Corsair Gaming Reports Q2 2024 Financial Results

Rhea-AI Summary

Corsair Gaming (CRSR) reported Q2 2024 financial results, showing a 19.7% decrease in net revenue to $261.3 million compared to Q2 2023. The company experienced a net loss of $29.6 million, or $0.28 per diluted share. Adjusted EBITDA was a loss of $1.2 million. The Gaming Components and Systems segment saw a significant decline, while the Gamer and Creator Peripherals segment grew by 19.6% year-over-year.

CEO Andy Paul attributed the disappointing results to a softer-than-expected self-built PC market. The company expects a market refresh cycle to start later than initially anticipated, likely influenced by upcoming GPU launches and game releases. Corsair updated its 2024 outlook, projecting net revenue between $1.25 billion to $1.35 billion and adjusted EBITDA of $60 million to $75 million.

Positive

• Gamer and Creator Peripherals segment grew 19.6% year-over-year
• Company maintains a healthy balance sheet with sufficient cash for product development
• Channel inventory reduced to a healthy position, potentially benefiting second half of 2024
• Corsair continues to dominate the market with leading share in most categories of Gaming Components and Systems segment

Negative

• Net revenue decreased 19.7% year-over-year to $261.3 million in Q2 2024
• Reported net loss of $29.6 million, or $0.28 per diluted share
• Adjusted EBITDA loss of $1.2 million compared to $17.8 million profit in Q2 2023
• Gaming Components and Systems segment revenue declined significantly
• Company reduced workforce by approximately 100 employees in July 2024
• Lowered full-year 2024 financial outlook

Financial Analyst

Corsair Gaming's Q2 2024 results paint a challenging picture for the company, with notable declines in key financial metrics. Net revenue dropped by 19.7% year-over-year to $261.3 million, primarily due to weakness in the Gaming Components and Systems segment. The company swung to a net loss of $29.6 million, compared to a small profit in the same quarter last year.

The Gaming Components and Systems segment, which includes memory products, saw a significant revenue decline of 32.3%. This underperformance is attributed to a softer self-built PC market and channel inventory adjustments. On a positive note, the Gamer and Creator Peripherals segment showed strong growth, with revenue increasing by 19.6%, marking the third consecutive quarter of robust growth in this area.

Corsair's balance sheet remains relatively stable with $94.6 million in cash and restricted cash. However, the company's profitability has been impacted by inflation, high interest rates and fixed costs allocated over lower volumes. In response, Corsair has implemented cost-saving measures, including a reduction of approximately 100 employees in July 2024.

Looking ahead, Corsair has revised its 2024 outlook, now expecting full-year revenue between $1.25 billion and $1.35 billion, with adjusted EBITDA projected at $60 million to $75 million. The company anticipates a market recovery driven by new GPU launches and game releases, but this refresh cycle may start later than initially expected.

While facing headwinds in its traditional components business, Corsair's strategic focus on expanding its Gamer and Creator Peripherals segment, including potential acquisitions like Fanatec, could provide a pathway to future growth and diversification.

Market Research Analyst

Corsair's Q2 2024 results reflect broader trends in the gaming hardware market, offering valuable insights for investors. The company's performance indicates a post-pandemic normalization in the self-built PC market, following the surge during COVID-19 lockdowns. This suggests that the market is currently experiencing a temporary lull before the next upgrade cycle.

Key observations from a market perspective include:

• The installed base of gaming hardware is at an all-time high, indicating long-term market growth potential.
• The headset market, often an entry point for gamers, remains nearly double its pre-COVID size, signaling sustained interest in gaming peripherals.
• The self-built PC market, while softer than pre-COVID levels, is still considered healthy by the company.
• An anticipated "echo" of the COVID surge is expected in the 3-5 year refresh cycle, potentially starting later than initially forecast.

Upcoming catalysts for market revival include:

• New NVIDIA GPUs expected around the end of 2024
• Highly anticipated game releases like Call of Duty: Black Ops 6 (late 2024) and Grand Theft Auto VI (2025)

Corsair's strategic pivot towards the Gamer and Creator Peripherals segment aligns with market trends, as evidenced by its 19.6% year-over-year growth. The company's expansion into new product categories like teleprompters, PC controllers and mobile controllers demonstrates adaptability to evolving consumer demands.

