Good morning, everybody. I am thrilled to welcome you to the Callaway Investor Day, and for those in the room, to our newest Topgolf venue here in El Segundo. I'm Chip Brewer, and I've had the privilege of being the CEO here at Callaway Golf for 10 years now. Prior to that, I was the CEO of a smaller equipment manufacturer for 10 years as well. When I got the job at Callaway, I told everybody that it was my dream job, and I'm fortunate to be able to say that that's still the case today. The team that I'm fortunate to lead has had a productive last 10 years here, and I'm immensely proud of what we've accomplished.
At the same time, I've never been more excited about the direction of our company and the opportunities that lay ahead. We look forward to sharing our story with you today and giving you more color on our direction, and we certainly appreciate your time and interest in us. One of the aspects of this company that I'm most proud of is the quality of the team. We have an experienced group of leaders with diverse backgrounds and proven track records, not only at the senior levels but across all levels of the organization. Today, you're gonna hear from the leaders on the screen there, and also have the ability to interact with a lot of key members of our team as you go through the reception tours and some of the breakout sessions. I hope you take advantage of that, and I know you're gonna enjoy it.
Also with us today is our Chairman of the Board, John Lundgren. John, thank you so much for making the time. As you're gonna hear and see today, we've really transformed this company over the last several years from a leader in golf equipment, a long-term leader, to the leader in what we call modern golf with a strong active lifestyle presence. For those that are new to the story, we define modern golf as the combination of on-course or traditional golf with the high-energy, high-growth off-course golf segment. Currently, off-course golf is about the same size as on-course golf, but it's growing quite a bit faster. About one-half of traditional or on-course golf participants also participate in off-course golf. Similarly, about one-half of off-course golfers play on-course golf.
The two combined create a dynamic modern golf ecosystem unlike anything that Old Tom Morris or Bobby Jones could have ever imagined. The portfolio of brands that makes up Callaway today are attractively positioned with deep moats and high growth prospects, and they're supported by common underlying trends and synergies that feed on each other. At Callaway, we're operating a diverse, high-growth global business at a scale that's difficult to match and that also presents significant competitive advantages in its reach to global modern golf consumers. We've long been a leader in golf equipment, and we have strong brand equity in that space. We have a proven business model and a coveted position within the industry. Our brand is consistently ranked as the leader in overall brand rating by outside rating agencies. We also have a leadership position in technology and innovation.
Over an extended period, we've earned the number one position in market share for clubs and the number two position for golf balls. Ensuring that our products in the golf equipment space are the best in the game is one of our core competencies, and it's also the keystone of our golf equipment strategy. It's supported by our culture as well as a long history of reinvestment in and excellence from both our R&D and operations teams. Recently, with the addition of Topgolf just last March, we now have unparalleled reach to off-course golfers as well, with 20 million unique visitors a year to Topgolf venues and over 7 billion balls hit across their ecosystem. Topgolf clearly has a first-mover advantage in this space, a position that we believe would be extremely difficult and expensive for a competitor to try to recreate.
We have a world-class real estate team leading the charge on site selection. We also have a proven ability to open and operate venues. Our venues, they do well over time. They also do well in the North, the South, the East, and the West. They do well in the Heartland, and they do well on the Coast. They do well domestically, and they do well internationally. They do well in large, medium, and small venues. I guess you get the point. Our venues, we believe, are proven, and the proven nature of those venues is a key takeaway and an investment thesis that I hope you come away with today. Topgolf also has both strong brand momentum and significant white space ahead.
Of course, we're also keeping our eyes open for other emerging concepts in the off-course segment, such as Five Iron, which we have a minority investment in as of last fall. Moving to the apparel, gear, and other segment. Over the past five years, we've grown our presence and our revenues in this segment significantly. As you'll hear from both Glenn and Joe later, we're very optimistic that this segment is well-positioned for further growth ahead. In Joe's presentation, we're gonna take a deeper dive on two really exciting brands, the TravisMathew and the Jack Wolfskin brands, both of which have strong momentum and are now in or entering the stage where they deliver very attractive profitability and cash flows. When you look at our results over time as a shareholder, we have a track record of strong shareholder value creation.
Over the past five years, net revenues increased by 17% annually, and Adjusted EBITDA grew by a more impressive 32%. More importantly, these results generated strong shareholder returns, outpacing both the S&P 500 and the Russell 3000, outpacing them by about 30%. As we look forward, we believe we will continue to outperform as we continue to both deliver operationally, something we've done consistently for many years now, and at the same time, unlock the long tail of embedded growth within our businesses. This slide goes through a little bit about the shift in our revenues that has occurred and the transformation in this business over the last five years. As you'll see on the screen, golf equipment was 84% of our revenues as recently as 2016. Last year, it was 38% of our revenues.
This happened at the same time as our golf equipment business grew from $652 million to $1.2 billion, or what I think is an impressive 88%. Our move to these higher growth segments sets us up structurally for higher growth, I guess that makes sense, right? Profitability going forward. It also provides diversification as we're no longer dependent on any one business segment to drive our growth. The shift positions us to benefit some broad macro trends and synergies that are fueling all of these segments. Let's turn to a little bit of some of these macro trends, starting first in the golf equipment space. The trends in golf equipment and golf participation in the last few years have been nothing short of phenomenal. Rounds played last year were up 20% versus 2019.
It's been hard to get a tee time, for goodness sake. Private clubs have gone from discounted memberships to long waiting lists. Equipment sales, they've grown nicely, even outstretching our capacity. New entrants, especially young and female new entrants, have surged to more than five million per year. With this, on-course participation has continued to grow, even accelerating a positive trend that started pre-pandemic. It's clearly just great to be in golf right now. We're certainly benefiting accordingly. That said, I think we should, you know, address what is certainly an investor concern at some times, and that's, is there a potential pullback in demand for golf? We understand that concern, and we're but we believe for golf, it's likely overblown. We believe any short-term pullback, if it happens at all, would be modest.
We can confidently tell you that we continue to experience demand levels that are extremely high and that we're confident the industry will sustain demand at significantly higher levels than 2019. This is due to the momentum of the game, its addictive nature, how well it fits with today's world, as well as the long-term lifestyle changes such as hybrid work environments, which are positively impacting it. We also believe golf's long-term growth rate will be higher than it was pre-pandemic, and that's in large part to the growing influence of off-course golf, which is being led by Topgolf. If you spend any time in our venues at all, you can't help but come away knowing what a positive influence is for the game of golf.
Also, as Glenn will speak to shortly, we're confident in our ability to continue to outperform the industry at large, something we've done for many years now. In the active lifestyle space, even before the pandemic, we saw a strong shift to people wanting to spend more time outdoors. They wanna explore and experience nature, but also be more aligned with environmental brands and eco-friendly, products. We've also seen an increasing trend in more casual or lifestyle apparel in all facets of one's life, but including the office now, a trend that fits extremely well with our, all of our brands, but especially the TravisMathew one.
At Topgolf, they're benefiting from the momentum of the off-course category as well as the movement towards an experience-oriented culture, especially among young people. Lastly, across the board, our businesses are benefiting from what I believe is a mega trend towards more hybrid work environments, which creates more flexible schedules and more free time. According to a recent McKinsey survey, pre-pandemic, 99% of top executives expected their employees to be at work in an office at least 80% of the time. Now, that number is only 10%, from 99 to 10 expect that same office condition. The vast majority expect employees in the office as only 20%-80% of the time. That's a big change. I'm sure it's probably consistent with what you've been hearing and seeing and maybe even experiencing. This mega trend clearly supports all of our businesses.
With all this, we believe that we have a clear path to sustainable growth and are uniquely positioned to deliver incremental shareholder value. We're gonna do this focusing on four key areas. First, we plan to maintain our leadership position in golf equipment and drive further market share gains. We believe we'll be able to leverage both our scale and our long history of reinvestments to help us accomplish this. Second, at Topgolf, we'll continue to execute our domestic and international venue expansion strategy. At the same time, drive same-venue sales growth, expand Toptracer range installations, and grow our media business. Third, we'll sustain our active lifestyle brand momentum, while at the same time increasing their direct-to-consumer presence, thereby expanding margins. Lastly, our global ops team and supply chain are unmatched. This will continue to present an advantage to our businesses as we grow.
Each of these pillars is gonna be amplified by strong synergy opportunities that we see across our business segments. The team's gonna provide you more specifics of these synergy in their presentations today, and then Brian will give a nice summary of that in his closing remarks. For those of you in the room, you're gonna see it coming to life here at El Segundo. By successfully executing this plan, we believe we can deliver 10%-12% annual revenue growth and 15%-18% Adjusted EBITDA growth through 2025. By 2025, we should comfortably exceed $800 million in Adjusted EBITDA. Although at this point, we're not providing guidance beyond 2025, it doesn't take a math major to just project that we'll be at or above $1 billion in a year or two after that.
As you'll see in Brian's section, this type of growth at scale is rare and generally rewarded with strong valuations. As we grow the business, naturally, you're gonna continue to see a shift in both revenue and profitability. By 2025, approximately 73% of our revenue will come from Topgolf and its apparel segments. More than half of our Adjusted EBITDA will be generated by Topgolf alone. When evaluating Callaway on a whole, we feel strongly that we present a unique and compelling investment opportunity. We have a proven business model with strong brand equity, demonstrated growth, and a track record of delivering results across all of our segments. We have unmatched scale and reach within the modern golf ecosystem with a dominant player in this attractive and growing segment. Our business model is now highly diversified with balanced growth across multiple attractive segments.
Our businesses, both individually and collectively, have high barriers to entry and deep moats. It would be extremely difficult and expensive, impractical, really, to replicate what we have. We're structurally positioned for our growth. We don't have to do anything fundamentally different. We just have to continue to execute in a way that for many years now, we've demonstrated we can. Let me say that again for emphasis. We don't have to do anything fundamentally different. Just have to continue to do what we've proven we can do. To me, that speaks volumes of this business being unique, proven, and compelling. I hope you find that to be the case as well after you listen to all the presenters today. Now I'm gonna turn to another important topic.
It's a little less directly tied to our financials and immediate shareholder value, but an important topic, especially in today's world. I'm gonna turn the podium over to my team. I'm gonna close by highlighting Callaway's first sustainability report, which was published just last month. As a global company, we recognize that our actions have an impact across multiple stakeholder groups, and we're committed to doing our part to operate in a responsible and sustainable manner. The content included in the report focuses on four key areas: people, planet, product, and procurement. Our efforts here include some things as mundane as reducing packaging waste and moving to recycled packaging across our supply chain.
It includes some really interesting, exciting capital investments to lower our carbon footprint, such as the conversion to a natural gas fuel cell system in our Chicopee ball plant that is going to eliminate approximately 2 million pounds of CO2 emissions per year. It includes putting solar panels on our new tour van, so that when it's on-site at an event, it uses 30% less fossil fuels. It includes working with key suppliers on their management of effluent, as well as employee working conditions. It includes the industry-leading work that Jack Wolfskin does in its products and supply chain.
The launch of sustainable fabrics at TravisMathew, and their work with the Surfrider Foundation to protect our coastlands, and the work that Topgolf's Driving for Good program does, as they assist various charities, including the First Tee and others, in both raising funds for their causes and making the venues accessible so that young people can have a place to grow and learn. Suffice it to say that this is a comprehensive program being driven by the entire organization. It's an effort we're both proud of and excited about. To discuss more about this people portion of our equation, as well as the strength of our people across the organization, I'd like to now turn the presentation over to Becky Fine, our Chief People Officer.
Thank you, Chip. What an exciting time it is to be at Callaway and the brands that we have in our portfolio. I'm Becky Fine, and I'm the Chief People Officer for Callaway. I've been with the company now for a little over a year. Prior to joining the Callaway team, I was with the Topgolf team as their head of human resources. I started my career in the hospitality industry in operations, and have about 35 years in HR and operations in both hospitality, manufacturing, entertainment, and technology-enabled businesses. One of my passions is making, building cultures that actually sustain growth and deliver results. I've worked in both company-owned and franchised environments, in both public companies, private companies, and private equity. I'm happy to be here. Nice to see you all.
As, as Chip has mentioned, we've also, you know, expanded from a portfolio and financial perspective. as we've continued to grow, we've also created a much more diverse workforce with all this growth and acquisition. Our acquisition of Jack Wolfskin has certainly expanded us into a much more global footprint. the Topgolf acquisition, we've added an additional over 21,000 hourly associates across the nation. From a hospitality perspective, we've entered that industry, and we've also added capabilities in innovation and gamification. We now have over 27,000 associates in 25 countries. What does this mean from a business perspective, and what does it also mean from a people perspective?
Our human capital strategy is important from a standpoint of transforming the way that we work and making sure that we leverage all of that talent and the capability to grow our business and make sure that we set ourselves up for the future. This diverse workforce, we intentionally preserve each of the cultural values and the business values of each of the brands that we operate in to create a point of differentiation for each of those brands. We also are able to leverage our size and scale and make sure that we preserve the customer experience along the way. As we look at operating our businesses in a positive working environment, we also stay very close to our people in making sure that our culture is staying intact as we grow.
Culture is at the center of everything that we do, and our values are an underpinning in each of the touch points of the employee journey. We weave in our cultural values from the recruiting process all the way through to our talent acquisition, our talent development, and our succession planning. It's not something that just lives on a board. It's a part of everything that we do. Over the past two years, with the challenging labor market, we found that our culture is what stood out and made it such an integral part for us being able to move through and grow beyond the challenges of a worldwide pandemic. As we've retained our top talent and been able to transform the way that we work, we've been able to grow our business, merge even stronger and actually acquire new businesses during this time.
Each of our businesses and our people are resilient and remaining optimistic through all of this. We are investing in developing our people to reduce our dependency on the outside labor market because it's tough out there right now. To be able to do this also helps us preserve our commitment to innovation and growing our business. You heard Chip speak a little bit about some of the investments that we're making as a business today. Some of those investments include IT infrastructure, accounting and finance systems to integrate and make us more efficient and improve our processing at scale. We're also investing our digital customer experience capabilities and analytics in order to identify new revenue capability and also identify some of our leverage capabilities across our brands.
Our human capital management strategy is going to help us tie together this new organization of growth that we have and help us make sure that we have the right people at the right time to meet our growing demands of our business from a people perspective. The supply chain organization infrastructure building, which you'll hear a little bit more from Mark. We're making those investments around the world, in all the plants and facilities, including the talent that we need to run that part of our business. We're focused on developing our people internally to reduce that demand and expectation from the outside market, and to have that nimble flexibility that we need to grow. Our commitment to having a diverse workforce intersects with our mission to make sure that the sport that we love is accessible to all.
We've created a number of partnerships to accelerate our commitment to growing the game of golf and create opportunities to making this sport more accessible to women and minorities. We've partnered with a number of historically Black colleges, like Howard University, and provided professional resources, career guidance, education, and careers in our industry. We're also working with groups like Fore Hire, the LPGA, and the Latina Golfers Association, which helps women who are playing at the student level, corporate level, and tour level, identify the skills that they've acquired while playing and how those link to careers in the golf industry. As a result, we're actually hiring people from all of these groups and breaking down some of the barriers that might have been perceived.
As we acquire Topgolf, we already created an opportunity for diversity just naturally by the workforce that exists there. Topgolf is naturally creating an opportunity for people of all abilities and all backgrounds to enter the sport and begin playing the sport that we love for the very first time. Already recognized as a great place to work, Topgolf has an award-winning. They've received several awards for minorities and women, and has a culture that continues to grow and diversify the game and expand globally through company-owned and franchised operations. Approximately 50% of our Topgolf guests that come in have never really played the game of golf before. We're actually opening that game up to many people who've never played.
We're focused on creating environments that grow our talent from the hourly workforce to the management workforce, which creates a more employer of choice opportunity for us. To hear a little bit more from our Topgolf, you'll get a chance to hear from Artie and Jen as they'll expand on that opportunity as well. Now we're gonna play a brief video to introduce Glenn Hickey in the golf equipment.
Good morning, everybody. My name is Glenn Hickey, and I run our golf equipment business and the Callaway brand globally, including our apparel business in Asia. After a brief stint as a bond trader in the late 1980s, I came to Callaway Golf as a sales rep, and now I've been with the company over 30 years. I've had multiple roles within the company. I've been in my current role since 2019. Our golf equipment business enjoys a strong market share position in all major markets across the world. As you can see from the middle chart, we are extremely well-diversified and not over-reliant on any one customer or one channel. On course is an area where we have invested over the years through ambassador relationships and fitting capabilities, and will remain critically important as we move forward.
We also continue to invest in our direct-to-consumer business and are in the process of onboarding a new senior vice president of consumer digital experiences to drive our business and our strategy going forward. From a market share perspective, we continue to enjoy a strong position across multiple categories, and we are seeing good progress and a strong start to the year in all categories in 2022. On the golf ball front, we continue to see new highs in share on a monthly basis, including the most recent data that was released last week. In March, we hit an all-time high of 21.9% in golf ball, our highest market share ever. This diverse strength across regions, channels, and product categories has enabled us to outpace the market regardless of market conditions consistently, as you can see, for the last five years.
