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NWTG
Earnings call · Jun 2026 (Q2 FY26)

Newton Golf Company Q2 FY26 earnings call NWTG

Aug 14, 2026 Source

Executive summary

Newton Golf Company Q2 FY26 — Manufacturing Transition Impacts Sales, Capital Structure Strengthened

Newton Golf's Q2 FY26 results were significantly impacted by a manufacturing transition to introduce updated 2.0 shafts, leading to reduced production and lower sales. Despite these near-term constraints and a widened net loss, the company made operational progress, improved gross margin, and strengthened its capital structure through new financing. Management is focused on scaling production, expanding distribution, and preparing for new product launches, with early signs of recovery in production and marketing activities.

Highlights

5

  • Professional adoption grew to over 77 golfers across major tours by quarter-end, up from over 60 in Q1.

  • Club fitter network expanded to approximately 273 accounts, up from 235 in Q1.

  • Gross margin improved to 69.2% of net sales in Q2 FY26, compared to 67.6% in the prior year quarter.

  • Secured a new $5 million senior secured revolving credit facility and completed a $2.3 million convertible note exchange, strengthening liquidity and capital structure.

  • Production shipment times improved to within 7 business days by early August, and $1.2 million of delayed customer orders were substantially fulfilled.

Concerns

5

  • Net sales decreased to $1.3 million in Q2 FY26, down from $2.1 million in the prior year quarter, primarily due to reduced manufacturing capacity and supply constraints.

  • Net loss widened to $2.3 million (negative $0.49 per share) in Q2 FY26, compared to a net loss of $1.5 million (negative $0.34 per share) in the prior year quarter.

  • Cash and cash equivalents declined to $442,000 at June 30, 2026, from $1.3 million at December 31, 2025.

  • Operating expenses were $2.5 million in Q2 FY26, driven by increased R&D ($348,000 vs $143,000) and higher manufacturing costs due to idle capacity.

  • Experienced $300,000 in order cancellations during Q2 FY26, contributing to $500,000 year-to-date cancellations.

Guidance & targets

CategoryTargetConfidence
Daily Shaft Production Capacity
600 shafts a day
high materiality
High
Annual Shaft Production Capacity
160,000 units a year
high materiality
High
Fast Motion Fairway Wood and Hybrid Shafts Commercial Launch
Commercial launch
medium materiality
High
Additional Capital
Required
high materiality
High

Product announcements

ProductTypeDetails
Fast Motion driver shaft and Motion driver and fairway shafts (2.0 versions)launch
Fast Motion fairway wood and hybrid shaftsroadmap

Deals & partnerships

null Senior secured revolving credit facility $5 million

Secured a new $5 million senior secured revolving credit facility after quarter-end. $750,000 had been drawn as of August 13, 2026.

null Exchange of outstanding convertible promissory notes for Series A convertible preferred stock $2.3 million

Completed the exchange of approximately $2.3 million of outstanding convertible promissory notes, including accrued interest, for Series A convertible preferred stock after quarter-end.

null Private placement financing through issuance of common stock $1 million gross proceeds

Completed a private placement financing on August 14, 2026, for aggregate gross proceeds of approximately $1 million, issuing common stock at $1.33 per share.

One very significant OEM Distribution and integration of Newton shafts at OEM HQ and fitting centers

Newton Golf has successfully established a partnership with a significant OEM, with their shafts now available at the OEM's headquarters and national fitting centers, and orders are increasing.

Risks & headwinds

Reduced manufacturing capacity and temporary carbon fiber supply constraints Q2 FY26

Primarily driven by reduced manufacturing capacity during our manufacturing transition, along with temporary carbon fiber supply constraints that delayed shipment timing on certain customer orders.

Mitigation:Implemented manufacturing transition activities, refined manufacturing techniques, improved output consistency, secured additional carbon fiber supply from Toray Japan and improved availability from Toray U.S.

Customer order cancellations due to fulfillment delays Q2 FY26 and H1 FY26

$300,000 in Q2 FY26, $500,000 year-to-date

Mitigation:Improved production shipment times to within 7 business days, substantially fulfilled delayed orders, and are now fully operational.

Expectation to require additional capital for ongoing operations and growth initiatives Balance of 2026 and beyond

While we expect to require additional capital to support ongoing operations and growth initiatives

Mitigation:Secured a $5 million revolving credit facility, completed a $2.3 million convertible note exchange, and raised $0.9 million net proceeds from a private placement, strengthening capital structure and liquidity.