However, macroeconomic factors such as inflation and high interest rates continue to impact high-value consumer purchases, as reflected in higher-than-average credit declines on system purchases. This economic environment may continue to challenge the gaming hardware market in the near term.

Tech Expert

From a technological standpoint, Corsair's Q2 2024 results and outlook provide interesting insights into the evolving landscape of gaming hardware and peripherals. The company's performance reflects the cyclical nature of the PC gaming market, which is heavily influenced by hardware advancements and software releases.

Key technological factors to consider:

• GPU Cycle Impact: The anticipated launch of new NVIDIA GPUs around the end of 2024 is likely to trigger a significant refresh cycle in the gaming PC market. This aligns with historical patterns where major GPU releases drive upgrades across the ecosystem.
• Game-Driven Hardware Demand: The upcoming releases of high-profile games like Call of Duty: Black Ops 6 and Grand Theft Auto VI are expected to drive demand for upgraded hardware, as gamers seek to optimize their systems for these graphically intensive titles.
• Diversification into New Tech Categories: Corsair's expansion into teleprompters, PC controllers and mobile controllers demonstrates the company's adaptability to emerging trends in content creation and mobile gaming.
• Sim Racing Technology: The company's entry into the Sim racing market and interest in acquiring Fanatec indicates a strategic move towards high-end, specialized gaming peripherals, which often incorporate advanced force feedback and precision control technologies.

Corsair's focus on the Gamer and Creator Peripherals segment is particularly noteworthy from a tech perspective. This sector often benefits from rapid innovation cycles and the integration of advanced technologies such as high-precision sensors, low-latency wireless connectivity and customizable RGB lighting.

The company's ability to maintain market leadership in the Gaming Components and Systems segment, despite current challenges, suggests a strong technological foundation. However, the softer self-built PC market highlights the importance of timing product releases with broader technological advancements in the industry.

As the gaming industry continues to evolve, Corsair's technological agility and focus on emerging categories will be important for long-term success in a market driven by rapid innovation and changing consumer preferences.

MILPITAS, Calif.--(BUSINESS WIRE)-- Corsair Gaming, Inc. (Nasdaq: CRSR) (“Corsair” or the “Company”), a leading global provider and innovator of high-performance products for gamers, streamers, content-creators, and gaming PC builders, today announced financial results for the second quarter ended June 30, 2024, and its updated financial outlook for the full year 2024.

Second Quarter 2024 Select Financial Metrics

• Net revenue was $261.3 million compared to $325.4 million in the second quarter of 2023, a decrease of 19.7%. Gaming Components and Systems segment net revenue was $167.1 million compared to $246.7 million in the second quarter of 2023, while Gamer and Creator Peripherals segment net revenue was $94.2 million compared to $78.8 million in the second quarter of 2023.
• Net loss attributable to common shareholders was $29.6 million, or a net loss of $0.28 per diluted share, compared to net income of $1.1 million, or a net income of $0.01 per diluted share, in the second quarter of 2023.
• Adjusted net loss was $6.8 million, or an adjusted net loss of $0.07 per diluted share, compared to adjusted net income of $9.8 million, or an adjusted net income of $0.09 per diluted share, in the second quarter of 2023.
• Adjusted EBITDA was a loss of $1.2 million, compared to adjusted EBITDA of $17.8 million in the second quarter of 2023.
• Cash and restricted cash was $94.6 million as of June 30, 2024.

First Half 2024 Select Financial Metrics

• Net revenue was $598.6 million compared to $679.4 million in the first six months of 2023, a decrease of 11.9%. Gaming Components and Systems segment net revenue was $397.4 million compared to $511.7 million in the first six months of 2023, while Gamer and Creator Peripherals segment net revenue was $201.2 million compared to $167.7 million in the first six months of 2023.
• Net loss attributable to common shareholders was $42.1 million, or a net loss of $0.41 per diluted share, compared to net income of $43 thousand, or a net income of $0.00 per diluted share, in the first six months of 2023.
• Adjusted net income was $2.7 million, or an adjusted net income of $0.03 per diluted share, compared to adjusted net income of $21.8 million, or an adjusted net income of $0.20 per diluted share, in the first six months of 2023.
• Adjusted EBITDA was $16.8 million, compared to adjusted EBITDA of $38.3 million in the first six months of 2023.

