sair Gaming(CRSR) - 2025 Q2 - Quarterly Results

Financial Highlights Corsair reported strong Q2 2025 results with double-digit year-over-year growth in revenue and gross profit, exceeding expectations, and significant improvement in profitability with positive Adjusted EBITDA and improved EPS Q2 2025 vs Q2 2024 Financial Highlights | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $320 million | $261.3 million | +23% | | Gross Profit | $85.9 million | $63.1 million | +36% | | Adjusted EBITDA | $8.1 million | $(1.2) million | Improved | | GAAP Net Loss per Share | $(0.16) | $(0.28) | Improved | | Non-GAAP EPS | $0.01 | $(0.07) | Improved | First Half 2025 vs First Half 2024 Financial Highlights | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $690 million | $598.6 million | +15% | | Gross Profit | $188.2 million | $149.7 million | +26% | | Adjusted EBITDA | $30.8 million | $16.8 million | +83% | | GAAP Net Loss per Share | $(0.26) | $(0.41) | Improved | | Non-GAAP EPS | $0.13 | $0.03 | +333% | Business Segment Performance Both business segments demonstrated strong year-over-year revenue growth, with Gaming Components & Systems growing 30% and Gamer Peripherals and Creator growing 9%, driven by new products and market expansion Gaming Components & Systems Segment This segment's revenue grew 30% year-over-year, primarily fueled by strong demand for components compatible with new NVIDIA 5000 series and AMD 9000 series GPUs, alongside robust DDR5 DRAM memory demand - Achieved 30% year-over-year revenue growth, largely driven by the launch of NVIDIA's 5000 series and AMD's 9000 series next-generation GPUs, which fueled demand for system upgrades and new builds[2] - The Memory business achieved strong, double-digit year-over-year revenue growth, driven by sustained demand for high-performance DDR5 DRAM[4] Gaming Components and Systems Segment Performance (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Revenue | $217.5M | $167.1M | +30.2% | | Gross Profit | $44.8M | $27.4M | +63.5% | | Gross Margin | 20.6% | 16.4% | +420 bps | Gamer Peripherals and Creator Segment This segment delivered 9% year-over-year revenue growth, gaining market share in keyboards and headsets, with successful global rollout of Fanatec sim racing products and Elgato benefiting from the Nintendo Switch 2 launch - Delivered 9% year-over-year revenue growth, supported by new product launches and gaining market share in both keyboard and headset categories[5] - Began the global rollout of Fanatec-branded racing products, with strong initial market adoption signaling a successful entry into the sim racing category[6] - Elgato brand benefited from the launch of the Nintendo Switch 2, which acted as a strong catalyst for increased gaming-related content creation[7] Gamer and Creator Peripherals Segment Performance (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Revenue | $102.6M | $94.2M | +8.9% | | Gross Profit | $41.1M | $35.7M | +15.1% | | Gross Margin | 40.0% | 37.9% | +210 bps | Management Commentary and Strategy Management emphasized disciplined execution and product innovation as key drivers, focusing on accelerating product delivery, improving operational efficiency from acquisitions, expanding into underserved channels, and proactively managing financial position amidst global tariff policies - CEO Thi La outlined three key strategic growth levers: accelerating innovative product delivery, expanding operational efficiency from acquisitions to drive margin expansion, and scaling presence in underserved channels, noting momentum in Asia[8] - New product innovations showcased at Computex 2025 include the Virtual Stream Deck technology and the ORIGIN PC AI Workstation 300, which are expected to unlock greater ecosystem synergy[8][9] - CFO Michael G. Potter noted the company managed external headwinds, including a $1.4 million bad debt expense and tariffs, while also making a $24 million term loan repayment and proactively refinancing its credit facility on favorable terms[9] Updated Full-Year 2025 Outlook Corsair reaffirmed its full-year 2025 net revenue guidance of $1.4 billion to $1.6 billion, with an updated outlook on adjusted operating income and adjusted EBITDA to be provided later, pending clarity on macroeconomic factors - The company reaffirmed its net revenue outlook for the full year 2025 to be in the range of $1.4 billion to $1.6 billion[10] - An updated adjusted operating income and adjusted EBITDA outlook will be provided later in the year, contingent on gaining greater visibility on macro factors, including potential tariffs[11] Financial Statements The financial statements detail Corsair's performance and financial position, showing a GAAP net loss improvement for Q2 2025, stable total assets of $1.22 billion, and a significant positive shift in operating cash flow for the first half of 2025 Condensed Consolidated Statements of Operations For Q2 2025, Corsair reported net revenue of $320.1 million and a GAAP net loss of $20.3 million, an improvement from the prior year, with similar improvements seen for the first six months Q2 2025 Income Statement Highlights (in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net revenue | $320,112 | $261,300 | | Gross profit | $85,871 | $63,085 | | Operating loss | $(16,923) | $(24,714) | | Net loss | $(20,306) | $(23,507) | | Net loss per share (Basic) | $(0.16) | $(0.28) | Segment Information For Q2 2025, the Gaming Components and Systems segment contributed $217.5 million