| --- | --- | |---------------------------|-------| | | | | | | | | | | | | | | | | Q2 2022 FINANCIAL RESULTS | | | August 4, 2022 | | 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 ...

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The company reports a significant net loss for H1 2022, driven by a sharp decline in revenue and gross profit Condensed Consolidated Statements of Operations (in thousands) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | **Net revenue** | $283,908 | $472,903 | $664,599 | $1,002,317 | | **Gross profit** | $36,459 | $130,351 | $127,215 | $290,679 | | **Operating income (loss)** | $(54,960) | $34,713 | $(57,445) | $102,002 | | **Net income (loss)** | $(51,839) | $27,745 | $(55,119) | $74,468 | | **Diluted EPS** | $(0.62) | $0.28 | $(0.68) | $0.74 | Condensed Consolidated Balance Sheet Highlights (in thousands) | Asset/Liability | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Cash | $35,851 | $62,415 | | Accounts receivable, net | $170,309 | $291,287 | | Inventories | $292,586 | $298,315 | | Goodwill | $347,907 | $317,054 | | Total assets | $1,231,892 | $1,337,396 | | Total debt (current & long-term) | $245,084 | $247,651 | | Total liabilities | $669,531 | $769,216 | Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $10,051 | $59,397 | | Net cash used in investing activities | $(32,550) | $(10,931) | | Net cash used in financing activities | $(677) | $(43,541) | | Net (decrease) increase in cash | $(26,678) | $4,983 | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Key disclosures include segment performance, the iDisplay acquisition, and details on goodwill and total debt - The company operates in two reportable segments: Gamer and creator peripherals, and Gaming components and systems[40](index=40&type=chunk)[41](index=41&type=chunk)[117](index=117&type=chunk) - On January 1, 2022, Corsair completed the acquisition of a 51% stake in iDisplay for a total consideration of **$36.4 million**, adding **$33.0 million** to goodwill[68](index=68&type=chunk)[72](index=72&type=chunk) - As of June 30, 2022, the company had total debt of **$245.1 million**, primarily from a Term Loan facility maturing in September 2026[89](index=89&type=chunk)[95](index=95&type=chunk)[98](index=98&type=chunk) Segment Net Revenue (in thousands) | Segment | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Gamer and Creator Peripherals | $88,989 | $155,157 | $223,137 | $331,069 | | Gaming Components and Systems | $194,919 | $317,746 | $441,462 | $671,248 | | **Total net revenue** | **$283,908** | **$472,903** | **$664,599** | **$1,002,317** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a significant performance downturn due to macroeconomic pressures, lower demand, and inventory charges - Revenue for Q2 2022 decreased by **40.0% YoY**, and for H1 2022, it decreased by **33.7% YoY** due to a slowdown in consumer spending[130](index=130&type=chunk)[143](index=143&type=chunk) - Gross margin for Q2 2022 decreased to **12.8%** from 27.6% in Q2 2021, impacted by freight costs, promotions, and inventory charges[130](index=130&type=chunk)[164](index=164&type=chunk) - The company recorded a **$22.7 million inventory impairment charge** in Q2 2022 and implemented a restructuring plan[55](index=55&type=chunk)[143](index=143&type=chunk) - As of June 30, 2022, the company had **$38.7 million** in cash and restricted cash and **$246.3 million** in outstanding Term Loan debt[130](index=130&type=chunk)[184](index=184&type=chunk) [Results of Operations](index=31&type=section&id=Results%20of%20Operations) Net revenue declined sharply across both segments in Q2 2022, with gross margin falling due to inventory charges and higher costs Net Revenue by Segment (in thousands) | Segment | Q2 2022 | Q2 2021 | % Change | | :--- | :--- | :--- | :--- | | Gamer and Creator Peripherals | $88,989 | $155,157 | (42.6)% | | Gaming Components and Systems | $194,919 | $317,746 | (38.7)% | | **Total** | **$283,908** | **$472,903** | **(40.0)%** | Gross Profit and Margin by Segment | Segment | Q2 2022 Gross Profit | Q2 2022 Gross Margin | Q2 2021 Gross Profit | Q2 2021 Gross Margin | | :--- | :--- | :--- | :--- | :--- | | Gamer and Creator Peripherals | $10,558 | 11.9% | $54,634 | 35.2% | | Gaming Components and Systems | $25,901 | 13.3% | $75,717 | 23.8% | | **Total** | **$36,459** | **12.8%** | **$130,351** | **27.6%** | - SG&A expenses decreased by **$6.8 million (8.5%)** in Q2 2022 YoY, mainly due to lower distribution and personnel-related costs[166](index=166&type=chunk) - Product development expenses increased by **$2.6 million (16.5%)** in Q2 2022 YoY, driven by amortization from the iDisplay acquisition[168](index=168&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) The company's operating cash flow decreased significantly, while debt levels remained stable with sufficient liquidity for operations Cash Flow Summary (Six Months Ended June 30, in thousands) | Activity | 2022 | 2021 | | :--- | :--- | :--- | | Operating Activities | $10,051 | $59,397 | | Investing Activities | $(32,550) | $(10,931) | | Financing Activities | $(677) | $(43,541) | - The company's Credit Agreement provides for a **$250 million term loan** and a **$100 million revolving credit facility**[192](index=192&type=chunk)[198](index=198&type=chunk) - The Credit Agreement was amended to replace LIBOR with BSBY and temporarily increase the maximum permitted leverage ratio[197](index=197&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is primarily exposed to market risks from interest rate fluctuations on its debt and foreign currency exchange rates - The company's **$246.3 million Term Loan** has a variable interest rate; a 100 basis point change would alter annual interest expense by **$2.5 million**[206](index=206&type=chunk) - In H1 2022, **16.2% of net revenue** was denominated in foreign currencies, with risks partially hedged by forward contracts[207](index=207&type=chunk)[208](index=208&type=chunk) [Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and internal controls over financial reporting were effective - Management concluded that disclosure controls and procedures were **effective** at a reasonable assurance level as of June 30, 2022[212](index=212&type=chunk) - No material changes occurred during the quarter that are reasonably likely to materially affect internal controls[213](index=213&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no current legal proceedings that are expected to have a material adverse effect on its business - The company does not expect any pending legal proceedings to have a **material adverse effect** on its business or financial condition[216](index=216&type=chunk) [Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) Key risks include brand dependence, competition, supply chain disruptions, and its status as a "controlled company" - The business is highly dependent on its ability to maintain brand strength and innovate due to **short product life cycles**[220](index=220&type=chunk)[222](index=222&type=chunk) - Sales are driven by new third-party hardware like GPUs and CPUs, and shortages can **seriously harm business**[226](index=226&type=chunk) - The company faces **intense competition** from established players like Logitech, Razer, Dell (Alienware), and HP (HyperX/Omen)[228](index=228&type=chunk)[231](index=231&type=chunk)[232](index=232&type=chunk) - The war in Ukraine and the COVID-19 pandemic could continue to cause **significant supply chain disruptions** and affect financial results[217](index=217&type=chunk)[266](index=266&type=chunk)[272](index=272&type=chunk) - EagleTree's **56.6% ownership** makes Corsair a "controlled company," exempting it from certain corporate governance requirements[367](index=367&type=chunk)[368](index=368&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=72&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - None[404](index=404&type=chunk) [Defaults Upon Senior Securities](index=72&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section is not applicable as there were no defaults upon senior securities - Not applicable[405](index=405&type=chunk) [Mine Safety Disclosures](index=72&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable as the company is not involved in mining operations - Not applicable[406](index=406&type=chunk) [Other Information](index=72&type=section&id=Item%205.%20Other%20Information) The company reported no other material information for the period - None[407](index=407&type=chunk) [Exhibits](index=73&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the report, including credit agreements and required officer certifications - Key exhibits filed include the First Amendment to the Credit Agreement, the Non-Employee Director Compensation Policy, and CEO/CFO certifications[410](index=410&type=chunk)[411](index=411&type=chunk)

