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sair Gaming(CRSR) - 2024 Q1 - Quarterly Results
sair Gamingsair Gaming(US:CRSR)2024-05-07 20:05

Financial Performance Overview Corsair's Q1 2024 net revenue declined to $337.3 million with a net loss, offset by strong peripherals segment growth and improved gross margins First Quarter 2024 Financial Highlights In Q1 2024, Corsair's net revenue was $337.3 million, a decrease from $354.0 million in Q1 2023, driven by a decline in the Gaming Components and Systems segment, partially offset by strong 20% year-over-year growth in the Gamer and Creator Peripherals segment, resulting in a net loss of $12.5 million compared to a net loss of $1.1 million in the same period last year Q1 2024 Key Financial Metrics | Metric | Q1 2024 | Q1 2023 | Q4 2023 | | :--- | :--- | :--- | :--- | | Net Revenue | $337.3M | $354.0M | $417.3M | | Net (Loss) Income | $(12.5)M | $(1.1)M | $6.2M | | Diluted Net (Loss) Income per Share | $(0.12) | $(0.01) | $0.06 | | Adjusted Net Income | $9.5M | $11.9M | $23.2M | | Adjusted EBITDA | $18.0M | $20.6M | $33.7M | - The Gamer and Creator Peripherals segment achieved significant 20% year-over-year revenue growth, reaching a record 40% gross margin13 - The Gaming Components and Systems segment net revenue was $230.3 million, down from $265.0 million in Q1 20234 Management Commentary Management highlighted strong performance and margin expansion in the peripherals segment, driven by new product launches, while noting subdued demand in the components market but expecting a recovery in the second half of 2024, with a focus on innovation and debt reduction - CEO Andy Paul emphasized that new products drove 20% YoY revenue growth in the Gamer and Creator Peripherals segment, with all product lines, including Elgato and SCUF Gaming, showing growth3 - The company plans to enter new categories with upcoming launches of a mobile gaming controller and a SIM racing product line, and has recently launched the Elgato Neo family to target a more casual user base5 - CFO Michael G. Potter noted a gross margin increase of 110 basis points to 25.7% in Q1 2024, despite increased freight costs. The company also paid off an additional $15 million in debt5 Financial Outlook Corsair reiterates its full-year 2024 financial outlook, anticipating revenue growth and improved adjusted EBITDA driven by better margins and cost controls Reiterates 2024 Financial Outlook Corsair has reiterated its financial outlook for the full year 2024, expecting revenue growth to improve throughout the year, and anticipates further improvement in adjusted EBITDA, driven by better margins, stabilized shipping costs, and controlled operating expenses Full Year 2024 Financial Outlook | Metric | Range | | :--- | :--- | | Net Revenue | $1.45 billion to $1.60 billion | | Adjusted Operating Income | $92 million to $112 million | | Adjusted EBITDA | $105 million to $125 million | - The company expects revenue growth to improve through 2024, with adjusted EBITDA improvement led by better margins, stable shipping costs, and tight operating expense controls6 Business and Product Updates Corsair has launched several new products across its brands, expanding its offerings in gaming peripherals, components, and streaming hardware Recent Product Developments Corsair has recently launched a variety of new products across its brands, including the Neo hardware line for simplified high-performance setups, an upgraded Elgato Facecam MK.2, its first 75% wireless keyboard (K65 Plus), a new compact CORSAIR ONE i500 gaming PC, and new iCUE Link RX Series fans and dual-chamber PC cases - Launched the 'Neo' hardware line, including a microphone, webcam, LED light, capture card, and Stream Deck, targeting simplicity and high performance13 - Introduced the K65 Plus Wireless, the company's first 75% layout keyboard with hot-swappable switches13 - Released new PC components including the CORSAIR ONE i500 PC, iCUE Link RX Series fans, and the 2500 & 6500 Series dual-chamber cases13 Financial Statements Detailed financial statements for Q1 2024 show Corsair's consolidated operations, segment performance, balance sheet, and cash flow Condensed Consolidated Statements of Operations For the first quarter of 2024, Corsair reported a gross profit of $86.6 million on net revenue of $337.3 million, resulting in an operating