Corsair Gaming Q2 2025 Earnings Call Transcript

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Provided by Quartr
August 7, 2025

Key Takeaways

  • Positive Sentiment: 23% year-over-year revenue growth to $320 million with a 36% gross profit increase and $8.1 million EBITDA, both beating consensus.
  • Positive Sentiment: Gaming Components & Systems revenue rose 30% and Gamer & Creative Peripherals grew 9%, with market share gains in keyboard and headset categories.
  • Negative Sentiment: Potential semiconductor tariffs may require pricing adjustments to protect margins, presenting a risk of short-term impacts before mitigation measures take effect.
  • Neutral Sentiment: New CEO’s three strategic priorities are accelerating product innovation, driving margin expansion through operational efficiency, and expanding channels in Asia, Latin America, and direct-to-consumer.
AI Generated. May Contain Errors.
Earnings Conference Call
Corsair Gaming Q2 2025
00:00 / 00:00

Transcript Sections

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Operator

Greetings, and welcome to CORSA Gaming's Second Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. I'd now like to turn the conference over to your host, Mr. David Pascali with Investor Relations. Thank you, and you may proceed, sir.

David Pasquale
Investor Relations at Global IR Partners

Thank you, operator. Good afternoon, everyone, and thank you for joining us for Coursera's financial results conference call for the second quarter ended 06/30/2025. On the call today, we have Coursera's CEO, Tee Law and CFO, Michael Potter. Tee will review highlights from the quarter. Michael will then review the financials and our outlook.

David Pasquale
Investor Relations at Global IR Partners

We will then have time for any questions. Before we begin, allow me to provide a disclaimer regarding forward looking statements. This call, including the Q and A portion, may include forward looking statements related to the expected future results for our company and are therefore forward looking statements. Our actual results may differ materially from our projections due to a number of risks and uncertainties. The risks and uncertainties that forward looking statements are subject to are described in our earnings release and other SEC filings.

David Pasquale
Investor Relations at Global IR Partners

Note that until our 10 Q has been filed, these numbers are preliminary. Today's remarks will also include references to non GAAP financial measures. Additional information, including reconciliation between non GAAP financial information to the GAAP financial information is provided in the press release we issued after the market closed today. With that, let me now turn the call over to Coursera's CEO, Tee La. Please go ahead,

THI LA
THI LA
CEO & Director at Corsair Gaming

Thank you, David, and thank you all for joining us today. Q2 twenty twenty five was a strong quarter for CORSAIR. We delivered 23% year over year revenue growth with total revenue of $320,000,000 and EBITDA of 8,100,000.0 exceeding consensus expectations on both the top and bottom line. Gross profit increased 36% year over year with improved margin performance across our portfolio due to favorable mix, channel execution and continued operational discipline. What stood out this quarter was the strength across both our Gaming Components and Systems segment, where we grew revenue 30% year on year and our gamer creator peripheral segment where we grew revenue 9% year on year, supported by successful new product launches.

THI LA
THI LA
CEO & Director at Corsair Gaming

And according to third party analysts, Coursera gained market share in both keyboard and headset categories. We saw a meaningful increase in system upgrades and new builds driven by excitement around the launch of the latest powerful GPUs from NVIDIA and AMD. This was coupled with the release of graphically intensive games like Doom, the Dark Ages, and Elder Scrolls four Remastered, which required a high performance graphics card and are catalyst for PC enthusiasts to upgrade their hardware to get an enriched gameplay experience. Spending was concentrated in components as expected, particularly power supplies, cooling, and memory as gamers sought to leverage new GPU capabilities such as real time ray tracing, AI rendering and generative AI support. We expect peripherals to follow this upgrade cycle fueled by upcoming releases like Witcher three Remaster, Battlefield six and the highly anticipated GTA VI.

THI LA
THI LA
CEO & Director at Corsair Gaming

This multistage refresh cycle is well aligned with our product roadmap across hardware and software. Adding to our confidence is the momentum of our Elgato business, which continues to lead in the creative space. Demand for our award winning stream deck and popular video capture products remained strong, particularly with the rise of new content driven by the Nintendo Switch two launch late Q2. We were also excited by the positive market response to our Facecam four ks and the Video Capture 4KS, both of which launched at the perfect time to deliver pro grade 4K60 video resolution at a more accessible price point and better availability. We believe these solutions will extend our leadership position.

