# Callaway Golf Co (CALY) Informational only - not investment advice. CIK: 0000837465 SIC: 3949 Sporting & Athletic Goods, NEC SIC breadcrumb: [Manufacturing](/division/D/) > [SIC Major Group 39](/major-group/39/) > [SIC 3949 Sporting & Athletic Goods, NEC](/industry/3949/) Latest 10-K filed: 2026-02-27 SEC page: https://www.sec.gov/edgar/browse/?CIK=837465 Filing source: https://www.sec.gov/Archives/edgar/data/837465/000083746526000010/modg-20251231.htm ## Selected Fundamentals | Metric | Value | Unit | FY | Filed | | --- | ---: | --- | ---: | --- | | Revenue | 2060100000 | USD | 2025 | 2026-02-27 | | Net income | -409300000 | USD | 2025 | 2026-02-27 | | Assets | 7286000000 | USD | 2025 | 2026-02-27 | ## Financials Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-27. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000837465.json. Derived margins are computed from the extracted annual SEC facts. | Metric | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Revenue | | | 871,192,000 | 1,048,736,000 | 1,242,834,000 | 1,701,063,000 | 1,589,500,000 | 3,133,400,000 | 3,995,700,000 | 2,132,700,000 | 2,077,700,000 | 2,060,100,000 | | Net income | | | 189,900,000 | 40,806,000 | 104,740,000 | 79,408,000 | -126,900,000 | 322,000,000 | 157,900,000 | 95,000,000 | -1,447,700,000 | -409,300,000 | | Operating income | | | 44,168,000 | 78,837,000 | 128,442,000 | 132,668,000 | -105,500,000 | 204,700,000 | 256,800,000 | 194,100,000 | 152,900,000 | 128,100,000 | | Gross profit | 357,926,000 | 357,633,000 | 385,011,000 | 480,448,000 | 578,369,000 | 766,787,000 | 657,585,000 | | | 927,100,000 | 887,000,000 | 867,600,000 | | Diluted EPS | | | 1.98 | 0.42 | 1.08 | 0.82 | -1.35 | 1.82 | 0.82 | 0.50 | -7.23 | -2.20 | | Assets | | | 801,282,000 | 991,157,000 | 1,052,944,000 | 1,960,548,000 | 1,980,600,000 | 7,747,800,000 | 8,590,400,000 | 9,120,600,000 | 7,636,100,000 | 7,286,000,000 | | Stockholders' equity | | | 598,906,000 | 649,631,000 | 724,574,000 | 767,353,000 | 675,644,000 | 3,682,900,000 | 3,774,300,000 | 3,878,200,000 | 2,407,700,000 | 2,068,900,000 | | Cash and cash equivalents | | | 125,975,000 | 85,674,000 | 106,666,000 | 106,666,000 | 366,100,000 | 352,200,000 | 180,200,000 | 393,500,000 | 445,000,000 | 903,200,000 | | Net margin | | | 21.80% | 3.89% | 8.43% | 4.67% | -7.98% | 10.28% | 3.95% | 4.45% | -69.68% | -19.87% | | Operating margin | | | 5.07% | 7.52% | 10.33% | 7.80% | -6.64% | 6.53% | 6.43% | 9.10% | 7.36% | 6.22% | ## Quarterly Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-08. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000837465.json. Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived. | Quarter | End date | Revenue | Net income | Diluted EPS | Method | | --- | --- | ---: | ---: | ---: | --- | | 2022-Q2 | 2022-06-30 | | | 0.53 | reported discrete quarter | | 2022-Q3 | 2022-09-30 | | | 0.20 | reported discrete quarter | | 2023-Q1 | 2023-03-31 | 1,167,400,000 | | 0.13 | reported discrete quarter | | 2023-Q2 | 2023-06-30 | 1,179,700,000 | 117,400,000 | 0.59 | reported discrete quarter | | 2023-Q3 | 2023-09-30 | 1,040,600,000 | 29,700,000 | 0.16 | reported discrete quarter | | 2023-Q4 | 2023-12-31 | 897,100,000 | -77,100,000 | | derived Q4 = FY annual - nine-month YTD | | 2024-Q1 | 2024-03-31 | 1,144,200,000 | 6,500,000 | 0.04 | reported discrete quarter | | 2024-Q2 | 2024-06-30 | 1,157,800,000 | 62,100,000 | 0.32 | reported discrete quarter | | 2024-Q3 | 2024-09-30 | 1,012,900,000 | -3,600,000 | -0.02 | reported discrete quarter | | 2024-Q4 | 2024-12-31 | 924,400,000 | -1,512,700,000 | | derived Q4 = FY annual - nine-month YTD | | 2025-Q1 | 2025-03-31 | 1,092,300,000 | 2,100,000 | 0.01 | reported discrete quarter | | 2025-Q2 | 2025-03-31 | | 2,100,000 | | reported discrete quarter | | 2025-Q3 | 2025-06-30 | | 20,300,000 | | reported discrete quarter | | 2025-Q2 | 2025-06-30 | 1,110,500,000 | | 0.11 | reported discrete quarter | | 2025-Q3 | 2025-09-30 | 934,000,000 | | -0.08 | reported discrete quarter | | 2025-Q4 | 2025-12-31 | | -417,000,000 | | derived Q4 = FY annual - nine-month YTD | | 2026-Q1 | 2026-03-31 | 687,500,000 | 93,100,000 | 0.47 | reported discrete quarter | ## Macro Cross-References - [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average - [UNRATE](/indicator/UNRATE/): Unemployment Rate - [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate - [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private - [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit - [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit - [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity - [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity - [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity - [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity - [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity - [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy - [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food - [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy - [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter - [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index - [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index - [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities - [T10YIE](/indicator/T10YIE/): 10-Year Breakeven Inflation Rate - [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons - [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm - [CIVPART](/indicator/CIVPART/): Labor Force Participation Rate - [EMRATIO](/indicator/EMRATIO/): Employment-Population Ratio - [UNEMPLOY](/indicator/UNEMPLOY/): Unemployed - [CE16OV](/indicator/CE16OV/): Employment Level - [ICSA](/indicator/ICSA/): Initial Claims - [JTSJOL](/indicator/JTSJOL/): Job Openings: Total Nonfarm - [JTSQUR](/indicator/JTSQUR/): Quits: Total Nonfarm - [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product - [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period - [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index - [TCU](/indicator/TCU/): Capacity Utilization: Total Index - [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units - [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units - [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade - [PCE](/indicator/PCE/): Personal Consumption Expenditures - [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income - [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate - [M2SL](/indicator/M2SL/): M2 - [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance - [MSPUS](/indicator/MSPUS/): Median Sales Price of Houses Sold for the United States - [HSN1F](/indicator/HSN1F/): New One Family Houses Sold: United States - [RHORUSQ156N](/indicator/RHORUSQ156N/): Homeownership Rate in the United States - [TTLCONS](/indicator/TTLCONS/): Total Construction Spending: Total Construction in the United States - [RRVRUSQ156N](/indicator/RRVRUSQ156N/): Rental Vacancy Rate in the United States - [TOTALSL](/indicator/TOTALSL/): Total Consumer Credit Owned and Securitized - [REVOLSL](/indicator/REVOLSL/): Revolving Consumer Credit Owned and Securitized - [DRCCLACBS](/indicator/DRCCLACBS/): Delinquency Rate on Credit Card Loans, All Commercial Banks - [GDP](/indicator/GDP/): Gross Domestic Product - [GPDI](/indicator/GPDI/): Gross Private Domestic Investment - [GCE](/indicator/GCE/): Government Consumption Expenditures and Gross Investment - [PCEC](/indicator/PCEC/): Personal Consumption Expenditures - [NETEXP](/indicator/NETEXP/): Net Exports of Goods and Services - [GFDEBTN](/indicator/GFDEBTN/): Federal Debt: Total Public Debt - [GFDEGDQ188S](/indicator/GFDEGDQ188S/): Federal Debt: Total Public Debt as Percent of Gross Domestic Product - [FYFSD](/indicator/FYFSD/): Federal Surplus or Deficit - [FGRECPT](/indicator/FGRECPT/): Federal Government Current Receipts - [FGEXPND](/indicator/FGEXPND/): Federal Government: Current Expenditures - [MANEMP](/indicator/MANEMP/): All Employees, Manufacturing - [USCONS](/indicator/USCONS/): All Employees, Construction - [USTRADE](/indicator/USTRADE/): All Employees, Retail Trade - [USFIRE](/indicator/USFIRE/): All Employees, Financial Activities - [USGOVT](/indicator/USGOVT/): All Employees, Government - [AWHAETP](/indicator/AWHAETP/): Average Weekly Hours of All Employees, Total Private - [DGORDER](/indicator/DGORDER/): Manufacturers' New Orders: Durable Goods - [NEWORDER](/indicator/NEWORDER/): Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft - [BUSINV](/indicator/BUSINV/): Total Business Inventories - [EXPGS](/indicator/EXPGS/): Exports of Goods and Services - [IMPGS](/indicator/IMPGS/): Imports of Goods and Services - [IR](/indicator/IR/): Import Price Index (End Use): All Commodities - [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand ## Latest quarter (10-Q) Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/837465/000083746526000017/modg-20260331.htm Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization. Confidence: high Filing date: 2026-05-08 Report date: 2026-03-31 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with the condensed consolidated financial statements and related notes that appear elsewhere in this report, and the condensed consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the SEC on February 27, 2026. Interim operating results are not indicative of operating results that may be expected for the year ending December 31, 2026, or any other future periods. See “Important Notice to Investors Regarding Forward-Looking Statements” on page 2 of this report. References to the “Company,” “Callaway Golf Company,” “we,” “our,” or “us” in this report refer to Callaway Golf Company, together with our wholly-owned subsidiaries. Divestitures of Topgolf and Jack Wolfskin In 2025, we executed a strategic realignment to focus on our core Golf Equipment and complementary soft goods businesses, which included the sale of Jack Wolfskin on May 31, 2025, for approximately $290.0 million and the sale of a 60% stake in our Topgolf and Toptracer business (“Topgolf”) based upon an equity value of approximately $1,100.0 million. The Topgolf transaction closed effective January 1, 2026, resulting in net proceeds to us of $818.8 million from the sale and related financing transactions, net of preliminary working capital adjustments and cash retained. Our remaining 40% interest in Topgolf is accounted for under the equity method. As a result of these divestitures, the operating results of Jack Wolfskin and Topgolf are reported in discontinued operations for all periods presented in this Form 10-Q. For more information, please refer to Note 3 of this Form 10-Q or our Annual Report on Form 10-K for the year ended December 31, 2025. Discussion of Non-GAAP Measures In addition to the financial results contained in this report, which have been prepared and presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”), we have also included supplemental information concerning our financial results on a non-GAAP basis. This non-GAAP information includes the following: •A constant currency measure on net sales in order to demonstrate the impact of foreign currency fluctuations on these results. This information represents an estimate for comparative purposes and is calculated by