Turtle Beach Q2 2026 Earnings Report

Turtle Beach EPS Results

• Actual EPS: -$0.38
• Consensus EPS: -$0.30
• Beat/Miss: Missed by -$0.08
• One Year Ago EPS: N/A

Turtle Beach Revenue Results

• Actual Revenue: $56.37 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Turtle Beach Announcement Details

• Quarter: Q2 2026
• Date: 8/6/2026
• Time: After Market Closes
• Conference Call Date: Thursday, August 6, 2026
• Conference Call Time: 4:30PM ET

Turtle Beach (NASDAQ:TBCH) (NASDAQ:TBCH) is a global developer, manufacturer and distributor of gaming audio peripherals, specializing in headsets, microphones and audio accessories for PC, console and mobile platforms. The company’s product lineup spans wired and wireless gaming headsets, mixing stations, sound cards and accessories designed to enhance the immersive experience for casual and professional gamers alike.

Founded in 1975 and headquartered in San Diego, California, Turtle Beach has built a longstanding reputation in audio innovation. In 2019, the company expanded its portfolio with the acquisition of ROCCAT, a German gaming peripheral brand, broadening its reach into high-performance keyboards, mice and mouse pads. These strategic moves have enabled Turtle Beach to strengthen its position across multiple hardware categories within the competitive gaming market.

Turtle Beach operates through a network of regional distributors and retail partners across North America, Europe and Asia-Pacific, leveraging both brick-and-mortar channels and direct-to-consumer e-commerce platforms. Under the leadership of CEO Juergen Stark, the company focuses on continual product development and new market opportunities in e-sports and live streaming segments. Turtle Beach’s commitment to audio quality and innovation positions it as a key player in the global interactive entertainment industry.

Turtle Beach Q2 2026 Earnings Call Transcript

Key Takeaways

• Second-quarter revenue was $56.4 million, essentially flat year over year, as retailers continued reducing inventory through much of the period before showing signs of stabilization.
• Gross margin improved to 38.8% from 32.2%, aided by $4.3 million in tariff refunds; excluding the refunds, margin was approximately 31.2% but still improved sequentially, with management expecting mid-to-high-30% margins in the second half.
• Management reaffirmed full-year 2026 guidance of $335 million–$355 million in revenue and $44 million–$48 million in adjusted EBITDA, citing improving sell-through, low channel inventory, Nintendo Switch 2 momentum, and major upcoming game releases including GTA 6 and Call of Duty: Modern Warfare 4.
• New products, including the Stealth Pro 2 headset and Nintendo Switch 2 accessories, are gaining share, while early third-quarter retail sell-through is reportedly growing year over year across key categories.
• The company increased marketing investments and reported a $7.3 million net loss, while upcoming holiday inventory purchases are expected to consume cash; however, Turtle Beach also repurchased approximately $25 million of stock during the quarter and has $31 million remaining under its authorization.

Presentation

[Operator]

Good day, ladies and gentlemen. Thank you for standing by. We welcome you to the Turtle Beach Corporation Second Quarter 2026 Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the prepared remarks presentation. As a reminder, the conference is being recorded. I will now turn the call over to Jacques Cornet from investor relations team. Jacques, you may begin.

[Jacques Cornet, Managing Director of Investor Relations at ICR]

Thank you, operator. On today's call, we'll be referring to the press release filed this afternoon that details the company's second quarter 2026 results, which is available on the news page of the company's investor relations website, corp.turtlebeach.com, where you'll also find the latest earnings presentation that supplements the information discussed on today's call. Finally, a recording of the call will be available in the Events and Presentation section of the company's investor relations website later today. Please be aware that some of the comments made during this call may include forward-looking statements within the meaning of the federal securities laws. Statements about the company's beliefs and expectations containing words such as may, will, could, believe, expect, anticipate, and similar expressions constitute forward-looking statements.

