Core Insights - Turtle Beach Corporation faced challenges in 2025, including global tariff impacts and a decline in the North American gaming accessories market, resulting in financial results below expectations [5][18] - The company anticipates significant growth opportunities in the next 24 months, driven by major game releases like Grand Theft Auto 6 and a console refresh cycle [6][8] - Operational improvements, including cost optimization and strategic inventory management, have strengthened the company's competitive position [10][12] Financial Performance - Q4 2025 net revenue was $118 million, a 19% decline year-over-year from $146.1 million [18] - Full-year 2025 net revenue was $319.9 million, down 14% from $372.8 million in 2024 [19] - Q4 gross margins reached 40.1%, up 310 basis points year-over-year, while full-year gross margins improved to 37.3%, the highest since 2018 [11][19] Strategic Initiatives - The company implemented cost optimization initiatives that led to a gross margin expansion of 270 basis points year-over-year [11] - A proactive approach to tariff changes included transitioning U.S.-bound production to Vietnam, preserving margin expansion [12] - The company authorized a new two-year $75 million share repurchase program, reflecting confidence in its financial position [14] Product Development and Market Position - Turtle Beach plans to launch over 50% more new products in 2026 compared to 2025, with significant releases starting in Q2 [8][9] - The anticipated release of Grand Theft Auto 6 is expected to drive increased gaming engagement and accessory demand [6][7] - The company is well-positioned to benefit from the upcoming console refresh cycle, which typically leads to higher accessory demand [8] Future Outlook - For 2026, Turtle Beach expects revenue in the range of $335 million to $355 million, representing an 8% growth at the midpoint compared to 2025 [21] - Adjusted EBITDA for 2026 is projected to be between $44 million and $48 million, indicating a positive outlook despite anticipated market headwinds [22] - The company remains focused on maintaining margins while preparing for growth as market conditions improve [23]

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]

FOURTH QUARTER & FULL YEAR 2025 EARNINGS PRESENTATION NASDAQ: TBCH | MARCH 12, 2026 SAFE HARBOR STATEMENT & IMPORTANT INFORMATION Forward -Looking Information and Statements This presentation, including the appendix, includes forward -looking information and statements within the meaning of the federal securities laws . Except for historical information contained in this release, statements in this release may constitute forward -looking statements regarding assumptions, projections, expectations, targets, ...

Financial Performance - Net Revenue for Q4 2025 was $118.8 million, and for the full year 2025, it was $319.9 million, reflecting a decline from the previous year [1][7] - Gross Margin improved to 40.1% in Q4 and 37.3% for the full year, marking year-over-year improvements of 310 basis points and 270 basis points respectively [1][7] - Net Income for Q4 2025 was $17.6 million, while for the full year, it was $15.7 million [1][7] - Adjusted EBITDA for Q4 2025 was $28.1 million, and for the full year, it was $40.1 million [1][7] Strategic Initiatives - The company focused on cost optimization and tariff mitigation strategies, achieving the highest gross margins since 2018 [3][4] - A total of $19 million was returned to shareholders through a share buyback program in 2025, totaling nearly $47 million since 2024 [4][6] Future Outlook - For 2026, the company is initiating guidance with expected net revenues between $335 million and $355 million, representing 5% to 11% year-over-year growth [9] - Adjusted EBITDA for 2026 is expected to be between $44 million and $48 million, indicating a 10% to 20% year-over-year growth [9] - The company anticipates continued market softness in Q1 2026 but expects gradual improvement as the year progresses [10] Industry Context - The anticipated launch of Grand Theft Auto VI in late 2026 is expected to significantly impact the gaming industry, driving increased engagement and accessory demand [11]

Core Viewpoint - Turtle Beach Corporation will report its financial results for Q4 and full year 2025 on March 12, 2026, after market close [1] Financial Reporting - The financial results will be discussed in a conference call and audio webcast at 5:00 PM ET / 2:00 PM PT on the same day [2] - The call will be hosted by the CEO Cris Keirn and CFO Mark Weinswig [2] Conference Call Information - The live webcast will be accessible on the "Events & Presentations" page of the company's website [3] - Participants can join the call by dialing 1-844-826-3035 or 1-412-317-5195, with a recommendation to call in 15 minutes early [3] Replay Information - A telephone replay of the call will be available until March 26, 2026, accessible by dialing 1-844-512-2921 or 1-412-317-6671 with passcode 10205777 [4] - A replay of the webcast will also be available on the investor relations website for a limited time [4] Company Overview - Turtle Beach Corporation is a leading provider of gaming accessories, known for its best-selling gaming headsets and top-rated game controllers [5] - The company has a strong reputation in the esports and gaming community, particularly with its Victrix brand [5] - Turtle Beach has maintained its position as a market leader in console gaming audio for over a decade [5]

