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2nd Quarter 2025 Financial Results
Newton Golf (NASDAQ:NWTG) revenues increased 154% to $2.1 million during the 2nd quarter of 2025, compared to $0.8 million in the prior year period. The increase was partially driven by the introduction of Newton Fast Motion shafts, which were launched on April 29, 2025. The Newton Fast Motion golf shaft has surged to become a giant success in just its first few months on the market. In May and June alone, 1,817 units generated over $696,000 in gross sales, and momentum only accelerated into the 3rd quarter with 2,211 units sold to date, producing more than $786,000 in revenue. This rapid adoption, which outpaced even the established Motion line, underscores the Fast Motion’s powerful market appeal, exceptional performance, and the strong demand from golfers seeking the next step in shaft innovation.
During the quarter, approximately $1.9 million of net sales were direct-to-consumer and generated through company related websites. The remaining $168,000 was derived from various distribution partners.
The company’s focus remains on Fast Motion, Motion, and Fairway Wood shafts, which has provided nearly 100% of revenue growth. During the first half of 2025, ad spending was demphasized on the putter products because of lower prevailing ROI on ad spend. We expect this trend to reverse and expect better growth in putter products during the rest of 2025.
Gross profit in the 2nd quarter of 2025 was $1.4 million compared to $489,000 in the prior year period. Gross margin was 67.6% in the quarter compared to 60.1% in the 2nd quarter of 2024. The increase in gross margin was due to the change in product mix sold and additional volume, which lowered per unit cost as compared to the prior year period.
SG&A expenses increased to $2.76 million during the 2nd quarter of 2025 compared to $1.48 million during the prior year period. The increase was due to increased promotional spending and advertising to support the rollout of Newton Shaft products.
R&D expenses were $143,000 during the 2nd quarter compared to $207,000 during the prior year period.
Net loss for the 2nd quarter of 2025 was ($1.52) million compared to a net loss of ($1.14) million in the prior year period.
Cash balances as of 6/30/25 stood at $4.0 million, and there was no outstanding debt. Working capital at the end of the 2nd quarter of 2025 was positive $3.4 million.
We believe the company is fully funded to support its business operations for the next 9 months. It’s possible the company could reach cash flow breakeven in 2026. The company stated there are no plans currently for a large dilutive capital raise. The company indicated they may use an At-The-Market (ATM) style offering to raise small amounts of equity capital if needed.
Business Highlights
- Newton Motion shaft adoption increased to over 50 professionals, with 8 new players joining across PGA TOUR Champions, LPGA, and the Korn Ferry tour.
- An unsolicited and unsponsored article praising Newton Shafts occurred on April 23, 2025 on Golf.com. The title of the article was “Why Newton Motion shafts are taking over the Champions Tour”. The full article can be found here.
- Expanded product portfolio, launching Newton Fairway Motion Shafts, five new Newton Gravity putter models, and the new Fast Motion shaft line, a lighter-weight shaft available in a distinct new color.
- Broadened global presence, securing distribution with two of Japan’s largest golf retailers, extending Newton’s international reach.
- Increased production capacity to meet accelerating demand for Motion and Fast Motion shafts.
- Experienced significant growth in direct-to-consumer sales through NewtonGolfCo.com.
- Miguel Ángel Jiménez earned his second PGA TOUR Champions victory using the Newton Fast Motion shaft
- In April 2025, the company announced the appointment of Andy Harris and Jeff Opheim as Tour representatives for the PGA TOUR, PGA TOUR Champions, and Korn Ferry Tour. Company Founder and Chief Technology Officer, Aki Yorihiro, will take on a key role as Tour Representative for the LPGA and PGA TOUR Champions.
Valuation and Estimates
The company raised its full-year 2025 revenue guidance to a range of $7.0 million to $7.5 million, up from the prior range of $6.5 million to $7.0 million issued last quarter, reflecting stronger-than-anticipated demand and continued momentum across key channels.
Our primary valuation tool utilizes a Discounted Cash Flow process. Based on growth and profitability projections, our DCF-based valuation target is approximately $6.00 per share. Our target price may be conservative as it incorporates a high discount rate of 15.0% due to the unpredictability of earnings, higher prevailing interest rates, and the timeline for reaching net profitability on an annual basis.
Recently, popular putter manufacturer L.A.B. Golf was acquired by a private equity firm in a deal reportedly valued at over $200 million. Reports indicate that L.A.B. Golf may sell almost 400,000 units in 2025. With putters priced at approximately $500, 2025 revenues could be in the range of $200 million.
Based on 1x our 2026 estimated revenues of approximately $11.1 million, a theoretical acquisition would show 44.3% upside in NWTG stock.
Our 2025 full-year revenue estimate is $7.35 million. Our 2025 GAAP EPS estimate is a loss of ($1.25). For 2026, we believe the company can continue to generate strong double-digit revenue growth, and our revenue estimate for 2026 is $11.1 million, and our 2026 EPS estimate is a loss of ($0.08).
We expect the company to reach cash flow breakeven in calendar year 2026.
The current market cap of only $7.1 million appears to be irrational and more reflective of the ongoing microcap stock malaise as opposed to company fundamentals.
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