Corsair Gaming: Q3 2021 Financial Results

By Annie Baker ● Nov 2, 2021
  • Corsair Gaming Inc (NASDAQ: CRSR) has reported its financial results for the third quarter ended September 30, 2021. These are the highlights.

Corsair Gaming Inc (NASDAQ: CRSR) has reported its financial results for the third quarter ended September 30, 2021. These are the highlights:

Year-to-Date 2021 Highlights

— Net revenue for the 9 months ended September 30, 2021 was $1.393 billion, an increase of 21.6% year-over-year. And gamer and creator peripherals segment net revenue was $470.3 million, an increase of 35.3% year-over-year. The gaming components and systems segment net revenue was $923.1 million, an increase of 15.6% year-over-year.

— Net income for the nine months ended September 30, 2021 was $76.2 million, or $0.76 per diluted share, compared to net income of $60.2 million in the same period last year, or $0.69 per diluted share.

— The adjusted net income for the nine months ended September 30, 2021 was $110.2 million, or $1.10 per diluted share, compared to adjusted net income of $91.9 million in the same period last year, or $1.05 per diluted share.

— The adjusted EBITDA for the nine months ended September 30, 2021 was $159.6 million, an increase of 13.6% year-over-year.
Q3 2021 Highlights

— The net revenue was $391.1 million, a decrease of 14.4% year-over-year. Gamer and creator peripherals segment net revenue was $139.3 million, a decrease of 13.8% year-over-year. Gaming components and systems segment net revenue was $251.9 million, a decrease of 14.8% year-over-year.

— The net income was $1.8 million, or $0.02 per diluted share, compared to net income of $36.4 million in the same period last year, or $0.40 per diluted share.

— The adjusted net income was $16.3 million, or $0.16 per diluted share, compared to adjusted net income of $48.5 million in the same period last year, or $0.54 per diluted share.

— The adjusted EBITDA was $27.6 million, a decrease of 56.6% year-over-year.

For the full year 2021, the company currently expects:

— Net revenue to be in the range of $1.825 billion to $1.925 billion.

— Adjusted operating income to be in the range of $180 million to $195 million.

— Adjusted EBITDA to be in the range of $190 million to $205 million.

Other Recent Developments

— On October 27th, 2021, Corsair announced two new series of DDR5 performance memory, DOMINATOR PLATINUM RGB DDR5 and VENGEANCE DDR5. And the new DDR5 standard brings with it higher frequencies, on-board voltage regulation and improved performance, debuting with Intel’s new 12th generation Intel Core processors.

  On October 21, 2021, Corsair – under its Elgato streaming brand – announced a new partnership with Snap to bring popular Augmented Reality Snap Lenses to EpocCam, the iOS app that turns your phone into a high-definition webcam for use with PC or Mac. And with 15 custom-themed lenses available, and more to be added in the future, Snap Lenses enrich the EpocCam experience with new ways for users to express themselves in a fun and creative way.

— On October 19, 2021, Corsair had announced the launch of its new range of iCUE ELITE LCD Display Liquid CPU Coolers. Combining cooling able to tame any modern consumer CPU with a vivid 2.1-inch LCD screen on the pump head to display anything from system vitals to animated GIFs, ELITE LCD coolers offer a unique window into both your PC’s performance and your own style and personality.

— On September 30, 2021, Corsair announced its first ever monitor called the XENEON 32QHD165. It features an ultra-slim 32-inch QHD screen with a cutting-edge IPS LED panel to produce a beautiful 2560×1440 image. With up to a 165Hz refresh rate, along with AMD FreeSync Premium certification and NVIDIA G-SYNC compatibility to keep up with every frame of the latest games, the XENEON 32QHD165 offers a terrific combination of powerful specs, smart features, and thoughtful design that power users need. Integrating seamlessly into the CORSAIR iCUE and Elgato Stream Deck software ecosystems for convenient, customized control, the XENEON 32QHD165 is positioned for taking center stage in a modern gaming and streaming setup.

