Financial Data and Key Metrics Changes - Fourth quarter net revenue was $118 million, a decline of 19% year-over-year compared to $446.1 million in the prior year period [16] - Full year net revenue was $319.9 million, a decline of 14% year-over-year compared to $372.8 million in 2024 [18] - Fourth quarter gross margins reached 40.1%, a year-over-year improvement of nearly 310 basis points [16] - Full year gross margins of 37.3% represented an improvement of 270 basis points year-over-year, marking the highest annual level since 2018 [18] - Net income for the fourth quarter was $17.6 million, compared to $20.1 million in the prior year period [16] - Full year net income was $15.7 million, representing a 3% year-over-year decline compared to $16.2 million in 2024 [18] Business Line Data and Key Metrics Changes - The company gained share in its core Turtle Beach headset brand despite overall market softness [6] - The racing sim product line is performing well, with share gains year-over-year [27] - The company plans to launch over 50% more new products in 2026 compared to 2025, with innovations across all categories [8][29] Market Data and Key Metrics Changes - The gaming accessories market experienced unexpected softness, particularly in North America [5] - The company anticipates a console refresh cycle in the coming years, which typically drives increased hardware adoption and accessory demand [8] - The upcoming release of Grand Theft Auto VI is expected to significantly impact gaming engagement and accessory demand [7] Company Strategy and Development Direction - The company is focused on capitalizing on the anticipated accessories upgrade and replacement cycle over the next 24 months [6] - A comprehensive refinancing strategy has improved financial flexibility and reduced the cost of capital [11] - The company remains disciplined in capital allocation, actively assessing bolt-on acquisitions while prioritizing share repurchases [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the trajectory of the business moving into 2026, despite current market headwinds [8] - The company expects full year 2026 revenue to be in the range of $335 million-$355 million, representing 8% growth at the midpoint compared to 2025 [21] - Management believes that the pressures faced in 2025 were cyclical and that the company is well-positioned for future growth [24] Other Important Information - The company repurchased approximately 1.35 million shares for about $19 million in 2025, with a new two-year $75 million share repurchase program authorized [12][20] - The board of directors has seen changes, with William Wyatt appointed as chairman following Terry Jimenez's departure [16] Q&A Session Summary Question: How are the racing sim products performing and what about the 50% more products for 2026? - The racing sim products are performing well with share gains, and the 50% increase in new products will span across all categories [27][29] Question: Can you provide a revenue range related to GTA VI for your guidance? - The second half of the year is expected to be strong, with GTA VI contributing significantly to growth [33] Question: What are the expectations for gross margin versus OpEx in 2026? - Continued improvements in gross margin are expected, with a similar OpEx structure to 2025 [39] Question: Will there be an increase in spending on G&A and marketing? - Additional investments in brand and marketing are anticipated, included in the guidance [50] Question: What is the current state of retail inventories? - Retail inventories ended the year lighter, but no further declines are expected, with potential for expansion [51] Question: What is the outlook for the next 12 months compared to the previous period? - A significantly better outlook is anticipated for the next 12 months, driven by new product launches and GTA VI [55] Question: What are the drivers of optimism beyond GTA VI? - Multiple factors including the overdue accessories replacement cycle and new product innovations are driving optimism [66]

Financial Data and Key Metrics Changes - Fourth quarter net revenue was $118 million, a decline of 19% year-over-year compared to $446.1 million in the prior year period [16] - Full year net revenue was $319.9 million, a decline of 14% year-over-year compared to $372.8 million in 2024 [17] - Fourth quarter gross margins reached 40.1%, a year-over-year improvement of nearly 310 basis points [16] - Full year gross margins of 37.3% represented an improvement of 270 basis points year-over-year, marking the highest annual level since 2018 [18] - Net income for the fourth quarter was $17.6 million, compared to $20.1 million in the prior year period [16] - Full year net income was $15.7 million, representing a 3% year-over-year decline compared to $16.2 million in 2024 [18] Business Line Data and Key Metrics Changes - The company gained share in its core Turtle Beach headset brand despite overall market softness [6] - The racing sim product line is performing well, with share gains year-over-year [27] - The company plans to launch over 50% more new products in 2026 compared to 2025, with innovations across all categories [8][29] Market Data and Key Metrics