I expect this to continue as we continue to attack new opportunities while optimizing our areas of strength. We expect to grow our golf ball or golf equipment business approximately 10% this year and continue to outperform the market. Over those five years, we have solidified our position as a global leader in clubs while growing our golf ball business significantly. We continue to invest in new capabilities that have allowed us to be seen as a leader in innovation and technology through the eyes of the consumer. This is an important advantage as we look forward. I know a big question for all of you is, will the recent surge in golf participation stick, and will the golf equipment business remain at levels we have seen the last couple of years?
I don't know if any of us have that exact answer, but we do believe that there's been some meaningful changes to consumers' lifestyles and desires that positions golf in a good place going forward. We have seen a historical boom in new entrants to the game, along with a surge in interest from those that left the game due to time constraints and other priorities. The hybrid workplace, which now appears to be here for good, has freed up time to get out on the course. We continue to see data that indicates that these new entrants are serious about staying in the game going forward. To sum up this slide, golf has become cool. The industry has learned from past mistakes and is now much more welcoming environment for those new to the game.
In addition, due to the success of Topgolf and to a smaller degree, the new indoor golf entertainment venues, the industry has a large funnel of new golfers and a relatively new ability to get a good percentage of those golfers to stick in the game. As I travel the world, this phenomenon that I see. This is a phenomenon that I see everywhere. Waiting lists to join private clubs, record participation, and enthusiasm for the game. Golf isn't just cool, it's very healthy as well. Why is Callaway Golf positioned to take advantage in this healthy environment? The answer is laid out in this slide. We continue to invest more than our competitors in resources and tools to keep our product development engine cranking out new and innovative products. We have a significant opportunity in some underdeveloped categories that we are now resourcing at a higher level.
We are uniquely positioned to win in segments that are growing faster than the category as a whole. Lastly, and most importantly, our brand portfolio gives us synergies that our competitors cannot match. As mentioned, our commitment to investing in R&D tools is unmatched. An annual spend of $50 million plus in R&D allows us breakthrough technologies such as Jailbreak and the use of artificial intelligence in the design of our club faces. These advantages are noticed by golfers and industry insiders as they review and evaluate our new products each and every year. A complete renovation of our golf ball plant in Chicopee, Massachusetts, is another example of an investment that will give us a competitive advantage moving forward. We are confident that we now have the capabilities to make the best golf ball in the world.
These investments show up in the field as golfers are deciding what to purchase. Innovations such as Jailbreak and the use of AI show up as performance advantages when golfers are evaluating products at retail for speed and consistency. The vast majority of golfers are saying that is what they want to see when they are deciding what is best for their game. That is a trend that has advantaged Callaway Golf and will continue to advantage us going forward. We're also now turning our attention to some categories that are underdeveloped. We have recently added talent to our organization who have a track record of success in golf gloves, golf bags and headwear. These are all categories where our scale and distribution strength gives a big opportunity as we get the product right.
As you see here, every point of share gain is a $10 million-plus incremental opportunity. As the undisputed leader in golf equipment sales to women golfers, we are best positioned to take advantage of the continued growth in this segment. We have a dominant number one market share position in all major equipment categories, including golf ball, with female golfers. This is a segment that is now 25% of the market, but headed to 30% + over the next few years. This was the fastest-growing segment in the U.S. last year, and in the U.K., 34% of new golfers were women last year. In addition to leading in equipment innovation and technology, we have also invested significantly in our business intelligence capabilities.
This competitive advantage has positioned us to better understand the trends in the market and work closely with our key customers around the world to manage inventories in a way that drives sell-through and enhances the profitability of the business, both for the retail partner and for Callaway Golf. Along with investing in making the best products in the world, we invest in building awareness of our brands and products. That investment is paying off. In the late 2021 Golf Product Attitude and Usage Study, consumers rated our advertising as most effective. In addition, we continue to grow our social media reach and have surpassed 2 million followers. We are also in the early stages of building an industry-leading consumer data platform and are in the process of onboarding an experienced executive who will lead that charge.
A key component of our marketing strategy is bringing world-class talent into Team Callaway, investing in future talent as well. We have the current U.S. Open champion, the most recent gold medalist, and young stars such as 20-year-old Yuka Saso, who won last year's U.S. Women's Open. 19-year-old Atthaya, I hope I pronounced that right, who recently won the LPGA event in San Diego, and 15-year-old TK, I'm not even gonna try to pronounce his last name, but he recently became the youngest male player to win on one of the major tours. Beating the previous mark held by Ryo Ishikawa, another Callaway Golf ambassador who plays in Japan. As well as traditional TV advertising and standard media mix, we have also invested heavily in our own in-house production team.
This enables us to create standout content, but also create our own TV shows, as we did last year when we launched our new product to a global audience via the Golf Channel and YouTube from Hawaii. Also worth calling out here is the Super Bowl TikTok video. You saw a little bit of it in the video we just played, which received over 15 million views across Super Bowl weekend and accurately predicted that the Rams were gonna win. Our marketing efforts are not just focused on core golfers, but also helping to widen the appeal of golf and golf content. One of the most exciting and meaningful opportunities going forward is working closely with our internal brand partners to create a compelling story that inspires premier facilities around the world to partner with our portfolio of brands in a preferred and/or exclusive manner.
We already have many examples of leveraging our Callaway Golf relationships to benefit our other brands. At the Belfry in England, we have a preferred relationship in golf equipment, golf apparel, and range technology. That is just one of many relationships like this in Europe. In the United States, we have solidified partnerships with golf course management companies Troon, Kemper Sports, and Omni, where Callaway Golf, TravisMathew, and Toptracer are preferred partners in their respective categories. We are also in the process of rolling out fitting capabilities at a number of Topgolf venues across the country, including one here today. To close, Callaway is positioned to continue to lead the industry in performance golf equipment, benefit from the health of the industry, and grow revenues and profits faster than the overall market. Thank you.
I would now like to introduce Joe Flannery, who runs our active lifestyle and apparel business.
Good job, Glenn. Good morning. Welcome to El Segundo. My name is Joe Flannery. I joined Callaway at the very beginning of 2020 as the Executive Vice President of Apparel and Soft Goods. I have over 25 years of retail-focused experience with global aspirational brands like Nike, Adidas, and The North Face. We have strong brands across the Apparel, Gear, and Other segment in three categories. Golf apparel with Callaway Apparel, golf accessories with Callaway and OGIO, and the active lifestyle segment with TravisMathew and Jack Wolfskin. The segment is strong, geographically diverse, and benefiting from a hybrid workforce. Growth of the game of golf and growth in the category of active lifestyle and outdoor are benefiting the brands. Total segment net sales this year is to be approximately $1 billion.
While these brands are core to our strategy, in the interest of time, I will focus today on our two active lifestyle brands, Jack Wolfskin and TravisMathew. These two robust brands have strong momentum heading into 2022 and are positioned for profitable year-over-year growth. TravisMathew has its roots in what we like to call modern golf, but has evolved beyond just golf into the active lifestyle category. Jack Wolfskin operates in the outdoor sector, which is seeing wonderful growth as people return to nature during the pandemic. For example, we saw hiking participation increase over 18% from 2019 to 2021. These brands have massive runway to become more D2C-centric as we invest more into omni-channel retail and e-commerce.
We have excellent management teams, some of them are here today, and you'll meet them on your tour, that come from great backgrounds, from brands like Helly Hansen, Mammut Sports Group, Procter & Gamble, Amer Sports, Nike, and Under Armour. We have opportunities for future brand collaborations between these brands and both Callaway and Topgolf. We have invested heavily in these brands, and the heavy investment period will be behind us at the end of this year after having invested in common systems, platforms, warehouses, processes, and technologies. These brands will be strong cash generators and strong bottom-line contributors to the greater Callaway portfolio. Now let's talk about Jack Wolfskin, a leading brand in outdoor and active lifestyle in Europe and China, with very strong awareness and net promoter scores in Europe and China.
They are creators of eco-conscious products for outdoor pursuits that are innovative and German engineered. You'll be able to see some of these products today on your showcase tour. We, Jack Wolfskin, are on a mission to provide access to all through experiences and benefits of the outdoors. Callaway acquired Jack Wolfskin in 2019, where it had sales of EUR 319 million and EUR 23 million in EBITDA. The brand sits in a growth sector and is complementary to Callaway from a geographic, seasonality, and product line perspective. Shortly after the acquisition, the brand went through COVID downturn, but returned to growth in 2021, and the team has shown great results despite retail lockdowns, war in Europe, and supply chain challenges. For Jack Wolfskin, we have three strategic growth drivers: brand reset, core market double down, and greater D2C focus.
This year, we anticipate between EUR 330 million and EUR 345 million in net sales and EUR 18 million and EUR 23 million in Adjusted EBITDA. This will be a strong result in face of continued challenges such as COVID, the current lockdown in China, and the war between Ukraine and Russia, where we currently have suspended our operations. Looking forward, we see the opportunity to reach EUR 475 million on the top line and EUR 70 million in Adjusted EBITDA by 2025. For the three strategies, as I mentioned, resetting the brand is a strategic growth driver. We are returning the brand to its roots where it began. Jack Wolfskin was born around a campfire.
We are rededicating ourselves to our original inspiration, becoming a catalyst for everyone to connect with, be inspired by, and become protagonists of nature and the planet we live upon. Our new tagline and purpose is, "We live to discover." This recent study shows that Jack Wolfskin has the second highest NPS score in Europe among our broad competitor set. This is highlighting the great brand reset work that the team has already started. Another recent survey from Germany's retail and fashion trade news source, TextilWirtschaft, shows that Jack Wolfskin is the most desired jacket brand in Germany and is ranked in the top three most sustainable retail apparel companies in the DACH region. In fall of 2022, we are launching the discovery knowledge and inspiration platform using our first signing to the Jack Wolfskin discovery team, National Geographic fellow, Ronan Donovan.
Ronan marks the first in a series of signings that replaces a traditional athlete team with a world-class international discovery team. These highly influential ambassadors for the brand will instantly provide Jack Wolfskin with rich digital storytelling that will increasingly make it a destination for the world of outdoor expedition discovery. We believe this is a first of its kind brand effort to systematically elevate researchers, advocates, and documentarians who spend their lives making impactful environmental and social progress outdoors. Here's a preview of some of the most recent content that we filmed with Ronan in Yellowstone. The second core strategy for Jack Wolfskin is enhancing our presence in core markets, or what we call the DACH Double Down, where we already have high brand awareness and growing affinity. We will grow the business by integrating our geo-targeted efforts with strategic wholesale partners, digital platforms, owned retail, and e-commerce.
Our efforts will connect with consumers where we have concentration of consumers and historically strong brand affinity and awareness. This will happen in Germany, Austria, Switzerland, as well as in China. Additional growth will also come from DACH or German adjacent markets, where we'll have a similar approach to integrating wholesale, retail and e-commerce in efforts in Poland, Benelux and the U.K., where brand awareness exists, is high, and yet we're just beginning these omni-channel efforts. We have longer-term goals of growing the business in both North America and Japan, where the outdoor industry has promising growth projections, yet we're calling these markets developing markets. Finally, we have a D2C focus, the third growth strategy. We have invested in talent, technology, data, and marketing efforts to grow our digital accessibility and presence in Europe and in China.
This effort benefits the brand's accessibility for our key wholesale partners as well as our own channels. Our goal is to hit 50% of sales coming from D2C in the future. Through these growth efforts and strategies, we have the opportunity to reach EUR 475 million in the top line and EUR 70 million of Adjusted EBITDA by 2025. Now let's focus on the TravisMathew brand. Founded in Newport Beach in 2007, the brand's position is playful, yet aspirational, Southern California-inspired lifestyle. With roots in modern golf, TM has evolved to be all about the active life. TM, or TravisMathew, has had incredible multi-channel and strong D2C growth with a track record of robust sales and profitability. Callaway purchased TravisMathew in August of 2017. That year, the brand had $61 million in sales and $7 million in EBITDA.
For TravisMathew, we have three major strategic growth drivers: profitable growth at retail, digital expansion, and strategic partnerships. In 2022, the brand has become even larger than we could have imagined when we first acquired the business and has incredible brand heat. Expected to be $300 million on the top line and greater than $50 million in Adjusted EBITDA in 2022. With the tremendous growth and momentum at TravisMathew, we see a clear path to be over $500 million in net sales and setting the pathway to being a billion-dollar brand. Back to the strategies, growing retail. When we acquired TravisMathew, the brand had five retail stores in the Southwest. At the end of 2021, we had 31.
By the end of this year, we'll have a national presence with 41 stores across the country with expansion and success in the Midwest, the Northeast, the Mid-Atlantic, and in Hawaii. Also, our new locations are performing extremely well. Impressive investment payback metrics, less than two-year payback on average for the recent store openings. TM has already expanded its retail presence internationally with one store in Japan that opened in 2020, and we are excited to announce that we will be opening up the first retail store in Europe on the other side of the Atlantic at and in partnership with St. Andrews. The St. Andrews retail location will be just feet off the eighteenth hole of the Old Course in the historical original caddy shack. The rollout of this location remains on track to open late this summer.
At TM, the team has shown an incredible ability to integrate digital content with ambassadors to drive commerce. TravisMathew signed ambassadors in basketball, football, golf, tennis, and boxing, with recent ambassadors including Chris Pratt, Alex Caruso, Sam Burns, Corey Seager, Jimmy Garoppolo, Matt Ryan, Steele Lafferty, and Jon Rahm, just to name a few. The brand has also had strong success with partnerships with large media platforms such as Barstool Sports, SiriusXM, NFL, CBS, NBC, Audacy, and PodcastOne. The TM Rewards program, our member-based loyalty program, is the glue that holds the omni-channel customer experience together. As the brand's D2C business continues to expand, the TM Rewards universe will be the connection to foster engagement and repeat purchase. Looking forward to partnering with Topgolf and their huge engaged consumer will also be a growth strategy for TravisMathew. Strategic partnerships is our third strategic growth platform.
TravisMathew has an incredibly diverse array of best-in-class partners, like DICK'S Sporting Goods. Here's a quote from DICK'S Sporting Goods. "TravisMathew has become a top-performing brand with DICK'S Sporting Goods with the largest growth trajectory in golf apparel." Nordstrom has also been an incredible partner for our brand, and they have been supportive of growing the assortment of products we offer in categories, including lifestyle and active, diversifying the brand's presence beyond that of golf. We are the number one apparel brand, let me repeat, the number one apparel brand at PGA TOUR Superstore, Worldwide Golf Shops, and many other golf retailers. Seeing great growth in our corporate channel through a new partnership with a corporate distributor in SanMar has been an excellent new addition to our channels, and we continue to see upside across all of these channels. In summary, we have exciting brands and growth categories.
Our brands and products are resonating well with the consumer. We have growing and profitable D2C businesses. We have strong management teams in place. We have achieved global scale, driving meaningful cost synergies, and our brands have attractive, profitable growth in generating strong cash flow. The growth of the Active Lifestyle brands, along with the growth of Callaway Apparel and accessories that Glenn just spoke to, will drive the segment growth rates. Now I wanna hand it over to my esteemed colleague, Mark Leposky, to talk about global operations.
Now for the exciting stuff. Good morning, everyone. My name is Mark Leposky, and my role at Callaway is to lead our efforts in the global supply chain. A little bit about me. I spent the first 13 years of my career at UPS Supply Chain Solutions and The Coca-Cola Company, and the last 22 years largely in the golf industry. 5 as the COO of TaylorMade Golf, 7 as their soft goods licensee, and as of this week, 10 years with Callaway Golf, as Chip hired me shortly after he arrived. I am also a veteran with 16 years as an infantry officer in the Army and the Army National Guard.
I don't have any walk-up videos or music like Glenn did, but to set the stage a little bit about our global operating team and this portion of the presentation, I wanted to share some fun facts. What do these numbers represent? The first number, 640. 640 is the number of engineers, physicists, aerodynamicists, chemists, computer scientists, and myriad of technical Ph.D.-degreed engineers and associates that are focusing on creating some of the most innovative products and services in our industry. The second number, 3,623, is the cumulative years of experience of those people, our associates, and these technical leaders. All this experience properly applied enables our digitally savvy workforce to create tools and technologies like artificial intelligence, advanced analytical systems, and data lakes to create differentiated products, services, innovations, and business frameworks.
As an enterprise, we have 1,801 active patents with hundreds of applications filed each year. We have statistical process control in our equipment manufacturing that takes over 50,000 measurements per day. Our digitally driven ball manufacturing plant that you heard of earlier takes over 50 million measurements per day, largely influenced by our X-ray systems capabilities. Then finally, in 2021, we designed, manufactured, and shipped over 40.1 million units of consumer goods around the world, and these numbers do not yet include Topgolf's retail shipments. At Callaway, we view our supply chain structure and scale as a competitive weapon. Never before has our platform been more tested during the last two pandemic-impacted years. We have a supply chain capable of not only expanding but also contracting effectively. This was well-tested during our pandemic experience.
