UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): |
(Exact name of Registrant as Specified in Its Charter)
(State or Other Jurisdiction |
(Commission File Number) |
(IRS Employer |
||
|
|
|
|
|
|
|
|||
|
||||
(Address of Principal Executive Offices) |
|
(Zip Code) |
||
Registrant’s Telephone Number, Including Area Code: |
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
|
|
Trading |
|
|
|
|
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition
On February 13, 2024, Corsair Gaming, Inc. (“Corsair” or the “Company”) issued a press release announcing certain of its financial results for the fiscal quarter and year ended December 31, 2023. The full text of the press release is furnished pursuant to Item 2.02 as Exhibit 99.1 to this Current Report on Form 8-K. A presentation regarding the Company's fiscal quarter and year ended December 31, 2023 is furnished pursuant to Item 2.02 as Exhibit 99.2 hereto.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit Number |
|
Description |
99.1 |
|
|
99.2 |
|
|
104 |
|
Cover Page Interactive Data File (embedded within the Inline XBRL document) |
The information in this Current Report on Form 8-K and Exhibit 99.1 and Exhibit 99.2 attached hereto shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. The information contained herein and in the accompanying exhibits shall not be incorporated by reference into any filing with the U.S. Securities and Exchange Commission made by Corsair Gaming, Inc., whether made before or after the date hereof, regardless of any general incorporation language in such filing.
1
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
|
CORSAIR GAMING, INC. |
|
|
|
|
|
Date: February 13, 2024 |
|
By: |
/s/ Michael G. Potter |
|
|
|
Michael G. Potter |
|
|
|
Chief Financial Officer (Authorized Officer, Principal Financial Officer and Principal Accounting Officer) |
2
Exhibit 99.1
Corsair Gaming Reports Fourth Quarter and Full Year 2023 Financial Results
Delivers 16% Q4 YoY Revenue Growth in Gamer and Creator Peripherals, with 6% Growth in Total FY23 Revenue, and Over 100% Growth in FY23 Adjusted EBITDA
MILPITAS, CA, February 13, 2024 – 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 fourth quarter and full year ended December 31, 2023, as well as guidance for 2024.
Fourth Quarter 2023 Select Financial Metrics
Full Year 2023 Select Financial Metrics
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.”
Andy Paul, Chief Executive Officer of Corsair, stated, “I am really excited to see that the gaming market is now showing signs of growth again after relaxing back from the surge that occurred during the pandemic. Consumer spending during the recent holiday period was better than we expected and we see that the high inventory levels at our competitors that were causing heavy discounting are generally back to normal. We saw a 16% year over year increase in our Gamer and Creator Peripherals segment for Q4 2023, which is a reflection of the market returning to growth and also Corsair gaining market share.”
“I am also very pleased with our overall performance for the full year. In Q1 2023, we were still lapping a quarter where most people were working at home but for the last three quarters of 2023 we saw overall growth of 11%. We launched some really exciting products during 2023, and many were sold out during Q4 2023, including our new PC controller, our new Elgato teleprompter, our new headsets and our new line of power supplies. In fact, we were airfreighting many of these products into our hubs during much of Q4 2023 to meet demand. We also launched our Elgato Marketplace, which sells apps and plug-ins for our Stream Deck, and has products from both us and third party developers. This is doing better than expected and already 35% of the Stream Deck installed base have opened accounts on the marketplace website.”
“The gaming hardware market in the United States and Europe, where we have most of our business, is now at a level between 30% and 50% bigger than pre-pandemic years. Looking forward to 2024, we expect that the Gaming Components and Systems segment will be similar to last year since we are mid-cycle for new GPUs and the next big GPU launch and demand surge is likely to be 2025. For the Gamer and Creator Peripherals segment, we expect significant growth, especially from new products we recently launched and more that we are about to launch. In addition, we plan to enter two new product categories in 2024, sim racing and mobile controllers. We expect the overall gaming market to now enter a new growth phase as we enter a refresh cycle from the surge of consumer spending that occurred during the shelter at home years. This plus our anticipated market share gains should help to position us over the next few years, as we strive to reach over $2 billion in revenue with double-digit percentage EBITDA margins.”
Michael G. Potter, Chief Financial Officer of Corsair, stated, “We more than doubled our adjusted EBITDA to $95.1 million from $46.5 million in 2022, and turned profitable on a GAAP basis with earnings per share to $0.03 per diluted share from a loss of $0.63 per diluted share in 2022, with adjusted earnings per share tripling to $0.55 per diluted share from $0.18 per diluted share in 2022. Gross margin increased by 310 basis points to 24.7 percent for 2023 from 21.6 percent in 2022, with our Gamer and Creator Peripherals segment gross margin increasing 510 basis points to 33.7 percent from 28.6 percent in 2022, and our Gaming Components and Systems gross margin increasing 300 basis points to 21.3 percent from 18.3 percent in 2022. We benefitted from demand for new products, reduced promotional activities and improved inventory levels as we continued to work towards our long-term target gross margin levels. With regard to inventory, we have returned to target levels in both the channel and our warehouses, and we are actually light in some categories, including some of our more recent product
launches. We expect to build on this positive momentum in 2024, with a strong demand outlook for our new products, improved profitability and continued growth in adjusted EBITDA. Our strong cash position and our reduction of face value of debt to below $200 million positions us well to continue to invest in our business.”
Financial Outlook
For the full year 2024, Corsair’s financial outlook reflects cautious optimism. Corsair expects revenue growth 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.
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 Developments
Conference Call and Webcast Information
Corsair will host a conference call to discuss the fourth quarter and full year 2023 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 1-877-407-0784 (USA) or 1-201-689-8560 (International) with conference ID 13743931. A replay will be available approximately 3 hours after the live call ends on Corsair's Investor Relations website, or through February 20, 2024 by dialing 1-844-512-2921 (USA) or 1-412-317-6671 (International), with passcode 13743931.