Andy Paul, Chief Executive Officer of Corsair, stated, “Clearly we are disappointed by our Q2 2024 results, which were driven by a softer-than-expected self-built PC market. The surge of activity during the COVID lock-down period, where the number of gaming PCs that were built approximately doubled from the prior year, and headset sales almost tripled, which we believe means that the installed base of gaming hardware is now at an all-time high. Even with this surge, we now are seeing the market for headsets, which is usually the entry point for first-time gaming hardware purchases, almost twice the size of the market before COVID lock-downs. We believe this shows the gaming market is continuing to grow.

“For the self-built PC market, where our components and memory product lines are used, we see the market a little softer than it was pre COVID, but we believe it is still at a healthy level. We are expecting an 'echo' of the COVID surge to occur as we move into a natural refresh cycle, which based on prior cycles is typically a 3 to 5 year period. This is very dependent on consumer spending power, inflation, and of course new games and the timing of new graphics hardware. Our expectation last year was that this coming refresh surge would happen in 2024 through 2026, 3 to 5 years after the COVID lock-down. It now appears that is more likely going to start a little later than expected, since we expect to see new GPUs from NVIDIA launching around the end of 2024, with many highly anticipated games expected to launch in late 2024 and 2025, notably Call of Duty: Black Ops 6 later this year and Grand Theft Auto VI in 2025. This will affect our sales of products in our Gaming Components and Systems segment and we have reforecast this accordingly. For Q2 2024, we did see some adjustments downwards of our channel inventory in our Memory product line, meaning that the sales out of our channel were ahead of our sales in by approximately 15%.

“In our Gamer and Creator Peripherals segment, we are seeing strong growth. While the market for those products is showing slight improvement, we also continue to launch products in new categories. Notably, this year we launched teleprompters, PC controllers and mobile controllers, as well as many other innovative new products in our existing categories. We also announced our entry into the Sim racing market, with our own designed products, which we recently showcased at Computex. We remain interested in the Sim racing brand Fanatec, owned by ENDOR AG. Although we were disappointed to see the company file for insolvency, we intend to continue exploring a potential acquisition. Such acquisition would likely be within the framework of the pending insolvency proceedings, and as a result, we cannot provide any assurance our bid will be successful. Q2 2024 was another good quarter for this segment as it grew by 19.6% YoY, which is the third successive quarter of strong, high-teens to 20% growth. We intend to continue to grow the Gamer and Creator Peripherals segment organically, as well as with strategic acquisitions. We believe this business has the potential to become larger than our traditional components business within a few years. For our Gaming Components and Systems segment, which includes our memory business, we continue to dominate the market with leading market share in most categories. We intend to continue that trend, while running these businesses as efficiently as we can from a cost standpoint, while we wait for the market to recover and return to growth.”

Michael G. Potter, Chief Financial Officer of Corsair, stated, “We are executing on cost savings, and took additional action in July 2024, including the reduction of approximately 100 employees, and will reduce some external expenses which we anticipate will lower operating expenses in the second half of 2024. We remain committed to controlling operating expenses, while continuing to support growth in our Gamer and Creator Peripherals segment, which generally has higher operating expense demands for R&D and marketing. We continue to see inflation and high interest rates having a negative effect on high-value consumer purchases, and are seeing higher-than-average credit declines on system purchases. Adding to this, we had a 1% to 2% margin impact from fixed costs allocated over lower than expected volumes. We continue to maintain a healthy balance sheet, with sufficient cash to fund the development of our expanding product portfolio. We expect to further reduce inventory during the third quarter, as we move into the traditionally stronger second half, which we expect will also generate additional cash. Finally, we further reduced our channel inventory, ending the quarter in a healthy position, which will benefit us in the second half of 2024 as we focus on driving revenue growth and profitability.”

Updated 2024 Financial Outlook

Corsair updated its financial outlook for the full year 2024. The Company continues to expect revenue to improve through 2024, with a further improvement in adjusted EBITDA led by an additional improvement in margin, stabilized shipping costs and continued tight operating expense controls.

