Corsair Gaming, Inc.

Previous wording

Our net revenue was $314.3 million and $320.1 million for the three months ended June 30, 2026 and 2025, respectively. Our gross margin was 33.2% and 26.8% for the three months ended June 30, 2026 and 2025, respectively. We had net income of $9.1 million and net loss of $20.3 million for the three months ended June 30, 2026 and 2025, respectively.

Current wording

Our net revenue was $367.0 million and $345.8 million for the three months ended September 30, 2026 and 2025, respectively. Our gross margin was 26.7% and 26.9% for the three months ended September 30, 2026 and 2025, respectively. We had net loss of $2.4 million and $10.4 million for the three months ended September 30, 2026 and 2025, respectively.

Previous wording

As of June 30, 2026, we had cash and restricted cash, in the aggregate of $193.9 million and the principal balance outstanding on our June 2030 Term Loan was $118.8 million. Cash generated from operations was $104.6 million and $48.9 million for the six months ended June 30, 2026 and 2025, respectively.

Current wording

As of September 30, 2026, we had cash and restricted cash, in the aggregate of $136.2 million and the principal balance outstanding on our June 2030 Term Loan was $117.2 million. Cash generated from operations was $90.5 million and $12.0 million for the nine months ended September 30, 2026 and 2025, respectively.

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, changes in laws or policies governing foreign trade, in particular tariffs, trade restrictions 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.

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, changes in laws or policies governing foreign trade, in particular tariffs, trade restrictions or taxes on imports or exports from or to countries where we manufacture or sell our products, inflationary pressure, uncertainty in key financial markets, and volatility in exchange rates.

Previous wording

Ongoing geopolitical developments, including conflicts and tensions in the Middle East, Ukraine, the Red Sea region, and between China and Taiwan, have contributed to volatility in global energy prices, transportation costs, and supply chains. These developments may increase our freight, logistics, and other input costs, and may affect consumer spending due to broader economic uncertainty. We continue to monitor these situations and implement mitigation actions; however, their duration, severity, and broader economic consequences remain uncertain.

Current wording

Ongoing geopolitical developments, including conflicts and tensions in the Middle East, Ukraine, the Red Sea region, and between China and Taiwan, have contributed to volatility in global energy prices, transportation costs, and supply chains. These developments have and may continue to increase our freight, logistics, and other input costs, and may affect consumer spending due to broader economic uncertainty. We continue to monitor these situations and implement mitigating actions; however, their duration, severity, and broader economic consequences remain uncertain.

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. Following a February 2026 U.S. Supreme Court ruling invalidating certain tariffs previously imposed under the International Emergency Economic Powers Act (IEEPA) and a subsequent order by the Court of International Trade establishing a refund claims process, we submitted refund claims in April 2026 and have since received and recognized substantially all of the associated refunds totalling $18.1 million including interest earned, of which approximately $15.6 million was recorded as a reduction to cost of goods sold during the second quarter of 2026. Separately, the U.S. federal government has introduced additional trade measures and investigations resulting in new tariffs. While we have taken mitigating actions, including shifting production across jurisdictions, the extent to which these actions will offset the impact of ongoing trade and tariff developments remains uncertain.

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. As previously disclosed, following a February 2026 U.S. Supreme Court ruling invalidating certain tariffs previously imposed under the International Emergency Economic Powers Act (IEEPA), we received and recognized substantially all of the associated refunds totaling $18.1 million including interest earned, of which approximately $15.6 million was recorded as a reduction to cost of goods sold during the second quarter of 2026. However, the trade and tariff environment remains uncertain, and additional tariffs, trade measures, or investigations may be introduced or modified in the future. While we have taken mitigating actions, including shifting production across jurisdictions, the extent to which these actions will offset the impact of ongoing trade and tariff developments remains uncertain.

Previous wording

We also experience seasonality in the sale of our products, which may be affected by general economic conditions. The extent of the impact of macroeconomic conditions and geopolitical tensions on our business, sales, results of operations, cash flows and financial condition will depend on future developments, which are not within our control and are highly uncertain and cannot be predicted. We will continue to evaluate these risks and uncertainties and further our mitigation plans.

Current wording

We also experience seasonality in the sale of our products, which may be affected by general economic conditions. The extent of the impact of macroeconomic conditions and geopolitical tensions on our business, sales, results of operations, cash flows and financial condition will depend on future developments, which are not within our control and are highly uncertain and cannot be predicted. We will continue to evaluate these risks and uncertainties and further our plans to mitigate them.