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; its expectations regarding 2024 and 2025; statements regarding new product launches and the entry into new product categories; and 2024 resulting in strong demand for Corsair’s products and improved profitability and continued growth in adjusted EBITDA; its estimated full year 2024 net revenue, adjusted operating income and adjusted EBITDA; and whether and when Corsair will reach revenue over $2 billion with double-digit percentage EBITDA margins. 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; our ability to successfully 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 to be 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 and year ended December 31, 2023 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:
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.
Investor Relations Contact: Ronald van Veen ir@corsair.com 510-578-1407 |
Media Contact: David Ross david.ross@corsair.com +4411 8208 0542 |
Corsair Gaming, Inc.
Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except per share amounts)
|
|
Three Months Ended |
|
|
Years Ended |
|
||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Net revenue |
|
$ |
417,286 |
|
|
$ |
398,730 |
|
|
$ |
1,459,875 |
|
|
$ |
1,375,098 |
|
Cost of revenue |
|
|
314,612 |
|
|
|
300,873 |
|
|
|
1,099,612 |
|
|
|
1,078,466 |
|
Gross profit |
|
|
102,674 |
|
|
|
97,857 |
|
|
|
360,263 |
|
|
|
296,632 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sales, general and administrative |
|
|
73,831 |
|
|
|
68,476 |
|
|
|
285,313 |
|
|
|
284,932 |
|
Product development |
|
|
16,719 |
|
|
|
15,741 |
|
|
|
65,261 |
|
|
|
66,493 |
|
Total operating expenses |
|
|
90,550 |
|
|
|
84,217 |
|
|
|
350,574 |
|
|
|
351,425 |
|
Operating income (loss) |
|
|
12,124 |
|
|
|
13,640 |
|
|
|
9,689 |
|
|
|
(54,793 |
) |
Other (expense) income: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense |
|
|
(4,351 |
) |
|
|
(3,871 |
) |
|
|
(17,420 |
) |
|
|
(9,560 |
) |
Interest income |
|
|
1,645 |
|
|
|
374 |
|
|
|
6,839 |
|
|
|
374 |
|
Other (expense) income, net |
|
|
(1,261 |
) |
|
|
(1,583 |
) |
|
|
(2,587 |
) |
|
|
213 |
|
Total other expense, net |
|
|
(3,967 |
) |
|
|
(5,080 |
) |
|
|
(13,168 |
) |
|
|
(8,973 |
) |
Income (loss) before income taxes |
|
|
8,157 |
|
|
|
8,560 |
|
|
|
(3,479 |
) |
|
|
(63,766 |
) |
Income tax (expense) benefit |
|
|
(581 |
) |
|
|
(1,442 |
) |
|
|
2,442 |
|
|
|
9,820 |
|
Net income (loss) |
|
|
7,576 |
|
|
|
7,118 |
|
|
|
(1,037 |
) |
|
|
(53,946 |
) |
Less: Net income attributable to noncontrolling interest |
|
|
595 |
|
|
|
409 |
|
|
|
1,553 |
|
|
|
442 |
|
Net income (loss) attributable to Corsair Gaming, Inc. |
|
$ |
6,981 |
|
|
$ |
6,709 |
|
|
$ |
(2,590 |
) |
|
$ |
(54,388 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Calculation of net income (loss) per share attributable to common stockholders of Corsair Gaming, Inc.: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) attributable to Corsair Gaming, Inc. |
|
$ |
6,981 |
|
|
$ |
6,709 |
|
|
$ |
(2,590 |
) |
|
$ |
(54,388 |
) |
Change in redemption value of redeemable noncontrolling interest |
|
|
(758 |
) |
|
|
5,794 |
|
|
|
5,777 |
|
|
|
(6,536 |
) |
Net income (loss) attributable to common stockholders of Corsair Gaming, Inc. |
|
$ |
6,223 |
|
|
$ |
12,503 |
|
|
$ |
3,187 |
|
|
$ |
(60,924 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) per share attributable to common stockholders of Corsair Gaming, Inc.: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
$ |
0.06 |
|
|
$ |
0.13 |
|
|
$ |
0.03 |
|
|
$ |
(0.63 |
) |
Diluted |
|
$ |
0.06 |
|
|
$ |
0.12 |
|
|
$ |
0.03 |
|
|
$ |
(0.63 |
) |
Weighted-average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
|
103,058 |
|
|
|
98,485 |
|
|
|
102,482 |
|
|
|
96,280 |
|
Diluted |
|
|
106,220 |
|
|
|
102,340 |
|
|
|
106,276 |
|
|
|
96,280 |
|
Corsair Gaming, Inc.
Segment Information
(Unaudited, in thousands, except percentages)
|
|
Three Months Ended |
|
|
Years Ended |
|
||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Net revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gamer and Creator Peripherals |
|
$ |
136,828 |
|
|
$ |
117,832 |
|
|
$ |
394,881 |
|
|
$ |
437,817 |
|
Gaming Components and Systems |
|
|
280,458 |
|
|
|
280,898 |
|
|
|
1,064,994 |
|
|
|
937,281 |
|
Total Net Revenue |
|
$ |
417,286 |
|
|
$ |
398,730 |
|
|
$ |
1,459,875 |
|
|
$ |
1,375,098 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross Profit: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gamer and Creator Peripherals |
|
$ |
50,897 |
|
|
$ |
39,674 |
|
|
$ |
132,982 |
|
|
$ |
125,079 |
|
Gaming Components and Systems |
|
|
51,777 |
|
|
|
58,183 |
|
|
|
227,281 |
|
|
|
171,553 |
|
Total Gross Profit |
|
$ |
102,674 |
|
|
$ |
97,857 |
|
|
$ |
360,263 |
|
|
$ |
296,632 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross Margin: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gamer and Creator Peripherals |
|
|
37.2 |
% |
|
|
33.7 |
% |
|
|
33.7 |
% |
|
|
28.6 |
% |
Gaming Components and Systems |
|
|
18.5 |
% |
|
|
20.7 |
% |
|
|
21.3 |
% |
|
|
18.3 |
% |
Total Gross Margin |
|
|
24.6 |
% |
|
|
24.5 |
% |
|
|
24.7 |
% |
|
|
21.6 |
% |
Corsair Gaming, Inc.
