Corsair Gaming Reports First Quarter 2022 Financial Results
First Quarter 2022 Highlights
- Net revenue was
$380.7 million , in line with the Company’s preliminary revenue provided onApril 21, 2022 . This represents an increase of 23.4% compared to the pre-pandemic first quarter of 2020, and a decrease of 28.1% compared to the first quarter of 2021, which included stimulus checks and pent-up demand. - Gamer and creator peripherals segment revenue was
$134.1 million , an increase of 76.8% compared to the pre-pandemic first quarter of 2020, and a decrease of 23.7% compared to the first quarter of 2021. - GAAP operating income declined 103.7% to a loss of
$2.5 million compared to$67.3 million in the first quarter of 2021. Adjusted operating income declined 83.4% to$13.3 million compared to$80.4 million in the first quarter of 2021. - Adjusted EBITDA was
$15.4 million , compared to$80.4 million in the first quarter of 2021. - GAAP net loss per diluted share was
$0.05 compared to$0.47 GAAP net income per diluted share in the first quarter of 2021. Adjusted net income per diluted share was$0.09 compared to$0.58 in the first quarter of 2021.
Definitions of the non-GAAP financial measures used in this press release and reconciliations of such measures to their nearest GAAP equivalents are included below under the heading “Use and Reconciliation of Non-GAAP Financial Measures.”
Financial Outlook
For the full year 2022, we currently expect:
- Net revenue to be in the range of
$1.6 billion to$1.8 billion . - Adjusted operating income to be in the range of
$100 million to$120 million . - Adjusted EBITDA to be in the range of
$110 million to$130 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, depreciation and 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 Developments
- Elgato announced the launch of HD60 X, a powerful new external capture card. Sporting state-of-the-art specs and seamless compatibility with the newest generation of game consoles, HD60 X equips anyone to stream and record their gameplay in the highest quality without limitations. You can then play high-fidelity games while livestreaming to Twitch or YouTube in Full HD 1080p60 quality, while simultaneously recording 1080p60 HDR10 footage to your hard drive. Instant Gameview technology syncs your broadcast with your gameplay, allowing you to monitor your capture feed with ultra-low latency.
- Corsair announced a partnership with world-renowned publisher 2K, bringing immersive in-game RGB lighting integration for all CORSAIR iCUE RGB devices to Gearbox Software’s highly anticipated Tiny Tina’s Wonderlands ®. PC players with CORSAIR iCUE products can enjoy exclusive real-time lighting effects that extend the game’s action across their entire iCUE setup in the upcoming spinoff of the Borderlands ® franchise.
- Corsair announced the new CORSAIR iCUE 5000T RGB PC case. Boasting a unique contoured design in black or white and 208 individually addressable RGB LEDs, the 5000T RGB has the most integrated lighting ever built into a CORSAIR case. High-airflow mesh panels and room for up to two simultaneous 360mm radiators for outstanding cooling ensure the 5000T RGB makes an immediate and lasting impression.
- Corsair unveiled the newest entry in the best-selling K70 series: the CORSAIR K70 RGB PRO Mechanical Gaming Keyboard. Uniting the acclaimed design and aluminum build of a full-size K70 with renowned CORSAIR RGB lighting and tournament-grade performance, the K70 RGB PRO sets a new standard for a full-size gaming keyboard. Available with a wide array of trusted CHERRY MX mechanical switches and loaded with features to help gamers get the most from their setup, anyone can find a K70 RGB PRO to fit their style of play.
Conference Call and Webcast Information
Corsair will host a conference call to discuss the first quarter 2022 financial results today at
The call will also be webcast live from our investor relations website at https://ir.corsair.com. Following completion of the call, a recorded replay of the webcast will be available on the website.
About
Corsair also includes subsidiary brands Elgato, which provides premium studio equipment and accessories for content creators, SCUF Gaming, which builds custom-designed controllers for competitive gamers, ORIGIN PC, a builder of custom gaming and workstation desktop PCs and laptops and Gamer Sensei brand, an esports coaching platform.