Previous wording

Increasing gamer and creators 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 broadens our sim racing offerings and complements our broader ecosystem of gaming and streaming products. On August 3, 2026, we acquired substantially all of the assets of Trak Racer, which designs, manufactures, distributes and sells racing, flight, motorcycle and other simulation cockpits, chassis, rigs and related peripherals and accessories, pursuant to an asset purchase agreement. The acquisition expands our sim racing product offerings and provides us with immediate access to a larger addressable market. Trak Racer will operate as a sub-brand under Fanatec. In addition, we acquired a minority interest in Bitfocus AS, a Norwegian software company specializing in production automation and control software for streaming, broadcast, and live event workflows. This investment supports our strategy of deepening the integration between our hardware and software ecosystem, including through planned integration with our Stream Deck platform, and provides us with exposure to the broader professional streaming and content creation software market. See Note 14, Subsequent Events, for additional details.

Current wording

Increasing gamer and creators 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 price of memory, GPUs, CPUs , 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 broadens our sim racing offerings and complements our broader ecosystem of gaming and streaming products. On August 4, 2026, we acquired substantially all of the assets of Trak Racer, which designs, manufactures, distributes and sells racing, flight, motorcycle and other simulation cockpits, chassis, rigs and related peripherals and accessories, pursuant to an asset purchase agreement. The acquisition expands our sim racing product offerings and provides us with immediate access to a larger addressable market. In addition, we acquired a minority interest in Bitfocus AS, a Norwegian software company specializing in production automation and control software for streaming, broadcast, and live event workflows. This investment supports our strategy of deepening the integration between our hardware and software ecosystem, including through planned integration with our Stream Deck platform, and provides us with access to the broader professional streaming and content creation software market. We continue to broaden our portfolio. SCUF Omega expanded our premium controller offering for PlayStation 5 and PlayStation 5 Pro. Further, following quarter-end, we launched the SABRE v3 PRO PureVector gaming mouse series, which features exclusive technology co-developed with Aimlabs to personalize directional sensitivity and improve aiming speed and consistency. Also, Elgato expanded into mobile recording with Wave Go, its first wireless microphone, extending the Wave ecosystem beyond the desktop with a convertible clip-on and handheld design.

Previous wording

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. Because our product portfolio is purpose-built to support high-performance CPUs and GPUs through advanced cooling and power delivery solutions, we believe we are well positioned to benefit from this ongoing market evolution toward more demanding computing and gaming workloads. 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 release in 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.

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. Because our product portfolio is purpose-built to support high-performance CPUs and GPUs through advanced cooling and power delivery solutions, we believe we are well positioned to benefit from this ongoing market evolution toward more demanding computing and gaming workloads. Demand for our product and our operating results may be affected by the timing, market pricing and pace of new CPU and GPU launches, the price of memory, 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. Market conditions remained mid-cycle for the three months ended September 30, 2026, as the market anticipates potential hardware refreshes and major software titles scheduled for release over the remainder of 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

Global semiconductor shortage. We continue to observe significant constraints in the global supply of semiconductors, particularly memory components, driven in part by demand associated with the buildout of AI infrastructure, which are materially impacting the broader hardware market. These dynamics have resulted in a substantial increase in memory prices. We are both a seller of memory products and a purchaser of memory and other components from third-party suppliers. As a result, elevated pricing benefits net sales and margin on the memory products we sell, while also increasing our cost of components across our broader product offerings. In addition, elevated component costs have made it more difficult for cost-sensitive consumers to upgrade or build new systems, which we believe is negatively affecting overall demand within our Gaming Components and Systems segment. Our core market position remains centered on the enthusiast-level PC builder, a demographic that has historically demonstrated less price sensitivity than the broader market, which we believe partially mitigates this impact. 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. For example, in May 2026, we launched CORSAIR PRO, a new portfolio of AI workstations and servers designed to support AI development, fine-tuning, inference, and deployment workloads.

Current wording

Global semiconductor shortage. We continue to observe significant constraints in the global supply of semiconductors, particularly memory components, driven in part by demand associated with the buildout of AI infrastructure, which are materially impacting the broader hardware market. These dynamics have resulted in a substantial increase in memory prices. We are both a seller of memory products and a purchaser of memory and other components from third-party suppliers. As a result, elevated pricing benefits net sales and margin on the memory products we sell, while also increasing our cost of components across our broader product offerings. In addition, elevated component costs have made it more difficult for cost-sensitive consumers to upgrade or build new systems, which we believe is negatively affecting overall demand within our Gaming Components and Systems segment. Our core market position remains centered on the enthusiast-level PC builder, a demographic that has historically demonstrated less price sensitivity than the broader market, which we believe partially mitigates this impact. 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.

