悩 CORSAIR CORSAIR Q3 2024 COMPANY UPDATE November 6, 2024 DISCLAIMER Forward Looking Statements This presentation contains forward looking statements that involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, the Company's results may differ materially from those expressed or implied by such forward-looking statements. All statements other than statements of historical fact could be deemed forward-looking statements, including, but n ...

Financial Data and Key Metrics Changes - Q3 2024 net revenue was $304.2 million, down from $363.2 million in Q3 2023, with year-to-date revenue of $902.8 million compared to $1 billion in the same period last year [26] - Overall gross profit in Q3 2024 was $69.7 million, down from $89.4 million in Q3 2023, with gross margin decreasing to 22.9% from 24.6% [29] - Q3 2024 net loss attributable to common shareholders was $58.4 million or $0.56 per diluted share, compared to a net loss of $3.1 million or $0.03 per diluted share in Q3 2023 [33] Business Line Data and Key Metrics Changes - The Gamer and Creator Peripheral segment generated $102 million in Q3 2024, up from $90.4 million in Q3 2023, with year-to-date revenue of $303.2 million compared to $258.1 million last year [27] - The Gaming Components and Systems segment contributed $202.2 million in Q3 2024, down from $272.8 million in Q3 2023, with year-to-date revenue decreasing to $599.6 million from $784.5 million [28] Market Data and Key Metrics Changes - European markets contributed 38.4% of Q3 2024 revenues, up from 33% in Q2 2024, while the APAC region accounted for 10.3%, down from 10.9% in Q2 2024 [27] - The gaming peripheral market has shown long-term growth, with a reported 80% increase in PC gaming headset sales in 2024 compared to pre-pandemic years [12] Company Strategy and Development Direction - The company is focusing on expanding its Peripheral business, which has higher gross margins compared to its Components and Memory segments, and expects this trend to continue [41] - Corsair is actively pursuing acquisitions to enhance its product offerings and market presence, particularly in high-margin segments [64] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about consumer spending, citing strong sales during Amazon Prime Day and positive retail channel activity leading into the holiday season [45] - The company anticipates a rebound in the Gaming Components and Systems segment in 2025, driven by new GPU launches and a return to consistent growth in the gaming market [59] Other Important Information - The company completed the acquisition of Fanatec, a leading provider of high-end Sim Racing components, and expects to add approximately $20 million of Fanatec revenue to Q4 2024 [22] - Corsair's adjusted EBITDA for Q3 2024 was $4.8 million, down from $23 million in Q3 2023, with expectations for improved margins and profitability moving forward [34] Q&A Session Summary Question: Can you elaborate on the EBITDA margin improvement plan? - Management highlighted upcoming game and technology launches that will drive sales of higher-margin products and the continued growth of the Peripheral business, which has higher gross margins compared to memory and components [40] Question: How has consumer demand changed compared to three months ago? - Management noted record sales during Amazon Prime Day and a positive shift in retail confidence, indicating a stronger consumer sentiment heading into the holiday season [42][45] Question: Can you explain the updated guidance and its drivers? - The majority of the guidance change was attributed to a Q3 shortfall, with some conservatism in Q4 expectations due to lower-than-expected Q3 performance [47][48] Question: What are the trends in the Stream Deck marketplace? - The marketplace has over 1 million accounts and is driving hardware sales, with expectations for future revenue growth from compelling paid apps [52] Question: What gives confidence in underlying demand within the industry? - Management expressed confidence due to the anticipated GPU refresh cycle and the growing number of gamers entering the market, particularly younger consumers who are more likely to purchase peripherals [66]