THI LA
THI LA
CEO & Director at Corsair Gaming

Another Q2 highlight was our presence at Computex twenty twenty five, where we showcased several next gen technologies and earned multiple awards. One of the most exciting was the launch of our virtual Stream Deck integration embedded into our Scimitar Elite gaming mouse and the Xenion Edge companion display. This feature allows user to display a fully interactive software Stream Deck directly on the user's monitor, enabling instant access to near unlimited powerful shortcuts for gamers and creators. You can expect to see more cross brand tech synergy in upcoming launches to demonstrate the strength of our ecosystem as we focus on leveraging our IP and platforms to add value for customers and accelerate revenue growth. In the gaming category, we introduced the Maker 75 DIY keyboard family, which combines custom built flexibility with gaming grade performance.

THI LA
THI LA
CEO & Director at Corsair Gaming

Integrated with the CORSAIR web for seamless online personalization, Maker 75 was honored with both a red dot best of the best and IF design award. On the system side, we announced the launch of our Origin PC AI work station 300, a compact 4.4 liter system powered by AMD Ryzen AI Max 300 series. This product is designed for quite efficiency, supports local LLMs, creative workloads, and AI development straight out from the box. This small but powerful platform expands our reach into AI native applications and offers professionals, creators, and developers a compelling new productivity solution. We expect AI to be a major long term catalyst across every aspect of our business from both our own operation efficiency to all of our product categories.

THI LA
THI LA
CEO & Director at Corsair Gaming

We are taking a thoughtful approach and integrating functionality where it is most compelling for our consumers. We also began ramping distribution of the desirable Fanatec branded sim racing products in late q two through our strategic channel partners. Early response was very encouraging and position us well in one of the fastest growing categories. Finally, I want to touch on tariffs. We continue to operate with flexibility across our supply chain, and we have successfully minimized impact to date.

THI LA
THI LA
CEO & Director at Corsair Gaming

That said, depending on how the semiconductor tariffs ultimately plays out, we may need to consider pricing adjustment to protect margins. Our goal remains to shield our customers as much as possible while staying nimble and efficient. Overall, I'm proud of how our teams executed this quarter. We saw strength in core demand, drove margin improvement, and advanced our innovation road map across hardware, software, and AI. Looking ahead, as the new CEO, my focus is centered on three strategic priorities.

THI LA
THI LA
CEO & Director at Corsair Gaming

First, we are accelerating our new product innovation cadence to ensure we deliver high impact products for our customers. Second, we will continue to focus on margin expansion, drive more business efficiency and expand synergies from our M and A portfolio. Third, we're focused on channel expansion, particularly in underserved markets like Asia and Latin America, where our recent investments are beginning to deliver strong returns year on year. We are also seeing continued momentum in our direct to consumer business and we'll scale that model to strengthen our customer engagement and margin performance. With that, I will now turn it over to Michael to walk through the financials.

Michael Potter
Michael Potter
CFO at Corsair Gaming

Thanks, Tee, and good afternoon, everyone. As Tee noted, this was a strong quarter for us. We delivered double digit revenue growth and EBITDA expansion, above expectations despite external headwinds. We are focused on executing to our business strategy, growing revenue and increasing profitability as we leverage our portfolio of leadership brands. We are confident in our business fundamentals and remain firmly on track for continued growth this year with a healthy balance sheet to support our growth strategy.

Michael Potter
Michael Potter
CFO at Corsair Gaming

In terms of the specifics, Q2 twenty twenty five net revenue increased 23% to $320,000,000 compared to $261,300,000 in Q2 twenty twenty four. For the first six months of twenty twenty five, net revenue increased 15.3% to $689,900,000 from $598,600,000 contributed 33.9% of our Q2 twenty twenty five revenues compared to 37.2% in Q1 twenty twenty five, while the APAC region was 13.5% of our Q2 twenty twenty five revenues compared to 11.3 in Q1 twenty twenty five. Turning now to our segments. The Gamer and Creative Peripheral segment contributed $102,600,000 of net revenue during the second quarter compared to $94,200,000 in Q2 twenty twenty four. For the first June 2025, Gamer and Creator Peripheral segment revenue increased to $214,600,000 compared to $201,200,000 for the first six months of twenty twenty four.

