[Financial Performance and Outlook](index=1&type=section&id=Financial%20Performance%20and%20Outlook) This section provides an overview of Corsair's financial results, management's perspective, and recent product developments [First Quarter 2025 Financial Highlights](index=1&type=section&id=First%20Quarter%202025%20Select%20Financial%20Metrics) Corsair reported strong growth in the first quarter of 2025, with net revenue increasing **9.6%** year-over-year to **$369.8 million**, driven by growth in both the Gamer and Creator Peripherals and the Gaming Components and Systems segments. The company's net loss narrowed to **$10.1 million** from **$12.5 million** in the prior-year quarter, while adjusted net income and adjusted EBITDA both saw significant increases, reaching **$12.3 million** and **$22.6 million**, respectively Q1 2025 Key Financial Metrics vs. Q1 2024 | Financial Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Revenue | $369.8M | $337.3M | +9.6% | | Net Loss (attributable to common shareholders) | ($10.1M) | ($12.5M) | Improved | | Diluted Net Loss per Share | ($0.10) | ($0.12) | Improved | | Adjusted Net Income | $12.3M | $9.5M | +29.5% | | Adjusted Diluted Net Income per Share | $0.11 | $0.09 | +22.2% | | Adjusted EBITDA | $22.6M | $18.0M | +25.6% | Q1 2025 Segment Net Revenue vs. Q1 2024 | Segment | Q1 2025 Net Revenue | Q1 2024 Net Revenue | Change | | :--- | :--- | :--- | :--- | | Gamer and Creator Peripherals | $112.0M | $107.0M | +4.7% | | Gaming Components and Systems | $257.8M | $230.3M | +12.0% | [Management Commentary and Business Outlook](index=1&type=section&id=Management%20Commentary%20and%20Business%20Outlook) Management expressed satisfaction with Q1 performance, highlighting the successful initial integration of Fanatec and a rebound in the Gaming Components segment. The company is proactively managing tariff risks by diversifying its supply chain, with only **19%** of U.S. imports sourced from China in Q1. While optimistic about continued momentum in the self-built PC market, Corsair is not reaffirming its full-year 2025 guidance due to tariff uncertainties. The company also noted the growing importance of AI as a growth driver and its efforts to strengthen the balance sheet - The initial integration of Fanatec into Corsair's e-commerce, supply chain, and customer support infrastructure was a key milestone, receiving an enthusiastic consumer response[4](index=4&type=chunk) - Corsair has a highly adaptable supply chain to mitigate tariff impacts. In Q1 2025, only **19%** of U.S. imports were from China, and this is expected to decrease. Manufacturing can be shifted to alternative locations within **two to four quarters** if necessary[7](index=7&type=chunk) - Due to uncertainty from newly announced tariffs, the company is not reaffirming its full-year 2025 guidance at this time but remains on track to achieve it if current conditions hold[7](index=7&type=chunk) - AI is becoming a significant growth driver, with Elgato already shipping AI-enhanced tools and customer support leveraging AI-driven systems[7](index=7&type=chunk) - The company has strengthened its balance sheet by reducing debt and enhancing liquidity, enabling strategic investments in innovation and long-term growth[7](index=7&type=chunk) [Recent Developments](index=2&type=section&id=Recent%20Developments) Corsair has recently launched several new products and expanded partnerships. This includes new HXi Series power supplies designed for the latest high-power GPUs from NVIDIA and AMD. The company also expanded its Custom Labs platform to include collaborations with major gaming franchises like Call of Duty and Starfield. Additionally, the Fanatec brand launched a new premium Porsche-licensed steering wheel - Launched HXi Series platinum power supplies with dual 12V-2x6 cables, designed to power demanding GPUs like the **NVIDIA® RTX 50 series** and **AMD® 9070 series**[9](index=9&type=chunk) - Expanded the Custom Labs platform with new options from the Call of Duty and Starfield franchises across multiple product categories[13](index=13&type=chunk) - The Fanatec brand launched the officially licensed CSL Elite Steering Wheel Porsche Vision GT, featuring a new premium microfiber fabric called Tactaris[13](index=13&type=chunk) [Financial Statements](index=6&type=section&id=Financial%20Statements) This section presents Corsair's consolidated financial statements, including statements of operations, segment information, balance sheets, and cash flows [Condensed Consolidated Statements of Operations](index=6&type=section&id=Corsair%20Gaming%2C%20Inc.%20Condensed%20Consolidated%20Statements%20of%20Operations) For the first quarter of 2025, Corsair's net revenue grew to **$369.8 million** from **$337.3 million** in the prior-year period. Gross profit increased to **$102.4 million**, up from **$86.6 million**. The company significantly reduced its operating loss to **$(2.3) million** compared to **$(10.2) million** in Q1 2024. Consequently, the net loss attributable to common shareholders improved to **$(10.1) million**, or **$(0.10) per share**, from **$(12.5) million**, or **$(0.12) per share**, year-over-year Q1 2025 Statement of Operations Highlights (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net revenue | $369,750 | $337,257 | | Gross profit | $102,362 | $86,639 | | Operating loss | $(2,263) | $(10,219) | | Net loss attributable to common stockholders | $(10,067) | $(12,540) | | Net loss per share, diluted | $(0.10) | $(0.12) | [Segment Information](index=7&type=section&id=Corsair%20Gaming%2C%20Inc.