On November 6, 2024, Corsair Gaming Inc (CRSR, Financial) released its 8-K filing detailing the financial results for the third quarter ended September 30, 2024. Corsair Gaming Inc, a prominent provider of high-performance gear for gamers and content creators, operates through two main segments: Gamer and Creator Peripherals, and Gaming Components and Systems. The company derives its revenue from regions including the Americas, Europe and the Middle East, and the Asia Pacific.
Performance Overview
Corsair Gaming Inc reported net revenue of $304.2 million for Q3 2024, surpassing the analyst estimate of $302.45 million. However, the company faced a net loss of $58.4 million, or $0.56 per diluted share, which was significantly above the analyst estimate of a $0.07 loss per share. This marks a substantial increase in net loss compared to the $3.1 million loss in the same quarter of 2023.
The company's revenue from the Gaming Components and Systems segment decreased to $202.2 million from $272.8 million in Q3 2023, reflecting a 16.2% decline. Conversely, the Gamer and Creator Peripherals segment saw a 13% increase in revenue to $102.0 million, up from $90.4 million in the previous year.
Financial Achievements and Challenges
Despite the challenging market conditions, Corsair Gaming Inc achieved a gross margin of 22.9% in Q3 2024, slightly down from 24.6% in Q3 2023. The company reported an adjusted EBITDA of $4.8 million, a decrease from $23.0 million in the same period last year. The decline in profitability is attributed to a $32.5 million non-cash charge for a valuation allowance on deferred tax assets.
Andy Paul, Chief Executive Officer of Corsair, stated, “Our Gaming Components and Systems business segment continues to show challenging results, as we near the end of the latest technology cycle of GPU cards. We believe the industry is gearing up for a strong 2025, with new Nvidia GPU cards expected to be launched in Q1, and we believe that we will see the beginning of a significant refresh cycle from the COVID lockdown surge of system builds.”
Income Statement Highlights
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Revenue | $304.2 million | $363.2 million |
| Net Loss | $58.4 million | $3.1 million |
| Adjusted EBITDA | $4.8 million | $23.0 million |
Balance Sheet and Cash Flow
As of September 30, 2024, Corsair Gaming Inc reported cash and restricted cash of $61.6 million, a decrease from $178.3 million at the end of 2023. The company's total assets stood at $1.20 billion, with total liabilities of $589.8 million. The decrease in cash reserves is attributed to the acquisition of the Fanatec business and other strategic investments.
Strategic Developments and Outlook
Corsair Gaming Inc has made significant strides in expanding its product offerings and market presence. The acquisition of the Fanatec Sim Racing brand positions the company as a leader in the Sim Racing market, complementing its existing product lines. Additionally, collaborations with major brands like Activision and Apple are expected to drive future growth.
Michael G. Potter, Chief Financial Officer of Corsair, commented, “We were able to use our strong balance sheet to complete the Fanatec business acquisition, which we expect will be a significant long-term growth driver similar to what we have achieved with other highly successful segment leading acquisitions we have previously integrated and grown.”
Looking ahead, Corsair Gaming Inc anticipates a challenging yet promising 2025, with expectations of a strong rebound in its components product lines and continued growth in the Gaming and Sim Racing segments. The company has updated its financial outlook for 2024, projecting revenue between $1.25 billion and $1.35 billion, with adjusted EBITDA expected to range from $40 million to $55 million.
Explore the complete 8-K earnings release (here) from Corsair Gaming Inc for further details.