taking current period local currency results and translating them into U.S. dollars based on the foreign currency exchange rates for the applicable comparable prior period. •Net income and diluted earnings per share from continuing operations excluding the non-cash amortization associated with acquired intangible assets, including acquired customer and distributor relationships and acquired developed technology related to our acquisitions of TravisMathew and OGIO (collectively, the “Acquisitions”). While the amortization of these assets is excluded from our calculation of non-GAAP net income, the revenue, operating costs and associated acquired assets that contribute to the revenue generation associated with these acquired companies is reflected in our calculation of non-GAAP net income from continuing operations. •Net income and diluted earnings per share from continuing operations excluding certain non-cash and non-recurring charges, as further detailed below, as well as the income (loss) from our equity method investment in Topgolf. In addition, for periods presented for fiscal year 2025, net income and diluted earnings per share from continuing operations were adjusted to include interest expense associated with term loan debt that was recognized as part of discontinued operations in order to show the full effect of consolidated interest expense from our corporate debt. We have included information in this report to reconcile non-GAAP information for the periods presented to the most directly comparable GAAP information. Non-GAAP information in this report should not be considered in isolation or as a substitute for any measure derived in accordance with GAAP and may also be inconsistent with the manner in which similar measures are derived or used by other companies. We use such non-GAAP information for financial and operational decision-making purposes and as a means to evaluate the underlying performance of our business and/or in forecasting our business. We believe that the presentation of such non-GAAP information, when considered in conjunction with the most directly comparable GAAP information, provides additional useful information for investors in their assessment of the underlying performance of our business. 32 Segment and Related Information Our products and brands are reported under two operating segments: Golf Equipment, which includes the operations of our golf clubs and golf balls business; and Apparel, Gear and Other, which includes the operations of our soft goods business marketed under the Callaway, TravisMathew and OGIO brand names. Golf Equipment Our Golf Equipment operating segment is comprised of Callaway Golf-branded woods, hybrids, irons, wedges, Odyssey putters, packaged sets, and Callaway Golf branded golf balls, as well as sales of pre-owned golf clubs. Our golf equipment products are designed to be technologically advanced and are for golfers of all skill levels, from beginner to professional. Operating results for our Golf Equipment segment fluctuate due to seasonal factors, as the game of golf is primarily played on a seasonal basis in most of the regions where we conduct business. Weather conditions in most parts of the world, including our primary geographic markets, generally restrict golf from being played throughout the entire year, with many of our on-course customers closing during the cold weather months. Operating results are also impacted by the timing of our product launches. In general, we launch new products for the new golf season during the first quarter of the year. This initial sell-in period typically continues into the second quarter, while third-quarter sales are generally dependent on reorders and may also include smaller new product launches. Fourth-quarter sales are generally less than the other quarters due to the end of the golf season in many of our key regions. In addition to this seasonality, our Golf Equipment sales may also be impacted by other factors, including the timing of new product introductions. As a result of these factors, a majority of our Golf Equipment sales, and most, if not all, of the profitability from our Golf Equipment operating segment generally occurs during the first half of the year. Apparel, Gear, and Other Our Apparel, Gear and Other segment is comprised of high quality soft good products which we design, develop and sell under the Callaway, TravisMathew and OGIO brands. These brands deliver a range of premium performance and lifestyle products in the United States and select international markets. We are focused on maintaining strong brand momentum by category and market share growth with key trade partners by enhancing our digital marketing, e-commerce and retail store presence, which we believe will increase direct-to-consumer sales and drive increased profitability over time. Sales of Callaway‑branded golf apparel and accessories generally follow the same seasonal patterns as golf equipment and are therefore typically higher during the first half of the year. Sales of TravisMathew and OGIO branded products, which include golf and lifestyle apparel, accessories, and performance products, are more diversified and therefore are more evenly distributed throughout the year due to broader product offerings and a greater mix of direct‑to‑consumer sales. For further information about our segments, see Note 17 “Segment Information” in the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q. Current Economic Conditions Macroeconomic Factors Our products are discretionary purchases, and demand may be adversely affected by changes in macroeconomic conditions that impact consumer discretionary spending. These conditions include, among other factors, inflationary pressures, interest rate environments, and changes in trade policies or tariffs. While we seek to mitigate the effects of such factors through monitoring consumer spending behavior and implementing strategic initiatives, prolonged or severe adverse economic conditions could negatively impact our operating results. 33 Tariffs In 2025, the U.S. government implemented reciprocal tariffs affecting many countries in which we do business, increasing costs for our products, components, and raw materials, a significant portion of which are sourced from outside the United States, including Asia and other regions, which may adversely affect product availability, pricing, and demand. The U.S. government has subsequently announced and rescinded various tariffs, contributing to continued uncertainty regarding their economic impact. On February 20, 2026, the United States Supreme Court struck down certain tariffs previously imposed under the International Emergency Economic Powers Act of 1977. The ruling did not address potential refunds of tariffs previously assessed under that authority, and as of March 31, 2026, we have not recognized an asset related to any potential refund. Following the ruling, additional tariffs were imposed under a separate authority, further contributing to uncertainty regarding tariff levels, duration, and related costs. Foreign Currency A significant portion of our operations is conducted outside the United States in currencies other than the U.S. dollar. We use foreign currency forward contracts to partially mitigate the short‑term effects of exchange rate fluctuations on our financial results; however, these instruments do not eliminate currency impacts or address long‑term exposure. Foreign currency fluctuations affect our results primarily through the translation of foreign‑currency‑denominated results into U.S. dollars and mark‑to‑market adjustments on certain intercompany balances and foreign currency forward contracts. For the three months ended March 31, 2026, foreign currency fluctuations had a favorable impact of $7.6 million on international net revenues. 34 Results of Operations We have reclassified certain prior-year amounts related to our discontinued operations to conform to the current year’s presentation. Unless otherwise specified, our discussion below reflects continuing operations only and prior period financial information related to discontinued operations has been reclassified and is separately presented in the condensed consolidated financial statements and accompanying notes. Net sales and operating segment results (in millions, except percentages) Net sales for the three months ended March 31, 2026 increased $57.9 million or 9.2% (8.0% on a constant currency basis) as compared to the three months ended March 31, 2025. Segment operating income increased $32.4 million or 23.6% driven by increases in both our Golf Equipment and Apparel, Gear and Other operating segments. Three Months Ended March 31, Growth/(Decline) Non-GAAP Constant Currency Growth vs. 2025(1) ($ in millions) 2026 2025 Dollars Percent Percent Net sales: Golf clubs $ 380.6  $ 340.0  $ 40.6  11.9  % 10.4% Golf balls 105.6  103.9  1.7  1.6  % 0.3% Golf Equipment 486.2  443.9  42.3  9.5  % 8.0% Apparel 102.7  98.0  4.7  4.8  % 5.1% Gear, accessories, & other 98.6  87.7  10.9  12.4  % 11.1% Apparel, Gear and Other 201.3  185.7  15.6  8.4  % 7.9% Total net sales $ 687.5  $ 629.6  $ 57.9  9.2  % 8.0% Segment operating income (loss): Golf Equipment $ 117.6  $ 101.8  $ 15.8  15.5  % Apparel, Gear and Other 52.0  35.4  16.6  46.9  % Total segment ope [Excerpt truncated for page length; source filing is linked above.] ## Latest 10-K MD&A Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high Item 7.    Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with the Consolidated Financial Statements, the related notes and the section “Important Notice to Investors Regarding Forward-Looking Statements” that appear herein. This section of this Annual Report on Form 10-K generally discusses: (i) 2025 and 2024 items and year-to-year comparisons between 2025 and 2024 and (ii) 2024 and 2023 items and year-to-year comparisons between 2024 and 2023 due to restatement of prior period amounts to reflect reporting for our discontinued operations. Divestitures of Topgolf and Jack Wolfskin In 2025, we executed a strategic realignment to focus on our core Golf Equipment and complementary soft goods businesses. On May 31, 2025, we sold the Jack Wolfskin business to a subsidiary of ANTA Sports Products Limited for approximately $290.0 million, net of cash retained and customary working capital adjustments. On November 17, 2025, we entered into a definitive agreement to sell a 60% stake in our Topgolf and Toptracer businesses to private equity funds managed by Leonard Green & Partners, L.P., at an equity value of approximately $1,100.0 million. The transaction closed effective January 1, 2026, with the Company retaining a 40% interest in Topgolf, which will be accounted for under the equity method. In connection with the sale and related financing transactions, we received approximately $800.0 million in net proceeds, after working capital adjustments and transaction expenses, subject to customary purchase price adjustments. As a result of these divestitures, the operating results of Jack Wolfskin and Topgolf are reported in discontinued operations for all periods presented in this Form 10-K. Critical Accounting Estimates Our discussion and analysis of our results of