Drive Shack Inc.

Q2 total company revenue was $86.7 million, up $12.8 million or 17.3% from $73.9 million a year ago. Consolidated net loss was $9.6 million, and net loss applicable to common shareholders was $10.8 million, or $0.12 per share, versus a loss of $0.04 per share last year. Adjusted EBITDA was $4.6 million versus $7.7 million in Q2 last year. American Golf revenue was $70.8 million, excluding managed course reimbursements, up $6.2 million or 12.5%; American Golf event revenue was $9.5 million, up $7.2 million or 311%. Drive Shack venue revenue was $11.2 million, with event revenue of $3.2 million, up $1.6 million or 106%; Puttery venue revenue was $4.5 million, led by The Colony at $2.4 million and Charlotte at $2.0 million, while D.C. contributed about $100,000 after opening near quarter-end. Cash and cash equivalents were $22.7 million at June 30, 2022, versus $58.3 million at December 31, 2021. Management said the Q2 Puttery EBITDA decline reflected a one-time inventory true-up, and on a run-rate basis they expect Puttery EBITDA margins to be around 35%. Looking ahead, the company expects four additional Puttery openings by the end of 2022 (Houston in Q3, Chicago in early Q4, Pittsburgh and Kansas City in late Q4), ending 2022 with seven Puttery venues open; Miami and Manhattan are now expected in early 2023, and management expects 18 openings in 2023, ending next year with 25 venues open.

Hana Khouri emphasized that the business has strong momentum across its portfolio, with especially clear validation in Puttery. She framed Puttery as the company’s best near-term growth path, highlighting favorable unit economics, a large addressable market, and proof that smaller venues can still produce attractive results. Her tone was confident but practical: she acknowledged delays, inventory-system issues, and capital needs, while stressing that the company is actively adapting the rollout strategy and site-selection process.

Kelley Buchhorn focused on the quarter’s reported financials and the main drivers of the year-over-year changes. She noted total company revenue of $86.7 million, operating loss of $6.4 million, net loss of $9.6 million, and adjusted EBITDA of $4.6 million, with the comparison to last year affected by pre-opening costs, headcount investments, and the New Orleans lease termination. She also pointed to cash of $22.7 million at quarter-end, down from $58.3 million at year-end because of capital expenditures for future Puttery venues, and said preferred-stock dividends were declared for the period beginning August 1, 2022 and ending October 31, 2022.

Analysts focused on whether 2022 Puttery openings were already funded, and management said the capital for the four remaining 2022 units was allocated and not contingent on a new raise. For 2023, Hana said funding will likely come from a mix of operating cash flow, debt financing, balance-sheet actions, and potentially asset sales, while acknowledging they are actively pursuing capital. Questions also centered on Puttery margins and G&A: management said the margin drop was due to a one-time inventory true-up and guided to about 35% run-rate EBITDA margins, while saying the G&A increase was largely a normalization step rather than a recurring step-up.