Corsair Gaming, Inc.

Previous wording

We are a leading global provider and innovator of high-performance products for gamers and digital creators, such as streamers, vloggers and broadcasters, many of which build their own PCs using our components. Our industry-leading gaming products help digital athletes, from casual gamers to committed professionals, perform at their peak across PC or console platforms, and our streaming products enable creators, particularly streamers, to produce studio-quality content to share with friends or to broadcast to millions of fans. Our PC components products offer our customers multiple options to build their customized gaming and workstation desktop PCs. Our solution is the most complete suite of products that address the most critical components for both game performance and streaming. Our product offering is enhanced by our two proprietary software platforms: iCUE for gamers and the Elgato streaming suite for content creators, including our Stream Deck control software, which provide unified, intuitive performance, and aesthetic control and customization across their respective product families. We also offer digital services to enhance the customer experience by integrating esports, Elgato's marketplace, customer care and extended warranty into our product offerings.

Current wording

We are a leading global provider and innovator of high-performance products for gamers and digital creators, such as streamers, vloggers and broadcasters, many of which build their own PCs using our components. Our industry-leading gaming products help digital athletes, from casual gamers to committed professionals, perform at their peak across PC or console platforms, and our streaming products enable creators, particularly streamers, to produce studio-quality content to share with friends or to broadcast to millions of fans. Our PC components products offer our customers multiple options to build their customized gaming and workstation desktop PCs. Our solution is the most complete suite of products that address the most critical components for both game performance and streaming. Our product offering is enhanced by our two proprietary software platforms: iCUE and our web-based Corsair Web Hub for gamers and the Elgato streaming suite for content creators, including our Stream Deck control software, which provide unified, intuitive performance, and aesthetic control and customization across their respective product families. We also offer digital services to enhance the customer experience by integrating esports, Elgato's marketplace, customer care and extended warranty into our product offerings.

Previous wording

Gamer and Creator Peripherals. Includes our high-performance gaming keyboards, mice, headsets, controllers, and streaming products, which includes capture cards, Stream Decks, microphones, teleprompters, and audio interfaces, our Facecam streaming cameras, studio accessories, sim racing products, and gaming furniture, among others.

Current wording

Gamer and Creator Peripherals. Includes our high-performance gaming keyboards, mice, headsets, controllers, and streaming products, which includes capture cards, Stream Decks, microphones, teleprompters, and audio interfaces, our Facecam streaming cameras, studio accessories, command center displays, sim racing products, and gaming furniture, among others.

Previous wording

Our net revenue was $320.1 million and $261.3 million for the three months ended June 30, 2025 and 2024, respectively. Our gross margin was 26.8% and 24.1% for the three months ended June 30, 2025 and 2024, respectively. We had a net loss of $20.3 million and $23.5 million for the three months ended March 31, 2025 and 2024, respectively.

Current wording

Our net revenue was $345.8 million and $304.2 million for the three months ended September 30, 2025 and 2024, respectively. Our gross margin was 26.9% and 22.9% for the three months ended September 30, 2025 and 2024, respectively. We had a net loss of $10.4 million and $51.6 million for the three months ended September 30, 2025 and 2024, respectively.

Previous wording

As of June 30, 2025, we had cash and restricted cash, in the aggregate of $107.4 million and the principal balance outstanding on our June 2030 Term Loan was $125.0 million. Cash generated from operations was $48.9 million and cash used in operations was $44.8 million for the six months ended June 30, 2025 and 2024, respectively.

Current wording

As of September 30, 2025, we had cash and restricted cash, in the aggregate of $66.1 million and the principal balance outstanding on our June 2030 Term Loan was $123.4 million. Cash generated from operations was $12.0 million and cash used in operations was $19.7 million for the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

Since February 2025, the U.S. government has proposed and in certain cases implemented new, substantial tariffs on imports to the United States from various countries, including Taiwan, China and Vietnam, where we manufacture or source our products. These tariffs and any retaliatory actions from other countries have created a volatile environment for global trade. As a global company with a flexible and multi-location manufacturing base, we are actively working to mitigate the potential supply chain challenges. Our products are manufactured in several countries, including the United States, through a combination of our own factories and a network of reliable assembly subcontractors, and we have in the past demonstrated our ability to shift production locations with minimal disruptions to our business. During the first six months of 2025, the impact of new tariffs on our business was not material to our condensed consolidated financial statements. However, there can be no assurances that we will continue to be successful in mitigating any negative impacts arising from the evolving global tariff landscape. We expect the global tariff environment to remain volatile throughout 2025, and we are actively monitoring developments in global tariffs and will continue to evaluate the potential impact on our business and financial condition, as well as on our suppliers, and the actions we may take to mitigate any impact. For our risk factor related to the impact of tariffs, see “Changes in trade policy and regulations in the United States and other countries, including changes in trade agreements and the imposition of tariffs, as well as retaliatory responses, may have adverse impacts on our business, results of operations and financial condition.” Under Part II Item 1A of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025.

