Corsair Gaming, Inc.
For the period ended Mar 31, 2026. Filed May 7, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 7, 2026
CRSR$11.84-7.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-04.
0001193125-25-264750
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-07.
0001193125-26-211947
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 107 previous paragraphs and 102 current paragraphs.
53 unchanged; 32 reworded; 17 added; 21 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 12 previous and 12 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (17)
Current report
HItem 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Current report
Recent geopolitical developments in the Middle East, including the conflict involving Iran, have contributed to volatility in global energy prices and transportation costs. These developments may increase our freight, logistics and other input costs and may also affect consumer spending due to broader economic uncertainty. While we continue to monitor the situation and implement mitigation actions, the duration, severity and broader economic consequences remain uncertain. Other geopolitical concerns include the ongoing conflicts in Ukraine and the broader Middle East, tensions in the Red Sea, and potential conflicts between China and Taiwan, and the resulting supply chain constraints.
Current report
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. In February 2026, the U.S. Supreme Court ruled that certain tariffs previously imposed under the International Emergency Economic Powers Act (IEEPA) were invalid. While this ruling creates the potential for refunds of duties previously paid, the ultimate availability, timing, and amount of recovery remain uncertain and is subject to further legal and administrative developments. In March 2026, the U.S. Court of International Trade (CIT) issued an order directing U.S. Customs and Border Protection (CBP) to establish a process for the submission and review of refund claims related to affected IEEPA tariffs, and in April 2026, we submitted refund claims under that process. The ruling remains subject to a potential government appeal or stay request, with a deadline of June 7, 2026. As the recoverability and timing of any such refund remains uncertain, we have not recognized a receivable and corresponding offset to expense or asset as of March 31, 2026 and will not, until such amounts are realized or realizable. In addition, the U.S. federal government has recently introduced additional trade measures and investigations that may result in new tariffs. While we have taken actions to mitigate supply chain and cost impacts, including shifting production across jurisdictions, we may not fully offset ongoing trade and tariff developments.
Current report
Global semiconductor shortage. We are observing significant constraints in the global supply of semiconductors driven by the proliferation of AI infrastructure, which are materially impacting the broader hardware market. Heightened demand for these components has driven commodity prices to high levels, resulting in a substantial increase in the market price of DRAM modules. We believe these elevated costs act as a barrier to entry for the budget-segment of the self-built PC market and may negatively impact our results in the near term. However, our core market position is centered on the enthusiast-level PC builder, a demographic that historically demonstrates less price sensitivity than the broader market. Additionally, we believe these supply dynamics are occurring alongside a shift in the workstation market driven by the expanded implementation of AI. As the costs of running critical business tasks on public cloud-based Large Language Models ("LLMs") increase, there is growing demand to operate local LLMs on private workstation hardware. We believe we are well positioned to address this emerging trend by delivering high-performance memory components and fully integrated, purpose-built systems necessary to support local AI processing workloads.
Current report
Net revenue decreased by 4.1% for the three months ended March 31, 2026, as compared to the same period last year.
Current report
Gross margin increased by 500 basis point for the three months ended March 31, 2026, as compared to the same period last year. The increase was primarily attributable to a 580 basis point improvement from favorable product mix and higher pricing, partially offset by a 100 basis point impact from higher tariff costs.
Current report
SG&A expenses decreased by $2.0 million, or 2.3%, for the three months ended March 31, 2026, as compared to the same period last year primarily due to a $2.9 million decrease in distribution costs due to lower sales volume, a $2.4 million decrease in stock-based compensation expense and a $1.4 million decrease in bad debt expense. These decreases were partially offset by a $3.2 million increase in personnel-related costs, a $0.7 million increase in amortization expense resulting from shortened useful lives of certain intangible assets, and a $0.6 million increase in facilities and maintenance expenses.
Current report
Income Tax Benefit (Expense)
Current report
Net revenue of the Gamer and Creator Peripherals segment increased by 10.1% for the three months ended March 31, 2026, as compared to the same period last year. The increase was primarily driven by higher sales within our peripherals, streaming and sim racing categories as a result of new product introductions and market share gains.
Current report
Net revenue of the Gaming Components and Systems segment decreased by 10.3% for the three months ended March 31, 2026, as compared to the same period last year. The decrease was primarily driven by softer demand in the self-built PC market, reflecting the lack of a significant GPU-driven upgrade cycle and elevated memory pricing, partially offset by continued strength in memory and systems products.
