appeals for the Federal Circuit have made, and may in the future make, changes in how the patent laws of the United States are interpreted. Similarly, foreign courts have made, and may in the future make, changes in how the patent laws in their respective jurisdictions are interpreted. We cannot predict future changes in the interpretation of patent laws or changes to patent laws that might be enacted into law by United States and foreign legislative bodies. These changes may materially affect our patents or patent applications and our ability to obtain and enforce or defend additional patent protection in the future.
We face intense competition in each of our markets and if we are unable to maintain a competitive advantage, loss of market share, sales or profitability may result.
The markets for golf equipment, wear and gear are highly competitive and there may be low barriers to entry in many of our markets. Pricing pressures, reduced profit margins, loss of market share or failure to grow in any of our markets, due to competition or otherwise, could materially adversely affect our business, financial condition and results of operations.
We compete against large‑scale global sports equipment and apparel companies, Japanese industrials, and more specialized golf equipment and golf wear companies. Many of our competitors have significant competitive strengths, including long operating histories, large consumer bases, established relationships with a broad set of suppliers and customers, established regional or local presence, strong brand recognition and greater financial, R&D, marketing, distribution and other resources than we do. There are unique aspects to the competitive dynamic in each of our product categories and markets. We are not the market leader with respect to certain categories or in certain markets.
Golf Equipment. The golf equipment market is highly competitive and is served by a number of well-established and well-financed companies with recognized brand names. New product introductions, price reductions, consignment sales, extended payment terms, “closeouts,” including closeouts of products that were recently commercially successful, and significant tour and advertising spending by competitors continue to generate intense market competition and create market disruptions. Our competitors in the golf equipment market have in the past and may continue to introduce their products on an accelerated cycle, which could lead to market disruption and impact sales of our products. We and our competitors continue to incur significant costs in the areas of R&D, advertising, marketing, tour and other promotional support to be competitive.
Golf Gear. The golf gear market is fragmented and served by a number of established competitors, as well as a number of smaller competitors, all of which are pursuing innovative ways to meet consumer needs. We face significant competition in every region with respect to each of our golf gear product categories.
Golf Wear. In the golf wear markets, we compete with a number of well‑established and well‑financed companies with recognized brand names. These competitors may have a large and broad consumer base, established relationships with a broad set of suppliers and customers, strong brand recognition and greater financial, R&D, marketing, distribution and other resources than we do.
Our competitors may be able to create and maintain brand awareness, gain market share and increase sales in new and existing markets more quickly and effectively than we can, and many of our competitors have substantial resources to devote towards these initiatives. If we are unable to grow or maintain our competitive position in any of our product categories, it could materially adversely affect our business, financial condition and results of operations.
We may have limited opportunities for future growth in sales of certain of our products.
The golf industry is highly competitive, and we already have a significant share of worldwide sales of golf balls, golf shoes and golf gloves. As such, our ability to gain incremental market share quickly or at all may be limited given the competitive nature of and other challenges associated with the golf industry. In the future, the overall dollar volume of worldwide sales of golf equipment, wear and gear may not grow or may decline which could materially adversely affect our business, financial condition and results of operations.
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A severe or prolonged economic downturn could adversely affect our customers’ financial conditions, levels of business activity and ability to pay their trade obligations.
We primarily sell our products to golf equipment retailers, such as on‑course golf shops, golf specialty stores and other qualified retailers, both directly and through foreign distributors. We perform ongoing credit evaluations of these customers’ financial condition and generally require no collateral from them. However, a severe or prolongeddownturn in the general economy could adversely affect the retail golf equipment market, which in turn would negatively impact the liquidity and cash flows of these customers and make it more difficult for them to obtain credit to finance purchases of our products and to pay their trade obligations. This could result in decreased orders for our products and increased delinquent or uncollectible accounts from these customers. A decrease in orders or the failure by these customers to pay a significant portion of outstanding accounts receivable balances on a timely basis could materially adversely affect our business, financial condition and results of operations.
A decrease in corporate spending on our custom logo golf balls could materially adversely affect our business, financial condition and results of operations.
Custom imprinted golf balls, a majority of which are purchased by corporate customers, are estimated to represent, on average, between 25-30% of our global net golf ball sales. There has long been a strong connection between the business community and golf, and if corporate spending decreases, it could impact the sales of our custom imprinted golf balls.
We depend on retailers and distributors to market and sell our products, and our failure to maintain and further develop our sales channels could materially adversely affect our business, financial condition and results of operations.
We primarily sell our products through retailers and distributors and depend on these third parties to market and sell our products to consumers. Any changes to our current mix of retailers and distributors could adversely affect our sales and could negatively affect both our brand image and our reputation. Our sales depend, in part, on retailers adequately displaying our products, including providing attractive space and merchandise displays in their stores, and training their sales personnel to sell our products. If our retailers and distributors are not successful in selling our products, our sales would decrease. Our retailers frequently offer products and services of our competitors in their stores. In addition, our success in growing our presence in existing and expanding into new international markets will depend on our ability to establish relationships with new retailers and distributors. If we do not maintain our relationships with our existing retailers and distributors or develop relationships with new retailers and distributors, our ability to sell our products would be negatively impacted.
On a consolidated basis, no one customer that sells or distributes our products accounted for more than 10% of our consolidated net sales in the year ended December 31, 2025. However, our top ten customers accounted for approximately 20% of our consolidated net sales in the year ended December 31, 2025. Accordingly, the loss of a small number of our large customers, or the reduction in business with one or more of these customers, could materially adversely affect our business, financial condition and results of operations. We do not currently have minimum purchase agreements with these large customers.
Consolidation of retailers or concentration of retail market share among a few retailers may increase and concentrate our credit risk, put pressure on our margins and impair our ability to sell products.
The sporting goods and off‑course golf equipment retail markets in some countries, including the United States, are dominated by a few large retailers. Certain of these retailers have in the past increased their market share and may continue to do so in the future by expanding through acquisitions and construction of additional stores. Future industry consolidation and correction is possible. These situations may result in a concentration of our credit risk with respect to our sales to such retailers, and, if any of these retailers were to experience a shortage of liquidity or other financial difficulties, or file for bankruptcy or receivership protection, it would increase the risk that their outstanding payables to us may not be paid. This consolidation may also result in larger retailers gaining increased leverage, which may impact our margins. In addition, increasing market share concentration among one or a few retailers in a particular country or region increases the risk that if any one of them substantially reduces their purchases of our products, we may be unable to find a sufficient number of other retail outlets for our products to sustain the same level of sales. Any reduction in sales by our retailers could materially adversely affect our business, financial condition and results of operations.
Our business depends on strong brands, and if we are not able to maintain and enhance our brands, we may be unable to sell our products.
Our brands have worldwide recognition, and our success depends on our ability to maintain and enhance our brand image and reputation. In particular, we believe that maintaining and enhancing the Titleist, Scotty Cameron, Vokey Design, FootJoy, KJUS and Club Glove brands is critical to maintaining and expanding our customer base. Maintaining, promoting and
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enhancing our brands may require us to make substantial investments in areas such as product innovation, product quality, intellectual property protection, marketing and employee training, and these investments may not have the desired impact on our brand image and reputation. Our business could be adversely impacted if we fail to achieve any of these objectives or if the reputation or image of any of our brands is tarnished or receives negative publicity. In addition, adverse publicity about regulatory or legal action against us could damage our reputation and brand image, undermine consumer confidence in us and reduce long‑term demand for our products, even if the regulatory or legal action is unfounded or not material to our operations. Also, as we seek to grow our presence in existing markets, and expand into new geographic or product markets, consumers may not embrace our brand image or be willing to pay a premium to purchase our products as compared to other brands. We anticipate that as our business continues to grow our presence in existing markets and expand into new markets, maintaining and enhancing our brands may become increasingly difficult and expensive. If we are unable to maintain or enhance the image of our brands, it could materially adversely affect our business, financial condition and results of operations.
Our business and results of operations are subject to seasonality and product launch cycles, which could result in fluctuations in our operating results and stock price.
Our business is subject to seasonal fluctuations because golf is played primarily on a seasonal basis in most of the regions where we do business. See “Business – Seasonality,” Item 1 of Part I to this report, for a discussion of our key selling periods and other factors relevant to our quarterly sales volumes. This seasonality affects sales in each of our reportable segments differently. In general, however, because of this seasonality, most of our sales and profitability generally occurs during the first half of the year. Accordingly, our results of operations are likely to fluctuate significantly from period to period. Results of operations in any period should not be considered indicative of the results to be expected for any future period. The seasonality of our business could be exacerbated by the adverse effects of unusual or severe weather conditions that may be caused or exacerbated by climate change.
Our sales can also be affected by the launch timing of new products. Product introductions generally stimulate sales as the golf retail channel takes on inventory of new products. Reorders of these new products then depend on the rate of sell‑through. Announcements of new products can often cause our customers to defer purchasing additional golf equipment until our new products are available. Our varying product introduction cycles, which are described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Factors Affecting Our Results of Operations – Cyclicality” and “–Product Life Cycles,” Item 7 of Part II to this report, may cause our results of operations to fluctuate as each product line has different volumes, prices and margins.
We have significant international operations and are exposed to risks associated with doing business globally.
We sell and distribute our products directly in many key international markets in Europe, Asia, North America and elsewhere around the world. These activities have resulted and will continue to result in investments in inventory, accounts receivable, employees, corporate infrastructure and facilities. In addition, in the United States, there is a limited number of suppliers of certain raw materials and components for our products as well as finished goods that we sell, and we have increasingly become more reliant on suppliers and vendors located outside of the United States. The operation of foreign distribution in our international markets, as well as the management of relationships with international suppliers and vendors, will continue to require the dedication of management and other resources. We also manufacture certain of our products outside of the United States, including some of our golf balls and substantially all of our golf gloves in Thailand, and we contract to manufacture substantially all of our FootJoy footwear in Vietnam.
Political, social and geopolitical conditions in the markets in which our products are manufactured and/or sold have been and could continue to be difficult to predict, and may result in adverse effects on our business. The effects of elections, referendums or other political conditions, events, tensions, wars, and other military conflicts in these markets have in the past impacted and could continue to impact how existing laws, regulations and government programs or policies are implemented or result in uncertainty as to how such laws, regulations, programs or policies may change, including with respect to the negotiation of new trade agreements, new, expanded or retaliatory tariffs against certain countries or covering certain products or ingredients (see “—U.S. and foreign trade policies, including the assessment of tariffs and other impositions on imported goods, may have a material adverse effect on our business, financial condition and results of operations”), sanctions, environmental and climate change regulations, taxes, benefit programs, the movement of goods, services and people between countries, relationships between countries, customer or consumer perception of a particular country or its government and other matters. Such uncertainty could have a negative impact on our business. Further, any changes in global or national political movements or trade policies could alter the trade environment and consumer purchasing behavior which, in turn, could have a material effect on our financial condition and results of operations.
In addition to the uncertainty and the foreign currency risks discussed previously under “—Our operations are conducted worldwide and our results of operations are subject to currency transaction and translation risks that could materially
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adversely affect our business, financial condition and results of operations,” we are exposed to increased risks inherent in conducting business outside of the United States, including:
• increased difficulty in protecting our intellectual property rights and trade secrets;
• unexpected government action or changes in legal, trade, tax or regulatory requirements;
• social, economic or political instability;
• the effects of any anti‑American sentiments on our brands or sales of our products;
• increased difficulty in ensuring compliance by employees, agents and contractors with our policies as well as with the laws of multiple jurisdictions;
• increased difficulty in controlling and monitoring foreign operations from the United States, including increased difficulty in identifying and recruiting qualified personnel for our foreign operations; and
• increased exposure to interruptions in air carrier or ship services.
Any violation of our policies or any applicable laws and regulations by our suppliers or manufacturers could interrupt or otherwise disrupt our sourcing, adversely affect our reputation or damage our brand image. While we do not control these suppliers or manufacturers or their labor practices, negative publicity regarding the management of facilities by, production methods of or materials used by any of our suppliers or manufacturers could adversely affect our reputation and sales and force us to seek alternative suppliers or manufacturing sources, which could materially adversely affect our business, financial condition and results of operations.
Failure to comply with applicable anti-bribery, anti-money laundering and economic sanctions laws could subject us to substantial penalties and other adverse consequences.
We are subject to a wide variety of U.S. federal and state and non‑U.S. laws, regulations and policies, including anti-bribery, anti-money laundering and economic sanctions laws. The FCPA, the U.K. Bribery Act of 2010 and similar anti-bribery laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments to government officials or other persons for the purpose of obtaining or retaining business. Economic and trade sanctions laws and regulations administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control, the U.S. Department of State and foreign jurisdictions impose requirements on our operations and may prohibit or restrict transactions in certain countries and with certain designated persons. In certain circumstances, strict compliance with anti‑bribery laws may conflict with local customs and practices. In addition, we may conduct business in certain regions through third-party intermediaries over whom we have less direct control, such as subcontractors, agents and partners (including our joint venture partners). Although we have implemented policies and procedures designed to facilitate compliance with applicable anti-bribery, anti-money laundering and economic sanctions laws, our officers, directors, employees, associates, subcontractors, agents, and partners may take actions in violation of our policies. Any such violation, or allegations of such violation, could result in substantial fines, sanctions, civil and/or criminalpenalties and curtailment of operations in the U.S. or other applicable jurisdictions. Any of the foregoing could materially adversely affect our business, reputation, financial condition and results of operations.
