TruGolf Reports First Quarter 2025 Financial Results Q1 2025 Sales Grow 7.5% Over Q1 2024
- Revenue grew 7.5% YoY to $5.4 million
- Gross margin improved to 68.0% from 61.0% YoY
- EPS improved to ($0.09) from ($0.22) YoY
- First franchise locations expected to open within 90 days
- Net losses doubled to ($2.6) million from ($1.3) million YoY
- Operating expenses increased 22.5% YoY
- Cash flow turned negative at ($0.5) million vs $2.7 million generated in Q1 2024
- Facing Nasdaq listing deficiencies
- Operating loss increased 30.7% to ($1.2) million
Insights
TruGolf shows mixed Q1 results with revenue growth but widening losses due to interest expenses from convertible note conversions.
TruGolf's Q1 2025 results present a mixed financial picture with some encouraging developments alongside concerning trends. Revenue grew
However, the bottom line deteriorated substantially with net losses doubling to
The EPS figure appears contradictory at first glance – despite doubled losses, EPS improved to
Cash flow metrics reveal additional concerns. Operating cash flow swung from a positive
The balance sheet remains stressed with several concerning elements – multiple notes payable to related parties, dividend notes payable, a significant PIPE loan, and negative shareholders' equity. This financial structure explains management's focus on addressing Nasdaq listing deficiencies, as negative shareholders' equity can trigger delisting proceedings.
The company appears to be positioning for future growth with its franchise strategy and new product introductions, but investors should carefully monitor whether revenue growth accelerates enough to offset the heavy operational costs and debt service requirements.
TruGolf's strategic shift to franchising model shows potential but faces execution challenges amid financial constraints.
TruGolf's evolution in the golf simulator market reveals an interesting strategic pivot. The company is transitioning toward a franchise model, with CEO Chris Jones highlighting that "the first franchise locations [are expected] to open over the next 90 days." This represents a potentially significant business model transformation that could provide more predictable revenue streams and accelerated market expansion without the capital requirements of wholly-owned locations.
The inventory increase of
TruGolf's continued investment in software development (
The upcoming product launches mentioned in management's commentary could be crucial for revitalizing growth. However, the
The company's self-described mission to make golf more "Available, Approachable, and Affordable through technology" positions them in the growing indoor golf simulation segment, which has seen increased interest as traditional golf experiences face accessibility challenges. However, execution will be critical, particularly while managing the financial constraints evident in their current balance sheet structure.
Salt Lake City, Utah, May 15, 2025 (GLOBE NEWSWIRE) -- TruGolf Holdings, Inc. (NASDAQ: TRUG), a leading provider of golf simulator software and hardware, announced today its first quarter 2025 results. The Company reported sales of
Chief Executive Officer and Director Chris Jones said, “2025 got off to a solid start and we expect the sales cadence to improve over the course of the year, driven by new product introductions. Management’s attention has also focused on addressing the previously reported Nasdaq listing deficiencies. The Company has announced a plan that will significantly reduce debt on its balance sheet and increase shareholder equity. This plan has been presented at a Nasdaq Listing Qualifications hearing on May 15th and we expect to receive their determination in the near term.”
Mr. Jones continued, “We look forward to further growth in the business as we continue to innovate in creating the best virtual golf ecosystem in the market. We expect the first franchise locations to open over the next 90 days, with the associated delivery of TruGolf hardware and software solutions. We are optimistic that new products expected to launch in the coming months will be well received.”
Operations:
Gross margin for 2025’s first quarter improved to
Interest expense jumped by
Disclaimer on Forward Looking Statements
This news release contains certain statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements that are not of historical fact constitute “forward-looking statements” and accordingly, involve estimates, assumptions, forecasts, judgements and uncertainties. Forward-looking statements include, without limitation, the timing of new franchise openings during 2025. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable as of the date made, expectations may prove to have been materially different from the results expressed or implied by such forward-looking statements. The Company has attempted to identify forward-looking statements by terminology including ''believes,'' ''estimates,'' ''anticipates,'' ''expects,'' ''plans,'' ''projects,'' ''intends,'' ''potential,'' ''may,'' ''could,'' ''might,'' ''will,'' ''should,'' ''approximately'' or other words that convey uncertainty of future events or outcomes to identify these forward-looking statements. These statements are only predictions and involve known and unknown risks, uncertainties, and other factors. Any forward-looking statements contained in this release speak only as of its date. The Company undertakes no obligation to update any forward-looking statements contained in this release to reflect events or circumstances occurring after its date or to reflect the occurrence of unanticipated events. More detailed information about the risks and uncertainties affecting the Company is contained under the heading "Risk Factors" in the Company's Annual Report on Form 10-K and subsequently filed Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the SEC, which are available on the SEC's website, www.sec.gov
About TruGolf:
Since 1983, TruGolf has been passionate about driving the golf industry with innovative indoor golf solutions. TruGolf builds products that capture the spirit of golf. TruGolf's mission is to help grow the game by attempting to make it more Available, Approachable, and Affordable through technology - because TruGolf believes Golf is for Everyone. TruGolf's team has built award-winning video games ("Links"), innovative hardware solutions, and an all-new e-sports platform to connect golfers around the world with E6 CONNECT. Since TruGolf's beginning, TruGolf has continued to attempt to define and redefine what is possible with golf technology.