operations, financial condition and liquidity are based upon our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, shareholders’ equity, revenues and expenses, as well as related disclosures of contingent assets and liabilities. We base our estimates and assumptions on historical experience and other assumptions that we believe are reasonable under the circumstances at that time. Actual results may differ from these estimates under different assumptions or circumstances. We review our estimates on an ongoing basis to ensure that changes in our business and new information is appropriately reflected as it becomes available. We believe the critical accounting estimates discussed below affect our more significant estimates and assumptions used in the preparation of our consolidated financial statements. For a complete discussion of all of our significant accounting policies, see Note 2. “Summary of Significant Accounting Policies” in the Notes to Consolidated Financial Statements in this Form 10-K. Sales Programs The amount of revenue we recognize is based on the amount of consideration we ultimately expect to receive from customers, which involves certain estimates and assumptions, including estimates for sales returns as well as estimates for our short-term sales programs, sales promotions and price concessions. These estimates are based on amounts earned or expected to be claimed by customers on the related sales. We record an estimate for anticipated returns at the time the sale is recognized. This estimate is based on historical returns data as well as current economic trends, changes in customer demands and the sell-through of products. If actual sales returns are significantly different than the recorded estimated amount, we may be exposed to material losses or gains. Assuming there had been a 10% increase over the recorded estimated sales returns reserve for the year ended December 31, 2025, pre-tax income would have decreased by approximately $6.4 million, net of the cost recovery of inventory. 38 Sell-through promotions such as price reductions and price concessions are short-term sales programs that are generally offered throughout the product’s life cycle, which is approximately two years, and are generally offered at the end of the product’s life cycle. We calculate an estimated rate related to these programs which is based on a combination of historical and forecasted data. We record a reduction to net sales using this rate at the time of the sale and monitor this rate against actual results and forecasted estimates. Adjustments to the rate are made as necessary in order to reflect the amount of consideration we expect to receive from our customers. If the actual amount of variable consideration is significantly different than our accrued estimates, we may be exposed to adjustments to revenue that could be material. Assuming there had been a 10% increase in the rate used to record sales program incentives, pre-tax income for the year ended December 31, 2025 would have decreased by approximately $1.5 million. Excess and Obsolescence Reserves Inventories are recorded at the lower of cost or net realizable value, which includes a reserve for excess, obsolete and/or unmarketable inventory. We estimate this reserve based upon current inventory levels, sales trends and historical experience as well as our estimates of market conditions and forecasts of future product demand, all of which are subject to change. In addition, we consider inventory aging, forecasted consumer demand and pricing, regulatory (USGA and R&A) rule changes, the promotional environment and technological obsolescence, all of which require a significant amount of assumptions and judgment. If these estimates are inaccurate or change, we may be exposed to adjustments to our inventory reserve which could materially impact our operating results. Assuming there had been a 10% increase in the inventory reserve for the year ended December 31, 2025, pre-tax income would have decreased by approximately $2.1 million. Business Combinations We apply the guidance within Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805, Business Combinations, when accounting for our acquisitions to determine whether a transaction is the acquisition of assets, or the acquisition of a business on the date of the acquisition. Asset acquisitions are accounted for by allocating the cost of the acquisition to the individual assets and liabilities assumed on a relative fair value basis; whereas the acquisition of a business requires us to recognize separately from goodwill the assets acquired and the liabilities assumed at the acquisition date fair values. Additionally, the acquisition of a business requires us to make significant estimates and judgments when assigning fair value to any assets and liabilities assumed. We may use, amongst other things, certain estimates related to expected future revenues, growth rates, cash flows, discount rates and uncertain tax positions and valuation allowances to assign a value to certain acquired assets. If we receive new information within the 12 month allowable measurement period about facts and circumstances that existed as of the acquisition date that, if known, would have affected the amounts recognized as of that date, we may adjust the purchase price allocation in the reporting period in which the amounts are determined. Any subsequent adjustments recorded after the conclusion of the allowable 12 month measurement period or final determination of the values of assets acquired or liabilities assumed are recorded to our consolidated statements of operations. Our estimates of fair value are based upon assumptions we believe to be reasonable at that time, but which are inherently uncertain and unpredictable. As a result, actual results may differ from estimates. Assets Held for Sale and Discontinued Operations A business is classified as held for sale when management having the authority to approve the action commits to a plan to sell the business, the business is available for immediate sale in its present condition and an active program to locate a buyer has been initiated. Additionally, the sale must be probable to occur during the next 12 months at a price that is reasonable in relation to its current fair value and actions required to complete the plan indicate it is unlikely significant changes to the plan will be made or the plan will be withdrawn. A business classified as held for sale is recorded at the lower of (i) its carrying amount and (ii) estimated fair value less costs to sell. When the carrying amount of the business exceeds its estimated fair value less costs to sell, a loss is recognized and updated each reporting period as appropriate. Assets held for sale are not further depreciated or amortized once such a determination is reached. The results of operations of businesses classified as held for sale are reported as discontinued operations if the disposal represents a strategic shift that will have a major effect on the entity’s operations and financial results. When a business is identified for discontinued operations reporting: (i) results for prior periods are retrospectively reclassified as discontinued operations; (ii) results of operations are reported in a single line, net of tax, in the consolidated statement of operations; and (iii) assets and liabilities are retrospectively reclassified as assets and liabilities of discontinued operations in the consolidated balance sheets starting in the period in which the business is classified as held for sale. 39 During 2025, we entered into an agreement to sell a 60% stake in the Topgolf and Toptracer businesses and we completed a sale of 100% of the outstanding equity interests of the Jack Wolfskin business. We determined the disposals represent a strategic shift that will have a major effect on our operations and financial results. As such, the results of Topgolf and Jack Wolfskin are presented as discontinued operations in the consolidated statements of operations for all periods presented and their related assets and liabilities as assets and liabilities of discontinued operations in the accompanying consolidated balance sheets for all periods presented. We ceased depreciating and amortizing our long-lived assets and intangible assets for both the Topgolf and Jack Wolfskin businesses when they met the held for sale criteria, which primarily includes property and equipment, right-of-use assets and amortizing intangible assets. In addition, we determined that the carrying amount of the Topgolf disposal group exceeded its fair value less cost to sell, which was determined using the equity value of Topgolf in connection with the sale, and recorded a write-down on the related assets and liabilities of $143.1 million within discontinued operations, net of tax on the consolidated statement of operations. Also, in connection with the sale of the Jack Wolfskin business, we recognized a pre-tax loss of $26.2 million. See Note 4. “Discontinued Operations” in the Notes to Consolidated Financial Statements in this Form 10-K for additional information. Impairment of Goodwill and Intangible Assets In accordance with FASB ASC 350, Intangibles—Goodwill and Other, we evaluate the recoverability of our goodwill and indefinite-lived intangible assets at least annually or more frequently whenever indicators are present that the carrying amounts of these assets may not be fully recoverable. To determine fair value, we use discounted cash flow estimates, quoted market prices, royalty rates when available and independent appraisals as appropriate. These estimates are subjective in nature and involve significant uncertainties and judgments. We use our best judgment based on current facts and circumstances related to our business when making these estimates, however, if actual results are not consistent with our estimates and assumptions used in calculating future cash flows and asset fair values, we may be exposed to impairment losses that could be material. An impairment loss is measured as the excess of the carrying amount of the asset over its estimated fair value. An impairment loss is recorded as a reduction to the carrying value of the asset and a charge to earnings in the period in which the impairment loss occurred. We perform our goodwill impairment assessment at the reporting unit level using a combination of an income approach and a market approach. The income approach valuation method requires us to make projections of revenue, gross margin, operating expenses, and working capital over a multi-year period, and also includes weighted-average cost of capital estimates, which reflect the relative risk of an investment. The market approach valuation method determines fair value by utilizing earnings multiples of comparable public companies or interests, which reflect the market in which each relative reporting unit operates, as well as recent comparable market transactions. We did not record any impairments on goodwill during the year ended December 31, 2025. For our indefinite-lived intangible assets, which primarily consist of our trade names, we estimate fair value based on an income approach using the relief-from-royalty method which