Previous 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 25.7% and 29.2% of our net revenue for the six months ended June 30, 2026 and 2025, respectively, and sales to our ten largest customers accounting for approximately 47.9% and 50.7% of our net revenue for the six months ended June 30, 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.

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 24.5% and 29.3% of our net revenue for the nine months ended September 30, 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 nine months ended September 30, 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 2025 and for the six months ended June 30, 2026 was favorably impacted by the release of 105 and 45 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 nine months ended September 30, 2026 was favorably impacted by the release of 105 and 71 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

Our Gamer and Creator Peripherals segment has a higher gross margin than our Gaming Components and Systems segment. As a result, our overall gross margin is affected by changes in product mix. External factors can have an impact on our product mix, such as popular game releases that can increase sales of peripherals and availability of new CPUs and GPUs that can impact component sales. In addition, within our Gamer and Creator Peripherals and Gaming Components and Systems segments, gross margin varies between products, and significant shifts in product mix within either segment may also significantly impact our overall gross margin.

Current wording

Our Gamer and Creator Peripherals segment has a higher gross margin than our Gaming Components and Systems segment. As a result, our overall gross margin is affected by changes in product mix. External factors can have an impact on our product mix, such as popular game releases that can increase sales of peripherals and availability and cost of new CPUs and GPUs and the price of memory that can impact component sales. In addition, within our Gamer and Creator Peripherals and Gaming Components and Systems segments, gross margin varies between products, and significant shifts in product mix within either segment may also significantly impact our overall gross margin.

Previous wording

The decrease in net revenue in the three-month period was due to an 8.7% decrease in sales for our Gaming Components and Systems segment, partially offset by a 12.9% 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 7.5% increase in sales for our Gaming Components and Systems segment and a 3.4% increase in sales for our Gamer and Creator Peripherals segment.

Previous wording

The decrease in net revenue in the six-month period was due to a 9.6% decrease in sales for our Gaming Components and Systems segment, partially offset by a 11.5% increase in sales for our Gamer and Creator Peripherals segment.

Current wording

Net revenue for the nine-month ended September 30, 2026 was essentially flat with the same period last year. A 4.0% decrease in net revenue of the Gaming Components and Systems segment was offset by an 8.7% increase in sales for our Gamer and Creator Peripherals segment.

Previous wording

Gross margin increased by 560 bps for the six months ended June 30, 2026 as compared to the same period last year. The increase was primarily attributable to a 365 bps improvement from favorable product mix, a 165 bps benefit from lower tariff costs including refund of duties previously paid under tariffs imposed pursuant to IEEPA, a 75 bps decrease in freight costs, and a 45 bps decrease in promotional costs. These increases were partially offset by a 90 bps decrease from higher excess and obsolete inventory provisions and lower inventory absorption.

Current wording

Gross margin increased by 350 bps for the nine months ended September 30, 2026 as compared to the same period last year. The increase was primarily attributable to a 220 bps increase from favorable product mix, a 125 bps increase from lower tariff costs, including refund of duties previously paid under tariffs imposed pursuant to the International Emergency Economic Powers Act (IEEPA), a 85 bps increase from lower promotional cost, and a 60 bps increase from lower freight costs. These increases were partially offset by a 50 bps decrease from higher inventory reserves and a 45 bps decrease from higher royalty cost on certain new product launches.

Previous wording

SG&A expenses decreased by $4.0 million, or 4.7%, for the three months ended June 30, 2026 as compared to the same period last year primarily due to a $3.4 million decrease in stock-based compensation expense, a $3.2 million decrease in distribution costs, and a $1.4 million decrease in the provision for doubtful accounts. These decreases were partially offset by a $2.8 million increase in personnel-related costs and a $0.9 million increase in facilities and maintenance expense.

Current wording

SG&A expenses increased by $2.3 million, or 2.8%, for the three months ended September 30, 2026 as compared to the same period last year primarily due to a $2.0 million increase in personnel-related costs, a $1.4 million increase in legal and other professional service expenses, and a $1.2 million increase in stock-based compensation expense. These increases were partially offset by a $0.8 million decrease in distribution costs, a $0.6 million decrease in facilities and maintenance expense and a $0.4 million decrease from the recovery of previously recognized bad debt.