Current wording

Since February 2025, the U.S. government has proposed and in certain cases implemented new, substantial tariffs on imports to the United States from various countries, including Taiwan, China and Vietnam, where we manufacture or source our products. These tariffs and any retaliatory actions from other countries have created a volatile environment for global trade. As a global company with a flexible and multi-location manufacturing base, we are actively working to mitigate the potential supply chain challenges. Our products are manufactured in several countries, including the United States, through a combination of our own factories and a network of reliable assembly subcontractors, and we have in the past demonstrated our ability to shift production locations with minimal disruptions to our business. During the first nine months of 2025, the impact of new tariffs on our business was not material to our condensed consolidated financial statements. However, there can be no assurances that we will continue to be successful in mitigating any negative impacts arising from the evolving global tariff landscape. We expect the global tariff environment to remain volatile throughout 2025, and we are actively monitoring developments in global tariffs and will continue to evaluate the potential impact on our business and financial condition, as well as on our suppliers, and the actions we may take to mitigate any impact. For our risk factor related to the impact of tariffs, see “Changes in trade policy and regulations in the United States and other countries, including changes in trade agreements and the imposition of tariffs, as well as retaliatory responses, may have adverse impacts on our business, results of operations and financial condition.” Under Part II Item 1A of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025.

Previous wording

Increasing gaming engagement. We believe that gaming’s increasing time share of global entertainment consumption will drive continued growth in spending on both games and gaming products. Gaming continues to become increasingly social, as streaming viewership becomes more widely adopted along with increasing numbers of content creators. More members of the younger generation are gamers and spend more time on gaming related activities than older generations. We believe these trends will over time bring more gamers and creators to purchase dedicated hardware and help grow the market for peripheral products. The growth of these markets will not be linear, as these markets are impacted by macroeconomic and consumer confidence, amongst other conditions. Our Gaming Components and Systems segment makes components used for self-built PCs and full gaming systems. The self-built PC market is heavily influenced by the timing of release of new game titles and next-generation CPUs and GPUs, as discussed in the bullet below. As for our Gamer and Creator peripherals segment, we saw continued growth from last year, primarily from our acquisition and integration of the new Fanatec business, which fully complements our sim racing chassis, gaming PCs, gaming and streaming peripherals, and monitors, and has expanded our product offerings in these markets. For the rest of 2025, we expect our Fanatec products to draw key specialist retailers, further expanding our reach in the enthusiast gaming market.

Current wording

Increasing gaming engagement. We believe that gaming’s increasing time share of global entertainment consumption will drive continued growth in spending on both games and gaming products. Gaming continues to become increasingly social, as streaming viewership becomes more widely adopted along with increasing numbers of content creators. More members of the younger generation are gamers and spend more time on gaming related activities than older generations. We believe these trends will over time bring more gamers and creators to purchase dedicated hardware and help grow the market for peripheral products. The growth of these markets will not be linear, as these markets are impacted by macroeconomic and consumer confidence, amongst other conditions. Our Gaming Components and Systems segment makes components used for self-built PCs and full gaming systems. The self-built PC market is heavily influenced by the timing of release of new game titles and next-generation CPUs and GPUs, as discussed in the bullet below. As for our Gamer and Creator peripherals segment, we saw continued growth from last year, primarily from our acquisition and integration of the new Fanatec business, which fully complements our sim racing chassis, gaming PCs, gaming and streaming peripherals, and monitors, and has expanded our product offerings in these markets. For the rest of 2025, we expect our Fanatec products to continue to draw key specialist retailers, further expanding our reach in the enthusiast gaming market.

Previous wording

We operate a global sales network that consists primarily of retailers (including e-retailers), as well as distributors we use to access certain retailers. Further, a limited number of retailers and distributors represent a significant portion of our net revenue, with e-retailer Amazon accounting for 29.2% and 29.7% of our net revenue for the six months ended June 30, 2025 and 2024, respectively, and sales to our ten largest customers accounting for approximately 50.7% and 52.6% of our net revenue for the six months ended June 30, 2025 and 2024, respectively. Our customers, including Amazon, typically do not enter into long-term agreements to purchase our products but instead enter into purchase orders with us. As a result of this concentration and the lack of long-term agreements with our customers, a primary driver of our net revenue and operating performance is maintaining good relationships with these retailers and distributors. To help maintain good relationships, we implement initiatives such as our updated packaging design which helps e-retailers such as Amazon process our packages more efficiently. Further, given our global operations, a significant percentage of our expenses relate to shipping costs. Our ability to effectively optimize these shipping costs, for example utilizing expensive shipping options such as air freight for smaller packages and more urgent deliveries and more cost-efficient options, such as ground or ocean freight, for other shipments, has an impact on our expenses and results of operations.