Current report
The gross margin of the Gamer and Creator Peripherals segment decreased by 70 basis point for the three months ended March 31, 2026 as compared to the same period last year. The decrease was primarily driven by a 170 basis point impact from tariffs, a 160 basis point impact from higher promotional costs, and a 70 basis point impact from higher air freight costs. These decreases were partially offset by a 320 basis point improvement from favorable product mix.
Current report
The gross margin of the Gaming Components and Systems segment increased by 670 basis point for the three months ended March 31, 2026 as compared to the same period last year. The increase was primarily driven by a 520 basis point improvement from memory price increases and favorable product mix, a 140 basis point benefit from lower promotional activity due to strong demand for memory products, a 90 basis point benefit from lower rework and warranty costs, and a 90 basis point benefit from lower air freight costs due to improved supply availability. These increases were partially offset by an 80 basis point impact from lower factory utilization and a 70 basis point impact from tariffs.
Current report
Cash Flows
Current report
Debt Obligations
Current report
Share Repurchase Program
Current report
On January 30, 2026, the Board of Directors authorized us to repurchase up to $50 million of our outstanding shares of common stock. This represents our first repurchase authorization. The repurchase program was effective immediately, does not have an expiration date and is subject to market conditions, applicable laws and regulatory guidelines. The timing and amount of any repurchases will depend on a variety of factors, and the program may be suspended or discontinued at any time and without prior notice.
Current report
For the three months ended March 31, 2026, we repurchased approximately 0.9 million shares of our common stock for an aggregate cost of $5.0 million. As of March 31, 2026, approximately $45.0 million remained available under this program.
Removed paragraphs (21)
Previous report
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Previous report
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 report
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 report
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 report
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 report
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 report
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 report
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 report
Income Tax Expense
Previous report
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 report
We assess our deferred tax assets and liabilities to determine if it is more likely than not that they will be realized; if not, a valuation allowance is required to be recorded. Previously, in the third quarter of 2024, we reached a cumulative loss position over the previous three years, and with consideration of other negative evidence, we concluded that it is more likely than not that we will not realize our U.S. federal and state deferred tax assets are not more likely than not to be realized. As a result of the foregoing, a full valuation allowance was recorded in 2024. The deferred tax liability related to indefinite-lived assets was excluded from sources of future taxable income, as the timing of its reversal cannot be predicted due to the nature of its indefinite life.
Previous report
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 report
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 report
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 report
The gross margin of the Gamer and Creator Peripherals segment increased by 100 bps for the three months ended September 30, 2025 as compared to the same period last year. The increase was primarily attributable to a 240 bps increase from an improved product mix and the inclusion of post-acquisition revenue from our September 2024 Fanatec Acquisition, and a 200 bps increase from lower inventory reserves. These increases were partially offset by a 140 bps decrease from higher return and rework costs, a 130 bps decrease from higher tariff costs, and a 90 bps decrease from lower factory utilization.
Previous report
The gross margin of the Gamer and Creator Peripherals segment increased by 130 bps for the nine months ended September 30, 2025 as compared to the same period last year primarily attributable to an improved product mix and the inclusion of post-acquisition revenue from our September 2024 Fanatec Acquisition.
Previous report
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 report
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 report
Liquidity
Previous report
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 report
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.
Reworded paragraphs (32)
Previous wording
You should read the following discussion of our financial condition and results of operations in conjunction with the condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q as well as in conjunction with the Risk Factors set forth in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the United States Securities and Exchange Commission (“SEC”) on February 26, 2025 and the Risk Factors set forth in Part II, Item 1A of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, as filed with the SEC on May 7, 2025. The following discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of many factors, including but not limited to those discussed under the heading “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024 or in Part II, Item 1A of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, and below in Item 3,“Quantitative and Qualitative Disclosures about Market Risk”.
Current wording
You should read the following discussion of our financial condition and results of operations in conjunction with the condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q as well as in conjunction with the Risk Factors set forth in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the United States Securities and Exchange Commission (“SEC”) on February 25, 2026. The following discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of many factors, including but not limited to those discussed under the heading “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025, and below in Item 3,“Quantitative and Qualitative Disclosures about Market Risk”.
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 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.
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 whom 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 component 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 proprietary software platforms: iCUE and the Elgato streaming suite for content creators, including our Stream Deck control software, which provide unified, intuitive performance, aesthetic control and customization across our Corsair hardware ecosystem and Elgato streaming products. 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
Gaming Components and Systems. Includes our high-performance power supply units, cooling solutions, computer cases, and DRAM modules, as well as high-end prebuilt and custom-built gaming PCs and laptops, and gaming monitors, among others.
