sair Gaming(US:CRSR)2021-05-04 18:50Financial Data and Key Metrics Changes - Corsair Gaming reported net revenue growth of 71.6% to $529.4 million in Q1 2021, compared to $308.5 million in Q1 2020, marking the second strongest quarterly performance [7][18] - Adjusted EBITDA nearly tripled, growing 196.6% to a record $80.4 million, with adjusted earnings per diluted share increasing from $0.45 to $0.58 [7][27] - Gross profit more than doubled to $160.3 million, an increase of 103.9% from $78.6 million in Q1 2020, with gross profit margin rising to 30.3% from 25.5% [20][27] Business Line Data and Key Metrics Changes - The Gamer and Creator Peripherals segment saw net revenue more than double to $175.9 million, a 131.9% increase from $75.9 million in Q1 2020, contributing 33.2% of total net revenue [18][19] - The Gaming Components and Systems segment provided $353.5 million in net revenue, a 51.9% increase from $232.7 million in Q1 2020, with memory products contributing $161.9 million [19][20] - Gross profit margin for the Gamer and Creator Peripherals segment was 39.1%, up from 29.2% in Q1 2020, while the Gaming Components and Systems segment gross profit margin was 25.9%, compared to 24.3% in Q1 2020 [21][23] Market Data and Key Metrics Changes - Corsair maintained the number one market share position in every gaming components category monitored in the U.S., which is its largest market [9] - The company reported that over 40% of gaming case sales are now smart cases, driving additional sales of IQ RGB accessories [12] Company Strategy and Development Direction - Corsair plans to continue expanding R&D and marketing, with R&D expenses up over 31% compared to Q1 2020, and expects to launch nearly two new products per week [15][17] - The acquisition of Visuals by Impulse aims to enhance offerings for creators and streamers, indicating a strategic focus on expanding product lines and market reach [16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued gaming activity and the conversion of casual gamers to committed gamers, with expectations for sustained demand for gaming gear [6][39] - The company raised its full-year 2021 revenue guidance to a range of $1.9 billion to $2.1 billion, reflecting growth of 11.6% to 23.4% [17] Other Important Information - Corsair reduced its debt by $28 million, resulting in a net leverage ratio well below 1, while also increasing cash reserves to $121.6 million [28][29] - The company received an S&P corporate rating upgrade from B+ to BB- in February 2021, enhancing confidence among suppliers and customers [30] Q&A Session Summary Question: Update on trends for the first half versus second half of the year - Management noted that gaming activity remains strong, with a focus on comparing current numbers to pre-COVID levels, indicating potential for continued growth [39] Question: Supply constraints and their impact - Management acknowledged ongoing supply constraints, particularly in semiconductors, but indicated that they have enough supply to meet current forecasts [40][41] Question: Importance of new product launches - New product launches are crucial for revenue growth, with a significant number of new products addressing gaps in the portfolio [43][44] Question: Performance memory segment details - The gross margin for memory products was reported at 21%, with pricing trends positively impacting margins [51] Question: Demand for gaming geographically - Management observed that demand remains strong in the U.S., while Europe showed some seasonal slowdown, but no significant changes in demand patterns were noted [66] Question: Direct-to-consumer revenue update - Direct-to-consumer revenue is currently well above 10%, with expectations to reach the target of 15% by 2023 [71] Question: Progress on Gamer Sensei acquisition - The integration of Gamer Sensei is ongoing, with plans to restructure the coaching model and enhance service offerings [75]