| Contact: | Michael Bacal |
| mbacal@darrowir.com | |
| 917-886-9071 | |
TRUGOLF HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 10,515,820 | $ | 8,782,077 | ||||
| Restricted cash | 2,100,000 | 2,100,000 | ||||||
| Accounts receivable, net | 1,579,614 | 1,399,153 | ||||||
| Inventory, net | 3,852,977 | 2,349,345 | ||||||
| Prepaid expenses and other current assets | 189,961 | 116,619 | ||||||
| Other current assets | - | 45,737 | ||||||
| Total Current Assets | 18,238,372 | 14,792,931 | ||||||
| Property and equipment, net | 192,711 | 143,852 | ||||||
| Capitalized software development costs, net | 1,710,652 | 1,540,121 | ||||||
| Right-of-use assets | 545,915 | 634,269 | ||||||
| Other long-term assets | 31,023 | 31,023 | ||||||
| Total Assets | $ | 20,718,673 | $ | 17,142,196 | ||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | 2,563,454 | $ | 2,819,703 | ||||
| Deferred revenue | 4,141,790 | 3,113,010 | ||||||
| Notes payable, current portion | 10,148 | 10,001 | ||||||
| Notes payable to related parties, current portion | 2,937,000 | 2,937,000 | ||||||
| Line of credit, bank | 802,738 | 802,738 | ||||||
| Dividend notes payable | 4,023,923 | 4,023,923 | ||||||
| Accrued interest | 565,402 | 661,376 | ||||||
| Accrued and other current liabilities | 2,823,067 | 999,307 | ||||||
| Accrued and other current liabilities - assumed in Merger | 45,008 | 45,008 | ||||||
| Lease liability, current portion | 296,291 | 363,102 | ||||||
| Total Current Liabilities | 18,208,821 | 15,775,168 | ||||||
| Non-current Liabilities: | ||||||||
| Notes payable, net of current portion | 7,137 | 9,732 | ||||||
| Note payables to related parties, net of current portion | 624,000 | 624,000 | ||||||
| PIPE loan payable, net | 5,165,893 | 4,068,953 | ||||||
| Gross sales royalty payable | 1,000,000 | 1,000,000 | ||||||
| Lease liability, net of current portion | 278,071 | 305,125 | ||||||
| Total Liabilities | 25,283,922 | 21,782,978 | ||||||
| Commitments and Contingencies | ||||||||
| Stockholders’ Deficit: | ||||||||
| Preferred stock, | - | - | ||||||
| Common stock, | ||||||||
| Common stock - Series A, | 2,918 | 2,612 | ||||||
| Common stock - Series B, | 172 | 172 | ||||||
| Treasury stock at cost, 4,692 shares of common stock held, respectively | (2,037,000 | ) | (2,037,000 | ) | ||||
| Additional paid-in capital | 21,294,479 | 18,548,931 | ||||||
| Accumulated deficit | (23,825,818 | ) | (21,155,496 | ) | ||||
| Total Stockholders’ Deficit | (4,565,249 | ) | (4,640,781 | ) | ||||
| Total Liabilities and Stockholders’ Deficit | $ | 20,718,673 | $ | 17,142,196 | ||||
TRUGOLF HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| For the | For the | |||||||
| Three Months Ended | Three Months Ended | |||||||
| March 31, 2025 | March 31, 2024 | |||||||
| Revenue, net | $ | 5,389,230 | $ | 5,012,022 | ||||
| Cost of revenue | 1,726,199 | 1,959,023 | ||||||
| Total gross profit | 3,663,031 | 3,052,999 | ||||||
| Operating expenses: | ||||||||
| Royalties | 225,320 | 329,888 | ||||||
| Salaries, wages and benefits | 1,946,816 | 1,841,595 | ||||||
| Selling, general and administrative | 2,725,119 | 1,825,201 | ||||||
| Total operating expenses | 4,897,255 | 3,996,684 | ||||||
| Loss from operations | (1,234,224 | ) | (943,685 | ) | ||||
| Other (expenses) income: | ||||||||
| Interest income | 54,596 | 30,587 | ||||||
| Interest expense | (1,490,694 | ) | (384,854 | ) | ||||
| Loss on investment | - | (3,912 | ) | |||||
| Total other expense | (1,436,098 | ) | (358,179 | ) | ||||
| Loss from operations before provision for income taxes | (2,670,322 | ) | (1,301,864 | ) | ||||
| Provision for income taxes | - | - | ||||||