• Net revenue to be in the range of $1.25 billion to $1.35 billion.
• Adjusted operating income to be in the range of $48 million to $63 million.
• Adjusted EBITDA to be in the range of $60 million to $75 million.

Certain non-GAAP measures included in our financial outlook were not reconciled to the comparable GAAP financial measures because the GAAP measures are not accessible on a forward-looking basis. We are unable to reconcile these forward-looking non-GAAP financial measures to the most directly comparable GAAP measures without unreasonable efforts because we are currently unable to predict with a reasonable degree of certainty the type and extent of certain items that would be expected to impact GAAP measures for these periods but would not impact the non-GAAP measures. Such items may include stock-based compensation charges, amortization, and other items. The unavailable information could have a significant impact on our GAAP financial results.

The foregoing forward-looking statements reflect our expectations as of today’s date. Given the number of risk factors, uncertainties and assumptions discussed below, actual results may differ materially. We do not intend to update our financial outlook until our next quarterly results announcement.

Recent Product Developments

• Entered Popular Sim Racing Category: Our initial launch includes a ground up designed sleek cockpit, constructed with a robust steel frame, and engineered to withstand the rigors of intense, high-octane racing.
• New Mobile Controller: The SCUF Nomad is an innovative iPhone® Bluetooth controller providing a premium mobile gaming experience in a compact design that can be taken anywhere. SCUF + Nomad is accompanied by a free iOS companion app that does not require a paid subscription.
• Customization: CORSAIR Custom Lab is a personalized shopping experience where gamers can choose from multiple peripherals with customized matching patterns or themes.
• K65 achieves #1 Revenue position in the United States for Q2. Third party data shows the newly launched K65 wireless keyboard achieved the highest revenue in the gaming keyboard category for Q2.

Conference Call and Webcast Information

Corsair will host a conference call to discuss the second quarter 2024 financial results today at 2:00 p.m. Pacific Time. The conference call will be accessible on Corsair’s Investor Relations website at https://ir.corsair.com, or by dialing 1-844-825-9789 (USA) or 1-412-317-5180 (International) with conference ID 10190926. A replay will be available approximately 2 hours after the live call ends on Corsair's Investor Relations website, or through August 8, 2024 by dialing 1-844-512-2921 (USA) or 1-412-317-6671 (International), with passcode 10190926.

About Corsair Gaming

Corsair (Nasdaq: CRSR) is a leading global developer and manufacturer of high-performance products and technology for gamers, content creators, and PC enthusiasts. From award-winning PC components and peripherals, to premium streaming equipment and smart ambient lighting, Corsair delivers a full ecosystem of products that work together to enable everyone, from casual gamers to committed professionals, to perform at their very best. Corsair also sells products under its Elgato brand, which provides premium studio equipment and accessories for content creators, SCUF Gaming brand, which builds custom-designed controllers for competitive gamers, Drop, the leading community-driven mechanical keyboard brand and ORIGIN PC brand, a builder of custom gaming and workstation desktop PCs.