Our business, financial condition and results of operations could be materially adversely affected if professional golfers do not endorse or use our products, or if the professional golfers using our products receive negative publicity.
We establish relationships and enter into endorsement arrangements with professional golfers in order to use, validate and promote our products, and we often feature those golfers in our advertising and marketing materials. We believe that professional usage of our products validates the performance and quality of our products and contributes to retail sales. We therefore spend a significant amount of money to secure professional usage of our products. Many other companies, however, also aggressively seek the patronage of these professionals and offer many inducements, including significant cash incentives and specially designed products, which could result in a decrease in the usage of our products by professional golfers or limit our ability to attract other tour professionals. There is a great deal of competition to secure the representation of tour professionals. As a result, it is expensive to attract and retain such tour professionals and we may lose the endorsement of these individuals, even prior to the expiration of the applicable contract term. A decline in the level of professional usage of our products, or a significant increase in the cost to attract or retain endorsers, could materially adversely affect our business, financial condition and results of operations.
Furthermore, actions taken by golfers or tours associated with our products that harm the reputations of those golfers or tours could also harm our brand image and impact our sales. We may also sponsor or feature golfers who do not perform at expected levels or who are not sufficiently marketable. If we are unable in the future to secure prominent golfers and arrange
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golfer endorsements of our products on terms that we deem to be reasonable, we may be required to modify our marketing platform and to rely more heavily on other forms of marketing and promotion, which may not prove to be as effective or may result in additional costs.
If we inaccurately forecast demand for our products, we may manufacture insufficient or excess quantities, which could materially adversely affect our business, financial condition and results of operations.
To reduce purchasing costs and ensure supply, we place orders with our suppliers in advance of when we expect to deliver our products. In addition, we plan our manufacturing capacity based upon the forecasted demand for our products. Forecasting the demand for our products is very difficult given the number of SKUs we offer and the amount of specification involved in each of our product categories. For example, in our golf shoe business, we offer a large variety of models as well as different styles and sizes for each model. The nature of our business makes it difficult to quickly adjust our manufacturing capacity if actual demand for our products exceeds or is less than forecasted demand. Factors that could affect our ability to accurately forecast demand for our products include, among others:
• changes in consumer demand for our products or the products of our competitors;
• new product introductions by us or our competitors;
• failure to accurately forecast consumer acceptance of our products;
• failure to anticipate consumer acceptance of new technologies;
• inability to realize revenues from booking orders;
• negative publicity associated with tours or golfers we endorse;
• unanticipated changes in general market conditions or other factors, which may result in cancellations of advance orders or a reduction or increase in the rate of reorders placed by retailers;
• weakening of economic conditions or consumer confidence in future economic conditions, which could reduce demand for discretionary items, such as our products;
• terrorism or acts of war, or the threat thereof, which could adversely affect consumer confidence and spending or interrupt production and distribution of products and raw materials;
• abnormal weather patterns or extreme weather conditions including hurricanes, floods and droughts, among others, which may disrupt economic activity; and
• general economic conditions.
If actual demand for our products exceeds the forecasted demand, we may not be able to produce sufficient quantities of new products in time to fulfill actual demand, which could limit our sales. Any inventory levels in excess of consumer demand may result in inventory write‑downs and/or the sale of excess inventory at discounted prices.
We may experience a disruption in the service, or a significant increase in the cost, of our primary delivery and shipping services for our products and component parts or a significant disruption at shipping ports.
We use United Parcel Service and FedEx Corporation for substantially all ground shipments of products to our U.S. customers. We use ocean shipping services and air carriers for most of our international shipments of products and many of the components we use to manufacture and assemble our products. If there are changes in trade or tariff laws which result in customs processing delays or any significant interruption in service by such providers or at shipping ports or airports, we may be unable to engage alternative suppliers or to receive or ship goods through alternate sites in order to deliver our products or components in a timely and cost‑efficient manner. We could experience manufacturing delays, increased manufacturing and shipping costs, and lost sales due to missed delivery deadlines and product introduction and demand cycles. Any significant interruption in ground shipment services, ship services, at shipping ports or air carrier services could materially adversely affect our business, financial condition and results of operations. If the cost of delivery or shipping services were to increase significantly and the additional costs could not be covered by product pricing, our business, financial condition and results of operations could be materially adversely affected.
If we are unable to successfully manage the implementation of our new Enterprise Resource Planning ("ERP") platform, our business and results of operations or the effectiveness of our internal controls over financial reporting may be adversely affected.
We are in the process of implementing a new worldwide ERP platform as part of our plans to integrate our operations and enhance our supply chain and finance capabilities. Additional implementation activities are expected to continue in phases
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over the next several years. ERP implementations are complex, labor intensive, and time-consuming projects, which also involve substantial expenditures on system software and implementation activities. The successful implementation of the new ERP platform is critical to our ability to provide important information to management, obtain and deliver products, provide services and customer support, accurately maintain books and records, provide accurate, timely and reliable reports on our financial and operating results, and otherwise operate our business. ERP implementations also require transformation of business and financial processes in order to reap the benefits of the ERP system. Any such implementation involves risks inherent in the conversion to a new computer system, including loss of information and potential disruption to our normal operations. The implementation and maintenance of the new ERP platform has required, and will continue to require, the investment of significant financial and human resources, the re-engineering of processes of our business, and the attention of many employees who would otherwise be focused on other aspects of our business. Our results of operations could be adversely affected if we experience additional time delays or cost overruns during the ERP implementation process, or if we are unable to reap the benefits we expect from the new ERP platform. Any material deficiencies in the design and implementation of the new ERP platform could also result in potentially materially higher costs and could adversely affect our ability to operate our business and otherwise negatively affect our financial reporting and the effectiveness of our internal control over financial reporting. Any of these consequences could have a material adverse effect on our business, financial condition and results of operations.
We rely on complex information systems to manage our manufacturing, distribution, sales, finance, accounting and other functions. If our information systems fail to perform these functions adequately or if we experience an interruption in our operations, including a breach in cybersecurity, our business, financial condition and results of operations could be materially adversely affected.
All of our major operations, including manufacturing, distribution, sales, finance and accounting, are dependent upon complex information systems. Our information systems are vulnerable to damage or interruption from:
• earthquake, fire, flood, hurricane and other natural disasters;
• power loss, computer systems failure, internet and telecommunications or data network failure;
• hackers, computer viruses, unauthorized access, software bugs or glitches; and
• accidental or unlawful acts by authorized personnel, including our employees, contractors and vendors.
For example, in November 2025, a technical error by a cloud technology company caused widespread disruptions of services across the internet. Although we did not experience any material impacts as a result of this incident, we could in the future experience similar third-party software-induced interruptions to our operations. Any damage or significant disruption in the operation of our systems, disruptions, delays or deficiencies in the design or implementation of new systems, or the failure of our information systems to perform as expected would disrupt our business, which may result in decreased sales, increased overhead costs, excess inventory or product shortages which could materially adversely affect our business, financial condition and results of operations.
Cybersecurity risks could disrupt our operations and negatively impact our reputation.
There are growing risks related to the security, confidentiality and integrity of personal and corporate information stored and transmitted electronically, consumer identity theft and user privacy due to increasingly diverse and sophisticated threats to network, systems and data security. Potential attacks span a spectrum from attacks by criminal hackers, hacktivists, and nation-state or state-sponsored actors, to employee malfeasance and human or technological error. Cyberattacksagainst companies like ours have increased in frequency and potential harm over time, and the methods used to gainunauthorized access constantly evolve, making it increasingly difficult to anticipate, prevent, and/or detect incidentssuccessfully in every instance. We expend significant resources in an effort to protect against security incidents and may choose to spend additional resources or modify our business activities, particularly where required by applicable data privacy and security laws or regulations or industry standards.
While we have implemented security measures, our information technology systems, as well as those of our vendors, contractors, and other third-party partners who process information on our behalf or have access to our systems, may be susceptible to security incidents, disruptions, cyberattacks, ransomware, electronic or physical break‑ins, viruses, phishing attacks and other forms of social engineering, denial-of-service attacks, third-party or employee theft or misuse and other negligent actions. Any perceived or actual unauthorized or inadvertent disclosure of personal or other confidential information, cyberattack or other breach or theft of the information we control, whether through a breach of our network by an unauthorized party, employee theft, misuse or error or otherwise, could harm our reputation, impair our ability to attract customers, result in substantial remediation costs, subject us to claims or litigation (including class claims), regulatory enforcement, liability under data protection laws, and additional reporting requirements, result in higher insurance premiums and materially adversely affect
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our business, financial condition and results of operations.
Artificial intelligence presents risks and challenges that can impact our business including by posing security risks to our confidential information, proprietary information, and personal data.
Issues associated with the development and use of artificial intelligence (“AI”), combined with an uncertain regulatory environment, may result in reputational harm, liability, or other adverse consequences to our business operations. We have adopted and may in the future adopt and integrate generative AI tools into our systems for specific use cases in consultation with our legal and information technology departments. Our vendors may incorporate generative AI into their offerings without disclosing this use to us, and the providers of these generative AI tools may not meet existing or rapidly evolving regulatory or industry standards with respect to privacy and data protection and may inhibit our or our vendors’ ability to maintain an adequate level of service and experience. Although we have implemented policies and procedures intended to mitigate the risks associated with the use of AI and machine learning technologies, users of our network services, technology systems or computing equipment may take actions in violations of those policies. If we, our vendors, or our third-party partners experience an actual or perceived breach of privacy or security incident because of the use of AI, we may losevaluable intellectual property and confidential information and our reputation and the public perception of the effectiveness of our security measures could be harmed. Further, bad actors around the world use increasingly sophisticated methods, including the use of AI, to engage in illegal activities involving the theft and misuse of personal information, confidential information, and intellectual property. AI and machine learning technologies may also contribute to novel and urgent cybersecurity risks, including through the use by third parties of such technologies to launch more automated, targeted and coordinated attacks. Any of these outcomes could have a material adverse effect on our business, reputation, financial condition and results of operations.
Failure to comply with data privacy and security laws and regulations could adversely affect our operating results and business.
Our business involves the receipt, storage and transmission of confidential information about our customers and others, including sensitive personal information and account and payment card information. A growing number of federal, state and international data privacy and security laws and regulations have been enacted that govern the collection, use, disclosure, transfer, storage, disposal, and protection of personal information. For example, several U.S. territories and all 50 states now have data breach notification laws that require timely notification to impacted individuals, and at times regulators, if a company has experienced the unauthorized access to or acquisition of personal data. In addition, comprehensive state privacy laws are expanding in the U.S. For example, the California Consumer Privacy Act (as amended, the “CCPA”) gives California residents certain privacy rights in the collection and disclosure of their personal information and requires businesses to make certain disclosures, limit their use of personal information, and take certain other acts in furtherance of those rights. Failure to comply with the CCPA may result in, among other things, significant civil penalties and injunctive relief, or potential statutory or actual damages. California has created a data protection agency authorized to implement and enforce the CCPA, which could result in increased enforcement. Many other states have also passed and may continue to pass similar comprehensive privacy laws whose restrictions and requirements differ from those of California. Similar laws have also been proposed at the federal and local levels. The evolving patchwork of differing state and federal privacy and data security laws increases the cost and complexity of operating our business and increases our exposure to liability. We will continue to monitor and assess the impact of these state laws, which may impose substantial penalties for violations, impose significant costs for investigations and compliance, and carry significant potential liability for our business.
Outside of the U.S., data protection laws, including the European Union’s General Data Protection Regulation and the United Kingdom’s General Data Protection Regulation and Data Protection Act (together referred to as the “GDPR”), also apply to some of our operations. Legal requirements in many countries relating to the collection, storage, processing and transfer of personal data continue to evolve. The GDPR imposes, among other things, data protection requirements that include strict obligations and restrictions on the ability to collect, analyze and transfer personal data of individuals within the European Union and the United Kingdom, a requirement for prompt notice of data breaches to data subjects and supervisory authorities in certain circumstances, and possible substantial fines for any violations. Companies that must comply with the GDPR face increased compliance obligations and risk, including more robust regulatory enforcement of data protection requirements and potentially significant fines for noncompliance. Other governmental authorities around the world are considering and, in some cases, have enacted, similar privacy and data security laws. Failure to comply with federal, state and international data protection laws and regulations could result in government investigations and/or enforcement actions (which could include substantial civil and/or criminalpenalties), private litigation and adverse publicity and could negatively affect our business, financial condition and results of operations.
Although we work to comply with applicable laws and regulations relating to data privacy and security, these requirements are evolving and may be modified, interpreted, and applied in an inconsistent manner from one jurisdiction to another and may conflict with one another or other legal obligations with which we must comply. Monitoring, preparing for and
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complying with the array of complex privacy and security legal regimes to which we are subject also requires us to devote significant time and resources. Moreover, many of the laws and regulations in this area are relatively new and their interpretations are uncertain and subject to change. This changing legal and regulatory landscape could in the future further limit our ability to use and share personal information and require changes to our operating model. Any failure or perceived failure by us or our employees, representatives, contractors, consultants, collaborators, or other third parties to comply with such requirements or adequately address privacy and security concerns, even if unfounded, could result in additional cost and liability to us, damage our reputation, and adversely affect our business and results of operations.
