Corsair Gaming, Inc. Q4 FY2024 earnings call

• Andy Paul noted Q4 had strong revenue and margins, with 50 Series Blackwell GPUs shipping and Fanatec acquisition integration. Gamer and creator business grew 20% YOY, Elgato doing well, Custom Labs initiative. Announced retirement, Thi La to be CEO effective July 1.
• Thi La expressed excitement about 2025 with Fanatec and NVIDIA 5000 series launch, having been with Corsair 14 years and leading growth.
• Michael Potter discussed financials, balanced inventory, Q4 and full year revenue, gross profit, margins, SG&A, R&D, adjusted metrics, and balance sheet with cash balance, inventory, and debt details.

The Gamer and Creator Peripherals segment contributed $169.6 million in net revenue during Q4 2024 compared to $136.8 million in Q4 2023. For the full year 2024, it was $472.7 million vs $394.9 million in 2023. Gross profit in Q4 2024 was $63.9 million vs $50.9 million in Q4 2023, with a gross margin of 37.7% vs 37.2% in Q4 2023. The Gaming Components and Systems segment had net revenue of $244.1 million in Q4 2024 vs $280.5 million in Q4 2023, and full year 2024 was $843.7 million vs $1.65 million in 2023. Memory products in Q4 2024 were $126.3 million vs $145.5 million in Q4 2023, and full year 2024 was $429.9 million vs $517.4 million in 2023. Gross profit for Gaming Components and Systems in Q4 2024 was $44.3 million vs $51.8 million in Q4 2023, with a gross margin of 18.1% vs 18.5% in Q4 2023. Memory products in this segment had a gross margin of 15.3% in Q4 2024 vs 13.5% in Q4 2023.

For full year 2025, expected total revenue in the range of $1.4 billion to $1.6 billion, adjusted operating income in the range of $67 million to $87 million, and adjusted EBITDA in the range of $80 million to $100 million. Expect revenue growth, margin improvement, and impact of tariffs mitigated through source location, supplier adjustments, and price increases.

• Forward-looking statements may differ from actual results due to various risks and uncertainties. - Uncertainties in market conditions affecting revenue and margins. - Impact of tariffs on supply chain and costs, though Corsair has mitigated previous tariff impacts.

Q: Thanks for taking my question. Andy, congratulations on a storied career... Is the Fanatec acquisition still on track?

A: Yeah. Well, thanks for the kind words, Aaron. So in terms of the integration, we are largely through it. The -- two parts, right? One was to sort out the customer service aspects. We've largely done that. And the second part of it is to integrate them in with our systems. Some of that is just sort of nice to have like putting them in with our financial system, so you can track things better. The other part of it is just better logistics. So we're getting there. I think in terms of getting them back to where they were, we're pretty much there now. However, the potential of expansion is really what we're working on now and that's a combination of reengaging with -- or engaging with retail, which they hadn't done before. And secondly, engaging with the network of people that actually build the complete sim rigs for customers. So those are things we're looking forward to. But I would say that having discussed it with our wholesales channel and our retailers, everyone is super excited about this opportunity.

Q: Hey, Andy. Thanks for working with you in the past, and wish you all the best. And Thi, welcome to the CEO position and look forward to working with you. Just two quick ones. Firstly, obviously, top of mind in terms of the GPU refresh in the first half and especially kind of a bit more selling momentum into the second quarter. Can you kind of unpack and maybe give more color just in terms of cadence kind of for -- you gave a range for the revenue low end and the high end. Just curious kind of what's going to drive towards the high end of the guidance for the full year and just how to think about the cadence for the GPU refresh?

A: Yeah. So look, this is -- we've been talking for a while about the fact that there's a lot of pent up demand for this GPU refresh. The way I was thinking about it was that, all the -- anytime you look back or you look across at what people are using, we always talk about the average -- the average refresh time being sort of three to five years for gaming stuff. But of course, that's an average and there's going to be people with 10 year old gear and seven year old gear. I think what happened before COVID or at COVID was all the people with old gear renewed it. And so we've had sort of a skewed distribution since COVID. But if you think about it, we're now three years exactly since the start of COVID or almost three years, and we're five years -- sorry, five years from the beginning of it, three years to the end of it. So we're now right into that point where the big bulge is really ready to upgrade. And so I think there's been huge anticipation with the 50 series cards. And I think it's funny watching the media comparing the 50 series cards with 40 series cards, but that's not what consumers are thinking about. Most consumers have got 20 series and 30 series cards, and so they're going to be upgrading five year old gear. So in terms of the cadence, we don't know exactly what NVIDIA's plans are. I mean, they've been sold out fairly limited quantities in January. Those were sold out in hours. And so I think that the big volume is going to be when the 5070 and 5070 Ti get -- start to get shipped, the more affordable one. So I think in terms of volume for us, it's going to be gradual pickup through the year. At the moment, I'd say, for the last two months, we've been kind of sold out on some of our component SKUs, power supplies and memory. So we're seeing pretty good activity in terms of the channel bringing products in. But I think it's going to -- I think we're looking forward here to a -- the next two years of solid refresh activity. That's the way I think about it. It's not going to be a one quarter blip or anything like that.