[Jacques Cornet, Managing Director of Investor Relations at ICR]

These statements involve risks and uncertainties regarding the company's operations and future results that could cause Turtle Beach Corporation's results to differ materially from management's current expectations. While the company believes that its expectations are based upon reasonable assumptions, numerous factors may affect actual results and may cause results to differ materially. Company encourages you to review the safe harbor statements and risk factors contained in today's press release and in its filings with the Securities and Exchange Commission, including, without limitation, the annual report on Form 10-K and other periodic reports, which identify specific risk factors that also may cause actual results or events to differ materially from those described in our forward-looking statements. Company does not undertake to publicly update or revise any forward-looking statements after this conference call. Company also notes that on this call, it will be discussing non-GAAP financial information.

[Jacques Cornet, Managing Director of Investor Relations at ICR]

Company is providing that information as a supplement to information prepared in accordance with accounting principles generally accepted in the United States or GAAP. You can find a reconciliation of these metrics to the company's reported GAAP results in the reconciliation tables provided in today's earnings release and the presentation. Hosting the call today are Cris Keirn, Chief Executive Officer, and Andrew Clipsham, Interim Chief Financial Officer. With that, I'll turn the call over to Cris.

[Cris Keirn, CEO at Turtle Beach]

Thanks, Jacques. Good afternoon, everyone, and welcome to our second quarter 2026 earnings call. During the second quarter, we continued executing against the strategic priorities we've outlined throughout the year. We expanded our product portfolio, advanced our brand transformation, returned significant capital to shareholders through share repurchases, and prepared Turtle Beach for what we believe will be a stronger demand environment in the second half of 2026. Revenue for the quarter was $56.4 million, essentially flat year-over-year. Continuing the trends we discussed on our last call, retail partners remained disciplined in managing inventory through much of the quarter, with further reductions in channel inventory through the first half of Q2. As the quarter progressed, however, we began to see encouraging signs that retailers have now stabilized inventory ahead of what we expect will be a stronger second half of the year.

[Cris Keirn, CEO at Turtle Beach]

We believe the combination of historically low channel inventory, improving early Q3 sell-through trends, and the industry's upcoming content releases create a favorable setup for the second half of the year. Together, these factors prepare the business for a return to growth during the back half of 2026. One of the defining characteristics of Turtle Beach in 2026 has been the pace of innovation across our portfolio. We are delivering a significant increase in new product introductions this year, and we're encouraged by the early performance of those models. The launch of Stealth Pro II, our new flagship headset, added share in the premium price tier for U.S. gaming headsets, supported by our new brand initiatives and building on the exceptional pre-order demand we mentioned in our previous call.

[Cris Keirn, CEO at Turtle Beach]

We also recently announced the industry's first officially licensed wireless gaming headset for Nintendo Switch 2, further reinforcing Turtle Beach's leadership in gaming audio and our collaborative partnership with Nintendo. In addition to this latest audio innovation, our new Nintendo Switch 2 controllers and incremental retail placements drove year-over-year U.S. share growth in Nintendo controllers for the quarter, building momentum for Turtle Beach in this key growth segment. More importantly, these launches, with more to be announced, strengthen our leadership heading into what we believe will be one of the strongest gaming content calendars in years.

[Cris Keirn, CEO at Turtle Beach]

Looking ahead, Grand Theft Auto VI remains on track for its confirmed November launch, while Call of Duty: Modern Warfare 4 has been confirmed to launch in October. Rather than simply benefiting from the increased demand these releases have historically generated, we've spent the past several quarters aligning our product roadmap, brand investments, retail distribution, and operations to proactively set up Turtle Beach for the anticipated increase in gamer engagement. With GTA VI launching first on consoles, we believe Turtle Beach is particularly well-positioned given our leadership across console gaming accessories and the timing of our newest product introductions as the market strengthens. Capital allocation also remained an important area of execution throughout the quarter. Following the refinancing of our credit facilities in May, we repurchased approximately $25 million of our common stock during the second quarter.