%20Segment%20Information) In Q1 2025, both of Corsair's segments showed year-over-year growth. The Gamer and Creator Peripherals segment's net revenue increased to **$112.0 million** with a gross margin of **41.5%**. The larger Gaming Components and Systems segment saw a more substantial revenue increase to **$257.8 million**, with its gross margin expanding significantly to **21.7%** from **18.7%** in the prior year, contributing to an overall company gross margin of **27.7%** Q1 2025 Segment Performance vs. Q1 2024 | Segment & Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Gamer and Creator Peripherals** | | | | Net Revenue | $111.97M | $106.97M | | Gross Profit | $46.41M | $43.64M | | Gross Margin | 41.5% | 40.8% | | **Gaming Components and Systems** | | | | Net Revenue | $257.78M | $230.28M | | Gross Profit | $55.95M | $43.00M | | Gross Margin | 21.7% | 18.7% | | **Total Company** | | | | Total Net Revenue | $369.75M | $337.26M | | Total Gross Margin | 27.7% | 25.7% | [Condensed Consolidated Balance Sheets](index=8&type=section&id=Corsair%20Gaming%2C%20Inc.%20Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, Corsair's balance sheet showed total assets of **$1.24 billion**. Cash and restricted cash stood at **$102.5 million**. Inventories increased to **$276.8 million** from **$260.0 million** at the end of 2024. The company continued to de-lever, with long-term debt, net, decreasing to **$136.4 million** from **$161.3 million** over the quarter. Total stockholders' equity remained stable at **$608.8 million** Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and restricted cash | $102,282 | $109,385 | | Inventories | $276,837 | $259,979 | | Total assets | $1,239,457 | $1,235,829 | | Long-term debt, net | $136,391 | $161,310 | | Total liabilities | $616,165 | $616,377 | | Total stockholders' equity | $608,757 | $604,303 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Corsair%20Gaming%2C%20Inc.%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the three months ended March 31, 2025, Corsair generated **$18.8 million** in cash from operating activities, a significant turnaround from the **$26.3 million** used in the same period of 2024. This improvement was driven by better net loss and favorable changes in working capital, particularly accounts payable. The company used **$22.3 million** in financing activities, mainly for a **$25.0 million** debt repayment. Overall, cash and restricted cash decreased by **$7.1 million** during the quarter Q1 2025 Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $18,750 | $(26,317) | | Net cash used in investing activities | $(3,072) | $(1,479) | | Net cash used in financing activities | $(22,254) | $(19,949) | | **Net decrease in cash and restricted cash** | **$(7,102)** | **$(48,381)** | [Non-GAAP Financial Measures](index=4&type=section&id=Non-GAAP%20Financial%20Measures) This section explains Corsair's use of non-GAAP financial measures and provides reconciliations to their GAAP equivalents [Use of Non-GAAP Financial Measures](index=4&type=section&id=Use%20and%20Reconciliation%20of%20Non-GAAP%20Financial%20Measures) Corsair utilizes non-GAAP financial measures, including adjusted operating income, adjusted net income, and adjusted EBITDA, to supplement its GAAP-based financial results. The company believes these measures offer investors a clearer understanding of its core operating performance by excluding certain non-cash or non-recurring expenses such as amortization, stock-based compensation, acquisition costs, and restructuring charges. These metrics are used internally by management for performance evaluation and planning - The company presents non-GAAP financial information as it believes these measures help identify underlying business trends that could be masked by excluded expenses[16](index=16&type=chunk) - Key adjustments to derive non-GAAP figures include backing out amortization, stock-based compensation, one-time legal costs, acquisition and integration costs, and restructuring charges[18](index=18&type=chunk)[21](index=21&type=chunk) [GAAP to Non-GAAP Reconciliations](index=10&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliations) In Q1 2025, Corsair's non-GAAP metrics showed significant improvement over their GAAP counterparts and the prior year. The GAAP operating loss of **$(2.3) million** was adjusted to a non-GAAP operating income of **$20.6 million**. The GAAP net loss of **$(10.3) million** reconciled to a non-GAAP adjusted net income of **$12.3 million**. Adjusted EBITDA increased to **$22.6 million** from **$18.0 million** year-over-year, with the adjusted EBITDA margin expanding to **6.1%** from **5.3%** Q1 2025 GAAP to Non-GAAP Reconciliation Highlights (in thousands) | Metric | Q1 2025 GAAP | Q1 2025 Non-GAAP | Q1 2024 Non-GAAP | | :--- | :--- | :--- | :--- | | Operating Income (Loss) | $(2,263) | $20,636 | $15,398 | | Net Income (Loss) | $(10,317) | $12,319 | $9,516 | | Adjusted EBITDA | N/A | $22,643 | $18,024 | Q1 2025 Margin Comparison | Margin | GAAP | Non-GAAP | | :--- | :--- | :--- | | Operating Margin | -0.6% | 5.6% | | Adjusted EBITDA Margin | N/A | 6.1% |

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].

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]