Corsair Gaming, Inc. (Nasdaq: CRSR), a leading global provider and innovator of high-performance gear for gamers, streamers, content-creators, and gaming PC builders, today announced financial results for the first quarter ended March 31, 2023.

Andy Paul, Chief Executive Officer of Corsair, stated, "We are off to a strong start to 2023 with a 33% improvement in adjusted EBITDA compared to the year ago period. We are thrilled to see that enthusiast-level consumers continue to build new gaming PCs at a rate significantly above pre-pandemic levels. Recent third party data shows that Corsair continues to gain and hold leading market share positions in most of our categories of components used in those builds. The broader market for gaming peripherals is also holding up at a level significantly above pre-pandemic levels, although slightly behind 2022 levels, most notably in Europe. During 2023 we started to ship many new innovative products, including our FLEX OLED bendable monitor, engineered in partnership with LG. With lower priced GPUs coming to market and exciting new game titles being released this year, we are confident that the gaming market will continue to grow off the higher recent levels and we believe that Corsair can continue to gain market share in many of the new categories we are entering."Michael G. Potter, Chief Financial Officer of Corsair, stated, "We were able to build off the good start to the year and continue to improve our financial strength and flexibility. Gross margins increased 30 basis points compared to Q1 2022 as we benefited from lower freight expenses. We are also starting to see the benefit of cost actions we took last year with operating expenses down almost 10% year-over-year. Our working capital position also improved in Q1 reflecting the positive impact of our inventory reduction efforts in 2022, and we reduced debt by $10 million, while preserving capital to invest further in growth."

First Quarter 2023 Select Financial Metrics

• Net revenue was $354.0 million compared to $380.7 million in the first quarter of 2022. Gaming components and systems segment net revenue was $265.0 million compared to $246.5 million in the first quarter of 2022, while Gamer and creator peripherals segment net revenue was $88.9 million compared to $134.1 million in the first quarter of 2022.
• Net loss attributable to common shareholders was $1.1 million, or $0.01 per diluted share, compared to a net loss of $5.1 million, or $0.05 per diluted share, in the first quarter of 2022.
• Adjusted net income was $11.9 million, or $0.11 per diluted share, compared to adjusted net income of $9.2 million, or $0.09 per diluted share, in the first quarter of 2022.
• Adjusted EBITDA was $20.6 million, compared to $15.4 million in the first quarter of 2022.
• Cash and cash equivalents were $182.1 million as of March 31, 2023.

Michael G. Potter, Chief Financial Officer of Corsair, stated, "We were able to build off the good start to the year and continue to improve our financial strength and flexibility. Gross margins increased 30 basis points compared to Q1 2022 as we benefited from lower freight expenses. We are also starting to see the benefit of cost actions we took last year with operating expenses down almost 10% year-over-year. Our working capital position also improved in Q1 reflecting the positive impact of our inventory reduction efforts in 2022, and we reduced debt by $10 million, while preserving capital to invest further in growth."

Financial Outlook
The Company reiterated its outlook for the full year 2023 for revenue to be flat to slightly up in a softer economic environment as compared to 2022. Corsair continues to expect an improvement for the full year 2023 in adjusted EBITDA led by an improvement in margin, normalized shipping costs and continued tight operating expense controls.

• Net revenue for the full year 2023 is expected to be in the range of $1.35 billion to $1.55 billion.
• Adjusted operating income to be in the range of $75 million to $95 million.
• Adjusted EBITDA to be in the range of $90 million to $110 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, 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

• Expanded our gaming headset lineup, with new wireless versions of the HS65 and HS55 lightweight headsets. Both feature Dolby 7.1 surround sound and low-latency 2.4 GHz wireless and Bluetooth connectivity, giving multi-platform compatibility. The HS65 also features Sound ID for personalized audio profiles.
• Fully rolled out the new MURALS feature in iCUE software, adding an intuitive new interface with which users can design and create system-wide lighting profiles in a variety of ways. Users can create a lighting profile from a sample video, image or even music, and apply that lighting profile across all their Corsair gear. MURALS also enables lighting synchronization and control for supported products from popular lighting manufacturers Philips HUE and Nanoleaf, further expanding the Corsair iCUE ecosystem of supported products.
• Launched new high performance DDR5 memory kits with break-through capacities of up to 192 GB for a 4-module kit, meeting the ever growing DRAM needs of gamers and content creators
• Launched Corsair Build Kits, selling complete PC build kits for customers to assemble themselves, helping customers by removing the research and part hunting sometimes required when building a new PC. With six different kits ranging from entry level to range-topping, the kits include everything users need to build a new PC, including processor, graphics card and memory. Supported by in-depth video tutorials to help customers build their PC, Corsair Build Kits offer a new way for customers to shop for a new PC, while still building it themselves.
• Announced a long-term partnership with world renowned gamer and streamer, Nick Kolchoff (known as Nickmercs), who will be exclusively using Corsair and Elgato Peripherals, Scuf Controllers and Origin gaming PCs for his game playing and streaming.
• Launched a market place for 3rd party software providers to offer plug ins and software solutions for the growing installed base of Elgato Streamdecks.