Current wording
Gaming Components and Systems. Includes our high-performance power supply units, cooling solutions, computer cases, and DRAM modules, as well as high-end prebuilt and custom-built gaming PCs and laptops, and AI workstations, among others.
Previous 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.
Current wording
Our net revenue was $354.5 million and $369.8 million for the three months ended March 31, 2026 and 2025, respectively. Our gross margin was 32.7% and 27.7% for the three months ended March 31, 2026 and 2025, respectively. We had a net income (loss) of $13.1 million and $(10.3) million for the three months ended March 31, 2026 and 2025, respectively.
Previous 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.
Current wording
As of March 31, 2026, we had cash and restricted cash, in the aggregate of $119.7 million and the principal balance outstanding on our June 2030 Term Loan was $120.3 million. Cash generated from operations was $29.7 million and $18.8 million for the three months ended March 31, 2026 and 2025, respectively.
Previous wording
Our results of operations and financial condition are affected by numerous factors, including those discussed under the heading “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024, in Part II, Item 1A of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 and of this Quarterly report on Form 10-Q, as well as those described below.
Current wording
Our results of operations and financial condition are affected by numerous factors, including those discussed under the heading “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025, as well as those described below.
Previous wording
Our business and financial performance depend significantly on worldwide economic conditions. We continue to face global macroeconomic challenges including evolving dynamics in the global trade environment and changes in laws or policies governing the terms of foreign trade, in particular increased trade restrictions, tariffs or taxes on imports or exports from or to countries where we manufacture or sell our products, inflationary trends, uncertainty in key financial markets, volatility in exchange rates and the risk of a recession. Other geopolitical concerns continue such as the effects of the ongoing conflicts in Ukraine and the Middle East, the tensions in the Red Sea, and any potential conflicts between China and Taiwan, and the resulting supply chain constraints.
Current wording
Our business and financial performance depend significantly on worldwide economic conditions. We continue to face global macroeconomic challenges including evolving dynamics in the global trade environment and changes in laws or policies governing the terms of foreign trade, in particular increased trade restrictions, tariffs or taxes on imports or exports from or to countries where we manufacture or sell our products, inflationary trends, uncertainty in key financial markets, and volatility in exchange rates.
Previous wording
We are exposed to fluctuations in foreign currency exchange rates. As a result of our foreign sales and operations, we have revenue, payroll and other operating expenses denominated in foreign currencies, in particular the Euro, British Pound, Chinese Yuan, and Taiwan Dollar. Unfavorable movement in the exchange rate between the U.S. dollar and the currencies we conduct sales or operate in may negatively impact our financial results.
Current wording
We are exposed to fluctuations in foreign currency exchange rates. As a result of our foreign sales and operations, we have revenue, payroll and other operating expenses denominated in foreign currencies, in particular the Euro, British Pound, Taiwan Dollar, and Chinese Yuan. Unfavorable movement in the exchange rate between the U.S. dollar and the currencies we conduct sales or operate in may negatively impact our financial results.
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 continue 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. In our Gamer and Creator Peripherals segment, we expect continued contribution from our Fanatec product portfolio, which expands our offerings in sim racing and complements our broader ecosystem of gaming and streaming products.
Previous wording
Introduction of new high-performance computing hardware and sophisticated games. We believe that the introduction of more powerful CPUs and GPUs that place increased demands on other system components, such as memory, power supply or cooling, has a significant effect on increasing the demand for our products. In addition, we believe that the introduction and success of games with sophisticated graphics that place increasing demands on system processing speed and capacity and therefore require more powerful CPUs or GPUs, drives demand for our high-performance gaming components and systems, such as power supply units and cooling solutions, and our gaming PC memory. As a result, our operating results may be materially affected by the timing of, and the rate at which computer hardware companies introduce, new and enhanced CPUs and GPUs, the timing of, and rate at which computer game companies and developers introduce sophisticated new and improved games that require increasingly high levels of system and graphics processing power, and whether these new products and games are widely accepted by gamers. Following a period of elevated demand in 2023, driven by increased GPU availability and popular game launches, demand moderated during 2024 as we entered into a mid-cycle period for new GPU platforms. In early 2025, the launch of the latest generation of GPUs led to a resurgence in demand for our gaming components and systems products, and we expect this trend to continue for the rest of 2025.