assumes that, in lieu of ownership, a third-party would be willing to pay a royalty in order to derive a benefit from the trade name. This approach includes reviewing current licensing agreements, market benchmarking and performing branded product profitability assessments, among other factors, to assign an estimated royalty rate. Once a royalty rate is assigned, a discount rate is applied to the estimated future cash flows of the asset in order to determine the fair value of the trade names. As a result of our intangible asset impairment assessment performed as of December 31, 2025, we determined that the fair value of our Topgolf tradename was impaired, and as a result, we recorded an impairment loss of $284.0 million to write down the Topgolf tradename to its new estimated fair value. See Note 4. “Discontinued Operations” in the Notes to Consolidated Financial Statements in this Form 10-K for additional information. Income Taxes Our income tax provision/benefit and related income tax assets and liabilities are based on a combination of actual and expected future income, U.S. federal and foreign statutory income tax rates, and tax regulations and planning opportunities in the jurisdictions in which we operate. Significant judgment is required when interpreting the applicable tax laws and regulations in such jurisdictions, evaluating our uncertain tax positions, and assessing the likelihood of realizing tax benefits. We accrue an amount for our estimate of additional tax liability, including interest and penalties in income tax provision, for any uncertain tax positions taken or expected to be taken in an income tax return. We review and update the accrual for uncertain tax positions as more definitive information becomes available. Actual results could differ from those judgments, and changes in judgments could materially affect our consolidated financial statements. 40 Certain income and expense items are accounted for differently for financial reporting and income tax purposes where tax regulations may require certain items to be included in our tax return at different times than when these items may be reflected in our financial statements. As a result, the income tax provision or benefit reflected in our consolidated statements of operations may differ from our tax returns filed with the applicable taxing authorities. These differences may be permanent or temporary, depending on their nature and the applicable tax regulations related to them, and as such, may create deferred income tax assets and liabilities, which are recognized on our consolidated balance sheet. Deferred income tax assets generally represent items that can be used as a tax deduction or credit in future tax returns for which we have already recorded a tax benefit in our consolidated statements of operations. We may record a valuation allowance to reduce our deferred income tax assets if, based on all available evidence, we believe that some portion of the tax benefit is not more likely than not to be realized. For further information, see Note 12. “Income Taxes” in the Notes to Consolidated Financial Statements in this Form 10-K. Recent Accounting Pronouncements Information regarding recent accounting pronouncements is contained in Note 2. “Summary of Significant Accounting Policies” in the Notes to Consolidated Financial Statements in this Form 10-K, which is incorporated herein by this reference. Discussion of Non-GAAP Measures In addition to the financial results contained in this report, which have been prepared and presented in accordance with GAAP, we have also included supplemental information concerning our financial results on a non-GAAP basis. This non-GAAP information includes the following: •A constant currency measure on net sales in order to demonstrate the impact of foreign currency fluctuations on these results. This information represents an estimate for comparative purposes and is calculated by taking current period local currency results and translating them into U.S. dollars based on the foreign currency exchange rates for the applicable comparable prior period. •Net income and diluted earnings per share excluding the non-cash amortization associated with acquired intangible assets, including acquired customer and distributor relationships and acquired developed technology related to our acquisitions of TravisMathew and OGIO (collectively, the “Acquisitions”). While the amortization of these assets is excluded from our calculation of non-GAAP net income, the revenue, operating costs and associated acquired assets that contribute to the revenue generation associated with these acquired companies is reflected in our calculation of non-GAAP net income. •Net income and diluted earnings per share excluding certain non-cash and non-recurring charges, as further detailed below. In addition, we have added back to certain of our non-GAAP results interest expenses relating to debt incurred at the corporate level that are categorized under discontinued operations in order to burden continuing operations with the full impact of the Company’s total term debt. We have included information in this report to reconcile non-GAAP information for the periods presented to the most directly comparable GAAP information. We use such non-GAAP information for financial and operational decision-making purposes and as a means to evaluate the underlying performance of our business and in forecasting our business. Non-GAAP information in this report should not be considered in isolation or as a substitute for any measure derived in accordance with GAAP, and may also be inconsistent with the manner in which similar measures are derived or used by other companies. We believe that the presentation of such non-GAAP information, when considered in conjunction with the most directly comparable GAAP information, provides additional useful information for investors in their assessment of the underlying performance of our business. 41 Current Economic Conditions Macroeconomic Factors Our products and services are discretionary purchases for consumers. As a result, demand for our products and services could be impacted by downturns in the economy and the corresponding impact on discretionary consumer and corporate spending. Macroeconomic factors including sustained inflation and high interest rates continue to put downward pressure on consumer and corporate discretionary spending, in addition to the recent increase in tariffs. While we generally try to mitigate the impact of such macroeconomic factors by closely monitoring changes in consumer retail spending behavior and through the implementation of various strategic initiatives, the persistence of these trends may have an adverse impact on our operating results depending on the severity and length of the changes. Tariffs In 2025, the U.S. government implemented reciprocal tariffs on many countries, including many jurisdictions in which we do business. The U.S. government has announced and rescinded multiple tariffs on multiple foreign jurisdictions, which has increased uncertainty regarding the ultimate effect of tariffs on economic conditions. The reciprocal tariffs implemented in 2025 increased the costs for our products, product components and raw materials, a significant amount of which we source from outside the United States, including Vietnam, Taiwan, Mexico, Bangladesh and other regions. On February 20, 2026, the United States Supreme Court issued a ruling striking down certain tariffs previously imposed under the International Emergency Economic Powers Act of 1977 (“IEEPA”). Following the Supreme Court’s decision, President Trump stated that he intends to use other authorities to invoke other laws to collect tariffs and announced new tariffs on imports from all countries. There remains substantial uncertainty regarding the duration of existing and newly announced tariffs, potential changes or pauses to such tariffs, tariff levels, and whether further additional tariffs or other retaliatory actions may be imposed, modified, or suspended. If the U.S. government or other governments levy additional tariffs, or if governments continue to generate uncertainty regarding tariffs, the adverse impacts to the costs for, and availability of, our products, product components and raw materials, may continue to increase. Further, retaliatory tariffs may increase the costs of selling our products in foreign jurisdictions. As a result of tariff costs, we may need to raise our prices to pass costs on to customers, which may not be possible, or may decrease customer demand for our products. The near- and long-term impacts from these tariffs on our business are difficult to predict and depend on the amount, duration, scope and nature of the increases, however, we do expect tariffs to have a negative impact on our business and results of operations in and beyond 2026. We are actively monitoring the impact of any further tariffs that become effective, as well as any potential retaliatory actions by other countries, and are continuing to look for ways to mitigate these higher costs, including continuing to optimize operations and accelerating existing cost reduction and margin improvement programs. Nonetheless, the increases in U.S. and other countries’ tariffs could have a material adverse effect on our financial condition and results of operations, including as a result of higher inflation in the markets in which we operate, an economic slowdown or general economic uncertainty. Foreign Currency A significant portion of our business is conducted outside of the United States in currencies other than the U.S. dollar. Therefore, we enter into foreign currency forward contracts to mitigate the effects that changes in foreign currency rates may have on our financial results. While these foreign currency forward contracts can mitigate the effects of changes in foreign currency rates in the short-term, they do not eliminate those effects, which can be significant, and they do not mitigate their effects over the long-term. These effects include (i) the translation of results denominated in foreign currency into U.S. dollars for reporting purposes, (ii) the mark-to-market adjustments of certain intercompany balance sheet accounts denominated in foreign currencies and (iii) the mark-to-market adjustments of our foreign currency forward contracts. In general, our overall financial results are affected positively by a weaker U.S. dollar and are affected negatively by a stronger U.S. dollar as compared to the foreign currencies in which we conduct business. Fluctuations in foreign currencies had a favorable impact on international net sales of $0.6 million for the year ended December 31, 2025, relative to the same period in the prior year, on a constant currency basis. 