If the technology‑based systems that give consumers the ability to shop with us online do not function effectively, our ability to grow our eCommerce business globally could be adversely affected.
We are increasingly using websites and social media to interact with consumers and as a means to enhance their experience with our products. We currently have eCommerce operations in the U.S., Canada, Europe and Asia. In our eCommerce services, we process, store and transmit customer data, including payment card information. We also collect consumer data through certain marketing activities. Failure to prevent or mitigate data loss or other security breaches, including breaches of our vendors’ technology and systems, could expose us or consumers to a risk of loss or misuse of such information, result in litigation or potential liability for us and otherwise adversely affect our business, financial condition and results of operations. We would also likely suffer indirect harms such as reputational damage and reticence among other companies to do business with us. For further information, see “—We rely on complex information systems to manage our manufacturing, distribution, sales, finance, accounting and other functions. If our information systems fail to perform these functions adequately or if we experience an interruption in our operations, including a breach in cybersecurity, our business, financial condition and results of operations could be materially adversely affected.”
Further, our eCommerce business is subject to general business regulations and laws, as well as regulations and laws specifically governing the internet, eCommerce and electronic devices. Existing and future laws and regulations, or new interpretations of these laws, may adversely affect our ability to conduct our eCommerce business. As a merchant that accepts debit and credit cards for payment, we are also subject to the Payment Card Industry Data Security Standard (“PCI DSS”), issued by the PCI Council. PCI DSS contains compliance guidelines and standards with regard to our security surrounding the physical and electronic storage, processing and transmission of individual cardholder data. Our failure to fully comply with PCI DSS could violate payment card association operating rules, federal and state laws and regulations and the terms of our contracts with payment processors and merchant banks.
Any failure on our part to provide private, secure, attractive, effective, reliable, user‑friendly eCommerce platforms that offer a wide assortment of merchandise with rapid delivery options and that continually meet the changing expectations of online shoppers could place us at a competitive disadvantage, result in the loss of eCommerce and other sales, harm our reputation with consumers, have an adverse impact on the growth of our eCommerce business globally and could materially adversely affect our business, financial condition and results of operations.
Goodwill and identifiable intangible assets represent a significant portion of our total assets and any impairment of these assets could negatively impact our results of operations and shareholders’ equity.
Our goodwill and identifiable intangible assets, which primarily consist of goodwill from acquisitions, trademarks, customer relationships and completed technology, represented 31% of our total assets as of December 31, 2025. Accounting rules require the evaluation of our goodwill and intangible assets with indefinite lives for impairment at least annually or whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Such indicators include: (i) a significant adverse change in customer demand or business climate that could affect the value of an asset; (ii) general economic conditions, such as increasing U.S. Treasury rates or unexpected changes in gross domestic product growth; (iii) a change in our market shares; (iv) budget‑to‑actual performance and consistency of operations margins and capital expenditures; (v) a product recall or an adverse action or assessment by a regulator; or (vi) changes in management or key personnel. Goodwill and identifiable intangible assets are deemed impaired when their carrying value exceeds their fair value. If a significant amount of our goodwill and identifiable intangible assets were deemed to be impaired, our business, financial condition and results of operations could be materially adversely affected.
Our current senior management team and other key employees are critical to our success and if we are unable to attract and/or retain key employees and hire qualified management, technical and manufacturing personnel, our ability to compete could be harmed.
Our ability to maintain our competitive position is dependent to a large degree on the efforts and skills of our senior management team and our other key employees. Our executives are experienced and highly qualified with strong reputations and relationships in the golf industry, and we believe that our management team enables us to pursue our strategic goals. Our other key sales, marketing, brand building, R&D, manufacturing, intellectual property protection and support personnel are also
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critical to the success of our business. The loss of the services of any of our senior management team or other key employees could disrupt our operations and delay the development and introduction of our products which could materially adversely affect our business, financial condition and results of operations. We do not have employment agreements with any of the members of our senior management team, except for David Maher, our President and CEO, and Sean Sullivan, our Executive Vice President and CFO. In addition, we do not have “key person” life insurance policies covering any of our officers or other key employees.
In addition, we compete with many companies that have far greater financial resources than we do, and thus can offer current or prospective employees more lucrative compensation packages than we can. Our future success depends upon our ability to attract and retain our executive officers and other key sales, marketing, brand building, R&D, manufacturing, intellectual property protection and support personnel and any failure to do so could materially adversely affect our business, financial condition and results of operations.
Sales of our products by unauthorized retailers or distributors could adversely affect our authorized distribution channels and harm our reputation.
Some of our products find their way to unauthorized outlets or distribution channels. This “gray market” for our products can undermine authorized retailers and foreign wholesale distributors who promote and support our products, and can injure the image of our company in the minds of our customers and consumers. While we have taken some lawful steps to limit commerce of our products in the “gray market” in both the United States and abroad, we have not been successful in halting such commerce.
We may fail to grow our presence in existing international markets and expand into additional international markets.
We intend to grow our presence in and continue to expand into select international markets. To achievesatisfactory performance in these international locations, it may be necessary to locate physical facilities, such as regional offices, in these foreign markets and to hire employees who are familiar with such foreign markets and qualified to market our products. These growth and expansion plans may be unsuccessful and will require significant management attention and resources. Our business, financial condition and results of operations could be materially adversely affected if we do not achieve the international growth and expansion that we anticipate.
We are exposed to a number of different tax uncertainties, including potential changes in tax laws, unanticipated tax liabilities and limitations on utilization of tax attributes after any change of control, which could materially adversely affect our business, financial condition and results of operations.
We are subject to income taxes in the United States (federal and state) and numerous foreign jurisdictions. Tax laws, regulations, and administrative practices in various jurisdictions may be subject to significant change, with or without notice, due to economic, political, and other conditions, and significant judgment is required in evaluating and estimating our provision and accruals for these taxes. Changes to or promulgation of new tax laws, interpretive regulations, other tax or accounting guidance could significantly impact how we are taxed on both U.S. and foreign earnings. Transactions that we have arranged in light of current tax rules could have adverse consequences if those tax rules change, and the imposition of any new or increased tariffs, duties and taxes could materially adversely affect our business, financial condition and results of operations.
Our effective tax rates in the future could be adversely affected by a number of factors, including changes in the expected geographic mix of earnings in countries with differing statutory tax rates, changes in the valuation and realizability of deferred tax assets and liabilities, changes to or issuance of new tax laws, interpretive regulations, notices or other administrative practices, principles, or guidance, changes to or issuance of new accounting guidance, changes in foreign currency exchange rates, entry into new businesses and geographies, changes to our existing businesses and operations, acquisitions (including integrations) and investments and how they are financed, changes in our stock price, and the outcome of income tax audits in various jurisdictions around the world.
Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “Code”), if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre‑change net operating loss (“NOL”) carryforwards and other pre‑change tax attributes, such as foreign tax credits and research tax credits, to offset its post‑change income and taxes may be limited. In general, an “ownership change” generally occurs if there is a cumulative change in our ownership by “5‑percent shareholders” that exceeds 50 percentage points over a rolling three‑year period. Similar rules apply under state tax laws. We may experience an ownership change from future transactions in our stock, some of which may be outside our control. As a result, if we earn net taxable income, our ability to use pre‑change NOL carryforwards or other pre‑change tax attributes to offset U.S. federal and state taxable income and taxes may be subject to incremental limitations.
We are engaged in a number of intercompany transactions across multiple tax jurisdictions. Although we believe that
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these transactions reflect the accurate economic allocation of profit and that the proper transfer pricing documentation is in place, the profit allocation and transfer pricing terms and conditions may be scrutinized by local tax authorities during an audit and any resulting changes may impact our mix of earnings in countries with differing statutory tax rates.
We are also subject to the audit or examination of our tax returns by the Internal Revenue Service (the “IRS”) and other tax authorities whereby tax authorities could impose additional tariffs, duties, taxes, penalties and interest on us. The determination of our worldwide provision for income taxes and other tax liabilities requires complex computations and significant judgments, and there are many transactions and calculations for which the ultimate tax determination is uncertain. Although we believe our estimates are reasonable and our tax provisions are adequate, the final determination of tax audits and any related disputes could be materially different from our historical income tax provisions and accruals. The results of audits or related disputes could have an adverse effect on our financial statements and our financial results for the period or periods for which the applicable final determinations are made.
Portions of our operations are subject to a reduced tax rate or are free of tax under various tax holidays and rulings that expire in whole or in part from time to time. These tax holidays and rulings may be extended when certain conditions are met, or terminated if certain conditions are not met. If the tax holidays and rulings are not extended, or if we fail to satisfy the conditions of the reduced tax rate, then our effective tax rate would increase in the future.
Over the past several years, the Organization for Economic Co-operation and Development (“OECD”), which represents a coalition of member countries that encompass many of the jurisdictions in which we operate, has promulgated recommended changes to numerous long standing international tax principles through its Base Erosion and Profit Shifting (“BEPS”) project, including the Pillar II global minimum tax regime. Certain countries in which we operate have enacted legislation consistent with the OECD Pillar II model rules and have introduced a 15% global minimum tax rate for large multinational corporations, effective beginning in 2024. We are included in the consolidated financial statements of a global ultimate parent, are monitoring legislative developments, and are continuing to evaluate the potential impact of Pillar II on our consolidated financial statements. While we do not expect the impact of Pillar II to be material, jurisdictions in which we do business may continue to react to the BEPS initiative by enacting further tax legislation, and our business could be materially impacted.
On July 4, 2025, the U.S. government enacted the One Big Beautiful Bill Act, which includes, among other provisions, changes to the U.S. corporate income tax system including the allowance of immediate expensing of qualifying research and development expenses and permanent extensions of certain provisions within the Tax Cuts and Jobs Act of 2017. This legislation has multiple effective dates, with certain provisions effective in 2025 and others in future periods.
Our insurance policies may not provide adequate levels of coverage against all claims and we may incur losses that are not covered by our insurance.
We maintain insurance of the type and in amounts that we believe is commercially reasonable and that is available to businesses in our industry. We carry various types of insurance, including general liability, auto liability, workers’ compensation, property, stock throughput, cyber and excess umbrella, from highly rated insurance carriers. We believe that the policy specifications and insured limits are adequate to cover against foreseeable losses with terms and conditions that are reasonable and customary for similar businesses and are within industry standards. Nevertheless, market forces beyond our control could limit the scope of the insurance coverage that we can obtain in the future or restrict our ability to buy insurance coverage at reasonable rates. We cannot predict the level of the premiums that we may be required to pay for subsequent insurance coverage, the level of any deductible and/or self‑insurance retention applicable thereto, the level of aggregate coverage available or the availability of coverage for specific risks.
In the event of a substantial loss, the insurance coverage that we carry may not be sufficient to compensate us for the losses we incur or any costs for which we are responsible. In addition, there are types of losses we may incur that cannot be insured against or that we believe are not commercially reasonable to insure. For example, we maintain business interruption insurance, but there can be no assurance that the coverage for a severe or prolonged business interruption would be adequate and the deductibles for such insurance may be high. These losses, if they occur, could materially adversely affect our business, financial condition and results of operations.
We are subject to product liability, warranty and recallclaims, and our insurance may not cover such claims.
Our products expose us to warranty claims and product liability claims if products we manufacture, sell or design actually or allegedlyfail to perform as expected, or the use of those products results, or is alleged to result, in personal injury, death or property damage. Further, we or one or more of our suppliers might not adhere to product safety requirements or quality control standards, and products may be shipped to retail partners before the issue is identified. If this occurs, we may have to recall our products to address performance, compliance or other safety related issues. The financial costs we may incur
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in connection with these recalls typically would include the cost of the product being replaced or repaired and associated labor and administrative costs and, if applicable, governmental fines and/or penalties.
Product recalls can harm our reputation and cause us to lose customers, particularly if those recalls cause consumers to question the performance, quality, safety or reliability of our products. Substantial costs incurred or lost sales caused by future product recalls could materially adversely affect our business, financial condition and results of operations. Conversely, not issuing a recall or not issuing a recall on a timely basis can harm our reputation and cause us to lose customers for the same reasons as expressed above. Product recalls, withdrawals, repairs or replacements may also increase the amount of competition that we face.
There is no assurance that we can successfullydefend or settle all product liability cases. Our insurance policies provide coverage againstclaims resulting from allegedinjuries arising from our products sustained during the respective policy periods, subject to policy terms and conditions. There can be no assurance that this coverage will be renewed or otherwise remain available in the future, that our insurers will be financially viable when payment of a claim is required, that the cost of such insurance will not increase, or that this insurance will ultimately prove to be adequate under our various policies. Furthermore, future rate increases might make insurance coverage programs uneconomical for us to maintain. These potential insurance-related problems or any adverse outcome in any liability suit could create increased expenses which could harm our business. We are unable to predict the nature of product liability claims that may be made against us in the future with respect to injuries, diseases or other illnesses resulting from the use of our products or the materials incorporated in our products.
Our actual product warranty obligations could materially differ from historical rates, which would oblige us to revise our estimated warranty liability accordingly. Adverse determinations of material product liability and warranty claims made against us could materially adversely affect our business, financial condition and results of operations and could harm the reputation of our brands.
We may be subject to litigation and other regulatory proceedings which may result in the expense of time and resources and could materially adversely affect our business, financial condition and results of operations.
