Golf entertainment and gear company Callaway Golf Company (NYSE: CALY) announced better-than-expected revenue in Q2 CY2026, with sales up 2% year on year to $612.2 million. On the other hand, next quarter’s revenue guidance of $425 million was less impressive, coming in 0.8% below analysts’ estimates. Its non-GAAP profit of $0.39 per share was 10% above analysts’ consensus estimates.
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Callaway Golf Company (CALY) Q2 CY2026 Highlights:
- Revenue: $612.2 million vs analyst estimates of $604.3 million (2% year-on-year growth, 1.3% beat)
- Adjusted EPS: $0.39 vs analyst estimates of $0.35 (10% beat)
- Adjusted EBITDA: $124.9 million vs analyst estimates of $105.2 million (20.4% margin, 18.7% beat)
- The company slightly lifted its revenue guidance for the full year to $2.06 billion at the midpoint from $2.04 billion
- EBITDA guidance for the full year is $253 million at the midpoint, above analyst estimates of $229.5 million
- Operating Margin: 18.8%, up from 12.4% in the same quarter last year
- Free Cash Flow Margin: 38.9%, up from 8.7% in the same quarter last year
- Market Capitalization: $3.43 billion
"We are very pleased with our second quarter results with our revenue growth, gross margin improvement and Adjusted EBITDA all exceeding expectations," commented Chip Brewer, President and Chief Executive Officer of Callaway Golf Company.
Company Overview
Formed between the merger of Callaway and Topgolf, Callaway Golf Company (NYSE: CALY) sells golf equipment and operates technology-driven golf entertainment venues.
Revenue Growth
Examining a company’s long-term performance can provide clues about its quality. Any business can have short-term success, but a top-tier one grows for years. Callaway Golf Company struggled to consistently generate demand over the last five years as its sales dropped at a 2.5% annual rate. This was below our standards and is a sign of poor business quality.
Long-term growth is the most important, but within consumer discretionary, product cycles are short and revenue can be hit-driven due to rapidly changing trends and consumer preferences. Callaway Golf Company’s recent performance shows its demand remained suppressed as its revenue has declined by 18.3% annually over the last two years. Note that COVID hurt Callaway Golf Company’s business in 2020 and part of 2021, and it bounced back in a big way thereafter. 
This quarter, Callaway Golf Company reported modest year-on-year revenue growth of 2% but beat Wall Street’s estimates by 1.3%. Company management is currently guiding for a 8.1% year-on-year decline in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to decline by 1% over the next 12 months. While this projection is better than its two-year trend, it’s hard to get excited about a company that is struggling with demand.
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Operating Margin
Callaway Golf Company’s operating margin has more or less stayed the same over the last 12 months , and we generally like to see margin increases due to economies of scale and cost efficiency over time.
In Q2, Callaway Golf Company generated an operating margin profit margin of 18.8%, up 6.4 percentage points year on year. This increase was a welcome development and shows it was more efficient.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
Sadly for Callaway Golf Company, its EPS declined by 12.3% annually over the last five years, more than its revenue. We can see the difference stemmed from higher interest expenses or taxes as the company actually improved its operating margin and repurchased its shares during this time.
In Q2, Callaway Golf Company reported adjusted EPS of $0.39, up from $0.24 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Callaway Golf Company’s full-year EPS to grow 16.4% from $0.65 to $0.76.
Key Takeaways from Callaway Golf Company’s Q2 Results
We were impressed by Callaway Golf Company’s optimistic EBITDA guidance for next quarter, which blew past analysts’ expectations. We were also glad its full-year EBITDA guidance trumped Wall Street’s estimates. On the other hand, its full-year revenue guidance was in line. Overall, we think this was still a solid quarter with some key areas of upside. Investors were likely hoping for more, and shares traded down 3.3% to $18.93 immediately after reporting.
So should you invest in Callaway Golf Company right now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