Financial Performance - Net revenue for Q3 2024 was $304.2 million, down from $363.2 million in Q3 2023, representing a decrease of 16.2%[71] - Gross margin decreased to 22.9% in Q3 2024 from 24.6% in Q3 2023[71] - The company reported a net loss of $51.6 million for Q3 2024, compared to a net loss of $2.9 million in Q3 2023[71] - Net revenue decreased by 16.2% and 13.4% for the three and nine months ended September 30, 2024, respectively, compared to the same periods last year[92] - The decrease in net revenue for the three-month period was primarily due to a 25.9% decrease in sales for the Gaming Components and Systems segment, partially offset by a 12.8% increase in the Gamer and Creator Peripherals segment[92] - Operating loss for the three months ended September 30, 2024, was $(20,944), compared to $(758) for the same period last year[89] - Net loss attributable to Corsair Gaming, Inc. for the three months ended September 30, 2024, was $(51,708), compared to $(3,079) for the same period last year[89] Cash Flow and Liquidity - Cash used in operations was $19.7 million for the nine months ended September 30, 2024, compared to cash provided by operations of $32.1 million for the same period in 2023[71] - As of September 30, 2024, the company had cash and restricted cash totaling $61.6 million and a borrowing capacity of $100.0 million under the Revolving Facility[104] - Net cash used in operating activities for the nine months ended September 30, 2024 was $19.7 million, compared to net cash provided of $32.1 million for the same period in 2023[106] - Cash used in investing activities was $50.5 million for the nine months ended September 30, 2024, primarily due to a $43.1 million cash outflow for the Fanatec Acquisition[108] - Cash used in financing activities was $46.6 million for the nine months ended September 30, 2024, which included $21.3 million for debt repayment and $19.8 million for purchasing additional ownership interest in iDisplay[109] - The company had a total principal outstanding of $177.8 million on the Term Loan as of September 30, 2024, with a variable interest rate structure[110] - The company may require additional funding in the future, which could involve raising funds through borrowings or public/private sales of debt or equity securities[104] Segment Performance - The Gamer and Creator Peripherals segment saw a slight improvement in sales during the first nine months of 2024, driven by new product introductions[74] - Net revenue for the Gamer and Creator Peripherals segment increased by 12.8% and 17.5% for the three and nine months ended September 30, 2024, driven by new product launches and post-acquisition revenues from Drop[99] - Net revenue for the Gaming Components and Systems segment decreased by 25.9% and 23.6% for the three and nine months ended September 30, 2024, influenced by a flat-to-low market trajectory in the self-built PC market[100] Expenses and Costs - SG&A expenses increased by $13.2 million, or 6.2%, for the nine months ended September 30, 2024, primarily due to an $8.4 million increase in legal expenses[94] - Product development expenses for the nine months ended September 30, 2024, increased by $2.0 million, or 4.2%, primarily due to a $1.7 million increase in personnel-related costs[95] - The gross margin for the Gamer and Creator Peripherals segment increased to 38.3% for the three months ended September 30, 2024, attributed to a favorable product mix and lower product costs[102] - The gross margin for the Gaming Components and Systems segment decreased by 6.7% for the three months ended September 30, 2024, due to unfavorable product mix and pricing pressures[103] Tax and Interest - Interest expense for the three months ended September 30, 2024, was $(3,011), down from $(4,271) in the same period last year[89] - Interest expense decreased by 29.5% and 22.4% for the three and nine months ended September 30, 2024, respectively, due to lower principal balance and interest rates on the Term Loan[96] - The effective tax rate was (110.0)% for the three months ended September 30, 2024, primarily due to a $28.0 million valuation allowance against U.S. federal and state deferred tax assets[97] - The effective tax rate for the company will vary depending on the proportion of foreign to U.S. income and changes in tax laws[88] Foreign Currency and Risk - Approximately 20.2% of Corsair Gaming's net revenue for the nine months ended September 30, 2024, was denominated in foreign currencies, primarily Euro and British Pound[118] - The outstanding notional principal amount of forward currency contracts was $19.5 million as of September 30, 2024, down from $44.3 million as of December 31, 2023[118] - The impact of changes in foreign currency rates resulted in a net loss of $(1.9) million for the nine months ended September 30, 2024, compared to $(1.5) million for the same period in 2023[118] - A hypothetical ten percent change in exchange rates would affect gains or losses on foreign currency exchange by approximately $3.1 million for the nine months ended September 30, 2024[118] Corporate Governance - There were no changes in internal control over financial reporting that materially affected Corsair Gaming's internal control during the quarter ended September 30, 2024[121] - Corsair Gaming's disclosure controls and procedures were evaluated as effective as of September 30, 2024, providing reasonable assurance for timely reporting[120] - The company does not anticipate that any ongoing legal proceedings will have a material adverse effect on its business or financial condition[121] Acquisitions and Growth - Corsair completed the acquisition of the Fanatec Business for $43.7 million on September 19, 2024, expanding its product offerings in the sim racing market[70] - Corsair launched 65 new products in the nine months ended September 30, 2024, following 108 new products launched in 2023[77] - The company expects continued growth in the peripheral market into late 2024 and 2025, despite a slowdown in the self-built PC market in early 2024[74]