From time to time, we are involved in lawsuits and regulatory actions relating to our business, including those that may relate to intellectual property, antitrust, data protection, commercial and employment matters and product liability. Due to the inherent uncertainties of litigation and regulatory proceedings, we cannot accurately predict the likelihood of such lawsuits or regulatory proceedings occurring or the ultimate outcome of any such proceedings. An unfavorable outcome could materially adversely affect our business, financial condition and results of operations. In addition, any such proceeding, regardless of its merits, could divert management’s attention from our operations and result in substantial legal fees.
We are subject to environmental, health and safety laws and regulations, which could subject us to liabilities, increase our costs or restrict our operations in the future.
Our properties and operations are subject to a number of environmental, health and safety laws and regulations in each of the jurisdictions in which we operate. These laws and regulations govern, among other things, air emissions, water discharges, handling and disposal of solid and hazardous substances and wastes, soil and groundwater contamination and employee health and safety. Our failure to comply with such environmental, health and safety laws and regulations could result in substantial civil or criminalfines or penalties or enforcement actions, including regulatory or judicial orders enjoining or curtailing operations or requiring remedial or corrective measures, installation of pollution control equipment or other actions.
We may also be subject to liability for environmental investigations and cleanups, including at properties that we currently or previously owned or operated, even if such contamination was not caused by us, and we may face claimsallegingharm to health or property or natural resource damages arising out of contamination or exposure to hazardous substances. We may also be subject to similar liabilities and claims in connection with locations at which hazardous substances or wastes we have generated have been stored, treated, otherwise managed or disposed.
We use certain substances and generate certain wastes that may be deemed hazardous or toxic under environmental laws, and we from time to time have incurred, and in the future may incur, costs related to cleaning up contamination resulting from historic uses of certain of our current or former properties or our treatment, storage or disposal of wastes at facilities owned by others. The costs of investigation, remediation or removal of such materials may be substantial, and the presence of those substances, or the failure to remediate a property properly, may impair our ability to use, transfer or obtain financing regarding our property. Liability in many situations may be imposed not only without regard to fault, but may also be joint and several, so that we may be held responsible for more than our share of the contamination or other damages, or even for the entire amount.
Environmental conditions at or related to our current or former properties or operations, and/or the costs of complying
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with current or future environmental, health and safety requirements (which have become more stringent and complex over time) could materially adversely affect our business, financial condition and results of operations.
We may require additional capital in the future, and such capital may not be available at all or available on terms acceptable to us and, if it is available, additional capital raised by us may dilute holders of our common stock.
We may need to raise additional funds through public or private debt (for example, our senior notes offering in 2025) or equity financings in order to:
• fund ongoing operations;
• take advantage of opportunities, including expansion of our business or the acquisition of complementary products, technologies or businesses;
• develop new products; or
• respond to competitive pressures.
Any additional capital raised through the sale of equity or securities convertible into equity will dilute the percentage ownership of holders of our common stock. Capital raised through debt financing would require us to make periodic interest payments and may impose restrictive covenants on the conduct of our business. Furthermore, additional financings may not be available on terms favorable to us, or at all, especially during periods of adverse economic conditions, which could make it more difficult or impossible for us to obtain funding for the operation of our business, for making additional investments in product development and for repaying outstanding indebtedness. Our inability to obtain additional funding on favorable terms could limit our ability to make expenditures that may be required for business growth or operational enhancements.
Our growth initiatives require significant capital investments and there can be no assurance that we will realize a positive return on these investments.
Initiatives to upgrade our facilities and business processes and to invest in technological improvements to our manufacturing and assembly facilities involve many risks, which could result in, among other things, business interruptions and increased costs, any of which may result in our inability to realize returns on our capital investments. If we have insufficient sales or are unable to realize the full potential of our capital investments, we may not realize a positive return on our investment, which could impact our margins and have a significant adverse effect on our business, financial condition and results of operations.
Our business could be materially adversely affected as a result of the risks associated with acquisitions and investments.
We have made acquisitions and investments in the past and may pursue further acquisitions and investments in the future. These transactions are accompanied by risks. For instance, an acquisition could have a negative effect on our financial and strategic position and reputation, or the acquired business could fail to further our strategic goals. We may not be able to successfully integrate acquired businesses into ours, and therefore we may not be able to realize the intended benefits from an acquisition. We may have a lack of experience in new markets or products brought on by the acquisition and we may have an initial dependence on unfamiliar supply or distribution partners. Any of the foregoing could divert management ’ s attention from our business and have a material adverse effect on our business, reputation, financial condition and results of operations.
Terrorist activities and international political instability may decrease demand for our products and disrupt our business.
Terrorist activities and armed conflicts could have an adverse effect upon the United States or worldwide economy and could cause decreased demand for our products. If such events disrupt domestic or international air, ground or sea shipments, or the operation of our suppliers or our manufacturing facilities, our ability to obtain the materials necessary to manufacture products and to deliver customer orders would be harmed, which could materially adversely affect our business, financial condition and results of operations. Such events can negatively impact tourism, which could adversely affect our sales to retailers at resorts and other vacation destinations. In addition, the occurrence of political instability and/or terrorist activities generally restricts travel to and from the affected areas, making it more difficult to manage our global operations.
Our business could be harmed by the occurrence of natural disasters or pandemic diseases.
The occurrence of a natural disaster, such as an earthquake, tsunami, fire, flood or hurricane, or the outbreak of a pandemic disease could materially adversely affect our business, financial condition and results of operations. A natural disaster or a pandemic disease could adversely affect both the demand for our products as well as the supply of the raw materials or components used to make our products. Demand for golf products also could be negatively affected if consumers in the affected regions restrict their recreational activities and discretionary spending and as tourism to those areas declines. If our suppliers
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experience a significant disruption in their business as a result of a natural disaster or pandemic disease, our ability to obtain the necessary raw materials or components to make products could be materially adversely affected. In addition, the occurrence of a natural disaster or the outbreak of a pandemic disease generally restricts travel to and from the affected areas, making it more difficult to manage our global operations.
Risks Related to Our Indebtedness
A high degree of leverage could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or in our industry, expose us to interest rate risk to the extent of our variable rate debt, and prevent us from meeting our obligations under our indebtedness.
As of December 31, 2025, we had $950.3 million of indebtedness. As of December 31, 2025, we had available borrowing capacity under our multi-currency revolving credit facility of $514.7 million after giving effect to $4.0 million of outstanding letters of credit and we had available borrowing capacity under our local credit facilities of $37.8 million. As of December 31, 2025, we had no outstanding interest rate swap contracts to hedge the interest rate risk on our variable rate debt.
A high degree of leverage could have important consequences for us, including:
• requiring us to utilize a substantial portion of our cash flows from operations to service our indebtedness, reducing the availability of our cash flows to fund working capital, capital expenditures, product development, acquisitions, general corporate and other purposes;
• increasing our vulnerability to adverse economic, industry or competitive developments;
• exposing us to the risk of increased interest rates because some of our borrowings are at variable rates of interest;
• making it more difficult for us to satisfy our obligations with respect to our indebtedness and any failure to comply with the obligations of any of our debt instruments, including financial maintenance covenants and restrictive covenants, if not cured or waived, could result in an event of default under the agreements governing our indebtedness;
• restricting us from making strategic acquisitions or causing us to make non‑strategic divestitures;
• limiting our ability to obtain additional financing for working capital, capital expenditures, product development, debt service requirements, acquisitions and general corporate or other purposes; and
• limiting our flexibility in planning for, or reacting to, changes in our business or market conditions and placing us at a competitive disadvantage compared to our competitors who are less highly leveraged and who, therefore, may be able to take advantage of opportunities that our leverage prevents us from exploiting.
Servicing our indebtedness requires a significant amount of cash. Our ability to generate sufficient cash depends on many factors, some of which are not within our control.
Our ability to make payments on our indebtedness and to fund planned capital expenditures will depend on our ability to generate cash in the future. To a certain extent, this is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. If we are unable to generate sufficient cash flows to service our debt and meet our other commitments, we may need to restructure or refinance all or a portion of our debt, sell material assets or operations, or raise additional debt or equity capital. We may not be able to effect any of these actions on a timely basis, on commercially reasonable terms, or at all, and these actions may not be sufficient to meet our capital requirements. In addition, any refinancing of our indebtedness could be at a higher interest rate, and the terms of our existing or future debt arrangements may restrict us from utilizing such alternatives. Any downgrade in our corporate credit ratings or the credit ratings of the Notes, or any indications from the rating agencies that our ratings are under surveillance or under review with possible negative implications could increase our cost of financing and limit our ability to access the capital markets to meet liquidity needs. Our failure to make the required interest and principal payments on our indebtedness could result in an event of default under the agreements governing our other indebtedness, which may result in the acceleration of some or all of our outstanding indebtedness. In the absence of sufficient resources to service our debt and meet our other commitments, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt service and other obligations. The credit agreement that governs our multi-currency revolving credit facility imposes restrictions on our ability to dispose of assets and use the proceeds from any such disposition. We may not be able to consummate those dispositions or to obtain the proceeds that we could realize from such dispositions and these proceeds may not be adequate to meet any debt service obligations then due. These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations.
We and our subsidiaries may be able to incur significant amounts of debt, which could exacerbate the risks associated with
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our current indebtedness.
We and our subsidiaries may be able to incur substantial additional indebtedness in the future. Although the credit agreement that governs our multi-currency revolving credit facility and the indenture that governs the 2033 Notes contain restrictions on incurring indebtedness for borrowed money, these restrictions are subject to a number of significant qualifications and exceptions and, under certain circumstances, the amount of indebtedness that could be incurred in compliance with these restrictions could be substantial. If we incur additional debt, the risks associated with our existing debt, including our ability to service our debt, could intensify.
The credit agreement that governs our multi-currency revolving credit facility contains restrictions that limit our flexibility in operating our business.
The credit agreement that governs our multi-currency revolving credit facility contains various covenants that limit our ability to engage in specified types of transactions. These covenants limit the ability of our subsidiaries to, among other things:
• incur additional indebtedness and guarantee indebtedness;
• issue certain preferred stock or similar equity securities;
• pay dividends or make other distributions in respect of, or repurchase or redeem, our capital stock;
• prepay, redeem or repurchase certain debt;
• make loans and investments;
• sell assets;
• incur liens;
• enter into transactions with affiliates;
• enter into agreements restricting our subsidiaries’ ability to pay dividends; and
• consolidate, merge or sell all or substantially all of our assets.
As a result of these and other covenants and restrictions, we are and will be limited in how we conduct our business, and we may be unable to raise additional debt or equity financing to compete effectively or to take advantage of new business opportunities. In addition, our credit agreement requires us to maintain specified financial maintenance ratios and, in connection with certain transactions, satisfy other financial condition tests. The terms of any future indebtedness we may incur could include more restrictive covenants. We cannot assure you that we will be able to maintain compliance with these covenants in the future and, if we fail to do so, that we will be able to obtain waivers from the lenders and/or amend the covenants. A breach of any of these covenants, among others, could result in a default under one or more of these agreements, including as a result of cross default provisions, which, if not cured or waived, could result in our being required to repay these borrowings before their maturity. If we are unable to repay outstanding borrowings when due, the lenders under our multi-currency revolving credit facility have the right to proceed against the collateral granted to them to secure the debt. If lenders under our multi-currency revolving credit facility accelerate the debt thereunder, then the obligations under the 2033 Notes could be accelerated. We cannot provide assurance that, if the indebtedness under our multi-currency revolving credit facility and the 2033 Notes were to be accelerated, our assets would be sufficient to repay in full that indebtedness and our other indebtedness. If not cured or waived, such acceleration could have a material adverse effect on our business and our prospects.
We may utilize derivative financial instruments to reduce our exposure to market risks from changes in interest rates on our variable rate indebtedness or alter our floating-to-fixed interest rate mix, and we may be exposed to risks related to counterparty credit worthiness or non‑performance of these instruments.
We may enter into floating-to‑fixed interest rate swaps to limit our exposure to changes in variable interest rates or otherwise alter our floating-to-fixed interest rate mix. Such instruments may result in economic losses depending on how interest rates change in relation to our swap positions. We may be exposed to credit‑related losses, which could impact the results of operations in the event of fluctuations in the fair value of the interest rate swaps due to a change in the credit worthiness or non‑performance by the counterparties to the interest rate swaps.
Risks Related to Ownership of Our Common Stock
The interests of Magnus and its affiliates and any of their successors or transferees may conflict with other holders of our common stock.
As of December 31, 2025, Magnus beneficially owned approximately 50.6% of our outstanding common stock.
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Magnus is able to control the election and removal of our directors and thereby effectively determine, among other things, the payment of dividends, our corporate and management policies, including potential mergers or acquisitions or asset sales, amendment of our amended and restated certificate of incorporation or amended and restated bylaws, and other significant corporate transactions for so long as Magnus retains significant ownership of us. So long as Magnus continues to own a significant amount of our voting power, even if such amount is less than 50%, Magnus will continue to be able to strongly influence or effectively control our decisions. The interests of Magnus and its affiliates may not coincide with the interests of other holders of our common stock.
By controlling the election and removal of our directors, Magnus is able to effectively determine the payment of dividends on our common stock. Magnus may cause us to pay dividends on our common stock at times or in amounts that may not be in the best interest of us or other holders of our common stock. For example, it may be in the interest of Magnus and its affiliates to cause the payment of dividends on our common stock in order to satisfy obligations under loan agreements they may enter into from time to time. See “—We cannot assure you that we will pay dividends on our common stock, and our indebtedness and other factors could limit our ability to pay dividends on our common stock.”