Michael Potter
Michael Potter
CFO at Corsair Gaming

The Gaming Components and Systems segment contributed 217,500,000 of net revenue during the second quarter from $167,100,000 in Q2 twenty twenty four. Memory products contributed $105,000,000 in Q2 twenty twenty five compared to $81,800,000 in 2Q twenty twenty four. For the first '6 months of twenty twenty five, Gaming and Systems segment revenue increased to $475,200,000 from $397,400,000 in the 2024, with the revenue from memory products increasing to $246,100,000 from $206,700,000 Overall, the gross profit in the second quarter increased 36.1% to $85,900,000 compared to $63,100,000 in Q2 twenty twenty four, reflecting our continued execution and increased contribution from higher growth products and channels. Gross margin increased two seventy basis points to 26.8% compared to 24.1% in Q2 twenty twenty four. Overall gross profit increased to $188,200,000 for the first June of twenty twenty five compared to $149,700,000 in the 2024.

Michael Potter
Michael Potter
CFO at Corsair Gaming

Gross profit in the Gamer and Creator Peripheral segment increased to $41,100,000 compared to $35,700,000 in Q2 twenty twenty four. Gross margin increased to 40% compared to 37.9% in Q2 twenty twenty four. The Gaming Components and Systems segment gross profit increased to $44,800,000 compared to $27,400,000 in Q2 twenty twenty four. Gross margin increased to 20.6% compared to 16.4% in Q2 twenty twenty four. Our memory products gross margins in this segment were 15.6% for the second quarter compared to 11.5% in Q2 twenty twenty four.

Michael Potter
Michael Potter
CFO at Corsair Gaming

Second quarter SG expenses were $85,300,000 compared to $70,400,000 in Q2 twenty twenty four in support of our higher revenue. Second quarter R and D expenses were $17,500,000 compared to $17,400,000 in Q2 twenty twenty four. This reflects our continued investments in support of our expanded product line and new areas, including sim racing and product customization. We remain committed to controlling operating expenses while supporting the company's long term growth opportunities. GAAP operating loss improved to $16,900,000 in the 2025 compared to a GAAP operating loss of $24,700,000 in Q2 twenty twenty four.

Michael Potter
Michael Potter
CFO at Corsair Gaming

Second quarter adjusted operating income was $6,600,000 compared to adjusted operating loss of $3,800,000 in Q2 twenty twenty four. Adjusted operating income was $27,300,000 for the 2025 compared to $11,600,000 in the 2024. Second quarter net loss attributable to common shareholders was $17,000,000 or $0.16 per diluted share as compared to a net loss of $29,600,000 or $0.28 per diluted share in Q2 twenty twenty four. On an adjusted basis, second quarter net income was $1,300,000 or $01 per diluted share compared to an adjusted net loss of $6,800,000 or $07 per share in Q2 twenty twenty four. For the first six months of twenty twenty five, adjusted net income was $13,600,000 or $0.13 per diluted share compared to $2,700,000 or $03 per share in the 2024.

Michael Potter
Michael Potter
CFO at Corsair Gaming

Finally, quarter adjusted EBITDA was $8,100,000 compared to a loss of $1,200,000 for Q2 twenty twenty four. For the first June of twenty twenty five, adjusted EBITDA increased 83.4% to $30,800,000 compared to $16,800,000 in a year ago period. Turning now to our balance sheet. We ended Q2 with a cash balance including restricted cash of $107,500,000 We made an additional $24,000,000 term loan repayment in Q2 and proactively refinanced our existing revolving and term loan credit facility ahead of schedule on favorable terms and conditions. Overall, we continue to maintain a healthy balance sheet with sufficient cash to fund the development of our expanding product portfolio and growth plan.

Michael Potter
Michael Potter
CFO at Corsair Gaming

We ended Q2 with $125,000,000 of debt at face value and our $100,000,000 working capital revolver remains undrawn and fully available. Since just before our IPO almost five years ago to today, we have reduced debt from approximately $550,000,000 to the current $125,000,000 face value. This has resulted in lower interest expense and greater capacity to enter into a strategic transaction if needed. We will continue to focus on growth as the main use of cash and we'll also maintain a buffer to be used as a resource while we navigate through the new tariffs. We also expect to continue to reduce debt over time.

Michael Potter
Michael Potter
CFO at Corsair Gaming

So far, we have focused on preserving gross profit for existing products while we've pursued our mitigation efforts. We believe that we've mitigated or will mitigate the new country specific tariffs through these efforts. New products are being targeted at recovering to existing gross margin levels when they're released. Overall, the scope and structure of the expected semiconductor tariffs is not known yet. We have planned for the most likely scenarios and under those our mitigation would take several quarters.