Previous wording

SG&A expenses decreased by $6.1 million, or 3.5%, for the six months ended June 30, 2026 as compared to the same period last year, primarily due to a $6.1 million decrease in distribution costs, a $5.8 million decrease in stock-based compensation expense, and a $2.8 million decrease in the provision for doubtful accounts. These decreases were partially offset by a $6.1 million increase in personnel-related costs, a $1.4 million increase in facilities and maintenance expense, and a $0.7 million increase in marketing and advertising costs.

Current wording

SG&A expenses decreased by $3.7 million, or 1.5%, for the nine months ended September 30, 2026 as compared to the same period last year, primarily due to a $6.9 million decrease in distribution costs, a $4.6 million decrease in stock-based compensation expense, and a $2.8 million decrease in the provision for doubtful accounts. These decreases were partially offset by an $8.1 million increase in personnel-related costs as higher compensation more than offset a decline in headcount, a $0.8 million increase in facilities and maintenance expense, a $0.8 million increase in the allocation of corporate IT-related and facility-related costs and a $0.7 million increase in legal and other professional service expenses.

Previous wording

Product development expenses decreased by $2.1 million, or 11.8%, for the three months ended June 30, 2026 as compared to the same period last year, primarily due to a $1.5 million decrease in consultant and contractor costs, a $0.8 million decrease in intangible amortization expense and a $0.4 million decrease in project material costs. These decreases were partially offset by a $0.9 million increase in personnel-related costs.

Current wording

Product development expenses decreased by $1.6 million, or 9.5%, for the three months ended September 30, 2026 as compared to the same period last year, primarily due to a $0.8 million decrease in intangible amortization expense, a $0.7 million decrease in consultant and contractor costs, and a $0.4 million decrease in the allocation of corporate IT-related and facility-related costs.

Previous wording

Product development expenses decreased by $2.5 million, or 7.0%, for the six months ended June 30, 2026 as compared to the same period last year, primarily due to a $2.6 million decrease in consultant and contractor costs, a $1.5 million decrease in intangible amortization expense, and a $0.6 million decrease in project materials costs. These decreases were partially offset by a $2.2 million increase in personnel-related costs and a $0.5 million increase in restructuring costs.

Current wording

Product development expenses decreased by $4.0 million, or 7.8%, for the nine months ended September 30, 2026 as compared to the same period last year, primarily due to a $3.3 million decrease in consultant and contractor costs, a $2.3 million decrease in intangible amortization expense, a $0.8 million decrease in project materials costs, and a $0.6 million decrease in the allocation of corporate IT-related and facility-related costs. These decreases were partially offset by a $2.5 million increase in personnel-related costs.

Previous wording

Interest expense decreased by 32.4% and 34.7% for the three and six months ended June 30, 2026, respectively, as compared to the same periods last year, primarily due to a lower principal balance on our term loans combined with lower interest rates.

Current wording

Interest expense decreased by 17.6% and 29.8% for the three and nine months ended September 30, 2026, respectively, as compared to the same periods last year, primarily due to a lower principal balance on our term loans.

Previous wording

Interest income increased by 142.1% and 50.8% for the three and six months ended June 30, 2026, respectively, as compared to the same periods last year, primarily due to $0.6 million of interest income recognized in the second quarter of 2026 in connection with a refund of duties previously paid under the tariffs imposed pursuant to IEEPA, which the U.S. Supreme Court ruled invalid in February 2026.

Current wording

Interest income increased by 92.8% for the nine months ended September 30, 2026 as compared to the same period last year, primarily due to higher cash balances in our interest-bearing accounts and $0.6 million of interest income recognized in the second quarter of 2026 in connection with a refund of duties previously paid under the tariffs imposed pursuant to IEEPA, which the U.S. Supreme Court ruled invalid in February 2026.

Previous wording

Other (expense) income, net for the six months ended June 30, 2026 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, and other non-operating income. In addition, other (expense) income, net for the six months ended June 30, 2025 included a $2.6 million reversal of a bargain purchase gain from the Fanatec Acquisition that was recognized in the prior year. 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 for the nine months ended September 30, 2026 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, and other non-operating income. In addition, other (expense) income, net for the nine months ended September 30, 2025 included a $2.6 million reversal of a bargain purchase gain from the Fanatec Acquisition that was recognized in the prior year. 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

Because the Company is unable to make a reliable estimate of its annual effective tax rate given the non-recurring nature of certain items affecting operating results in 2026, income tax expense for the three and six months ended June 30, 2026 was computed using the actual year-to-date effective tax rate method, rather than the estimated annual effective tax rate method, adjusted for discrete items.