In the ordinary course of its business activities, Magnus and its affiliates may engage in activities where their interests conflict with our interests or those of our other shareholders. Except as may be limited by applicable law, Magnus and its affiliates do not have any duty to refrain from competing directly with us or engaging, directly or indirectly, in the same business activities or similar business activities or lines of business in which we operate. Magnus and its affiliates also may pursue acquisition opportunities that may be complementary to our business and, as a result, those acquisition opportunities may not be available to us. In addition, Magnus and its affiliates may have an interest in us pursuing acquisitions, divestitures and other transactions that, in its judgment, could enhance its investment, even though such transactions might present risks to other shareholders.
In addition, the concentration of our ownership held by Magnus may delay, deter or prevent possible changes in control of the Company or a change in the composition of our board of directors and could preclude any unsolicited acquisition of us, which may reduce the value of an investment in our common stock. Magnus may also transfer a substantial amount of our common stock, including a controlling interest in Acushnet, to third parties. The interests of any such transferees may not coincide with the interests of other holders of our common stock.
In the past, Magnus and its affiliates have entered into loan agreements, some of which have included pledges of their holdings of our common stock to their lenders. Although we have been informed by Magnus that its shares of our common stock are not pledged as collateral under any existing loan agreements, those loan agreements could be amended, and those amended loan agreements or any future loan agreements could provide for pledges of its shares of our common stock. In the past, Magnus has informed us that its shares of our common stock were its only assets. Any transfer by Magnus of its ownership stake in us as a result of its obligations to third parties or otherwise could have a significant impact on our shareholding structure and our corporate governance, and the occurrence or expectation of such a transfer could materially depress the market price of our common stock. Such transfers of our common stock may also result in a change of control and cause an event of default or other negative consequences under certain agreements and other instruments that we have or may enter into from time to time. Under the credit agreement that governs our multi-currency revolving credit facility, for example, if any person (other than certain permitted parties, which include an affiliate of Magnus) were to become the beneficial owner of 35% or more of our outstanding common stock, it would result in a change of control and cause an event of default. A change of control under our outstanding equity award agreements and other employment arrangements may result in the vesting of outstanding equity awards and the acceleration of benefits or other payments under certain employment arrangements.
We are a “controlled company” under NYSE rules and, as a result, we qualify for and may elect to rely upon exemptions from certain corporate governance requirements that would otherwise provide protection to our shareholders.
As of December 31, 2025, Magnus beneficially owned approximately 50.6%, of our outstanding common stock. As a result, we qualify as a “controlled company” within the meaning of the corporate governance standards of the NYSE. As a controlled company, we may elect not to comply with certain corporate governance requirements, including:
• the requirement that a majority of our board of directors consist of independent directors;
• the requirement that we have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities;
• the requirement that we have a nominating and corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and
• the requirement for an annual performance evaluation of the compensation and nominating and corporate governance committees.
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We have not elected to rely on any of the “controlled company” exemptions at this time. However, if we elect to rely on one or more of the exemptions in the future, our other shareholders will not have the same protections afforded to shareholders of companies that are subject to all NYSE corporate governance requirements.
Our share repurchase program could be suspended or terminated, may not enhance long-term stockholder value, and may increase the volatility of the price of our stock and diminish our cash reserves.
Our board of directors has authorized us to repurchase up to $1.25 billion of our common stock since our share repurchase program was established in 2018. Our share repurchase program does not have an expiration date and does not obligate us to repurchase any specific dollar amount or to acquire any specific number of shares. Decisions regarding the repurchase of shares will depend on many factors, such as our financial condition, earnings, capital requirements, debt service obligations, covenants associated with certain of our debt service obligations, associated taxes, legal requirements and regulatory constraints, in addition to equity market conditions and our share price. Our share repurchase program could affect the price of our stock and increase volatility and may be suspended or terminated at any time, which may result in a decrease in the trading price of our stock. We cannot guarantee that we will repurchase shares in the future or conduct share repurchase programs.
We cannot assure you that we will pay dividends on our common stock, and our indebtedness and other factors could limit our ability to pay dividends on our common stock.
We intend to pay cash dividends on our common stock, subject to the discretion of our board of directors and our compliance with applicable law, and depending on, among other things, our results of operations, capital requirements, financial condition, contractual restrictions, restrictions in our debt agreements and in any equity securities, business prospects and other factors that our board of directors may deem relevant. Because we are a holding company and have no direct operations, we depend on our subsidiaries for cash to fund all our operations and expenses. We expect to pay dividends, if any, only from funds we receive from our subsidiaries, which may further restrict our ability to pay dividends due to the laws of their jurisdiction of organization, agreements of our subsidiaries or covenants under any existing and future outstanding indebtedness we or our subsidiaries incur. Certain of our existing agreements governing indebtedness, including the credit agreement that governs our multi-currency revolving credit facility, under certain conditions restrict our ability to pay dividends on our common stock. We expect that any future agreements governing indebtedness will contain similar restrictions. For more information, see “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities – Dividend Policy,” Item 5 of Part II to this report, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources,” Item 7 of Part II to this report.
Our dividend policy entails certain risks and limitations, particularly with respect to our liquidity. By paying cash dividends rather than investing that cash in our business or repaying debt, we risk, among other things, slowing the pace of our growth and having insufficient cash to fund our operations or unanticipated capital expenditures or limiting our ability to incur additional borrowings. Although we expect to pay dividends according to our dividend policy, we may determine not to pay dividends according to our policy, or at all, if, among other things, we do not have the cash necessary to pay our intended dividends.
The declaration and payment of dividends will be determined at the discretion of our board of directors, acting in compliance with applicable law and contractual restrictions. However, the composition of our board of directors is determined by Magnus, which controls a majority of the voting power of all outstanding shares of our common stock. Accordingly, the decision to declare and pay dividends on our common stock in the future, as well as the amount of each such dividend payment, may also depend on the amounts Magnus requires for its needs.
You may be diluted by the future issuance of additional common stock in connection with our incentive plans, acquisitions or otherwise.
As of December 31, 2025, we had 441,628,178 shares of common stock authorized but unissued. Our amended and restated certificate of incorporation authorizes us to issue these shares of common stock and securities convertible into, exchangeable for, or exercisable into our common stock for the consideration and on the terms and conditions established by our board of directors in its sole discretion, whether in connection with acquisitions or otherwise. We have 6,007,959 shares available for issuance under the Acushnet Holdings Corp. Amended and Restated 2015 Omnibus Incentive Plan (the “Amended and Restated 2015 Plan”). Any shares of common stock that we issue, under the Amended and Restated 2015 Plan or other equity incentive plans that we may adopt in the future, will dilute the percentage ownership held by our existing shareholders.
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Future equity sales, or the perception of future equity sales, by us or our existing shareholders in the public market could cause the market price for our common stock to decline.
The sale of substantial amounts of shares of our common stock in the public market, or the perception that such sales could occur, including sales by us or our shareholders, could harm the prevailing market price of shares of our common stock. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell newly issued equity securities in the future at a time and at a price that we deem appropriate. These factors could also make it more difficult for us to raise additional funds through future offerings of our shares of common stock or other securities.
Anti‑takeover provisions in our organizational documents and Delaware law might discourage or delay acquisition attempts for us that you might consider favorable.
Our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that may make the merger or acquisition of Acushnet more difficult without the approval of our board of directors. Among other things:
• although we do not have a stockholder rights plan, these provisions would allow us to authorize the issuance of undesignated preferred stock in connection with a stockholder rights plan or otherwise, the terms of which may be established and the shares of which may be issued without stockholder approval, and which may include super voting, special approval, dividend or other rights or preferences superior to the rights of the holders of common stock;
• these provisions require advance notice for nominations of directors by stockholders and for stockholders to include matters to be considered at our annual meetings;
• these provisions prohibit stockholder action by written consent;
• these provisions provide for the removal of directors only upon affirmative vote of holders of at least 66⅔% of the shares of common stock entitled to vote generally in the election of directors if Magnus and its affiliates hold less than 50% of our outstanding shares of common stock; and
• these provisions require the amendment of certain provisions only by the affirmative vote of at least 66⅔% of the shares of common stock entitled to vote generally in the election of directors if Magnus and its affiliates hold less than 50% of our outstanding shares of common stock.
Further, as a Delaware corporation, we are also subject to provisions of Delaware law, which may impair a takeover attempt that our shareholders may find beneficial. These anti‑takeover provisions and other provisions under Delaware law could discourage, delay or prevent a transaction involving a change in control of Acushnet, including actions that our shareholders may deem advantageous, or negatively affect the trading price of our common stock. These provisions could also discourage proxy contests and make it more difficult for you and other shareholders to elect directors of your choosing and to cause us to take other corporate actions you desire.
General Risk Factors
If our estimates or judgments relating to our critical accounting estimates prove to be incorrect, our financial condition and results of operations could be adversely affected.
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as discussed under “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” Item 7 of Part II to this report. The results of these estimates form the basis for making judgments about the carrying values of assets, liabilities and equity, and the amount of revenue and expenses that are not readily apparent from other sources. Significant assumptions and estimates used in preparing our consolidated financial statements include those related to impairment of goodwill, pension and other post‑retirement benefits, provisions for income taxes and valuation allowances for deferred tax assets. Our financial condition and results of operations may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of securities analysts and investors, resulting in a decline in the price of our common stock.
The market price of shares of our common stock may be volatile.
Our common stock is traded on the NYSE. Factors such as general market conditions, actions by institutional investors to rapidly accumulate or divest of a substantial number of our shares, fluctuations in financial results, variances from financial
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market expectations, changes in earnings estimates or recommendations by analysts, or announcements by us or our competitors may cause the market price of our common stock to fluctuate, perhaps substantially.
If we are unable to maintain effective internal controls over financial reporting, we may not be able to produce timely and accurate financial statements, which could have a material adverse effect on our business and stock price.
If we fail to maintain effective internal controls over financial reporting or if we identify material weaknesses in our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial statements which could cause the market price of our common stock to decline, and we could become subject to sanctions or investigations by the stock exchange upon which our common stock is listed, the SEC or other regulatory authorities, and we could be delayed in delivering financial statements, which could result in a default under the agreements governing our indebtedness.
improve
best
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We believe our differentiated focus on performance and quality excellence, enduring connections with dedicated golfers and favorable and market-differentiating mix of consumable and durable products have been the key drivers of our financial performance.
Basis of Presentation
The accompanying results have been prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”). These consolidated financial statements include the accounts of Acushnet Holdings Corp. and Acushnet Company, including Acushnet Company's wholly-owned subsidiaries and less than wholly-owned subsidiaries, which include variable interest entities (“VIE”) in which Acushnet Company is the primary beneficiary. In addition, investments in entities over which the Company has significant influence but not control are accounted for using the equity method of accounting. The Company conducts substantially all its business through Acushnet Company and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
We have three reportable segments. These segments include Titleist golf equipment, FootJoy golf wear and Golf gear. Segment operating income (loss) includes directly attributable expenses and certain shared costs of corporate administration that are allocated to the operating segments, but excludes certain other costs, such as interest expense, net; restructuring costs; the non-service cost component of net periodic benefit cost; transaction fees; as well as other non-operating gains and losses that are not allocated to the reportable segments.
Key Factors Affecting Our Results of Operations
Rounds of Play
We generate substantially all of our sales from the sale of golf-related products, including golf balls, golf clubs, golf shoes, golf gloves, golf gear and golf apparel. The demand for golf-related products in general, and golf balls in particular, is directly related to the number of golf participants and the number of rounds of golf being played by these participants. The game of golf remained in high demand in 2025, with the number of on-course golf participants in the U.S. increasing for the eighth consecutive year. Worldwide, the number of rounds played increased by approximately 2% compared to 2024, and by approximately 22% compared to 2019. In the U.S., which represents the game’s largest market, the number of rounds played increased by approximately 1% compared to 2024, and by approximately 25% compared to 2019. We anticipate that the number of rounds played will remain resilient in 2026, driven by an increased number of dedicated golfers and continued participation.
Economic Conditions
Our products are recreational in nature and are therefore discretionary purchases for consumers. Consumers are generally more willing to make discretionary purchases of golf products when economic conditions are favorable and when
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consumers feel confident and prosperous. Discretionary spending on golf and the golf products we sell is affected by consumer spending habits and many macroeconomic factors, including general business conditions, stock market prices and volatility, corporate spending, housing prices, inflation, interest rates, the availability of consumer credit, taxes and consumer confidence in future economic conditions. Consumers may reduce or postpone purchases of our products as a result of shifts in consumer spending habits as well as during periods when economic uncertainty increases, disposable income is lower, or during periods of actual or perceived unfavorable economic conditions.
Demographic Factors
Golf is a recreational activity that requires both time and financial resources. The industry has historically been driven by adults aged 30 and above—primarily gen x-ers, baby boomers, millennials, and, increasingly, gen z—who have the capacity to participate consistently in the sport. Beyond the gen x and baby boomer cohorts, promising developments include a generational shift in golfer demographics fueled by millennial and gen z golfers making their marks at both professional and amateur levels, as well as a notable rise in junior participation among players ages 6–17. The sport’s demographic base is further broadening, supported by a sustained increase in women participating in golf in recent years.