42 Inflation Inflationary pressure may contribute to the increase in the cost of our products as well as operating costs. While we generally may be able to minimize the impact of inflationary pressures through higher prices or other initiatives, the length and severity of these conditions are unpredictable, and should conditions persist and/or worsen, such inflationary pressures may have an adverse effect on our operating expenses. Further, we may not be able to offset these increased costs through price increases. As a result, our cash flows and results of operations could be adversely affected. Segment and Related Information Our products, services and brands are reported under two operating segments: Golf Equipment, which includes the operations of our golf clubs and golf balls business; and Apparel, Gear and Other, which includes the operations of our soft goods business marketed under the Callaway, TravisMathew and OGIO brand names. For further detail related to our operating segments, products and seasonality, see “Part I, Item 1. Business – Overview” in this Form 10-K. 43 Results of Operations for Fiscal Year 2025 Compared to Fiscal Year 2024 We have reclassified certain prior-year amounts to conform to the current year’s presentation. Unless otherwise specified, our discussion below reflects continuing operations only. Prior period financial information related to discontinued operations has been reclassified and separately presented in the consolidated financial statements and accompanying notes to conform to the current period presentation. Net sales and operating segment results (in millions, except percentages) Net sales for the year ended December 31, 2025 decreased $17.6 million, or 0.8% as compared to the year ended December 31, 2024 due to a decrease in the Apparel, Gear and Other operating segment, impacted by soft macroeconomic conditions primarily in the U.S. and Asia, while Golf Equipment sales were approximately flat. Segment operating income decreased $25.3 million or 8.9% driven by declines in both our Apparel, Gear and Other and Golf Equipment operating segment. Year Ended December 31, Increase/(Decrease) Non-GAAP Constant Currency Growth 2025 vs. 2024 (1) 2025 2024 Dollars Percent Percent Net sales: Golf clubs $ 1,052.9  $ 1,060.9  $ (8.0) (0.8) % (0.9)% Golf balls 322.2  321.8  0.4  0.1  % 0.1% Golf Equipment 1,375.1  1,382.7  (7.6) (0.5) % (0.7)% Apparel 398.8  405.6  (6.8) (1.7) % (1.3)% Gear, accessories, & other 286.2  289.4  (3.2) (1.1) % (1.0)% Apparel, Gear and Other 685.0  695.0  (10.0) (1.4) % (1.2)% Total net sales $ 2,060.1  $ 2,077.7  $ (17.6) (0.8) % (0.9)% Segment operating income (loss): Golf Equipment 170.1  183.7  (13.6) (7.4) % Apparel, Gear and Other 87.8  99.5  (11.7) (11.8) % Total segment operating income (loss) 257.9  283.2  (25.3) (8.9) % Non-recurring items (2) (6.0) (8.4) 2.4  (28.6) % Corporate costs and expenses (3) (123.8) (121.9) (1.9) 1.6  % Total operating income 128.1  152.9  (24.8) (16.2) % Interest expense, net (60.6) (63.0) 2.4  (3.8) % Other income, net 20.1  21.6  (1.5) (6.9) % Income (loss) from continuing operations before income taxes $ 87.6  $ 111.5  $ (23.9) (21.4) % (1) Calculated by applying 2024 exchange rates to 2025 reported sales in regions outside the U.S. (2) Includes non-cash amortization of acquired intangible assets and non-recurring expenses primarily consisting of restructuring and reorganization charges, other non-recurring losses and costs associated debt modifications, the integration of new IT systems stemming from acquisitions, and non-recurring costs related to a cybersecurity incident. (3) Corporate costs and expenses include corporate general and administrative expenses not utilized by management in determining segment profitability. Golf Equipment Net sales During the year ended December 31, 2025, net sales in our Golf Equipment operating segment decreased $7.6 million (0.5%) compared to the same period in 2024 primarily due to declines in golf club sales related to packaged set volumes and soft market conditions in Korea. 44 Operating income During the year ended December 31, 2025, Golf Equipment segment operating income decreased $13.6 million (7.4%) compared to the same period in 2024 primarily due to lower annual incentive compensation expense in 2024 and unfavorable impacts of approximately $22.0 million from tariffs, partially offset by an $8.2 million lease termination incentive received in Japan. Apparel, Gear and Other Net sales During the year ended December 31, 2025, net sales in our Apparel, Gear and Other segment decreased $10.0 million (1.4%) compared to the same period in 2024, primarily due to a decline in sales of apparel and gear resulting from soft market conditions globally, partially offset by the continued expansion of TravisMathew product lines and the opening of new retail stores. Operating income During the year ended December 31, 2025, Apparel, Gear and Other segment operating income decreased $11.7 million (11.8%) as compared to the same period in 2024 primarily driven by the decline in net sales and the unfavorable impacts from tariffs, partially offset by a decline in operating expenses mostly driven by a lease termination incentive received in Japan combined with cost savings initiatives. Sales by Geographic Region We sell our Golf Equipment and Apparel, Gear and Other products in the United States and internationally, with our principal international regions being Europe and Asia. Apparel, Gear and Other product sales for our TravisMathew business are primarily concentrated in the United States. Net sales by major geographic region for the periods presented below were as follows (in millions, except percentages): Year Ended December 31, Increase/(Decrease) Non-GAAP Constant Currency Growth 2025 2024 Dollars Percent Percent Net sales: United States $ 1,363.3  $ 1,381.1  $ (17.8) (1.3) % (1.3)% Europe 203.8  182.1  21.7  11.9  % 8.7% Asia 363.1  379.1  (16.0) (4.2) % (3.7)% Rest of World 129.9  135.4  (5.5) (4.1) % (1.7)% Total net sales $ 2,060.1  $ 2,077.7  $ (17.6) (0.8) % (0.9)% United States During the year ended December 31, 2025, net sales in the United States decreased $17.8 million (1.3%) compared to the year ended December 31, 2024. The decrease was primarily due to lower sales volumes of golf clubs and travel gear. Europe During the year ended December 31, 2025, net sales in Europe increased $21.7 million (11.9%) compared to the year ended December 31, 2024. The increase was primarily driven by increases in golf club and golf ball sales. Asia During the year ended December 31, 2025, net sales in Asia decreased $16.0 million (4.2%) compared to the year ended December 31, 2024. The decrease was primarily due to soft demand in the apparel market in Korea and Japan. 45 Rest of World During the year ended December 31, 2025, net sales in Rest of World decreased $5.5 million (4.1%) compared to the year ended December 31, 2024. The decrease was primarily due to lower golf equipment sales in Canada and Australia combined with unfavorable foreign currency impacts. Gross Profit (in millions, except percentages) Year Ended December 31, Increase/(Decrease) 2025 2024 Dollars Percent Net sales $ 2,060.1  $ 2,077.7  $ (17.6) (0.8) % Cost of sales 1,192.5  1,190.7  1.8  0.2  % Gross profit $ 867.6  $ 887.0  $ (19.4) (2.2) % Gross margin 42.1  % 42.7  % Cost of sales Our cost of sales is variable in nature and fluctuates relative to sales volumes. Cost of sales includes raw materials and component costs, direct labor and manufacturing overhead, inbound freight, duties, tariffs and shipping charges, and depreciation and amortization directly related to manufacturing and distribution. Gross profit and gross margin During the year ended December 31, 2025, gross profit decreased by $19.4 million (2.2%) as compared to the year ended December 31, 2024. Gross profit as a percent of net sales (“gross margin”) decreased to 42.1% for the year ended December 31, 2025 compared to 42.7% for the year ended December 31, 2024. The decrease in gross profit is primarily due to lower sales in our Apparel, Gear and Other and Golf Equipment operating segments combined with the decrease in gross margins from the unfavorable impacts of tariffs. Operating Expenses (in millions, except percentages) Year Ended December 31, Increase/(Decrease) 2025 2024 Dollars Percent Operating expenses: Selling, general and administrative expense $ 674.0  $ 670.0  $ 4.0  0.6  % Research and development expense 65.5  64.1  1.4  2.2  % Total operating expenses $ 739.5  $ 734.1  $ 5.4  0.7  % Selling, general and administrative expense Selling, general and administrative (“SG&A”) expenses primarily consist of employee costs, advertising and promotional expense, legal and professional fees, tour expenses, travel expenses, building and rent expenses, depreciation and amortization charges (excluding those related to manufacturing and distribution), and other miscellaneous expenses. During the year ended December 31, 2025, SG&A expenses increased by $4.0 million (0.6%) as compared to the year ended December 31, 2024. The increase was primarily due to increases in employee costs due to a lower annual cash incentive compensation expense paid in 2024 and increased tour expenses from signing and win bonuses, partially offset by a $12.0 million gain recognized from a lease termination incentive in the first quarter of 2025 in Japan and reductions in spend on professional fees and cost savings initiatives. Research and development expense Research and development expenses are comprised of costs to design, develop, test or improve our products and technology, and primarily include employee costs of personnel engaged in research and development activities, research costs and depreciation expense. During the year ended December 31, 2025, research and development expense increased $1.4 million (2.2%) as compared to the year ended December 31, 2024. The increase was primarily due to higher annual incentive compensation expense partially offset by a decrease in professional fees. 46 Other Income and Expense (in millions, except percentages) Year Ended December 31, Increase/(Decrease) 2025 2024 Dollars Percent Other income and expenses: Interest expense, net $ (60.6) $ (63.0) $ 2.4  (3.8) % Other income, net 20.1  21.6  (1.5) (6.9) % Total other expense, net $ (40.5) $ (41.4) $ 0.9  (2.2) % Other Income and Expense Interest expense Interest expense, net decreased $2.4 million (3.8%) during the year ended December 31, 2025 as compared to the year ended December 31, 2024, primarily due to decreased interest expense on our term loan as a result of the debt repricing that took place during the first quarter of 2024 combined with lower outstanding balances resulting from a $50.0 million discretionary repayment made during the second quarter of 2024. Other income Other income, net decreased by $1.5 million (6.9%) during the year ended December 31, 2025, as compared to the year ended December 31, 2024, primarily due to an unfavorable change in net losses and gains from foreign currency transactions and hedging activity, partially offset by increased dividend income on our money market accounts. Income Taxes Income tax expense Our income tax expense increased $30.7 million to $48.8 million during the year ended December 31, 2025 as compared to $18.1 million in 2024. As a percentage of pre-tax income, our effective tax rate for the year ended December 31, 2025 increased to 55.7% compared to 16.2% in 2024. Effective tax rate Our effective tax rate for the year ended December 31, 2025 was higher primarily due to an increase in our valuation allowance against certain deferred