Financial Data and Key Metrics Changes - The company generated $80.5 million in revenue for Q3 2025, with gross margins improving by nearly 120 basis points year-over-year to over 37% [5][13] - Operating expenses were $24.7 million, representing 30.7% of revenue, compared to $27.7 million or 29.4% in the prior year [14] - Net income for the quarter was $1.7 million, which included a one-time non-cash write-off of $1.9 million related to refinancing [15] - Adjusted EBITDA for the quarter was $11 million, reflecting strong performance at the current revenue level [15] - The company expects full-year revenue to be in the range of $340 million to $360 million and adjusted EBITDA to be in the range of $47 million to $53 million [17] Business Line Data and Key Metrics Changes - The company launched over 40 new products since Q2, enhancing its position in the gaming accessories market [7] - Controllers are identified as a strong growth opportunity, with the Victrix brand gaining traction among competitive gamers [9] - The simulation product line, including new racing wheels, has seen growth, while the flight simulator market remains down year-over-year [25] Market Data and Key Metrics Changes - The overall gaming accessories market remains down year-to-date, but year-over-year improvements have been observed through Q3 [11] - The accessories market was down over 20% year-over-year in Q1, improving to low to mid-teens by Q3 [22] Company Strategy and Development Direction - The company is focused on innovation and has expanded its product lineup across headsets, controllers, simulation gear, and PC peripherals [7] - The strategy includes returning capital to shareholders through share repurchases, with $10 million repurchased in Q3 [6] - The company aims to capitalize on upcoming major game releases and the anticipated growth cycle in gaming [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the industry's growth trajectory, citing upcoming game releases and a replacement cycle for accessories as catalysts for growth in 2026 [11][30] - The company has successfully mitigated tariff impacts and expects continued improvement in gross margins [32][36] Other Important Information - The company completed a refinancing of its term loan and credit facility, lowering its interest rate by over 450 basis points, which will provide annual interest savings of over $2 million [6][15] - The cash position at the end of Q3 was $12 million, with total debt at $90 million [15] Q&A Session Summary Question: What are the trends in consumer spending for headsets and controllers? - Management noted that the refresh cycle for accessories has been delayed, but the market is improving year-over-year, with expectations for growth in 2026 [22][23] Question: What is the demand for new racing wheels and the flight simulator market? - The company has seen growth in the racing wheel category, while the flight simulator market is down in line with the overall accessories market [25] Question: How will the delay of GTA 6 impact 2026 financials? - Management acknowledged the delay but remains optimistic about other upcoming game releases and overall industry momentum [30][31] Question: How sustainable are the gross margin improvements? - Management is confident in sustaining gross margin improvements due to effective tariff mitigation strategies [32][36] Question: What features in new products will drive upgrades? - New headsets feature lower power consumption and improved comfort, while controllers include technology upgrades to eliminate drift [40] Question: How is consumer strength shaping up for the holiday season? - Management observed strong demand at higher price points, with some challenges in lower and mid-tier products [46]

Financial Performance - Q3 2025 revenue reached $80.5 million, supporting the company's full-year guidance[4] - Q3 2025 gross margin improved year-over-year to 37% from 36%, driven by cost optimization initiatives[4] - Net income decreased to $1.7 million in Q3 2025 from $3.4 million in Q3 2024 due to lower revenue[8] - Adjusted EBITDA decreased to $11.0 million in Q3 2025 from $16.3 million in Q3 2024, also due to lower revenue[8] Capital Structure and Share Repurchase - The company refinanced prior debt with a new $90 million revolving credit facility and a $60 million term loan[5] - Approximately $10 million in common shares were repurchased during Q3 2025, bringing the total to approximately $45 million over the past seven quarters[5] Market Position and Product Innovation - Turtle Beach headsets gained market share amidst an improving gaming headset market year-to-date September and in Q3 2025[5] - The company revealed over 40 new gaming accessories since Q2 2025[5] - Turtle Beach products are top-sellers in the broader gaming peripherals market[5] - The company is focused on unlocking potential in the $11 billion gaming accessories market[12] Guidance and Long-Term Targets - The company's 2025 net revenue guidance is $340 million to $360 million, with adjusted EBITDA between $47 million and $53 million[9] - The company's long-term financial targets include revenue growth of 10%+ CAGR, gross margins in the mid-to-high 30s, and adjusted EBITDA margins in the mid-to-high teens[9]

Core Insights - Turtle Beach Corporation reported a net revenue of $80.5 million for the third quarter of 2025, with a gross margin improvement to 37.4%, reflecting a year-over-year increase of nearly 120 basis points [1][9] - The company achieved a quarterly net income of $1.7 million and reported an adjusted EBITDA of $11.0 million [1][9] - Turtle Beach reiterated its full-year revenue guidance of $340 million to $360 million and adjusted EBITDA guidance of $47 million to $53 million [1][7] Financial Performance - The gross margin increased to 37.4%, up nearly 120 basis points year-over-year, indicating effective cost optimization initiatives [3][9] - The company’s net income for the quarter was $1.7 million, compared to a net loss of $1.9 million in the same period last year [9][25] - Adjusted EBITDA for the quarter was reported at $11.0 million, down from $16.3 million in the prior year [9][25] Strategic Initiatives - Turtle Beach launched or announced over 40 new products since Q2, including officially licensed PlayStation headsets and a range of Nintendo-licensed accessories [4] - The company completed a refinancing of its debt facilities, lowering the cost of capital on the term loan by approximately 450 basis points, resulting in expected annual interest savings of over $2 million [6][9] - Share repurchases totaled approximately $10 million during the quarter, reinforcing the company’s commitment to returning capital to shareholders [5][9] Market Position and Outlook - The company is positioned to capture significant growth opportunities in the gaming accessories market, driven by strong product momentum and multiple industry growth drivers [4] - Turtle Beach's financial outlook for the full year remains positive, with expectations for continued revenue and EBITDA growth [7][9]