Forward Looking Statements

Except for the historical information contained herein, the matters set forth in this press release are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, Corsair’s expectations regarding market headwinds and tailwinds, including its expectations regarding the gaming market’s continued growth, as well as the timing and impact from product refresh cycles; its expectations regarding sales and revenue growth in 2024 and 2025; statements regarding new product launches, the entry into new product categories and demand for new products; its ability to successfully close and integrate acquisitions, including its bid for ENDOR AG; its plans and expectations regarding continuing to grow its Gaming and Creator Peripherals segment and the size of this segment in the future; the impact of the Company’s cost-saving measures; its plans regarding reducing inventory; and its estimated full year 2024 net revenue, adjusted operating income and adjusted EBITDA. Forward-looking statements are based on our management’s beliefs, as well as assumptions made by, and information currently available to them. Because such statements are based on expectations as to future financial and operating results and are not statements of fact, actual results may differ materially from those projected. Factors which may cause actual results to differ materially from current expectations include, but are not limited to: current macroeconomic conditions, including the impacts of high inflation and risk of recession, on demand for our products, consumer confidence and financial markets generally; the lingering impacts and future outbreaks of the COVID-19 pandemic and its impacts on our operations and the operations of our manufacturers, retailers and other partners, as well as its impacts on the economy overall, including capital markets; our ability to build and maintain the strength of our brand among gaming and streaming enthusiasts and our ability to continuously develop and successfully market new products and improvements to existing products; the introduction and success of new third-party high-performance computer hardware, particularly graphics processing units and central processing units as well as sophisticated new video games; fluctuations in operating results; the risk that we are not able to compete with competitors and/or that the gaming industry, including streaming and esports, does not grow as expected or declines; the loss or inability to attract and retain key management; the impacts from geopolitical events and unrest; delays or disruptions at our or third-parties’ manufacturing and distribution facilities; the risk that we are not able to successfully identify and close acquisitions, as well as integrate any companies or assets we have acquired or may acquire; currency exchange rate fluctuations or international trade disputes resulting in our products becoming relatively more expensive to our overseas customers or resulting in an increase in our manufacturing costs; and the other factors described under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission (“SEC”) and our subsequent filings with the SEC. Copies of each filing may be obtained from us or the SEC. All forward-looking statements reflect our beliefs and assumptions only as of the date of this press release. We undertake no obligation to update forward-looking statements to reflect future events or circumstances. Our results for the quarter ended June 30, 2024 are also not necessarily indicative of our operating results for any future periods.

Use and Reconciliation of Non-GAAP Financial Measures

To supplement the financial results presented in accordance with GAAP, this earnings release presents certain non-GAAP financial information, including adjusted operating income (loss), adjusted net income (loss), adjusted net income (loss) per diluted share and adjusted EBITDA. These are important financial performance measures for us, but are not financial measures as defined by GAAP. The presentation of this non-GAAP financial information is not intended to be considered in isolation of or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

We use adjusted operating income (loss), adjusted net income (loss), adjusted net income (loss) per share and adjusted EBITDA to evaluate our operating performance and trends and make planning decisions. We believe that these non-GAAP financial measures help identify underlying trends in our business that could otherwise be masked by the effect of the expenses and other items that we exclude in such non-GAAP measures. Accordingly, we believe that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects, and allowing for greater transparency with respect to the key financial metrics used by our management in our financial and operational decision-making. We also present these non-GAAP financial measures because we believe investors, analysts and rating agencies consider it useful in measuring our ability to meet our debt service obligations.

Our use of these terms may vary from that of others in our industry. These non-GAAP financial measures should not be considered as an alternative to net revenue, operating income (loss), net income (loss), cash provided by operating activities, or any other measures derived in accordance with GAAP as measures of operating performance or liquidity. Reconciliations of these measures to the most directly comparable GAAP financial measures are presented in the attached schedules.

We calculate these non-GAAP financial measures as follows:

• Adjusted operating income (loss), non-GAAP, is determined by adding back to GAAP operating income (loss), the impact from amortization, stock-based compensation, one-time costs related to legal and other matters, acquisition and related integration costs, restructuring and other charges, and acquisition accounting impact related to recognizing acquired inventory at fair value.
• Adjusted net income (loss), non-GAAP, is determined by adding back to GAAP net income (loss), the impact from amortization, stock-based compensation, one-time costs related to legal and other matters, acquisition and related integration costs, restructuring and other charges, acquisition accounting impact related to recognizing acquired inventory at fair value, and the related tax effects of each of these adjustments.
• Adjusted net income (loss) per diluted share, non-GAAP, is determined by dividing adjusted net income (loss), non-GAAP by the respective weighted average shares outstanding, inclusive of the impact of other dilutive securities.
• Adjusted EBITDA is determined by adding back to GAAP net income (loss), the impact from amortization, stock-based compensation, one-time costs related to legal and other matters, depreciation, interest expense, net, acquisition and related integration costs, restructuring and other charges, acquisition accounting impact related to recognizing acquired inventory at fair value, and tax expense (benefit).

We encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure and to view these non-GAAP financial measures in conjunction with the related GAAP financial measures.