Condensed Consolidated Balance Sheets
(Unaudited, in thousands)
|
|
December 31, |
|
|
December 31, |
|
||
|
|
|
|
|
|
|
||
Assets |
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
||
Cash and restricted cash |
|
$ |
178,325 |
|
|
$ |
153,827 |
|
Accounts receivable, net |
|
|
253,268 |
|
|
|
235,656 |
|
Inventories |
|
|
240,172 |
|
|
|
192,717 |
|
Prepaid expenses and other current assets |
|
|
39,824 |
|
|
|
40,593 |
|
Total current assets |
|
|
711,589 |
|
|
|
622,793 |
|
Restricted cash, noncurrent |
|
|
239 |
|
|
|
233 |
|
Property and equipment, net |
|
|
32,212 |
|
|
|
34,927 |
|
Goodwill |
|
|
354,705 |
|
|
|
347,747 |
|
Intangible assets, net |
|
|
188,009 |
|
|
|
216,255 |
|
Other assets |
|
|
70,709 |
|
|
|
75,290 |
|
Total assets |
|
$ |
1,357,463 |
|
|
$ |
1,297,245 |
|
Liabilities |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Debt maturing within one year, net |
|
$ |
12,190 |
|
|
$ |
6,495 |
|
Accounts payable |
|
|
239,957 |
|
|
|
172,033 |
|
Other liabilities and accrued expenses |
|
|
166,340 |
|
|
|
164,470 |
|
Total current liabilities |
|
|
418,487 |
|
|
|
342,998 |
|
Long-term debt, net |
|
|
186,006 |
|
|
|
232,170 |
|
Deferred tax liabilities |
|
|
17,395 |
|
|
|
18,054 |
|
Other liabilities, noncurrent |
|
|
41,595 |
|
|
|
48,589 |
|
Total liabilities |
|
|
663,483 |
|
|
|
641,811 |
|
Temporary equity |
|
|
|
|
|
|
||
Redeemable noncontrolling interest |
|
|
15,937 |
|
|
|
21,367 |
|
Permanent equity |
|
|
|
|
|
|
||
Corsair Gaming, Inc. stockholders’ equity: |
|
|
|
|
|
|
||
Common stock and additional paid-in capital |
|
|
630,652 |
|
|
|
593,496 |
|
Retained earnings |
|
|
40,410 |
|
|
|
37,223 |
|
Accumulated other comprehensive loss |
|
|
(3,487 |
) |
|
|
(6,881 |
) |
Total Corsair Gaming, Inc. stockholders’ equity |
|
|
667,575 |
|
|
|
623,838 |
|
Nonredeemable noncontrolling interest |
|
|
10,468 |
|
|
|
10,229 |
|
Total permanent equity |
|
|
678,043 |
|
|
|
634,067 |
|
Total liabilities, temporary equity and permanent equity |
|
$ |
1,357,463 |
|
|
$ |
1,297,245 |
|
Corsair Gaming, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
|
|
Three Months Ended |
|
|
Years Ended |
|
||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) |
|
$ |
7,576 |
|
|
$ |
7,118 |
|
|
$ |
(1,037 |
) |
|
$ |
(53,946 |
) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Stock-based compensation |
|
|
7,628 |
|
|
|
5,281 |
|
|
|
30,873 |
|
|
|
22,158 |
|
Depreciation |
|
|
3,194 |
|
|
|
3,033 |
|
|
|
12,210 |
|
|
|
10,728 |
|
Amortization |
|
|
9,483 |
|
|
|
8,871 |
|
|
|
38,488 |
|
|
|
42,795 |
|
Debt issuance costs amortization |
|
|
280 |
|
|
|
124 |
|
|
|
679 |
|
|
|
398 |
|
Deferred income taxes |
|
|
1,392 |
|
|
|
(2,184 |
) |
|
|
(6,332 |
) |
|
|
(21,736 |
) |
Other |
|
|
1,490 |
|
|
|
2,748 |
|
|
|
3,584 |
|
|
|
4,469 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Accounts receivable |
|
|
384 |
|
|
|
(77,517 |
) |
|
|
(17,686 |
) |
|
|
55,845 |
|
Inventories |
|
|
(4,018 |
) |
|
|
56,917 |
|
|
|
(39,470 |
) |
|
|
111,288 |
|
Prepaid expenses and other assets |
|
|
6,453 |
|
|
|
8,400 |
|
|
|
1,902 |
|
|
|
1,268 |
|
Accounts payable |
|
|
23,863 |
|
|
|
8,163 |
|
|
|
62,150 |
|
|
|
(65,928 |
) |
Other liabilities and accrued expenses |
|
|
(632 |
) |
|
|
293 |
|
|
|
3,792 |
|
|
|
(40,950 |
) |
Net cash provided by operating activities |
|
|
57,093 |
|
|
|
21,247 |
|
|
|
89,153 |
|
|
|
66,389 |
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Acquisition of businesses, net of cash acquired |
|
|
— |
|
|
|
— |
|
|
|
(14,220 |
) |
|
|
(19,534 |