We are now a battle-tested and battle-hardened organization, and frankly, the experience we gained during the pandemic has made every aspect of our supply chain team and platform stronger. Over the last 10 years, we have built structure, unique planning and execution systems and capabilities that have enabled us to scale and create a product engine that manufactures and ships products all over the world. Our supply chain is comprised of our own highly capable manufacturing and distribution capabilities, but we're also aligned with some of the most capable manufacturing partners in our industry. This gives us a supply chain platform that is capable of manufacturing some of the most complex products in our industry at scale. In the last 5 years, we've taken great measures to create geographic diversity in the supply chain, especially in our manufacturing platforms.
This is providing us greater flexibility given the pandemic disruptions, as well as some lower labor costs and duty and tariff avoidance, to name a few benefits. Specifically last year, a week before our third quarter earnings announcement, Vietnam gave us a present of closing. As a result of our geographic diversity, we were able to lift and shift some of our production into neighboring countries that enabled us to still launch our products on time this year. Our supply chain is also powered by our sophisticated information technology systems, which allow us the ability to properly align supply with demand and actively manage every aspect of our production, quality, and delivery processes. We've deployed a sales and operations planning process in every brand and region that focuses on consumer demand and sell-through.
This process provides our executives the ability to actively manage demand and supply fluctuations and effectively allocate the supply to optimize brand, revenue, and profitability goals. Specifically, as it relates to managing the health of our inventory and working capital, Chip once told me when I first started, I wouldn't be fired for chasing demand that exceeded our revenue, but I could be fired for having too much at the end of the season. We've made that a particular emphasis in our team. Alan Hocknell, who you'll meet here today in our equipment R&D teams, have developed in-house a unique set of design tools which use artificial intelligence. We utilize these tools to optimize product performance more specifically to the needs of different golfers than ever before.
Our AI system is also used to challenge our own design beliefs and conventions that we may have never previously considered, frankly. In this design method, we use virtual prototyping capabilities and supercomputing capabilities to iterate many thousands of solutions. It's the type of numerical analysis that if you tried it on your home computer, it would literally take decades to complete. Flash Face and Jailbreak that you heard about here today are just two examples of technologies developed using AI and are central to our leadership in generating ball speed for all types of golfers. Our fusion body construction technology has been developed to combine materials, each chosen for a specific purpose in a design, as our engineers push to use every gram of weight in the head to deliver better control of the ball with the golf club.
Finally, we've created and continue to evolve our extensive manufacturing and transportation network. Our focus is now to leverage the strength of our equipment supply chain infrastructure and our digital capabilities to create and extend best practices and synergies across all brands, divisions, and regions. As I mentioned previously, we built and aligned with the best available manufacturing partners in our respective categories. Our collaborative approach with our strategic partners ensures that the investments made within our supply chain are focused on creating capabilities, efficiencies, and capacities that we need to grow our revenue and profitability as an enterprise. As a matter of fact, since 2019, four of our key partners have invested over $115 million in facility capacity expansions, both in our club and ball categories.
As you may know, and Chip alluded to earlier, our industry has seen some extreme growth through the pandemic. Our investments have enabled us to create the available capacity in the respective categories shown here. Having available excess production capacity gave us the ability to absorb and navigate through the varied disruptions over the past two years, the mix of raw material shortages, component shortages, logistical challenges, pandemic-driven shutdowns, and labor shortages. This all gives us a better chance to achieve our revenue and profitability objectives despite the disruptions. We're also realizing synergy benefits with our newest division, Topgolf. For example, not only were we able to ensure that they had clubs and grips when we were constrained in components, but we were also able to give them a cost break of $0.50 per grip on all of their grips for their clubs.
Another little known fact is that Callaway Golf is now the largest purchaser of range balls in the world. As a result, we were able to ensure that Topgolf maintained and will continue to maintain assurance of supply despite the shortages of raw materials and production capacity within the industry. Topgolf is now receiving and will continue to receive all the benefits of our equipment supply chain and the innovation, assurance of supply, and purchasing power that comes with it. I thought it might be useful to showcase one facet of how we utilize the supply chain as a competitive weapon. Shortly after Chip and I arrived at Callaway in 2012, we utilized our technology platform and our engineering know-how to re-engineer our entire club assembly process from order to delivery.
This project transformed our custom club business to a lean, make-to-order supply chain with a quick turn delivery system. Since creating and launching our differentiated make-to-order platform, we've seen custom clubs grow into a meaningful percentage of our total club sales and drive strong custom club growth over the period. Our delivery cycle times were consistently praised by our customers to be two to four weeks better than our primary competition during the pandemic and still are today. Not only are the delivery cycle times better, but the investments that we've made in proprietary equipment to customize your Callaway Golf clubs make them some of the most precisely built clubs in golf. Holding tolerances of plus or minus one-eighth of a degree in loft and lie, and one-sixteenth of an inch in total length.
Overall, this level of capability delivers a great consumer experience, strong profitability for our retail partners, and preference for our brand. As I indicated and you saw earlier, we are also a company with a deep manufacturing heritage ourselves, and nowhere is this more evident than in our golf ball category. As we began our innovation journey in the ball category 10 years ago, it quickly became obvious that we were not only going to need more capacity, but to achieve our objectives of competing at the highest levels in the industry, we were gonna have to make some meaningful investments in our supply chain. In our Chicopee facility, we have largely completed over $50 million of capital investments, and our strategic partner in Asia built us a captive plant with many mirrored capabilities which opened in 2019.
These investments have unlocked capacity and capabilities in our manufacturing processes and measurement capabilities. Every value-added process within the Chicopee plant has been redesigned and utilizes digital-capable machinery. Our Chicopee factory now is capable of holding dimensional tolerances smaller than the diameter of a human hair, and weight tolerances of less than one-third of the weight of a paperclip. We've also invented proprietary technology which combines equipment, material formulation, and construction, which allows us to measure every layer of a golf ball with our X-ray systems. No other company is capable of doing this today. We call all these capabilities Precision Technology, and you'll see that moniker on our golf ball packaging here today. Additionally, our decorating capabilities enabled by a proprietary printing machine we co-developed with one of our equipment partners, has positioned Callaway as the industry leader in what we call decorated balls.
Since launching Truvis in 2015, Truvis Logo in 2017, and Triple Track in 2019, we have been chasing the demand created by this capability ever since. All these investments enable us to leapfrog other competitors within our industry in manufacturing capability and quality. The factory of the future is now here, and the benefits of our investments are now becoming more obvious to all of our constituents, from tour players to consumers alike. As a matter of fact, our share growth in this category has been phenomenal, especially over the last couple years. We are the first brand in nearly 20 years to cross the Datatech 20% market share threshold, and it feels like we're just getting started.
Last year, our golf ball category was a $235 million category, and I personally believe that you'll see the Callaway Golf brand surpass $300 million sooner than later. Callaway Golf has also had soft goods business segment for many years, but not until the last four years as we leaned into an acquisition strategy in the apparel category had we had the opportunity to build a robust supply chain similar to that of our equipment supply chain. One of the key unlocks was the acquisition of Jack Wolfskin in 2019, which provided scale that we needed to utilize as a cornerstone to build our global apparel supply chain platform. Although hampered somewhat by the pandemic and our inability to travel freely, we have utilized our local sourcing operations teams embedded around the world and Zoom team.
Zoom and Teams collaboration calls to identify and realize synergies in nearly every brand, including Topgolf. We have currently identified over $15 million in annual synergies that we'll realize fully by the end of 2023. One example is that in 2019, after the acquisition of Jack Wolfskin, our combined brand portfolio had only one known shared factory across all the brands in tier one and tier two suppliers. Today, we have 51 known shared suppliers across our total apparel and soft goods supply chain. Another benefit for Topgolf and Toptracer will be the ability for them to leverage our platform to design and manufacture the uniforms for our over 20,000 associates, which is currently in development. Sharing technological know-how and strengths across the brands also happens within the apparel and soft goods supply chain.
Jack Wolfskin, for instance, invented the world's first membrane made of fully recycled material. This patented and exclusive technology, named Texapore Ecosphere, is the best fusion between performance and sustainability in a waterproof membrane. This technical know-how is already providing benefits to our other brands in outdoor and all-weather gear categories. One final synergy point that is becoming very important for us today is the aggregation of freight volumes in our shared manufacturing facilities. Because we're sharing manufacturing facilities, we now have the ability to consolidate smaller shipments for each brand into containers headed to our regional DCs. This allows for more timely and efficient delivery windows and better utilization of containers and transportation costs into each region. The final mile of our supply chain is our regional multi-branded assembly and value-added services platforms.
Over the last few years, it's been necessary for us, due to our growth, to take steps to extend our capacity in each of these regions to ensure that we can support the revenue growth across the enterprise. This May, our North American facility in Fort Worth, Texas, will be the first facility to provide distribution services across every brand in our portfolio when we integrate Topgolf and Toptracer into the operation. In these facilities, we configure and ship our products to all customers and channels. We also provide a variety of value-added services like custom clubs, logo balls, logo gloves, personalized clubs, and embroidered bags and apparel. Every region has a multi-branded facility capable of fulfilling the logistical needs of the local markets and providing a collection of value-added services.
All these capabilities are enabled by our sophisticated ERP platform and our state-of-the-art warehouse management system and automation systems. These facilities also create benefits in aggregating our outbound transportation service providers and provides volume for delivery services within each region. In closing, hopefully I've been able to provide you with some insight into our teams and our global supply chain. Frankly, I've only scratched the surface of our capabilities. Our focus every day is to create demonstrably superior and pleasingly different products, services, and business frameworks that create competitive advantage. We have a formidable product innovation centers of excellence in each division and brand that create differentiated products for their respective brands.
The strengths of each brand in their respective categories help create synergies by becoming technical resources and collaborators for the other brands in our portfolio, enabling us to seize opportunities across the enterprise. Our R&D, engineering, and manufacturing teams, as pointed out previously in our presentation, deliver meaningful capabilities across all product platforms and categories. Our team's knowledge and operating structure benefits all brands as our planning and lean manufacturing management approach is applied across all product categories and services. What does all this mean for our future?
I believe that the combination of our extraordinary people, our supply chain structure, scale, and technology platforms are truly a competitive weapon in our industry and position our company to drive innovation, create leverage, provide assurance of supply that ensures we achieve our revenue and profitability goals for years to come. With that, I wanna thank you for listening intently today, and I'm gonna turn it back over to Lauren for a little Q&A. Thank you, everyone. Tried to give them everything.
Okay. Testing. Are we good on the webcast? Whoa. Pass. Good? I think it's working. Okay. Perfect. Awesome. Okay, we'll get started. We'll start with Alex in the room and then for those of you on the webcast, if you have a question, you can submit it through the Q&A chat, and we'll get it answered in the room.
Perfect. Hi, Alex Perry from Bank of America. Just first, could you maybe just walk us through some synergy opportunities between Topgolf and the golf equipment business? I think you gave a few examples, sort of bringing more fitting areas to Topgolf venues, and maybe another example would be, you know, the current venues that we're at with, you know, the lakes and sort of encouraging more on course participation, for Topgolf users. Yeah, just any more color on synergy opportunities would be great. Thank you.
Yeah, Alex, it's a excellent question. I'm gonna defer that if I may, because the Topgolf team is gonna go into that in a fair amount of detail in their presentations today. If you still have that question after we hear their portion of the presentation, then let's revisit it then. The synergy opportunities are pretty significant, and you're gonna hear about them, and I think you'll also get a chance to see them come to life here in the venue.
Yeah, I think. Sorry, we're just gonna pause for one second. We're having audio issues on the webcast. Just making sure. Can you see the questions directly or do you wait for her? She's gonna pass this out to me. There we go. Hi, folks on the webcast. I'm not sure if you can hear me now. If you can, maybe somebody just ping me and say that it's working because I can see in the Q&A. Yeah. Let's keep going with it, and then. Oh, yes. Thank you, Kyle. Okay. We're good?
Keeping Lauren happy during this is a really good thing right now. I don't know who is more worried right then, me or her.
million in sales and EUR 7 million EBITDA by 2025. What are the one or two big things that have to happen to get to those numbers? I guess number one. Number two, you threw out a big number for Travis, a potential $1 billion sales opportunity. How realistic is that, and then what's the timeframe you're talking about there?
Joe, those are excellent questions, and I'm really happy to have my compatriot Joe Flannery to throw those over to.
Well, we have a tremendous amount of belief in the leadership teams and the momentum at both brands. I'll start with the Travis brand being in multiple segments, both golf, lifestyle, footwear, and active. The size of the entire industry pie is far larger than that of just outdoor, and it's global. We look at competitors in the space well beyond that of golf. We look at competitors like lululemon, Nike and Vuori. You can see their growth trajectory, and we have confidence that our growth trajectory has as much, if not more brand heat than those brands.
From a Jack Wolfskin perspective, the improvements on the business over the past two years, despite having had retail lockdown in core regions like Central Europe, you know, and in China, and yet delivering the numbers that they're going to deliver is confidence in that leadership team. As that leadership team expands to new regions, as we called it, dock adjacent, and investing in the omni-channel model, where historically we might have only had a distributor in those markets, we see significant growth, and we have confidence that our projections are realistic.
Thanks. Randy. Hey, it's Randy Konik from Jefferies. I guess first for Mark, you gave us some good perspective. It's a well-oiled machine on the supply chain side. Maybe kind of give us your thoughts five years from now, your wish list on, you know, what do you want to see out of the, you know, nimbleness or the speed out of the supply chain or what you can kind of bring to bear across the entire portfolio or ecosystem. You've already given us some good color around synergy around the cost side, but I'm really curious on, you know, items around speed, nimbleness, and so on and so forth from your perspective.
I would tell you, as I alluded to in the presentation, we are highly focused on DSPD, right? Demonstrably superior and pleasingly different products. What really makes me happy is when I can create capabilities that provide Dr. Alan Hocknell a canvas to create new products on. We are intently focused on mining all the capabilities in the supply chain and our manufacturing capabilities that lead to product innovation. That's a huge focus, and not just on the equipment side, on the ball side, in the apparel side as well, whether it's technical apparel or opportunities to look at other materials and fabrics for the brands. Really the raw material manufacturing innovations is a big part of it.
The other part you allude to is the service component, and I pointed to that in our custom club. You know, we look at, you know, we're living in largely a Amazonian-driven culture these days, where people want it sooner. To the degree that we can iron out the challenges associated with getting your product when you want it, that's our focus. You know, in a non-pandemic impacted environment, we commit to less than five days with your custom clubs in delivery. We are looking at other innovations in other categories like embroidery and then logos and let's call it corporate events and other types of services that we can complement the brands with.
The brands all get the benefit from those capabilities in each of our facilities, so they can pick and choose from that portfolio. It's really about driving innovation in the products and through all of that with a lens of being lean and truly being as efficient and taking the waste out as much as we can. We wanna be able to create scalability so they never have to worry about whether they're gonna have, you know, be able to deliver their revenue numbers. It's just about how much we can deliver.
Susan Anderson from B. Riley. Another quick question on the supply chain, with Chip, the ball plant. I'm curious, it looks like you're still at pretty low capacity based on the chart that you put up. How are you thinking about leveraging that plant as your market share continues to grow and as the models continue to expand, if you could maybe give some color around the margins? Chip, one quick question just on the overall industry. You sound pretty confident about keeping the ball players that you gained during COVID. I guess maybe if you could talk about or just give some color around that confidence on keeping them in the industry versus maybe potentially leaving as we get back to more normal output.
Sure. I guess, Mark, do you wanna-
What I will tell you is we've been the investments we've made is like changing the tire with the car still rolling because we've been in production and as we've been evolving and moving into equipment. We're largely complete. We've got a few other pieces of equipment that we're waiting on that will unlock some more capacity for us. We believe we're gonna maximize that facility, and obviously, as the more volume that we're able to produce, Glenn's capable of selling those balls to everyone. We feel good about our trend there. We continue to see opportunities for more growth, more efficiencies and leverage.
Yeah. Susan, the, you know, in terms of the, you know, golf, on course golf, right?
You know, we are confident that we're gonna be able to retain the vast majority of the new entrants into it, and that it's gonna be significantly higher than it was pre-pandemic. You know, some of that is just the nature of golf, right? It's a sticky game. It's addictive. Once you get to playing it, you tend to wanna play more. It's a passion-based game. The hardest part about golf is getting into the game. Once you're in it, you know, it tends to really capture your imagination quite formidably. Memberships, you know, are up significantly. You know, you're likely to use those memberships, and they're intertwined with your lifestyle. Then golf just fits with the world now better.
You know, the hybrid work environments, the off-course golf segment, which is driving it. You know, Topgolf itself is growing so quickly, its impact on off-course golf, it almost is the category, right? It was a regional player. It didn't have the ability to drive participation, et cetera. If you say that the hardest part about golf is becoming a golfer, you know, and if you don't have a rich parent, it's hard to become a golfer unless you have a Topgolf. If you ever wanna look at growth of the game or diversity, you just spend a few hours in one of these facilities. You won't question it. You know, they'll be hitting golf balls, having a blast, and you know, the ability to transition that. It just becomes a math exercise after that.
