Corsair Gaming, Inc. ("Corsair" or the "Company"), 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 second quarter ended June 30, 2023, and reiterated its financial outlook for the full year 2023.

Second Quarter 2023 Select Financial Metrics

• Net revenue was $325.4 million compared to $283.9 million in the second quarter of 2022, an increase of 14.6%. Gaming components and systems segment net revenue was $246.7 million compared to $194.9 million in the second quarter of 2022, while Gamer and creator peripherals segment net revenue was $78.8 million compared to $89.0 million in the second quarter of 2022.
• Net income attributable to common shareholders was $1.1 million, or net income of $0.01 per diluted share, compared to a net loss of $59.4 million, or a net loss of $0.62 per diluted share, in the second quarter of 2022.
• Adjusted net income was $9.8 million, or net income of $0.09 per diluted share, compared to adjusted net loss of $19.0 million, or a net loss of $0.20 per diluted share, in the second quarter of 2022.
• Adjusted EBITDA was $17.8 million, compared to a loss of $11.0 million in the second quarter of 2022.
• Cash and cash equivalents were $184.0 million as of June 30, 2023.

First Half 2023 Select Financial Metrics

• Net revenue was $679.4 million compared to $664.6 million in the first six months of 2022, an increase of 2.2%. Gaming components and systems segment net revenue was $511.7 million compared to $441.5 million in the first six months of 2022, while Gamer and creator peripherals segment net revenue was $167.7 million compared to $223.1 million in the first six months of 2022.
• Net income attributable to common shareholders was $43 thousand, or a net income of $0.00 per diluted share, compared to a net loss of $64.5 million, or a net loss of $0.68 per diluted share, in the first six months of 2022.
• Adjusted net income was $21.8 million, or net income of $0.20 per diluted share, compared to an adjusted net loss of $9.8 million, or a net loss of $0.10 per diluted share, in the first six months of 2022.
• Adjusted EBITDA was $38.3 million, compared to adjusted EBITDA of $4.4 million in the first six months of 2022.

Andy Paul, Chief Executive Officer of Corsair, stated, "We are very excited with our Q2 and 1H results, showing growth in revenue, gross margin, and profitability compared to last year. The gaming hardware market improved during the second quarter with less discounting from peripheral competitors and continued strong gaming PC build activity driven by new games and new graphics cards launching. Activity in the U.S. and Europe is now on par with mid-2022 and substantially higher than pre-pandemic levels. We continue to take market share in our components and memory segment and improve gross margins in our peripheral categories, with less market discounting occurring. In June, we launched a new ecosystem, iCUE link, which uses special proprietary connectors and protocols so that components can be connected together in series with one cable, and then controlled individually via our iCUE software. We believe this makes gaming system building much easier and should entice more new first-time customers. Following the quarter close, we announced the acquisition of certain assets of Drop, a community-based e-commerce company specializing in customized DIY keyboards and keycaps and many other enthusiast and audiophile products. We expect some significant opportunities and synergies here, both by offering custom versions of our products on the Drop site, as well as introducing some of their popular products into our worldwide channel."

Michael G. Potter, Chief Financial Officer of Corsair, stated, "We are pleased with the substantial financial improvement led by revenue growth, improved gross margins, steadily improving adjusted EBITDA, and a more balanced inventory. We exceeded our near-term expectations for gross margins, which increased 140 basis points compared to Q1 2023, and increased 1,270 basis points and 580 basis points, compared to Q2 2022 with and without the impact of the Q2 2022 excess inventory reserve, as we benefitted from ongoing improvements in freight costs, as well as new products. We continued to be operational cash flow positive, while investing in inventory to support the expected stronger second half of 2023. Shortly after quarter-end we invested in growth via our acquisition of certain of Drop's assets. We expect liquidity to remain excellent for the rest of 2023 allowing us to be flexible as opportunities present themselves."

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

• Acquired certain assets of Drop, a leading privately held peripheral developer known for its customizable mechanical keyboards and switches, and its millions-member strong enthusiast community. Personalized keyboards that can be modified by the consumer is one of the fastest growing trends in the gaming peripheral space.
• Enhanced the Company's popular Stream Deck Mobile iOS app, allowing every iPhone or iPad user to use a 6-button app-based Stream Deck for free. A Pro subscription model unlocks further functionality and up to 64 customizable controls, empowering millions of users and making it easier to streamline tasks and save time using the iPhone or iPad they already know and love.
• Expanded Corsair's award-winning memory line-up with DOMINATOR TITANIUM DDR5 memory. Built using some of the fastest DDR5 ICs alongside patented CORSAIR DHX cooling technology for improved overclocking potential, DOMINATOR TITANIUM continues the DOMINATOR legacy with incredible design and fast performance. Boasting 11 vibrant individually addressable RGB LEDs and a replaceable top-bar, DOMINATOR TITANIUM offers unique customization options, alongside its flagship performance.
• Delivered increased simplicity to DIY PC builders with the launch of the iCUE LINK Smart Component Ecosystem. iCUE LINK changes the way experienced PC builders and newcomers alike will create their next PC, implementing patent-pending single-cable technology to reduce the time it takes to build and set up a new performance PC by as much as 50% while dramatically reducing cable management and wire clutter.