Weather Conditions
Weather conditions in most parts of the world, including our primary geographic markets, generally restrict golf from being played year-round, with many of our on‑course retail customers closed during the cold weather months and, to a lesser extent, during the hot weather months. Unfavorable weather conditions in our major markets, such as a particularly long winter, a cold and wet spring, or an extremely hot summer, would reduce the number of playable days and rounds played in a given year and decrease the amount spent by golfers and golf retailers on our products, particularly with respect to consumable products such as golf balls and golf gloves. In addition, unfavorable weather conditions and natural disasters can adversely affect the number of custom club fitting and trial events that we can perform during the key selling period. Unusual or severe weather events throughout the year, such as storms or droughts or other water shortages, can negatively affect golf rounds played both during such events and afterward. Consequently, sustained adverse weather conditions, especially during the warm weather months, could impact our sales. Adverse weather conditions may have a greater impact on us than other golf equipment companies as we have a large percentage of consumable products in our product portfolio, and the purchase of consumable products are more dependent on the number of rounds played in a given year.
Seasonality
In general, during the first quarter, we begin selling our products into the golf retail channel for the new golf season. This initial sell‑in generally continues into the second quarter. Our second‑quarter sales are significantly affected by the amount of sell‑through, in particular the amount of higher value discretionary purchases made by customers, which drives the level of reorders of the products sold during the first quarter. Our third‑quarter sales are generally dependent on reorder business, and are generally lower than the second quarter as many retailers begin decreasing their inventory levels in anticipation of the end of the golf season. Our fourth‑quarter sales are generally less than the other quarters due to the end of the golf season in many of our key markets, but can also be affected by key product launches, particularly golf clubs. This seasonality, and therefore quarter-to-quarter fluctuations, can be affected by many factors, including weather conditions as discussed previously under “ – Weather Conditions” and the timing of new product introductions as discussed below under “ – Cyclicality” and “ – Product Life Cycles . ” This seasonality affects sales in each of our reportable segments differently. In general, however, because of this seasonality, a larger portion of our sales and profitability generally occurs during the first half of the year.
Cyclicality
Our sales can also be affected by the launch timing of new products. Product introductions generally stimulate sales as the golf retail channel takes on inventory of new products. Reorders of these new products then depend on the rate of sell‑through. Announcements of new products can often cause our customers to defer purchasing additional golf equipment until our new products are available. The varying product introduction cycles described below may cause our results of operations to fluctuate as each product line has different volumes, prices and margins.
Product Life Cycles
Titleist Golf Equipment Segment
We generally launch new Titleist golf ball models on a two-year cycle. In general, in odd-numbered years, we launch our premium performance models, Pro V1 and Pro V1x, in the first quarter and in even-numbered years, we launch our premium performance AVX model and most performance models in the first and second quarters. For new golf ball models, sales occur at a higher rate in the year of the initial launch than in the second year.
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We generally launch new Titleist golf club models on a two‑year cycle using the following product launch cycle. At present, we anticipate continuing to use this product launch cycle going forward because we believe it aligns our launches with the purchase habits of dedicated golfers. In general, we launch:
• drivers and fairways in the second quarter of even‑numbered years, which typically results in an increase in sales of drivers and fairways in the ensuing months because retailers take on initial supplies of these products as stock inventory as well as increase custom fitting activity of these new products, with increased sales continuing into the following spring and summer of odd‑numbered years;
• hybrids in the first or second quarter of odd-numbered years, with the majority of sales generated by such new products occurring in the spring, summer and fall of odd‑numbered years;
• irons in the second quarter of odd‑numbered years, which typically results in an increase in sales of irons in the ensuing months because retailers take on initial supplies of these products as stock inventory as well as increase custom fitting activity of these new products, with increased sales continuing into the following spring and summer of even-numbered years;
• Vokey Design wedges in the first quarter of even‑numbered years, with the majority of sales generated by such new products occurring in the spring and summer of such even‑numbered years; and
• Scotty Cameron putters in the first quarter, with Super Select models launched in odd-numbered years and Phantom X models launched in even-numbered years, with the majority of sales generated by such new products occurring in the spring and summer of the year in which they are launched.
FootJoy Golf Wear and Golf Gear Segments
Our FootJoy golf wear and Golf gear businesses are not subject to the same degree of cyclical fluctuation as our golf ball and golf club businesses as new product offerings and styles are generally introduced each year and at different times during the year.
Foreign Currency
Net sales generated in regions outside of the United States represented over 40% of our net sales in each of the three years ended December 31, 2025. Substantially all of these net sales were generated in the applicable local currency, which include, but are not limited to, the Japanese yen, the Korean won, the British pound sterling, the euro and the Canadian dollar. In contrast, substantially all of the purchases of inventory, raw materials or components by subsidiaries in these regions are made in U.S. dollars. For each of the three years ended December 31, 2025, approximately 80% of our cost of goods sold incurred by our subsidiaries in regions outside of the United States were denominated in U.S. dollars. Because these subsidiaries incur substantially all of their cost of goods sold in currencies that are different from the currencies in which they generate substantially all of their sales, we are exposed to transaction risk attributable to fluctuations in such exchange rates, which can impact the gross profit of these subsidiaries.
In an effort to protect againstadverse fluctuations in foreign exchange rates and minimize foreign currency transaction risk, we take an active approach to currency hedging, which includes among other things, entering into various foreign exchange forward contracts, with the primary goal of providing earnings and cash flow stability. As a result of our active approach to currency hedging, we are able to take a more long-term view and more flexible approach towards pricing our products and making cost‑related decisions. In taking this active approach, we coordinate with the management teams of our key subsidiaries on an ongoing basis to share our views on anticipated currency movements and make decisions on securing foreign currency exchange contract positions that are incorporated into our business planning and forecasting processes. Because our hedging activities are designed to reduce volatility, they reduce not only the negative impact of a stronger U.S. dollar but could also reduce the positive impact of a weaker U.S. dollar.
Because our consolidated accounts are reported in U.S. dollars, we are also exposed to currency translation risk when we translate the financial results of our consolidated subsidiaries from their local currency into U.S. dollars. In each of the three years ended December 31, 2025, over 40% of our net sales and over 25% of our total operating expenses (which amounts represent substantially all of the operating expenses incurred by our subsidiaries in regions outside of the United States) were denominated in foreign currencies. Fluctuations in foreign currency exchange rates may positively or negatively affect our reported financial results and can significantly affect period‑over‑period comparisons. A strengthening of the U.S. dollar relative to our foreign currencies could materially adversely affect our business, financial condition and results of operations.
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Recent Developments
Debt Refinancing ("2025 Debt Refinancing"): During the fourth quarter of 2025, we (i) amended and restated our credit agreement to, among other things, extend the maturity of our multi-currency revolving credit facility from August 2, 2027 to November 24, 2030, and (ii) completed the issuance and sale of $500.0 million in gross proceeds of 5.625% senior notes due 2033 (the “2033 Notes”) through Acushnet Company, our primary operating subsidiary. The proceeds from the 2033 Notes offering were used to redeem all $350.0 million aggregate principal amount of our then-outstanding 7.375% senior notes due 2028 (the “2028 Notes”), repay a portion of our indebtedness under our multi-currency revolving credit facility and pay related fees and expenses. As a result, during the year ended December 31, 2025 we recognized a $17.0 million loss on debt extinguishment on the consolidated statement of operations; driven primarily by a $12.9 million premium paid upon redemption of the 2028 Notes, as well as the derecognition of $3.9 million of unamortized debt issuance costs. See “ – Liquidity and Capital Resources – Debt and Financing Arrangements” and “Notes to Consolidated Financial Statements – Note 11 – Debt and Financing Arrangements ,” Item 8 of Part II to this report.
Voluntary Bridge to Retirement (“VBR”) Program : During the second quarter of 2025, we initiated a VBR program to reduce operating costs and bridge certain long-tenured eligible employees to retirement. As part of this program, eligible employees were offered severance in the form of salary and benefit continuation. In connection with the VBR program, during the year ended December 31, 2025, we incurred restructuring costs of $13.7 million. There are no further material costs expected to be incurred in relation to the VBR program. See “Notes to Consolidated Financial Statements – Note 24 – Restructuring Costs,” Item 8 of Part II to this report.
Information Technology Optimization : During 2024, we began a multi-year implementation of a new global cloud-based ERP platform as part of our plans to integrate our operations and enhance our supply chain and finance capabilities. We expect that the new global ERP platform will enable further operating efficiencies and support the Company’s digital transformation. Additional implementation activities are expected to continue in phases by geographic region over the next several years. The global ERP platform implementation spending comprises both capitalized costs and operating expenses. The operating expenses represent costs directly related to the deployment of the global ERP platform above the normal ongoing level of spending on information technology to support our operations. In connection with this strategic initiative, during the years ended December 31, 2025, 2024 and 2023, we incurred expenses of $10.5 million, $11.0 million and $1.9 million, respectively. In addition, we invested $38.2 million and $12.6 million for capitalized implementation costs associated with the integration, configuration and customization of this new global ERP platform during the years ended December 31, 2025 and 2024, respectively. We anticipate spending approximately $30 million to $35 million in total during 2026 related to the deployment of the new global ERP platform.
Supply Chain Optimization : We continue to progress towards our objective of establishing a more resilient supply chain for our FootJoy footwear. Until 2024, the majority of our FootJoy footwear was manufactured in a facility in Fuzhou, China, owned by Acushnet Lionscore Limited ("Lionscore"), a joint venture in which we have a 40% interest, with the remaining 60% owned by Myre, our long‑standing Taiwan-based supply partner. During 2024, FootJoy shifted footwear production volume from Fuzhou, China to the Long An Facility in Vietnam, which is operated by an affiliate of Myre. FootJoy subsequently ceased production at Lionscore's Fuzhou, China facility in January 2025. In relation to this initiative, we incurred restructuring charges of $18.0 million during the year ended December 31, 2024, as described in “Notes to Consolidated Financial Statements – Note 24 – Restructuring Costs,” Item 8 of Part II to this report.
In addition, we are no longer the primary beneficiary of Lionscore and have deconsolidated its accounts from our consolidated financial statements. As a result of this deconsolidation, we recognized a non-cash gain of $20.9 million during the year ended December 31, 2025. See “Notes to Consolidated Financial Statements – Note 8 – Other Business Developments,” Item 8 of Part II to this report.
On January 6, 2026, we formed a new joint venture with Myre and subscribed for shares in the capital of ACL FootJoy, in which we have a 40% interest, with the remaining 60% owned by Myre, with the primary purpose of sourcing raw materials for, and contracting for the manufacture and production of, footwear in Vietnam at one or more factories owned and/or controlled by Myre and/or its affiliates. We currently contract to manufacture substantially all of our FootJoy footwear at the Long An Facility pursuant to this joint venture arrangement. See “Notes to Consolidated Financial Statements – Note 8 – Other Business Developments,” Item 8 of Part II to this report, for a discussion of the ACL FootJoy joint venture.
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Tariffs and Foreign Exchange : During 2025, the U.S. government announced the imposition of significant tariff measures, including a baseline tariff of 10% on most products imported into the United States, as well as individualized tariffs on products imported from select trading partners, including Canada, China, Mexico, Thailand and Vietnam. Increased U.S. tariffs have led and may continue to lead to the imposition of retaliatory tariffs by foreign jurisdictions. Additionally, the U.S. government has announced and rescinded multiple tariffs on several foreign jurisdictions, which has increased uncertainty regarding the ultimate effect of the tariffs on economic conditions. As a result, we have incurred incremental tariff costs in connection with importing raw materials, component parts and finished goods. Throughout the year ended December 31, 2025, we implemented various actions to mitigate the effect of these incremental tariffs costs on our gross profit and gross margin. Current uncertainties about tariffs and their effects on trading relationships may further affect the costs of our imported raw materials, components parts and finished goods, as well as increase market volatility and currency exchange rate fluctuations, which may influence our hedging strategy. We continue to monitor the economic effects of these developments and evaluate opportunities to mitigate their related impacts. See “Risk Factors,” Item 1A of Part I to this report, for additional information.
Paid Time Off (“PTO”) Policy Change : As part of our continued efforts to attract and retain key talent, we modified our U.S. employee PTO policy during the fourth quarter of 2024 to more closely align with industry benchmarks. As a result of this change, we recognized a non-cash benefit of $17.7 million during the year ended December 31, 2024.
Distribution Optimization : In 2023, we opened a new customization and distribution center in Lakeville, Massachusetts. This facility is representative of our commitment to providing leading services and the highest quality distribution experience. In connection with this strategic investment in the optimization of our distribution and custom fulfillment capabilities, we incurred costs of $3.4 million and $10.3 million during the years ended December 31, 2024 and 2023, respectively.
Key Performance Measures
We use various financial metrics to measure and evaluate our business, including, among others: (i) net sales on a constant currency basis, (ii) Adjusted EBITDA on a consolidated basis, (iii) Adjusted EBITDA margin on a consolidated basis and (iv) segment operating income (loss).