Changes - The gaming accessories market experienced unexpected softness, particularly in North America [5] - The company anticipates a strong replacement cycle driven by major game releases, including Grand Theft Auto VI, scheduled for late 2026 [7][8] - The industry is entering a console refresh cycle, expected to drive increased hardware adoption and accessory demand [8] Company Strategy and Development Direction - The company implemented comprehensive cost optimization initiatives that drove gross margin expansion [9] - A strategic refinancing of debt was completed, lowering the base interest rate on the term loan by approximately 450 basis points [11] - The company is actively assessing bolt-on acquisitions to complement its growing platform, although no new deals have been announced [13][14] - The focus for 2026 is on leveraging operational gains and capitalizing on improving market conditions [24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the trajectory of the business moving into 2026, despite current market headwinds [8][20] - The company expects full year 2026 revenue to be in the range of $335 million-$355 million, representing 8% growth at the midpoint compared to 2025 [21] - Management believes the current equity market does not appropriately price the stock, leading to potential increased share repurchases [15] Other Important Information - The company repurchased approximately 1.35 million shares for approximately $19 million in 2025, with a new 2-year $75 million share repurchase program authorized [12][19] - The balance sheet remains solid with a cash position of $17 million as of December 31 [18] Q&A Session Summary Question: How are the racing sim products performing and what about the 50% more products for 2026? - Management noted that racing sim products are doing well with share gains and that the 50% increase in SKUs will span across all categories, with exciting innovations coming soon [27][29] Question: Can you provide a revenue range related to GTA VI for your guidance? - Management confirmed that the second half of the year is expected to be strong, with GTA VI's launch in Q4 being a significant driver of growth [32][33] Question: What are the expectations for gross margin versus OpEx in 2026? - Management expects continued improvements in gross margin due to prior tariff mitigations and product changes, while OpEx structure will remain similar to 2025 [39] Question: What is the current state of retail inventories? - Management indicated that retail inventories ended the year in a lighter position due to softer demand, but they do not anticipate further declines in channel inventories [51] Question: What is the company's leverage threshold for potential borrowing capacity expansion? - Management is comfortable with a leverage range of 2-2.5 and is exploring options to obtain new financing for increased flexibility [59] Question: What are the drivers of optimism beyond GTA VI? - Management highlighted multiple factors including the overdue accessories replacement cycle, new product innovations, and the upcoming console refresh cycle as drivers of optimism [66]

Financial Data and Key Metrics Changes - Fourth quarter net revenue was $118 million, a decline of 19% year-over-year compared to $446.1 million in the prior year period [15] - Full year net revenue was $319.9 million, a decline of 14% year-over-year compared to $372.8 million in 2024 [16] - Fourth quarter gross margins reached 40.1%, an improvement of nearly 310 basis points year-over-year [15] - Full year gross margins of 37.3% represented an improvement of 270 basis points year-over-year, marking the highest annual level since 2018 [16] - Net income for the fourth quarter was $17.6 million, compared to $20.1 million in the prior year period [15] - Full year net income was $15.7 million, representing a 3% year-over-year decline compared to $16.2 million in 2024 [17] Business Line Data and Key Metrics Changes - The company gained share in its core Turtle Beach headset brand despite overall market softness [5] - The company is launching over 50% more new products in 2026 compared to 2025, with significant releases beginning in Q2 [7][8] - The racing sim product line is performing well, with share gains year-over-year [25] Market Data and Key Metrics Changes - The North American gaming and accessories markets experienced unexpected softness [5] - The company anticipates a strong replacement cycle driven by major game releases, particularly Grand Theft Auto VI, scheduled for late 2026 [6][19] - The industry is entering a console refresh cycle with new platforms expected from major manufacturers [7] Company Strategy and Development Direction - The company implemented comprehensive cost optimization initiatives that drove gross margin expansion [8] - A strategic refinancing of debt lowered the base interest rate on the term loan by approximately 450 basis points, generating annual interest savings of over $2 million [10] - The company is actively assessing opportunistic bolt-on acquisitions to complement its growing platform [12] - The focus for 2026 is to leverage operational gains while positioning for growth as market conditions improve [21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the trajectory of the business as it navigates through current market headwinds [7] - The company expects full year 2026 revenue to be in the range of $335 million-$355 million, representing 8% growth at the midpoint compared to 2025 [19] - Management believes the pressures faced in 2025 were cyclical and used the year to strengthen execution and foundation [21] Other Important Information - The company repurchased approximately 1.35 million shares for about $19 million in 2025, returning nearly $47 million to shareholders over the past two years [11][18] - A new 2-year $75 million share repurchase program was authorized, the largest in company history [11] Q&A Session Summary Question: How are the racing sim products performing and what about the 50% more products for 2026? - The racing sim category is performing well with share gains, and the 50% increase in SKUs will be across all categories, including exciting innovations in headsets [25][26] Question: Can you provide a revenue range related to GTA VI? - The second half of the year is expected to be strong, with guidance built on the assumption of GTA VI launching in Q4 [30] Question: What are the expectations for gross margin versus OpEx in 2026? - Continued improvements in gross margin are expected, with a similar OpEx structure to 2025, including investments in technology and brand [35] Question: What is the outlook for retail inventories? - The company ended the year with a lighter inventory position, but does not anticipate further declines in channel inventories [47] Question: What is the leverage threshold comfortable for the company? - A leverage range of 2-2.5 is considered comfortable, with potential for additional financing to enhance flexibility [56] Question: What are the drivers of optimism beyond GTA VI? - Multiple factors contribute to optimism, including an overdue accessories replacement cycle and new product innovations [63]

Financial Data and Key Metrics Changes - First quarter revenue grew by 14% year over year to $63.9 million, driven by the full quarter contribution from the PDP acquisition [4][13] - Adjusted EBITDA increased to $4.1 million, up 180% from $1.4 million a year ago, indicating strong operating leverage [5][15] - Gross margins improved by 470 basis points year over year to 36.6% [5][14] - Operating expenses were $21.8 million, representing 34% of revenue compared to 42% in the prior year [14] Business Line Data and Key Metrics Changes - The U.S. gaming accessories market experienced a 16% year over year decline in Q1, impacting overall revenue growth despite Turtle Beach's performance [5][25] - The company noted that headsets and third-party controllers were down more than 20% in Q1 [25] Market Data and Key Metrics Changes - The broader gaming accessories market is projected to be down about 10% to 12% for the full year, with expectations of improvement in the second half of the year due to new product launches [26][40] - Anticipated growth drivers include the launch of the Nintendo Switch 2 and other major game releases [10][11] Company Strategy and Development Direction - The company is focusing on expanding its gaming accessories portfolio and capitalizing on industry growth drivers, including the upcoming Nintendo Switch 2 [11][12] - A new share repurchase program of up to $75 million over the next two years has been authorized, reflecting confidence in the company's future [12][17] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by tariffs and the evolving economic landscape but expressed confidence in navigating these issues with minimal long-term effects [7][20] - The company is prepared for potential tariff changes and has proactively increased inventory levels to mitigate risks [7][39] Other Important Information - The company has executed the largest share repurchase program in its history, repurchasing nearly $30 million worth of stock over the past year [12][16] - Cash flow from operations grew by nearly 50% year over year to over $40 million, marking one of the highest cash flow generating quarters in the company's history [16] Q&A Session Summary Question: What is the impact of the GTA VI delay on revenue? - Management indicated that the revised guidance reflects a combination of factors, including the GTA VI delay and broader market conditions, leading to a projected revenue decline of about $50 million [23][24] Question: What are the expectations for gross margins in the upcoming quarters? - Gross margins are expected to be in the low 30s for Q2, with a recovery anticipated in Q3 and Q4 [29][31] Question: Are there any further cost controls being implemented? - The company is actively seeking cost synergies post-PDP acquisition and is exploring additional cost reduction opportunities [32][33] Question: What is the current tariff assumption for Vietnam? - The guidance includes current tariff conditions, and the company is prepared to adjust if the situation changes [44][46] Question: How is the company managing inventory levels? - The company has focused on maintaining a favorable inventory mix, clearing slow-moving goods, and stocking replenishment-based inventory [75][76]