20 million uniques is really small when you talk about Joe and how he's gonna take TravisMathew to its billion. In golf, .where there's 25 million participants in the U.S 20 million uniques growing at the rate we're growing Topgolf, pretty impactful. You know, the math kinda speaks for itself. We do have a high confidence and, you know, we were intent on communicating that, including our what essentially is guidance for the golf equipment revenues for our business for the year.
Team, this is Patrick real fast. I'm gonna repeat the question 'cause the folks in the webcast are having a little hard time hearing the question, and then we will proceed from there, so.
Daniel Roe from Stephens over here. I'll ask a student's question on golf balls. You guys have driven that, I think, Mark, you said about 21% market share now. I guess, where do you guys see that going longer term? Is there room now that you have brand equity at the high end with the Chrome Soft to introduce more middles here? Golf ball is kind of at the middle price range. Eventually, when do we reach capacities where you might need another facility? How are you thinking about capital investment eventually around that sort of segment?
For the webcast, the question was around the golf ball business and its opportunity, with market share and capacity related to that.
I'm enjoying this, so I'm gonna turn that right over to Glenn and Mark and let them commit themselves to these. This is a lot of fun for me too.
You first, Mark. I'm committed to have the capacity Glenn needs to sell every ball he can sell. No, you obviously reach limits at some point. I don't see us reaching the limits of our Chicopee facility for quite some time, but
It's continuing to scale.
Yeah
at Chicopee right now. We've been constrained there as we've been increasing it, and we have plans for further gains there that we've got clear visibility to it.
Some of the digital equipment that I spoke of was delayed somewhat due to the pandemic and chip shortages, but some of that is still coming. We're in a pretty good place to scale our business.
That's without, you know, significant further capital. The capital investment side of that. Now there's gonna be some ongoing maintenance. It's a factory. They have ongoing maintenance CapEx at a, you know, certain level that is required every year to keep it at the level that we're gonna maintain that facility. The big investment stage for this capacity and capabilities is behind us.
I would say in the different categories, you know, we have the ability to design unique golf balls, and Mark has the ability to make the best golf balls in the world. Then with our scale in terms of distribution, you know, globally, we have the opportunity to, I mean, golf ball is a distribution game, and if we can get more distribution than our competitors, we're gonna continue to grow share.
About the premium versus mid-price point, how's Supersoft doing?
Yeah.
How are you doing in the premium?
Supersoft is right now the number two selling golf ball in the world on a unit basis. So, you know, we have a lot of success in Supersoft. ERC Soft at the mid-price point continues to do well, and then obviously Chrome Soft continues to grow as well.
Hi, Patrick Hollinger from Goldman Sachs. Our question was just about the DTC opportunity for the apparel brands. You mentioned the goal of having over 50% of sales for Jack Wolfskin come from DTC. We were wondering if there's any more color you can share on the cadence of achieving that goal and kind of the margin opportunity that's there.
The question in the room was related to the direct-to-consumer opportunity for the apparel brands. As Joe had mentioned, you know, the goal was to get to 50%. Joe, give it a shot.
Yeah, sure. Well, I don't think we're gonna be breaking out a timeline for that objective, and we're not providing channel segment margin profiles. Obviously, by the nature of the question, you know, it's a margin accretive section, and the teams are doing incredible with the developments of new marketing tactics, new data tactics, and integrating the data that we have between our catalog, our retail, and our e-commerce in core markets, as I had mentioned, such as Germany, Austria, Switzerland, and in China. We have hired a significant new digital team over in Europe, led by an individual who last led global commerce digitally for the Birkenstock brand. We are investing significantly into performance marketing as well as digital capabilities on the Hybris platform that are enabling that growth.
Follow up on golf ball from Alex Maroccia. Just curious about how big would you estimate the golf ball market is in total today and how fast you forecast to grow through 2025 for the market as a whole? So if you could parse that out into domestic trends versus international.
The question from the room was around the size of the golf ball retail market globally, and how that splits out between the U.S. and international.
Yeah. Golf ball retail market, I don't have an estimate for. Golf ball wholesale is close to $1.5 billion, I would guess. Retail's $2 billion-$3 billion, I guess, in that.
About right.
That range.
Correct.
It's golf ball itself has been growing very quickly over the last several years, but it really will over the long term trend with rounds played in participation stats. We'll talk a little bit about our assumptions on that, and you'll see when Brian talks that we expect the golf industry in our current modeling to grow low- to mid-single digits% long term.
Hi, Kevin McCarthy, Neuberger Berman. Just a question for, on TravisMathew. Similar to the Jack comment about getting to 50% DTC, do you have a similar algorithm or a similar aspiration on the TravisMathew side? That's the first part of the question.
Well, we're.
Sorry, Joe. Real fast. Just the question from the room was around the direct-to-consumer opportunity for TravisMathew.
We are very excited about the D2C aspect of TravisMathew. The performance today has been incredibly strong, but so has our partnerships, as I had mentioned. We're seeing incredible growth through a diverse channel of partners in the department store, the sporting goods, the golf national accounts, and the green grass. Those growth rates are at a high level. We're not going to put out a goal for D2C as a percentage of the business because the overall pie is growing at a similar rate.
That said, we are incredibly excited by the continued growth with e-commerce and brick-and-mortar retail, which as I had mentioned, has an incredible payback period, and we're gonna be opening up a ton of stores this year, having a total of 41 by the end of the year, and we see a long path to more retail stores, both domestically and internationally.
Yeah. I'll add a little bit on that. The TravisMathew brand is, you know, a unique brand. It's just been growing so fast. Every year we go through the budgeting process, and they show their direct to consumer percentage forecast to go up significantly, right? It's, you know, holy smokes, it's gonna be, by far and away the largest channel, 40%-50% sometimes. But then they go out and overperform at the wholesale channel and, you know, it keeps that percentage down. One of the factors that we see with that brand is that as we put these stores in, we'll put a store in often in one of the early models where they put it near a Nordstrom's because they happen to have a very good partnership with Nordstrom's.
The sales in Nordstrom's goes up, and then the sales and everything around it in the market goes up as well, and the store pays back in about two years. But our growth initiative with Travis is more of a retail store because we don't have many, although we've got you see that we're adding them now. It takes a little bit longer, but it's tending to feed the wholesale as well. Harder to give an exact percentage on that 'cause everything's going up at the moment.
Hi, this is Sage Casaga from Gerber Kawasaki Wealth Management. My question is around, you know, given the fact that there's about 25 million people that go to Topgolf per year, now what is the biggest opportunity that you're seeing within these venues? I know there's digital offerings such as like World Golf Tour app, and, you know, within the Toptracer technology. But what's the plan with all of this, you know, data that it may be collecting? And as a follow-up, if Topgolf is growing so quickly, difficult for competitors to sort of recreate, what's inhibiting you from scaling that business a little bit quicker, besides maybe project costs and-
Construction delays.
Thank you.
Just for the webcast, it was a two-part question. One was around the digital opportunity synergies that Topgolf can potentially provide to our other brands. Also is there an opportunity because the venues are so successful to do more than the, you know, 11 a year that we've stated or that we will state here in the next part of the presentation?
I think we've stated it now.
No, Sage, those are great questions. I like the first question that's asked. We're gonna be going through a very detailed presentation on Topgolf. They're gonna answer some of that, but some of those questions are still gonna be very valid. I'd like to defer those until we get the Topgolf team up here, and we'll reengage on those. Growth of Topgolf is exciting. Tremendous digital opportunities that we're unlocking. I mentioned how proven I believe the venue performance is, and you know, it's certainly a fair question on, you know, what about doing it even faster. We've heard that, and I look forward to having the Topgolf answer it instead of me this time.
We've got a couple questions from the webcast, so we'll hit those real quick and then go back to the questions from the room. The first one was around material cost inflation, especially metals, and is the company seeing that and you know how is that impacting the business?
Yeah, I'll take that one, and Mark, feel free to chime in. We're seeing where nobody's immune from the inflation that's in the world today, right? If you're a manufacturer of any product, consumer of labor, you know, and certainly on the service side and food and beverage, there's inflation, you know, throughout right now. That certainly includes our raw materials across our legacy business, as well as components. We see some of those inflationary pressures, call it 3%-15%, varying on the product, 'cause we've got a pretty diverse portfolio, so you know, you can go from one side of that to the other.
We also see some FX and some freight pressures that you hear when you talk to every global company that moves things around the world right now. Fortunately, we're able to take price. Our consumer is reacting positively to our products. There has not been significant, if any, pushback on price. We really don't see a negative signal there. That offsets the vast majority of any margin pressure that would exist. We're, you know, seeing a very good outlook for our business in general right now. The inflationary environment, you know, we're not immune to it, but we are in a very desirable position of being able to manage it productively.
Great. Thanks.
Anything you want to add on that, Mark?
I think that you captured it very well.
Okay. You know, you get into more specifics because you could ask us from cotton to raw materials, petrochemicals into the golf ball plant.
Yep.
T-to, uh, metals into-
Tungsten, titanium
To freight. You know, we're in each and every one of those down to chicken wings, which I never thought I would actually be listening to the cost of chicken wings going up. Evidently they did. They're able to manage through the chicken wing price increases here at Topgolf, and you can ask them for more detail on that as they get up here.
Great. The second question from the webcast was around Jack Wolfskin and with the core market starting to turn around and things going pretty well there, is there opportunity to bring that brand to the U.S., you know, a little more quickly, and maybe just talk about that opportunity?
Yeah, sure. The opportunity, as I called out for the Jack Wolfskin brand, is to double down in DACH, where we have the highest brand awareness of our competitor set. The second opportunity is the DACH-adjacent markets where we have high brand awareness such as Poland, Benelux, and the U.K. That said, we have opened up an office just off of Main Street in Park City. Please come by and say hi when you're skiing in Park City. We see some long-term growth opportunity in the U.S., and we have some initial success in e-commerce and with some key retail partnerships. We also have had strong success in Canada across some golf national accounts and outdoor national accounts.
That said, we wanna temper the expectations because the brand awareness is very, very, very low, and the competitive set is quite strong. We're considering it a developing market.
I'm gonna jump in on this one, too. You'll get used to this. The Jack Wolfskin, you know, brand, when you look at it, obviously the U.S. is clearly a significant opportunity. I wanna just, I guess, take this moment to remind you why I'm so confident in it. First and foremost, you know, Joe has built a terrific team within that Jack Wolfskin brand. Much better than I could have ever done. It certainly helps to have expertise in that team there, and we certainly have that now. When you look at that business, what you look at fundamentally is some of that brand rating, right? I know in the U.S. we don't know who Jack Wolfskin is yet, although we're starting to scratch the surface of that.
Think about how strong that brand rating was in its core markets. I mean, the number two net promoter scores, the number 1 most desired jacket, I mean, that speaks volumes. The other thing that gives you confidence is the sell-through. Their sell-through has been excellent, and it has been building momentum as they further build expertise in the product and the marketing side. The third thing is the pre-books. You've got some very strong fundamentals in that business. It's, you know, there's also some things we're working through, right? There's a war, there's pandemics. The fundamental of whether the consumer loves it, those have been strengthening and are probably the most important metrics that you wanna look at in terms of health of the brand. I think we can take one more question in the room, and then. Yes, go ahead.
Do you have a mic?
Hi, Kevin Heenan, JP Morgan. Thanks for taking the question. I guess within the 10%-12% revenue outlook that you provided, what does that embed as far as traditional metrics like rounds played and on- versus off-course participation go forward and, you know, with all of the lines of business that, you know, we discussed this morning, I guess, how much sensitivity is there to the model from, you know, dips or conversely upticks in rounds played, you know, in any given year? I mean, what would a, you know, if there were to be a moderation off of the 2021 highs, would that materially change the 10%-12% you've laid out?
The question from the room, and Kevin, make sure I get this right, is what are the overall market assumptions assumed in the 10%-12% four-year growth rate that Brian is going to talk about here pretty soon, and how much of a potential downturn in golf equipment would impact that 10%-12% range? Okay. I'll start, and then I'm sure Brian will jump in on this. I wanna. Golf equipment is a natural question and, you know, when you think of Callaway, you're gonna think of golf equipment. It's a significant business for us, legacy business. But again, if you look at my presentation, 2025, 73% of the revenues are projected to be in either apparel or Topgolf.
From a sensitivity of what, you know, a change to our forecast on participation, it's not that sensitive. You know, we have transformed this business, you know, to a modern golf ecosystem and with a strong active lifestyle presence where our growth is systematic. It's basically, you know, fundamentally structured in right now, and, you know, we're very proud of that. Then we've done a little bit of modeling, and Brian's gonna do that just 'cause what if, right? We're not projecting this, but, you know, if golf equipment did go backwards 10%, that would be bad. We've seen that happen during the Great Recession. It went backwards briefly. It hasn't really ever done anything like that ever before, even in mild recessions.
We're still comfortable with the growth projections that we're providing you. Obviously, tailwinds are always better, but, we're able to absorb volatility, and we're diversified to the point now we're not dependent on any one, segment for our overall success.
Yep. Overall, golf growth is the slowest growing piece of the business, and as Chip mentioned, it will be only 25% of our business by 2025. I don't think we're that sensitive to it, as Chip was mentioning. As he also mentioned, as we went down 10% in the golf equipment business, we still think we hit our goal of $800 million of EBITDA by 2025. You know, we'd be on the lower end of that, of course, but we would still hit it.
Great. Okay. Well, it's about 9:57 right now, so we'll give everyone 7-10 minutes to take a little break, and then we'll come back in the room to hear from the Topgolf team. Thank you.
Thank you so much, everyone. Okay. Without further ado, I'm gonna turn it over to the Topgolf team, and I'd love to introduce Artie Starrs.
All right. Thank you, Lauren. I'm Artie Starrs, CEO of Topgolf. It's a pleasure to be here. On behalf of our 21,000 associates and growing, there's close to 600 here in the venue today, and our leadership team, I just wanna welcome you here. This is, you know, an exciting day for all of us as part of the Topgolf brand. We can't wait for you to experience all that Topgolf El Segundo has to offer, and we appreciate your interest in what we're doing, and we're excited to tell our story. Let's play. This is our North Star, our internal call to action, and this informs our promise to create more places to play, more ways to access play, and the continuous innovation on the special play you can only get from Topgolf. More play more. Oh, I don't know why it's. Sorry.
Thank you. Here we go. It's hard to believe a month ago, we celebrated just the first anniversary of being a part of the Callaway family. I've been here a year now. Our leadership team is assembled. I can't wait for you to meet them later today. We believe we are well-positioned to help drive Callaway's leadership in modern golf. We have a brand and experience that is relevant and has created and defined a whole new category. As Chip mentioned, our venue model is now proven and repeatable, and you'll hear the economics are strengthening. We are just getting started on the digital front, and there's a massive runway ahead for a deeper relationship with our players. The Callaway family offers significant synergy potential for us. This will improve the player experience and create shareholder value. Most importantly, we have momentum.
You can see this in our recent performance. The consumer is excited about our brand and our offering, and we're improving on how profitably we deliver on it. Now, when I look at Topgolf, when our team looks at Topgolf, we believe we are a category of one. You can't help but feel that being here at Topgolf El Segundo, our venues are iconic, offering the premier golf entertainment experience. This is supported by the leading ball tracing technology, which changed broadcast viewing forever and is now changing the economics for range owners. This is complemented with proprietary in-house game development and media capabilities that allow us to serve only from Topgolf content in our bays, our Toptracer ranges around the world, and at the iOS and Android store in the palm of your hand.
With an audience of 30 million and growing, we are creating and engaging players with new ways to play their game. Now on our venue model, it's now proven and consistent. The track record is extraordinary, and the return profile is outstanding. At the end of this year, we will have opened our 81st owned and operated venue with tremendous white space still remaining. We will continue this opening pace through an attractive model with high cash-on-cash returns between 45% and 50%. We're doing all of this while differentiating ourselves through our brand positioning category of one leadership, supported by proprietary technologies you can only get from Topgolf, extensive experience in complex real estate transactions and execution, and operating these venues with excellence at scale. Now, we have always been a technology company.
I was here at the El Segundo opening a couple weeks ago, and the mayor here in El Segundo introduced this venue to the community as where technology meets tradition. The foundation of the brand was putting a chip inside of a golf ball, and we have a cult-like social media following, something that you'll see shortly. We have a massive runway on the digital front, massive runway to increase and improve our digital engagement with them. They want this. On the Toptracer front, you'll see in the bays here today, if you're a novice golfer, have never played before, we invite you to play Angry Birds. We invite you to play Jewel Jam. This is. Kids love this stuff, and they have a blast when they come here for the first time. If you're a golf enthusiast or accomplished player, you can play St.