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, our expectations regarding growth trends in the gaming hardware sector; our expectations regarding GPU and CPU prices and availability; the potential surge in self-built gaming PC activity in the second half of 2022 and 2023; our belief that with our expanding iCUE control software, and innovative new products pipeline, we will continue to take market share; our belief that Q1 2022 was the peak of pandemic-related high freight cost and that gross margins will improve in the second half of the year; whether we will be able to execute on M&A opportunities and or reduce our debt, as well as the timing of the foregoing; and our estimated full year 2022 net revenue, adjusted operating income and adjusted EBITDA; and our estimated 2026 net revenue target. 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: the impact the COVID-19 pandemic, including the potential end of the pandemic and the cessation of pandemic-related restrictions, will have on demand for our products as well as its impact on our operations and the operations of our manufacturers, retailers and other partners, and its impact 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 gear and improvements to existing gear; 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 impact of global instability, such as the war between
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, adjusted net income, adjusted net income 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, adjusted net income, adjusted net income per diluted share and adjusted EBITDA to evaluate our operating performance and trends and make planning decisions. We believe that these non-GAAP 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 adjusted operating income, adjusted net income, adjusted net income per diluted share and adjusted EBITDA 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 performance measures because we believe investors, analysts and rating agencies consider them 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 revenues, operating income, net income, 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, non-GAAP, is determined by adding back to GAAP operating income (loss) the acquisition accounting impact related to recognizing acquired inventory at fair value, change in fair value of contingent consideration for business acquisitions, stock-based compensation, intangible asset amortization, certain acquisition-related and integration-related expenses, and non-deferred secondary offering costs.
- Adjusted net income, non-GAAP, is determined by adding back to GAAP net income (loss) the acquisition accounting impact related to recognizing acquired inventory at fair value, change in fair value of contingent consideration for business acquisitions, stock-based compensation, intangible asset amortization, certain acquisition-related and integration-related expenses, non-deferred secondary offering costs, loss on extinguishment of debt, and the related tax effects of each of these adjustments.
- Adjusted net income per diluted share, non-GAAP, is determined by dividing adjusted net income, 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 acquisition accounting impact related to recognizing acquired inventory at fair value, change in fair value of contingent consideration for business acquisitions, stock-based compensation, certain acquisition-related and integration-related expenses, non-deferred secondary offering costs, intangible asset amortization, depreciation, interest expense (including loss on extinguishment of debt) 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.