[Cris Keirn, CEO at Turtle Beach]

Those repurchases reflect our disciplined approach to capital allocation and our continued belief that the market does not fully recognize the long-term value of Turtle Beach. With approximately $31 million remaining under our current authorization, we will continue balancing opportunistic share repurchases with investments that support long-term value creation for the growth opportunities ahead. Given our confidence in our new product pipeline, the strength of the second-half gaming release calendar, and our expectation that channel inventories will rebuild toward more normalized levels, we are reaffirming our full-year 2026 guidance.

[Cris Keirn, CEO at Turtle Beach]

Before turning to the financials, I'd like to introduce Andrew Clipsham, our recently appointed Interim Chief Financial Officer. Andrew has been with Turtle Beach for nearly eight years and brings more than 20 years of global financial leadership experience. Throughout his time with the company, he has played an important role in strengthening our financial operations and supporting many of the strategic initiatives we've discussed over the past several years. I'm pleased to welcome Andrew to his first earnings call as Interim CFO. With that, I'll turn it over to Andrew to provide additional details on our second quarter financials.

[Andrew Clipsham, Interim CFO at Turtle Beach]

Thank you, Cris, and good afternoon, everyone. It's a pleasure to be joining you today as Interim Chief Financial Officer. Second quarter revenue was $56.4 million, which is broadly unchanged from $56.8 million in the prior year period. While retail inventory levels remained below historical norms through much of the quarter, we began to see improving retail ordering patterns as we moved through the period. Gross margin for the quarter was 38.8%, an increase of 660 basis points compared to 32.2% in the prior year quarter. Gross margins benefited from approximately $4.3 million of a total $8.2 million of tariff refunds received during the period. Excluding one-time items, our underlying gross margin profile continues to reflect the benefits of the structural improvements we've made over recent years through product mix optimization, supply chain initiatives, and disciplined pricing actions.

[Andrew Clipsham, Interim CFO at Turtle Beach]

For the balance of the year, we continue to expect gross margins to remain within our targeted mid to high 30% range. As our newest products scale through the second half of the year and revenue increases seasonally, we expect those operating improvements and positive product mix to become increasingly evident. The recently announced tariff action increases the effective tariff rate on imports from China and Vietnam to approximately 12.5% from the prior 10% level. While we continue to monitor the trade environment closely, the actions we've taken over the past year to diversify our supply chain and optimize sourcing provide confidence that we can largely mitigate these changes without a material impact on profitability. Operating expenses were $24.9 million, or 44% of revenue, compared to $18.6 million, or 33% of revenue in the prior year quarter.

[Andrew Clipsham, Interim CFO at Turtle Beach]

The increase primarily reflects higher marketing investments supporting our expanded product launch schedule and brand initiatives together with higher general and administrative expenses compared to the prior year quarter that included a one-time insurance recovery. The marketing investments are consistent with the strategy we've outlined throughout the year and are intended to support long-term growth rather than near-term revenue. Net loss for the quarter was $7.3 million compared to $2.9 million in the prior year period. This quarter's loss reflects increased marketing investments during the period to support our brand and 2026 product roadmap, together with modestly higher interest expense. The prior year quarter included a one-time insurance recovery, which partially offset the net loss for that period. This recovery was adjusted out of prior year EBITDA. Adjusted EBITDA for the quarter was $1.3 million compared to -$3.0 million in the prior year period.

[Andrew Clipsham, Interim CFO at Turtle Beach]

The year-over-year improvement reflects the stronger gross margins presented in these results. Turning to the balance sheet, at June 30, net debt was $64.4 million, consisting of $83.9 million of outstanding debt and $19.6 million of cash. Operating cash inflow for the quarter was $6.5 million, compared to an operating cash outflow of $3.1 million during the prior year period. Our revolving credit facility remained undrawn at quarter end. As we announced in May, we completed the refinancing of our credit facilities to increase financial flexibility and better align our capital structure with our long-term capital allocation priorities. The new structure provides up to $80 million in an asset-based revolving facility, as well as an $85 million term loan, supporting both operational flexibility and our ongoing share repurchase strategy.

