Corsair Gaming Q1 2026 Earnings Call Transcript

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Provided by Quartr
May 7, 2026

Key Takeaways

  • Positive Sentiment: Record gross margin (32.7%), adjusted EBITDA of $35.8M (up 58% YoY) and improved EPS, plus generated $29.7M cash from operations and reached a near 0 net debt position while repurchasing ~$5M of stock.
  • Positive Sentiment: Gamer & creator peripherals showed structural growth (10% YoY) driven by the Stream Deck ecosystem and double-digit sequential growth in new Elgato marketplace accounts and digital products, with Stream Deck integration across Corsair hardware.
  • Negative Sentiment: Gaming components and systems revenue fell ~10% YoY due to a non-GPU upgrade cycle, weak memory pricing and semiconductor supply constraints that the company expects to persist into the near term (potentially easing in 2027).
  • Positive Sentiment: Higher-margin mix is improving as DTC rose to 20% of revenue (from 17%), with a stated goal of 25%, helping lift blended gross margin and supporting the company’s shift toward recurring and higher-margin channels.
  • Neutral Sentiment: Q2 guidance calls for revenue of $295M–$320M and adjusted EBITDA of $12.5M–$15.5M (with reaffirmed full-year guidance), reflecting seasonal patterns and management’s cautious posture given macro and semiconductor uncertainty.
AI Generated. May Contain Errors.
Earnings Conference Call
Corsair Gaming Q1 2026
00:00 / 00:00

Transcript Sections

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Operator

Afternoon, welcome to Corsair Gaming's first quarter 2026 earnings conference call. As a reminder, today's call is being recorded, your participation implies consent to such recordings. With that, I would like to turn over to David Pasquale with Investor Relations. Please proceed.

David Pasquale
David Pasquale
Investor Relations Contact at Corsair Gaming

Thank you, operator. Good afternoon, everyone, and thank you for joining us today. With me on the call are Thi La, our Chief Executive Officer, and Gordon Mattingly, our Chief Financial Officer. Before we begin, I'd like to remind you that today's discussion contains forward-looking statements, including, but not limited to, our guidance for the second quarter of 2026 and other statements that are not historical in nature, are predictive in nature, or depend upon or refer to future events or conditions. These forward-looking statements are based on our current assumptions and expectations. Actual results could differ materially. Please refer to the risk factors in our most recent annual report on Form 10-K filed with the SEC, as well as today's earnings press release for a full discussion of the factors that could cause our actual results to differ. We undertake no obligation to update these forward-looking statements.

David Pasquale
David Pasquale
Investor Relations Contact at Corsair Gaming

Additionally, we will discuss certain non-GAAP financial measures today. Definitions and reconciliations to the most comparable GAAP measures are included in our earnings press release and the investor presentation posted to our investor relations website at ir.corsair.com. With that, I'd like to turn the call over to our CEO, Thi La. Please go ahead, Thi.

Thi La
Thi La
CEO at Corsair Gaming

Thank you, David. Good afternoon, everyone. We delivered a strong start to 2026. This quarter reflects real progress in the transformation of this business, and I will frame what the results show before Gordon takes you through the details. The headline is this: first quarter record gross margin, both adjusted EBITDA and EPS well above the high end of our guidance, and a meaningful improvement in profitability versus a year ago. We also generated strong cash flow, reduced net debt to near zero, and returned capital to shareholders via our share repurchase. What I want to convey is that this is more than one strong metric. It is the whole company moving in the right direction at the same time. In gamer and creator peripherals, we had another excellent quarter. Revenue grew 10% year-over-year, and we absorbed real tariff headwinds in the process.

Thi La
Thi La
CEO at Corsair Gaming

The growth is structural, not cyclical, and I want to explain why. Stream Deck, our solution that combines workflow control software with a hardware innovative interface, puts powerful automation literally at your fingertips. What we have built on top of that is a flywheel, a marketplace for plug-ins and digital products that connects developers with users, and it is working. Underscoring our success and momentum, our Elgato Marketplace delivered double-digit sequential growth in new accounts and digital products this quarter. We are also excited to see the rise of AI-assisted development, accelerating that flywheel further, lowering the barrier for a new generation of builders. Critically, Stream Deck is no longer just a standalone device. We have deployed the ecosystem across our product lines with keyboards, mice, and other Corsair peripherals now integrating directly with Stream Deck, turning the software layer into a connective tissue across our hardware portfolio.