|
|
||||||||
|
|
|
Three Months Ended |
|
|||||
|
|
|
2022 |
|
|
2021 |
|
||
|
|
|
|
|
|
|
|
|
|
|
Net revenue |
|
$ |
380,691 |
|
|
$ |
529,414 |
|
|
Cost of revenue |
|
|
289,935 |
|
|
|
369,086 |
|
|
Gross profit |
|
|
90,756 |
|
|
|
160,328 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
Sales, general and administrative |
|
|
76,131 |
|
|
|
77,853 |
|
|
Product development |
|
|
17,110 |
|
|
|
15,186 |
|
|
Total operating expenses |
|
|
93,241 |
|
|
|
93,039 |
|
|
Operating income (loss) |
|
|
(2,485 |
) |
|
|
67,289 |
|
|
Other (expense) income: |
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
(1,279 |
) |
|
|
(4,946 |
) |
|
Other expense, net |
|
|
(499 |
) |
|
|
(2,425 |
) |
|
Total other expense, net |
|
|
(1,778 |
) |
|
|
(7,371 |
) |
|
Income (loss) before income taxes |
|
|
(4,263 |
) |
|
|
59,918 |
|
|
Income tax benefit (expense) |
|
|
983 |
|
|
|
(13,195 |
) |
|
Net income (loss) |
|
|
(3,280 |
) |
|
|
46,723 |
|
|
Less: Net loss attributable to noncontrolling interests |
|
|
(407 |
) |
|
|
— |
|
|
Net income (loss) attributable to |
|
$ |
(2,873 |
) |
|
$ |
46,723 |
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of net income (loss) per share attributable to common stockholders of |
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to |
|
$ |
(2,873 |
) |
|
$ |
46,723 |
|
|
Change in redemption value of redeemable noncontrolling interests |
|
|
(2,261 |
) |
|
|
— |
|
|
Net income (loss) attributable to common stockholders of |
|
$ |
(5,134 |
) |
|
$ |
46,723 |
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share attributable to common stockholders of |
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.05 |
) |
|
$ |
0.51 |
|
|
Diluted |
|
$ |
(0.05 |
) |
|
$ |
0.47 |
|
|
Weighted-average common shares outstanding: |
|
|
|
|
|
|
|
|
|
Basic |
|
|
95,275 |
|
|
|
91,951 |
|
|
Diluted |
|
|
95,275 |
|
|
|
100,211 |
|
|
|
||||||||
|
|
|
Three Months Ended |
|
|||||
|
|
|
2022 |
|
|
2021 |
|
||
|
|
|
|
|
|
|
|
|
|
|
Net revenue: |
|
|
|
|
|
|
|
|
|
Gamer and Creator Peripherals |
|
$ |
134,148 |
|
|
$ |
175,912 |
|
|
Gaming Components and Systems |
|
|
246,543 |
|
|
|
353,502 |
|
|
Total Net revenue |
|
$ |
380,691 |
|
|
$ |
529,414 |
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit: |
|
|
|
|
|
|
|
|
|
Gamer and Creator Peripherals |
|
$ |
43,057 |
|
|
$ |
68,866 |
|
|
Gaming Components and Systems |
|
|
47,699 |
|
|
|
91,462 |
|
|
Total Gross Profit |
|
$ |
90,756 |
|
|
$ |
160,328 |
|
|
|
|
|
|
|
|
|
|
|
|
Gross Margin: |
|
|
|
|
|
|
|
|
|
Gamer and Creator Peripherals |
|
|
32.1 |
% |
|
|
39.1 |
% |
|
Gaming Components and Systems |
|
|
19.3 |
% |
|
|
25.9 |
% |
|
Total Gross Margin |
|
|
23.8 |
% |
|
|
30.3 |
% |
|
|
||||||||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
Cash and restricted cash |
|
$ |
31,754 |
|
|
$ |
65,149 |
|
|
Accounts receivable, net |
|
|
236,472 |
|
|
|
291,287 |
|
|
Inventories |
|
|
300,423 |
|
|
|
298,315 |
|
|
Prepaid expenses and other current assets |
|
|
57,877 |
|
|
|
51,024 |
|
|
Total current assets |
|
|
626,526 |
|
|
|
705,775 |
|
|
Restricted cash, noncurrent |
|
|
231 |
|
|
|
231 |
|
|
Property and equipment, net |
|
|
19,607 |
|
|
|
16,819 |
|
|
|
|
|