Corsair Gaming, Inc. Condensed Consolidated Statements of Operations (Unaudited, in thousands, except per share amounts)
		Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
Net revenue		$	261,300			$	325,432			$	598,557			$	679,396
Cost of revenue			198,215				242,600				448,833				511,160
Gross profit			63,085				82,832				149,724				168,236
Operating expenses:
Sales, general and administrative			70,388				69,953				150,605				137,482
Product development			17,411				15,593				34,052				32,431
Total operating expenses			87,799				85,546				184,657				169,913
Operating loss			(24,714	)			(2,714	)			(34,933	)			(1,677	)
Other (expense) income:
Interest expense			(3,436	)			(4,496	)			(7,127	)			(8,798	)
Interest income			1,158				1,978				2,723				3,452
Other expense, net			(516	)			(1,134	)			(977	)			(1,630	)
Total other expense, net			(2,794	)			(3,652	)			(5,381	)			(6,976	)
Loss before income taxes			(27,508	)			(6,366	)			(40,314	)			(8,653	)
Income tax benefit			4,001				2,287				5,778				2,926
Net loss			(23,507	)			(4,079	)			(34,536	)			(5,727	)
Less: Net income attributable to noncontrolling interest			687				401				1,223				765
Net loss attributable to Corsair Gaming, Inc.		$	(24,194	)		$	(4,480	)		$	(35,759	)		$	(6,492	)
Calculation of net loss per share attributable to common stockholders of Corsair Gaming, Inc.:
Net loss attributable to Corsair Gaming, Inc.		$	(24,194	)		$	(4,480	)		$	(35,759	)		$	(6,492	)
Change in redemption value of redeemable noncontrolling interest			(5,385	)			5,577				(6,360	)			6,535
Net income (loss) attributable to common stockholders of Corsair Gaming, Inc.		$	(29,579	)		$	1,097			$	(42,119	)		$	43
Net income (loss) per share attributable to common stockholders of Corsair Gaming, Inc.:
Basic		$	(0.28	)		$	0.01			$	(0.41	)		$	0.00
Diluted		$	(0.28	)		$	0.01			$	(0.41	)		$	0.00
Weighted-average common shares outstanding:
Basic			103,956				102,304				103,760				101,996
Diluted			103,956				106,502				103,760				106,169

Corsair Gaming, Inc. Segment Information (Unaudited, in thousands, except percentages)
		Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
Net revenue:
Gamer and Creator Peripherals		$	94,229			$	78,755			$	201,202			$	167,697
Gaming Components and Systems			167,071				246,677				397,355				511,699
Total Net revenue		$	261,300			$	325,432			$	598,557			$	679,396
Gross Profit:
Gamer and Creator Peripherals		$	35,699			$	25,509			$	79,342			$	52,157
Gaming Components and Systems			27,386				57,323				70,382				116,079
Total Gross Profit		$	63,085			$	82,832			$	149,724			$	168,236
Gross Margin:
Gamer and Creator Peripherals			37.9	%			32.4	%			39.4	%			31.1	%
Gaming Components and Systems			16.4	%			23.2	%			17.7	%			22.7	%
Total Gross Margin			24.1	%			25.5	%			25.0	%			24.8	%

Corsair Gaming, Inc. Condensed Consolidated Balance Sheets (Unaudited, in thousands)
		June 30, 2024				December 31, 2023
Assets
Current assets:
Cash and restricted cash		$	94,344			$	178,325
Accounts receivable, net			188,564				253,268
Inventories			265,537				240,172
Prepaid expenses and other current assets			31,179				39,824
Total current assets			579,624				711,589
Restricted cash, noncurrent			243				239
Property and equipment, net			30,960				32,212
Goodwill			354,394				354,705
Intangible assets, net			168,715				188,009
Other assets			100,305				70,709
Total assets		$	1,234,241			$	1,357,463
Liabilities
Current liabilities:
Debt maturing within one year, net		$	12,218			$	12,190
Accounts payable			167,608				239,957
Other liabilities and accrued expenses			142,904				166,340
Total current liabilities			322,730				418,487
Long-term debt, net			168,050				186,006
Deferred tax liabilities			11,112				17,395
Other liabilities, noncurrent			57,920				41,595
Total liabilities			559,812				663,483
Temporary equity
Redeemable noncontrolling interest			21,667				15,937
Permanent equity
Corsair Gaming, Inc. stockholders’ equity:
Common stock and additional paid-in capital			649,245				630,652
(Accumulated deficit) retained earnings			(1,709	)			40,410
Accumulated other comprehensive loss			(4,807	)			(3,487	)
Total Corsair Gaming, Inc. stockholders' equity			642,729				667,575
Nonredeemable noncontrolling interest			10,033				10,468
Total permanent equity			652,762				678,043
Total liabilities, temporary equity and permanent equity		$	1,234,241			$	1,357,463