Thi La
Thi La
CEO at Corsair Gaming

This integration, alongside the Elgato Marketplace, provides unique benefits to our customers, and the results show in our Q1 2026 market share gain. Wave Next is our most ambitious hardware-software integration to date, unifying audio workflows into a single ecosystem with onboard DSP and intuitive tactile control. Sim racing also had a strong quarter. We recently signed a strategic partnership with Formula One, naming Fanatec as a licensed F1 brand partner and F1 esports official partner for the F1 Sim Racing World Championship. Fanatec was showcased at the Miami Grand Prix recently. This validates our position at the top of the market and opens meaningful doors for brand reach and product authenticity going forward. In gaming components and systems, revenue declined 10% year-over-year, and I want to be direct about why.

Thi La
Thi La
CEO at Corsair Gaming

We are in a non-GPU upgrade cycle, compounded by challenging memory pricing dynamics. Semiconductor supply constraints have added further headwinds on both availability and consumer demand. These are industry-wide dynamics, not Corsair specific, and we expect them to persist through near-term. What I want you to focus on is how we managed through it. Despite the revenue decline, we grew gross profit 18% year-over-year to $65.7 million and expanded gross margin 670 basis points from 21.7%-28.4%. Gordon will give you the specifics, but the point is that our team delivered real margin improvement under dynamic pressure. That reflects operational discipline and a deliberate shift toward higher margin products.

Thi La
Thi La
CEO at Corsair Gaming

Within the segment, we're also seeing early but real demand for AI-focused workstations, particularly from prosumers and SMB customers who need high performance, locally run AI compute. This is a large and growing market, and it plays to Corsair's and ORIGIN PC strengths. We are encouraged by the early signals and believe this has the potential to become a more meaningful contributor as adoption matures. Though we want to be measured in our expectations until semiconductor availability is more established. Stepping back, the strategy we've been executing against is that Corsair profitability improves as we continue to grow our higher margin gaming and creative segment, leveraging our platform ecosystem and continue to exercise operational discipline. This quarter is a proof point that our strategy is working. Our 2026 priorities are clear.

Thi La
Thi La
CEO at Corsair Gaming

First, improve the quality of growth, leaning into higher margin categories and scaling our ecosystem where we see strong momentum. Second, grow the Elgato Marketplace and recurring revenue to drive lifetime value engagement and margin enhancement. Third, scale direct-to-consumer because higher margin channels and better customer data make other parts of the business smarter. With that, I will turn it over to Gordon to take you through the financials. Gordon?

Gordon Mattingly
Gordon Mattingly
CFO at Corsair Gaming

Thank you, Thi. Good afternoon, everyone. Before I get into the numbers, I want to frame what this quarter's results represent. We are working to transform Corsair into a consistently profitable cash-generative business, underpinned by our diversified portfolio of market-leading brands. This quarter, we saw several benefits of that transformation and diversification simultaneously contributing to our strong results. These include consistent market leadership in memory products, an accelerating pace of innovation in higher margin peripherals, platform growth in Elgato, direct consumer expansion, and disciplined expense and working capital management. Our team will continue to prioritize progress and improvement across all these areas. Turning to our results. Revenue for the first quarter was $354.5 million, above the midpoint of our guidance.

Gordon Mattingly
Gordon Mattingly
CFO at Corsair Gaming

Gross profit increased 13% year-over-year to $116 million, reflecting strong execution within both our segments, while gross margin expanded to a first quarter record of 32.7%. Our gamer and creator peripherals segment gross profit grew 8% to $50.3 million despite year-over-year tariff related headwinds, with segment gross margin of 14.8%. Our gaming components and systems segment gross profit grew 18% to $65.7 million, with segment gross margin expanding significantly from 21.7%-28.4%. This is an increase of 670 basis points, which was driven by our strong supply chain execution, favorable memory pricing, and sequential market share gains. Though we do expect margin normalization over time, we are very pleased with the expansion we delivered in Q1.

Gordon Mattingly
Gordon Mattingly
CFO at Corsair Gaming

Our higher margin gamer and creator peripherals segment also grew to 35% of our Q1 revenue mix, up from 30% a year ago, which helped lift our blended company gross margin, a trend that we expect to continue. I want to call out one additional driver of margin quality. Our direct-to-consumer channel grew to 20% of Q1 revenue, up from 17% a year ago. That three-point mix shift matters. Direct-to-consumer carries structurally higher margins than our wholesale and retail channels. As a result, this growth flowed directly into gross profit. It's a deliberate part of our strategy, and we continue to make good progress on it. Disciplined operating expense management with flat year-over-year expenses enabled gross profit growth to flow entirely through to adjusted EBITDA.

