sair Gaming(CRSR) - 2025 Q1 - Quarterly Results

Financial Performance and Outlook This section provides an overview of Corsair's financial results, management's perspective, and recent product developments First Quarter 2025 Financial Highlights 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 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] - 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] - 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] - AI is becoming a significant growth driver, with Elgato already shipping AI-enhanced tools and customer support leveraging AI-driven systems[7] - The company has strengthened its balance sheet by reducing debt and enhancing liquidity, enabling strategic investments in innovation and long-term growth[7] Recent Developments 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] - Expanded the Custom Labs platform with new options from the Call of Duty and Starfield franchises across multiple product categories[13] - The Fanatec brand launched the officially licensed CSL Elite Steering Wheel Porsche Vision GT, featuring a new premium microfiber fabric called Tactaris[13] Financial Statements This section presents Corsair's consolidated financial statements, including statements of operations, segment information, balance sheets, and cash flows Condensed Consolidated Statements of Operations 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 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 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 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 This section explains Corsair's use of non-GAAP financial measures and provides reconciliations to their GAAP equivalents Use of Non-GAAP Financial Measures 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] - 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][21] GAAP to Non-GAAP Reconciliations 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% |