Current wording
Introduction of new high-performance computing hardware and sophisticated games. We believe that the introduction of more powerful CPUs and GPUs that place increased demands on other system components, such as memory, power supply units or cooling, has a significant effect on increasing the demand for our products. In addition, we believe that the introduction and success of games with sophisticated graphics that place increasing demands on system processing speed and capacity and therefore require more powerful CPUs or GPUs, drives demand for our high-performance gaming components and systems, such as power supply units and cooling solutions, and our gaming PC memory. Demand for our product and our operating results may be affected by the timing and pace of new CPU and GPU launches, as well as the introduction and adoption of new game titles that require higher levels of system performance. For example, following the early 2025 launch of the latest generation of GPUs, we experienced a period of elevated demand as enthusiasts upgraded their systems to support new architectures. In 2026, we expect demand to reflect mid-cycle conditions, as the market anticipates potential hardware refreshes and major software titles scheduled for late 2026 and 2027. However, the timing and market acceptance of these new products, as well as the ongoing impact of component costs on hardware affordability, may continue to influence the rate of consumer upgrades.
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 29.3% 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.
Current wording
We operate a global sales network that consists primarily of retailers (including e-retailers), as well as distributors, which 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 25.0% and 28.3% of our net revenue for the three months ended March 31, 2026 and 2025, respectively, and sales to our ten largest customers accounting for approximately 46.8% and 50.4% of our net revenue for the three months ended March 31, 2026 and 2025, 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 of revenue 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 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.
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 2025 and for the three months ended March 31, 2026 was favorably impacted by the release of 105 and 20 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 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.
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, semiconductor shortages, delay in the anticipated launch of new or enhanced GPUs and CPUs, and shifts in customer behavior.
Previous wording
Integrated circuits, or ICs, account for most of the cost of producing our high-performance memory products. IC prices are subject to pricing fluctuations, which can affect the average sales prices of memory modules, and thus impact our net revenue, and can have an effect on gross margins. The impact on net revenues can be significant as our high-performance memory products, included within our Gaming Components and Systems segment, represent a significant portion of our net revenue.
Current wording
Integrated circuits (“ICs”) account for most of the cost of producing our high-performance memory products. IC prices are subject to pricing fluctuations, which can affect the average sales prices of memory modules, and thus impact our net revenue, and can have an effect on gross margins. The impact on net revenues can be significant as our high-performance memory products, included within our Gaming Components and Systems segment, represent a significant portion of our net revenue.
Previous 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.
Current wording
The decrease in net revenue in the three-month period was due to a 10.3% decrease in sales for our Gaming Components and Systems segment, which was partially offset by a 10.1% increase in sales for our Gamer and Creator Peripherals segment.
Previous 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.
Current wording
Product development expenses decreased by $0.4 million, or 2.2%, for the three months ended March 31, 2026, as compared to the same period last year primarily due to a $1.1 million decrease in consulting and contractor costs and a $0.8 million decrease in amortization expense as certain intangible assets became fully amortized. These decreases were partially offset by a $1.6 million increase in personnel-related costs.
Previous wording
Interest Expense, Interest Income and Other Expense, Net
Current wording
Interest Expense, Interest Income and Other (Expense) Income, Net
Previous 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.
Current wording
Interest expense decreased by $1.0 million, or 36.8% for the three months ended March 31, 2026, as compared to the same period last year primarily due to lower principal balance on our term loan combined with lower interest rates.
Previous 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.
Current wording
Interest income decreased by $0.2 million, or 33.2% for the three months ended March 31, 2026, as compared to the same period 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 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.
Current wording
Other (expense) income, net changed by $4.3 million, from a net expense of $3.9 million for the three months ended March 31, 2025 to a net income of $0.4 million for the three months ended March 31, 2026. Other (expense) income, net for the three months ended March 31, 2025 included a $2.6 million reversal of bargain purchase gain from the Fanatec Acquisition that was recognized in year ended December 31, 2024. The remainder of other (expense) income, net for the three months ended March 31, 2026 and 2025 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 is primarily driven by fluctuations in exchange rates for the Euro, the British Pound, and the New Taiwan Dollar.
Previous 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.
Current wording
Our effective tax rates were a tax benefit of 1.2% and a tax expense of (25.0)% for the three months ended March 31, 2026 and 2025, respectively. The change in the effective tax rate was primarily driven by a net discrete tax benefit recognized in the first quarter of 2026 related to an internal restructuring and transfer of intellectual property, partially offset by tax expense on taxable income and changes in the mix of income across jurisdictions. We continue to maintain a full valuation allowance against our U.S. deferred tax assets, and as a result, our domestic tax provision is primarily limited to state taxes and discrete adjustments.
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 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.
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 March 31, 2026, our principal sources of liquidity were cash and restricted cash, in aggregate of $119.7 million, and our borrowing capacity under the June 2030 Revolving Facility (as defined under “Capital Resources” below) of $99.6 million.