[Andrew Clipsham, Interim CFO at Turtle Beach]

During the second quarter, we repurchased approximately $25 million of common stock, representing nearly two million shares at an average purchase price of $12.53. Following these repurchases, approximately 17.9 million shares remained outstanding, with approximately $31 million remaining available under our current buyback authorization. As Cris mentioned, we continue to view share repurchases as an important component of our capital allocation framework. At the same time, we'll remain disciplined in balancing those repurchases with investments that support future growth. Turning to guidance, we are reaffirming our full-year 2026 outlook. Revenue is expected to remain in the range of $335 million-$355 million, while adjusted EBITDA is expected to be between $44 million and $48 million. As is typical for Turtle Beach, we expect the majority of our revenue to be generated in the second half of the year.

[Andrew Clipsham, Interim CFO at Turtle Beach]

This year's revenue cadence is expected to be more heavily weighted towards the back half than our historical seasonal pattern, reflecting the timing of our expanded new product introductions, improving channel inventory levels, and the industry's major software releases, including Grand Theft Auto VI. While we currently expect the third quarter to contribute a percentage in the mid to high 20s of full-year revenue, the precise timing of retailer holiday inventory load-ins can shift revenue between the third and fourth quarters. This is a normal feature of our business, is reflected in our guidance, and does not affect our expectations for the full year. With that, I'll turn the call back to Cris.

[Cris Keirn, CEO at Turtle Beach]

Thanks, Andrew. As we look toward the second half of 2026, our priorities remain clear. We are focused on executing our product roadmap, supporting our retail partners through the holiday season, continuing to invest behind the Turtle Beach brand, and allocating capital with discipline. The work we've completed over the past several years has created a stronger company with a broader product portfolio, improved operating leverage, and greater financial flexibility.

[Cris Keirn, CEO at Turtle Beach]

While the overall gaming accessories market has remained challenged over the past several quarters, we believe the industry is entering a more favorable period, supported by an improving content release calendar, momentum around Nintendo Switch 2, and the anticipated launch of Grand Theft Auto VI and other titles. As those industry catalysts develop, our focus remains on translating revenue growth into expanding profitability and long-term shareholder value through disciplined execution. As always, I'd like to thank our employees for their strong delivery towards our goals, our retail and strategic partners for their collaboration, and our shareholders for their continued support. With that, operator, we can open the call for Q&A.

[Operator]

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Our first question is from Drew Crum from B. Riley Securities. Please proceed with your question. Perhaps you are on mute and would need to unmute your device to ask your question.

[Drew Crum, Analyst at B. Riley Securities]

Okay. Let me try that again. Thanks, everyone. Good afternoon. Andrew, welcome to the call. Appreciate the detail on the retail inventory dynamics you noted. One month into 3Q, can you talk about any observations, what you've seen in terms of willingness on the part of retailers to replenish, or that's something you're anticipating later in the quarter? I have a follow.

[Cris Keirn, CEO at Turtle Beach]

Hi, Drew. Yeah, thanks for your question. Good to hear from you. Yes, we are seeing positive signs here to start Q3. We're a month in here. What we have seen is really since the pre-orders for GTA VI started. While we haven't received the market data yet, obviously that won't come out until in a few weeks here in August from Circana. We do have the reported sell-through from retail that we get on a weekly basis. We've seen since that pre-order started, weekly year-over-year growth in the business.

[Cris Keirn, CEO at Turtle Beach]

That's been a very positive sign for us. We're seeing that momentum continue here into August, the very early part of August. We're pleased to see that development. In addition, the channel inventory dynamics that we saw in the first quarter, that really continued until about midpoint in the second quarter, appear to be behind us. We've seen a nice stabilization of those numbers. Knowing what's coming up in the back half with not only GTA VI but some other really strong titles, we feel that'll be a nice tailwind for the business moving forward.

[Drew Crum, Analyst at B. Riley Securities]

Got it. Okay. Appreciate that. Just a quick follow-up. I know that the business typically uses cash in 3Q. Can you talk about your ability to continue to buy shares given the cash flow dynamics of the business?

[Andrew Clipsham, Interim CFO at Turtle Beach]

Near term.