in revenue with a 20.6% gross margin, while the Gamer and Creator Peripherals segment generated $102.6 million with a higher 40.0% gross margin, both showing year-over-year growth Q2 2025 Segment Performance (in thousands) | Segment | Net Revenue | Gross Profit | Gross Margin | | :--- | :--- | :--- | :--- | | Gamer and Creator Peripherals | $102,642 | $41,089 | 40.0% | | Gaming Components and Systems | $217,470 | $44,782 | 20.6% | | Total | $320,112 | $85,871 | 26.8% | Condensed Consolidated Balance Sheets As of June 30, 2025, Corsair maintained total assets of $1.22 billion, with cash and restricted cash at $107.4 million, a reduction in total debt to $124.4 million, and an increase in inventories to $295.6 million Key Balance Sheet Items (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and restricted cash | $107,449 | $109,631 | | Inventories | $295,627 | $259,979 | | Total assets | $1,221,880 | $1,235,829 | | Total liabilities | $606,709 | $616,377 | | Total stockholders' equity | $603,897 | $604,303 | Condensed Consolidated Statements of Cash Flows For the first six months of 2025, net cash provided by operating activities was $48.9 million, a significant turnaround from the prior year's cash use, with $47.0 million used in financing activities primarily for debt repayment - Net cash provided by operating activities for the first six months of 2025 was $48.9 million, a significant improvement from a net cash use of $(44.8) million in the same period of 2024[30] - The company made debt repayments of $49.0 million in the first six months of 2025[30] GAAP to Non-GAAP Reconciliations This section provides detailed reconciliations from GAAP to non-GAAP metrics, revealing a positive non-GAAP operating income of $6.6 million, non-GAAP net income of $1.3 million, and adjusted EBITDA of $8.1 million for Q2 2025, demonstrating significant year-over-year improvement Non-GAAP Operating Income (Loss) Reconciliations After adjustments, Corsair's non-GAAP operating income for Q2 2025 was $6.6 million, a significant improvement from a loss of $3.8 million in Q2 2024, with adjusted operating income reaching $27.3 million for the first six months GAAP to Non-GAAP Operating Income Reconciliation (in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Operating Loss - GAAP | $(16,923) | $(24,714) | | Adjustments | $23,566 | $20,893 | | Adjusted Operating Income (Loss) - Non-GAAP | $6,643 | $(3,821) | Non-GAAP Net Income (Loss) and Net Income (Loss) Per Share Reconciliations Adjusted non-GAAP net income for Q2 2025 was $1.3 million, or $0.01 per diluted share, marking a substantial turnaround from the adjusted net loss of $6.8 million, or $(0.07) per share, in Q2 2024 GAAP to Non-GAAP Net Income & EPS Reconciliation | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Loss - GAAP (in thousands) | $(20,306) | $(23,507) | | Adjusted Net Income (Loss) - Non-GAAP (in thousands) | $1,294 | $(6,828) | | Diluted EPS - GAAP | $(0.16) | $(0.28) | | Adjusted Diluted EPS - Non-GAAP | $0.01 | $(0.07) | Adjusted EBITDA Reconciliations Adjusted EBITDA for Q2 2025 was $8.1 million, a substantial improvement from a loss of $1.2 million in Q2 2024, with the first six months of 2025 showing an 83% increase to $30.8 million GAAP Net Loss to Adjusted EBITDA Reconciliation (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Loss - GAAP | $(20,306) | $(23,507) | $(30,623) | $(34,536) | | Adjusted EBITDA - Non-GAAP | $8,138 | $(1,244) | $30,781 | $16,780 | Important Information This section provides standard disclosures, including a company overview, forward-looking statement disclaimers, and a detailed explanation of the non-GAAP financial measures used in the report, along with contact information About Corsair Gaming Corsair is a global developer and manufacturer of high-performance products for gamers, content creators, and PC enthusiasts, offering a full ecosystem of products under multiple brands - Corsair is a leading global developer of products for gamers, content creators, and PC enthusiasts, delivering a full ecosystem of products[14] - The company sells products under multiple brands, including Fanatec, Elgato, SCUF Gaming, Drop, and ORIGIN PC[14][15] Forward-Looking Statements This section cautions investors that statements regarding future performance, such as the 2025 financial outlook, are subject to numerous risks and uncertainties, including macroeconomic conditions, trade regulations, and geopolitical events - The press release contains forward-looking statements regarding the 2025 financial outlook and strategic growth, which are not guarantees of future performance[16] - Key risks that could cause actual results to differ include macroeconomic conditions, trade regulations and tariffs, ability to market new products, and geopolitical events[16] Use and Reconciliation of Non-GAAP Financial Measures Corsair explains its use of non-GAAP measures like adjusted operating income, adjusted net income, and adjusted EBITDA to supplement GAAP results, believing these measures help evaluate operating performance and identify underlying business trends by excluding certain expenses - The company uses non-GAAP financial measures to supplement GAAP results, believing they help identify underlying business trends and are useful for investors and analysts[17][18][19] - Definitions are provided for calculating adjusted operating income (loss), adjusted net income (loss), adjusted net income (loss) per diluted share, and adjusted EBITDA[22]