Gordon Mattingly
Gordon Mattingly
CFO at Corsair Gaming

As a result, adjusted EBITDA grew to $35.8 million, up 58% year-over-year and above the high end of our guidance at 10.1% of revenue. This marks our second consecutive quarter of double-digit adjusted EBITDA margin. Earnings per share improved significantly, coming in at $0.11 on a GAAP basis and $0.27 on a non-GAAP basis compared to a loss in the prior year period. Turning to the balance sheet and cash flow. We generated $29.7 million in cash from operations in Q1, driven by strong earnings with balanced working capital management. This translated into good progress on the balance sheet with our cash and restricted cash increasing sequentially by $20.9 million-$119.7 million. Importantly, we ended the first quarter with a near zero net debt position.

Gordon Mattingly
Gordon Mattingly
CFO at Corsair Gaming

This will give us even greater flexibility to deploy our capital across the business and maximize future shareholder returns. In line with that, during the first quarter, we repurchased approximately $5 million of stock under our recent $50 million authorization. This reflects our view that our shares represent a highly compelling investment opportunity. We intend to continue to deploy our capital optimally, whether investing in organic growth, executing M&A, deleveraging the business, or returning capital to shareholders. Turning to our guidance. For the second quarter of 2026, we expect net revenue to be in the range of $295 million-$320 million, adjusted EBITDA to be in the range of $12.5 million-$15.5 million, and non-GAAP EPS to be in the range of $0.05-$0.07 per share.

Gordon Mattingly
Gordon Mattingly
CFO at Corsair Gaming

We expect revenue to be down by about 4% year-over-year at the midpoint of our guided range, with expected low teens year-over-year growth in our gamer and creator peripheral segment, offset by a more cautious outlook for gaming components and systems, driven by the ongoing global semiconductor shortages and related demand dynamics. The sequential decline in our revenue from Q1 reflects the normal seasonal pattern of our business. Adjusted EBITDA is expected to grow more than 70% year-over-year at the assumed midpoint of our guided range as we continue to focus on margin expansion and operating expense management. We also reaffirm our previously issued full-year guidance, reflecting continued confidence in our outlook. To close, we delivered a strong first quarter with solid top-line performance relative to expectations, significant profit growth, together with meaningful balance sheet improvement and cash generation.

Gordon Mattingly
Gordon Mattingly
CFO at Corsair Gaming

As we look ahead, our priorities remain clear. Continued optimization of our product mix towards higher margin categories and sales channels, disciplined cost management, and driving consistent profitable growth across our diversified portfolio of market-leading brands. We believe the progress we've made positions us well to build on this momentum through the remainder of 2026, and we remain confident in our ability to execute against our strategy as we deploy our capital optimally to deliver long-term value for our shareholders. Operator, that concludes our formal remarks. You can now open the call for Q&A.

Operator

Thank you. We will now begin our question-and-answer session. Thank you. Your first question today comes from Aaron Lee from Macquarie. Please go ahead.

Aaron Lee
Aaron Lee
Analyst at Macquarie

Hey, everyone. Thanks for taking the question and nice job on the quarter.

Thi La
Thi La
CEO at Corsair Gaming

Hi, Aaron.

Aaron Lee
Aaron Lee
Analyst at Macquarie

Yeah, wanted to talk about, yeah, maybe to start with guidance. Obviously, you beat the high end of EBITDA guidance in the first quarter. Can you just talk a bit about the decision to keep the full-year outlook the same? Does that just kind of reflect, you know, it's early in the year, so no reason to kind of move that around or any other puts and takes that we should be mindful of? Thank you.

Gordon Mattingly
Gordon Mattingly
CFO at Corsair Gaming

You got it absolutely right. If you look at revenue for Q1, we're a little bit above the midpoint of guidance, but from a revenue perspective, no reason to change the annual guide. We're on track. From a profit perspective, you're absolutely right. It's pretty pleasing for us to have already banked 33% of the annual guide, 25% of the way through the year. But back to what you said at the outset, we're pretty early on through the year. The macro situation's a little bit uncertain, so we just feel that it's right to maintain the guide that we issued before, and we remain confident in that guidance.

Aaron Lee
Aaron Lee
Analyst at Macquarie

Okay, perfect. Thank you. Wanted to ask about AI. You know, you made some pretty interesting comments, you know, about the opportunity there. Can you just talk about your strategy to penetrate this TAM? Is this something that would require significant time or investment to unlock, or can you be pretty nimble? Thank you.

Thi La
Thi La
CEO at Corsair Gaming

Hey, Aaron. On AI workstation, this is a product line that we launched about two quarters ago. At the beginning of the category was still pretty new. There were a lot of education that needs to be done. Since then, a lot more LLM models became available to the market, and people are a lot more familiar with using AI to do their work, to, you know, establish very complex business model. Alongside with that, we started to see a much stronger awareness of the benefit of AI computing. Furthermore, the concern around security and the ability to just do local computing with AI, it's a lot higher, and the demand started to surface for our particular solution.