) |
Payment of deferred and contingent consideration |
|
|
— |
|
|
|
(90 |
) |
|
|
— |
|
|
|
(185 |
) |
Purchase of property and equipment |
|
|
(1,977 |
) |
|
|
(6,465 |
) |
|
|
(12,761 |
) |
|
|
(26,315 |
) |
Investment in available-for-sale convertible note |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,000 |
) |
Net cash used in investing activities |
|
|
(1,977 |
) |
|
|
(6,555 |
) |
|
|
(26,981 |
) |
|
|
(47,034 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Repayment of debt and debt issuance costs |
|
|
(24,750 |
) |
|
|
(5,466 |
) |
|
|
(41,000 |
) |
|
|
(9,483 |
) |
Borrowings from line of credit |
|
|
— |
|
|
|
75,500 |
|
|
|
— |
|
|
|
701,500 |
|
Repayments of line of credit |
|
|
— |
|
|
|
(75,500 |
) |
|
|
— |
|
|
|
(701,500 |
) |
Proceeds from public offering, net of underwriting discounts and commissions and other offering costs |
|
|
— |
|
|
|
81,359 |
|
|
|
(497 |
) |
|
|
81,359 |
|
Proceeds from issuance of shares through employee equity incentive plans |
|
|
659 |
|
|
|
2,883 |
|
|
|
7,449 |
|
|
|
7,015 |
|
Payment of taxes related to net share settlement of equity awards |
|
|
(91 |
) |
|
|
(133 |
) |
|
|
(1,409 |
) |
|
|
(1,532 |
) |
Dividend paid to noncontrolling interest |
|
|
— |
|
|
|
(2,107 |
) |
|
|
(980 |
) |
|
|
(4,312 |
) |
Payment of contingent consideration |
|
|
— |
|
|
|
— |
|
|
|
(950 |
) |
|
|
(438 |
) |
Net cash provided by (used in) financing activities |
|
|
(24,182 |
) |
|
|
76,536 |
|
|
|
(37,387 |
) |
|
|
72,609 |
|
Effect of exchange rate changes on cash |
|
|
(140 |
) |
|
|
1,150 |
|
|
$ |
(281 |
) |
|
$ |
(3,284 |
) |
Net increase in cash and restricted cash |
|
|
30,794 |
|
|
|
92,378 |
|
|
|
24,504 |
|
|
|
88,680 |
|
Cash and restricted cash at the beginning of the period |
|
|
147,770 |
|
|
|
61,682 |
|
|
|
154,060 |
|
|
|
65,380 |
|
Cash and restricted cash at the end of the period |
|
$ |
178,564 |
|
|
$ |
154,060 |
|
|
$ |
178,564 |
|
|
$ |
154,060 |
|
Corsair Gaming, Inc.
GAAP to Non-GAAP Reconciliations
Non-GAAP Operating Income Reconciliations
(Unaudited, in thousands, except percentages)
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Years Ended |
|
||||||||
|
|
2023 |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|||||
Operating Income (loss) - GAAP |
|
$ |
12,124 |
|
|
$ |
(758 |
) |
|
$ |
13,640 |
|
|
$ |
9,689 |
|
|
$ |
(54,793 |
) |
Amortization |
|
|
9,483 |
|
|
|
9,507 |
|
|
|
9,430 |
|
|
|
38,488 |
|
|
|
43,354 |
|
Stock-based compensation |
|
|
7,628 |
|
|
|
7,825 |
|
|
|
5,281 |
|
|
|
30,873 |
|
|
|
22,158 |
|
Inventory reserve in excess of normal run rate to address overhang in the channel |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
19,489 |
|
Acquisition-related and integration-related costs |
|
|
1,401 |
|
|
|
1,386 |
|
|
|
338 |
|
|
|
3,561 |
|
|
|
1,134 |
|
Acquisition accounting impact related to recognizing acquired inventory at fair value |
|
|
561 |
|
|
|
960 |
|
|
|
— |
|
|
|
1,521 |
|
|
|
282 |
|
Restructuring costs |
|
|
595 |
|
|
|
709 |
|
|
|
628 |
|
|
|
1,304 |
|
|
|
2,197 |
|
Non-deferred offering costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
324 |
|
Other |
|
|
— |
|
|
|
— |
|
|
|
245 |
|
|
|
— |
|
|
|
441 |
|
Adjusted Operating Income - Non-GAAP |
|
$ |
31,792 |
|
|
$ |
19,629 |
|
|
$ |
29,562 |
|
|
$ |
85,436 |
|
|
$ |
34,586 |
|
As a % of net revenue - GAAP |
|
|
2.9 |
% |
|
|
-0.2 |
% |
|
|
3.4 |
% |
|
|
0.7 |
% |
|
|
-4.0 |
% |
As a % of net revenue - Non-GAAP |
|
|
7.6 |
% |
|
|
5.4 |
% |
|
|
7.4 |
% |
|
|
5.9 |
% |
|
|
2.5 |
% |
Corsair Gaming, Inc.