Current wording

We operate a global sales network that consists primarily of retailers (including e-retailers), as well as distributors we use to access certain retailers. Further, a limited number of retailers and distributors represent a significant portion of our net revenue, with e-retailer Amazon accounting for 29.3% and 31.5% of our net revenue for the nine months ended September 30, 2025 and 2024, respectively, and sales to our ten largest customers accounting for approximately 50.4% and 53.4% of our net revenue for the nine months ended September 30, 2025 and 2024, respectively. Our customers, including Amazon, typically do not enter into long-term agreements to purchase our products but instead enter into purchase orders with us. As a result of this concentration and the lack of long-term agreements with our customers, a primary driver of our net revenue and operating performance is maintaining good relationships with these retailers and distributors. To help maintain good relationships, we implement initiatives such as our updated packaging design which helps e-retailers such as Amazon process our packages more efficiently. Further, given our global operations, a significant percentage of our expenses relate to shipping costs. Our ability to effectively optimize these shipping costs, for example utilizing expensive shipping options such as air freight for smaller packages and more urgent deliveries and more cost-efficient options, such as ground or ocean freight, for other shipments, has an impact on our expenses and results of operations.

Previous wording

Gamers demand new technology and product features, and we expect our ability to accurately anticipate and meet these demands will be one of the main drivers for any future sales growth and market share expansion. We believe our net revenue for 2024 and for the six months ended June 30, 2025 was favorably impacted by the release of 78 and 54 new products, respectively. While we intend to continue to develop and release new products, there can be no assurance that our new product introductions will have a favorable impact on our operating results or that customers will choose our new products over those of our competitors.

Current wording

Gamers demand new technology and product features, and we expect our ability to accurately anticipate and meet these demands will be one of the main drivers for any future sales growth and market share expansion. We believe our net revenue for 2024 and for the nine months ended September 30, 2025 was favorably impacted by the release of 78 and 80 new products, respectively. While we intend to continue to develop and release new products, there can be no assurance that our new product introductions will have a favorable impact on our operating results or that customers will choose our new products over those of our competitors.

Previous wording

We have experienced and expect to continue to experience seasonal fluctuations in sales due to the buying patterns of our customers and spending patterns of gamers. Our net revenue has generally been lower in the first and second calendar quarters due to lower consumer demand following the fourth quarter holiday season and because of the decline in sales that typically occurs in anticipation of the introduction of new or enhanced CPUs, GPUs, and other computer hardware products, which usually take place in the second calendar quarter, and which tend to drive sales in the following two quarters. Further, our net revenue tends to be higher in the third and fourth calendar quarters due to seasonal sales such as “Black Friday” and “Cyber Monday” as well as “Singles Day” in China, as retailers tend to make purchases in advance of these sales. Our sales also tend to be higher in the fourth quarter due to the introduction of new consoles and high-profile games in connection with the holiday season. As a consequence of seasonality, our net revenue for the second calendar quarter is generally the lowest of the year followed by the first calendar quarter. Historical seasonal patterns may not continue in the future and may be further impacted in the future by macroeconomic factors, including trade policy and tariffs, increasing supply constraints, GPU shortages, and shifts in customer behavior. For example, our revenue seasonality for the third quarter of 2024 was negatively impacted due to a lower demand for our products in the Gaming Components and Systems segment, which was primarily attributable to the delayed launches of new, reasonably priced GPUs and CPUs, as well as the postponed releases of new game titles to early 2025.

Current wording

We have experienced and expect to continue to experience seasonal fluctuations in sales due to the buying patterns of our customers and spending patterns of gamers. Our net revenue has generally been lower in the first half of the year due to lower consumer demand following the fourth quarter holiday season and because of the decline in sales that typically occurs in anticipation of the introduction of new or enhanced CPUs, GPUs, and other computer hardware products. Further, our net revenue tends to be higher in the second half of the year due to seasonal sales such as “Black Friday” and “Cyber Monday” as well as “Singles Day” in China, as retailers tend to make purchases in advance of these sales. Our sales also tend to be higher in the fourth quarter due to the release of high-profile games, including the annual release of popular gaming franchises in connection with the holiday season. As a consequence of seasonality, our net revenue for the second calendar quarter is generally the lowest of the year. Historical seasonal patterns may not continue in the future and may be further impacted in the future by macroeconomic factors, including trade policy and tariffs, increasing supply constraints, GPU shortages, and shifts in customer behavior.

Previous wording

Net revenue increased by 22.5% and 15.3% for the three and six months ended June 30, 2025, respectively, as compared to the same periods last year.

Current wording

Net revenue increased by 13.7% and 14.7% for the three and nine months ended September 30, 2025, respectively, as compared to the same periods last year.

Previous wording

The increase in net revenue in the three-month period was due to a 30.2% increase in sales for our Gaming Components and Systems segment, and a 8.9% increase in sales for our Gamer and Creator Peripherals segment.

Current wording

The increase in net revenue in the three-month period was due to a 15.3% increase in sales for our Gaming Components and Systems segment, and a 10.5% increase in sales for our Gamer and Creator Peripherals segment.

Previous wording

The increase in net revenue in the six-month period was due to a 19.6% increase in sales for our Gaming Components and Systems segment, and a 6.7% increase in sales for our Gamer and Creator Peripherals segment.

Current wording

The increase in net revenue in the nine-month period was due to a 18.1% increase in sales for our Gaming Components and Systems segment, and a 8.0% increase in sales for our Gamer and Creator Peripherals segment.

