Corsair Gaming (CRSR) Q1 2025 Earnings Call May 06, 2025 05:00 PM ET Company Participants David Pasquale - Investor RelationsAndy Paul - Co-Founder & CEOTHI LA - President and COOMichael Potter - CFONone - Executive Conference Call Participants Aaron Lee - Senior Research Analyst Operator Afternoon, and welcome to Corsair Gaming's First Quarter twenty twenty five Earnings Conference Call. As a reminder, today's call is being recorded, and your participation implies consent to such recording. At this time, a ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________ Commission File Number: 001-39533 Corsair Gaming, Inc. (Exact Name of Registrant as Specified in Its Charter) (State ...

Corsair Gaming (CRSR) Q1 2025 Earnings Call May 06, 2025 05:00 PM ET Speaker0 Afternoon, and welcome to Corsair Gaming's First Quarter twenty twenty five Earnings Conference Call. As a reminder, today's call is being recorded, and your participation implies consent to such recording. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. With that, I would now like to turn the call over to David Pasquale with Investor Relations. Tha ...

Q1 2025 UPDATE May 6, 2025 DISCLAIMER Forward Looking Statements This presentation contains express and implied forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding the Company's financial outlook for the full year 2025; market headwinds and tailwinds, including its expectations regarding the gaming market's continued growth; new product launches, the entry into new product categories and demand for new pro ...

Exhibit 99.1 Corsair Gaming Reports Strong First Quarter 2025 Growth in Revenue, EBITDA and Gross Margin Global Manufacturing Strategy Limits Tariff Exposure MILPITAS, CA, May 6, 2025 – Corsair Gaming, Inc. (Nasdaq: CRSR) ("Corsair" or the "Company"), a leading global provider and innovator of high-performance products for gamers, streamers, content-creators, and gaming PC builders, today announced financial results for the first quarter ended March 31, 2025. First Quarter 2025 Select Financial Metrics Defi ...

Core Insights - Enthusiast Gaming Holdings Inc. announced a new season of Rising Stars, an interactive campaign that offers a $100,000 contract to a grand prize winner to join Luminosity Gaming as a content creator [1] - The campaign aims to support smaller gaming content creators through creative challenges, culminating in a virtual livestream finale featuring notable Luminosity content creators [2][5] - The entire season is sponsored by Elgato, with additional support from various brands, enhancing brand visibility and engagement [4] Company Strategy - Luminosity Gaming focuses on livestreamed content creation, engaging millions of viewers monthly and fostering passionate communities [3] - The initiative is part of a broader strategy to enhance brand consideration and product awareness for sponsors while celebrating diverse voices in the gaming community [6] - The submission window for Rising Stars opened on March 1st and will close on March 7th, encouraging aspiring creators to participate [6] Industry Context - Enthusiast Gaming positions itself as a leading gaming media and entertainment company in North America, connecting video game enthusiasts and esports fans [7] - The company leverages its core pillars—creators, content, communities, games, and experiences—to create integrated brand solutions targeting Gen Z and Millennial audiences [7]