Manufacturing inefficiencies and increased costs associated with idle manufacturing capacity Q2 FY26

Higher operating loss resulting from the lower net sales and increased costs associated with idle manufacturing capacity and manufacturing process improvements

Mitigation:Operational improvements made during the manufacturing transition, including refining manufacturing techniques and improving production yield, are expected to support higher throughput.

What to watch in Q3 FY26

Daily Shaft Production Capacity

Next quarter
Current Over 200 shafts a day
Target Progress towards 600 shafts a day, with 500 shafts/day milestone

Why it matters

Scaling production is essential for meeting demand, reducing backlog, and converting demand into revenue, directly impacting top-line growth.

So currently, we're back to doing over 200 shafts a day. We have a plan to scale to 600 shafts a day. Once we cross the milestone of 500 shafts a day, we'll probably have to add an additional sander and more room to paint.

Q&A highlights

Inquired about current and planned production capacity, given past issues.

Management stated current production is over 200 shafts/day, with a plan to scale to 600 shafts/day, reaching 160,000 units annually from 55,000. This scaling primarily involves adding personnel.

“So currently, we're back to doing over 200 shafts a day. We have a plan to scale to 600 shafts a day... So that basically takes our production capacity where we are today at about 55,000 units a year and we can go up to 160,000 units a year with what we've planned for scalability.”

asked by David Marsh · answered by Jeffery Clayborne

2 min read 6 chapters

Detailed narrative

Manufacturing Transition and Operational Improvements

Newton Golf underwent a significant manufacturing transition in Q2 FY26, involving updates to shaft manufacturing recipes, production processes, and recalibration of machinery. These activities, coupled with temporary carbon fiber supply constraints, initially delayed shipments and reduced production throughput. However, the company made meaningful operational progress, refining techniques, improving equipment utilization, and reducing production loss rates, which are expected to support higher volumes and tighter product consistency.

Product Development and Professional Adoption

The company introduced updated 2.0 versions of its Fast Motion driver shaft and Motion driver and fairway shafts, distinguished by green logos, designed for more consistent performance and broader fitting profiles. Initial professional adoption of these new shafts has been strong, with over 77 professional golfers using Newton shafts by quarter-end, up from 60 in Q1. The company is also advancing new Fast Motion fairway wood and hybrid shafts for a Q4 FY26 or Q1 FY27 commercial launch, aiming to increase shaft placements per golfer.

Sales and Marketing Strategy Adjustment

During the manufacturing transition, management intentionally moderated marketing activity to align customer demand with available production capacity and reduce backlog, avoiding demand generation beyond fulfillment capabilities. The company also engaged a new marketing agency to improve customer acquisition efficiency and refine brand messaging. Marketing activities selectively resumed in late July under a revised commercial strategy, with encouraging initial results, though remaining below historical levels.

Financial Performance Overview

Q2 FY26 saw net sales decline to $1.3 million from $2.1 million year-over-year, primarily due to reduced manufacturing capacity. Gross profit was $911,000, with gross margin improving to 69.2% due to a favorable product and sales channel mix. However, operating expenses increased to $2.5 million, driven by higher R&D and manufacturing costs associated with idle capacity. This resulted in a widened net loss of $2.3 million, or negative $0.49 per share.

Capital Structure Strengthening

To address liquidity and support operations, Newton Golf issued $2.25 million in convertible promissory notes in H1 FY26. After quarter-end, the company secured a $5 million senior secured revolving credit facility and exchanged approximately $2.3 million of outstanding convertible notes for Series A convertible preferred stock. Additionally, a private placement financing completed on August 14, 2026, generated approximately $0.9 million in net proceeds. These actions significantly improved the company's capital structure and financial flexibility.

Order Fulfillment and Backlog Reduction

The temporary carbon fiber supply constraints and manufacturing transition led to delayed shipments and customer order cancellations, totaling $300,000 in Q2 and $500,000 year-to-date. However, by early August, production shipment times improved to within 7 business days, and the approximately $1.2 million of customer deposits and open wholesale orders reported at the end of Q1 were substantially fulfilled, indicating a return to operational normalcy.

AI-generated summary of the company's earnings call. Not investment advice.