Corsair Gaming, Inc. ("Corsair" or the "Company"), a leading global provider and innovator of high-performance gear for gamers and content creators, today announced financial results for the quarter ended September 30, 2022. Andy Paul, Chief Executive Officer of Corsair, stated, "We achieved 10% sequential revenue growth from Q2 2022 to Q3 2022, while significantly reducing our channel inventory in what remains a challenging environment. Sales out levels from our Channel to Consumers were significantly above pre-pandemic levels in almost all product lines and were above the year ago level in many of our product categories.

As we mentioned in previous quarters, the self-built PC market has been held back over the past 2 years, as high demand for GPU cards from crypto miners caused GPU prices to rise and in some cases double. Now that Crypto mining can no longer utilize graphics cards as they used to, GPU demand has since normalized resulting in a decline in prices back to standard MSRP or below. We are already seeing the positive effects of this on the market.Additionally, in recent weeks, there have been launches of new technology platforms from Nvidia, AMD and Intel, and this has immediately accelerated the self-built PC market. This is because our enthusiast customers can now build a better and faster gaming PC for a lower cost than they could over the last 2 years.

For gaming PCs built with these new platforms there is a need for faster memory such as DDR5, larger power supplies with 1000 W capability or higher, and better cooling technology, all product categories that we are expert in, and have high market share.

For peripheral and streaming product lines, we are also seeing the market pick up, and while earlier in the year we saw consumer sales levels that were 15% to 20% down from last year, in the United States we now see a recovery to almost the same levels as last years as we move through the second half of the year. Europe is clearly a weaker market than the United States and Asia, since they have low consumer confidence levels because of the war and currency pressure have caused price rises in most consumer electronics products.

Longer term we expect to further benefit from the expansion in the gaming market's number of active consumers during the pandemic, which we believe will drive a higher spending base over the next few years."

Michael G. Potter, Chief Financial Officer of Corsair, stated, "We remain in a challenging environment in Q4 2022, with the strengthening of the US dollar against other currencies and continued weakness in Europe being headwinds for us. Worldwide channel inventory levels improved during Q3, removing much of the overhang from orders placed due to longer lead-times in prior periods caused by the effects of the COVID pandemic. We also reduced our own inventory by about 15% quarter over quarter, as we drive our inventory to more historic normalized levels. We are starting to benefit from the cost actions we announced last quarter, along with the success of newer products we recently released, which we believe will have a significant positive effect on margins moving forward, some of which we realized in Q3 2022. We are also encouraged by the improving supply chain environment, including a significant reduction in freight rates and supply chain lead times, which are rapidly approaching the same levels as they were pre pandemic."

Financial Outlook
For the full year 2022, we currently expect:

• Net revenue to be in the range of $1.325 billion to $1.375 billion.
• Adjusted operating income to be in the range of $20 million to $30 million.
• Adjusted EBITDA to be in the range of $35 million to $45 million.

Certain non-GAAP measures included in our financial outlook were not reconciled to the comparable GAAP financial measures because the GAAP measures are not accessible on a forward-looking basis. We are unable to reconcile these forward-looking non-GAAP financial measures to the most directly comparable GAAP measures without unreasonable efforts because we are currently unable to predict with a reasonable degree of certainty the type and extent of certain items that would be expected to impact GAAP measures for these periods but would not impact the non-GAAP measures. Such items may include stock-based compensation charges, depreciation and amortization, inventory write-down charges and other items. The unavailable information could have a significant impact on our GAAP financial results.

The foregoing forward-looking statements reflect our expectations as of today's date. Given the number of risk factors, uncertainties and assumptions discussed below, actual results may differ materially. We do not intend to update our financial outlook until our next quarterly results announcement.

Recent Developments

• Commenced sales of the CORSAIR VOYAGER a1600 AMD Advantage Edition laptop on the CORSAIR webstore and from distributors worldwide. The CORSAIR VOYAGER a1600 features state-of-the-art AMD processor and graphics for mobile systems working in tandem using exclusive AMD smart technologies, alongside CORSAIR and Elgato software and technologies, to create a gaming and streaming experience like no other.
• Launched the new XENEON FLEX 45WQHD240 OLED Gaming Monitor, a flagship bendable gaming monitor created in close partnership with LG Display. Boasting the latest in W-OLED technology, the XENEON FLEX OLED offers phenomenal image quality, excellent black levels and response times, with the ability for enthusiasts to manually adjust the curvature of its 45 in 21:9 aspect ratio panel.
• Unveiled the CORSAIR K100 AIR Wireless Mechanical Gaming Keyboard, CORSAIR's thinnest high-performance keyboard ever. From its elegant brushed aluminium frame to its versatile connectivity options for multiple devices, the K100 AIR delivers a modern, premium experience that meets the needs of gamers and productivity focused consumers alike.
• Announced the wide-ranging compatibility of CORSAIR's PC components with Nvidia's newly announced 40-series graphics cards, including the revolutionary RTX 4090. From power supplies able to drive the world's most powerful gaming systems, to stylish and capable gaming cases and a huge array of cooling options and accessories, CORSAIR offers the hardware to power, house, and cool the world's most powerful graphics cards.