Business Risks and Market Conditions - The company faces significant risks that could adversely affect its business, reputation, financial condition, and future prospects[60]. - The company operates in a highly competitive market characterized by rapid technological change and aggressive price competition, which could lead to a loss of market share[68]. - Economic conditions, including high inflation and reduced consumer spending, may adversely affect demand for high-performance gaming products[88]. - The war between Russia and Ukraine may prolong GPU shortages due to resource supply disruptions[84]. - Cloud computing adoption could diminish demand for high-performance gaming hardware, posing a risk to the business[87]. - The company faces geopolitical risks due to the concentration of manufacturing in China, Taiwan, and Southeast Asia[108]. - The ongoing wars in Ukraine and the Middle East have contributed to significant market disruptions and volatility in commodity prices[96]. - The company faces risks related to international operations, including political and economic instability, which may harm its business[138]. Sales and Revenue Trends - Sales are influenced by the introduction and success of new high-performance computer hardware, particularly GPUs and CPUs, as well as sophisticated new video games[66]. - The company experienced a decrease in demand for products in the Gaming Components and Systems segment due to a slowdown in the self-built PC market in 2024, with expectations for demand to pick up with the next substantial GPU launch in 2025[66]. - The gaming industry’s growth, including live game streaming and esports, is crucial for the company’s growth prospects, with any decline potentially harming the business[73]. - Seasonal fluctuations in sales are expected, with total unit shipments typically highest in Q3 and Q4, and lowest in Q1 and Q2[81]. - Net revenue for 2024 was $1,316.4 million, a decrease of 9.8% from $1,459.9 million in 2023[255]. - Net revenue decreased by $143.5 million, or 9.8%, in 2024 compared to 2023, primarily due to a 20.8% decrease in sales for the Gaming Components and Systems segment, partially offset by a 19.7% increase in the Gamer and Creator Peripherals segment[281]. Product Development and Innovation - The competitive position and success depend on the ability to build and maintain brand strength among gaming enthusiasts, with a focus on continuous innovation and marketing efforts[61]. - The introduction of new and enhanced computer games is essential for sustaining consumer interest in gaming, which directly impacts the demand for the company’s products[67]. - The need for continuous product development increases the risk of defects, which could lead to increased warranty costs and damage to reputation[107]. - Product development expenses were $67.5 million and $65.3 million for the years ended December 31, 2024 and 2023, representing 5.1% and 4.5% of net revenue respectively[118]. - The company launched 78 new products in 2024, which positively impacted net revenue[262]. Supply Chain and Manufacturing - Supply chain issues, including raw material scarcity, could lead to increased costs and delays in product production, adversely affecting financial performance[78]. - The company relies on a limited number of suppliers for DRAM ICs, which poses risks if supply is disrupted[95]. - The company has limited manufacturing facilities and depends on third-party manufacturers, which may lead to product shortages and quality control issues[103]. - The company’s operations are subject to the U.S. Foreign Corrupt Practices Act and other anti-corruption laws, with potential severe consequences for violations[217]. Financial Performance and Costs - Gross margin improved to 24.9% in 2024 from 24.7% in 2023, compared to 21.6% in 2022[255]. - The company reported a net loss of $85.2 million in 2024, compared to a net loss of $2.6 million in 2023[255]. - Cash and restricted cash decreased to $109.6 million in 2024 from $178.6 million in 2023[256]. - Sales, general and administrative (SG&A) expenses increased by $24.7 million, or 8.7%, in 2024, driven by a $9.3 million rise in distribution costs and an $8.9 million increase in legal and professional service expenses[284]. - Total operating expenses increased to $377,551 thousand in 2024 from $350,574 thousand in 2023[280]. Customer and Market Relationships - The company relies on effective customer support to maintain customer loyalty and resolve product-related issues, which is critical for brand marketing[62]. - Sales to Amazon represented 30.9% and 30.7% of net revenue in 2024 and 2023, respectively, with the top ten customers accounting for 53.1% and 55.4% of net revenue[102]. - The company relies on third-party ecommerce service providers for online sales, and any failure in their performance could negatively impact sales and reputation[173]. Regulatory and Compliance Issues - The company is subject to complex customs and tariff regulations that could increase costs and affect margins[116]. - The company is subject to various federal and state regulations, and noncompliance could result in significant penalties and harm to its business[214]. - The company has implemented internal controls to promote compliance with anti-corruption laws, but risks remain from employee actions that could lead to investigations[219]. - Compliance with evolving data privacy regulations, such as the California Consumer Privacy Act, poses challenges and potential risks to the company's operations[157]. Ownership and Governance - The company is controlled by a single stockholder, EagleTree, which may have different interests than other stockholders[61]. - EagleTree beneficially owned approximately 53.7% of the common stock as of December 31, 2024, allowing it to control the company's affairs[189]. - The company is classified as a "controlled company" under Nasdaq rules, which allows it to rely on exemptions from certain corporate governance requirements[192]. - The company has anti-takeover provisions in its amended and restated certificate of incorporation that could delay or prevent changes in control or management[201].

Q4 AND FY2024 UPDATE February 12, 2025 DISCLAIMER Forward Looking Statements This presentation contains express and implied forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding the Company's financial outlook for the full year 2025; market headwinds and tailwinds, including its expectations regarding the gaming market's continued growth; new product launches, the entry into new product categories and demand ...

Financial Data and Key Metrics Changes - Q4 2024 net revenue was $413.6 million, a decrease from $417.3 million in Q4 2023 [24] - Full year 2024 net revenue was $1,316.4 million, down from $1,459.9 million in 2023 [24] - Q4 2024 adjusted EBITDA was $33.1 million compared to $33.7 million in Q4 2023 [32] - Full year 2024 adjusted EBITDA was $54.7 million, down from $95.1 million in 2023 [32] - Q4 2024 net income attributable to common shareholders was $1.3 million or $0.01 per diluted share, compared to $6.2 million or $0.06 per diluted share in Q4 2023 [31] Business Line Data and Key Metrics Changes - Gamer and Creator Peripherals segment revenue in Q4 2024 was $169.6 million, up from $136.8 million in Q4 2023 [25] - Gaming Components and Systems segment revenue in Q4 2024 was $244.1 million, down from $280.5 million in Q4 2023 [26] - Memory products revenue in Q4 2024 was $126.3 million, down from $145.5 million in Q4 2023 [26] - Gross profit for the Gamer and Creator Peripherals segment was $63.9 million in Q4 2024, compared to $50.9 million in Q4 2023 [27] Market Data and Key Metrics Changes - European markets contributed 38% of Q4 2024 revenues, slightly down from 38.4% in Q3 2024 [25] - APAC region contributed 9.1% of Q4 2024 revenues, down from 10.3% in Q3 2024 [25] Company Strategy and Development Direction - The company is focused on integrating the Fanatec sim racing business and expanding its footprint in the sim racing market [10][12] - Corsair aims to capitalize on the anticipated demand from the new GPU launches and the upcoming release of GTA 6 [9][10] - The company plans to continue investing in innovation and reducing operating costs while strengthening its balance sheet [23] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing strong demand for high-end components and the successful integration of Fanatec [10][12] - The company expects revenue growth to improve in 2025, with a range of $1.4 billion to $1.6 billion projected [38] - Management noted that the impact of new tariffs has been considered in their guidance, with a focus on mitigating risks [70][74] Other Important Information - The company announced that Andy Paul will retire at the end of Q2 2025, with Thi La set to become the new CEO [17][18] - The company ended Q4 with a cash balance of $109.6 million and $174 million of debt, down $25 million year-over-year [33][34] Q&A Session Summary Question: Is the Fanatec acquisition on track to be completed by the second quarter? - The integration is largely complete, focusing on customer service and logistics improvements [43][44] Question: How have partnerships with Activision and Apple impacted the business? - Significant traffic increase was noted on the website following the Call of Duty: Black Ops 6 launch, indicating a valuable marketing relationship [49][50] Question: What is the expected cadence for the GPU refresh and its impact on revenue? - Anticipation for the GPU refresh is high, with a gradual pickup in sales expected throughout the year [60][62] Question: How does the company view its position regarding tariffs compared to competitors? - The company has mitigated tariff impacts effectively and feels comfortable with its current guidance [74] Question: How beneficial is NVIDIA's AI services business for Corsair? - The company has not targeted data centers but sees potential demand from individuals building workstations for AI models [87][89]

