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]