tax assets combined with an increase in global minimum taxes. Excluding the impact of the increased valuation allowance and global minimum taxes in 2025, our effective tax rate would have been 19.2% and 13.3% for the years ended December 31, 2025 and 2024, respectively. For further discussion on our income taxes, see Note 12. “Income Taxes” in the Notes to Consolidated Financial Statements in this Form 10-K. Discontinued Operations Our loss from discontinued operations improved $1,093.0 million to a loss of $448.1 million during the year ended December 31, 2025, as compared to a loss of $1,541.1 million in 2024. The improvement was primarily due to $1,168.0 million decrease in goodwill and trade name impairment charges related to the Topgolf business and a $55.0 million increase in income tax benefit, partially offset by a $143.1 million loss on sale of Topgolf. Additionally, due to the amendment of our Term Loan B requiring a mandatory repayment of $500.0 million upon the consummation of the sale of Topgolf, we attributed a portion of the interest expense incurred on our Term Loan B to discontinued operations. Accordingly, for the years ended December 31, 2025 and 2024, we allocated interest expense of $38.1 million and $43.5 million, respectively, from continuing operations to discontinued operations. For further discussion on our discontinued operations, see Note 4. “Discontinued Operations” in the Notes to Consolidated Financial Statements in this Form 10-K. 47 Net Income, Diluted Earnings Per Share and Reconciliation of Non-GAAP Measures The following table presents a reconciliation of our GAAP results for the years ended December 31, 2025 and 2024 to our non-GAAP results for the same periods (in millions, except per share information): Year Ended December 31, 2025 Year Ended December 31, 2024 Net Income From Continuing Operations Diluted Earnings (Loss) per share (4) (5) Net Income From Continuing Operations Diluted Earnings (Loss) per share (4) (5) GAAP net income from continuing operations $ 38.8  $ 0.21  $ 93.4  $ 0.50  Non-cash amortization of acquired intangibles (1) (0.5) —  (0.5) —  Interest expense and non-recurring items (2) 24.9 0.13  23.6 0.13  Tax valuation allowance (3) (24.0) (0.13) — —  Non-GAAP net income from continuing operations $ 38.4  $ 0.21  $ 70.3  $ 0.38  GAAP diluted weighted-average shares outstanding 185.7  199.3  Non-GAAP diluted weighted-average shares outstanding 185.7  184.6  (1) Includes the amortization of acquired intangible assets, including customer and distributor relationships, reacquired distribution rights and acquired developed technology related to our Acquisitions. See “Discussion of Non-GAAP Measures” for more information. (2) 2025 and 2024 amounts include the addition of $38.2 million and $43.5 million, respectively, of term loan interest expense that was incurred at the corporate level and included in discontinued operations in order to burden continuing operations with the effect of total term loan interest expense. In addition, 2025 reflects the exclusion of $5.5 million of restructuring charges, and 2024 reflects the exclusion of $4.7 million in charges related to our 2024 debt repricing, $1.2 million of restructuring charges, $2.1 million in IT integration and implementation costs primarily related to the merger with Topgolf, $1.4 million in costs related to a cybersecurity incident, and $1.3 million of costs incurred to centralize warehousing and distribution operations to achieve synergies in connection with our acquisitions. (3) Represents valuation allowances established on certain U.S. deferred tax assets related to continuing operations in connection with the sale of our Topgolf business. (4) Diluted earnings per share is calculated using the if-converted method, which excludes interest expense related to the Convertible Notes from the calculation of net income in periods where income is reported. During the year ended December 31, 2025, GAAP and Non-GAAP diluted weighted-average shares outstanding exclude the impact of the Convertible Notes, which were anti-dilutive for the period. During the year ended December 31, 2024, Non-GAAP diluted weighted-average shares outstanding exclude the impact of the Convertible Notes, which were anti-dilutive for the period. (5) When aggregated, diluted earnings per share amounts may not be additive due to rounding. GAAP net income from continuing operations Net income from continuing operations after taxes and diluted earnings per share for the year ended December 31, 2025 were $38.8 million and $0.21 per share, respectively, as compared to net income from continuing operations and diluted earnings per share of $93.4 million and $0.50 per share, respectively, for the year ended December 31, 2024. The decrease in net income from continuing operations was primarily due to a decrease in income from continuing operations as a result of lower net sales and unfavorable impacts of tariffs, in addition to an increase in the income tax provision from establishing valuation allowances on certain U.S. deferred tax assets. Non-GAAP net income from continuing operations On a non-GAAP basis, excluding the items described in the table above, our net income and diluted earnings per share for the for the year ended December 31, 2025 would have been $38.4 million and $0.21 per share, respectively, compared to $70.3 million and $0.38 per share, respectively, for the same period in 2024. The decrease in non-GAAP net income was primarily due to a decrease in income from continuing operations resulting from lower net sales combined with the unfavorable impact of tariffs, in addition to an increase in the income tax provision from establishing valuation allowances on certain U.S. deferred tax assets. Results of Operations for Fiscal Year 2024 Compared to Fiscal Year 2023 We have reclassified certain prior-year amounts to conform to the current-year’s presentation. Unless otherwise specified, our discussion below reflects continuing operations only. Prior period financial information, related to discontinued operations, has been reclassified and separately presented in the consolidated financial statements and accompanying notes to conform to the current period presentation. 48 Net sales and operating segment results (in millions, except percentages) Net sales for the year ended December 31, 2024 decreased $55.0 million or 2.6% (1.6% on a constant currency basis) as compared to the year ended December 31, 2023 due primarily to a (13.1)% decline in our Apparel, Gear and Other operating segment. Segment operating income decreased $45.0 million or 13.7% primarily due to decreases in our Apparel, Gear and Other operating segment and our Golf Equipment operating segment. Increase/(Decrease) Non-GAAP Constant Currency Growth 2024 vs. 2023 (1) 2024 2023 Dollars Percent Percent Net sales: Golf clubs $ 1,060.9  $ 1,073.4  $ (12.5) (1.2) % —% Golf balls 321.8  314.5  7.3  2.3  % 2.7% Golf Equipment 1,382.7  1,387.9  (5.2) (0.4) % 0.6% Apparel 405.6  411.7  (6.1) (1.5) % (0.2)% Gear, accessories, & other 289.4  333.1  (43.7) (13.1) % (12.4)% Apparel, Gear and Other 695.0  744.8  (49.8) (6.7) % (5.7)% Total net sales $ 2,077.7  $ 2,132.7  $ (55.0) (2.6) % (1.6)% Segment operating income: Golf Equipment 183.7  193.4  (9.7) (5.0) % Apparel, Gear and Other 99.5  134.8  (35.3) (26.2) % Total segment operating income 283.2  328.2  (45.0) (13.7) % Non-recurring items (2) (8.4) (14.4) 6.0  (41.7) % Corporate costs and expenses (3) (121.9) (119.7) (2.2) 1.8  % Total operating income 152.9  194.1  (41.2) (21.2) % Interest expense, net (63.0) (70.7) 7.7  (10.9) % Other income, net 21.6  6.1  15.5  254.1  % Income from continuing operations before income taxes $ 111.5  $ 129.5  $ (18.0) (13.9) % (1) Calculated by applying 2023 exchange rates to 2024 reported sales in regions outside the U.S. (2) Includes non-cash amortization of acquired intangible assets and non-recurring expenses primarily consisting of restructuring and reorganization charges, other non-recurring losses and costs associated debt modifications, the integration of new IT systems stemming from acquisitions, and non-recurring costs related to a cybersecurity incident. (3) Corporate costs and expenses include corporate general and administrative expenses not utilized by management in determining segment profitability. Golf Equipment Net sales During the year ended December 31, 2024, net sales in our Golf Equipment operating segment decreased $5.2 million (0.4%) compared to the same period in 2023 primarily due to unfavorable changes in foreign currency exchange rates. Operating income During the year ended December 31, 2024, Golf Equipment segment operating income decreased $9.7 million (5.0%) compared to the same period in 2023 primarily due to softer market conditions in Korea combined with higher freight costs and unfavorable foreign currency exchange rates. 49 Apparel, Gear and Other Net sales During the year ended December 31, 2024, net sales in our Apparel, Gear and Other operating segment decreased $49.8 million (6.7%) compared to the same period in 2023, primarily due to decreases in sales of Callaway and TravisMathew soft goods. The decrease in sales for Callaway soft goods was primarily due to softer market conditions in Korea combined with the impact of unfavorable foreign currency exchange rates primarily in Japan. The decrease at TravisMathew was primarily due to an expected decrease in corporate channel sales resulting from a sell-in to a distribution partner during the first quarter of 2023, which did not recur in 2024. These declines were partially offset by direct-to-consumer growth in the retail and e-commerce channels at TravisMathew due to product line expansion and the opening of new retail stores. Operating income During the year ended December 31, 2024, Apparel, Gear and Other segment operating income decreased $35.3 million (26.2%) compared to the same period in 2023 primarily driven by decreases in sales and operating expense deleverage. Sales by Geographic Region We sell our Golf Equipment and Apparel, Gear and Other products in the United States and internationally, with our principal international regions being Europe and Asia. Apparel, Gear and Other product sales for our TravisMathew business are primarily concentrated in the United States. Net sales by major geographic region for the periods presented below were as follows (in millions, except percentages): Increase/(Decrease) Non-GAAP Constant Currency Growth 2024 2023 Dollars Percent Percent Net sales: United States $ 1,381.1  $ 1,395.7  $ (14.6) (1.0) % (1.0)% Europe 182.1  173.4  8.7  5.0  % 3.5% Asia 379.1  436.6  (57.5) (13.2) % (7.9)% Rest of World 135.4  127.0  8.4  6.6  % 7.6% Total net sales $ 2,077.7  $ 2,132.7  $ (55.0) (2.6) % (1.6)% United States During the year ended December 31, 2024, net sales in the United States decreased $14.6 million (1.0%) compared to the year ended December 31, 2023. The decrease was primarily due to a decline in sales of TravisMathew products in the corporate wholesale channel. Europe During the year ended December 31, 2024, net sales in Europe increased $8.7 million (5.0%) compared to the year ended December 31, 2023. The increase was primarily driven by increases in golf club sales. Asia During the year ended December 31, 2024, net sales in Asia decreased $57.5 million (13.2%) compared to the year ended December 31, 2023. The decrease was primarily due to softer demand in the apparel market in Korea combined with the unfavorable impact of changes in foreign currency both in Japan and Korea. 