Corsair Gaming, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited, in thousands)
		Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
Cash flows from operating activities:
Net loss		$	(23,507	)		$	(4,079	)		$	(34,536	)		$	(5,727	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Stock-based compensation			8,010				8,174				15,701				15,420
Depreciation			3,093				3,036				6,180				5,933
Amortization			9,501				9,757				19,016				19,498
Deferred income taxes			(9,206	)			(3,490	)			(15,265	)			(5,699	)
Other			623				2,154				1,381				2,282
Changes in operating assets and liabilities:
Accounts receivable			28,891				(697	)			75,819				13,926
Inventories			(13,769	)			(24,014	)			(25,870	)			(19,342	)
Prepaid expenses and other assets			2,897				(4,510	)			7,334				(5,587	)
Accounts payable			(24,056	)			7,404				(72,018	)			25,560
Other liabilities and accrued expenses			(939	)			8,411				(22,521	)			(2,292	)
Net cash (used in) provided by operating activities			(18,462	)			2,146				(44,779	)			43,972
Cash flows from investing activities:
Purchase of property and equipment			(2,509	)			(2,780	)			(5,029	)			(7,457	)
Purchase of intangible asset			(100	)			—				(100	)			—
Purchase price adjustment related to business acquisition			—				—				1,041				—
Bridge loan receivable			(12,310	)			—				(12,310	)			—
Net cash used in investing activities			(14,919	)			(2,780	)			(16,398	)			(7,457	)
Cash flows from financing activities:
Repayment of debt			(3,125	)			(1,250	)			(18,125	)			(11,250	)
Payment of deferred and contingent consideration			—				—				(4,942	)			(950	)
Proceeds from issuance of shares through employee equity incentive plans			949				4,262				3,300				6,379
Payment of taxes related to net share settlement of equity awards			(17	)			(231	)			(415	)			(787	)
Dividend paid to noncontrolling interest			—				—				(1,960	)			—
Payment of other offering costs			—				—				—				(497	)
Net cash (used in) provided by financing activities			(2,193	)			2,781				(22,142	)			(7,105	)
Effect of exchange rate changes on cash			(22	)			(188	)			(658	)			542
Net (decrease) increase in cash and restricted cash			(35,596	)			1,959				(83,977	)			29,952
Cash and restricted cash at the beginning of the period			130,183				182,053				178,564				154,060
Cash and restricted cash at the end of the period		$	94,587			$	184,012			$	94,587			$	184,012

Corsair Gaming, Inc. GAAP to Non-GAAP Reconciliations Non-GAAP Operating Income (Loss) Reconciliations (Unaudited, in thousands, except percentages)
		Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
Operating Loss – GAAP		$	(24,714	)		$	(2,714	)		$	(34,933	)		$	(1,677	)
Amortization			9,501				9,757				19,016				19,498
Stock-based compensation			8,010				8,174				15,701				15,420
One-time costs related to legal and other matters			1,056				—				7,470				—
Acquisition and related integration costs			1,677				634				2,379				774
Restructuring and other charges			440				—				1,566				—
Acquisition accounting impact related to recognizing acquired inventory at fair value			209				—				378				—
Adjusted Operating Income (Loss) – Non-GAAP		$	(3,821	)		$	15,851			$	11,577			$	34,015
As a % of net revenue – GAAP			-9.5	%			-0.8	%			-5.8	%			-0.2	%
As a % of net revenue - Non-GAAP			-1.5	%			4.9	%			1.9	%			5.0	%