Andrews or Pebble Beach right out here, and more iconic courses are to come. We also connect players around the world through experiences on our WGT mobile game. If you haven't downloaded it, I encourage you to do so. It has some of the most beautiful golf photography you'll see anywhere in global competitions that bring people together, such as the Nine Shot Challenge. We'll always be looking for ways to improve how our guests play and can engage with us. You'll see our new ball dispensers today, and you'll also see the new interface on the gameplay, which is in all of our venues as of last week. We have an opportunity to improve our digital business. We are providing new ways to reserve a bay digitally through the website or our app, and also order F&B through the ease of your mobile device.
More on that later. Now, this merger with Callaway has created exciting new ways for Topgolf and Callaway customers to engage with our better together ecosystem. Our brand awareness has increased and is gaining equity with traditional golfers through exposure like Jon Rahm and his right bicep. It's a big bicep, if you haven't seen it. You can see in the venue here today and at the pro shop over at the Lakes at El Segundo, the potential for full court integration of Callaway products from TravisMathew and Jack Wolfskin. It's pretty exciting to see these brands come together and be relevant to our players that come here.
The ability to be a part of the global leader in golf as we expand our Toptracer footprint is another thing that's paying massive dividends as the golf professional and club relationships that Glenn and his team have are creating a lot of opportunities for Ben Sharpe and his team in terms of strengthening the pipeline, and we'll share some of those specifics in a moment. As I said earlier, we have strong momentum. This business is on a roll. Despite the first half of 2021 being significantly impacted by COVID, the year was a breakthrough year for Topgolf. We grew our venue count by 15%, which is impressive, but more importantly, as you'll shortly hear from Chris Callaway, we rebuilt a multi-year pipeline that's extremely strong.
We added nearly 7,000 Toptracer bays, ending the year over 15,000 bays. Perhaps what we're most proud of is we closed the year strong with superior comp growth versus 2019, as we saw corporate events start to return to normal levels over the holiday periods. 6% comp growth in Q4. In the first quarter of 2022, despite the Omicron softness we experienced in January and we flagged earlier in the quarter, we posted comp growth of 2.3% versus 2019 or 23% vs. 2021. Let me talk a little bit about our team. First of all, it's just a privilege to be on this team. I pinch myself every day, and as an investor, I'm sure many of you know I tap dance to my office every time I come into Topgolf.
It's just an awesome team to be a part of and an awesome brand to be a part of. You know, when I introduce this team and you look at this team, we've got a broad range of experiences. This is a category of one, as I said, but some of the strongest consumer and retail brands are represented, leadership development brands, digital media brands. This team is perfectly suited to drive the future of Topgolf, and as I said, I just couldn't be more excited to be a part of it. You'll get a chance to hear from several of our leaders shortly about their areas of expertise and responsibility, and you'll get to meet everybody throughout the venue as you move around Topgolf El Segundo after we're done with the Q&A today.
The primary thing I would tell you about this team is we are focused. We are focused on our mission, and we are extremely enthusiastic about the future of Topgolf. Speaking about our mission, we are on a mission to double our player base by 2025 to 57 million and increase the number of balls hit each year so that 50 billion balls are hit between now and the end of 2025. As context, the National Golf Foundation estimates there are 37 million golfers in the United States today. That's people who play once a year. 19 million of those visited a Topgolf in the United States. This is a huge goal. At Topgolf, we believe in the unlimited power of play, and we believe in the unlimited power of this brand.
We know that to accomplish this mission and to grow the game of golf, we must enable more play and encourage our guests to play more. We are currently a big part of the game, and we're proud of that. We are also gonna become an even bigger part of the game going forward, and we fully embrace and are humbled by the opportunity Chip mentioned in diversifying the game and making it accessible to more and more players. Now let's talk about growth. How did we get here? We get here through our three ways to play, our venues, our Toptracer business, and our media capability. In our venues, we will continue to open new venues, and we have massive white space, both domestically and internationally.
For the existing venues, we have identified an actionable opportunities to drive sustainable same-venue sales growth with further upside while continuing to improve margins. In our Toptracer platform, we will continue installing bays around the world, and this changes the way players engage with the driving range and the economics for a range owner. Lastly, through our media business, we'll continue to enable digital play through World Golf Tour and the soon-to-be-released Tee Time Adventures. Some specifics on this. Each of these ways to play has a very clear path to growth. As Patrick let the cat out of the bag earlier, we're upping our venue opening expectations from 10 to 11, opening 11 owned and operated venues annually. We expect to drive low single-digit same-venue sales growth and maintain attractive EBITDAR margins of 32% in our venues.
We're also targeting to open two new franchise venues in 2022. We recently opened in Oberhausen, Germany, and we'll open in Bangkok later this year. With the goal of ramping to eight or more annual openings by 2025, as there is significant interest from our franchise partners given the success of the economic model. With Toptracer, we expect to install 8,000 or more bays annually and have an extremely strong pipeline in place, and Sharp will talk a bit more about this in a minute. What is driving this is the industry-leading and most scalable range technology that transforms the economics for the driving range owner. With our media group, Tee Time Adventures is coming soon. It's a really cool game, fantasy oriented. Kids and gamers are gonna absolutely love it.
The long-term focus is integrating this content across the various platforms that we have. You know, I see the content that we're developing having outstanding integration potential and the characters that we're developing in our bays in our Toptracer ranges. That's something that only Topgolf is currently able to do. You know, on the white space, we've grown from 40 venues in 2017 to 76 currently, and we expect to have 86 venues around the world by the end of 2022. Yet we're only 20% penetrated. As I said, our target is to open 11 owned and operated venues and move from two to eight or more franchise venues between now and 2025.
Now as it relates to comp growth and same venue sales, while our new venues will drive most of the growth for Topgolf in the near term, we are hyper-focused on driving comps. Specifically, we're focused on increasing our reserved product, which provides both revenue and margin efficiencies. Just one example, our internal data suggests material demand is currently unmet as a result of not having ample reservations available. We're testing various strategies that are going well and marketing to meet this demand. One specific data point. In the second half of 2021, our business was up 3%, 6% in the fourth quarter. Our walk-in reservations grew nearly 80% from 2019 levels, but they are still only 30% of walk-in mix.
We know a digitally engaged player allows for a deeper relationship with that player and a stronger likelihood to return to Topgolf more frequently. On the event side, while 2021 saw the emergence of our social events channel, Gen Gray, who you'll hear from in a minute, our Chief Operating Officer, her team just did an extraordinary job with corporate events now effectively building a channel that was nascent into something that's just, you know, a really meaningful part of our business. It's continuing to develop as corporate events come back. We've invested heavily in this team. No one does events like we do, and it's clearly paying off as corporate events after the January softness from Omicron have returned to 2019 levels.
Last, our most significant guest opportunity, and I assure you, if you talk to anybody at Topgolf, what is the number one priority across our business is bay utilization. The number one complaint we get is long wait times. I go to venues often, visited close to 70 now, and we have wait times at every one of them during peak. Our utilization is still only 70% on Friday and Saturdays. If you reflect on the opportunity with digitally reserved product that we have and guests telling us when they're going to come and assuring them when their time is done, I see a significant opportunity to grow our utilization from the current levels. On margins, you know, once again, the team did an extraordinary job last year.
In 2021, venue EBITDAR margins were 400 basis points higher than 2019, despite the first half of the year being significantly top-line impacted from COVID. That's 29% to north of 33% last year. This was driven by strategic initiatives and menu simplification, efficiencies in our labor model, and revisions to our pricing strategy. Margins did benefit in the short term from being short-staffed, something that was experienced across the hospitality industry. This is impacting top line. We know that it impacted us in Q1 by close to 2 points, not being able to fully staff our venues. We are working to fully restaff our venues and are expecting continued inflationary pressure on food costs and labor. Given the dynamic nature of our business, we believe we have the opportunity with price and some of the other strategies in place to offset this.
Long term, the enhancements in our operating model, the acceleration of digital reservations, and the return to 2019 levels, which we've already seen in corporate events. Corporate events are our highest margin channel, I'll remind you. We expect to sustain 300 basis points of EBITDAR margin improvement from the 2019 levels or 32% going forward. Moving to Toptracer, this market is just simply massive. I mean, I foresee a world where you're not really a driving range unless you have a capability like Toptracer at it. We are the clear market leader, and our growth trajectory is extremely strong. The pace of installs has increased 63% annually since 2019, despite some of the challenges, especially in Asia, that COVID has presented. We have a dominant market share.
We ended the year with over 15,000 cumulative bays and a clear and large growth path ahead. Our goal is to install 8,000 annually, and the pipeline is, you know, extremely strong. Finally, a clear competitive advantage we have at Topgolf is our ability to develop and promote proprietary content across our various ways to play. Whether it's enhancing the experiences on mobile, at a venue or at a range, or engaging with you through social media and doughnut hole TikTok videos, which you'll see here in a minute, this brand has unbelievable potential and capability in creating content that you can only get from Topgolf. This is a perfect transition for me to hand over the mic to my friend and our Chief Marketing Officer, Jeff Colton.
Jeff, just this morning was named one of the top 50 marketers, entrepreneurial marketers in Forbes magazine. He joined us late last year. He most recently led marketing at Coca-Cola North America, but has had significant impact on brands like Starbucks, Nike/Converse. He's brought a ton of energy to our business, and I can't wait for you to hear from Jeff. Thank you.
Good morning.
Morning.
Welcome to El Segundo. I know I'm not the first to welcome you, but welcome to El Segundo, and outside those doors, in those bays with our players, is the future of golf. The future of golf starts now, and we're excited about it. It's a great time to be at Topgolf, and it's an incredible time to be part of the Callaway family. I'll tell you why it's a great time to be at Topgolf. First and foremost, the leadership team that I've been fortunate enough to join in the last eight months is one of the greatest, best teams I've ever worked on. The people are amazing. There is no evil here. We are all focused on the same mission and focused on it together.
It's a very exciting time, but it starts with a belief. Artie said it a little while ago. We believe in the unlimited power of play, and play being a concept, a word that's escaping our lives as we get older. The world conspires against you getting out and really letting go and playing, and we are all about play. We're all about bringing play back to the front and watching people do this. We're leading the charge in defining what modern golf is, and we are changing the face of the game of golf. Younger, more diverse, and frankly, more fun than the game's ever been. Every single day, we meet first-time golfers, recreational golfers, and people who just roll in here to play and to have a good time.
We are encouraged by what we see and inspired by the things that we see. Our experience is truly unique and differentiated from anything else in the marketplace, and we're really excited about that. Sorry, just apologize about that. We're bringing new people to the game of golf is what I was trying to say. Our marketing is really interesting. I had the opportunity to work for Howard Schultz for 3 years, and he taught me the importance of experience and how much experience matters in the venue, in the retail outlet, that it's the most important form of marketing. We've got more than 21,000 people, 21,000 associates in all of our venues who are our strongest marketers.
Whether it's in the venue, whether it's our folks at the range or at home at work, these interactions are critical to the success of our brand. Like I said, the strongest marketers are passionate associates, and word of mouth is our strongest form of marketing, frankly. When we look at our opportunity in the marketplace, Chip earlier talked about modern golf and off-course golf. We're driving 85% of what is happening off course in golf, and we're just getting started. The off-course side of golf is redefining the actual definition of the game and how people are thinking about and interacting with the game. 85%, and we see that's not slowing down at all. As a marketer, some people look at this next number.
We have > 50% awareness in the markets that we currently trade in. That is an absolute dream. That is opportunity knocking. When we talk about same-venue sales, we have massive opportunity to drive same-venue sales by introducing ourselves to new people in markets where we're already existing, and at the same time, introduce ourselves to people in markets that we're just entering. It's a very exciting time for us to be a brand. Couple things about the brand. We're a new entry point to golf. There are many people that come in here every day, and when you talk to them beforehand, they're, "I don't wanna play golf.
I don't play golf." They come in through a corporate event or their first time here, they walk out with a smile on their face saying, "Oh, my gosh, I just played golf." For us, that's success. It's getting people to laugh and enjoy and enjoy themselves the first time they swing a club, whether they hit the ball or not. We are also for everyone. Everyone is welcome here. We want diversity. We want new people to come into this great game of golf, and we are focused on changing the demographic makeup of this game. There will soon be a day when people growing up and playing golf, these people will never know a world of golf without Topgolf in it. Future champions will come from our base.
We're also this place where technology, you know, we live in a digital world where everything's technology-based, but it's technology meets fun in real life. We have amazing technology in our base, games like Angry Birds, where you can come and play, hit the golf ball, but also play a video game at the same time. We've got a massive in real life and online, engaged audience. Then our competitive advantages, they're pretty simple. We have a first-mover advantage. It's one of our strongest 76 venues around the world, and a unique and defendable experience, and no one really other than ourselves is our competition. The venue experience is differentiated. I hope that you'll see in a few minutes.
We have a massively engaged in real life, like I said, 30 million people, 30 million visits a year, highly engaged in real life, that is generating a tremendous amount of content for us that I'll tell you about in a second. Toptracer, our technology, is enabling new gaming experiences for us in the venues. It's great to be part of the Callaway family. We're seeing new leverage and synergies in working with the Callaway brand, working with TravisMathew, and some of the other brands. Then we've only just merely scratched the surface when it comes to international expansion. Let me talk for just a second about our content and what we're seeing happening.
Every day, people are coming in, and as they're playing, you know, they're taking their phones, they're videoing their experiences, and they're having a good time, and we're seeing massive millions and millions of dollars worth of media value on a daily basis being generated by our guests. I go back to the importance of the experience. If we provide the right experience for our players, they will and they have fun, they will tell their friends about it, and it's an important thing.
I just want to show you a couple things in our content, whether it's driving an ice cream truck around Southern California for a month in the upper left-hand corner, giving free ice cream away, introducing ourselves to the market, to a creator's event that we had in Las Vegas at our venue, to bringing Topgolf to places like Dodger Stadium and Fenway Park, showing up in really interesting and unique places. Believe me, we were in Dodger Stadium about two months ago, and to watch people hit a golf ball that gets traced with Toptracer technology onto the field at Dodger Stadium was something that I'll certainly never forget, and I know that the people that did it will never forget as well.
I wanna show you an example of just a simple little thing that we saw on TikTok. I don't claim to be the one that knows the magic secret formula for how to make the perfect TikTok video, but I wanna show you a quick video of what one of our consumers did. I'm gonna play it again just because you gotta like you have to really
Can I have a coffee?
Simple little video that got 1 million views. We saw it and thought, "Wow, this is a good opportunity for us to participate, to celebrate content that's being created in our own venue." We created basically a response video, our own version of that video, and I'm gonna play that for you now.
Can I have-
That video got 10 million views. 10 million. Let's have some fun. We then created another video where we injected our macaroni and cheese bites. But the funny thing is here, 1 million to 10 million to 500—over 500 people literally coming into the venue and filming their own version of that video and then broadcasting it on their channels. 500 people walk in and did the same thing. In the month when this happened, we doubled our donut hole sales. I highly encourage you to hit a donut hole or two on the tables at the breaks.
It's just an example, a small example of the power of this brand and the power of the experience that our team has created and just the pure joy and excitement we see on a daily basis from our consumers. The sky's the limit for this brand. I stand here today having led marketing for some of the biggest brands in the world. I worked at Starbucks. I recently headed up marketing for Coca-Cola North America. I was on the team that led a turnaround of a 100-year-old sneaker brand that turned it into a brand that was flatlining to the number one sneaker in the world. I can tell you, I have never stood in a place and seen such amazing opportunity in front.
It's so exciting what's happening outside the windows of this room, what's happening at the golf course next door, and what's happening at the rest of our venues around the world. Like I said, the sky is the limit. For everyone, we are here to expand the game and change the makeup and bring diversity into the game. We have a differentiated and very unique experience, and we've got engaged associates and players that are having fun playing golf, and that's what we're trying to do. I leave you with, I'd like to introduce you next to our Chief Operating Officer, Gen Gray. Before I introduce her, I just want to give a couple little tidbits about her. She is without a doubt the heart and soul of our brand and our company.
She is universally loved, has been a mentor to me in the eight months I've been here. I've learned more from her than I've learned from most people in my career, and I continue to learn every day. What's really impressive is this past year she was recognized by Forbes in the Compassionate Leaders Circle, a small group of leaders. In fact, this is a list that every single one of us in this room should aspire to be on someday. The criteria. Compassionate, competent, collaborative, contemplative, civil, curious and courageous. Seven strong words, all starting with the letter C, that represent my good friend, Gen Gray.
Wow. Thank you for that beautiful introduction, Jeff. I got to introduce Chris Callaway in a few minutes. I hope I can lead up to that. Well, I am thrilled today to be with all of you, and welcome to Topgolf El Segundo. A little bit about my background. I grew up in the restaurant and hospitality and events business. I worked my way up from server to COO, 20 years with a brand, a couple of different concepts. I believe holistically in internal leadership development. As I'm a product of that, and so as Becky mentioned earlier, we are really integrating a lot of systems and processes and cultural avenues to develop leaders internally. Kristi Maynor, our Chief People Officer, who you'll meet a little later, will sure be able to tell you about that on the tour.