Previous wording

Gross margin increased by 270 bps for the three months ended June 30, 2025 as compared to the same period last year. The increase was primarily attributable to a 130 bps increase from an improved product mix and a 130 bps increase from lower inventory reserves.

Current wording

Gross margin increased by 400 bps for the three months ended September 30, 2025 as compared to the same period last year. The increase was primarily attributable to a 250 bps increase from an improved product mix and the inclusion of post-acquisition revenue from our September 2024 Fanatec Acquisition, and a 150 bps increase from lower inventory reserves.

Previous wording

Gross margin increased by 230 bps for the six months ended June 30, 2025 as compared to the same period last year. The increase was primarily attributable to a 150 bps increase from an improved product mix, and a 80 bps increase from a combination of efficiencies in managing product returns, and lower inventory reserves.

Current wording

Gross margin increased by 290 bps for the nine months ended September 30, 2025 as compared to the same period last year. The increase was primarily attributable to a 180 bps increase from an improved product mix and the inclusion of post-acquisition revenue from our September 2024 Fanatec Acquisition, and a 110 bps increase from lower inventory reserves.

Previous wording

SG&A expenses increased by $14.9 million, or 21.2%, for the three months ended June 30, 2025 as compared to the same period last year primarily due to a $4.0 million increase in distribution costs from higher sales volume, a $3.3 million increase in marketing and advertising costs, a $2.7 million increase in personnel-related cost, a $1.7 million increase in stock-based compensation expense, a $1.3 million increase in provision for doubtful accounts, and a $0.8 million increase in facilities and maintenance expense.

Current wording

SG&A expenses increased by $8.0 million, or 10.7%, for the three months ended September 30, 2025 as compared to the same period last year primarily due to a $3.3 million increase in marketing and advertising costs, a $3.0 million increase in personnel-related cost, a $2.5 million increase in distribution costs from higher sales volume, and a $2.0 million increase in facilities and maintenance expense. These increases were partially offset by a $1.9 million decrease in stock-based compensation, and a $1.4 million decrease in legal and other professional service expenses.

Previous wording

SG&A expenses increased by $21.7 million, or 14.4%, for the six months ended June 30, 2025 as compared to the same period last year primarily due to a $8.0 million increase in distribution costs from higher sales volume, a $6.0 million increase in marketing and advertising costs, a $3.6 million increase in personnel-related cost, a $3.5 million increase in stock-based compensation expense, a $2.9 million increase in provision for doubtful accounts, and a $1.4 million increase in facilities and maintenance expense. These increases were partially offset by a $5.2 million decrease in legal and other professional service expenses, mainly due to the one-time legal settlement cost that was recognized in the six months ended June 30, 2024.

Current wording

SG&A expenses increased by $29.6 million, or 13.2%, for the nine months ended September 30, 2025 as compared to the same period last year primarily due to a $10.5 million increase in distribution costs from higher sales volume, a $9.4 million increase in marketing and advertising costs, a $6.5 million increase in personnel-related cost, a $3.4 million increase in facilities and maintenance expense, a $3.0 million increase in provision for doubtful accounts, and a $1.5 million increase in stock-based compensation expense. These increases were partially offset by a $6.8 million decrease in legal and other professional service expenses, mainly due to the one-time legal settlement cost that was recognized in the nine months ended September 30, 2024.

Previous wording

Product development expenses increased by $0.1 million, or 0.6%, for the three months ended June 30, 2025 as compared to the same period last year primarily due to a $0.5 million increase in higher consulting and contractor costs, which was partially offset by a $0.4 million decrease in depreciation expense.

Current wording

Product development expenses increased by $0.2 million, or 1.0%, for the three months ended September 30, 2025 as compared to the same period last year primarily due to a $1.0 million increase in personnel-related cost, which was partially offset by a $0.5 million decrease in the allocation of corporate IT-related and facility-related costs, and a $0.3 million decrease in stock-based compensation expense.

Previous wording

Product development expenses increased by $1.1 million, or 3.2%, for the six months ended June 30, 2025 as compared to the same period last year primarily due to a $2.0 million increase in consulting and contractor costs, which was partially offset by a $1.0 million decrease in depreciation expense.

Current wording

Product development expenses increased by $1.3 million, or 2.5%, for the nine months ended September 30, 2025 as compared to the same period last year primarily due to a $2.0 million increase in consulting and contractor costs and a $1.6 million increase in personnel-related cost. These increases were partially offset by a $1.1 million decrease in the allocation of corporate IT-related and facility-related costs, a $0.9 million decrease in depreciation expense, and a $0.6 million decrease in stock-based compensation expense.

Previous wording

Interest expense decreased by 27.9% and 27.7% for the three and six months ended June 30, 2025, respectively, as compared to the same periods last year primarily due to lower principal balance on our September 2026 Term Loan combined with lower interest rates.

Current wording

Interest expense decreased by 31.8% and 28.9% for the three and nine months ended September 30, 2025, respectively, as compared to the same periods last year primarily due to lower principal balance on our term loans combined with lower interest rates.

