Corsair Gaming’s Q2 2024 Financial Report Reveals Layoffs Affecting 100 Employees

Computex Taipei

Corsair Gaming, Inc. (Nasdaq: CRSR) recently released its financial results for the second quarter of 2024, along with an updated financial outlook for the full year. The company, known for its high-performance products for gamers, streamers, content creators, and gaming PC builders, reported a decrease in net revenue compared to the same period last year.

In the second quarter of 2024, Corsair’s net revenue was $261.3 million, down 19.7% from $325.4 million in the second quarter of 2023. The Gaming Components and Systems segment saw a decrease in net revenue from $246.7 million to $167.1 million, while the Gamer and Creator Peripherals segment experienced growth, with net revenue increasing from $78.8 million to $94.2 million.

Unfortunately, Corsair also reported a net loss attributable to common shareholders of $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.

Corsair’s net revenue for the first half of 2024 was $598.6 million, an 11.9% decrease from $679.4 million in the first six months of 2023. The Gaming Components and Systems segment saw a decrease in net revenue from $511.7 million to $397.4 million, while the Gamer and Creator Peripherals segment experienced growth, with net revenue increasing from $167.7 million to $201.2 million.

The company reported a net loss attributable to common shareholders of $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, expressed disappointment in the company’s Q2 2024 results, which were influenced by a softer-than-expected self-built PC market. However, he highlighted the surge of activity during the COVID lockdown period, where the number of gaming PCs built doubled from the previous year and headset sales nearly tripled. This indicates that the installed base of gaming hardware is at an all-time high.

Paul also noted that the market for headsets, which is usually the entry point for first-time gaming hardware purchases, is now almost twice the size it was before COVID lockdowns. This demonstrates the continued growth of the gaming market. While the self-built PC market is slightly softer than it was pre-COVID, Corsair expects an “echo” of the COVID surge as the market enters a natural refresh cycle. The company anticipates this refresh surge to occur between 2024 and 2026, with the launch of new GPUs from nVidia and highly anticipated games like Call of Duty: Black Ops 6 and Grand Theft Auto VI.

In the Gamer and Creator Peripherals segment, Corsair is experiencing strong growth. The market for these products is showing slight improvement, and the company continues to launch products in new categories. This year, Corsair introduced teleprompters, PC controllers, and mobile controllers, along with many other innovative new products. The company also announced its entry into the SIM Racing market, showcasing its own designed products at Computex. Corsair is also exploring a potential acquisition of the Sim racing brand Fanatec, owned by ENDOR AG.

Michael G. Potter, Chief Financial Officer of Corsair, discussed the company’s cost-saving efforts, including a reduction in workforce and external expenses, to lower operating expenses in the second half of 2024. Corsair is committed to controlling operating expenses while supporting growth in the Gamer and Creator Peripherals segment. The company is also dealing with the negative effects of inflation and high interest rates on high-value consumer purchases.

Despite the challenges, Corsair maintains a healthy balance sheet with sufficient cash to fund the development of its expanding product portfolio. The company expects to further reduce inventory in the third quarter and generate additional cash in the traditionally stronger second half of 2024.

Looking ahead, Corsair updated its financial outlook for the full year 2024. The company anticipates revenue improvement, with a further improvement in adjusted EBITDA led by margin growth, stabilized shipping costs, and tight operating expense controls. The updated financial outlook includes net revenue in the range of $1.25 billion to $1.35 billion, adjusted operating income in the range of $48 million to $63 million, and adjusted EBITDA in the range of $60 million to $75 million.

Corsair continues to innovate and introduce new products to the market. Recent developments include the launch of a sleek cockpit for the popular Sim racing category, the SCUF Nomad mobile controller for iPhone, and the Corsair Custom Lab, which offers personalized shopping experiences for gamers. The company’s K65 wireless keyboard also achieved the highest revenue in the gaming keyboard category in the United States for Q2.

Corsair remains optimistic about the future, aiming to grow its Gamer and Creator Peripherals segment organically and through strategic acquisitions. The company believes this business has the potential to surpass its traditional components business in size within a few years.

While Corsair faces challenges in the current market, its commitment to innovation, cost control, and customer satisfaction positions it well for future success.

Background Information

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About Corsair: Corsair, founded in 1994, is a manufacturer of high-performance gaming and enthusiast PC components and peripherals. The company specializes in producing top-tier gaming keyboards, mice, headsets, as well as computer cases, power supplies, and memory modules. Corsair has earned a strong reputation in the industry for its commitment to quality and innovation, catering to gamers and PC enthusiasts worldwide.

  

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About nVidia: NVIDIA has firmly established itself as a leader in the realm of client computing, continuously pushing the boundaries of innovation in graphics and AI technologies. With a deep commitment to enhancing user experiences, NVIDIA's client computing business focuses on delivering solutions that power everything from gaming and creative workloads to enterprise applications. for its GeForce graphics cards, the company has redefined high-performance gaming, setting industry standards for realistic visuals, fluid frame rates, and immersive experiences. Complementing its gaming expertise, NVIDIA's Quadro and NVIDIA RTX graphics cards cater to professionals in design, content creation, and scientific fields, enabling real-time ray tracing and AI-driven workflows that elevate productivity and creativity to unprecedented heights. By seamlessly integrating graphics, AI, and software, NVIDIA continues to shape the landscape of client computing, fostering innovation and immersive interactions in a rapidly evolving digital world.

  

Event Info

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About Computex: Computex, held annually in Taipei, Taiwan, stands as one of the world's leading technology trade shows, showcasing cutting-edge innovations in computing hardware, software, and emerging technologies. With a focus on industry trends and product launches, it serves as a pivotal platform for tech giants and startups alike to unveil their latest advancements and forge key partnerships, attracting a global audience of industry professionals, enthusiasts, and media representatives.