Corsair Gaming, Inc. (Nasdaq: CRSR) ("Corsair" or the "Company"), a leading global provider and innovator of high-performance products for gamers, streamers, content-creators, and gaming PC builders, today announced financial results for the fourth quarter and full year ended December 31, 2023, as well as guidance for 2024. Definitions of the non-GAAP financial measures used in this press release and reconciliations of such measures to their nearest GAAP equivalents are included below under the heading "Use and Reconciliation of Non-GAAP Financial Measures."

Andy Paul, Chief Executive Officer of Corsair, stated, "I am really excited to see that the gaming market is now showing signs of growth again after relaxing back from the surge that occurred during the pandemic. Consumer spending during the recent holiday period was better than we expected and we see that the high inventory levels at our competitors that were causing heavy discounting are generally back to normal. We saw a 16% year over year increase in our Gamer and Creator Peripherals segment for Q4 2023, which is a reflection of the market returning to growth and also Corsair gaining market share."Fourth Quarter 2023 Select Financial Metrics

• Net revenue was $417.3 million compared to $363.2 million in the third quarter of 2023 and $398.7 million in the fourth quarter of 2022. Gaming Components and Systems segment net revenue was $280.5 million compared to $272.8 million in the third quarter of 2023 and $280.9 million in the fourth quarter of 2022, while Gamer and Creator Peripherals segment net revenue was $136.8 million compared to $90.4 million in the third quarter of 2023 and $117.8 million in the fourth quarter of 2022.
• Net income attributable to common shareholders was $6.2 million, or net income of $0.06 per diluted share, compared to a net loss of $3.1 million, or a net loss of $0.03 per diluted share, in the third quarter of 2023 and net income of $12.5 million, or net income of $0.12 per diluted share, in the fourth quarter of 2022.
• Adjusted net income was $23.2 million, or net income of $0.22 per diluted share, compared to adjusted net income of $13.4 million, or net income of $0.13 per diluted share in the third quarter of 2023 and adjusted net income of $20.7 million, or net income of $0.20 per diluted share, in the fourth quarter of 2022.
• Adjusted EBITDA was $33.7 million, compared to $23.0 million in the third quarter of 2023, and $32.0 million in the fourth quarter of 2022.
• Cash and restricted cash was $178.6 million as of December 31, 2023.

Full Year 2023 Select Financial Metrics

• Net revenue was $1,459.9 million in 2023 compared to $1,375.1 million in 2022. Gaming Components and Systems segment net revenue was $1,065.0 million in 2023 compared to $937.3 million in 2022, while Gamer and Creator Peripherals segment net revenue was $394.9 million in 2023 compared to $437.8 million in 2022.
• Net income attributable to common shareholders was $3.2 million, or net income of $0.03 per diluted share for the full year 2023, compared to a net loss of $60.9 million, or a net loss of $0.63 per diluted share, for the full year 2022.
• Adjusted net income was $58.3 million, or net income of $0.55 per diluted share for the full year 2023, compared to adjusted net income of $18.4 million, or net income of $0.18 per diluted share for the full year 2022.
• Adjusted EBITDA was $95.1 million in 2023, compared to $46.5 million for the full year 2022.

"I am also very pleased with our overall performance for the full year. In Q1 2023, we were still lapping a quarter where most people were working at home but for the last three quarters of 2023 we saw overall growth of 11%. We launched some really exciting products during 2023, and many were sold out during Q4 2023, including our new PC controller, our new Elgato teleprompter, our new headsets and our new line of power supplies. In fact, we were air-freighting many of these products into our hubs during much of Q4 2023 to meet demand. We also launched our Elgato Marketplace, which sells apps and plug-ins for our Stream Deck, and has products from both us and third party developers. This is doing better than expected and already 35% of the Stream Deck installed base have opened accounts on the marketplace website."

"The gaming hardware market in the United States and Europe, where we have most of our business, is now at a level between 30% and 50% bigger than pre-pandemic years. Looking forward to 2024, we expect that the Gaming Components and Systems segment will be similar to last year since we are mid-cycle for new GPUs and the next big GPU launch and demand surge is likely to be 2025. For the Gamer and Creator Peripherals segment, we expect significant growth, especially from new products we recently launched and more that we are about to launch. In addition, we plan to enter two new product categories in 2024, sim racing and mobile controllers. We expect the overall gaming market to now enter a new growth phase as we enter a refresh cycle from the surge of consumer spending that occurred during the shelter at home years. This plus our anticipated market share gains should help to position us over the next few years, as we strive to reach over $2 billion in revenue with double-digit percentage EBITDA margins."