Previous wording

Interest income decreased by 49.9% and 55.6% for the three and six months ended June 30, 2025, respectively, as compared to the same periods last year primarily due to lower cash balance in our interest-bearing account combined with lower interest rates.

Current wording

Interest income decreased by 33.7% and 53.4% for the three and nine months ended September 30, 2025, respectively, as compared to the same periods last year primarily due to lower cash balance in our interest-bearing account combined with lower interest rates.

Previous wording

Other expense, net for the six months ended June 30, 2025 included a $2.6 million reversal of bargain purchase gain from the Fanatec Acquisition that was recognized in the prior year. The remainder of other expense, net for the three and six months ended June 30, 2025 and 2024 was primarily comprised of foreign exchange gains and losses on cash, accounts receivable and intercompany balances denominated in currencies other than the functional currencies of our subsidiaries. Our foreign currency exposure was primarily driven by fluctuations in the foreign currency exchange rates of the Euro, British Pound, and Taiwan Dollar.

Current wording

Other expense, net for the nine months ended September 30, 2025 included a $2.6 million reversal of bargain purchase gain from the Fanatec Acquisition that was recognized in the prior year. The remainder of other expense, net for the three and nine months ended September 30, 2025 and 2024 was primarily comprised of foreign exchange gains and losses on cash, accounts receivable and intercompany balances denominated in currencies other than the functional currencies of our subsidiaries. Our foreign currency exposure was primarily driven by fluctuations in the foreign currency exchange rates of the Euro, British Pound, and Taiwan Dollar.

Previous wording

Our effective tax rates were tax benefit of 1.8% and 14.5% for the three months ended June 30, 2025 and 2024, respectively. The change in our effective rate in the three-month period was primarily driven by a change in the mix of income and losses in the various tax jurisdictions in which we operate, as well as the impact of valuation allowance on U.S. federal and state deferred tax assets, which reduced the U.S. deferred income tax benefit.

Current wording

Our effective tax rates were tax expense of (25.0)% and (110.0)% for the three months ended September 30, 2025 and 2024, respectively. The change in our effective rate in the three-month period was primarily due to an income tax provision of $28.0 million for valuation allowance recorded against our U.S. federal and state deferred tax assets in the three months of September 30, 2024, as well as a change in the mix of income and losses in the various tax jurisdictions in which we operate.

Previous wording

Our effective tax rates were tax expense of (5.8)% and tax benefit of 14.3% for the six months ended June 30, 2025 and 2024, respectively. The change in our effective rate in the six-month period was primarily driven by a change in the mix of income and losses in the various tax jurisdictions in which we operate, as well as the impact of valuation allowance on U.S. federal and state deferred tax assets, which reduced the U.S. deferred income tax benefit.

Current wording

Our effective tax rates were tax expense of (10.1)% and (32.7)% for the nine months ended September 30, 2025 and 2024, respectively. The decrease in our effective rate in the nine-month period was primarily due to an income tax provision of $28.0 million for valuation allowance recorded against our U.S. federal and state deferred tax assets in the nine months of September 30, 2024, as well as a change in the mix of income and losses in the various tax jurisdictions in which we operate.

Previous wording

On July 4, 2025, the reconciliation bill, commonly referred to as the One Big Beautiful Bill Act (“OBBB”) was signed into law, which includes a broad range of tax reform provisions that may affect our financial results. The OBBB primarily makes permanent many of the tax provisions originally enacted under the Tax Cuts and Jobs Act of 2017 and introduces modifications to certain U.S.

Current wording

On July 4, 2025, the U.S. congressional reconciliation bill, commonly referred to as the One Big Beautiful Bill Act (“OBBB”) was signed into law, which includes a broad range of tax reform provisions that may affect our financial results. The OBBB primarily makes permanent many of the tax provisions originally enacted under the Tax Cuts and Jobs Act of 2017 and introduces modifications to certain U.S. corporate tax provisions. The OBBB has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. As the OBBB Act was enacted during the quarter ended September 30, 2025, the Company is required, in accordance with U.S. GAAP, to record the effects of the new legislation in the period of enactment. We have completed a provisional analysis of the OBBB’s impact on our deferred tax assets and liabilities. As a result of the provisional analysis, the Company has concluded a U.S. taxable loss of $45 million for the nine months ended September 30, 2025, primarily due to the reinstatement of the immediate expensing of research and experimental costs; however, there is no net impact to our tax provision for the three and nine months ended September 30, 2025 due to our current U.S valuation allowance position.

Previous wording

Net revenue of the Gamer and Creator Peripherals segment increased by 8.9% and 6.7%, respectively, for the three and six months ended June 30, 2025 as compared to the same periods last year. The increases were primarily due to the inclusion of post-acquisition revenues from our September 2024 Fanatec Acquisition.

Current wording

Net revenue of the Gamer and Creator Peripherals segment increased by 10.5% and 8.0%, respectively, for the three and nine months ended September 30, 2025 as compared to the same periods last year. The increases were primarily due to the inclusion of post-acquisition revenues from our September 2024 Fanatec Acquisition, and the success of recent new product launches.