Since a significant percentage of our net sales are generated outside of the United States, we use net sales on a constant currency basis to evaluate the sales performance of our business in period over period comparisons and to forecast our business going forward. Constant currency information allows us to estimate what our sales performance would have been without changes in foreign currency exchange rates. This information is calculated by taking the current period local currency net sales and translating them into U.S. dollars based upon the foreign currency exchange rates for the applicable comparable prior period. This constant currency information should not be considered in isolation or as a substitute for any measure derived in accordance with U.S. GAAP. Our presentation of constant currency information may not be consistent with the manner in which similar measures are derived or used by other companies.
We primarily use Adjusted EBITDA on a consolidated basis to evaluate the effectiveness of our business strategies, assess our consolidated operating performance and make decisions regarding the pricing of our products, go-to-market execution and costs to incur across our business. We present Adjusted EBITDA as a supplemental measure of our operating performance because it excludes the impact of certain items that we do not consider indicative of our ongoing operating performance. We define “Adjusted EBITDA” in a manner consistent with the term “Consolidated EBITDA” as it is defined in our credit agreement. Adjusted EBITDA represents net income (loss) attributable to Acushnet Holdings Corp. plus interest expense, net, income tax expense (benefit), depreciation and amortization and other items defined in our credit agreement, including: share-based compensation expense; restructuring and transformation costs; certain transaction fees; extraordinary, unusual or non-recurring losses or charges; indemnification expense (income); certain pension settlement costs; certain other non-cash (gains) losses, net and the net income (loss) relating to noncontrolling interests. Adjusted EBITDA is not a measurement of financial performance under U.S. GAAP. It should not be considered an alternative to net income (loss) attributable to Acushnet Holdings Corp. as a measure of our operating performance or any other measure of performance derived in accordance with U.S. GAAP. In addition, Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non‑recurring items, or affected by similar non‑recurring items. Adjusted EBITDA has limitations as an analytical tool, and you should not consider such measure either in isolation or as a substitute for analyzing our results as reported under U.S. GAAP. Our definition and calculation of Adjusted EBITDA is not necessarily comparable to other similarly titled measures used by other companies due to different methods of calculation. For a reconciliation of Adjusted EBITDA to net income (loss) attributable to Acushnet Holdings Corp., see “—Results of Operations” below.
We also use Adjusted EBITDA margin on a consolidated basis, which measures our Adjusted EBITDA as a percentage of net sales, because our management uses it to evaluate the effectiveness of our business strategies, assess our consolidated operating performance and make decisions regarding pricing of our products, go-to-market execution and costs to
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incur across our business. We present Adjusted EBITDA margin as a supplemental measure of our operating performance because it excludes the impact of certain items that we do not consider indicative of our ongoing operating performance. Adjusted EBITDA margin is not a measurement of financial performance under U.S. GAAP. It should not be considered an alternative to any measure of performance derived in accordance with U.S. GAAP. In addition, Adjusted EBITDA margin should not be construed as an inference that our future results will be unaffected by unusual or nonrecurring items, or affected by similar nonrecurring items. Adjusted EBITDA margin has limitations as an analytical tool, and you should not consider such measure either in isolation or as a substitute for analyzing our results as reported under U.S. GAAP. Our definition and calculation of Adjusted EBITDA margin is not necessarily comparable to other similarly titled measures used by other companies due to different methods of calculation.
Lastly, we use segment operating income (loss) to evaluate the effectiveness of business strategies, assess segment operating performance and make decisions regarding costs to incur across the business. Segment operating income includes directly attributable expenses and certain shared costs of corporate administration that are allocated to the reportable segments, but excludes certain other costs, such as interest expense, net; restructuring costs; the non-service cost component of net periodic benefit cost; transaction fees; as well as other items that are not allocated to the reportable segments.
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Results of Operations
The following table sets forth, for the periods indicated, our results of operations.
Year ended December 31,
(in thousands)
Net sales
Cost of goods sold
Gross profit
Operating expenses:
Selling, general and administrative
Research and development
Intangible amortization
Income from operations
Interest expense, net
Loss on debt extinguishment
Other (income) expense, net
Income before income taxes
Income tax expense
Net income
Less: Net loss (income) attributable to noncontrolling interests
Net income attributable to Acushnet Holdings Corp.
Adjusted EBITDA:
Net income attributable to Acushnet Holdings Corp.
Interest expense, net
Loss on debt extinguishment
Income tax expense
Depreciation and amortization
Share-based compensation
Restructuring costs (1)
Transformation costs (2) (3)
Other (4)
Net (loss) income attributable to noncontrolling interests
Adjusted EBITDA
Adjusted EBITDA margin
(1) For the year ended December 31, 2025, includes $13.7 million related to the VBR program. For the year ended December 31, 2024, includes $18.0 million related to the optimization of our supply chain.
(2) For the years ended December 31, 2025, 2024 and 2023 includes $10.5 million, $11.0 million and $1.9 million, respectively, related to our information technology optimization.
(3) For the years ended December 31, 2024 and 2023, includes $3.4 million and $10.3 million, respectively, related to our distribution optimization.
(4) For the year ended December 31, 2025, includes a non-cash gain of $20.9 million related to the deconsolidation of Lionscore, amortization expense of $2.4 million related to capitalized implementation costs for cloud computing arrangements, as well as pension settlement costs of $1.3 million related to lump-sum distributions to participants in our defined benefit plans as a result of the VBR program. For the year ended December 31, 2024, includes the non-cash benefit of $17.7 million associated with the PTO Policy Change. In addition, the years ended December 31, 2025, 2024 and 2023, include other gains, losses or costs added back for purposes of calculating Adjusted EBITDA as defined in our credit agreement.
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Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024
Net sales by reportable segment is summarized as follows:
Year ended
Constant Currency
December 31,
Increase/(Decrease)
Increase/(Decrease)
(in millions)
$ change
% change
$ change
% change
Golf balls
Golf clubs
Titleist golf equipment
FootJoy golf wear
Golf gear
Net sales information by region is summarized as follows:
Year ended
Constant Currency
December 31,
Increase/(Decrease)
Increase/(Decrease)
(in millions)
$ change
% change
$ change
% change
United States
EMEA
Japan
Korea
Rest of World
Total net sales
Segment operating income by reportable segment is summarized as follows:
Year ended
December 31,
Increase/(Decrease)
(in millions)
$ change
% change
Titleist golf equipment
FootJoy golf wear
Golf gear
Net Sales
For the year ended December 31, 2025, net sales increased 4.1%, or 4.2% on a constant currency basis, compared to the year ended December 31, 2024. The increase was driven by higher net sales in Titleist golf equipment, primarily due to higher average selling prices in golf clubs and higher sales volumes in golf balls, as well as higher net sales in Golf gear, primarily due to higher average selling prices across all product categories. These increases were partially offset by lower net sales in FootJoy golf wear, primarily due to lower sales volumes in footwear, partially offset by higher average selling prices across all product categories. An increase in net sales of products that are not allocated to one of our three reportable segments also contributed to the change in net sales.
The increase in net sales in the United States was primarily driven by increases in Titleist golf equipment of $60.8 million and in Golf gear of $9.4 million. The increase in Titleist golf equipment was primarily driven by higher average selling prices in golf clubs and higher sales volumes of our 2025 Pro V1 golf ball models, GT hybrids and our latest generation T-Series irons. These increases were partially offset by lower sales volumes of second model year drivers, wedges, and performance model golf balls. The increase in Golf gear was primarily driven by higher average selling prices across all product categories. An increase in net sales of products that are not allocated to one of our three reportable segments also contributed to the change in net sales.
Net sales in regions outside the United States increased 2.5%, or 2.7% on a constant currency basis, driven by increases in EMEA and Rest of World, partially offset by decreases in Japan and Korea. In EMEA and Rest of World, the increases were driven by higher net sales across all reportable segments. An increase in net sales of products that are not allocated to one of our three reportable segments also contributed to the change in net sales in Rest of World. In Japan, the decrease was primarily due to lower net sales in FootJoy golf wear, largely in the footwear and apparel product categories,
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partially offset by higher net sales in Titleist golf equipment, driven by golf balls. In Korea, the decrease was largely due to lower net sales in FootJoy golf wear, primarily in the footwear and apparel product categories, and Golf gear, partially offset by higher net sales in Titleist golf equipment, largely due to golf clubs.
Gross Profit
Gross profit increased $33.5 million for the year ended December 31, 2025 compared to the year ended December 31, 2024. Gross margin was 47.7% for the year ended December 31, 2025 compared to 48.3% for the year ended December 31, 2024. The increase in gross profit was primarily the result of increases in Golf gear of $13.3 million, Titleist golf equipment of $10.4 million and FootJoy golf wear of $4.2 million. The increase in Golf gear was primarily driven by the higher average selling prices discussed previously and lower distribution costs. The increase in Titleist golf equipment was primarily due to the higher sales volumes and higher average selling prices discussed previously, partially offset by higher manufacturing costs. The increase in FootJoy golf wear was primarily driven by the higher average selling prices and a favorable shift in product mix, partially offset by lower sales volumes discussed previously. An increase in gross profit of products not allocated to one of our three reportable segments also contributed to the change in gross profit. In addition, these changes in gross profit include the incremental tariff costs discussed previously, as well as the impact of the $6.6 million benefit recognized during the year ended December 31, 2024 related to the PTO Policy Change.
Selling, General and Administrative Expenses
Selling, general and administrative ("SG&A") expenses increased $31.8 million for the year ended December 31, 2025 compared to the year ended December 31, 2024. This increase was primarily the result of increases of $20.9 million in selling expense, $12.1 million in advertising and promotion expenses, and $5.8 million in administrative expense. These changes include the impact of the $9.1 million benefit recognized during the year ended December 31, 2024 related to the PTO Policy Change. The increase in selling expense was primarily due to investments to expand our product fitting networks and to enhance consumer engagement. The increase in advertising and promotion expenses was primarily in Titleist golf equipment to support new product launches. The increase in administrative expense was primarily due to higher information technology-related expenses. These increases were offset in part by a decrease in restructuring costs primarily driven by costs incurred related to the optimization of our supply chain of $18.0 million during the year ended December 31, 2024 which were offset in part by costs incurred related to the VBR program of $13.7 million during the year ended December 31, 2025. SG&A expenses also include a $2.7 million decrease in expense related to our distribution optimization, as well as a $6.2 million decrease in foreign currency transaction losses, offset in part by a $4.7 million increase in losses on foreign exchange forward contracts.
Research and Development
Research and development ("R&D") expenses increased $8.7 million for the year ended December 31, 2025 compared to the year ended December 31, 2024, primarily as a result of additional expenses to support next generation product introductions, as well as the impact of the $2.0 million benefit recognized during the year ended December 31, 2024 related to the PTO Policy Change.
Intangible amortization
Intangible amortization expense decreased $2.1 million for the year ended December 31, 2025 compared to the year ended December 31, 2024 as certain intangible assets became fully amortized during the year.
Interest Expense, net
Interest expense, net increased $5.7 million for the year ended December 31, 2025 compared to the year ended December 31, 2024, primarily due to an increase in borrowings, offset in part by a decrease in interest rates.
Other (Income) Expense, net
Other income, net increased $17.3 million for the year ended December 31, 2025 compared to other expense, net of $2.0 million for the year ended December 31, 2024, primarily due to a non-cash gain of $20.9 million related to the deconsolidation of Lionscore. This increase in other income, net was partially offset by an increase of $2.3 million in the non-service cost component of net periodic benefit costs driven by an increase in settlement costs, partially as a result of the VBR program.
Income Tax Expense
Income tax expense increased $4.5 million for the year ended December 31, 2025 compared to the year ended December 31, 2024. Our effective tax rate ("ETR") was 21.9% for the year ended December 31, 2025 compared to 19.2% for
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the year ended December 31, 2024. The change in ETR was primarily driven by changes in our jurisdictional mix of earnings, as well as a reduced income tax benefit related to the U.S. deduction of foreign-derived intangible income.
Segment Results
Titleist Golf Equipment Segment
Net sales in our Titleist golf equipment segment increased 5.9%, or 5.8% on a constant currency basis, for the year ended December 31, 2025 compared to the year ended December 31, 2024, primarily driven by higher average selling prices in golf clubs and higher sales volumes of our 2025 Pro V1 golf ball models. In addition, higher sales volumes of our T-Series irons launched in the third quarter of 2025 and GT hybrids launched in the first quarter of 2025 were more than offset by lower sales volumes of second model year drivers, wedges and performance model golf balls.
Operating income in our Titleist golf equipment segment decreased $29.0 million, or 10.6%, compared to the prior year period. The decrease in operating income resulted from higher operating expenses of $39.4 million partially offset by an increase in gross profit of $10.4 million. The increase in gross profit was primarily driven by the higher sales volumes and higher average selling prices as discussed previously. This increase was partially offset by incremental tariff costs and higher manufacturing costs, as well as the impact of the $5.8 million benefit recognized during the year ended December 31, 2024 related to the PTO Policy Change. Higher operating expenses were a result of increases of $15.8 million in selling expense, $11.4 million in advertising and promotion expenses, $7.4 million in research and development expenses, and $6.9 million in administrative expense. These operating expense changes include the impact of the $7.7 million benefit recognized during the year ended December 31, 2024 related to the PTO Policy Change.
FootJoy Golf Wear Segment
Net sales in our FootJoy golf wear segment decreased 0.8%, or 0.7% on a constant currency basis, for the year ended December 31, 2025 compared to the year ended December 31, 2024, due to lower sales volumes, primarily in footwear, partially offset by higher average selling prices across all product categories.
