Corsair Gaming, Inc. Q1 FY2025 earnings call

• Andy Paul reported that Corsair met revenue and earnings targets for Q1 with $370 million revenue, ~10% growth over Q1 last year. • Successful initial integration of Fanatec into Corsair, with improved product availability, faster support, etc. • Discussed tariffs, noting little effect on consumer demand so far and encouraged by measured approach on semiconductors. • Mentioned home entertainment like gaming is less affected in recession than outside spending. • AI is having growing impact, with Elgato shipping AI-enhanced tools, AI integrated into wavelength, and support teams using AI-driven knowledge systems. • Thi La discussed Corsair's flexible multi-location manufacturing strategy, with only 19% of U.S. market products sourced from China in Q1 2025, expected to drop further. • Michael Potter reviewed financials, noting net revenue growth, improved margins, balance sheet strength, and completion of Fanatec integration efforts.

The Gamer and Creator Peripheral segment contributed $112 million of net revenue during the first quarter compared to $107 million in Q1 2024. The Gaming Components and Systems segment contributed $257.8 million of net revenue during the first quarter compared to $230.3 million in Q1 2024. Memory products contributed $141.1 million in Q1 2025 compared to $124.9 million in Q1 2024. Gross profit in the first quarter was $102.4 million compared to $86.6 million in Q1 2024, with gross margin increasing to 27.7% from 25.7%. Gross profit in the Gamer and Creator Peripheral segment was $46.4 million compared to $43.6 million in Q1 2024, with gross margin improving to 41.5% from 40.8%. The Gaming Components and Systems segment gross profit was $55.9 million compared to $43 million in Q1 2024, with gross margin at 21.7% compared to 18.7%. Memory products gross margins in this segment were 16.9% for the first quarter compared to 14.5% in Q1 2024.

• Given current uncertainty from tariffs and potential retaliatory actions, Corsair is not reaffirming full year 2025 financial guidance. • Intends to provide an update later in the year as visibility improves.

• Uncertainty regarding tariffs, as fluid situation could meaningfully affect consumer demand for building gaming PCs and buying peripherals. • Economic slowdown or recession involving layoffs and price increases could impact market growth.

Q: Has anything changed in terms of confidence in the hardware refresh cycle around the new NVIDIA GPUs and how Corsair has performed in past recessions?

A: Andy Paul said two-thirds of revenue comes from people building gaming PCs, with determining factor being cost of GPU and CPU. Tariff level of semiconductors is crucial. On recession, people tend to stay home, resort to home entertainment like gaming, so Corsair would be in reasonable situation.

Q: Any drivers of growth in peripherals and if momentum in Components segment will continue?

A: Andy Paul said growth in peripherals was driven by Fanatec acquisition. In Components segment, market was limited by availability of cards, and tariffs didn't start kicking in until end of quarter, but refresh cycle has started with 50 series cards from NVIDIA