Forward Looking Statements
Except for the historical information contained herein, the matters set forth in this press release are forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, Corsair's expectations regarding market headwinds and tailwinds, its substantial progress to reduce inventory levels, its belief that the self-built gaming PC market will continue to improve, its expectations regarding the end of the year 2022 and 2023, whether consumers that entered the gaming market during the pandemic will positively impact Corsair's results and market, its ability to continue to release innovative and what it believes to be industry leading products, whether cost actions will benefit margins and its estimated full year 2022 net revenue, adjusted operating income and adjusted EBITDA. Forward-looking statements are based on our management's beliefs, as well as assumptions made by, and information currently available to them. Because such statements are based on expectations as to future financial and operating results and are not statements of fact, actual results may differ materially from those projected. Factors which may cause actual results to differ materially from current expectations include, but are not limited to: the impact the COVID-19 pandemic, including the potential end of the pandemic and the cessation of pandemic-related restrictions, will have on demand for our products as well as its impact on our operations and the operations of our manufacturers, retailers and other partners, and its impact on the economy overall, including capital markets; our ability to build and maintain the strength of our brand among gaming and streaming enthusiasts and our ability to continuously develop and successfully market new gear and improvements to existing gear; the introduction and success of new third-party high-performance computer hardware, particularly graphics processing units and central processing units as well as sophisticated new video games; fluctuations in operating results; the risk that we are not able to compete with competitors and/or that the gaming industry, including streaming and esports, does not grow as expected or declines; the loss or inability to attract and retain key management; the impact of global instability, such as the war between Russia and Ukraine, and any sanctions or other geopolitical tensions that may result therefrom; delays or disruptions at our or third-parties' manufacturing and distribution facilities; currency exchange rate fluctuations or international trade disputes resulting in our gear becoming relatively more expensive to our overseas customers or resulting in an increase in our manufacturing costs; general economic conditions that adversely effect, among other things, the financial markets and consumer confidence and spending; and the other factors described under the heading "Risk Factors" in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2022 filed with the Securities and Exchange Commission ("SEC") on or about the date hereof and our subsequent filings with the SEC. Copies of each filing may be obtained from us or the SEC. All forward-looking statements reflect our beliefs and assumptions only as of the date of this press release. We undertake no obligation to update forward-looking statements to reflect future events or circumstances. Our results for the quarter ended September 30, 2022 are also not necessarily indicative of our operating results for any future periods.

Use and Reconciliation of Non-GAAP Financial Measures
To supplement the financial results presented in accordance with GAAP, this earnings release presents certain non-GAAP financial information, including adjusted operating income (loss), adjusted net income (loss), adjusted net income (loss) per diluted share and adjusted EBITDA. These are important financial performance measures for us, but are not financial measures as defined by GAAP. The presentation of this non-GAAP financial information is not intended to be considered in isolation of or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

We use adjusted operating income (loss), adjusted net income (loss), adjusted net income (loss) per share and adjusted EBITDA to evaluate our operating performance and trends and make planning decisions. We believe that these non-GAAP financial measures help identify underlying trends in our business that could otherwise be masked by the effect of the expenses and other items that we exclude in such non-GAAP measures. Accordingly, we believe that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects, and allowing for greater transparency with respect to the key financial metrics used by our management in our financial and operational decision-making. We also present these non-GAAP financial measures because we believe investors, analysts and rating agencies consider it useful in measuring our ability to meet our debt service obligations.

Our use of these terms may vary from that of others in our industry. These non-GAAP financial measures should not be considered as an alternative to net revenue, operating income (loss), net income (loss), cash provided by operating activities, or any other measures derived in accordance with GAAP as measures of operating performance or liquidity. Reconciliations of these measures to the most directly comparable GAAP financial measures are presented in the attached schedules.

We calculate these non-GAAP financial measures as follows:

• Adjusted operating income (loss), non-GAAP, is determined by adding back to GAAP operating income (loss) the acquisition accounting impact related to recognizing acquired inventory at fair value, change in fair value of contingent consideration for business acquisitions, inventory reserve in excess of normal run rate to address overhang in the channel, stock-based compensation, amortization, certain acquisition-related and integration-related costs, restructuring costs, non-deferred offering costs, debt modification costs and other financing related costs.
• Adjusted net income (loss), non-GAAP, is determined by adding back to GAAP net income (loss) the acquisition accounting impact related to recognizing acquired inventory at fair value, change in fair value of contingent consideration for business acquisitions, inventory reserve in excess of normal run rate to address overhang in the channel, stock-based compensation, amortization, certain acquisition-related and integration-related costs, restructuring costs, non-deferred offering costs, debt modification costs, loss on extinguishment of debt, other financing related costs and the related tax effects of each of these adjustments.
• Adjusted net income (loss) per diluted share, non-GAAP, is determined by dividing adjusted net income (loss), non-GAAP by the respective weighted average shares outstanding, inclusive of the impact of other dilutive securities.
• Adjusted EBITDA is determined by adding back to GAAP net income (loss) the acquisition accounting impact related to recognizing acquired inventory at fair value, change in fair value of contingent consideration for business acquisitions, inventory reserve in excess of normal run rate to address overhang in the channel, stock-based compensation, certain acquisition-related and integration-related costs, restructuring costs, non-deferred offering costs, debt modification costs, other financing related costs, amortization, depreciation, interest expense (including loss on extinguishment of debt) and tax expense (benefit).

We encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure and to view these non-GAAP financial measures in conjunction with the related GAAP financial measures.