PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Corsair's Q1 2025 unaudited financials show net revenue of $369.8 million, a net loss of $10.3 million, and positive operating cash flow of $18.8 million Condensed Consolidated Statements of Operations Q1 2025 saw net revenue rise 9.6% to $369.8 million, gross profit increase to $102.4 million, and net loss improve to $10.5 million Q1 2025 vs Q1 2024 Statement of Operations Highlights (in thousands, except per share amounts) | Metric | Q1 2025 | Q1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Net revenue | $369,750 | $337,257 | 9.6% | | Gross profit | $102,362 | $86,639 | 18.2% | | Operating loss | $(2,263) | $(10,219) | 77.9% improvement | | Net loss attributable to Corsair | $(10,459) | $(11,565) | 9.6% improvement | | Diluted EPS | $(0.10) | $(0.12) | 16.7% improvement | Condensed Consolidated Balance Sheets As of March 31, 2025, total assets reached $1.24 billion, with cash at $99.8 million and long-term debt reduced to $136.4 million Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash | $99,843 | $107,011 | | Accounts receivable, net | $219,216 | $218,648 | | Inventories | $276,837 | $259,979 | | Total current assets | $633,359 | $623,388 | | Total assets | $1,239,457 | $1,235,829 | | Accounts payable | $240,114 | $207,215 | | 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 Q1 2025 operating cash flow turned positive at $18.8 million, with $22.3 million used in financing activities, including debt repayment Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash from 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 | $(7,102) | $(48,381) | | Cash at end of period | $102,529 | $130,183 | Notes to Condensed Consolidated Financial Statements Notes detail accounting policies, segment reporting, Fanatec acquisition adjustments, debt structure, and a valuation allowance on U.S. deferred tax assets - The company operates in two reportable segments: Gamer and Creator Peripherals and Gaming Components and Systems2430 - The purchase price allocation for the Fanatec acquisition was adjusted in Q1 2025, resulting in the recognition of $0.3 million in goodwill and the reversal of a $2.6 million bargain purchase gain recognized in 2024414244 - As of March 31, 2025, the company had an outstanding Term Loan with a principal balance of $149.0 million, maturing in September 202655 - A full valuation allowance was recorded against U.S. federal and state deferred tax assets in 2024 due to a cumulative loss position, impacting the effective tax rate79 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q1 2025 revenue growth of 9.6%, gross margin improvement, segment performance, and strong liquidity, while addressing macroeconomic challenges Results of Operations Q1 2025 net revenue grew 9.6% to $369.8 million, gross margin expanded to 27.7%, and SG&A expenses increased 8.4% - Net revenue increased 9.6% YoY, driven by an 11.9% increase in Gaming Components and Systems and a 4.7% increase in Gamer and Creator Peripherals118 - Gross margin improved by 200 bps to 27.7%, attributed to better product mix, lower product costs, and reduced costs for processing inventory returns119 - SG&A expenses increased by $6.8 million (8.4%) due to higher distribution, marketing, stock compensation, and bad debt expenses, partially offset by a $5.2 million decrease in legal and professional fees121 - Other expense included a $2.6 million reversal of a bargain purchase gain from the Fanatec Acquisition that was recognized in the prior year125 Segment Results Gamer and Creator Peripherals revenue grew 4.7% to $112.0 million, while Gaming Components and Systems revenue increased 11.9% to $257.8 million Net Revenue by Segment (in thousands) | Segment | Q1 2025 | Q1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Gamer and Creator Peripherals | $111,973 | $106,973 | 4.7% | | Gaming Components and Systems | $257,777 | $230,284 | 11.9% | | Total Net Revenue | $369,750 | $337,257 | 9.6% | Gross Profit and Margin by Segment | Segment | Q1 2025 Gross Profit | Q1 2025 Gross Margin | Q1 2024 Gross Profit | Q1 2024 Gross Margin | | :--- | :--- | :--- | :--- | :--- | | Gamer and Creator Peripherals | $46,414 | 41.5% | $43,643 | 40.8% | | Gaming Components and Systems | $55,948 | 21.7% | $42,996 | 18.7% | | Total Gross Profit | $102,362 | 27.7% | $86,639 | 25.7% | Liquidity and Capital Resources Liquidity includes $102.5 million cash and $99.8 million available credit, with $18.8 million generated from operations and reduced Term Loan balance - Principal sources of liquidity as of March 31, 2025, were $102.5 million in cash and restricted cash, and $99.8 million available under the Revolving Facility135 Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash from 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) | - The company prepaid $21.9 million of its Term Loan principal in Q1 2025, reducing the outstanding principal to $149.0 million146147 Item 3. Quantitative and Qualitative Disclosures About Market Risk The company faces market risks from interest rate fluctuations on its variable-rate Term Loan and foreign currency exposure on 20.6% of net revenue - The company is exposed to interest rate risk on its $149.0 million variable-rate Term Loan; a 100 basis point change would impact annual interest expense by about $1.5 million162 - Foreign currency risk exists as 20.6% of Q1 2025 net revenue was denominated in foreign currencies, mainly the Euro and British Pound163 - The company uses foreign currency forward contracts to hedge against currency fluctuations, with an outstanding notional principal of $33.6 million as of March 31, 2025164 Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal controls - Management concluded that as of March 31, 2025, the company's disclosure controls and procedures were effective at providing reasonable assurance169 - No material changes to the internal control over financial reporting occurred during the quarter ended March 31, 2025170 PART II. OTHER INFORMATION Item 1. Legal Proceedings The company does not anticipate any material adverse effects on its financials from current legal proceedings incidental to business - The company does not expect any current legal proceedings to have a material adverse effect on its business, results of operations, or financial condition173 Item 1A. Risk Factors A new risk factor addresses potential adverse impacts from changes in trade policies and tariffs, which could increase costs and disrupt supply chains - A new risk factor has been added concerning changes in trade policy and the imposition of tariffs by the U.S. and other countries175 - Tariffs and retaliatory actions could increase product costs, limit raw material availability, disrupt the supply chain, and adversely affect sales, costs, and gross margins176177 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds There were no unregistered sales of equity securities or use of proceeds to report during the period - There were no unregistered sales of equity securities during the period178 Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including CEO/CFO certifications and XBRL data files - The exhibits filed with this report include CEO and CFO certifications (Exhibits 31.1, 31.2, 32.1) and XBRL data files183
sair Gaming(CRSR) - 2025 Q1 - Quarterly Report