Topgolf Generates Over $20 Million In Revenue Annually

Topgolf is a golf driving range game with electronically tracked golf balls and automatically scored drives that started in 2000.

It grew to become a multinational sports entertainment company.

Topgolf is headquartered in Dallas, Texas.

It has locations in the United States, United Kingdom, Australia, Germany, Mexico, and the United Arab Emirates.

In October 2020, publicly traded Callaway Golf announced it was acquiring Topgolf, and the merger was completed in March 2021.

Topgolf has boomed in popularity and has generated millions of dollars annually.

Below, we will discuss Topgolf’s business and how successful the company has been.

Topgolf Generates Over $20 Million In Revenue Annually

Topgolf has over 80 locations in nine different countries.

In 2017, Topgolf generated $630 million in revenue.

Here is a breakdown of annual revenue for Topgolf since 2017.

• 2017: $630 Million
• 2018: $862 Million
• 2019: $1.1 Billion
• 2020: Unknown
• 2021: $1.2 Billion
• 2022: $1.5 Billion

Topgolf’s business is growing each year and is only getting stronger.

They plan on opening more than 100 venues by the end of this decade.

It is best to break down Topgolf’s business into two parts.

1. Venues
2. Technology

Topgolf’s Venues

The majority of Topgolf’s revenue comes from its venues.

They have 80 venues in nine different countries.

They are opening up 10-15 new venues each year and plan to open up 100 more venues by the end of this decade.

Most of the venues are classified as large venues.

The large venues cost $30-$40 million to build.

They generate between $20-$28 million each year in revenue and have a cash-on-cash return of 50-60%.

The estimated payback period on these venues is 2.5 years.

These economics are strong for Topgolf because they make the majority of their money off events, food, and beverages.

Unlike a normal driving range that makes its money on traditional gameplay.

For example, here is Topgolf’s US venue revenue breakdown from 2019.

• Events: 34%
• Food & Beverage: 33%
• Gameplay: 29%
• Other (merchendise, etc): 4%

This commitment to growth has hurt the company’s finances.

Topgolf generated only $3 million in profit in quarter one of 2023.

This is mainly due to the fact they have $1.2 billion in venue financing liabilities as they try to build 10-15 more facilities each year.

Topgolf’s Technology

The technology is small for Topgolf but is certainly growing.

Topgolf is the owner and operator, and they license out their toptracer range technology.

This is the same technology that you see on TV for all the major golf tournaments.

The technology showcases the flight path and distance and ball speed of every shot.

Topgolf also licenses this technology to individual driving ranges.

There are 750 different driving ranges in 31 countries using this technology.

Here are Topgolf’s toptracer range technology financials.

• No install fee for driving ranges
• Charges $160 per bay per month or $2,000 annually
• Active in 22,000 bays worldwide, generating $44 million in annual revenue

This may represent a small part of the business today, approximately 3% of annual revenue, Topgolf believes it can eventually be a $200 million per year business.

Topgolf feels this way because they installed 1,500 toptracer bays in quarter one of 2023 alone and they expect to install another 7,000 bays by the end of this year.

Topgolf’s Future Looks Bright

Topgolf generates nearly 40% of Callaway’s annual revenue.

Callaway is putting Topgolf’s logo on their sponsored athletes, such as Jon Rahm.

Topgolf has exploded since it started in 2000 and the future looks strong.