Previous wording

Net revenue of the Gaming Components and Systems segment increased 30.2% and 19.6%, respectively, for the three and six months ended June 30, 2025 as compared to the same periods last year. These increases were primarily due to an increase in demand for our memory products and our other component products in the self-built PC market, which was driven by the launch of the new generation of GPUs and CPUs in early 2025.

Current wording

Net revenue of the Gaming Components and Systems segment increased by 15.3% and 18.1%, respectively, for the three and nine months ended September 30, 2025 as compared to the same periods last year. These increases were primarily due to an increase in demand for our memory products and our other component products in the self-built PC market, which was driven by the launch of the new generation of GPUs and CPUs in early 2025.

Previous wording

The gross margin of the Gaming Components and Systems segment increased by 420 bps for the three months ended June 30, 2025 as compared to the same period last year. The increase was primarily attributable to a 230 bps increase from an improved product mix and lower product material costs, a 120 bps increase from improved factory utilization, a 80 bps increase from lower spending on promotional activities as a proportion to revenue, and a 80 bps increase from lower inventory reserves. These increases were partially offset by a 120 bps decrease from higher air freight costs.

Current wording

The gross margin of the Gaming Components and Systems segment increased by 580 bps for the three months ended September 30, 2025 as compared to the same period last year. The increase was primarily attributable to a 300 bps increase from an improved product mix and higher average selling prices, a 150 bps increase from lower spending on promotional activities as a proportion to revenue, and a 120 bps increase from lower inventory reserves.

Previous wording

The gross margin of the Gaming Components and Systems segment increased by 350 bps for the six months ended June 30, 2025 as compared to the same period last year. The increase was primarily attributable to a 250 bps increase from an improved product mix and lower product material costs, and a 80 bps increase from improved factory utilization.

Current wording

The gross margin of the Gaming Components and Systems segment increased by 430 bps for the nine months ended September 30, 2025 as compared to the same period last year. The increase was primarily attributable to a 270 bps increase from an improved product mix and higher average selling prices, a 80 bps increase from lower inventory reserves, and a 70 bps increase from improved factory utilization.

Previous wording

We have financed our operations and acquisitions through cash from operations, and when necessary, through debt facilities and issuance of equity securities. As of June 30, 2025, our principal sources of liquidity were cash and restricted cash, in aggregate of $107.4 million, and our borrowing capacity under the June 2030 Revolving Facility (as defined under “Capital Resources” below) of $99.8 million.

Current wording

We have financed our operations and acquisitions through cash from operations, and when necessary, through debt facilities and issuance of equity securities. As of September 30, 2025, our principal sources of liquidity were cash and restricted cash, in aggregate of $66.1 million, and our borrowing capacity under the June 2030 Revolving Facility (as defined under “Capital Resources” below) of $99.8 million.

Previous wording

Net cash provided by operating activities for the six months ended June 30, 2025 was $48.9 million and consisted of non-cash adjustments of $49.4 million, a net cash inflow of $30.1 million from changes in our net operating assets and liabilities, partially offset by a net loss of $30.6 million. The non-cash adjustments primarily consisted of amortization of intangibles, depreciation, stock-based compensation expense, and the reversal of the Fanatec Acquisition bargain purchase gain previously recognized in the year ended December 31, 2024. The net cash inflow from changes in our net operating assets and liabilities was primarily related to an increase in accounts payable due to timing of payments and higher inventory purchases, as well as a decrease in accounts receivable due to timing of collections, partially offset by cash outflows from an increase in inventories as we stocked up inventory in the United States in anticipation of tariffs, as well as a decrease in other liabilities and accrued expenses primarily due to a reduction in the accruals needed for customer incentives programs and sales returns with lower revenues in the quarter ended June 30, 2025 as compared to the quarter ended December 31, 2024.

Current wording

Net cash provided by operating activities for the nine months ended September 30, 2025 was $12.0 million and consisted of a net inflow from non-cash adjustments of $68.3 million and was partially offset by a net loss of $41.0 million and a net cash outflow of $15.3 million from changes in our net operating assets and liabilities. The non-cash adjustments primarily consisted of amortization of intangibles, depreciation, stock-based compensation expense, provision for doubtful accounts, and the reversal of the Fanatec Acquisition bargain purchase gain previously recognized in the year ended December 31, 2024. The net cash outflow from changes in our net operating assets and liabilities was primarily related to higher inventory purchases as we prepare for year-end sales, as well as a decrease in other liabilities and accrued expenses primarily due to a reduction in the accruals for operating expenses and accruals for customer incentives programs and sales returns with lower revenues. These net cash outflow were partially offset by an increase in accounts payable due to an increase in inventory purchases and the timing of payments, as well as a decrease in accounts receivable from lower revenue.