Operating income in our FootJoy golf wear segment increased $3.5 million, or 14.0% compared to the prior year period. The increase in operating income resulted from higher gross profit of $4.2 million, partially offset by higher operating expenses of $0.7 million. Gross profit increased primarily as a result of the higher average selling prices and a favorable shift in product mix discussed previously, partially offset by lower sales volumes as discussed previously and incremental tariff costs. Higher operating expenses were primarily a result of an increase of $1.7 million in selling expense, partially offset by a decrease of $1.0 million in advertising and promotion expenses. These operating expense changes include the impact of the $2.6 million benefit recognized during the year ended December 31, 2024 related to the PTO Policy Change.
Golf Gear Segment
Net sales in our Golf gear segment increased 5.5%, or 5.6% on a constant currency basis, for the year ended December 31, 2025 compared to the year ended December 31, 2024, driven by higher average selling prices across all product categories.
Operating income in our Golf gear segment increased $9.9 million, or 38.4%, compared to the prior year period. The increase in operating income resulted from higher gross profit of $13.3 million partially offset by higher operating expenses of $3.4 million. Gross profit increased largely due to the higher average selling prices and lower distribution costs discussed previously, partially offset by incremental tariff costs. Higher operating expenses were primarily a result of an increase of $1.5 million in selling expense.
Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023
A detailed review of our results of operations for the year ended December 31, 2024 as compared to the year ended December 31, 2023 can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of the Annual Report for the year ended December 31, 2024, which was filed with the SEC on February 27, 2025, and is incorporated herein by reference.
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Liquidity and Capital Resources
Our primary cash needs relate to working capital, repurchasing shares of our common stock, capital expenditures, paying dividends, servicing our debt and pension contributions. Additionally, f rom time to time, we may make strategic investments to complement our products, technologies or businesses, which could impact our liquidity needs. We expect to rely on cash flows from operations and borrowings under our multi-currency revolving credit facility and local credit facilities as our primary sources of liquidity.
Our liquidity is impacted by our level of working capital, which is cyclical as a result of the general seasonality of our business. Our accounts receivable balance is generally at its highest starting at the end of the first quarter and continuing through the second quarter, and declines during the third and fourth quarters as a result of both an increase in cash collections and lower sales. Our inventory balance also fluctuates as a result of the seasonality of our business. Generally, our buildup of inventory starts during the fourth quarter and continues through the first quarter and into the beginning of the second quarter in order to meet demand for our initial sell-in during the first quarter and reorders in the second quarter. Both accounts receivable and inventory balances are impacted by the timing of new product launches.
As of December 31, 2025, we had $48.7 million of unrestricted cash and cash equivalents. As of December 31, 2025, 95.4% of our total unrestricted cash and cash equivalents was held by subsidiaries in regions outside of the United States. We manage our worldwide cash requirements by monitoring the funds available among our subsidiaries and determining the extent to which we can access those funds on a cost effective basis. We are not aware of any restrictions on repatriation of these funds and, subject to foreign withholding taxes, those funds could be repatriated, if necessary. We have repatriated, and intend to repatriate, funds to the United States from time to time to satisfy domestic liquidity needs arising in the ordinary course of business.
Macroeconomic factors could impact our results of operations in ways we cannot currently predict. Nonetheless, we believe that cash expected to be provided by operating activities, together with our cash on hand and the availability of borrowings under our multi-currency revolving credit facility and our local credit facilities (subject to customary borrowing conditions) will be sufficient to meet our liquidity requirements for at least the next 12 months. Our ability to generate sufficient cash flows from operations is, however, subject to many risks and uncertainties, including current and future economic trends and conditions, demand for our products, availability and cost of our raw materials and components, foreign currency exchange rates and other risks and uncertainties applicable to our business, as described in "Risk Factors," Item 1A of Part I to this report.
Debt and Financing Arrangements
In the fourth quarter of 2025, we completed our 2025 Debt Refinancing to, among other things, extend the maturity of our multi‑currency revolving credit facility, issue the 2033 Notes and fully redeem the 2028 Notes.
As of December 31, 2025, we had $514.7 million of availability under our multi-currency revolving credit facility after giving effect to $4.0 million of outstanding letters of credit. Additionally, we had $37.8 million available under certain local credit facilities of our subsidiaries.
The credit agreement governing our multi-currency revolving credit facility contains customary affirmative and restrictive covenants, including, among others, financial covenants based on our leverage and interest coverage ratios. This credit agreement also includes customary events of default, the occurrence of which, following any applicable cure period, would permit the lenders to, among other things, declare the principal, accrued interest and other obligations to be immediately due and payable. As of December 31, 2025, we were in compliance with all covenants under our credit agreement.
The 2033 Notes were issued pursuant to an indenture dated November 24, 2025 (the "Indenture"), which contains covenants that, among other things, limit the ability of the Company and its subsidiaries to incur liens securing indebtedness for borrowed money, enter into sale and leaseback transactions, and consolidate or merge with or into other companies. As of December 31, 2025, we were in compliance with all covenants under the Indenture.
See "Notes to Consolidated Financial Statements- Note 11- Debt and Financing Arrangements," Item 8 of Part II to this report, for a description of our debt and financing arrangements. Additionally, see "Risk Factors - Risks Related to Our Indebtedness", Item 1A of Part I to this report, for further discussion surrounding the risks and uncertainties related to our debt and financing arrangements.
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Dividends and Share Repurchase Program
During the year ended December 31, 2025, we paid dividends on our common stock of $56.2 million to our shareholders. During the first quarter of 2026, our board of directors declared a dividend of $0.255 per share of common stock to shareholders of record as of March 6, 2026, which is payable on March 20, 2026.
As of December 31, 2025, our board of directors had authorized us to repurchase up to an aggregate of $1.25 billion of our issued and outstanding common stock since the share repurchase program was established in 2018. During the year ended December 31, 2025, we repurchased 3,133,650 shares of common stock at an average price of $67.50 for an aggregate of $211.5 million. Included in this amount were 1,889,313 shares of common stock repurchased from Magnus Holdings Co., Ltd. ("Magnus"), for an aggregate of $125.0 million. As of December 31, 2025, we had $240.7 million remaining under the current share repurchase authorization.
See “Notes to Consolidated Financial Statements-Note 16-Common Stock,” Item 8 of Part II to this report, for a description of our share repurchase program and Magnus share repurchase agreements.
Capital Expenditures and Other Investments
During the year ended December 31, 2025, we invested $74.3 million in capital expenditures. Capital expenditures in 2026 are expected to be approximately $95.0 million, although actual amounts may vary depending upon a variety of factors, including the timing of certain capital project implementations and receipt of capital purchases due to supply chain challenges. Capital expenditures generally relate to investments to support the manufacturing and distribution of products, our go to market activities, as well as investments in facilities to support our global strategic initiatives.
In addition, during the year ended December 31, 2025, we invested $38.2 million in capitalized implementation costs associated with the implementation of a new global cloud-based ERP platform as part of our plans to integrate our operations and enhance our supply chain and finance capabilities. In 2026, we expect to invest approximately $25.0 million in capitalized implementation costs associated with this global ERP platform.
Cash Flows
The following table presents the major components of net cash flows from operating, investing and financing activities for the periods indicated:
Year ended December 31,
(in thousands)
Cash flows from:
Operating activities
Investing activities
Financing activities
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash
Net (decrease) increase in cash, cash equivalents and restricted cash
Cash Flows from Operating Activities
The decrease in cash provided by operating activities for the year ended December 31, 2025, as compared to the year ended December 31, 2024, was primarily driven by an increase in investments in our global ERP platform as well as an increase in cash used to fund other working capital requirements. At any specific point in time, working capital is subject to many variables, including seasonality and inventory management, the timing of cash receipts and payments, vendor payment terms and fluctuations in foreign exchange rates.
Cash Flows from Investing Activities
Cash used in investing activities for the year ended December 31, 2025 was consistent with the year ended December 31, 2024 driven by steady capital expenditure levels.
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Cash Flows from Financing Activities
The decrease in cash used in financing activities for the year ended December 31, 2025, as compared to the year ended December 31, 2024, was primarily driven by an increase in net proceeds from borrowings, offset in part by an increase in purchases of common stock, as well as costs paid in connection with our 2025 Debt Refinancing.
Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023
A review of our cash flow activities for the year ended December 31, 2024 as compared to the year ended December 31, 2023 can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of the Annual Report for the year ended December 31, 2024, which was filed with the SEC on February 27, 2025, and is incorporated herein by reference.
Contractual Obligations
Our principal contractual obligations and commitments consist of debt service obligations (including interest expense and unused commitment fees related to our multi-currency revolving credit facility), operating and finance lease obligations, purchase obligations and pension and other postretirement benefit obligations.
During the normal course of business, we enter into agreements to purchase goods and services, including purchase commitments for advertising (including media placement and production costs), finished goods inventory, capital expenditures and endorsement arrangements with professional golfers. As of December 31, 2025, the future payments related to these purchase commitments, which expire at various dates through 2030 and thereafter, amounted to approximately $348.0 million, of which approximately $323.0 million is expected to be paid in fiscal year 2026.
See "Notes to Consolidated Financial Statements-Note 11-Debt and Financing Arrangements", "Note 4-Leases" and "Note 14-Pension and Other Postretirement Benefits" in Item 8 of Part II of this Annual Report for more information on the nature and timing of obligations for debt, leases and pension and postretirement benefit plans, respectively. The future amount of interest expense payments are expected to vary as discussed in "Interest Rate Risk," Item 7A of Part II, to this report.
Off‑Balance Sheet Arrangements
As of December 31, 2025, other than as discussed above, we did not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.
Critical Accounting Estimates
The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
A summary of significant accounting policies is included in Note 2, "Summary of Significant Accounting Policies," to the Consolidated Financial Statements in Item 8 of Part II, which is incorporated herein by reference. An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, if different estimates reasonably could have been used, or if changes in the estimate that are reasonably possible could materially impact the financial statements. We believe the following judgments and estimates are critical in the preparation of our consolidated financial statements.
Pension and Other Postretirement Benefit Plans
We provide various post-employment plans including defined benefit plans (or "pension plans") and other postretirement benefit plans which provide retiree welfare and other benefits to certain eligible U.S. and foreign employees. Projected benefit obligations are measured using various actuarial assumptions, such as discount rates, rate of compensation increase, mortality rates, turnover rates and health care cost trend rates, as determined at each year end measurement date. The measurement of net periodic benefit cost is based on various actuarial assumptions, including discount rate, expected return on plan assets and rate of compensation increase, which are determined as of the prior year measurement date. Our actuarial assumptions are reviewed on an annual basis and modified when appropriate.
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Our projected benefit obligations related to our pension and other postretirement benefit plans are valued using weighted‑average discount rates of 5.43% and 5.19%, respectively, for the year ended December 31, 2025. Decreasing the discount rates by 100 basis points would have increased the projected benefit obligations of our pension and other postretirement benefit plan by approximately $27.2 million and $0.9 million, respectively, for the year ended December 31, 2025.
Our net periodic benefit cost related to our pension and other postretirement benefit plans is calculated using weighted average discount rates of 5.57% and 5.54%, respectively, for the year ended December 31, 2025. Decreasing the discount rate by 100 basis points would increase net periodic pension cost by approximately $1.2 million and increase other postretirement benefit cost by approximately $0.1 million for the year ended December 31, 2025. Additionally, our net periodic benefit cost related to our pension plans is calculated using an expected return on plan assets of 4.52% for the year ended December 31, 2025. Decreasing the expected return on plan assets by 100 basis points would increase net periodic pension benefit cost by approximately $1.6 million for the year ended December 31, 2025.
Income Taxes
Deferred tax assets represent amounts available to reduce income taxes payable on taxable income in future years. Such assets arise because of temporary differences between the financial reporting and tax basis of assets and liabilities, as well as from net operating losses and tax credit carryforwards. We evaluate the recoverability of these future tax deductions and credits by assessing the adequacy of future expected taxable income from all sources, including reversal of temporary differences, forecasted operating earnings and available tax planning strategies. These sources of income rely heavily on estimates that are based on a number of factors, including historical experience and short-range and long-range business forecasts. As of December 31, 2025, we had a valuation allowance on certain net operating loss and tax credit carryforwards based on our assessment that it is more likely than not that the deferred tax assets will not be recognized. As of December 31, 2025 and 2024, the cumulative valuation allowance against deferred tax assets was $36.5 million and $40.8 million, respectively.
We are subject to income taxes in the U.S. and foreign jurisdictions. We account for uncertain tax positions using a more likely than not threshold for recognizing and resolving uncertain tax matters. Significant judgment is required in evaluating our uncertain tax positions and determining our provision for income taxes. Although we believe we have adequately reserved for our uncertain tax positions, no assurance can be given that the outcome of these matters will not be different. We adjust these reserves in light of changing facts and circumstances, such as the closing of tax audits or refinement of an estimate. To the extent the outcome of these matters is different than the amounts recorded, such differences will affect the provision for income taxes and the effective tax rate in the period in which the determination is made.
Recently Issued Accounting Standards
We have reviewed all recently issued accounting standards and have determined that, other than as disclosed in “Notes to Consolidated Financial Statements – Note 2 – Summary of Significant Accounting Policies”, Item 8 of Part II to this report, such accounting standards will not have a significant impact on our consolidated financial statements or otherwise do not apply to our operations.