Market Overview - US Gaming Enthusiasts are a leading indicator of self-built PC demand increase as GPU prices fall[5] - The US components total addressable market (TAM) shows growth of 32%, 27%, and 29% in Q3'21, Q4'21 and Q1'22 respectively, compared to pre-pandemic levels[5] - The US Gaming Peripherals TAM also shows long-term growth trends with increases of 74%, 62%, and 45% in Q3'21, Q4'21 and Q1'22 respectively, compared to pre-pandemic levels[8] - Corsair dominates in the self-built gaming PC space with a 65% market share in gaming components (excluding memory) and a 45% market share in gaming memory[6] Financial Performance (Q1 2022) - Net revenue decreased by 28.1% year-over-year to $3807 million, but increased 234% compared to Q1'20[27] - Gross profit decreased by 434% year-over-year to $908 million, with a gross profit margin of 238%, a decrease of 650 bps[27] - Adjusted EBITDA decreased by 808% year-over-year to $154 million, with an adjusted EBITDA margin of 41%[27] - Gaming Components and Systems revenue decreased by 303% year-over-year to $2465 million[29] - Gamer and Creator Peripherals revenue decreased by 237% year-over-year to $1341 million, but was up 768% above pre-pandemic Q1'20[30] Financial Guidance (FY2022) - The company expects net revenues between $16 billion and $18 billion[31] - Adjusted operating income is projected to be between $100 million and $120 million[31] - Adjusted EBITDA is expected to be between $110 million and $130 million[31]