GAAP to Non-GAAP Reconciliations
Non-GAAP Net Income and Net Income Per Share Reconciliations
(Unaudited, in thousands, except per share amounts)
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Years Ended |
|
||||||||
|
|
2023 |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|||||
Net income (loss) attributable to common stockholders of Corsair Gaming, Inc. (1) |
|
$ |
6,223 |
|
|
$ |
(3,079 |
) |
|
$ |
12,503 |
|
|
$ |
3,187 |
|
|
$ |
(60,924 |
) |
Less: Change in redemption value of redeemable noncontrolling interest |
|
|
(758 |
) |
|
|
— |
|
|
|
5,794 |
|
|
|
5,777 |
|
|
|
(6,536 |
) |
Net income (loss) attributable to Corsair Gaming, Inc. |
|
|
6,981 |
|
|
|
(3,079 |
) |
|
|
6,709 |
|
|
|
(2,590 |
) |
|
|
(54,388 |
) |
Add: Net income attributable to noncontrolling interest |
|
|
595 |
|
|
|
193 |
|
|
|
409 |
|
|
|
1,553 |
|
|
|
442 |
|
Net Income (loss) - GAAP |
|
|
7,576 |
|
|
|
(2,886 |
) |
|
|
7,118 |
|
|
|
(1,037 |
) |
|
|
(53,946 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Amortization |
|
|
9,483 |
|
|
|
9,507 |
|
|
|
9,430 |
|
|
|
38,488 |
|
|
|
43,354 |
|
Stock-based compensation |
|
|
7,628 |
|
|
|
7,825 |
|
|
|
5,281 |
|
|
|
30,873 |
|
|
|
22,158 |
|
Inventory reserve in excess of normal run rate to address overhang in the channel |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
19,489 |
|
Acquisition-related and integration-related costs |
|
|
1,401 |
|
|
|
1,386 |
|
|
|
338 |
|
|
|
3,561 |
|
|
|
1,134 |
|
Acquisition accounting impact related to recognizing acquired inventory at fair value |
|
|
561 |
|
|
|
960 |
|
|
|
— |
|
|
|
1,521 |
|
|
|
282 |
|
Restructuring costs |
|
|
595 |
|
|
|
709 |
|
|
|
628 |
|
|
|
1,304 |
|
|
|
2,197 |
|
Asset impairment charge |
|
|
— |
|
|
|
— |
|
|
|
1,000 |
|
|
|
— |
|
|
|
1,000 |
|
Non-deferred offering costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
324 |
|
Other |
|
|
— |
|
|
|
— |
|
|
|
245 |
|
|
|
— |
|
|
|
441 |
|
Non-GAAP income tax adjustment |
|
|
(4,052 |
) |
|
|
(4,137 |
) |
|
|
(3,369 |
) |
|
|
(16,404 |
) |
|
|
(17,984 |
) |
Adjusted Net Income - Non-GAAP |
|
$ |
23,192 |
|
|
$ |
13,364 |
|
|
$ |
20,671 |
|
|
$ |
58,306 |
|
|
$ |
18,449 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Diluted net income (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
GAAP |
|
$ |
0.06 |
|
|
$ |
(0.03 |
) |
|
$ |
0.12 |
|
|
$ |
0.03 |
|
|
$ |
(0.63 |
) |
Adjusted, Non-GAAP |
|
$ |
0.22 |
|
|
$ |
0.13 |
|
|
$ |
0.20 |
|
|
$ |
0.55 |
|
|
$ |
0.18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Weighted average common shares outstanding - Diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
GAAP |
|
|
106,220 |
|
|
|
102,863 |
|
|
|
102,340 |
|
|
|
106,276 |
|
|
|
96,280 |
|
Adjusted, Non-GAAP |
|
|
106,220 |
|
|
|
106,532 |
|
|
|
102,340 |
|
|
|
106,276 |
|
|
|
100,557 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
(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 |
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Years Ended |
|
||||||||
|
|
2023 |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|||||
Net Income (loss) - GAAP |
|
$ |
7,576 |
|
|
$ |
(2,886 |
) |
|
$ |
7,118 |
|
|
$ |
(1,037 |
) |
|
$ |
(53,946 |
) |
Amortization |
|
|
9,483 |
|
|
|
9,507 |
|
|
|
9,430 |
|
|
|
38,488 |
|
|
|
43,354 |
|
Stock-based compensation |
|
|
7,628 |
|
|
|
7,825 |
|
|
|
5,281 |
|
|
|
30,873 |
|
|
|
22,158 |
|
Depreciation |
|
|
3,194 |
|
|
|
3,083 |
|
|
|
3,033 |
|
|
|
12,210 |
|
|
|
10,728 |
|
Interest expense, net of interest income |
|
|
2,706 |
|
|
|
2,529 |
|
|
|
3,497 |
|
|
|
10,581 |
|
|
|
9,186 |
|
Inventory reserve in excess of normal run rate to address overhang in the channel |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
19,489 |
|
Acquisition-related and integration-related costs |
|
|
1,401 |
|
|
|
1,386 |
|
|
|
338 |
|
|
|
3,561 |
|
|
|
1,134 |
|
Acquisition accounting impact related to recognizing acquired inventory at fair value |
|
|
561 |
|
|
|
960 |
|
|
|
— |
|
|
|
1,521 |
|
|
|
282 |
|
Restructuring costs |
|
|
595 |
|
|
|
709 |
|
|
|
628 |
|
|
|
1,304 |
|
|
|
2,197 |
|
Asset impairment charge |
|
|
— |
|
|
|
— |
|
|
|
1,000 |
|
|
|
— |
|
|
|
1,000 |
|
Non-deferred offering costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
324 |
|
Other |
|
|
— |
|
|
|
— |
|
|
|
245 |
|
|
|
— |
|
|
|
441 |
|
Tax expense (benefit) |
|
|
581 |
|
|
|
(97 |
) |
|
|
1,442 |
|
|
|
(2,442 |
) |
|
|
(9,820 |
) |
Adjusted EBITDA - Non-GAAP |
|
$ |
33,725 |
|
|
$ |
23,016 |
|
|
$ |
32,012 |
|
|
$ |
95,059 |
|
|
$ |
46,527 |
|
Adjusted EBITDA margin - Non-GAAP |
|
|
8.1 |
% |
|
|
6.3 |
% |
|
|
8.0 |
% |
|
|
6.5 |
% |
|
|
3.4 |
% |
Q4 AND FY2023 FINANCIAL RESULTS February 13, 2024 Exhibit 99.2
DISCLAIMER Forward Looking Statements This presentation contains forward looking statements that involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, the Company's results may differ materially from those expressed or implied by such forward-looking statements. All statements other than statements of historical fact could be deemed forward-looking statements, including, but not limited to: information or predictions concerning the Company's future financial performance (including its FY2024 guidance and long-term goals), business plans and objectives, potential growth opportunities, potential market leadership, technological, industry or market trends (including assumptions regarding the 2025 market) and potential market opportunities. These statements are based on estimates and information available to the Company at the time of this presentation and are not guarantees of future performance. Actual results could differ materially from the Company's current expectations as a result of many factors, including, but not limited to: current macroeconomic conditions, including but not limited to the