50 Rest of World During the year ended December 31, 2024, net sales in Rest of World increased $8.4 million (6.6%) compared to the year ended December 31, 2023. The increase was primarily due to strong performance in Australia and Canada for our Golf Equipment and Apparel, Gear and Other products, partially offset by the unfavorable impact of changes in foreign currencies. Gross Profit (in millions, except percentages) Year Ended December 31, Increase/(Decrease) 2024 2023 Dollars Percent Net sales $ 2,077.7  $ 2,132.7  $ (55.0) (2.6) % Cost of sales 1,190.7  1,205.6  (14.9) (1.2) % Gross profit $ 887.0  $ 927.1  $ (40.1) (4.3) % Gross margin 42.7  % 43.5  % Cost of sales Our cost of sales is variable in nature and fluctuates relative to sales volumes. Cost of sales includes raw materials and component costs, direct labor and manufacturing overhead, inbound freight, duties and shipping charges, and depreciation and amortization. Gross profit and gross margin During the year ended December 31, 2024, gross profit decreased by $40.1 million (4.3%) as compared to the year ended December 31, 2023. Gross margin decreased to 42.7% for the year ended December 31, 2024 compared to 43.5% for the year ended December 31, 2023. The decrease in gross profit is primarily due to lower sales in our Apparel, Gear and Other and Golf Equipment operating segments combined with the decrease in gross margins due to unfavorable impacts from freight and shipping charges. Operating Expenses (in millions, except percentages) Increase/(Decrease) 2024 2023 Dollars Percent Operating expenses: Selling, general and administrative expense $ 670.0  $ 671.2  $ (1.2) (0.2) % Research and development expense 64.1  61.8  2.3  3.7  % Total operating expenses $ 734.1  $ 733.0  $ 1.1  0.2  % Selling, general and administrative expense Selling, general and administrative (“SG&A”) expenses primarily consist of employee costs, advertising and promotional expense, legal and professional fees, tour expenses, travel expenses, building and rent expenses, depreciation and amortization charges (excluding those related to manufacturing and distribution), and other miscellaneous expenses. During the year ended December 31, 2024, SG&A expenses decreased by $1.2 million (0.2%) as compared to the year ended December 31, 2023. The decrease was primarily a $6.7 million decrease in tour player expenses and ambassador endorsement agreements and planned decreases in television and digital advertising expenditures related to cost savings initiatives. The decreases were partially offset by incremental lease expenses related to the expansion of our TravisMathew business and increases in computer software and licensing costs. Research and development expense Research and development expenses are comprised of costs to design, develop, test or improve our products and technology, and primarily include employee costs of personnel engaged in research and development activities, research costs and depreciation expense. 51 During the year ended December 31, 2024, research and development expense increased $2.3 million (3.7%) as compared to the year ended December 31, 2023. The increase was primarily due to increases in computer software and license-related costs and increases in professional fees. Other Income and Expense (in millions, except percentages) Increase/(Decrease) 2024 2023 Dollars Percent Other income and expenses: Interest expense, net $ (63.0) $ (70.7) $ 7.7  (10.9) % Other income, net 21.6  6.1  15.5  n/m Total other expense, net $ (41.4) $ (64.6) $ 23.2  (35.9) % Other Income and Expense Interest expense Interest expense, net decreased $7.7 million (10.9%) during the year ended December 31, 2024 as compared to the year ended December 31, 2023, primarily due to decreased interest expense on our term loan as a result of the debt repricing that took place during the first quarter of 2024. Other income Other income, net increased by $15.5 million during the year ended December 31, 2024, as compared to the year ended December 31, 2023, primarily due to increased dividend income from our money market accounts, a dividend received from our investment in Full Swing, and a decrease in transactional losses from repricing our long-term debt in 2024, partially offset by an unfavorable change in foreign currency transactions and hedging activity. Income Taxes Income tax expense Our income tax expense decreased $11.9 million to $18.1 million during the year ended December 31, 2024 as compared to $30.0 million in 2023. As a percentage of pre-tax income, our effective tax rate for the year ended December 31, 2024 decreased to 16.2% compared to 23.2% in 2023. Effective tax rate Our effective tax rate for the year ended December 31, 2024 was lower primarily due to various domestic and foreign taxes in 2023 that did not recur in 2024. For further discussion on our income taxes, see Note 12. “Income Taxes” in the Notes to Consolidated Financial Statements in this Form 10-K. Discontinued Operations Our loss from discontinued operations increased $1,536.6 million to $1,541.1 million during the year ended December 31, 2024, as compared to $4.5 million in 2023, primarily due to a $1,452.0 million impairment loss on goodwill and intangible assets associated with the Topgolf business recognized in 2024, combined with a $46.7 million reduction in income tax benefits and an increase in interest expense. Additionally, due to the amendment of our Term Loan B requiring a mandatory repayment of $500.0 million upon the consummation of the sale of Topgolf, we attributed a portion of the interest expense incurred on our Term Loan B to discontinued operations. Accordingly, for the years ended December 31, 2024 and 2023, we allocated interest expense of $43.5 million and $36.8 million, respectively, from continuing operations to discontinued operations. For further discussion on our discontinued operations, see Note 4. “Discontinued Operations” in the Notes to Consolidated Financial Statements in this Form 10-K. 52 Net Income, Diluted Earnings Per Share and Reconciliation of Non-GAAP Measures The following table presents a reconciliation of our GAAP results for the years ended December 31, 2024 and 2023 to our non-GAAP results for the same periods (in millions, except per share information): Year Ended December 31, 2024 Year Ended December 31, 2023 Net Income From Continuing Operations Diluted Earnings (loss) per share (4) (5) Net Income From Continuing Operations Diluted Earnings (loss) per share (4) (5) GAAP net income from continuing operations $ 93.4  $ 0.50  $ 99.5  $ 0.53  Non-cash amortization of acquired intangibles (1) (0.5) —  (2.6) (0.01) Interest expense and non-recurring items (2) 23.6 0.13  11.5 0.05  Tax valuation allowance (3) — —  58.3 0.31  Non-GAAP net income from continuing operations $ 70.3  $ 0.38  $ 32.3  $ 0.17  GAAP diluted weighted-average shares outstanding 199.3  201.1  Non-GAAP diluted weighted-average shares outstanding 184.6  186.4  (1) Includes the amortization of acquired intangible assets, including customer and distributor relationships, reacquired distribution rights and acquired developed technology related to our Acquisitions. See “Discussion of Non-GAAP Measures” for more information. (2) 2024 amounts primarily include the addition of $43.5 million of term loan interest expense that was incurred at the corporate level and included in discontinued operations in order to burden continuing operations with the effect of total term loan interest expense and the exclusion of $4.7 million in charges related to our 2024 debt repricing, $1.2 million of restructuring charges, $2.1 million in IT integration and implementation costs primarily related to the merger with Topgolf, $1.4 million in costs related to a cybersecurity incident, and $1.3 million of costs incurred to centralize warehousing and distribution operations to achieve synergies in connection with our acquisitions. 2023 amounts primarily include the addition of $36.8 million of term loan interest expense that was incurred at the corporate level and included in discontinued operations in order to burden continuing operations with the effect of total term loan interest expense and the exclusion of $13.7 million in total charges related to our 2023 debt modification, $4.2 million in IT integration and implementation costs and $2.4 million in costs related to a cybersecurity incident. (3) Related to the release of tax valuation allowances that were recorded in connection with the merger with Topgolf. (4) Diluted earnings per share is calculated using the if-converted method, which excludes interest expense related to the Convertible Notes from the calculation of net income in periods where income is reported. During the years ended December 31, 2024 and 2023, Non-GAAP diluted weighted-average shares outstanding exclude the impact of the Convertible Notes, which were anti-dilutive for the period. (5) When aggregated, diluted earnings per share amounts may not be additive due to rounding. GAAP net income from continuing operations Net income from continuing operations and diluted earnings per share for the year ended December 31, 2024 was $93.4 million and $0.50 per share, respectively, as compared to net income from continuing operations and diluted earnings per share of $99.5 million and $0.53 per share, respectively, for the year ended December 31, 2023. The decline in net income from continuing operations was primarily due to the decreases in revenue from both of our operating segments, partially offset by a decrease in interest expense and income tax provision. Non-GAAP net income from continuing operations On a non-GAAP basis, excluding the items described in the table above, our net income from continuing operations and diluted earnings per share for the for the year ended December 31, 2024 would have been $70.3 million and $0.38 per share, respectively, compared to $32.3 million and $0.17 per share, respectively, for the same period in 2023. The increase in non-GAAP net income from continuing operations was primarily due to a $74.7 million decrease in income tax provision, partially offset by a $45.0 million decrease in segment operating income. 