I've run food and beverage and event sales, the guest care team. I have this wonderful privilege of leading the operations business here at Topgolf. Welcome to our home. I'd like to just spend a couple minutes to talk a little bit about how our strategy is coming to life here in El Segundo. We're continuously improving and growing and enhancing our designs. What you can see here is one of our venues in the U.K., where we first started. We were smaller with limited event space and less food and beverage capability. These venues are still very successful today in the U.K., but what you can see is we have evolved. We've grown and developed new features that allow us to generate significantly higher revenues.
Today, you are here in El Segundo, standing in the most modern expression of our Topgolf brands. We can accommodate an assortment, an array of entertainment experiences, Toptracer-enabled games in the bays, Callaway synergized retail spaces, modern lounges and restaurants, dedicated event spaces, and premium features on our tee lines, like the VIP bays, which you'll see a little later as TravisMathew is set up there. In addition, we're very excited about our Par 3 golf course attached to our venue with the tenth hole Toptracer experience, which Ben will show you in the tour. These changes have enabled our venues to generate strong revenue volumes while providing truly engaging player experiences. Topgolf sits at the intersection of a number of key shifts in consumer behavior that you're all very well aware of. We know that consumers are increasingly prioritizing experiences. They're seeking out active lifestyles.
They're engaging more proactively in the digital world and spending more time than ever on social media. These are not a fad, and they will continue to strengthen in the coming decades, and our venues are positioned to capitalize. The in-bay experience is the genesis of our venue business, and we are a social destination for all, with immersive gameplay for players and associates alike, amplified by technology and enhanced by a high-quality food and beverage experience. Our platform reach extends across a high-quality demographic of individuals with disposable entertainment dollars in the sought-after 18-34 demographic. We serve approximately 50 million visitors in 2020, half identified non-golfers, Topgolf.
We are also extending the digital access to our fans and providing more opportunities, as already mentioned, to book a bay, to join the wait list, to pay for your experience, or to engage with another extension of our brand via your mobile phone. Our culture and our core values are the foundation of our venues. Like our differentiated player experience, we enjoy a unique and differentiated associate experience and culture. We believe in the spirit of the shield, which is the individual potential of all people, and we bring it to life with our core values. We exist to bring joy, we create more play, and we create moments that matter for everyone. You might see that on the tee line today as you're walking by.
If you see a group of bay hosts, as we call them, instead of servers, holding up big signs to celebrate a birthday, an anniversary, or a special occasion, or maybe, hey, you're just out to have some fun and play. You'll see this happening across the tee line as you're doing your tour, and I encourage you to ask any of our associates about how they create moments that matter for everyone. They have the autonomy to do that. They know that that's integral into doing just their day jobs, and they love it. It's one of the things that makes us really unique. We believe that the differentiated player and associate experience, fueled by our digital access, are the central to the venue business and our growth.
Here to tell you a little bit more about our growth, I'd love to introduce to you our Chief Development Officer, Chris Callaway. Chris is the best in the business. We're lucky to have his expertise. He spent 25 years heading up the real estate team at Walmart and Sam's. I would be remiss if I didn't just introduce him as Mr. Callaway, so please join me on stage.
Thanks, Gen. Nice job. Hello, everyone. I'm Chris Callaway. I lead our real estate design and construction team here at Topgolf. I'm excited to be able to talk to you today about our new venue growth. We have been able to successfully develop new venues across multiple geographies. Domestically, we've now opened 69 venues across the U.S., and we successfully operate in both warm and cold weather markets. In addition, we have three international owned and operated venues in the U.K. Along with four open international franchise venues, including Australia, Mexico, Dubai, and Germany, for a total of 76 venues open thus far.
We've been able to successfully create a design spectrum of various different venue designs that enable Topgolf and our venue growth to be scaled across a range of different market sizes like large markets like Dallas or Atlanta, medium-sized markets like Baton Rouge or Omaha, to smaller markets like Chattanooga, Tennessee, or Augusta, Georgia. This spectrum of design takes operational learnings and some of the key best features from our largest venues, such as our bars, our patios, our event spaces, and it scales them to the size of the capital investment and venue size that's appropriate to optimize for the respective market demand in each of the different market sizes. Our large venues of 100+ bays typically are in markets of 1 million people or more.
Our medium-sized venues, which are typically 70-100 bays, are targeting markets of 600,000 to 1 million people. Our smaller market venues are typically targeting markets of between 250,000 and 600,000 people, with 30-60 bays in those size markets. As you can see, we've created a scale that allows us to optimize for the market demand. In my 25 years of real estate development experience of large scale rollout of formats at Walmart acts as a foundation of many of the processes and development approach that we've taken and implemented in my last five years here at Topgolf. Through our proven and rigorous process-oriented approach to real estate development, we've established a strong real estate pipeline.
Today, we have a robust pipeline in place with 34 sites currently in the development process, which gives us confidence in our ability to deliver on our goal of opening 11 venues per year. We're continuously working on multiple years of real estate pipeline at a given time, and we have a proven track record of reliable new venue growth. We've consistently delivered on our new venue plan. In fact, we opened nine venues in 2021, which is remarkable as an achievement when you consider the pause in development that occurred in the height of the COVID pandemic in 2020. 2021 also included expansion into some of our less penetrated coastal markets, such as Holtsville, New York, on Long Island, and San Jose, California.
You will also see a continuation of this push into new markets, in 2022, such as the El Segundo venue we're standing in today, as well as Ontario, California, which is also an L.A. Metro area venue, along with our first traditional venue in the Seattle Metro, Philadelphia, as well as our first modern Topgolf in Glasgow, Scotland, as an owned and operated venue. Our robust pipeline continues to give us confidence as we work to fill out our map and push toward filling out our white space. Our development experience, combined with the brand strength of Topgolf, enable us to select and secure high-quality sites. Landlords and developers seek out Topgolf as a tenant of choice and anchor for their developments.
In recent openings in 2021 and so far through this year of 2022, we've continued to see strong performance that have actually outperformed our expectations. An example of that, on the top of the page, Fort Myers, Florida, is a 72-bay, two-level, medium-sized venue that opened in Q4 2021. It has been our strongest medium-sized venue opening to date. In addition, Ontario, California, which opened in March of 2022, is a large-scale venue, on the other side of L.A., and it has opened as one of our strongest openings ever as a large venue. Then since that time, we opened just two weeks ago here in El Segundo, and we're off to an amazing start here as well.
We're really pleased with the strength of our openings and the progress we're making. With El Segundo now being open in Southern California, this is only our fourth venue in the state of California. California has 39 million people. That just gives you an idea of the degree of white space and opportunity that exists for Topgolf. At the end of last year, we reached 66 million Americans within 25 minutes of a venue, of a Topgolf venue. By the end of next year, we will be at 88 million people. That's just over a quarter of the U.S. population. However, that still leaves 74% of the U.S. population remaining for future growth, which we will capture through our design spectrum of right-sized venues, tentative choice brand status, and our site selection and development expertise.
Now let's talk about international. We're growing our footprint internationally. Currently, we have three owned and operated venues in the U.K. and four franchise venues in international. As already mentioned earlier, we opened in Germany in January of 2022, and we expect to open in Bangkok later this year. By 2025, we will have opened 22 more international venues. Initially, we've emphasized our partner selection and finding the first best sites. Now as our franchise partners have made strong progress, we are even more confident than ever about our perfect blend of Topgolf franchise approach, taking Topgolf's expertise in the brand and the format, coupled with our franchisees' experience and knowledge of the local markets and countries across the world.
Through our rigorous site selection process, we've identified over 200 U.S. trade areas for future venue opportunities across the spectrum of our venue format sizes. By the end of 2022, we will have 77 U.S. domestic venues open with a plan to open 11 per year thereafter, as we've discussed earlier today. Today, our international white space includes over 250 venue opportunities, and we currently have development agreements in place already with our franchise partners for over 130 of these development opportunities. We're well on our way. With that, I'd like to transition to introduce Ben Sharpe, who will talk about our Toptracer business. First, I'd like to tell you a little bit about Ben. Ben is a golf industry veteran.
He's been in the business over 20 years and including previous roles such as the President of adidas Golf, the CEO of TaylorMade. We're very fortunate to have someone as sharp as Ben leading our Toptracer business. Please welcome my brother from across the pond, Ben Sharpe.
Veteran's old, right? Thanks, Chris. I think it's super exciting to see the white space that we have ahead of us in our venues business. There's more. There's a lot more. In my 20 years in the golf industry, Toptracer, while still young, is the most exciting technology and movement I've seen in my time. Toptracer has revolutionized the game of golf twice. Through our TV technology, we've changed the way that people watch golf and have created golf's own first-and-10-yard line, helping casual golf fans learn more about the game and helping our broadcast partners tell their story in a more believable way. We're now changing the way that people can play, engaging golfers to play more through screen engagement, through data-driven practice.
We can clearly see we are growing the game and getting more golfers to hit more golf balls more often. We relaunched our range business in 2018. To give you an idea of the size of our business, by the end of 2021, we had over 15,000 Toptracer Range bays installed around the world and produced revenues of $43 million for that year. Our product is scalable and flexible. We can install Toptracer Range in all practice facilities around the world, from covered bay ranges that you see are very prevalent in the markets of Europe, Korea, and the world's largest driving range market in Japan. We can install monitors in uncovered ranges, which are perfect for sunshine states, Southern Europe, Australia, New Zealand.
We've made sure that we can cater for the world's largest golf market, which is here in the U.S., by offering a grass tee solution, where through Toptracer technology, you can enjoy it on your cell phone or your tablet. Our opportunity is every golf facility. Our opportunity is every golfer. From elite players to my 11-year-old daughter, Toptracer benefits everyone. We really are widening the funnel of players and customers that we can attract to our company. Now, as Artie said, we have a clear leadership position and first-mover advantage. But we've worked really hard in the last few years to continue to build on this leadership and build strong relationships with partners who can accelerate our growth.
Through sales partners in some faraway markets like Japan, Korea, Indonesia, and Australia and New Zealand, we're able to benefit from the relationships through those partners, but also benefit from the Callaway network in attracting the right partners to accelerate our growth. It's important that we have an aspirational quality to our brand, and we're associated with the people who govern our sport. We have strong relationships with the likes of the PGA of America, with the R&A, and broadcast network partners such as NBC and CBS. We also work closely with all of the world's main professional tours. As Glenn mentioned, through this merger, he's been able to give me a lot more sales guys who can sell my product. Not only that, is we can offer more to our customers and the management groups.
We've struck strong relationships with Troon Golf, KemperSports, and Omni to be the preferred range supplier, range technology supplier to these groups. These groups combined consist of over 1,000 golf facilities around the world. In addition to that, with Callaway, again, we can make sure that we offer a full solution from equipment to apparel to accessories to technologies, to some of the most storied and iconic locations around the world. Toptracer is not just an exciting SaaS business, delivering $2,000 per bay in cash to Topgolf annually, but it's great for the business of golf. Our challenge is we're still a relatively new idea, but our opportunity is to engage our 600 strong and growing customer group to share their stories and their fantastic results.
These are just four of 600+ success stories, and as you can see from The Belfry, a Ryder Cup venue, who has been a busy range in my hometown of Birmingham. Since Toptracer install, their range revenue has increased by 300%. To a small 10-bay range in Jacksonville, Florida, Blue Skies, who've been able to increase their business significantly, to Suminoe, a 128-bay range in Japan, who've increased their revenue by 50%. They've both been able to do this by a combination of attracting more people to play and being able to use technology to increase the yield per player. Now, I often hear comments from customers who've installed it and seen these results to say, "I wish I'd installed this sooner." Did I.
Clearly it shows that Toptracer is transforming the business of golf, and in my opinion, it's the biggest Grow The Game initiative in our sport. I believe we have the best and the most scalable product, and this is a comparison slide to see what other range technology is out there. We've been able to build a globally recognized brand on the back of our TV broadcast business over the last 4 years. Through that, through that visibility on golf broadcasts, we've been able to get an understanding of who we are within the golf community. We can offer our solution to covered ranges, to uncovered ranges, to grass tees.
When you look at the engagement of golfers on our app, we have over 1.4 million people using our app on a regular basis, and the reviews, and the scores of the reviews dwarf our competition. We'd love to be the most used app in golf. In terms of number of bays and number of countries we're serving, and the opportunities that we can benefit from being part of an established and leading, and the best and largest golf company in the world, we can move faster than anybody. In 2022, we'll install more bays than our nearest competitor has cumulatively to date. Now, the partnership with Callaway unlocks significant synergies for Toptracer. From a sales perspective, we have more people talking about our technology, and it helps under...
accelerate the understanding of our product and the recognition of our brand. Some examples have been the Belfry that Glenn mentioned earlier. Celtic Manor, another Ryder Cup venue. We have relationships with St. Andrews, the Home of Golf, and from the start of this year's Open Championship, we'll be the only range technology where you can play the St. Andrews Old Course. We have strong relationships where we've installed in Valhalla and Erin Hills and many iconic locations around the world. It doesn't stop there, because through that reach, we can increase marketing initiatives that benefit us all. We combined with Callaway to do a world record attempt, which was a viral effort with the European Tour, and it was the most watched golf video in Europe for last year.
We're able to support media events and customer events by offering different locations so people can see product in action. We can also now offer a coordinated full group product and value offering to all customers and tailor our offering accordingly. As we mentioned, we have the management companies, and we'll continue to make sure that we work hard to win their business and be their best partner. Another synergy we have is what Mark Leposky mentioned. 3,623 years of experience in global operations in the golf industry. Now, with us as a technology leader, we can lean on Mark, and we can move our product around faster, we can get to the market quicker, and we can act in speed, which will give us a huge competitive advantage. Looking forward to working with you, Mark.
Just think of the data that we can get out of our system. For the full year in 2021, we traced over 2 billion golf balls with Toptracer technology. That's now used by Alan Hocknell and the R&D team at Callaway to help refine their technologies. Our super HD cameras can give a different perspective on ball flight to help our golf ball R&D. There's data from our tour team which can help in how we build our practice models to make sure we're catering for the best golfers as well as the everyday golfers. Through our app, the data that we're able to capture will be able to help every player improve their game. One of the barriers to the game is it's hard, and if you make it easy, it's more fun.
When it's fun, people will play more. We offer a full technology equipment, apparel, and accessory solution. No other golf company offers this. Our white space is massive. We believe that there are over three-quarters of a million driving range bays in the market today. In the prioritized markets we're going after, there's still over 600,000, and we've only just started. Toptracer is a transformational technology, and we are committed to being a pioneer in engaging more people to play and helping golf facilities grow their businesses. We've only just started, and our runway is long. We also have the opportunity, in some ways, to connect Callaway to Topgolf and the golfer to the Callaway group. More than anyone, we will bring more people from more backgrounds to play this game of golf.
Speed and quality is the key to our success, and I believe we're best positioned to lead that charge. It's now I'd like to turn over to William Davenport, Topgolf's Chief Financial Officer. Now, he gave me his bio, but I'm gonna go and do my own. William has been with Topgolf for eight years now and led significant growth. Whilst he makes sure that we have discipline in our fiscal world, he also is a culture champion in making sure that we understand what got us to where we've got to and how we're gonna get to the future. Prior to his time at Topgolf, he spent time in the restaurant business at Brinker, and he also had some time with Neiman Marcus. But most importantly, he's a bloody good bloke. William Davenport.
Thank you, Ben. Good morning, everybody. It's great to see everybody back out here again. It's been a while. I'm going to take us through Topgolf's growth model, and I'm gonna start with our venue level economics. We believe that a key differentiator for Topgolf is our ability to deploy new venues at scale that generate strong and consistent cash-on-cash returns due to their high volumes and strong margins. For a representative middle-market venue, we target $17.5 million in revenue per year with an EBITDAR margin of 32%. Now, this is up from our previous target of 29%, which reflects the impact of our margin initiative strategies that the team highlighted earlier in today's presentation. We're very proud of what we've done recently, and we're excited about where we're gonna take this in the future.
With these strong margins in our venue-level financing, we're able to achieve very attractive returns. The third-party financing we receive on most of our new venues limits our initial cash outlay to approximately 25% of the total venue construction cost. Remember, we don't own the underlying land. Through this combination, our venue cash-on-cash returns remains 45%-50% despite the current construction cost inflation environment. We expect to continue to invest capital into our new venues over time to maintain our brand standards, guest experiences, and margin profiles, and still expect to generate attractive returns of 40% or higher on a representative venue, even if you included the average maintenance spend over the first 10 years of a venue's life.
Please keep in mind that while revenue and EBITDAR performance will vary across venue sizes and venue cohorts, the numbers on this page are an average blend of venue sizes. Our experienced operating team, investments in guest experience, and effective marketing engine provide confidence in our ability to drive sales and profitability towards these targets. Overall, our strong venue-level economics represent a significant competitive advantage for Topgolf and one we believe differentiates ourselves not only from our peers but other entertainment-based concepts in general. Importantly, our confidence in achieving our targets is supported by our past performance. Now, there's a lot of information on this page, so I'll give you a minute to absorb it and review it. I'm gonna draw your attention to a few key points on the slide.