348,424 |
|
|
|
317,054 |
|
|
Intangibles assets, net |
|
|
249,841 |
|
|
|
225,709 |
|
|
Other assets |
|
|
74,796 |
|
|
|
71,808 |
|
|
Total assets |
|
$ |
1,319,425 |
|
|
$ |
1,337,396 |
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
Debt maturing within one year, net |
|
$ |
4,754 |
|
|
$ |
4,753 |
|
|
Accounts payable |
|
|
203,454 |
|
|
|
236,120 |
|
|
Other liabilities and accrued expenses |
|
|
176,556 |
|
|
|
205,874 |
|
|
Total current liabilities |
|
|
384,764 |
|
|
|
446,747 |
|
|
Long-term debt, net |
|
|
241,709 |
|
|
|
242,898 |
|
|
Deferred tax liabilities |
|
|
29,241 |
|
|
|
25,700 |
|
|
Other liabilities, noncurrent |
|
|
52,176 |
|
|
|
53,871 |
|
|
Total liabilities |
|
|
707,890 |
|
|
|
769,216 |
|
|
Temporary equity |
|
|
|
|
|
|
|
|
|
Redeemable noncontrolling interests |
|
|
19,424 |
|
|
|
— |
|
|
Permanent equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock and additional paid-in capital |
|
|
489,755 |
|
|
|
470,373 |
|
|
Retained earnings |
|
|
93,013 |
|
|
|
98,147 |
|
|
Accumulated other comprehensive loss |
|
|
(2,494 |
) |
|
|
(340 |
) |
|
|
|
|
580,274 |
|
|
|
568,180 |
|
|
Nonredeemable noncontrolling interests |
|
|
11,837 |
|
|
|
— |
|
|
Total permanent equity |
|
|
592,111 |
|
|
|
568,180 |
|
|
Total liabilities, temporary equity and permanent equity |
|
$ |
1,319,425 |
|
|
$ |
1,337,396 |
|
|
|
||||||||
|
|
|
Three Months Ended |
|
|||||
|
|
|
2022 |
|
|
2021 |
|
||
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
(3,280 |
) |
|
$ |
46,723 |
|
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
|
5,147 |
|
|
|
3,076 |
|
|
Depreciation |
|
|
2,604 |
|
|
|
2,436 |
|
|
Amortization of intangible assets |
|
|
10,138 |
|
|
|
8,702 |
|
|
Debt issuance costs amortization |
|
|
86 |
|
|
|
537 |
|
|
Loss on debt extinguishment |
|
|
— |
|
|
|
439 |
|
|
Deferred income taxes |
|
|
(4,078 |
) |
|
|
(3,005 |
) |
|
Other |
|
|
567 |
|
|
|
1,316 |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
54,434 |
|
|
|
(13,416 |
) |
|
Inventories |
|
|
(662 |
) |
|
|
(13,508 |
) |
|
Prepaid expenses and other assets |
|
|
(8,147 |
) |
|
|
(4,419 |
) |
|
Accounts payable |
|
|
(35,308 |
) |
|
|
(26,988 |
) |
|
Other liabilities and accrued expenses |
|
|
(27,607 |
) |
|
|
25,875 |
|
|
Net cash provided by (used in) operating activities |
|
|
(6,106 |
) |
|
|
27,768 |
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
Acquisition of business, net of cash acquired |
|
|
(19,534 |
) |
|
|
(1,684 |
) |
|
Payment of deferred consideration |
|
|
— |
|
|
|
(4,353 |
) |
|
Purchase of property and equipment |
|
|
(4,365 |
) |
|
|
(2,036 |
) |
|
Net cash used in investing activities |
|
|
(23,899 |
) |
|
|
(8,073 |
) |
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
Repayment of debt |
|
|
(1,250 |
) |
|
|
(28,000 |
) |
|
Borrowing from line of credit |
|
|
293,000 |
|
|
|
— |
|
|
Repayment of line of credit |
|
|
(293,000 |
) |
|
|
— |
|
|
Payment of contingent consideration |
|
|
(292 |
) |
|
|
— |
|
|
Proceeds from issuance of shares through employee equity incentive plans |
|
|
523 |
|
|
|
185 |
|
|
Payment of taxes related to net share settlement of equity awards |
|
|
(887 |
) |
|
|
— |
|
|
Net cash used in financing activities |
|
|
(1,906 |
) |
|
|
(27,815 |
) |
|
Effect of exchange rate changes on cash |
|
|
(1,484 |
) |
|
|
134 |
|
|
Net decrease in cash and restricted cash |
|
|
(33,395 |
) |
|
|
(7,986 |
) |
|