53 Financial Condition Cash and cash equivalents Our cash and cash equivalents increased $458.2 million to $903.2 million at December 31, 2025 from $445.0 million at December 31, 2024. The increase in cash and cash equivalents was primarily related to cash provided by operating activities of continuing operations of $219.7 million and cash provided by investing activities of continuing operations of $253.0 million which was driven by net proceeds from the sale of Jack Wolfskin of $286.0 million, partially offset by capital expenditures. The increases above were partially offset by net cash used in financing activities of continuing operations of $2.9 million. During the year ended December 31, 2025, we used our cash and cash equivalents to fund operations and purchase capital expenditures. We believe that our existing funds and existing sources of and access to capital and any future financings, as necessary, are adequate to fund our future operations. For further information related to our financing arrangements, see Note 7. “Financing Arrangements” in the Notes to Consolidated Financial Statements in Part IV, Item 15 and “Liquidity and Capital Resources” in Part II, Item 7 of this Form 10-K. Accounts receivable Our accounts receivable balance fluctuates throughout the year as a result of the general seasonality of our business, and is also affected by the timing of new product launches. With respect to our Golf Equipment business, accounts receivable are generally the highest during the first and second quarters during the seasonal peak in the golf industry, and generally decline significantly during the third and fourth quarters as a result of an increase in cash collections combined with lower seasonal sales. With respect to our Apparel, Gear and Other business, accounts receivable balances for our TravisMathew business are generally unaffected by seasonality while accounts receivable balances for our Callaway and OGIO soft good brands are subject to the same general seasonality as our golf equipment business. As of December 31, 2025, our net accounts receivable decreased $14.0 million to $123.2 million from $137.2 million as of December 31, 2024. The decrease is primarily due to decreases in net sales. Inventory Our inventory balance fluctuates throughout the year as a result of the general seasonality of our Golf Equipment business, and is also affected by the timing of new product launches. With respect to our Golf Equipment business, the buildup of inventory generally begins during the fourth quarter and continues into the first quarter and beginning of the second quarter in order to meet increased demand during the golf season. Inventory levels are also impacted by the timing of new product launches as well as the success of new products. With respect to our Apparel, Gear and Other business, inventory levels are generally unaffected by seasonality. Our inventory decreased by $2.9 million to $625.3 million as of December 31, 2025 compared to $628.2 million as of December 31, 2024. The decrease was primarily due to a decrease in in-transit inventory partially offset by buildup of inventory on hand to prepare for 2026 product launches. Liquidity and Capital Resources Liquidity Our principal sources of liquidity consist of our existing cash balances, funds expected to be generated from operations and funds from our credit facilities. Based upon our current cash balances, our estimates of funds expected to be generated from operations, as well as from current and projected availability under our current or future credit facilities, we believe that we will be able to finance current and planned operating requirements, capital expenditures, required debt repayments and contractual obligations and commercial commitments for at least the next 12 months from the issuance date of this Form 10-K. Our ability to generate sufficient positive cash flows from operations is subject to many risks and uncertainties, including future economic trends and conditions, demand for our products, supply chain challenges, price inflation, foreign currency exchange rates, and other risks and uncertainties applicable to us and our business (see “Risk Factors” contained in Part I, Item 1A in this Form 10-K). 54 Capital resources As of December 31, 2025, we had $1,245.1 million in cash and availability under our credit facilities, which is an increase of $451.2 million or 57% compared to December 31, 2024. On January 2, 2026, we made a $1,000.0 million partial repayment on our 2023 Term Loan B with the proceeds we received from the sale of our 60% equity share in the Topgolf and Toptracer businesses combined with cash on hand. The repayment consisted of a $500.0 million mandatory repayment pursuant to an amendment to the 2023 Term Loan B that we entered into in December 2025 and an additional $500.0 million discretionary repayment. Immediately following the closing of the Topgolf transaction and the completion of the partial repayment on our 2023 Term Loan B, on January 2, 2026 we were in a net cash position with approximately $680.0 million in cash and cash equivalents and approximately $480.0 million in gross debt. Information about our credit facilities and long-term borrowings is presented in Note 7. “Financing Arrangements” in the Notes to Consolidated Financial Statements in this Form 10-K and is incorporated herein by this reference. As of December 31, 2025, approximately 10% of our cash was held in regions outside of the United States. We continue to maintain our indefinite reinvestment assertion with respect to most jurisdictions in which we operate because of local cash requirements to operate our business. If we were to repatriate cash to the United States outside of settling intercompany balances, we may need to pay incremental foreign withholding taxes which, subject to certain limitations, generate foreign tax credits for use against our U.S. tax liability, if any. Additionally, we may need to pay certain state income taxes. Significant cash obligations We plan to utilize our liquidity (as described above) and our cash flows from business operations to fund our material cash requirements. The table below summarizes certain significant cash obligations as of December 31, 2025 that will affect our future liquidity (in millions): Payments Due By Period Total 2026 2027 - 2028 2029 - 2030 Thereafter Debt (1) $ 1,478.7  $ 775.6  $ 72.2  $ 628.8  $ 2.1  Interest payments (2) 209.6  52.6  100.1  56.6  0.3  Finance leases, including imputed interest (3) 0.9  0.3  0.4  0.2  —  Operating leases, including imputed interest (4) 297.9  36.1  65.8  58.5  137.5  Minimum lease payments for leases signed but not yet commenced (5) 12.9  0.7  2.1  2.5  7.6  Unconditional purchase obligations (6) 87.2  51.2  35.1  0.9  —  Uncertain tax contingencies (7) 1.3  —  0.5  —  0.8  Total $ 2,088.5  $ 916.5  $ 276.2  $ 747.5  $ 148.3  (1) Excludes unamortized debt discounts, unamortized debt issuance costs, and fair value adjustments. Includes $44.7 million of outstanding ABL borrowings. For further details related to long-term debt, see Note 7. “Financing Arrangements” in the Notes to Consolidated Financial Statements in this Form 10-K. On January 2, 2026, in connection with the sale of Topgolf, we made a $1,000.0 million partial repayment on our 2023 Term Loan B which consisted of a $500.0 million mandatory prepayment and a $500.0 million discretionary payment. (2) Long-term debt may have fixed or variable interest rates. For further details, see Note 7. “Financing Arrangements” in the Notes to Consolidated Financial Statements in this Form 10-K. (3) Represents future minimum payments under financing leases. For further details, see Note 6. “Leases” in the Notes to Consolidated Financial Statements in this Form 10-K. (4) Represents commitments for minimum lease payments under non-cancellable operating leases. For further details, see Note 6. “Leases” in the Notes to Consolidated Financial Statements in this Form 10-K. (5) Represents future minimum lease payments under lease agreements that have not yet commenced as of December 31, 2025 in relation to future TravisMathew retail stores. For further discussion, see Note 6. “Leases” in the Notes to Consolidated Financial Statements in this Form 10-K. (6) During the normal course of our business, we enter into agreements to purchase goods and services, including commitments for endorsement agreements with professional athletes and other endorsers, consulting and service agreements, and intellectual property licensing agreements pursuant to which we are required to pay royalty fees. The amounts listed above approximate the minimum purchase obligations we are obligated to pay under these agreements over the next five years and thereafter as of December 31, 2025. The actual amounts paid under some of the agreements may be higher or lower than these amounts. In addition, we also enter into unconditional purchase obligations with various vendors and suppliers of goods and services during the normal course of business through purchase orders or other documentation or that are undocumented except for an invoice. For further details, see Note 13. “Commitments & Contingencies” in the Notes to Consolidated Financial Statements in this Form 10-K. (7) Amounts represent current and non-current portions of uncertain income tax positions as recorded on our Consolidated Balance Sheets as of December 31, 2025. Amounts exclude uncertain income tax positions that we would be able to offset against deferred taxes. For further discussion, see Note 12. “Income Taxes” in the Notes to Consolidated Financial Statements in this Form 10-K. 55 During the normal course of business, we have made certain indemnities, commitments and guarantees under which we may be required to make payments in relation to certain transactions. These include (i) intellectual property indemnities to our customers and licensees in connection with the use, sale and/or license of our products or trademarks, (ii) indemnities to various lessors in connection with facility leases for certain claims arising from such facilities or leases, (iii) indemnities to vendors and service providers pertaining to the goods or services provided to us or based on the negligence or willful misconduct, and (iv) indemnities involving the accuracy of representations and warranties in certain contracts. In addition, we have made contractual commitments to each of our officers and certain other employees providing for severance payments upon the termination of employment. We have also issued guarantees in the form of a standby letter of credit in the amount of $0.4 million primarily as security for contingent liabilities under certain workers’ compensation insurance policies. The duration of these indemnities, commitments and guarantees varies, and in certain cases may be indefinite. The majority of these indemnities, commitments and guarantees do not provide for any limitation on the maximum amount of future payments we could be obligated to make. Historically, costs incurred to settle claims related to indemnities have not been material to our financial position, results of operations or cash flows. In addition, we believe the likelihood is remote that payments under the commitments and guarantees described above will have a material effect on our financial condition. The fair value of these indemnities, commitments and guarantees that we issued during the 12 months ended December 31, 2025 was not material to our financial position, results of operations or cash flows. In addition to the contractual obligations listed above, our liquidity could also be adversely affected by an unfavorable outcome with respect to claims and litigation that we are subject to from time to time. See Note 13. “Commitments & Contingencies” in the Notes to Consolidated Financial Statements in this Form 10-K. We have no material off-balance sheet arrangements.