Revenue Performance - Net revenue for Q4 2024 was $413.6 million, a slight decrease from $417.3 million in Q4 2023, with a 20% year-over-year growth in the Gamer and Creator Peripherals segment[5]. - Full year 2024 net revenue totaled $1,316.4 million, down from $1,459.9 million in 2023, with Gamer and Creator Peripherals segment revenue increasing to $472.7 million from $394.9 million[5]. - Net revenue for Q4 2024 was $413.6 million, a decrease of 0.2% from $417.3 million in Q4 2023[23]. - The segment of Gaming Components and Systems generated $244.1 million in revenue, down from $280.5 million in Q4 2023[25]. Profitability - Net loss attributable to common shareholders for 2024 was $99.2 million, or $0.95 per diluted share, compared to a net income of $3.2 million, or $0.03 per diluted share in 2023[5]. - Adjusted EBITDA for Q4 2024 was $33.1 million, slightly down from $33.7 million in Q4 2023, while full year adjusted EBITDA decreased to $54.7 million from $95.1 million in 2023[5]. - Operating income for Q4 2024 was $5.9 million, down from $12.1 million in Q4 2023, while the total operating expenses rose to $102.3 million from $90.6 million[23]. - Net loss attributable to Corsair Gaming, Inc. was $2.3 million in Q4 2024, compared to a net income of $7.0 million in Q4 2023[23]. - Net income for the three months ended December 31, 2024, was $2,728,000, a decrease of 64% compared to $7,576,000 for the same period in 2023[29]. - Adjusted Operating Income for the three months ended December 31, 2024, was $31,725,000, representing 7.7% of net revenue, compared to $31,792,000 or 7.6% in the same period of 2023[31]. - The diluted net income per share for the three months ended December 31, 2024, was $0.01, down from $0.06 in the same period of 2023[34]. - The company reported a net loss attributable to common stockholders of $99,175,000 for the year ended December 31, 2024, compared to a net income of $3,187,000 in 2023[34]. Cash Flow and Assets - Cash and restricted cash decreased to $109.4 million from $178.3 million year-over-year[27]. - Net cash provided by operating activities for the three months ended December 31, 2024, was $55,555,000, slightly down from $57,093,000 in the same period of 2023[29]. - The company reported a net cash increase of $48,025,000 for the three months ended December 31, 2024, compared to an increase of $30,794,000 in the same period of 2023[29]. - The net cash used in investing activities for the year ended December 31, 2024, was $52,705,000, compared to $26,981,000 in 2023[29]. - Total assets decreased to $1.236 billion as of December 31, 2024, from $1.357 billion a year earlier[27]. - Corsair Gaming's total liabilities decreased to $616.4 million from $663.5 million year-over-year[27]. Segment Performance - The Gamer and Creator Peripherals segment's gross profit now exceeds that of the Gaming Components and Systems segment, indicating a shift in profitability focus[6]. - The company reported a gross profit of $63.9 million from Gamer and Creator Peripherals, up from $50.9 million in Q4 2023, indicating a gross margin of 37.7%[25]. - Gross profit increased to $108.2 million in Q4 2024, up from $102.7 million in Q4 2023, resulting in a gross margin of 26.2% compared to 24.6%[25]. Future Outlook - Corsair expects revenue for 2025 to be in the range of $1.4 billion to $1.6 billion, with adjusted EBITDA projected between $80 million and $100 million[11]. - The company anticipates a rebound in demand for high-performance gaming gear, driven by new GPU launches and a growing market for PC upgrades[8]. - Corsair's recent acquisition of Fanatec is expected to contribute to revenue growth, with new products like the ClubSport GT Cockpit being introduced[6]. - The company plans to continue organic growth alongside strategic acquisitions in high-value peripherals[6]. - Corsair's K65 Wireless keyboard and M75 Gaming mouse have been selected by Apple for retail, enhancing brand visibility and market reach[12].