Previous wording
Our principal uses of cash generally include purchases of inventory, payroll and other operating expenses related to the development and marketing of our products, capital expenditure, repayments of debt and related interest, income tax payments, future investments in business and technology, and selective mergers and acquisitions.
Current wording
Our principal uses of cash generally include purchases of inventory, payroll and other operating expenses related to the development and marketing of our products, capital expenditures, repayments of debt and related interest, income tax payments, share repurchases, future investments in business and technology, and selective mergers and acquisitions.
Previous wording
We believe that the anticipated cash flows from operations based on our current business outlook, combined with our current levels of cash balances at September 30, 2025, supplemented with the borrowing capacity under our June 2030 Revolving Facility, if and as needed, will be sufficient to fund our principal uses of cash for at least the next twelve months. In the longer term, liquidity will depend to a great extent on our future revenues and our ability to appropriately manage our costs based on the demand for our products. We may require additional funding and need or choose to raise the required funds through borrowings or public or private sales of debt or equity securities. The sale of additional equity would result in additional dilution to our stockholders. The incurrence of debt financing would result in debt service obligations and the instruments governing such debt could provide for operating and financial covenants that would restrict our operations. There can be no assurance that any such equity or debt financing will be available on favorable terms, or at all.
Current wording
We believe that the anticipated cash flows from operations based on our current business outlook, combined with our current levels of cash balances at March 31, 2026, supplemented with the borrowing capacity under our June 2030 Revolving Facility, if and as needed, will be sufficient to fund our principal uses of cash for at least the next twelve months. In the longer term, liquidity will depend to a great extent on our future revenues and our ability to appropriately manage our costs based on the demand for our products. We may require additional funding and need or choose to raise the required funds through borrowings or public or private sales of debt or equity securities. The sale of additional equity would result in additional dilution to our stockholders. The incurrence of debt financing would result in debt service obligations and the instruments governing such debt could require operating and financial covenants that would restrict our operations. There can be no assurance that any such equity or debt financing will be available on favorable terms, or at all.
Previous 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.
Current wording
Net cash provided by operating activities for the three months ended March 31, 2026 was $29.7 million and consisted of net income of $13.1 million, and non-cash adjustments of $18.0 million, partially offset by a net cash outflow of $1.3 million from changes in net operating assets and liabilities. Non-cash adjustments primarily consisted of amortization of intangibles, depreciation, and stock-based compensation expense. The net cash outflow from changes in operating assets and liabilities was primarily related to a decrease in accounts payable due to lower inventory purchases and vendor mix and a decrease in other liabilities and accrued expenses due to a reduction in the accruals needed for customer incentives programs; a reduction in sales returns reserves in line with lower revenue; as well as the payment of the 2025 employee bonus during the quarter. These outflows were partially offset by a decrease in accounts receivable from lower revenue and favorable customer mix, and a decrease in inventory compared to the prior quarter.
Previous 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.
Current wording
Net cash provided by operating activities for the three months ended March 31, 2025 was $18.8 million and consisted of non-cash adjustments of $27.1 million, a net cash inflow of $2.0 million from changes in our net operating assets and liabilities, partially offset by a net loss of $10.3 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, partially offset by cash outflows from an increase in inventories as we stocked up 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.
Previous wording
Cash used in investing activities was $10.1 million for the nine months ended September 30, 2025 for capital expenditure.
Current wording
Cash used in investing activities was $3.7 million for the three months ended March 31, 2026, compared to $3.1 million for the same period in 2025, primarily reflecting capital expenditures.
Previous 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.
Current wording
Cash used in financing activities was $5.3 million for the three months ended March 31, 2026 and primarily consisted of $5.0 million repurchases of common stock, $1.6 million repayment of debt, $0.6 million payment of taxes related to net share settlement of equity awards, and $0.2 million payment of dividends to noncontrolling interest, partially offset by $2.1 million proceeds received from the issuance of shares through the employee equity incentive plans.
Previous 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.
Current wording
Cash used in financing activities was $22.3 million for the three months ended March 31, 2025 and consisted of $25.0 million repayment of debt, $0.4 million payment of taxes related to net share settlement of equity awards, and $0.3 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.
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. 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.
Current wording
On June 30, 2025, we entered into an Amended and Restated Credit Agreement with BofA to refinance our prior first lien credit and guaranty agreement with BofA, entered into on September 3, 2021. 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.
Previous 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.
Current wording
As of March 31, 2026, we had $2.7 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 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.
Current wording
There have been no material changes to our critical accounting policies and estimates during the three months ended March 31, 2026 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, 2025 filed with the SEC on February 25, 2026.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
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.