Corsair Gaming, Inc. (CRSR): A Gaming and Streaming Powerhouse Poised for Continued Growth

Published on March 11, 2025 | Ticker: CRSR

Business Overview and History

Corsair Gaming, Inc. (CRSR) is a leading global provider and innovator of high-performance products for gamers, streamers, content-creators, and gaming PC builders. The company has a rich history spanning over three decades, during which it has successfully navigated the ever-evolving gaming and streaming landscape, cementing its position as a premier brand among enthusiasts.

Corsair was founded in 1994 by Andy Paul as a designer and manufacturer of high-performance computer memory products for gaming enthusiasts. Paul recognized the growing demand for customizable and high-quality PC components among gamers, which led to the company's initial focus on memory modules. Over the next two decades, Corsair expanded its product portfolio beyond memory to include power supply units, cooling solutions, computer cases, and other PC components essential for building high-end gaming systems.

In 2017, Corsair underwent a major corporate restructuring when it was acquired by private equity firm EagleTree Capital. This acquisition provided Corsair with additional resources and capital to accelerate its growth and expand into new product categories. The company's expansion continued with the acquisition of Elgato Systems in 2018, a leading provider of hardware and software for content creators and streamers.

Corsair's product portfolio further diversified as the company branched out into gaming peripherals such as keyboards, mice, headsets, and controllers. The company also made strategic moves into the pre-built gaming PC and laptop markets through the acquisitions of Origin PC and SCUF Gaming, a manufacturer of high-performance gaming controllers, both in 2019.

Throughout its history, Corsair has faced several challenges, including supply chain disruptions and component shortages, particularly during the COVID-19 pandemic, which impacted its ability to meet customer demand. The company has also had to contend with intense competition in the gaming hardware and peripherals market, requiring continuous investment in research and development to maintain its technological edge and brand reputation among gaming enthusiasts.

Business Segments

Corsair Gaming, Inc. operates in two main business segments: Gamer and Creator Peripherals, and Gaming Components and Systems.

Gamer and Creator Peripherals Segment

The Gamer and Creator Peripherals segment includes Corsair's high-performance gaming keyboards, mice, headsets, controllers, and streaming products. This segment offers products such as gaming keyboards, gaming mice, gaming headsets, game controllers, capture cards, stream decks, microphones, audio interfaces, streaming cameras, studio accessories, sim racing products, and gaming furniture. These peripherals are designed to enhance the performance and content creation capabilities of gamers and digital creators. In 2024, net revenue for the Gamer and Creator Peripherals segment was $472.7 million, representing 35.9% of Corsair's total net revenue. Gross profit for this segment was $182.3 million, with a gross margin of 38.6%.

Gaming Components and Systems Segment

The Gaming Components and Systems segment includes Corsair's high-performance power supply units (PSUs), cooling solutions, computer cases, DRAM modules, as well as high-end prebuilt and custom-built gaming PCs and laptops, and gaming monitors. This segment provides the key components that gamers use to build their own customized gaming and workstation desktop PCs. In 2024, net revenue for the Gaming Components and Systems segment was $843.7 million, representing 64.1% of Corsair's total net revenue. Gross profit for this segment was $145.3 million, with a gross margin of 17.2%.

Financial Performance and Ratios

Corsair's financial performance has been mixed in recent years, with the company navigating global macroeconomic challenges and industry-specific headwinds. In the fiscal year 2024, the company reported net revenue of $1.32 billion, down from $1.46 billion in the previous year. This decline was primarily attributed to a slowdown in the self-built PC market, which impacted the company's Gaming Components and Systems segment.

Financials

Despite the revenue decline, Corsair's gross margin improved from 24.7% in 2023 to 24.9% in 2024, driven by a stronger product mix and improved cost management. The company's adjusted EBITDA, however, declined from $95.1 million in 2023 to $54.7 million in 2024, reflecting the impact of the revenue decline and increased operating expenses.

For the fiscal year 2024, Corsair reported a net loss of $85.2 million, compared to a net income of $1.5 million in 2023. Operating cash flow for 2024 was $35.9 million, while free cash flow stood at $25.9 million.

