By Thomas Kerr, CFA
NASDAQ: NWTG
READ THE FULL NWTG RESEARCH REPORT
4th Quarter Financial Results
On March 31, 2026, Newton Golf (NASDAQ: NWTG) released 4th quarter and full year 2025 financial results, which showed impressive revenue growth above our expectations.
Revenues in the 4th quarter of 2025 were $2.3 million, which was a 112% increase from $1.1 million in the prior-year period. The growth was primarily driven by strong demand for the company’s Newton Motion™ shaft product line, along with continued expansion of its direct-to-consumer channel.
Gross profit was approximately $0.6 million (25% gross margin) in the quarter, compared to approximately $0.8 million (72% gross margin) in the prior-year quarter. The decline in gross margin was primarily attributable to an inventory adjustment recorded during the quarter, as well as higher labor costs incurred to support increased demand. The inventory adjustment reflects improvements made to the company’s inventory verification and costing procedures during the year. We expect gross margins to return to the 60%-70% range in 2026.
Total operating expenses increased to $3.1 million from $2.2 million in the prior-year quarter, primarily reflecting higher marketing, personnel, and public company operating costs to support sales growth and business development initiatives, as well as ongoing investment in R&D related to the company’s shaft technology platform. Net loss for the 4th quarter was ($2.4) million, or ($0.52) per share, compared to a net loss of ($8.3) million, or ($76.66) per share, in the prior-year quarter.
Cash balances as of 12/31/25 stood at $1.3 million, and there was no outstanding debt. After the end of the year, the company entered into a securities purchase agreement for the sale of up to $2.0 million of convertible notes and warrants to purchase shares of common stock at an exercise price of $1.75 per share. The first closing occurred on March 16, 2026, where the company issued to entities affiliated with a company director a $500,000 convertible note at an interest rate of 10% with a maturity in 18 months. A five-year warrant to purchase 50,000 shares of common stock was also issued.
Full Year 2025 Financial Results
Net sales for 2025 were $8.1 million, an increase of 136% compared to $3.4 million in 2024. The growth was primarily driven by strong demand for the company’s Newton Motion shaft product line, along with continued expansion of direct-to-consumer sales.
Gross profit rose to $4.6 million (56% gross margin), compared to $2.3 million (66% gross margin) in 2024. While gross profit increased in dollars, gross margin declined due to higher labor-related costs, including additional full-time employees, greater use of temporary labor, and overtime needed to meet the strong demand for its golf shaft products.
Operating expenses increased to $12.1 million from $7.3 million in 2024. The increase was primarily driven by higher marketing, personnel, and public company costs to support revenue growth and business development efforts. Expenses also included higher professional service costs tied to enterprise system upgrades and integrations, including NetSuite, AfterShip, and demand-planning tools, aimed at improving inventory accuracy, operational efficiency, and long-term scalability.
Net loss for 2025 totaled ($6.0) million or ($1.63) per share, compared to a net loss of ($11.8) million or ($178.33) per share in 2024.
2025 Business Highlights
- Ranked the #1 selling shaft brand for both drivers and fairway woods at Club Champion, reflecting increased adoption among professional club fitters, supporting broader distribution opportunities across the professional fitting channel.
- Expanded the company's professional club fitter network to approximately 230 locations, an increase of 130% from 2024, strengthening the company's channel presence across the premium fitting market.
- Surpassed 60 professional golfers playing Newton shafts across PGA TOUR Champions, LPGA, and Korn Ferry Tours, more than doubling from 30 players in 2024.
- Increased brand visibility at global competitions with several players using Newton shafts at the 2025 World Long Drive Championship, including Tanner Pipes, who captured the Men's Amateur title with a 396-yard drive.
- Introduced the Fast Motion™ driver shaft, expanding the company's premium driver shaft lineup and extending the Newton Motion™ shaft platform across multiple swing-profile configurations.
- Launched a dedicated Japanese e-commerce platform, newtongolf.jp, enabling direct access to customers in one of the world's largest golf equipment markets.
- Appointed Jeff Clayborne as CFO and, effective January 30, 2026, expanded his role to Chief Operating Officer to include oversight of manufacturing and operational functions supporting the company's scaling manufacturing and operational platform.
Potential OEM Opportunities
The company commented that they have been exploring working with OEMs to provide shafts to their product lines. This entails structured product testing and evaluation programs with leading global golf equipment manufacturers. Although no names were mentioned, it could involve working with top golf brands such as Callaway, TaylorMade or Titleist. While these activities are in the early stage and no definitive commercial supply agreements have yet to be finalized, this level of engagement is a meaningful technical validation of the Newton Golf platform. Over time, successful OEM integrations could expand the addressable opportunities for Newton Shafts and support broader adoption across global club fitting channels. In addition, this can be accomplished without the need for major capacity expansion as the current manufacturing facility has the capacity to make approximately 200,000 shafts and in 2025, the company produced about 41,000 shafts.
Valuation and Estimates
Our primary valuation tool utilizes a Discounted Cash Flow process. Based on higher than expected revenues, which implies a faster time frame to cash flow breakeven, our target price is $6.50 per share. Our target price may be conservative as it incorporates a high discount rate of 15.0% due to the unpredictability of earnings, 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.
Our 2026 full year revenue estimate is now $12.2 million. Our 2026 GAAP EPS estimate is a loss of ($0.48). We believe the company can continue to generate strong double-digit revenue growth over the next 3-5 years. Our revenue estimate for 2026 is $17.1 million, and our 2027 EPS estimate is $0.15.
We expect the company to reach cash flow breakeven at some point in calendar year 2026.
The company is selling at 61% of 2026 estimated revenues, which is a significant discount to other fast-growing sporting goods companies.
The current market cap of only $7.6 million appears to be irrational and more reflective of the ongoing microcap stock malaise as opposed to company fundamentals.
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