Previous wording

Net cash used in operating activities for the six months ended June 30, 2024 was $44.8 million and consisted of a net loss of $34.5 million and a net cash outflow of $37.3 million from changes in our net operating assets and liabilities, partially offset by non-cash adjustments of $27.0 million. The net cash outflow from changes in our net operating assets and liabilities was primarily related to a decrease in accounts payable due to timing of payments and a decrease in other liabilities and accrued expenses mainly due to a reduction in the accruals needed for sales returns and customer incentives with lower revenues, as well as an increase in inventories, attributable in part to the buildup of safety stock to accommodate supply lead times in our peripherals products and in part due to lower demand for our components products in the first half of 2024. These net cash outflows were partially offset by a decrease in accounts receivable from lower revenue and a decrease in prepaid and other assets. The non-cash adjustments primarily consisted of amortization of intangibles, depreciation and stock-based compensation expense, which were partially offset by changes in deferred income taxes.

Current wording

Net cash used in operating activities for the nine months ended September 30, 2024 was $19.7 million and consisted of a net loss of $86.1 million and a net cash outflow of $10.3 million from changes in our net operating assets and liabilities, offset partially by non-cash adjustments of $76.8 million. The net cash outflow from changes in our net operating assets and liabilities was primarily related to a decrease in accounts payable due to timing of payments and a decrease in other liabilities and accrued expenses mainly due to a reduction in the accruals needed for sales returns and customer incentives with lower revenues, and lower bonus, as well as an increase in inventories as we prepared for year-end sales. These net cash outflows were partially offset by a decrease in accounts receivable from lower revenue. The non-cash adjustments primarily consisted of amortization of intangibles, depreciation and stock-based compensation expense, as well as changes in deferred income taxes.

Previous wording

Cash used in investing activities was $5.8 million for the six months ended June 30, 2025 for capital expenditure.

Current wording

Cash used in investing activities was $10.1 million for the nine months ended September 30, 2025 for capital expenditure.

Previous wording

Cash used in investing activities was $16.4 million for the six months ended June 30, 2024 and primarily consisted of $12.3 million disbursement of Bridge Loan, $5.0 million of capital expenditure, partially offset by $1.0 million cash received from escrow for the purchase price adjustment related to a business acquisition.

Current wording

Cash used in investing activities was $50.5 million for the nine months ended September 30, 2024 and primarily consisted of $43.1 million cash used for the Fanatec Acquisition (refer to Note 4, “Business Combinations” for more information on the Fanatec Acquisition), $8.4 million of capital expenditure, partially offset by $1.0 million cash received from escrow for the purchase price adjustment related to the Drop Acquisition.

Previous wording

Cash used in financing activities was $47.0 million for the six months ended June 30, 2025 and consisted of $49.0 million repayment of debt, $1.0 million payment of taxes related to net share settlement of equity awards, and $0.5 million payment of dividends to noncontrolling interest, partially offset by $3.4 million proceeds received from the issuance of shares through the employee equity incentive plans.

Current wording

Cash used in financing activities was $47.4 million for the nine months ended September 30, 2025 and consisted of $51.3 million repayment of debt and debt issuance costs, $1.1 million payment of taxes related to net share settlement of equity awards, and $0.5 million payment of dividends to noncontrolling interest, partially offset by $5.5 million proceeds received from the issuance of shares through the employee equity incentive plans.

Previous wording

Cash used in financing activities was $22.1 million for the six months ended June 30, 2024 and primarily consisted of $18.1 million repayment of debt, $4.9 million settlement of deferred consideration related to a prior business acquisition in 2019, $2.0 million payment of dividends to noncontrolling interest, and $0.4 million payment of taxes related to net share settlement of equity awards, partially offset by $3.3 million proceeds received from the issuance of shares through the employee equity incentive plans.

Current wording

Cash used in financing activities was $46.6 million for the nine months ended September 30, 2024 and primarily consisted of $21.3 million repayment of debt, $19.8 million purchase of additional ownership interest in iDisplay (refer to Note 14, "Redeemable Noncontrolling Interest" for more information on the additional ownership interest purchase), $4.9 million settlement of deferred consideration related to a prior business acquisition in 2019, $5.2 million payment of dividends to noncontrolling interest, and $0.6 million payment of taxes related to net share settlement of equity awards, partially offset by $5.1 million proceeds received from the issuance of shares through the employee equity incentive plans. During the nine months ended September 30, 2024, we borrowed $21.5 million from our Revolving Facility to fund our operations and the full amount was repaid within the same period.

Previous wording

On September 3, 2021, we refinanced the First Lien Credit and Guaranty Agreement with a new Credit Agreement (as amended, the “Credit Agreement”) with Bank of America, N.A. The Credit Agreement provided for a $100.0 million five-year revolving credit facility maturing in September 2026 (the “September 2026 Revolving Facility”) and a $250.0 million five-year term loan facility maturing in September 2026 (the “September 2026 Term Loan”). The Credit Agreement also permitted, subject to conditions stated therein, additional incremental facilities in a maximum aggregate principal amount not to exceed $250.0 million. Prepayment of the September 2026 Term Loan and the September 2026 Revolving Facility was permitted at any time without premium or penalty. We prepaid $42.75 million and $12.5 million of the September 2026 Term Loan principal in the six months ended June 30, 2025 and in the year ended December 31, 2024, respectively.