[Cris Keirn, CEO at Turtle Beach]

Absolutely. As you mentioned, we are getting to that period of time where we start to build inventory for holiday. You may see in the numbers, we've had a good reduction of inventory year-over-year. Up to this point in the year, we're about $20 million of inventory lower than we were at this time last year. If you remember, we had purchased ahead a good amount of inventory at that time, in anticipation of the tariffs, which turned out to be a very good move for the company. Where we are now, we feel good about our inventory levels, but we are going to be committing more of that cash to the inventory build coming up. Particularly with the growth that we expect to see in Q3 and Q4 due to the titles that are going to be releasing here in the back half.

[Drew Crum, Analyst at B. Riley Securities]

Got it. Okay. Thanks, guys.

[Cris Keirn, CEO at Turtle Beach]

Thanks so much, Drew.

[Operator]

Our next question is from Sean McGowan with ROTH Capital Partners. Please proceed with your question.

[Sean McGowan, Analyst at ROTH Capital Partners]

Thank you. Hi, Cris, Andrew. Question about costs. You gave us an idea of what to expect in terms of third quarter revenue relative to the full year, but can you talk a little bit about the phasing of costs, particularly selling and marketing? Is that going to be more skewed to the fourth quarter than typical?

[Cris Keirn, CEO at Turtle Beach]

Yeah. Hi, Sean. Thanks for your question. It's a great question, especially considering the dynamics we've got coming up. We have put more of the budget towards sales and marketing in the first half. There's two reasons for that. Number one, as we mentioned previously, we have a lot of new product launches this year. We've announced several of those. We've got more announcements coming here later this year. Secondly, we've launched the new brand initiatives, which we've seen some really great early reception and results from on those initiatives.

[Cris Keirn, CEO at Turtle Beach]

So we have increased our spend so far this year. We do anticipate continuing some of that spend as we get into the back half, particularly with the opportunities that some of the new games are going to present. Some of the lift that we've seen in the past, we talked a little on the last call about this, about the historical lift that we've seen from a game like "GTA VI." We will be continuing kind of the same level of spend that you've seen increase from us in the first half. You'll see similar kind of numbers in the second half, and that's all included in our guide.

[Sean McGowan, Analyst at ROTH Capital Partners]

Okay. Another cost question. Was there anything in the G&A number in the second quarter that was kind of a benefit or an offset, or is that kind of a real number that we can expect to see maybe somewhat higher than that, but it was lower than I thought it would be. Good job, but was there something in there that was sort of an unusual benefit?

[Andrew Clipsham, Interim CFO at Turtle Beach]

Hi, Andrew here. There's nothing there that's a significant benefit. In fact, we are lapping a benefit in G&A of the prior year where we received an insurance recovery from an incident that happened towards the end of 2024. The levels of G&A that we see at the moment are consistent. There's nothing special in there, and we expect to see similar levels through the rest of the year.

[Sean McGowan, Analyst at ROTH Capital Partners]

Thanks. That's helpful. My last question is, you are launching a lot more products than last year and more than normal. How has that gone as they kind of move through the system? Any glitches so far, or have things been pretty smooth?

[Cris Keirn, CEO at Turtle Beach]

We've been pleased with the performance of those products so far. Particularly Stealth Pro II, we talked about that. That's our new flagship headset. Really strong pre-orders on that. We've seen some nice share growth in that premium tier, which has been growing and continues to grow as a larger part of the market. In addition to that, we've had launches across multiple other categories. I would say that the largest benefit we've seen thus far has been a lot of our new Nintendo launches are doing quite well on both the controller side and some of the other accessories that we've launched there.

[Cris Keirn, CEO at Turtle Beach]

We've also recently announced we've got the first wireless headset coming out for Nintendo Switch 2, so we're really excited about that. We see a lot of potential for Nintendo Switch 2 sales continuing into the back half of the year. In that category, we've mentioned in the past that typically you see a lot of first-party sales at the launch of the console, and then as you get further into the life cycle, you start to realize some of the shift into products like ours. We're certainly seeing that in Q2 with some nice share gains in that space. We're excited about what's moving forward with Switch 2 and the momentum that we see there.