— On September 16, 2021, Corsair announced the new SABRE RGB PRO WIRELESS gaming mouse, the latest addition to the CHAMPION SERIES family of products built for competition and tested by top esports professionals. And SABRE RGB PRO WIRELESS combines an incredibly lightweight, ergonomic design, and esports-ready performance with high-performance wireless speed via SLIPSTREAM WIRELESS technology. The SABRE RGB PRO WIRELESS weighs an ultra-light 79g, supporting the rapid movements and lightning-quick reflexes needed to prevail during competition.

— On September 7, 2021, Corsair announced the continuation of its partnership with leading video game publisher Ubisoft, bringing immersive in-game RGB lighting integration for all CORSAIR iCUE RGB devices to the latest installment of the popular Far Cry franchise: Far Cry 6. And players can experience exclusive dynamic lighting effects, from fiery explosions to blissful jungle, that convey the action not just through the screen, but across their entire iCUE setup.

— On September 7, 2021, Corsair announced it completed the successful refinancing of its 2017 credit facilities with borrowings under a new $350 million credit facility, consisting of a $250 million term loan and $100 million revolving line-of-credit, both maturing in August 2026. And the new term loan is provided by Bank of America and bears interest at a rate equal to a margin plus either a base rate or LIBOR rate. Based on Corsair’s net leverage ratio at the time of the new borrowing, the rate for a LIBOR borrowing under the new term loan is LIBOR plus 1.25%, compared to the retired term loan which carried a combined interest rate of 4.75% for a LIBOR borrowing, made up of LIBOR, with a 1% floor, plus a margin of 3.75%. Corsair had repaid the full $273.9 million outstanding under its 2017 credit facility using proceeds from this 2021 credit facility and cash on hand. The maturity date of the retired term loan was August 2024 and of the retired revolving line-of-credit was August 2022.

— On August 20, 2021, Corsair announced the launch of its new CORSAIR HS80 RGB WIRELESS Gaming Headset, offering gamers SLIPSTREAM WIRELESS technology, an exceedingly comfortable new floating-headband design, durable construction, and refined style.

— On August 17, 2021, Corsair – under its SCUF Gaming brand – announced the Designed for Xbox SCUF Instinct and Instinct Pro controllers, created specifically for the Xbox Series X|S. SCUF Instinct incorporates all of the innovative features gamers expect from SCUF, including the patented paddle control system that helped make SCUF controllers the premier choice of competitive players. This refined ergonomic shape enables better control for a wide variety of hand sizes, with millions of cosmetic and physical customization options to suit all gamers including interchangeable faceplates, thumbsticks, and D-pads.

KEY QUOTES:

“Corsair remains well-positioned to capitalize on the underlying secular growth trends around gaming, esports and streaming, and we intend to continue to make investments to enhance our customer experience. During the third quarter, we were pleased to see our strong pace of innovation continued with the release of our new FaceCam 1080p streaming camera and Xeneon gaming monitor. These both represent an initial entry for us into large and growing markets. We just announced the first of our DDR5 products and believe we are well-positioned to maintain our leadership position in the memory components category. Despite the headwinds caused by the current global logistics and supply chain environment, we believe that underlying consumer demand for gaming and streaming products remains strong.”

“We have responded to the difficult sourcing and shipping environment by building inventory in our hubs closer to our customers, but it has been difficult to pass costs on to our customers. We still expect good growth for 2021, but the various challenges are constraining it to closer to our initial expectations for the year. We believe that the actual demand environment remains good, and that once this difficult environment is behind us we can return to our targeted growth and profitability targets. We have adjusted our 2021 outlook based on the current conditions.”

— Andy Paul, Chief Executive Officer of Corsair

“We refinanced our long-term debt in the third quarter, substantially reducing the interest rate, doubled the available revolver to $100 million, increased the term, and reduced the total outstanding debt by $24 million to $250 million of face value. During the third quarter, we experienced an increase in logistics costs over the already elevated rate in the second quarter, and costs and shipping times are expected to remain elevated for the remainder of 2021. Our strong financial position has allowed us to adjust to the current environment by increasing inventory and making longer term supply chain commitments where needed.”

— Michael G. Potter, Chief Financial Officer of Corsair