In the most recent quarter (Q4 2024), Corsair reported revenue of $413.6 million, a slight decrease of 0.89% compared to Q4 2023. Net income for the quarter was $1.3 million.

Geographic Performance

In 2024, Corsair's sales were geographically distributed as follows:

Americas (including U.S.): 52.9% of net revenue
EMEA: 36.2% of net revenue
Asia Pacific: 10.9% of net revenue

Liquidity

Corsair's balance sheet remains healthy, with a current ratio of 1.57 as of December 31, 2024, indicating strong liquidity. The company's debt-to-equity ratio stands at 0.02, suggesting a conservative capital structure. Corsair's quick ratio is 0.92, further demonstrating its ability to meet short-term obligations.

As of December 31, 2024, Corsair had $109.6 million in cash and restricted cash. The company also has access to a $100 million Revolving Facility, of which $99.8 million remains undrawn, providing additional financial flexibility.

Navigating Challenges and Positioning for Growth

Corsair has weathered several challenges in recent years, including the impact of the COVID-19 pandemic, global supply chain disruptions, and the delayed launch of new GPU platforms. However, the company has demonstrated its resilience and ability to adapt to changing market conditions.

The acquisition of Fanatec in 2024 has further strengthened Corsair's position in the rapidly growing sim racing market, which is expected to reach a total addressable market of approximately $1 billion in 2024. By integrating Fanatec's premium sim racing products with its existing gaming PC, peripherals, and monitoring solutions, Corsair is poised to capitalize on the increasing popularity of sim racing among enthusiasts.

Moreover, the launch of NVIDIA's 50 Series Blackwell GPUs in early 2025 is expected to drive a surge in demand for high-performance gaming components and systems, a segment where Corsair has a strong presence. The company's focus on innovation, diversified product portfolio, and strategic acquisitions have positioned it well to capitalize on these industry trends.

Outlook and Risks

For the full year 2025, Corsair is guiding for total revenue in the range of $1.4 billion to $1.6 billion, adjusted operating income between $67 million and $87 million, and adjusted EBITDA in the range of $80 million to $100 million. This outlook reflects the company's confidence in its ability to navigate the current macroeconomic and industry challenges and return to a growth trajectory.

The company expects to have approximately $2.2 million of net interest expense per quarter in 2025 and is using an effective tax rate of approximately 15% to 17% for 2025. Corsair anticipates a full year weighted average diluted shares outstanding of approximately 106 million to 110 million shares in 2025.

However, Corsair is not without its risks. The company operates in a highly competitive industry, with constant pressure on pricing and the need for continuous innovation to stay ahead of the curve. Additionally, the company's reliance on a limited number of large customers, such as Amazon, which accounted for 30.9% of net revenue in 2024, exposes it to concentration risk.

The gaming hardware industry faced macroeconomic challenges in 2024, including ongoing conflicts in Ukraine and the Middle East, supply chain constraints, and inflationary pressures. These factors may continue to impact the industry in the near term. However, the overall gaming market and content creation/streaming markets are expected to continue growing, driven by factors such as the increasing popularity of gaming, esports, and video streaming.

Geopolitical tensions, supply chain disruptions, and the ongoing impact of the COVID-19 pandemic also pose potential risks to Corsair's operations and financial performance. The company's ability to effectively manage these risks and execute on its growth strategy will be crucial in determining its long-term success.

Conclusion

Corsair Gaming, Inc. is a well-established player in the gaming and streaming hardware market, with a diverse product portfolio and a strong brand recognition among enthusiasts. Despite facing headwinds in recent years, the company has demonstrated its resilience and adaptability, positioning itself for a return to growth in 2025 and beyond.

The acquisition of Fanatec, the anticipated launch of NVIDIA's 50 Series Blackwell GPUs, and the company's focus on innovation and diversification provide a solid foundation for Corsair's future success. While challenges remain, the company's financial position, liquidity, and long-term growth prospects make it an intriguing opportunity for investors seeking exposure to the dynamic gaming and streaming industries.

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