Callaway Golf : Fourth Quarter 2021 Earnings Conference Call Presentation

Fourth Quarter & Full Year 2021 Earnings Conference Call

February 10, 2022

IMPORTANT NOTICES

Forward-lookingStatements: Forward-looking Statements: During the presentation, any comments made about future plans, events, financial results, performance, prospects, or growth opportunities, including statements relating to the Company's and Topgolf's full year and first quarter 2022 guidance (including net revenue and Adjusted EBITDA), continued impact of the COVID-19 pandemic on the Company's business and the Company's ability to improve and recover from such impact, impact of any measures taken to mitigate the effect of the pandemic, strength and demand of the Company's products and services, continued brand momentum, demand for golf and outdoor activities and apparel, continued investments in the business, benefits of strategic collaborations, increases in shareholder value, post-pandemic consumer trends and behavior, future industry and market conditions, the benefits of the Topgolf merger, including the anticipated operations, venue/bay expansion plans, financial position, liquidity, performance, prospects or growth and scale opportunities of the Company, Topgolf or the combined company, and statements of belief and any statement of assumptions underlying any of the foregoing, are forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are often characterized by the use of words such as "estimate," "expect," "anticipate," "project," "plan," "intend," "seek," "believe," "forecast," "foresee," "likely," "may," "should," "goal," "target," "might," "will," "could," "predict," "continue" and the negative or plural of these words and other comparable terminology. Such statements reflect the Company's best judgment as of the time made based on then current market trends and conditions. Actual results could differ materially from those as a result of certain risks, unknowns and uncertainties applicable to the Company and its business. For additional details concerning these and other risks and uncertainties that could affect these statements and the Company's business, you should consult the Company's earnings release issued on February 10, 2022, as well as Part I, Item 1A of the Company's most recent Annual Report on Form 10-K, and Part II, Item 1A of the Company's subsequently filed Quarterly Reports on Form 10-Q, together with the Company's other reports subsequently filed with the SEC from time to time. The Company undertakes no obligation to republish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Regulation G: In addition, in order to assist you with period-over-period comparisons on a consistent and comparable basis, today's presentation includes certain non-GAAP information. The Company provided information excluding certain non-cash amortization and depreciation of intangibles and other assets related to the Company's acquisitions (including an impairment charge of $174 million recorded in 2020), non-cash amortization of the debt discount related to the Company's convertible notes, acquisition and other non-recurring items (including a $253 million non-cash gain in 2021 resulting from the Company's pre-merger equity position in Topgolf), and a non-cash valuation allowance recorded against certain of the Company's deferred tax assets as a result of the Topgolf merger. This non-GAAP information may include non-GAAP financial measures within the meaning of Regulation G. These non-GAAP measures should not be considered as a substitute for any measure derived in accordance with GAAP. The non-GAAP information may also be inconsistent with the manner in which similar measures are derived or used by other companies. Management uses such non-GAAP information for financial and operational decision-making purposes and as a means to evaluate period-over-period comparisons and in forecasting the Company's business going forward. Management believes that the presentation of such non-GAAP information, when considered in conjunction with the most directly comparable GAAP information, provides additional useful comparative information for investors in their assessment of the underlying performance of the Company's business with regard to these items. The Company has provided reconciliations of such non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with GAAP. The reconciliations are included in this presentation or in the schedules to the Company's February 10, 2022 earnings release, which is available on the Investor Relations section of the Company's website located at http://ir.callawaygolf.com/.

For forward-looking Adjusted EBITDA information provided in this presentation, reconciliation of such forward-looking Adjusted EBITDA to the most closely comparable GAAP financial measure (net income) is not provided because the Company is unable to provide such reconciliation without unreasonable efforts. The inability to provide a reconciliation is because the Company is currently unable to predict with a reasonable degree of certainty the type and extent of certain items that would be expected to impact net income in the future but would not impact Adjusted EBITDA. These items may include certain non-cash depreciation, which will fluctuate based on the Company's level of capital expenditures, non-cash amortization of intangibles related to the Company's acquisitions, income taxes, which can fluctuate based on changes in the other items noted and/or future forecasts, and other non-recurring costs and non-cash adjustments. Historically, the Company has excluded these items from Adjusted EBITDA. The Company currently expects to continue to exclude these items in future disclosures of Adjusted EBITDA and may also exclude other items that may arise. The events that typically lead to the recognition of such adjustments are inherently unpredictable as to if or when they may occur, and therefore actual results may differ materially. This unavailable information could have a significant impact on net income.

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Company & Strategic Overview

Chip Brewer

President and CEO

2021 YEAR IN REVIEW

• Full year consolidated net revenue +97% to $3.1 billion
• Full year adjusted EBITDA +170% to $445 million
• Pivotal year, marked by exceptional results, significant growth, and strong momentum across all business segments
• Closed on the acquisition of Topgolf in Q1, transforming Callaway into the unrivaled leader in the modern golf and lifestyle space
• Made key investments in infrastructure and people to support a larger business and set Callaway up for continued growth and financial success

FY 2021 REVENUE BY SEGMENT1

Golf Equipment	Topgolf
35%
39%

Apparel, Gear and Other

26%

LEADING TECH-ENABLED GOLF, LIFESTYLE APPAREL AND ENTERTAINMENT COMPANY

1.	Due to the timing of the Topgolf acquisition on March 8, 2021, Callaway's reported full year financial results will only include 10 months of Topgolf results in 2021.	4

TOPGOLF SEGMENT UPDATE

Venue Update

• Fourth quarter walk-in traffic and event business sales for both social and corporate events surpassed expectations, driving Q4 2021 same venue sales to +6% over 2019 levels
• Full year 2021 same venue sales were approximately 95% of 2019 levels, meaningfully higher than projected and a very strong result given the operating environment
• Opened nine new venues in 2021 with one opened in Q4 2021 in Ft. Myers, FL
• 2022 pipeline includes 10 new venues with the potential of adding one more in very late Q4
• Timing of the venue openings will be heavily weighted toward the back half of the year, with five expected to open in Q4 2022

Toptracer

• Installed over 1,700 new bays in Q4 2021 for a total of just under 7,000 new bay installations in FY 2021
• Expect to install 8,000 bays or more in 2022

Topgolf Media

• Developing a new game to launch in 2022 that caters to the younger, more traditional gamer, whereas the World Golf Tour game focuses more on the traditional golfer
• Opportunity to grow digital community and integrate technology into digital offerings at both venues and Toptracer ranges to drive synergies from our game development capabilities

STRONG QUARTER AND YEAR DRIVEN BY CONSISTENT WALK-IN TRAFFIC AND A RECOVERY IN EVENTS

1. Same venue sales represents sales for the comparable venue base, which is defined as the number of company-operated venues with at least 24 full fiscal months of operations.	5