Michael Potter
Michael Potter
CFO at Corsair Gaming

Once we know what these will be, we expect to update guidance in our normal quarterly cadence. In terms of the full year 2025, Coursera is reaffirming the net revenue outlook issued on 02/12/2025 for net revenues to be in the range of $1,400,000,000 to $1,600,000,000 for the full year 2025. We intend to provide an updated adjusted operating income and adjusted EBITDA outlook later this year if macro factors including developments in global trade policy, such as implementation of additional potential country specific and sectoral tariffs afford us a greater visibility on our operating results. We're mitigating additional tariff impacts, but there is a lag between the imposition of them and the results of our actions. So there will be a short term impact as new tariffs are set.

Michael Potter
Michael Potter
CFO at Corsair Gaming

With that, we're happy to open the call for questions. Operator, will you please open the call for Q and A?

Operator

Thank you very much. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star and then one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. For participants using speaker equipment, it may be necessary for you to pick up your handset before pressing the star keys.

Operator

One moment, please, while we while we pause for questions. First question comes from Aaron Lee from Macquarie. Please proceed with your questions, Aaron.

Aaron Lee
Aaron Lee
Senior Research Analyst at Macquarie Group

Hey, good afternoon. Thanks for taking my question. I guess maybe to start on Fanatec. It sounds like you're seeing really good progress there and you noted the strong sell through. I guess can you just talk about what the next steps are that you're looking towards to continue that momentum?

THI LA
THI LA
CEO & Director at Corsair Gaming

Hi, Erin. How are you doing?

Aaron Lee
Aaron Lee
Senior Research Analyst at Macquarie Group

Good. Thank joining

THI LA
THI LA
CEO & Director at Corsair Gaming

us today. So with regards to Fanatec, we have the first phase, which was integration in terms of moving their entire platform onto infrastructure, and that was done from an e commerce perspective, as well as the supply chain. So, we extract quite a bit of saving coming from that front. The second phase was to extend the distribution to limited channel partners with regards to products that we cannot reach consumers today in certain regions. Now, the third step is to step up on roadmap and releasing new products, and you will start to see some of the new products coming out toward Q4 of this year.

THI LA
THI LA
CEO & Director at Corsair Gaming

We're very excited about that. And then continue to build up availability. And also, there are some mitigation from a tariff perspective that we can still do. So, that's going to be next from the standpoint of expansion.

Aaron Lee
Aaron Lee
Senior Research Analyst at Macquarie Group

Got it. Thank you. And then maybe just a clarification on tariffs. I just want to confirm, does all your commentary in the press release include the tariffs that went into effect today? And then with regard to the big beautiful bill, do you expect any benefits or impact from that? Thank you.

Michael Potter
Michael Potter
CFO at Corsair Gaming

So no tariffs today if you mean the new ones that were talked about. For the country specific tariffs that were announced a few days ago and went into effect today, yes. Because there's always news about tariffs or at least sound bites about tariffs every day. So the country specific ones, yes, we've included that in our discussions. The one big beautiful bill, there's some small tax benefits that will come to us.

Michael Potter
Michael Potter
CFO at Corsair Gaming

Other than that, nothing in particular that'll make a difference.

THI LA
THI LA
CEO & Director at Corsair Gaming

Yeah. What's not in it is the semiconductor tariff that we don't know how that would play out.

Aaron Lee
Aaron Lee
Senior Research Analyst at Macquarie Group

Okay. Gotcha. Thank you.

THI LA
THI LA
CEO & Director at Corsair Gaming

Yeah. Thank you. Thank Thank you, everyone.

Operator

There are no further questions. I'd now like to hand the call back to COSE's CEO, Tila. Thank you.

THI LA
THI LA
CEO & Director at Corsair Gaming

Thank you, everyone, for joining us on the call today and for your continued support. If you have any follow-up questions, please contact our Investor Relations department. We look forward to updating you next quarter. And thank you, and have a good evening.

Operator

Thank you very much. Ladies and gentlemen, that does conclude today's call. You may now disconnect your lines.

Executives
Analysts
    • David Pasquale
      Investor Relations at Global IR Partners
    • Aaron Lee
      Senior Research Analyst at Macquarie Group
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