Michael G. Potter, Chief Financial Officer of Corsair, stated, "We more than doubled our adjusted EBITDA to $95.1 million from $46.5 million in 2022, and turned profitable on a GAAP basis with earnings per share to $0.03 per diluted share from a loss of $0.63 per diluted share in 2022, with adjusted earnings per share tripling to $0.55 per diluted share from $0.18 per diluted share in 2022. Gross margin increased by 310 basis points to 24.7 percent for 2023 from 21.6 percent in 2022, with our Gamer and Creator Peripherals segment gross margin increasing 510 basis points to 33.7 percent from 28.6 percent in 2022, and our Gaming Components and Systems gross margin increasing 300 basis points to 21.3 percent from 18.3 percent in 2022. We benefitted from demand for new products, reduced promotional activities and improved inventory levels as we continued to work towards our long-term target gross margin levels. With regard to inventory, we have returned to target levels in both the channel and our warehouses, and we are actually light in some categories, including some of our more recent product launches. We expect to build on this positive momentum in 2024, with a strong demand outlook for our new products, improved profitability and continued growth in adjusted EBITDA. Our strong cash position and our reduction of face value of debt to below $200 million positions us well to continue to invest in our business."

Financial Outlook
For the full year 2024, Corsair's financial outlook reflects cautious optimism. Corsair expects revenue growth to improve through 2024, with a further improvement in adjusted EBITDA led by an additional improvement in margin, stabilized shipping costs and continued tight operating expense controls.

• Net revenue to be in the range of $1.45 billion to $1.60 billion.
• Adjusted operating income to be in the range of $92 million to $112 million.
• Adjusted EBITDA to be in the range of $105 million to $125 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, 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

• Further expanded the iCUE LINK Ecosystem, with the introduction of new flagship all-in-one coolers. Answering the DIY PC builders' call, Corsair's iCUE LINK H100i, H150i, and H170i LCD AIO coolers come in radiator sizes of 240 mm, 360 mm and 420 mm. Boasting a 2.1-inch IPS LCD screen with a 480 x 480 resolution screen capable of displaying real-time coolant temperatures, images, and animated GIFs. iCUE LINK QX120 and QX140 RGB fans feature 34 individually addressable LEDs.
• Introduced the iCUE LINK Hydro X, an innovative new flagship of the Pump/Reservoir Combo lineup. The iCUE LINK XD5 RGB ELITE LCD features a 2.1-inch IPS LCD screen with a fully customizable display. iCUE LINK XG7 RGB 40-Series GPU Water Blocks, the Hydro X Series is now integrated with the iCUE LINK ecosystem, making building a world-class custom loop easier than ever.
• Unveiled its fastest SSD ever, the MP700 PRO, utilizing the PCIe 5.0 interface to offer sequential read speeds of up 12,400 MB/sec and writes of up to 11,800 MB/sec. Available with three different cooling options, to ensure users have the best option for their systems. Corsair also launched the MP600 MICRO, a small form factor SSD that's compatible with the Lenovo Legion Go handheld gaming PC.
• Debuted the K70 CORE RGB mechanical keyboard. Designed with pre-lubricated CORSAIR MLX Red Linear ultra-responsive mechanical switches, the K70 provides a refined playing and typing experience. Two layers of sound dampening foam produce satisfying acoustics and feel, eliminating annoying pings and clacks that take you out of the game, all at a competitive price point and made with 85% post-consumer recycled plastic.
• M75 AIR ultra-lightweight wireless mouse: Weighing just 60 g, the new symmetrically shaped M75 AIR offers comfort and control for all grip types, and provides a smooth glide on any playing surface. Precise CORSAIR MARKSMAN 26K DPI optical sensor tracks micro adjustments flawlessly, with a long-lasting battery providing up to 100 hours of use over Bluetooth between charges, and fast charges from 0-100% in 75 minutes.