Newton Golf (NASDAQ:NWTG) reported lower second-quarter sales and a wider net loss as the golf shaft manufacturer navigated a manufacturing transition, temporary carbon fiber supply constraints and deliberately reduced marketing activity to keep demand aligned with fulfillment capacity.
For the quarter ended June 30, 2026, net sales were $1.3 million, down from $2.1 million in the prior-year period. Net loss widened to $2.3 million, or $0.49 per share, from a loss of $1.5 million, or $0.34 per share, a year earlier.
Manufacturing Transition Affected Shipments
Yorihiro said the transition included changes to shaft manufacturing recipes, machining recalibration, finishing workflows, paint mixtures and maintenance activities intended to improve quality, consistency and scalability. The work, combined with temporary carbon fiber supply constraints, delayed certain customer shipments.
The company also intentionally moderated marketing spending to avoid generating orders beyond what it could fulfill promptly, while working to reduce its backlog. Newton Golf hired a new head of manufacturing in April, who has more than 20 years of production and operational leadership experience, according to Yorihiro.
During the call, Chief Financial Officer and Chief Operating Officer Jeff Clayborne said production had returned to more than 200 shafts per day. The company plans to scale to 600 shafts per day, which Clayborne said would increase annual production capacity from roughly 55,000 units currently to approximately 160,000 units. Reaching more than 500 shafts per day would require an additional sander and more paint capacity, he said.
By early August, shipment times had improved to within seven business days, and the company had substantially fulfilled delayed orders represented by approximately $1.2 million in customer deposits and open wholesale orders reported at the end of the first quarter.
Clayborne said Newton Golf experienced roughly $300,000 in order cancellations during the second quarter and approximately $500,000 year to date, but said cancellations had “virtually” returned to prior levels as shipping caught up.
Margins Improved Despite Lower Volume
Second-quarter gross profit was $911,000, compared with $1.4 million in the prior-year quarter. Gross margin improved to 69.2% from 67.6%, which Clayborne attributed primarily to a more favorable product and sales-channel mix, including a higher proportion of direct-to-consumer sales. Manufacturing inefficiencies associated with the transition partially offset that benefit.
Total operating expenses declined to approximately $2.5 million from $2.9 million a year earlier. Selling, general and administrative expense fell by about $700,000 to $2.1 million, reflecting lower sales and marketing costs. The decrease was partly offset by manufacturing costs classified as operating expenses because of reduced production throughput and idle capacity, as well as higher stock-based compensation expense.
Research and development expense rose to $348,000 from $143,000, driven by overtime and travel tied to the manufacturing transition, labor reclassified for new-product work and process-improvement activities.
For the first half of 2026, Newton Golf reported net sales of $2.3 million, down 30% from $3.3 million in the prior-year period. Its first-half net loss was $4.9 million, or $1.07 per share, compared with a $2 million loss, or $0.74 per share, a year earlier. Clayborne cited lower sales, higher operating costs and an approximately $2 million unfavorable year-over-year change in the non-cash fair value of warrant liabilities.
Updated Products and Commercial Expansion
Newton Golf introduced updated “2.0” versions of its Fast Motion driver shaft and Motion driver and fairway shafts, identified by green product logos. Yorihiro said the revisions are intended to provide more consistent performance characteristics, tighter ball-flight dispersion, greater continuity between driver and fairway specifications, and tighter manufacturing tolerances.
Management said the new products required revisions to roughly 21 shaft recipes across its one-through-seven dot fitting system and three product lines. Yorihiro said improved manufacturing techniques changed shaft output characteristics, requiring the company to revise the recipes to preserve the performance profile represented by each dot designation.
Professional adoption expanded to more than 77 players across the PGA Tour, PGA Tour Champions, LPGA and Korn Ferry Tours at the end of the second quarter, up from more than 60 at the end of the first quarter. Newton Golf’s professional fitter network grew to about 273 accounts from approximately 235, supported by 38 new club-fitter and golf-course accounts after the company appointed an East Coast sales manager.
Yorihiro also said the company is working with one unnamed “significant” original equipment manufacturer, with its shafts available at the manufacturer’s headquarters and national fitting centers. He said orders had begun and were starting to increase. Newton Golf is also being evaluated by three additional OEMs, he said.
The company expects to commercially launch Fast Motion fairway wood and hybrid shafts in the fourth quarter of 2026 or the first quarter of 2027. Yorihiro said the broader platform could create opportunities for multiple Newton shaft placements in a golfer’s bag.
Liquidity Actions and Capital Needs
Cash and cash equivalents totaled $442,000 at June 30, down from $1.3 million at year-end 2025. During the first half, Newton Golf issued $2.225 million in convertible promissory notes for working capital and general corporate purposes.
After the quarter ended, the company entered a $5 million senior secured revolving credit facility and exchanged approximately $2.3 million of convertible notes, including accrued interest, for Series A convertible preferred stock. As of Aug. 13, the company had drawn $750,000 under the revolving facility.
On Aug. 14, Newton Golf completed a private placement of common stock that generated approximately $1 million in gross proceeds and about $0.9 million in net proceeds. The shares were issued at $0.33 each, which the company said represented a premium to its market price at closing.
Yorihiro said Newton Golf expects to require additional capital to support operations and growth initiatives, though management believes its recent financing actions improved liquidity and financial flexibility.
About Newton Golf (NASDAQ:NWTG)
Sacks Parente Golf, Inc (“SPG”) is a technology-forward golf company, with a growing portfolio of golf products, including putting instruments, golf shafts, golf grips, and other golf-related products. In April 2022, in consideration of our growth opportunities in shaft technologies, we expanded our manufacturing business to include advanced premium golf shafts by opening a new shaft manufacturing facility in St. Joseph, MO. We intend to manufacture and assemble substantially all products in the United States.