Current wording

Because the Company is unable to make a reliable estimate of its annual effective tax rate given the non-recurring nature of certain items affecting operating results in 2026, income tax expense for the three and nine months ended September 30, 2026 was computed using the actual year-to-date effective tax rate method, rather than the estimated annual effective tax rate method, adjusted for discrete items.

Previous wording

Our effective tax rates were tax benefit of 0.3% and 1.8% for the three months ended June 30, 2026 and 2025, respectively. The change in our effective tax rate for the three months ended June 30, 2026, compared to the prior year period, was primarily driven by changes in the geographic mix of income and losses across jurisdictions, partially offset by the release of a FIN 48 reserve upon the conclusion of our Netherlands income tax audit.

Current wording

Our effective tax rates were tax expense of (70.9)% and (25.0)% for the three months ended September 30, 2026 and 2025, respectively. The change in our effective tax rate for the three months ended September 30, 2026, compared to the prior year period, was primarily driven by changes in the geographic mix of income and losses across jurisdictions and the continued application of a full valuation allowance against our U.S. deferred tax assets, which limited the tax benefit on the U.S. pre-tax loss, combined with an increase in foreign pre-tax income.

Previous wording

Our effective tax rates were tax benefit and expense of 0.8% and (5.8)% for the six months ended June 30, 2026 and 2025, respectively. Our effective tax rate in both periods reflects the continued application of a full valuation allowance against our U.S. federal and state deferred tax assets, which limits the extent to which U.S. pre-tax results affect our consolidated provision. The change in our effective tax rate for the six months ended June 30, 2026, was primarily due to discrete tax benefits recognized upon the favorable resolution of a tax audit in the Netherlands and the transfer of intellectual property from the United Kingdom to the United States, partially offset by increased tax expense from shifting from a consolidated pre-tax loss in the prior-year period to consolidated pre-tax income in the current period.

Current wording

Our effective tax rates were tax expense of 3.9% and (10.1)% for the nine months ended September 30, 2026 and 2025, respectively. Our effective tax rate in both periods reflects the continued application of a full valuation allowance against our U.S. federal and state deferred tax assets, which limits the extent to which U.S. pre-tax results affect our consolidated provision. The change in our effective tax rate for the nine months ended September 30, 2026, was primarily due to discrete tax benefits recognized upon the favorable resolution of a tax audit in the Netherlands and the transfer of intellectual property from the United Kingdom to the United States, partially offset by increased tax expense from shifting from a consolidated pre-tax loss in the prior-year period to consolidated pre-tax income in the current period.

Previous wording

Net revenue of the Gamer and Creator Peripherals segment increased by 12.9% and 11.5%, respectively, for the three and six months ended June 30, 2026 as compared to the same periods 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 channel expansion.

Current wording

Net revenue of the Gamer and Creator Peripherals segment increased by 3.4% and 8.7%, respectively, for the three and nine months ended September 30, 2026 as compared to the same periods 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, channel expansion and the acquisition of Trak Racer during the quarter.

Previous wording

Net revenue of the Gaming Components and Systems segment decreased by 8.7% and 9.6%, respectively, for the three and six months ended June 30, 2026 as compared to the same periods 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 growth in demand for memory and systems products.

Current wording

Net revenue of the Gaming Components and Systems segment increased by 7.5% for the three months ended September 30, 2026 compared to the same period last year, primarily driven by memory, which grew 42.7% on higher demand and increased prices. For the nine months ended September 30, 2026, net revenue decreased by 4.0% as the memory growth was more than offset by lower sales of other components products, resulting from softer demand in the self-built PC market, due to the lack of a significant GPU-driven upgrade cycle and elevated memory pricing.

Previous wording

The gross margin of the Gaming Components and Systems segment increased by 630 bps for the six months ended June 30, 2026 as compared to the same period last year. The increase was primarily attributable to a 295 bps improvement from favorable product mix, a 150 bps benefit from lower tariff costs related to the IEEPA tariff refund, a 140 bps decrease in freight costs, and a 120 bps decrease in promotional costs. These increases were partially offset by a 75 bps decrease from lower inventory absorption.