Current wording

On September 3, 2021, we refinanced our First Lien Credit and Guaranty Agreement with a new Credit Agreement (as amended, the “Credit Agreement”) with Bank of America, N.A. The Credit Agreement provided for a $100.0 million five-year revolving credit facility maturing in September 2026 (the “September 2026 Revolving Facility”) and a $250.0 million five-year term loan facility maturing in September 2026 (the “September 2026 Term Loan”). The Credit Agreement also permitted, subject to conditions stated therein, additional incremental facilities in a maximum aggregate principal amount not to exceed $250.0 million. Prepayment of the September 2026 Term Loan and the September 2026 Revolving Facility was permitted at any time without premium or penalty. We prepaid $42.8 million and $12.5 million of the September 2026 Term Loan principal in the nine months ended September 30, 2025 and in the year ended December 31, 2024, respectively.

Previous wording

On June 30, 2025, we entered into an Amended and Restated Credit Agreement with Bank of America, N.A. to refinance the Credit Agreement. The Amended and Restated Credit Agreement provides for total commitments of $225.0 million, consisting of a $100.0 million five-year revolving credit facility maturing on June 30, 2030 (the “June 2030 Revolving Facility”) and a $125.0 million five-year term loan facility maturing on June 30, 2030 (the “June 2030 Term Loan”). The Amended and Restated Credit Agreement also permits, subject to conditions stated therein, additional incremental facilities in a maximum aggregate principal amount not to exceed $125.0 million. As of June 30, 2025, the outstanding balance of the September 2026 Term Loan under the Credit Agreement of $125.0 million was carried over to the Amended and Restated Credit Agreement and will be repayable according to the new payment schedule under the Amended and Restated Credit Agreement.

Current wording

On June 30, 2025, we entered into an Amended and Restated Credit Agreement with Bank of America, N.A. to refinance the Credit Agreement. The Amended and Restated Credit Agreement provides for total commitments of $225.0 million, consisting of a $100.0 million five-year revolving credit facility maturing on June 30, 2030 (the “June 2030 Revolving Facility”) and a $125.0 million five-year term loan facility maturing on June 30, 2030 (the “June 2030 Term Loan”). The Amended and Restated Credit Agreement also permits, subject to conditions stated therein, additional incremental facilities in a maximum aggregate principal amount not to exceed $125.0 million. On June 30, 2025, the outstanding balance of the September 2026 Term Loan under the Credit Agreement of $125.0 million was carried over to the Amended and Restated Credit Agreement and will be repayable according to the new payment schedule under the Amended and Restated Credit Agreement.

Previous wording

The Amended and Restated Credit Agreement has a variable rate structure. According to the provisions of the Amended and Restated Credit Agreement, the June 2030 Term Loan and June 2030 Revolving Facility will each bear interest at our election, at either (a) term Secured Overnight Financing Rate ("SOFR") plus a percentage spread (ranging from 1.50% to 2.50%) based on our total net leverage ratio or (b) the base rate (as described in the Restated Credit Agreement as the greatest of (i) Bank of America’s prime rate, (ii) the federal funds rate plus 0.50% and (iii) one-month term SOFR plus 1.0%) plus a percentage spread (ranging from 0.50% to 1.50%) based on the our total net leverage ratio.

Current wording

The Amended and Restated Credit Agreement has a variable rate structure. According to the provisions of the Amended and Restated Credit Agreement, the June 2030 Term Loan and June 2030 Revolving Facility each bears interest at our election, at either (a) term Secured Overnight Financing Rate ("SOFR") plus a percentage spread (ranging from 1.50% to 2.50%) based on our total net leverage ratio or (b) the base rate (as described in the Restated Credit Agreement as the greatest of (i) Bank of America’s prime rate, (ii) the federal funds rate plus 0.50% and (iii) one-month term SOFR plus 1.0%) plus a percentage spread (ranging from 0.50% to 1.50%) based on the our total net leverage ratio.

Previous wording

As of June 30, 2025, we had $3.9 million in non-current income tax payable, including interest and penalties, related to our income tax liability for uncertain tax positions. At this time, we are unable to make a reasonably reliable estimate of the timing of payments in individual years in connection with these tax liabilities; therefore, such amounts are not included in the contractual cash obligation table above.

Current wording

As of September 30, 2025, we had $3.7 million in non-current income tax payable, including interest and penalties, related to our income tax liability for uncertain tax positions. At this time, we are unable to make a reasonably reliable estimate of the timing of payments in individual years in connection with these tax liabilities; therefore, such amounts are not included in the contractual cash obligation table above.

Previous wording

There have been no material changes to our critical accounting policies and estimates during the six months ended June 30, 2025 as compared to the critical accounting policies and estimates described in our Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on February 26, 2025.

Current wording

There have been no material changes to our critical accounting policies and estimates during the nine months ended September 30, 2025 as compared to the critical accounting policies and estimates described in our Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on February 26, 2025.