[Sean McGowan, Analyst at ROTH Capital Partners]

Okay. Thank you very much.

[Cris Keirn, CEO at Turtle Beach]

Thanks, Sean.

[Operator]

Once again, if you would like to ask a question, please press star one on your telephone keypad. Our next question is from Jack Codera with Maxim Group LLC. Please proceed with your question.

[Jack Codera, Analyst at Maxim Group]

Hi, thanks. This is Jack Codera calling in for Jack Vander Aarde. Thanks for taking my questions. A quick question on the gross margin. If you back out the tariff impact, it was closer to around, call it 32%. How should we think about those 660-odd basis points? Was that entirely accrued from 2025? I guess the real question is: what would you say the real second quarter gross margin was?

[Andrew Clipsham, Interim CFO at Turtle Beach]

If we are to back out the effects of the tariff refunds received, you're correct. We're looking at about 31.2% gross margin for the quarter, which is still an increase on the previous quarter, which was running at 26.8%. We're seeing a steady growth in our gross margin, and we do expect to keep gross margins in line with our guidance for the back half of this year.

[Cris Keirn, CEO at Turtle Beach]

Just to add to that, Jack, we thought we'd be ending up in roughly the low 30s. We had some comments on the last call about that. We weren't sure of the timing of the tariff refunds at that point. Good to see those come in and provide that benefit here in Q2. As you look ahead for the full year, we still believe that we're going to end up in that target range that we have of mid to high 30s. We think there's an opportunity to even improve slightly on last year's margins, which were quite strong for the full year. We're encouraged with the progress we're seeing there, and we'll continue to work on that front.

[Jack Codera, Analyst at Maxim Group]

That's super helpful. If you could kind of give an update on all the segments. Obviously, we have the huge Catalyst GTA, which seems like it's not going to be delayed, knock on wood. You mentioned the weekly year-over-year growth. Are you seeing that across your different segments? Is it kind of rising tide rises all boats? How are you seeing simulation controllers? Any color on those segments would be very helpful.

[Cris Keirn, CEO at Turtle Beach]

We're seeing it really, all boats are rising here with increased engagement. I think also anticipation of upcoming engagement here in the back half of the year from gamers. Just giving you a quick breakdown on the different categories. Headsets in particular, when you look at lift that happened with GTA V, it was very strong lift across headsets. We're starting to see that come in. The headset market's been roughly flat year-to-date. We do anticipate, and the initial numbers we're seeing out of Q3 would indicate that that is going to continue to increase now as we get further into Q3. Controllers are also doing quite well with the overall shift to third-party controllers as we get further into the life cycle for Switch 2, as an example.

[Cris Keirn, CEO at Turtle Beach]

We're seeing nice, strong demand there in the controller space. Across the remainder of our business is about 10%. The remaining 10% or so of the business is where our head devices, mice, keyboards, and sim products reside. We're seeing nice share gains in the sim space year-over-year. Those products continue to do well with some of the retail placements that we were able to get on those at the time of launch. It's really more of a factor of all boats appear to be rising here across the categories.

[Jack Codera, Analyst at Maxim Group]

Okay. Thank you for taking my questions. Take care.

[Cris Keirn, CEO at Turtle Beach]

Thanks, Jack.

[Operator]

We have reached the end of the question and answer session. I would like to turn the floor back over to Cris Keirn for closing remarks.

[Cris Keirn, CEO at Turtle Beach]

Thank you for your interest in Turtle Beach, everyone, and have a great day.

[Operator]

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your patience.

Participants

Executives

• Cris Keirn, CEO
• Andrew Clipsham, Interim CFO

Analysts

• Jacques Cornet, Managing Director of Investor Relations at ICR
• Drew Crum, Analyst at B. Riley Securities
• Sean McGowan, Analyst at ROTH Capital Partners
• Jack Codera, Analyst at Maxim Group