First, in 2021, we were able to achieve an average EBITDAR of $5.4 million across our recent cohorts with a full year of operations. Our cash-on-cash returns on the initial construction costs for these venues were in line with our targets at approximately 49%. It should be noted that these averages exclude the cash-on-cash returns for our self-finance venues, but there are only a handful of those venues in our portfolio today. These averages also exclude our three flagship venues in Las Vegas, Orlando, and Nashville, which have even higher revenue and EBITDAR profiles, given either their unique build, such as Las Vegas, or their location, such as Orlando, near the convention center. Overall, we believe that we have proven that we can hit our new venue growth pipeline, and we can do so in a capital-efficient manner.
As we look at the entire venue business through 2025, we expect to demonstrate strong top-line growth as a result of the key themes you've heard discussed today. I'll walk through a few of those. Specifically, we expect to increase capacity by opening 11 new venues a year, and we feel like that we have proven that we have the pipeline and the expertise to be able to achieve those targets. Second, our system-wide sales already recovered to 2019 levels in late 2021 and early 2022, and as already outlined, we believe that we can expand that through our digital access events and utilization strategies. We're very excited by the potential of these programs. Three, we have strong development contracts in place for franchise venues, whose opening cadence will ramp significantly as we approach 2025.
Finally, we will continue to grow our partnerships business, which we moved to the venues division in 2022 to align with the revenue-generating assets of our sponsorship contracts. Our Q1 2022 financial results will reflect this change, and 2021 is shown pro forma for this change on this slide. Overall, we expect to generate an incremental $1 billion of venue revenue, driven primarily by our owned and operated venues. Putting it all together, we expect Topgolf to grow revenue by 18% or more compounded annually, and Adjusted EBITDA by 25% compounded annually through 2025, which will deliver $450 million of Adjusted EBITDA by 2025.
We will do this by providing more play and allowing our players to play more by first expanding our owned and operated presence globally to 114 venues, expanding our franchise business from four today to over 22 venues by 2025, installing 8,000 or more new Toptracer bays annually, and expanding our gaming presence. All this growth will not only drive us to achieve our financial targets, but will also achieve our mission to grow the game of golf on our path to 50 billion balls hit by our players over the next four years. Finally, to hit these targets, we will of course need to strategically invest capital. We will spend approximately $230 million of CapEx in 2022 as we catch up on deferred items and invest in new technology across the system.
By 2025, we expect to reduce our annual CapEx to be around $185 million per year, with a core focus on our venues, either through new venue growth, maintaining our fleet, or enhancing guest experience through our strategic initiatives. This total also includes strategic initiatives, investments, and new technology development to support not only the venues, but also our other businesses, including Toptracer and the media group. With these investments, we'll continue to deliver dynamic and durable growth for our shareholders. With that, I'll turn it back to Artie.
All right, you can see we're having some fun. I'm glad you got to meet the team. You also get to meet Kristi Maynor, our CPO, Chief People Officer. She recently joined us from Egon Zehnder. Andrew Macaulay, our Chief Technology Officer, who drives all the innovation in the Bay, and J.F. Prata, who leads our media team in San Francisco and develops our exciting and cool games of the future. I encourage you to make sure you meet them when you're walking around the venue. To wrap it up and before I hand it to Brian, I just wanna, you know, share some closing thoughts. Number one, this brand is clearly relevant. It's functionally relevant in that we do something that is different than almost anyone else.
Our consumers love us in a way that I've not seen in a business like this before. When I wear the shield going through an airport, it's like being a rock star. The love for this brand is something that is indescribable, and those of you who live in communities where we are, I know see the same thing. It's culturally brought to life with our over 20,000 associates. They love this place, and they bring this place to life. As Jeff said, they're the real marketers. The experience at Topgolf that you can only get from Topgolf is our real marketing engine. This venue model is now proven. You can see it in the economics. I think William's slide shows it well. Chris reinforced that. Our recent openings are amongst our most successful ever. The digital opportunity is abundantly clear.
I spent the last eight years at Yum! Brands, saw our businesses there at low digital mix move to high digital mix, and saw what happens when customers become more digitally engaged, and the success it has in driving comp growth. The Callaway synergies are abundantly clear. You're gonna see them across the El Segundo venue today. Our leadership teams are working closely together on areas that are driving value on sales and operations. Our players and shareholders are benefiting from this and are going to benefit more and more going forward. Most importantly, we have momentum. We had a strong 2021. 2022 is off to a terrific start. I'll highlight our corporate events business is back at 2019 levels. Some of our largest customers that were shut down for almost two years are back open for business and coming to Topgolf.
Before I hand it to Brian, I'd be remiss if I didn't encourage each of you to come out and play. We're in the hospitality business. We want you to come out and enjoy Topgolf. Download the app. Let us know when you're coming. We promise you a fun time. We'll warn you, if you come, you're gonna wanna play more. Thank you so much.
All right, we're getting close. Anyway, thanks everyone for being here today. I am Brian Lynch, the Chief Financial Officer and Chief Legal Officer at Callaway. I joined the company 22 years ago, and even had the pleasure of working with Mr. Callaway for a couple of years before he passed. Chip is the sixth CEO that I've worked with since joining Callaway, and I must say, he is my absolute favorite. The primary purpose of the event today is to discuss our long-term vision for the company. With that said, given the timing of today's event in relation to quarter end, we wanna give you some color around how we performed in Q1. We're still in the process of closing our books for Q1, so we'll provide color primarily around revenue.
We'll provide a more fulsome report of first quarter financial results and provide updated full year guidance during our regularly scheduled earnings call on May 10. With that said, Q1 total net revenue was $1.04 billion, coming in ahead of expectations. Are we there? Okay. Yep. Coming ahead of expectations up 60% year-over-year. Now remember, in 2021, given the timing of the merger, Topgolf results were only 1 month for that quarter. Even if you include Topgolf for 3 months and look at our consolidated revenue, we would still be up 31% for the first quarter. Top line performance in the quarter was driven by broad-based strength across each of our segments. In golf equipment, continued strong demand for clubs and balls was supplemented by improved supply, especially late in the quarter.
Mark's team did a great job of getting us some extra supply. To reiterate Glenn's comment earlier this morning, with the strong fundamentals we've been experiencing, we now believe our full year 2022 golf equipment revenue will be up approximately 10% compared to 2021. Topgolf Q1 net revenue also came in above the top end of our guidance range, as that business rebounded late in the quarter more strongly than expected from COVID, from the COVID impacts early in the quarter. Q1 same-venue sales, which we initially expected to be down slightly in the quarter, actually came in 2% higher compared to 2019. Our apparel, gear, and other business had a strong quarter also, led by continuing momentum at TravisMathew and by Jack Wolfskin performing well, especially given the macroeconomic circumstances in Europe.
We believe full year 2022 soft goods revenue will be approximately $1 billion. During the quarter, we completed our most recent $50 million share buyback program by repurchasing an additional $25 million of our common stock during the quarter. Now, shifting back to our long-term outlook. I want to take a moment to ground us again in our long-term growth strategy that Chip discussed. First, we will maintain our leadership position in golf equipment by continuing to lead the golf industry in innovation and delivering the best products. Second, Topgolf has a clear path to deliver continued growth through the development of new venues, both domestically and internationally, and through same-venue sales growth, as well as growth in the Toptracer immediate businesses.
Third, our soft goods active lifestyle brands have strong momentum, and the move toward more direct-to-consumer sales will have a positive impact on margin growth. Lastly, we will leverage our increased scale and reach among our integrated supply chain. This will allow us, among other things, to capitalize on digital revenues, opportunities, and realize cross-segment cost synergies. By successfully executing our strategic plan, we believe our Adjusted EBITDA will be over $800 million by 2025, representing a 15%-18% compound annual growth rate. We feel good about achieving this goal. This assumes no major change in consumer behavior resulting from significant macro factors such as a major recession or a major COVID impact. However, even if we...
We talked about this a little earlier, but even if we pressure test this and assume there is a 10% decline in our golf equipment business next year, we believe we can achieve this goal. Now, I wanna emphasize, we are not forecasting that the golf equipment business goes back to 10%. This was really solely for purpose of testing our model. We just believe that if it's even if it did, we could still hit those goals. To achieve this target, we are anticipating growth across each of our Topgolf and non-Topgolf businesses over the next four years.
For Topgolf, from 2021 to 2025, we expect 18% or higher annual revenue growth and 25% or higher annual EBITDA growth, translating to Adjusted EBITDA margins in the mid- to high teens. For the non-Topgolf business, we expect single-digit annual net revenue growth and annual Adjusted EBITDA growth of 10% or more with our soft goods business growing faster than the golf equipment business. On a consolidated basis, this would result in 10%-12% annual revenue growth and 15%-18% annual Adjusted EBITDA growth. It is worth noting that these growth rates. Topgolf is expected to be more than 50% of our total Adjusted EBITDA by 2025, a significant milestone in our diversification strategy and a meaningful shift in our overall Callaway business model. The primary assumptions underlying our long-term goals are as follows.
For Topgolf, as the team mentioned earlier, we expect to open 11 new venues per year, install at least 8,000 new Toptracer bays per year, and grow same-venue sales in the low single-digit % annually. For golf equipment, after two high-growth years, we assume that our business stabilizes in 2023 and then grows at a low- to mid-single-digit % level through 2025. We expect club margins to remain stable and anticipate incremental margin gains in golf ball as we increase volume. Lastly, this business should continue to be a high free cash flow generating business, helping fund the growth of our other businesses. For apparel, gear and other, we anticipate mid-teens % revenue growth driven primarily by TravisMathew and Jack Wolfskin. Operating margins are expected to expand as our direct-to-consumer business grows and we gain more leverage.
Lastly, the Callaway softgoods business should continue to be a healthy driver of growth as we anticipate some market share gains in underdeveloped categories like golf bags, hats, and gloves. In addition to these assumptions, in the appendix of this presentation, we have given you a one-time snapshot of the component pieces of Adjusted EBITDA by segment for 2021. We do not plan to report Adjusted EBITDA on this level going forward, but hope this will provide a helpful baseline for modeling purposes. As Chip laid out, we have strategically transformed our business over the past five years by adding higher growth segments that balance our previous concentration in golf equipment. Looking back to 2016, golf equipment was 84% of our revenue. As a result of our strategic diversification to high-growth segments, by 2021, golf equipment accounted for only 38% of our revenue.
By 2025, we expect it will be only approximately a quarter of our business. Topgolf, on the other hand, is expected to be almost half of our revenue by 2025, and the soft goods business is expected to be approximately the same revenue size as the golf equipment business. There is a clear path ahead of us to unlock within each business, independent of synergies. However, we strongly believe that this portfolio of brands is stronger together, and there are opportunities for synergies with our Topgolf business that we would like to summarize and quantify for you today. Some examples of revenue synergies include, one, Callaway's overall strong liquidity position, which has accelerated Topgolf's venue expansion and is supporting the new 11 venues per year target communicated today.
We recognize that venue development is a capital-intensive endeavor, but it is one we believe provides very attractive returns, and Callaway is well-positioned to support this development given our strong cash flow-generating golf equipment business and balance sheet liquidity. Toptracer Bay expansion is another great example. As a result of the merger, Ben Sharpe and his team gained a sales force with deep relationships in driving ranges and green grass management companies across the world, which have already opened the door to opportunities that may not have existed otherwise. This is clearly a competitive advantage for us. Digital information and the use of our consumer data platform are longer tail opportunities where we believe we can communicate with consumers in a targeted manner that no other competitor can replicate.
As Glenn mentioned, we are in the process of hiring an expert to help oversee this effort, and we are excited about the opportunities it presents. Lastly, there are opportunities across the portfolio of our 76 existing venues and 11 new venues per year to elevate the retail shop experience at Topgolf to integrate more of our brands. You will see that if you go to the Topgolf Pro Shop here at El Segundo, and you'll begin to see more of it around the globe. Overall, we believe these revenue synergies will provide at least $225 million of revenue opportunities and $85 million of Adjusted EBITDA contribution annually by 2025. It's also one of the reasons we are significantly ahead of our original Topgolf plan when we presented it at the time of the merger.
On the cost side, we expect to gain an additional $15 million of Adjusted EBITDA synergies through efforts such as lower cost of debt, shared services, and the supply chain synergies Mark discussed earlier. All these synergies are included in the targets we provide today. Our capital allocation strategy has remained largely the same since the merger. Investing in the growth of our existing businesses is our first priority, and we believe there is significant embedded growth to unlock as we develop new venues and expand our active lifestyle soft goods business. Maintaining a healthy balance sheet and prudently managing leverage is also important. Our goal is to have our total net leverage levels below 3x with our funded net debt leverage, which excludes Topgolf venue financing, even lower.
For the next year or two, we would expect our net leverage levels to be between 3 and 3.5, given some working capital catch-up and some CapEx catch-up. After that, it should be below 3x. We will balance our remaining priorities between opportunistically exploring investment opportunities and returning capital to shareholders via share repurchases, as we did over the past two quarters. Moving to cash flow generation. Our business is set to generate annual operating cash flow growth of 20% or more through 2025, with total expected operating cash flow approximately $600 million in 2025. As a reminder, the Topgolf business is operating cash flow positive currently, and our golf equipment and apparel businesses are expected to continue to generate strong cash flow as well.
On an adjusted free cash flow basis, which starts with operating cash flow and then subtracts non-growth CapEx from our existing business, in other words, it excludes growth CapEx to give you a picture of what the business would be generating at that point in time, we expect a 25% or higher CAGR between 2021 and 2025 to generate $450 million in adjusted free cash flow by 2025. This assumes approximately $150 million of non-growth CapEx across all of our businesses. Excluding growth CapEx, Topgolf expects to be adjusted free cash flow positive this year. As we allocate capital to the growth CapEx budget, we believe it is a strong investment given the high return on investment opportunities we are funding, such as new venues, which generate over 40% cash on cash returns.
TravisMathew store expansion, which, as Joe mentioned, has less than a two-year payback. Golf ball capacity investments, which have contributed significantly to our increased ball share over the years. If you include these attractive growth CapEx opportunities in Topgolf's free cash flow, Topgolf should be fully self-funding in 2023 and generating excess cash in 2024. As we reach the end of our prepared remarks, one of the key items we hope you take from this presentation is that we are a unique business and investment opportunity, not only from a strategic growth perspective, but also from a quantitative valuation perspective.
If you run a filter with the 3,023 companies in the Russell 3000 and whittle it down by market cap, sector, and growth outlook, you get to a list of only 31 companies that provide the same or better attractive revenue and Adjusted EBITDA margin opportunities as Callaway. That is a very small universe of companies with similar or greater economic prospects, which we believe puts us in a unique class of investment prospects. When valuing our business, we believe enterprise value to EBITDA is the most appropriate metric to capture the embedded growth within the existing portfolio. It is important to highlight that these 31 companies are trading at a median multiple of 18.3x, significantly higher than our stock.
Now, Lauren said I am not allowed to say our stock is undervalued, so I will just say we are trading at a great entry point. I'm not just saying that. You may have noticed that Chip and I have been buying stock when permitted under our trading windows. In closing, when evaluating Callaway on the whole, we believe we present a unique and compelling investment opportunity. We have proven businesses with strong brand equity, demonstrated growth, and a track record of delivering results across all segments. We have unmatched scale and reach within the modern golf ecosystem. We are the dominant player in this very attractive and growing segment. Our business model is now highly diversified with balanced growth across multiple attractive segments.
Our business, both individually and collectively, have high barriers to entry and have created deep moats, and it would be difficult to replicate or challenge our position. Lastly, we are structurally positioned for accelerated growth with the current portfolio and do not need to do anything fundamentally different to achieve our long-term goals. We just need to execute our plan. With that, I will turn it back to Lauren, who hopefully is still talking to me, and then we'll go to, I think, Q&A next.
Yes. Great. Perfect. We'll call the Topgolf team back up and Chip and Brian and Patrick, and we'll roll right into Q&A. We just have one mic runner this time 'cause we have extra speakers, so Christine is on. Randy, we'll start.
Great. Randy Konik at Jefferies. I guess this question's for Brian. Over the remarks of the presentation, you gave the long run plan for EBITDA of $800 million. I think it was said twice that even in a hypothetical scenario, if golf equipment declined, which again, it's not declining, but in a hypothetical, you still believed you could hit that $800 million EBITDA target. Can you give us some perspective on, you know, areas of conservatism or potential cushion in the different segments within your business that you think about when you make that statement, you know, a couple times during the presentation would be super helpful.
Sure. I mean, we feel very comfortable with the guidance that we gave. We believe we can hit that. We provided that downside scenario, excuse me, just because we talked about it earlier, there have been a few concerns people voice. What if golf goes back? It won't affect us as much as we talked about it earlier this morning. We feel very comfortable we'll hit it. Can we do better? If business will perform better, we can absolutely do better, but we feel comfortable with the range we gave today. We're not trying to give you higher than that.
