Golf simulator TruGolf soars on upbeat preliminary results

Shares of TruGolf Holdings, a micro-cap supplier of indoor golf simulators that allow people to play at home or in enclosed stadiums, surged more than 25% yesterday, February 19. The company reported record revenue for 2024, and its second-half EBITDA is expected to exceed even the boldest forecasts by nearly 50%.

TruGolf gained 25% on the Nasdaq yesterday to close at $0.51 per share. In premarket trading today, February 20, it has already given back 8%.

On Wednesday, TruGolf announced its preliminary financial results for 2024: its revenue increased about 9% to a record $22.5 million, which represents the lower bound of the company’s guided range.

Meanwhile, second-half EBITDA looks set to beat even the boldest expectations by 50%. The company guided for EBITDA to be in a range of $1.1-1.5 million; the preliminary data indicates that it will exceed $2.2 million. Overall, TruGolf expects EBITDA for the full year to total $1.2 million.

“Second half [of the year] demand was so strong for some products that we simply ran out of inventory,” as  CEO Chris Jones was saying in the press release. Sales were boosted by the launch of new games for the Multisport Arcade simulator, the E6 APEX Course — which offers a virtual round of golf on more than 1,200 courses worldwide — and an update to Wild West Shootout.

Audited results for TruGolf will be published in March, in accordance with U.S. startup regulations.

TruGolf has a more than 40-year history in game development. It started in 1983 as a subsidiary of Access Software, the developer of video games such as Tex Murphy, Beach-head, and Links, before partnering with Microsoft to create Microsoft Golf. In 1999, the tech giant acquired Access, but TruGolf was not included in the deal. After that, the TruGolf team focused on creating its own golf simulators. Today, the company sells equipment and software under its own brand, as well as software separately to other companies.

In summer 2024, TruGolf announced the launch of a national franchising initiative as part of an “aggressive growth strategy.” Several franchise locations have already opened, and equipment shipments for these sites are scheduled to go out in the first half of 2025, the company stated in documents submitted to financial regulators.

Golf is one of the most popular sports in the U.S. According to the National Golf Foundation (NGF), in 2023 more than a third of Americans over the age of five either played golf, followed the game, or listened to a golf-related podcast. Interest is so strong that there are now more golf courses nationwide than Starbucks or McDonald's stores.

At the same time, hundreds of golf courses in the U.S. close each year because maintaining them is too expensive, as TruGolf has previously noted. According to NGF statistics, 40% of American golfers play exclusively off course (meaning they use specialized facilities and simulators).

TruGolf hasbeen trading on the Nasdaq since February 1, 2024, following its merger with a SPAC. Since then, the stock has lost more than 80% of its value.

TruGolf’s business remains unprofitable. In 2023, its losses increased more than tenfold to $10.3 million. For the first half of 2024, the company reported that its loss had nearly halved from a year earlier, however. Additionally, TruGolf has a small free float; in October 2024, the company noted that more than 75% of its shares were held by three shareholders, including its CEO.

According to Benzinga, the only analyst covering the company still sees potential in TruGolf. His target price is $2.00 per share versus the current market price of less than $0.50.