Current wording

The gross margin of the Gaming Components and Systems segment increased by 400 bps for the nine months ended September 30, 2026 as compared to the same period last year. The increase was primarily attributable to a 120 bps increase from favorable product mix, a 115 bps increase from lower promotional cost, a 85 bps increase from lower air freight costs, and a 110 bps increase from lower tariff costs related to the IEEPA tariff refund. These increases were partially offset by a 60 bps decrease from lower inventory absorption from lower 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, 2026, our principal sources of liquidity were cash and restricted cash, in aggregate of $193.9 million, and our borrowing capacity under the June 2030 Revolving Facility (as defined under “Capital Resources” below) of $99.6 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, 2026, our principal sources of liquidity were cash and restricted cash, in aggregate of $136.2 million, and our borrowing capacity under the June 2030 Revolving Facility (as defined under “Capital Resources” below) of $99.4 million.

Previous wording

Net cash provided by operating activities for the six months ended June 30, 2026 was $104.6 million and consisted of net income of $22.2 million, adjusted for non-cash items of $33.6 million and a net cash inflow of $48.8 million from changes in our net operating assets and liabilities. The non-cash adjustments primarily consisted of $18.6 million of amortization of intangibles, $12.6 million of stock-based compensation expense, and $7.2 million of depreciation, partially offset by a $6.4 million net deferred tax benefit. The net cash inflow from changes in our net operating assets and liabilities was primarily related to a $73.1 million decrease in accounts receivable and a $38.9 million decrease in inventories, partially offset by a $33.7 million decrease in accounts payable due to lower inventory purchases, the timing of vendor payments and mix of vendor terms, and a $29.5 million decrease in other liabilities and accrued expenses.

Current wording

Net cash provided by operating activities for the nine months ended September 30, 2026 was $90.5 million and consisted of net income of $19.8 million, adjusted for non-cash items of $54.2 million and a net cash inflow of $16.5 million from changes in our net operating assets and liabilities. The non-cash adjustments primarily consisted of $27.5 million of amortization of intangibles, $19.1 million of stock-based compensation expense, and $11.0 million of depreciation, partially offset by a $5.1 million net deferred tax benefit. The net cash inflow from changes in our net operating assets and liabilities was primarily related to a $43.5 million decrease in accounts receivable, a $28.0 million increase in accounts payable due to timing of vendor payments and mix of vendor terms, and an $9.6 million increase in other liabilities and accrued expenses, partially offset by a $65.7 million increase in inventories primarily reflecting higher average prices of DRAM.

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 outflows 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

Cash used in investing activities was $6.4 million for the six months ended June 30, 2026 for capital expenditures.

Current wording

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

Previous wording

Cash used in financing activities was $2.6 million for the six months ended June 30, 2026 and consisted of $3.1 million repayment of debt and debt issuance costs, $5.0 million of repurchases of common stock, $0.8 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 $6.5 million proceeds received from the issuance of shares through employee equity incentive plans.

Current wording

Cash provided in financing activities was $0.5 million for the nine months ended September 30, 2026 and consisted of $4.7 million repayment of debt and debt issuance costs, $5.0 million of repurchases of common stock, $1.1 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 $11.5 million proceeds received from the issuance of shares through employee equity incentive plans.

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

On January 30, 2026, the Board of Directors authorized us to repurchase up to $50 million of our outstanding shares of common stock representing 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 wording

On January 30, 2026, the Board of Directors authorized us to repurchase up to $50.0 million of our outstanding shares of common stock representing 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.

Previous wording

As of June 30, 2026, we had $1.2 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, 2026, we had $1.3 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

A critical accounting policy is defined as one that has both a material impact on our financial condition and results of operations and requires us to make difficult, complex and/or subjective judgments, often as a result of the need to make estimates about matters that are inherently uncertain. Our condensed consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), which requires us to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the condensed consolidated financial statements, as well as the reported amounts of revenue and expenses during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe to be applicable and evaluate them on an ongoing basis to ensure they remain reasonable under current conditions. Actual results may differ significantly from those estimates, which could have a material impact on our business, results of operations, and financial condition.

Current wording

A critical accounting policy is defined as one that has both a material impact on our financial condition and results of operations and requires us to make difficult, complex and/or subjective judgments, often as a result of the need to make estimates about matters that are inherently uncertain. Our condensed consolidated financial statements are prepared in accordance with U.S. GAAP, which requires us to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the condensed consolidated financial statements, as well as the reported amounts of revenue and expenses during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe to be applicable and evaluate them on an ongoing basis to ensure they remain reasonable under current conditions. Actual results may differ significantly from those estimates, which could have a material impact on our business, results of operations, and financial condition.

Previous wording

There have been no material changes to our critical accounting policies and estimates during the six months ended June 30, 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.

Current wording

There have been no material changes to our critical accounting policies and estimates during the nine months ended September 30, 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.