impacts of high inflation and the risk of a recession on demand for our products, consumer confidence and financial markets generally; the Company’s ability to build and maintain the strength of its brand among gaming and streaming enthusiasts and its 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 the Company is 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 Russia and Ukraine or any conflict between China and Taiwan, and any sanctions or other geopolitical tensions that may result therefrom; the impacts from any pandemic, including any lingering impacts from the COVID-19 pandemic; delays or disruptions at manufacturing and distribution facilities of the Company or third parties; the Company's ability to successfully integrate any companies or assets it may acquire; currency exchange rate fluctuations or international trade disputes resulting in the Company’s gear becoming relatively more expensive to its overseas customers or resulting in an increase in the Company’s manufacturing costs; and the other factors described under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 filed (once available) with the Securities and Exchange Commission ("SEC") and its subsequent filings with the SEC. The Company assumes no obligation, and does not intend, to update these forward-looking statements, except as required by law. Investors are urged to review in detail the risks and uncertainties outlined in Corsair’s SEC filings. You may get these SEC documents for free by visiting EDGAR on the SEC website at http://www.sec.gov. Non-GAAP Financial Measures Included in this presentation are certain non-GAAP financial measures, including Adjusted Operating Income (Loss), Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income (Loss) and Adjusted Net Income (Loss) Per Share, which are not recognized under the generally accepted accounting principles (“GAAP”) in the United States and designed to complement the financial information presented in accordance with GAAP in the United States because management believes such measures are useful to investors. The non-GAAP measures have limitations as analytical tools and you should not consider them in isolation of, or as an alternative to, measures prepared in accordance with U.S. GAAP. The non-GAAP measures used by the Company may differ from the non-GAAP measures used by other companies. The Company urges you to review the reconciliation of its non-GAAP financial measures to the most directly comparable U.S. GAAP financial measures set forth in the Appendix to this presentation, and not to rely on any single financial measure to evaluate the Company's business. Market & Industry Data This presentation also contains estimates and other statistical data made by independent parties and by the Company relating to the Company’s industry, the Company’s business and the market for the Company’s products and its future growth. This data involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. In addition, projections, assumptions, and estimates of the Company’s future performance and the future performance of the market for its products are necessarily subject to a high degree of uncertainty and risk.
Founded in 1994 2,100+ Employees $1.45B 2023 Revenue GAMER and Creator Peripherals GAMING components and Systems Computer Cases Cooling Solutions STREAMING GEAR Keyboards Mice GAMING Headsets PERFORMANCE Controllers COMPLETE SYSTEMS High Performance MEMORY POWER SUPPLY UNITS Gaming furniture CORSAIR AT A GLANCE
ESTABLISHED GLOBAL FOOTPRINT MILPITAS, CA CORSAIR HQ MIAMI, FL ORIGIN PC READING, UK CORSAIR EUROPE MUNICH, GERMANY ELGATO TAIPEI ATLANTA, GA SCUF VIETNAM CHINA CORSAIR ASIA 200+ Sales & Marketing employees in 38+ countries
MARKET UPDATE
2023 OVERVIEW 2023 was a strong year for PC gaming with new technologies and string of successful game launches New graphics cards have invigorated PC building, while the well-received iCUE Link ecosystem has made building easier Next major growth surge in PC building expected in 2025 with expected launch of a new generation of graphics cards Gaming peripheral market is recovering. Strong Black Friday activity points to a healthy future Expect to drive growth through key product launches and by expanding our customization offerings
EACH GENERATION IS PLAYING MORE GAMES Source: Newzoo. 80% of Gen Z and Millennial Consumers Play Games. August 2021. 81% Gamers Average play time/week 7.20H 77% Gamers Average play time/week 6.50H 60% Gamers Average play time/week 4.25H 42% Gamers Average play time/week 2.30H
SIGNIFICANT WHITE SPACE OPPORTUNITY; THE MAJORITY OF GAMING HARDWARE TAM IS STILL CONSUMED BY A SMALL PERCENTAGE OF GAMERS 1.6B Casual PC Gamers 245M Regular PC Gamers Regular PC Gamers Pre-Built Gaming PC Casual PC Gamers Little Hardware Ownership, Younger Gamer PC Gaming Enthusiasts Self-Built Gaming PC 32M PC Gaming Enthusiasts 50%+ of overall TAM spent in this fast-growing core segment Source: DFC Intelligence (as of Q4’23). Note: Total gamer counts eliminate double counting for gamers playing on multiple platforms.
2023 HIGHLIGHTS
16.1% QoQ Gamer & Creator Peripherals Growth OVERALL YOY GROWTH 6% overall net revenue growth for full year 13.6% growth for full year in Components and Systems due to GPU launches and market share gain Market recovery in Peripherals space in Q4’23 allowed 16% growth compared to Q4’22 Gaming Components and Systems Gamer and Creator Peripherals REVENUE BY SEGMENT
ELGATO MARKETPLACE OFF TO STRONG START Within 4 months of launch, 35% of Elgato Stream Deck users joining the Marketplace shows strong desire for new applications and functionality Over 4.5 million downloads since the Marketplace's launch Rapidly growing base of 300+ Makers constantly creating new applications and plugins for sale on Marketplace.