Corsair Gaming, Inc. (NASDAQ:CRSR) Q1 2022 Earnings Conference Call May 5, 2022 6:00 PM ET Company Participants Ronald van Veen - Vice President, Finance & Investor Relations Andy Paul - Chief Executive Officer Michael Potter - Chief Financial Officer Conference Call Participants Mario Lu - Barclays Rod Hall - Goldman Sachs Drew Crum - Stifel Franco Granda - D.A. Davidson Doug Creutz - Cowen Operator Good afternoon, and welcome to the Corsair Gaming's First Quarter 2022 Earnings Conference Call. As a remind ...

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, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | --- | --- | --- | |---------------------------------------------------------------------------------------|-------------------------------------------------------------- ...

Business Risks and Competition - The company faces significant risks that could adversely affect its business, reputation, financial condition, and future prospects[74]. - Intense competition exists in the gaming gear market, with primary competitors including Logitech, Razer, and HP, which may impact market share[86]. - The company must effectively compete on price for its high-performance gear, as many products are priced higher than competitors[92]. - The company’s growth prospects are affected by various external factors, including economic conditions and consumer perceptions of gaming[93]. - The company does not plan to target mobile gamers, which could harm its business if gamers migrate away from PCs and consoles[95]. - The success of the company is linked to the growth of live game streaming and esports, with potential risks if these markets stagnate or decline[98]. Market Expansion and Product Development - The company has entered three new markets in the last 18 months, including microphones, cameras, and gaming monitors, but faces competition from larger consumer electronics companies[80]. - The company relies on the introduction and success of new high-performance computer hardware and sophisticated video games to drive sales of its gear[83]. - The gaming industry growth is crucial for the company, with a significant portion of net revenue generated from gaming-related gear[94]. - The company must continuously develop new products to remain competitive, increasing the risk of defects and quality control issues[138]. - The company launched 141 new products in 2021, expanding its market presence in microphones, cameras, and gaming monitors[279]. Financial Performance and Revenue - Net revenue for the year ended December 31, 2021, was $1,904.1 million, representing a 11.8% increase from $1,702.4 million in 2020[279]. - Net income for 2021 was $101.0 million, compared to $103.2 million in 2020, indicating a slight decline in profitability[279]. - The gamer and creator peripherals segment accounted for 34.0% of total net revenue in 2021, up from 31.7% in 2020[279]. - Direct-to-consumer sales represented 10.7% of total net revenue in 2021, an increase from 8.6% in 2020[279]. - Amazon accounted for 26.7% of net revenue in 2021, with the top ten customers contributing approximately 51.7% of total revenue[284]. Supply Chain and Manufacturing Risks - The company relies heavily on key management personnel, particularly the CEO, and losing them could significantly harm its competitive position and financial performance[101]. - Limited manufacturing facilities only assemble DRAM modules and custom-built PCs, relying heavily on third-party manufacturers, which poses risks of product shortages and delays[131]. - The company faces potential disruptions due to reliance on a small number of suppliers, with some being exclusive or single-source, increasing vulnerability to supply chain issues[133]. - The ongoing COVID-19 pandemic has led to logistics challenges globally, affecting supply chains and operational efficiency[125]. - The company sources DRAM ICs from major manufacturers like Samsung, Hynix, and Micron, which hold significant market shares, and any supply limitations could affect production[122]. Regulatory and Compliance Issues - The company is subject to various federal and state regulations, and noncompliance could lead to significant penalties and harm its business[250]. - The company is subject to evolving privacy laws, such as the GDPR, which could increase compliance costs and operational complexities[190]. - The company collects user data related to gamers and streamers, which is subject to various international regulations, posing compliance challenges[189]. - The company is subject to GDPR and UK GDPR regulations, with potential fines up to €20 million or 4% of global turnover[192]. - The CCPA, effective from 2020, grants California consumers expanded privacy rights, increasing compliance costs and potential liabilities for the company[195]. Financial Obligations and Debt - The company had $247.7 million of indebtedness as of December 31, 2021, and expects to incur additional indebtedness in the future, particularly for acquisitions[173]. - The company's Consolidated Total Net Leverage Ratio was 1.1 to 1.0 and the Consolidated Interest Coverage Ratio was 11.5 to 1.0 as of December 31, 2021, both of which are within the required covenants[178]. - The company relies significantly on credit from manufacturers and suppliers, with payment terms typically ranging from zero to 120 days[171]. - Any inability to meet working capital needs could require the company to reduce expenses or delay product development, adversely affecting growth prospects[172]. Intellectual Property and Legal Risks - The company’s future success is dependent on its ability to protect its intellectual property, including trademarks and patents, which may be costly and challenging[211]. - The company is currently involved in an intellectual property infringement claim but does not believe it will have a material adverse effect on its business[216]. - The company has faced past claims related to intellectual property infringement, which have required settlements and could lead to significant costs or operational restrictions[217]. Environmental and Geopolitical Risks - The company is subject to various environmental laws and regulations that could impose substantial costs and affect operations, including compliance with the Dodd-Frank Act regarding conflict minerals[219][222]. - The company operates a facility in Taiwan for DRAM module assembly, but relies on manufacturers in China and Southeast Asia, exposing it to geopolitical risks[141]. - The concentration of manufacturing in specific regions increases risks related to natural disasters, political instability, and trade restrictions, which could adversely affect operations[143]. Stock and Corporate Governance - The corporate headquarters are located in the San Francisco Bay Area, and the testing and packaging of DRAM modules occur in Taiwan, both of which are prone to natural disasters that could disrupt operations[218]. - As of December 31, 2021, EagleTree beneficially owned approximately 57.3% of the company's common stock, allowing it to control significant corporate decisions[224]. - The company is classified as a "controlled company" under Nasdaq rules, which allows it to rely on exemptions from certain corporate governance requirements[225]. - The company has anti-takeover provisions that could delay or prevent takeover attempts, which may limit the price investors are willing to pay for common stock[236]. - The company does not currently intend to pay dividends on its common stock, meaning returns will depend on stock price appreciation[242].

| --- | --- | --- | --- | --- | |------------------------------------------|-------|-------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Q4 & FISCAL YEAR 2021 FINANCIAL RESULTS | | | | | | February 8, 2022 | | | | | 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 mat ...

Corsair Gaming, Inc. (NASDAQ:CRSR) Q4 2021 Earnings Conference Call February 8, 2022 5:00 PM ET Company Participants Ronald van Veen - Vice President of Finance and Investor Relations Andy Paul - Founder, Chief Executive Officer and Director Michael Potter - Chief Financial Officer Conference Call Participants Drew Crum - Stifel Mario Lu - Barclays Tim Nollen - Macquarie Douglas Creutz - Cowen Roderick Hall - Goldman Sachs Operator Good afternoon, and welcome to the Corsair Gaming's Fourth Quarter 2021 Earn ...

Corsair Gaming, Inc. (NASDAQ:CRSR) Q3 2021 Earnings Conference Call November 2, 2021 8:30 AM ET Company Participants Ronald Veen - Vice President of Finance and Investor Relations Andy Paul - Founder, Chief Executive Officer and Director Michael Potter - Chief Financial Officer Conference Call Participants Mario Lu - Barclays Investment Bank Doug Creutz - Cowen and Company Drew Crum - Stifel Financial Corp Tim Nollen - Macquarie Tom Forte - D.A. Davidson Rod Hall - Goldman Sachs Dalton Kern - Baird O ...

| --- | --- | |----------------------------------------|-------| | | | | | | | | | | | | | Q3 FISCAL YEAR 2021 FINANCIAL RESULTS | | | November 2nd, 2021 | | 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 o ...