Thi La
Thi La
CEO at Corsair Gaming

A lot of the performance that we see in Q1 for the system side is really stemming from the awareness and the need of this new consumers, we call them prosumers, as well as SMB wanting to invest in the category. The category itself, we shared the TAM data in our earnings. It's a big market. It's just a question is, number one, the acceleration timeline and the availability of semiconductor.

Aaron Lee
Aaron Lee
Analyst at Macquarie

Great. Thank you very much.

Thi La
Thi La
CEO at Corsair Gaming

Thank you.

Operator

Thank you. Your next question comes from Drew Crum from Stifel. Please go ahead.

Thi La
Thi La
CEO at Corsair Gaming

Hi, Drew.

Drew Crum
Drew Crum
Analyst at Stifel

Okay, thanks. Good afternoon, everyone. Thi, just wanted to get your additional thoughts on updated expectations for when you think semiconductor supply will improve for your business. I think the language that you used was, it would be constrained near-term. Just any more detail there and how you're thinking about it beyond 2026, and then I have a follow-up.

Thi La
Thi La
CEO at Corsair Gaming

At this point, you know, the data that we use is pretty much very consistent with what the market is saying, sometime in 2027.

Thi La
Thi La
CEO at Corsair Gaming

Although in terms of availability for us, we will continue to be able to, you know, have access to memory, especially DRAM. The big question is around pricing, because you do see demand, basically track ASP of memory, for example. For us, when we talk about availability of semiconductor, it just means that the supply-demand picture is more balanced and you will see ASP normalize, and that's gonna bring in, we believe at this point, a much bigger accelerations in computing. For our business, that's very beneficial to see people coming back into the market. I think we just see right now just this pent-up demand on waiting for the ASP to normalize.

Drew Crum
Drew Crum
Analyst at Stifel

Got it. Okay. Thank you. My follow-up is pertaining to the improvement in mix from DTC at 20% of revenue. I think this has been a key initiative for the company for several years now. Are there specific drivers to move that percentage higher? Do you have an intermediate or longer-term target in terms of what it can represent as a percentage of your total revenue? Thanks.

Thi La
Thi La
CEO at Corsair Gaming

It yes. We have made a deliberate goal to get the B2C business to 25%, and we communicated this a few quarters ago. Since then, you know, we've grown from 18% now to 20% for exiting this Q1. That came from a number of activities or investments. The first one is M&A, right? A lot of our M&As companies are very strong in B2C. Number two is product strategy, where we put products on B2C versus the broader channel, and we increased marketing investments for our B2C business. The store that we opened in the Bay Area is the first retail format that we have for Corsair and all of our brands, and that's shown to be very successful.

Thi La
Thi La
CEO at Corsair Gaming

We also kicked off AI commerce, or AI e-commerce investment, to basically adapt to consumers' shopping behavior with the most recent change, and that's also been paying off.

Drew Crum
Drew Crum
Analyst at Stifel

Got it. Thank you.

Thi La
Thi La
CEO at Corsair Gaming

Thank you.

Operator

Thank you. Once again, if you would like to ask a question, please press star then one. Your next question comes from Colin Sebastian from Baird.

Analyst at Baird

Hey, this is Zach on for Colin. Thanks for the question. You disclosed that the double-digit sequential growth in a few KPIs for the Elgato Marketplace. You know, just stepping back, what type of applications are gaining the most traction with users, and how are you thinking about the longer-term opportunity there? Thanks.

Thi La
Thi La
CEO at Corsair Gaming

Yeah. We actually see a pretty broad range of products that are being submitted recently, and it's ranging from content creation, extensive use of Adobe Photoshop, for example, to gaming applications, so different kind of profiles to help you game better and even broadcasting voice, you know, video control, and including streaming software. Because the use case is so diverse and the Stream Deck platform is very flexible, I think people are very active in terms of adding content all the time. The bottleneck is almost to where we can curate the content and make it published, you know, fast enough. You know, this is the beauty of the solution is this can be anything. I think we lost Zach. Are we still on?

Analyst at Baird

Yeah, that was my only question. Thank you.

Thi La
Thi La
CEO at Corsair Gaming

Oh, thank you, Zach.

Analyst at Baird

Thanks.

Operator

Thank you. Once again, if you would like to ask a question, please press star then one. There are no other questions at this time. This does conclude our question and answer session. I would now like to turn the conference back over to CEO Thi La for any closing remarks.

Thi La
Thi La
CEO at Corsair Gaming

Thank you all for joining us today. We're proud of the start that we make in 2026 and look forward to updating you on our continued progress when we report Q2 results. Have a good evening.

Executives
    • David Pasquale
      David Pasquale
      Investor Relations Contact
    • Gordon Mattingly
      Gordon Mattingly
      CFO
    • Thi La
      Thi La
      CEO
Analysts
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