CORSAIR M&A STRATEGY PAVES WAY FOR COMPLETE CUSTOMIZATION Customization center in Taiwan now fully operational: Customized SCUF products delivered to customers worldwide Enables short runs, partnerships, & one-off units Drop integration enabled further customization: Custom keycaps, keyboards, and desk mats Origin PC manufacturing moving to Atlanta facility to enable further customization options for our customers 100K units of personalized products shipped in 2023, at 10% price premium Leads the way for further customization and personalization across all Corsair product lines
LONG TERM OUTLOOK
KEY DRIVERS FOR LONG TERM GROWTH Leading product launches to drive market share 1 Regional expansion 2 Margin % growth by new feature rich products and strategic M&A 3 Customization and personalization 4 Gaming market growth The gaming market is growing and resilient – Consumers want to have the latest technologies which enhance their gaming experiences 5
Mid point 2024 guidance Long term goals* Revenue $1,525M $2.0 - $2.5B+ Gross Margin 27% 30%+ Adjusted EBITDA(1) $115M $220M - $300M+ Adjusted EBITDA %(1) 7.5% 11 – 12% *Long term goals are aspirational and depend on market conditions, product mix and other factors. WHERE WE ARE HEADED (1) Adjusted EBITDA and Adjusted EBITDA % are non-GAAP measures. We do not provide a reconciliation of forward-looking non-GAAP measures to their comparable GAAP measure. See the slide titled "Financial Guidance FY2024" for more information
FINANCIAL RESULTS CORSAIR CONFIDENTIAL
Q4 2023 AND FY2023 RESULTS(1) Solid net revenue growth for the year, with European share of total steadily climbing throughout the year reaching 38.6% in Q4’23. This is back at the level we saw prior to the war in Ukraine, while Asia Pacific region was weaker, due to soft consumer demand in China. For the year more than doubled adjusted EBITDA over 2022, turned profitable on a GAAP basis and tripled our EPS on a non-GAAP basis. ($ in millions except EPS and percentages) Q4'22 Q4'23 Y/Y FY'22 FY'23 Y/Y Net Revenue $398.7 $417.3 4.7% $1,375.1 $1,459.9 6.2% Gross Profit $97.9 $102.7 4.9% $296.6 $360.3 21.5% Gross Profit Margin 24.5% 24.6% 10 bps 21.6% 24.7% 310 bps Operating Income (Loss) $13.6 $12.1 -11.1% ($54.8) $9.7 -117.7% Adjusted Operating Income(1) $29.6 $31.8 7.5% $34.6 $85.4 147.0% Net Income (Loss) Attributable to Common Stockholders $12.5 $6.2 -50.2% ($60.9) $3.2 -105.2% Earnings (Loss) per Share (Diluted) $0.12 $0.06 -50.0% $(0.63) $0.03 -104.8% Adjusted Net Income(1) $20.7 $23.2 12.2% $18.4 $58.3 216.0% Adjusted Earnings per Share (Diluted)(1) $0.20 $0.22 10.0% $0.18 $0.55 205.6% Adjusted EBITDA(1) $32.0 $33.7 5.4% $46.5 $95.1 104.3% (1) See appendix for reconciliation of non-GAAP metrics to most comparable GAAP metrics.
Q4 2023 AND FY2023 SEGMENT RESULTS Gaming Components and Systems Q4’23 and FY23 Results ($ in millions except percentages) Q4'22 Q4'23 Y/Y FY'22 FY'23 Y/Y Net Revenue $280.9 $280.5 -0.2% $937.3 $1,065.0 13.6% % of Total Net Revenue 70.4% 67.2% -320 bps 68.2% 73.0% 480 bps Gross Profit $58.2 $51.8 -11.0% $171.6 $227.3 32.5% Gross Profit Margin 20.7% 18.5% -220 bps 18.3% 21.3% 300 bps Gamer and Creator Peripherals Q4’23 and FY23 Results ($ in millions except percentages) Q4'22 Q4'23 Y/Y FY'22 FY'23 Y/Y Net Revenue $117.8 $136.8 16.1% $437.8 $394.9 -9.8% % of Total Net Revenue 29.6% 32.8% 320 bps 31.8% 27.0% -480 bps Gross Profit $39.7 $50.9 28.3% $125.1 $133.0 6.3% Gross Profit Margin 33.7% 37.2% 350 bps 28.6% 33.7% 510 bps Strong full year growth of 13.6% in the Gaming Components and Systems segment driven by introduction of new GPU platform and new product introductions. Gamer and Creator Peripherals segment showed strong net revenue growth and margin expansion in Q4'23 as the market has turned to growth post-Covid, competitor discounting due to excess inventory has resided and our new products were well received in the market.
GAAP SEGMENT GROSS MARGIN % Q4 at 37.2% for Gamer and Creator Peripherals
ADJUSTED EBITDA RECOVERY(1) See appendix for reconciliation of non-GAAP metrics to most comparable GAAP metrics.
FINANCIAL GUIDANCE FY 2024(1) Given the number of risk factors, uncertainties and assumptions, many of which are discussed in slide 2, actual results may differ materially. We do not intend to update our financial outlook until our next quarterly results announcement. Estimates should not be viewed as a substitute for our full annual financial statement and are not necessarily indicative of the results to be expected for any future period. 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 into non-GAAP measures to the most directly comparable GAAP measures without unreasonable effort 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 this period but would not impact the non-GAAP measures. Such items may include stock-based compensation charges, public offering related charges, depreciation and amortization, and other items. The unavailable information could have a significant impact on our GAAP financial results. Financial Metrics 2024 Guidance Net Revenues $1.45-1.60 billion Adjusted Operating Income $92-112 million Adjusted EBITDA $105-125 million
DEBT SUMMARY ($ in millions) December 31, 2023 Cash (Excluding restricted cash) $175.6 Term Loan (face value) $199.0 Total Debt $199.0 Net Debt $23.4 Paid off $41 million of debt during 2023, while increasing cash (excluding restricted cash) by $24 million and paying for the acquisition of Drop assets.