Corsair Gaming, Inc. GAAP to Non-GAAP Reconciliations Non-GAAP Net Income (Loss) and Net Income (Loss) Per Share Reconciliations (Unaudited, in thousands, except per share amounts)
		Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
Net income (loss) attributable to common stockholders of Corsair Gaming, Inc. (1)		$	(29,579	)		$	1,097			$	(42,119	)		$	43
Less: Change in redemption value of redeemable noncontrolling interest			(5,385	)			5,577				(6,360	)			6,535
Net loss attributable to Corsair Gaming, Inc.			(24,194	)			(4,480	)			(35,759	)			(6,492	)
Add: Net income attributable to noncontrolling interest			687				401				1,223				765
Net Loss – GAAP			(23,507	)			(4,079	)			(34,536	)			(5,727	)
Adjustments:
Amortization			9,501				9,757				19,016				19,498
Stock-based compensation			8,010				8,174				15,701				15,420
One-time costs related to legal and other matters			1,056				—				7,470				—
Acquisition and related integration costs			1,677				634				2,379				774
Restructuring and other charges			440				—				1,566				—
Acquisition accounting impact related to recognizing acquired inventory at fair value			209				—				378				—
Non-GAAP income tax adjustment			(4,214	)			(4,665	)			(9,286	)			(8,215	)
Adjusted Net Income (Loss) - Non-GAAP		$	(6,828	)		$	9,821			$	2,688			$	21,750
Diluted net income (loss) per share:
GAAP		$	(0.28	)		$	0.01			$	(0.41	)		$	0.00
Adjusted, Non-GAAP		$	(0.07	)		$	0.09			$	0.03			$	0.20
Weighted-average common shares outstanding - Diluted:
GAAP			103,956				106,502				103,760				106,169
Adjusted, Non-GAAP			103,956				106,502				106,537				106,169
(1) Numerator for calculating net income (loss) per share-GAAP

Corsair Gaming, Inc. GAAP to Non-GAAP Reconciliations Adjusted EBITDA Reconciliations (Unaudited, in thousands, except percentages)
		Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
Net Loss – GAAP		$	(23,507	)		$	(4,079	)		$	(34,536	)		$	(5,727	)
Amortization			9,501				9,757				19,016				19,498
Stock-based compensation			8,010				8,174				15,701				15,420
One-time costs related to legal and other matters			1,056				—				7,470				—
Depreciation			3,093				3,036				6,180				5,933
Interest expense, net of interest income			2,278				2,518				4,404				5,346
Acquisition and related integration costs			1,677				634				2,379				774
Restructuring and other charges			440				—				1,566				—
Acquisition accounting impact related to recognizing acquired inventory at fair value			209				—				378				—
Income tax benefit			(4,001	)			(2,287	)			(5,778	)			(2,926	)
Adjusted EBITDA - Non-GAAP		$	(1,244	)		$	17,753			$	16,780			$	38,318
Adjusted EBITDA margin - Non-GAAP			-0.5	%			5.5	%			2.8	%			5.6	%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240801004727/en/

Investor Relations Contact:

Ronald van Veen

ir@corsair.com

510-578-1407



Media Contact:

David Ross

david.ross@corsair.com

+4411 8208 0542

Source: Corsair Gaming, Inc.

FAQ

What were Corsair Gaming's (CRSR) Q2 2024 revenue and earnings?

Corsair Gaming reported Q2 2024 net revenue of $261.3 million, a 19.7% decrease year-over-year. The company experienced a net loss of $29.6 million, or $0.28 per diluted share.

How did Corsair's (CRSR) business segments perform in Q2 2024?

The Gaming Components and Systems segment revenue decreased to $167.1 million from $246.7 million in Q2 2023. The Gamer and Creator Peripherals segment grew 19.6% year-over-year to $94.2 million.

What is Corsair's (CRSR) updated financial outlook for 2024?

Corsair updated its 2024 outlook, projecting net revenue between $1.25 billion to $1.35 billion and adjusted EBITDA of $60 million to $75 million.

What factors affected Corsair's (CRSR) performance in Q2 2024?

Corsair's Q2 2024 results were impacted by a softer-than-expected self-built PC market, inflation, high interest rates affecting consumer purchases, and higher-than-average credit declines on system purchases.