| Net loss | $ | (2,670,322 | ) | $ | (1,301,864 | ) | ||
| Net loss per common share Series A - basic and diluted | $ | (0.09 | ) | $ | (0.22 | ) | ||
| Net loss per common share Series B - basic and diluted | $ | (1.56 | ) | $ | (1.14 | ) | ||
| Weighted average shares outstanding Series A - basic and diluted | 28,461,277 | 5,994,704 | ||||||
| Weighted average shares outstanding Series B - basic and diluted | 1,716,860 | 1,144,573 | ||||||
TRUGOLF HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| For the | For the | |||||||
| Three Months Ended | Three Months Ended | |||||||
| March 31, 2025 | March 31, 2024 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (2,670,322 | ) | $ | (1,301,864 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 115,300 | 36,105 | ||||||
| Amortization of convertible notes discount | 231,940 | 947 | ||||||
| Amortization of right-of-use asset | 88,354 | 82,454 | ||||||
| Change in OCI | - | 1,662 | ||||||
| Stock issued for make good provisions on debt conversion | 1,087,513 | - | ||||||
| Stock options issued to employees | 3,341 | - | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable, net | (180,461 | ) | 468,422 | |||||
| Inventory, net | (1,503,632 | ) | (216,569 | ) | ||||
| Prepaid expenses | (73,342 | ) | 200,278 | |||||
| Other current assets | 45,737 | 2,478,953 | ||||||
| Accounts payable | (256,248 | ) | 1,146,347 | |||||
| Deferred revenue | 1,028,780 | 90,524 | ||||||
| Accrued interest payable | (95,974 | ) | 82,759 | |||||
| Accrued and other current liabilities | 1,823,760 | (321,090 | ) | |||||
| Lease liability | (93,865 | ) | (80,311 | ) | ||||
| Net cash provided by (used in) operating activities | (449,119 | ) | 2,668,617 | |||||
| Cash flows from investing activities: | ||||||||
| Purchases of property and equipment | (64,159 | ) | (332,342 | ) | ||||
| Capitalized software, net | (270,531 | ) | - | |||||
| Net cash used in investing activities | (334,690 | ) | (332,342 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from PIPE loans, net of discount | 2,520,000 | 4,320,000 | ||||||
| Cash acquired in Merger | - | 103,818 | ||||||
| Increase in other liabilities | - | 18,545 | ||||||
| Costs of Merger paid from PIPE loan | - | (2,082,787 | ) | |||||
| Repayments of line of credit | - | (1,980,937 | ) | |||||
| Repayments of liabilities assumed in Merger | - | (15,716 | ) | |||||
| Repayments of notes payable | (2,448 | ) | (2,295 | ) | ||||
| Repayments of notes payable - related party | - | (268,500 | ) | |||||
| Net cash provided by financing activities | 2,517,552 | 92,128 | ||||||
| Net change in cash , cash equivalents and restricted cash | 1,733,743 | 2,428,403 | ||||||
| Cash, cash equivalents and restricted cash - beginning of year | 10,882,077 | 5,397,564 | ||||||
| Cash, cash equivalents and restricted cash - end of year | $ | 12,615,820 | $ | 7,825,967 | ||||
| Supplemental cash flow information: | ||||||||
| Cash paid for: | ||||||||
| Interest | $ | 108,993 | $ | 302,095 | ||||
| Income taxes | $ | - | $ | - | ||||
| Non-cash investing and financing activities: | ||||||||
| PIPE note principal converted to Class A Common Stock | $ | 1,655,000 | $ | - | ||||
| Notes payable assumed in Merger | $ | - | $ | 1,565,000 | ||||
| Accrued liabilities assumed in Merger | $ | - | $ | 310,724 | ||||
| Remeasurement of common stock exchanged/issued in Merger | $ | - | $ | (1,875,724 | ) | |||
FAQ
What were TruGolf's (TRUG) Q1 2025 earnings results?
Why did TruGolf (TRUG) net losses double in Q1 2025?
What is TruGolf's (TRUG) plan to address Nasdaq listing deficiencies?
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How much cash does TruGolf (TRUG) have as of Q1 2025?