APPENDIX
USE OF NON-GAAP FINANCIAL MEASURES To supplement the financial results presented in accordance with GAAP, this presentation includes certain non-GAAP financial information, including Adjusted Operating Income (Loss), Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income (Loss) and Adjusted Net Income (Loss) Per Share. 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 these non-GAAP financial measures 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 financial measures. Accordingly, we believe that these non-GAAP financial 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 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 appendix. 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.
GAAP TO NON-GAAP RECONCILIATIONS Non-GAAP Operating Income Reconciliations (Unaudited, in thousands, except percentages) Three Months Ended December 31, Three Months Ended September 30, Three Months Ended December 31, Years Ended December 31, 2023 2023 2022 2023 2022 Operating Income (loss) - GAAP $ 12,124 $ (758 ) $ 13,640 $ 9,689 $ (54,793 ) Amortization 9,483 9,507 9,430 38,488 43,354 Stock-based compensation 7,628 7,825 5,281 30,873 22,158 Inventory reserve in excess of normal run rate to address overhang in the channel — — — — 19,489 Acquisition-related and integration-related costs 1,401 1,386 338 3,561 1,134 Acquisition accounting impact related to recognizing acquired inventory at fair value 561 960 — 1,521 282 Restructuring costs 595 709 628 1,304 2,197 Non-deferred offering costs — — — — 324 Other — — 245 — 441 Adjusted Operating Income - Non-GAAP $ 31,792 $ 19,629 $ 29,562 $ 85,436 $ 34,586 As a % of net revenue - GAAP 2.9 % -0.2 % 3.4 % 0.7 % -4.0 % As a % of net revenue - Non-GAAP 7.6 % 5.4 % 7.4 % 5.9 % 2.5 %
GAAP TO NON-GAAP RECONCILIATIONS Non-GAAP Net Income and Net Income Per Share Reconciliations (Unaudited, in thousands, except per share amounts) Three Months Ended December 31, Three Months Ended September 30, Three Months Ended December 31, Years Ended December 31, 2023 2023 2022 2023 2022 Net income (loss) attributable to common stockholders of Corsair Gaming, Inc. (1) $ 6,223 $ (3,079 ) $ 12,503 $ 3,187 $ (60,924 ) Less: Change in redemption value of redeemable noncontrolling interest (758 ) — 5,794 5,777 (6,536 ) Net income (loss) attributable to Corsair Gaming, Inc. 6,981 (3,079 ) 6,709 (2,590 ) (54,388 ) Add: Net income attributable to noncontrolling interest 595 193 409 1,553 442 Net Income (loss) - GAAP 7,576 (2,886 ) 7,118 (1,037 ) (53,946 ) Adjustments: Amortization 9,483 9,507 9,430 38,488 43,354 Stock-based compensation 7,628 7,825 5,281 30,873 22,158 Inventory reserve in excess of normal run rate to address overhang in the channel — — — — 19,489 Acquisition-related and integration-related costs 1,401 1,386 338 3,561 1,134 Acquisition accounting impact related to recognizing acquired inventory at fair value 561 960 — 1,521 282 Restructuring costs 595 709 628 1,304 2,197 Asset impairment charge — — 1,000 — 1,000 Non-deferred offering costs — — — — 324 Other — — 245 — 441 Non-GAAP income tax adjustment (4,052 ) (4,137 ) (3,369 ) (16,404 ) (17,984 ) Adjusted Net Income - Non-GAAP $ 23,192 $ 13,364 $ 20,671 $ 58,306 $ 18,449 Diluted net income (loss) per share: GAAP $ 0.06 $ (0.03 ) $ 0.12 $ 0.03 $ (0.63 ) Adjusted, Non-GAAP $ 0.22 $ 0.13 $ 0.20 $ 0.55 $ 0.18 Weighted average common shares outstanding - Diluted: GAAP 106,220 102,863 102,340 106,276 96,280 Adjusted, Non-GAAP 106,220 106,532 102,340 106,276 100,557 (1) Numerator for calculating net income (loss) per share-GAAP
GAAP TO NON-GAAP RECONCILIATIONS Adjusted EBITDA Reconciliations (Unaudited, in thousands, except percentages) Three Months Ended December 31, Three Months Ended September 30, Three Months Ended December 31, Years Ended December 31, 2023 2023 2022 2023 2022 Net Income (loss) - GAAP $ 7,576 $ (2,886 ) $ 7,118 $ (1,037 ) $ (53,946 ) Amortization 9,483 9,507 9,430 38,488 43,354 Stock-based compensation 7,628 7,825 5,281 30,873 22,158 Depreciation 3,194 3,083 3,033 12,210 10,728 Interest expense, net of interest income 2,706 2,529 3,497 10,581 9,186 Inventory reserve in excess of normal run rate to address overhang in the channel — — — — 19,489 Acquisition-related and integration-related costs 1,401 1,386 338 3,561 1,134 Acquisition accounting impact related to recognizing acquired inventory at fair value 561 960 — 1,521 282 Restructuring costs 595 709 628 1,304 2,197 Asset impairment charge — — 1,000 — 1,000 Non-deferred offering costs — — — — 324 Other — — 245 — 441 Tax expense (benefit) 581 (97 ) 1,442 (2,442 ) (9,820 ) Adjusted EBITDA - Non-GAAP $ 33,725 $ 23,016 $ 32,012 $ 95,059 $ 46,527 Adjusted EBITDA margin - Non-GAAP 8.1 % 6.3 % 8.0 % 6.5 % 3.4 %