Financial Performance - Net revenue for Q3 2024 was $304.2 million, a decrease of 16.2% compared to $363.2 million in Q3 2023[2] - Net loss attributable to common shareholders was $58.4 million, or $0.56 per diluted share, compared to a net loss of $3.1 million, or $0.03 per diluted share, in Q3 2023[2] - Adjusted EBITDA for Q3 2024 was $4.8 million, down from $23.0 million in Q3 2023[2] - Gross profit for the three months ended September 30, 2024, was $69,661 thousand, down 22.1% from $89,353 thousand in the prior year[21] - Operating loss for the three months ended September 30, 2024, was $(20,944) thousand, compared to a loss of $(758) thousand for the same period in 2023[19] - Net loss attributable to Corsair Gaming, Inc. for the three months ended September 30, 2024, was $(51,708) thousand, significantly higher than $(3,079) thousand in the same quarter of 2023[19] - The company reported a basic net loss per share of $(0.56) for the three months ended September 30, 2024, compared to $(0.03) in the same period last year[20] - Corsair Gaming reported a net loss of $51.586 million for the three months ended September 2024, compared to a net loss of $2.886 million for the same period in 2023[25] - The adjusted net loss for the three months ended September 2024 was $30.252 million, compared to an adjusted net income of $13.364 million in the same period last year[27] - GAAP net loss for the three months ended September 2024 was $51.586 million, compared to a loss of $2.886 million for the same period in 2023[28] Segment Performance - The Gaming Components and Systems segment net revenue was $202.2 million, down from $272.8 million in Q3 2023, while the Gamer and Creator Peripherals segment net revenue increased to $102.0 million from $90.4 million[2] - The Gamer and Creator Peripherals segment achieved 13% revenue growth year-over-year in Q3 2024, with strong margins of 38.3%[4] - Gross margin for Gamer and Creator Peripherals improved to 38.3% in Q3 2024 from 33.1% in Q3 2023[23] Future Outlook - Corsair expects full year 2024 revenue to be in the range of $1.25 billion to $1.35 billion, including approximately $20 million of EBITDA-neutral revenue in Q4 2024 from the Fanatec acquisition[5] - Adjusted operating income is now expected to be in the range of $28 million to $43 million, down from a previous expectation of $48 million to $63 million[6] - Corsair anticipates that Q4 2024 will be EBITDA neutral, with profitability expected in 2025 driven by the Fanatec acquisition[4] Cost Management - The company has implemented cost-saving measures expected to yield several million dollars in savings per quarter starting in Q4 2024[4] Cash Flow and Assets - Total current assets decreased to $571,553 thousand as of September 30, 2024, from $711,589 thousand at the end of 2023, reflecting a decline of 19.7%[24] - Cash and restricted cash decreased to $61,361 thousand from $178,325 thousand, a decline of 65.6%[24] - Corsair Gaming's total cash and restricted cash at the end of the period was $61.606 million, down from $147.770 million at the end of September 2023[25] - The company experienced a net cash used in operating activities of $25.101 million for the three months ended September 2024, compared to a net cash used of $11.912 million in the prior year[25] - Corsair Gaming's cash flows from financing activities resulted in a net cash outflow of $24.474 million for the three months ended September 2024, compared to $6.100 million in the same period last year[25] Acquisitions and Integration - Corsair completed the acquisition of the Fanatec Sim Racing brand, enhancing its position in the Sim Racing market[9] - The company incurred $43.131 million in cash outflows related to business acquisitions during the three months ended September 2024[25] - Acquisition and related integration costs for the three months ended September 2024 were $2.281 million, compared to $1.386 million in the same period last year[28] Expenses - Total operating expenses for the three months ended September 30, 2024, were $90,605 thousand, slightly higher than $90,111 thousand in the prior year[19] - Stock-based compensation for the three months ended September 2024 was $7.424 million, slightly down from $7.825 million in the same period last year[26] - Stock-based compensation for the nine months ended September 2024 totaled $23.125 million, slightly down from $23.245 million in the previous year[28] - Amortization expenses for the nine months ended September 2024 were $28.583 million, compared to $29.005 million in the same period of 2023[28] - Interest expense for the nine months ended September 2024 was $7.118 million, down from $7.875 million in the previous year[28] - Restructuring and other charges for the three months ended September 2024 were $3.369 million, up from $0.709 million in the prior year[28] - Income tax expense for the three months ended September 2024 was $27.018 million, compared to a tax benefit of $(0.097) million in the same period last year[28]

| --- | --- | |-------------------------------|-------| | | | | | | | | | | | | | | | | | | | Q2 2024 | | | Company Update August 1, 2024 | | | | | DISCLAIMER Forward Looking Statements This presentation contains forward looking statements that involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, the Company's results may differ materially from those expressed or implied by such forward-looking statements. All statements other than ...

Corsair Gaming, Inc. (NASDAQ:CRSR) Q2 2024 Earnings Conference Call August 1, 2024 5:00 PM ET Company Participants Ronald van Veen - Vice President of Finance and Investor Relations Andy Paul - Chief Executive Officer Michael Potter - Chief Financial Officer Conference Call Participants George Wang - Barclays Capital, Inc. Colin Sebastian - Baird Andrew Crum - Stifel, Nicolaus & Company, Inc. Doug Creutz - Cowen Aaron Lee - Macquarie Group Operator Good afternoon, everyone, and welcome to Corsair Gaming's S ...

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 June 30, 2024 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) Delaware ...

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