loss of $10.2 million, with a net loss attributable to common stockholders of $12.5 million, or $0.12 per diluted share, a wider loss compared to the $1.1 million loss in Q1 2023 Q1 2024 vs Q1 2023 Statement of Operations (in thousands) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net Revenue | $337,257 | $353,964 | | Gross Profit | $86,639 | $85,404 | | Operating (Loss) Income | $(10,219) | $1,037 | | Net Loss Attributable to Common Stockholders | $(12,540) | $(1,054) | | Diluted Net Loss Per Share | $(0.12) | $(0.01) | Segment Information The company's performance varied significantly between its two segments, with the Gamer and Creator Peripherals segment seeing a 20.3% year-over-year revenue increase to $107.0 million and substantial gross margin expansion to 40.8%, while the Gaming Components and Systems segment experienced a 13.1% revenue decline to $230.3 million with its gross margin contracting to 18.7% Segment Performance (Q1 2024 vs Q1 2023, in thousands) | Segment | Net Revenue (Q1'24) | Net Revenue (Q1'23) | Gross Margin (Q1'24) | Gross Margin (Q1'23) | | :--- | :--- | :--- | :--- | :--- | | Gamer and Creator Peripherals | $106,973 | $88,942 | 40.8% | 30.0% | | Gaming Components and Systems | $230,284 | $265,022 | 18.7% | 22.2% | | Total | $337,257 | $353,964 | 25.7% | 24.1% | Condensed Consolidated Balance Sheets As of March 31, 2024, Corsair's balance sheet showed total assets of $1.26 billion and total liabilities of $567.9 million, with cash and restricted cash decreasing to $130.2 million and total debt reduced to approximately $183.3 million Balance Sheet Summary (in thousands) | Metric | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and restricted cash | $129,942 | $178,325 | | Total Assets | $1,257,191 | $1,357,463 | | Total Liabilities | $567,940 | $663,483 | | Total Corsair Gaming, Inc. stockholders' equity | $663,539 | $667,575 | Condensed Consolidated Statements of Cash Flows For the first quarter of 2024, the company experienced a net cash outflow from operating activities of $26.3 million, a significant reversal from the $41.8 million inflow in the same period last year, with net cash used in financing activities of $19.9 million primarily due to debt repayment, resulting in a net decrease in cash and restricted cash of $48.4 million for the quarter Cash Flow Summary (Q1 2024 vs Q1 2023, in thousands) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(26,317) | $41,826 | | Net cash used in investing activities | $(1,479) | $(4,677) | | Net cash used in financing activities | $(19,949) | $(9,886) | | Net (decrease) increase in cash and restricted cash | $(48,381) | $27,993 | Non-GAAP Financial Measures Corsair utilizes non-GAAP financial measures to provide a clearer view of its operational performance by adjusting for specific non-recurring or non-cash items Use and Reconciliation of Non-GAAP Measures Corsair uses non-GAAP financial measures such as adjusted operating income, adjusted net income, and adjusted EBITDA to supplement its GAAP results, as management believes these measures help identify underlying business trends by excluding items like amortization, stock-based compensation, and other one-time costs, providing a clearer view of operational performance - The company uses non-GAAP measures to evaluate operating performance, identify underlying trends, and make planning decisions16 - Adjustments to GAAP figures typically include amortization, stock-based compensation, one-time legal costs, restructuring charges, and acquisition-related costs20 GAAP to Non-GAAP Reconciliations The reconciliation tables show significant adjustments from GAAP to non-GAAP figures for Q1 2024, where the GAAP operating loss of $10.2 million was adjusted to a non-GAAP operating income of $15.4 million, and the GAAP net loss of $11.0 million was reconciled to a non-GAAP net income of $9.5 million, with adjusted EBITDA for the quarter at $18.0 million Q1 2024 GAAP to Non-GAAP Reconciliation Summary (in thousands) | Metric | GAAP | Non-GAAP (Adjusted) | | :--- | :--- | :--- | | Operating (Loss) Income | $(10,219) | $15,398 | | Net Loss / Income | $(11,029) | $9,516 | | Diluted EPS | $(0.12) | $0.09 | | EBITDA | N/A | $18,024 | - Major adjustments for Q1 2024 included $9.5 million for amortization, $7.7 million for stock-based compensation, and $6.4 million for one-time legal costs303234