Cash and restricted cash at the beginning of the period |
|
|
65,380 |
|
|
|
133,568 |
|
|
Cash and restricted cash at the end of the period |
|
$ |
31,985 |
|
|
$ |
125,582 |
|
|
|
||||||||
|
|
|
Three Months Ended |
|
|||||
|
|
|
2022 |
|
|
2021 |
|
||
|
|
|
|
|
|
|
|
|
|
|
Operating Income (loss) - GAAP |
|
$ |
(2,485 |
) |
|
$ |
67,289 |
|
|
Acquisition accounting impact related to recognizing acquired inventory at fair value |
|
|
275 |
|
|
|
— |
|
|
Change in fair value of contingent consideration for business acquisitions |
|
|
— |
|
|
|
72 |
|
|
Stock-based compensation |
|
|
5,147 |
|
|
|
3,076 |
|
|
Intangible asset amortization |
|
|
10,138 |
|
|
|
8,702 |
|
|
Acquisition-related and integration-related costs |
|
|
243 |
|
|
|
208 |
|
|
Non-deferred secondary offering costs |
|
|
— |
|
|
|
1,031 |
|
|
Adjusted Operating Income - Non-GAAP |
|
$ |
13,318 |
|
|
$ |
80,378 |
|
|
|
|
|
|
|
|
|
|
|
|
As a % of net revenue - GAAP |
|
|
-0.7 |
% |
|
|
12.7 |
% |
|
As a % of net revenue - Non-GAAP |
|
|
3.5 |
% |
|
|
15.2 |
% |
|
Non-GAAP Net Income and Net Income Per Share Reconciliations |
||||||||
|
|
|
Three Months Ended |
|
|||||
|
|
|
2022 |
|
|
2021 |
|
||
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) - GAAP |
|
$ |
(3,280 |
) |
|
$ |
46,723 |
|
|
Acquisition accounting impact related to recognizing acquired inventory at fair value |
|
|
275 |
|
|
|
— |
|
|
Change in fair value of contingent consideration for business acquisitions |
|
|
— |
|
|
|
72 |
|
|
Stock-based compensation |
|
|
5,147 |
|
|
|
3,076 |
|
|
Intangible asset amortization |
|
|
10,138 |
|
|
|
8,702 |
|
|
Acquisition-related and integration-related costs |
|
|
243 |
|
|
|
208 |
|
|
Non-deferred secondary offering costs |
|
|
— |
|
|
|
1,031 |
|
|
Loss on debt extinguishment |
|
|
— |
|
|
|
439 |
|
|
Non-GAAP income tax adjustment |
|
|
(3,349 |
) |
|
|
(2,089 |
) |
|
Adjusted Net Income - Non-GAAP |
|
$ |
9,174 |
|
|
$ |
58,162 |
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per share: |
|
|
|
|
|
|
|
|
|
Adjusted, Non-GAAP |
|
$ |
0.09 |
|
|
$ |
0.58 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding: |
|
|
|
|
|
|
|
|
|
Adjusted, Non-GAAP |
|
|
100,290 |
|
|
|
100,211 |
|
|
|
||||||||
|
|
|
Three Months Ended |
|
|||||
|
|
|
2022 |
|
|
2021 |
|
||
|
|
|
|
|
|
|
|
|
|
|
Net Income (loss) - GAAP |
|
$ |
(3,280 |
) |
|
$ |
46,723 |
|
|
Acquisition accounting impact related to recognizing acquired inventory at fair value |
|
|
275 |
|
|
|
— |
|
|
Change in fair value of contingent consideration for business acquisitions |
|
|
— |
|
|
|
72 |
|
|
Stock-based compensation |
|
|
5,147 |
|
|
|
3,076 |
|
|
Acquisition-related and integration-related costs |
|
|
243 |
|
|
|
208 |
|
|
Non-deferred secondary offering costs |
|
|
— |
|
|
|
1,031 |
|
|
Intangible asset amortization |
|
|
10,138 |
|
|
|
8,702 |
|
|
Depreciation |
|
|
2,604 |
|
|
|
2,436 |
|
|
Interest expense (includes loss on debt extinguishment) |
|
|
1,279 |
|
|
|
4,946 |
|
|
Income tax expense (benefit) |
|
|
(983 |
) |
|
|
13,195 |
|
|
Adjusted EBITDA - Non-GAAP |
|
$ |
15,423 |
|
|
$ |
80,389 |
|
|
Adjusted EBITDA margin - Non-GAAP |
|
|
4.1 |
% |
|
|
15.2 |
% |
View source version on businesswire.com: https://www.businesswire.com/news/home/20220505006111/en/
Investor Relations Contact:
ir@corsair.com
510-578-1407
Media Contact:
adrian.bedggood@corsair.com
510-657-8747
+44-7989-258827
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