Are there any specific areas when you look at across the different segments or the model, either on the cost side or the revenue side, that you can say, "Hey, this is where this could be a little bit more conservative or cushion that we think about maybe apparel business margins could be better." I don't know. I'm just curious on how you think about saying, even if golf equipment was down, hypothetically, we can still hit these numbers. Here's why.
Yeah. These were not our most aggressive under any circumstance. You know, some people in Investor Days ago were super aspirational. These are numbers we believe are realistic, and then we can hit them.
As a result, Randy, yeah, there's some upside on different areas, and obviously, there are gonna be, you know, curve balls we'll have to figure out along the way as well. There always are. You know, Artie's expression is there's still gas in the tank. We're basically this Topgolf management team and Callaway have had this asset for a year. You're seeing us deliver operating margin improvements. You know, Artie talks about these digital initiatives they've got underway. You know, we're not counting those yet, but there's the potential for that. You can't help but feel the enthusiasm in the room. We don't ever say the Topgolf venues are opening fine, right?
They're all opening stronger, and the brand's building momentum. TravisMathew is building momentum. You know, we're very confident on the trend of the Jack Wolfskin business. There's a good balance of upside and you know the real-world risks in our plan that we're presenting.
Hi. Alexander Perry, BofA. I had a Topgolf specific question here. Could you just maybe talk to us a little bit more about the drivers of profitability for the Topgolf business? Do you expect to become more efficient with things such as labor? I think maybe you said last year you had a two-point tailwind from understaffed venues. You know, does that switch into a headwind this year? You know, is there room for improvement on, in terms of productivity initiatives at Topgolf? Just a follow-up question on Topgolf. The low single-digit same-venue sales growth, how much of that is sort of embedded with pricing opportunity on F&B and gameplay versus traffic? Thank you.
Want me to take it?
Yeah.
Three things. One is I wanna maybe just correct one thing, the comment on labor. You know, I think what I said was we were understaffed by two points in the first quarter, and that cost us two points top line.
Yeah.
Staffing is something I would look at for our business. Whenever we say we're understaffed, it has an impact on the top line. Just let me park that one. As far as, like, what drives profitability, the first one's traffic. I mean, just to be, traffic is we're a top-line driven business. You know, I think William shared the specific economics. When the top line is good and strong like we're seeing, new openings continue to be strong, the margins are proven and repeatable, and we're able to put that through the underwriting process that Chris mentioned. We've got all these data points right now that are pretty dispositive in terms of, like, when we open, we know we have a pretty good idea what the top line's gonna be. A couple of recent ones have actually outperformed that.
We know Gen Gray and her team putting it through the Topgolf engine, that 32% EBITDA margin we feel, and we feel really good about it. As it relates to the low same-venue sales, yes, we have opportunity in pricing. We study the competition daily. They're, you know, and reflecting on our own F&B pricing currently, you know, those of you who cover the F&B space and restaurants, there's significant price being taken, and we haven't taken as much at this point. We may. We're not prepared to sort of disclose that here. We are more focused on the longer term, what I would call like significant equity value creators in the model, which are in digital, which is in the events channel that, you know, we believe we have a massive competitive advantage.
When you look at a room like this, which you would only see in a really nice hotel, you don't have 10 feet away a way to entertain hundreds of people. Then the third piece on bay utilization, which is just my personal and in going to 70 venues last year, it's the biggest opportunity that we have. It starts with that digital engagement with the player.
Thanks. Joe Altobello, Raymond James. Couple questions on the Topgolf unit economics. I guess first, we're obviously in a rising rate environment, so how have you guys factored that into your REIT financing costs? Then secondly, is there a risk that future openings don't look like past openings in the sense that have you kind of cherry-picked some of the best locations already in the first 70-ish U.S. markets, and the next 130 might not be as attractive, so you don't get to those $70.5 million, $5.6 million EBITDA numbers? Thanks.
Sure. So on the REIT financing, obviously we're familiar with what's happening with the capital markets right now. The last couple weeks I've spent time with our two largest real estate development partners, financing partners. We're not seeing an increase in rates. Quite the contrary, we're seeing a reduction, and I think there's a few reasons for that. I think number one is the proven economics that we're putting out. Being part of the Callaway family is certainly helping, and there's just a more robust market for Topgolf real estate financing than I've been here a year, but what I'm told, much more robust market than what we've ever seen in the past. So we see clear line of sight to terrific real estate financing market for our venues going forward.
You know, that market's very excited about, you know, what we're putting out. I'm sorry, your second question was on... You know, next. Yeah. I'll start, and then, you know, I can hand it over to Chris if he wants to add any additional color. We're not cherry-picking. We go through the same underwriting process. I studied all the decks before, you know, I got, you know, that were before. It's the same process. We certainly see some that are better than others, but the targets that William put out, you know, that's what we shoot for. I mean, those are the numbers, and what we have in the pipeline falls within those ranges.
I think what I would just say, and this is, you know, brand plus economics plus execution, the recent openings are better. They weren't better in the underwriting process, but they are opening better. I think it's to Chip's point, the brand is strengthening. Each one of these that opens. El Segundo is, I think, a great example. It serves this market. But when Jeff and his team talk about it on social media, and I mean, the number of phone calls they get, like Topgolf is a bigger brand because this venue opened, and I think we're seeing that with every incremental opening.
Yeah. The only thing I would add there is, as I highlighted in my presentation, while, you know, by the end of 2023, we will have venues within 25-minute drive time of 88 million Americans. That's only a quarter of the U.S. population. That leaves 76% of the U.S. as white space. As I also described, we've broadened our different formats and sizes and scales to right size to the market opportunities. We're also seeing a big trend as our brand has continued to strengthen, where developers and landowners are specifically seeking out Topgolf, particularly as retailers are looking to have more entertainment in their development and shopping centers as a way of diversifying and driving traffic to their centers, particularly as online and digital retail has played a factor in retail centers.
They're seeking alternative uses for development. I actually think we have a tremendous amount of quality site opportunity remaining.
Just to follow up, Jake Ripstein. Just to follow up on the REIT question. For the 11 sites that you've talked about for this year, do you have REIT partners already set up, given that you said rates are coming down, which is not what I would have expected. Are those folks fully committed for these 11?
Yes. The answer is yes. We have financing partners in place for all of the 11 venues in the pipeline for this year. As already expressed, as our brand has strengthened, as we've you know become a part of the Callaway organization, and as the market in general has heated up, where people are looking for places to place funds, we continue to have more and more competition for our venue opportunities from a financing standpoint. Because of that, we've been able to leverage that as an opportunity to improve our financing rates. The answer is yes, all of our 22 projects do have financing in place.
Hey, over here. Brett Andress, KeyBanc. A question on the 70% utilization. Is that a recent phenomenon in the sense that-
I guess I'm trying to figure out what drives that, right? Is that labor, you know, the labor to kind of push through that volume? Or is it trying to line up reservations with walk-ins? Just, how easily correctable is that?
Yeah.
Because it seems like a big opportunity. Then Brian and Chip, we talked about stressing, to some extent, the golf industry. Have you thought about stressing Topgolf, maybe not from a venue growth standpoint, but just the four wall, and what that could maybe look like in the model?
Yeah. The utilization is not new. I think it's, you know, Jen, correct me if I'm wrong, but I think it's been relatively consistent, and that's a peak number. I think the easiest way to describe it is everybody, or I shouldn't say everybody, a lot of guests wanna come at certain times. Because that reservation hasn't been digitally secured or digitally, you know, connected with sort of a start and a stop time, and you couple that with events which are sort of set, it creates these, you know, gaps in the schedule, if you wanna call it that.
We're seeing we have in test right now in one venue and rolling to a couple more a significant improvement in utilization with an increase of more reservations available to our walk-in guests. I don't wanna say it's easily correctable, but what I will say is that culturally, booking a reservation from Topgolf is, we don't think, that big of a leap. We think it's what players want. We're seeing that already. It is a shift in terms of the occasion previously. We don't have all of that upside baked into our long-term plans. We feel really good that it's culturally relevant, and it's gonna add to the profitability of our venues.
The second question, we didn't run any specific modeling that we'd present today, but the Topgolf venues and business have just continually outperformed. We're significantly ahead of the original expectations at the merger time, and they just, if anything, continue to outperform.
Yeah. We're very sensitive, as you could imagine, when the scale of the business is gonna be, you know, so skewed by 2025 to the significance of Topgolf. It will be sensitive to the four-wall EBITDA margins that they deliver. We run normal sensitivities on any model where you know, up, down a couple % here or there. We don't see downside there as a significant risk, you know, given everything we've seen. We haven't pressure-tested that one specifically.
Hi, Kevin Heenan, JP Morgan. I guess on the promotional environment, have you seen any change in the environment on the golf equipment or apparel side to date, or have you embedded some return or normalization on that front in the plan you've laid out today? I guess specifically as it relates to your 1Q 2022 update today, understanding you haven't closed your books yet, but would it be fair to translate the upside to your revenue as upside to the earnings as well? Or would there be one-time or other items to consider that might impact that? Thanks.
In terms of answering the first question, we haven't seen any real or substantive promotional activity in our golf equipment business or really the apparel businesses to speak of. No, there has not been a return to any promotional activity. It's still a chase capacity environment. As we've modeled this going forward, we have projected that will return to a more normal situation at some point as capacity will eventually catch up. We did assume that. Exactly when that's gonna happen, we can't give you that at the moment. We tried to articulate by telling you we expect that business to be up 10% this year.
Your second question, I certainly do not want people to leave here today thinking, "Oh, they only talked about revenue. EBITDA must not be good." That is not the case. We just did not wanna give specific EBITDA numbers. We had a very good quarter, and we're pleased with our quarter, and we'll give you the full update on the other one. That is not an inference you should draw.
Hey, guys. Rudy Yang from Berenberg. With regards to a lot of the targets you guys put out today, could you just talk about the conceptualization of that plan? I guess, at what point in time did you start to sit down and kind of revisit the initial targets you put out? To that point, what are the factors that you are going to evaluate in the future when, I guess, you inevitably have to consider if you're gonna take up that 11 venues per year target?
We ought to tackle that 11 venue per year target sooner rather than later, 'cause that seems to be an elephant in the room. Let me try to answer the first part of the question, and then Artie, you know, jump in. You know, we're constantly reevaluating, right? We got the deal. I mean, the deal was basically agreed to in August or something like that, we announced it, you know, after that, and we were evaluating, you know, two weeks after. You're constantly getting more information, and the environment's been so dynamic, right, with closures, et cetera, and the starts and stops of various businesses. We've been very fortunate as it works out in total.
You know, all of our businesses are on considerably strong runs and have demonstrated that, you know, for a long time. It's not really whether we'll take up the 11 venues or not. We're not. I don't view our business as capitally constrained. We have capital, and we have significantly outperformed all of our expectations on that front. You know, we're $ hundreds of millions ahead of what we expected from a capital usage perspective. You know, we see very clear near-term path to strong free cash flow positive situation. Again, we talk a little bit about why are the REITs rates going down? Because we are so much more proven. It's capital markets acting like they should. You know, when we were unproven, there's a risk premium.
When we are proven, the risk premium goes away, and with, you know, it's also a synergy that comes with it. You know, we're gonna continue to evaluate. We're gonna continue to develop new opportunities along the way. We're only talking to you today about the embedded, you know, growth opportunities that are in our existing system. You know, we're proving ourselves, I hope, as strong operators. The fundamental is that we really don't have to do that much systematically different in order to drive these. We have to open venues. If you come here, go through this presentation and, you know, don't believe that we can do that well, I'm gonna have a hard time convincing you at some stage because we keep, you know, flat out being able to prove that out.
If we can continue to deliver better results, we'll be adjusting our expectations accordingly.
Just to follow up on what Chip was saying, versus our original plan when we were entering into the merger, we're now funding Topgolf. Our expectations are $225 million less than our original plan.
Then on the 11 venues, the team's done a terrific job to rebuild the pipeline. Initially, we said it was 10, now it's 11. It takes time to build a pipeline in a business like this and to, you know, to secure the venues. The performance has been extremely strong. If that continues, you know, we'll see down the road. At this point, we're opening so well, so consistently well, we clearly have some magic in what we're doing in both terms of the real estate execution and the operating and opening. We're thrilled that we're opening 11 a year. You know, if that changes, we will certainly be in touch.
It is a little of the, you know, that pipeline. If we did wanna move it from 11, you know, that would be a 2024 or 2025.
Right.
Because one of the other barriers to entry. This, you know, business, you know, is capital intensive. You get that. It also doesn't happen fast. You decide you wanna be in it, you better get good fast, and you're gonna then build that pipeline. You know, you can find one, sure. You'll probably have a 50/50 chance that it works because it's not your core competence, and you see that from competitors. Go build, you know, the pipeline that we have in order to be able to scale that's further out. We're providing guidance here because, you know, that's what we've been advised through 2025. Any further than that, it gets a little too far out and, you know, the ability to influence that. You have seen us as we gain confidence.
You know, initially we thought 8. We did 9 last year. Now we're comfortable at 11, scaling it reasonably, but not overstretching that, given the risks that go with the rewards.
I've got two questions from the webcast. First one is from Casey Alexander at Compass Point. We talked about calling our supply chain a competitive weapon. Our competitors who are not as capable of managing the supply chain like we are becoming permanently damaged as they lose share.
That's a good question. I think that the golf equipment business has consolidated over the last 10, 20 years, right? There's really good reasons why it's consolidating. You get bigger economies of scale to distribute your products, bigger economies of scale to manufacture the products, to design them, et cetera. It's just becoming a big players game, and that will accelerate. The complexity of the supply chain continues to accelerate that. Yes, it will make it more difficult, not easier for smaller players to carve out a meaningful niche in the business. I think that's long-term trend of golf.
Great. Thanks, Jeff. Next question is about the international franchise agreements with Topgolf. Can you share any information around the new franchisees you're in contract with? Are there any trends in the kind of partners you are finding?
Yeah. I'll say a little bit, and then William can follow up. You know, our most recent openings in Dubai and Oberhausen, Germany, have been extremely strong. Our Dubai partner is gonna build additional venues with us, and we expect our German partner to do the same. They both have development agreements with us. So we feel really good about our international partners. China, we have a terrific partner in China and Southeast Asia, you know, building a $30 million-$40 million project in China right now is tough. The lounge is open in Shanghai or was open in Shanghai, but with what's happening in Shanghai, it's just tricky. We're very enthusiastic about the franchise partners we have.
They're following closely the economics that we're posting here in the U.S., and we expect them to, you know, to continue to build venues successfully as they already have. William, I don't know if you have anything you wanna add.
A little bit more on what you said. The success we've had recently, Dubai, Germany, et cetera, it attracts more interest. The more success we have domestically, the more success we have internationally, we'll attract more people. We have a lot of inbound requests. We have a few deals that we're working on, but we're not ready to disclose them at this time. You know, when we have Bangkok opening, and eventually China will be open as well, that's just going to expand that further. You know, everybody's going the right direction right now. COVID did have an outsized impact on our development pipeline. As you can imagine, this was generally the first venue most of our partners were opening, so it was already a challenge for them to open their first one, and then you had something like COVID come in.
We're very experienced. We have a very strong, you know, supply chain pipeline. We were able to just ramp back up very quickly. It had an outsized impact on them, but now we're moving again, and feel very optimistic about that ramping up over the next few years.
Patrick Hollinger with Goldman Sachs. We just wanted to ask, in 1Q 2022, you mentioned that the main driver of outperformance for the golf equipment business was the improved supply. Just wanted to ask what changed there and whether that improvement seems like it'll be sustainable generally past 1Q.
You might remember during our Q1 earnings call toward the end, we said it would be volatile toward the end of the quarter. You know, there's a lot scheduled for what comes in and what goes out that can push from Q1 to Q2. We gave you our best estimate, but said, you know, there could be changes. This is one of the examples where we were able to get in a bunch of supply earlier. Mark's team did a good job, and since we had it, we shipped it.
It was a good strategy.
That is a good strategy. We should always do that.
The catch up in supply was Q1 related. We do think that our supply chain is... It's gonna be a dynamic environment. That's just part of the way the business is today. We expect to have you know good supply through the balance of the year. There are certain constraint areas. Steel shafts are you know a constraint of sort. We're working through it. We're scaling there. We have strong partnerships. We think we'll be as good, if not better, probably better than competition. There'll be some constraints there and some in you know golf ball raw material. In other areas, we're you know adding capacity and feel very good about our situation going forward.
Ready for lunch and the tour.
Great. Okay. Well, I think that concludes the formal portion of the presentation. For everyone on the webcast, thank you for joining us. For those in the room, we have lunch just outside the bays here, so grab something to eat, make yourself comfortable. I think we were gonna start tours around 12:30 PM. We'll probably push that a little bit just so you guys have some time to eat. Once we're kind of getting the tours rounded up, I'll come through and let everyone know. You should have numbers on your name badge. That's your designated tour group. I'll keep you posted. There are certain tour leaders and everything, but I'll get that all worked out, and we'll kind of walk around and find y'all.
Have some fun.
Thanks, Lauren Scott.