Corsair Gaming, Inc. (CRSR) Q1 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call highlights strong financial performance with record gross margins and EPS improvement. The share repurchase plan and growth in the direct-to-consumer channel are positive signals. Despite the cautious outlook for the Gaming Components segment due to semiconductor shortages, the overall guidance and market strategy, including AI market penetration, remain optimistic. The Q&A session did not reveal significant negative sentiment, supporting a positive outlook. Given the small market cap, the stock is likely to react positively, potentially within the 2% to 8% range.
Key Financial Performance
Revenue $354.5 million, above the midpoint of guidance, reflecting a 10% year-over-year growth in Gamer and Creator Peripherals and a 10% year-over-year decline in Gaming Components and Systems due to a non-GPU upgrade cycle and challenging memory pricing dynamics.
Gross Profit $116 million, increased 13% year-over-year, driven by strong execution within both segments.
Gross Margin 32.7%, a first quarter record, expanded due to favorable memory pricing, strong supply chain execution, and a shift towards higher-margin products.
Gamer and Creator Peripheral Segment Gross Profit $50.3 million, grew 8% year-over-year despite tariff-related headwinds, with a segment gross margin of 40.8%.
Gaming Components and Systems Segment Gross Profit $65.7 million, grew 18% year-over-year, with segment gross margin expanding significantly from 21.7% to 28.4%, driven by strong supply chain execution and favorable memory pricing.
Direct-to-Consumer Channel Revenue 20% of Q1 revenue, up from 17% a year ago, contributing to higher gross profit due to structurally higher margins.
Adjusted EBITDA $35.8 million, up 58% year-over-year, representing 10.1% of revenue, driven by disciplined operating expense management and gross profit growth.
Earnings Per Share (EPS) $0.11 on a GAAP basis and $0.27 on a non-GAAP basis, improved significantly compared to a loss in the prior year period.
Cash from Operations $29.7 million, driven by strong earnings and balanced working capital management.
Cash and Restricted Cash $119.7 million, increased sequentially by $20.9 million, resulting in a near 0 net debt position.
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Operating Highlights
Stream Deck Integration: Stream Deck is now integrated across Corsair's product lines, including keyboards, mice, and other peripherals, creating a connected ecosystem.
Wave Next: A new hardware and software integration unifying audio workflows with onboard DSP and tactile control.
AI-focused Workstations: Early demand for high-performance AI-focused workstations targeted at prosumers and SMB customers.
Elgato Marketplace Growth: Double-digit sequential growth in new accounts and digital products, driven by AI-assisted development.
Sim Racing Partnership: Strategic partnership with Formula 1, naming Fanatec as a licensed F1 brand partner and F1 Esports Official Partner.
Gross Margin Improvement: Gross margin expanded to a record 32.7%, driven by higher-margin product focus and operational discipline.
Direct-to-Consumer Growth: Direct-to-consumer channel grew to 20% of Q1 revenue, contributing to higher margins.
Cash Flow and Debt Reduction: Generated $29.7 million in cash from operations and reduced net debt to near zero.
Higher-Margin Product Focus: Shift towards higher-margin gaming and creator segments to improve profitability.
Scaling Ecosystem: Focus on growing the Elgato marketplace and direct-to-consumer channels to enhance margins and customer engagement.
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Risk or Challenges
Gaming Components and Systems Revenue Decline: Revenue in this segment declined 10% year-over-year due to a non-GPU upgrade cycle and challenging memory pricing dynamics. Semiconductor supply constraints further added headwinds on both availability and consumer demand. These industry-wide dynamics are expected to persist in the near term.
Semiconductor Supply Constraints: Global semiconductor shortages are impacting availability and consumer demand, particularly in the gaming components and systems segment. This challenge is expected to continue affecting operations and revenue in the near term.
Tariff-Related Headwinds: The company faced tariff-related headwinds in its Gamer and Creator Peripheral segment, which impacted gross profit despite overall growth in the segment.
Margin Normalization Risk: While the company achieved significant gross margin expansion, there is an expectation of margin normalization over time, which could impact profitability.
Seasonal Revenue Decline: The company expects a sequential decline in revenue from Q1 to Q2 due to the normal seasonal pattern of its business, which could affect short-term financial performance.
Cautious Outlook for Gaming Components and Systems: The company has a cautious outlook for this segment due to ongoing global semiconductor shortages and related demand dynamics, which are expected to impact revenue and growth.
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Guidance & Outlook
Second Quarter 2026 Guidance: Net revenue expected to range between $295 million and $320 million. Adjusted EBITDA projected to be between $12.5 million and $15.5 million. Non-GAAP EPS anticipated to range from $0.05 to $0.07 per share. Revenue expected to decline approximately 4% year-over-year at the midpoint of the range, with low teens year-over-year growth in the Gamer and Creator Peripheral segment offset by cautious outlook for gaming components and systems due to global semiconductor shortages.
Full Year 2026 Guidance: Reaffirmed previously issued guidance, reflecting confidence in the company's outlook.
Market Trends and Segment Performance: Low teens year-over-year growth expected in the Gamer and Creator Peripheral segment for Q2 2026. Gaming components and systems segment faces challenges due to ongoing global semiconductor shortages and related demand dynamics.
Margin Expansion and Profitability: Adjusted EBITDA for Q2 2026 expected to grow more than 70% year-over-year at the midpoint of the guided range. Focus remains on margin expansion and operating expense management.
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Shareholder Return Plan
Share Repurchase: During the first quarter, Corsair Gaming repurchased approximately $5 million of stock under their recent $50 million authorization. This reflects their view that their shares represent a highly compelling investment opportunity. They intend to continue deploying capital optimally, including returning capital to shareholders.
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Key Q&A
Q:Why did the company decide to keep the full-year outlook the same despite beating the high end of EBITDA guidance in Q1?
A:The company decided to maintain the full-year outlook because it is still early in the year, and the macroeconomic situation remains uncertain. They are confident in their guidance but see no reason to change it at this point.
Q:What is the company's strategy for penetrating the AI market, and does it require significant time or investment?
A:The company launched its AI workstation product line two quarters ago. The market is growing due to increased awareness of AI benefits and security concerns. The company sees demand from prosumers and SMBs. The timeline for acceleration and semiconductor availability are key factors, but the company is leveraging the large TAM (Total Addressable Market).
Q:What are the updated expectations for semiconductor supply improvement, and how does it impact the business?
A:The company expects semiconductor supply to improve by 2027. They currently have access to memory like DRAM, but pricing remains a concern. They anticipate a balanced supply-demand picture and normalized ASPs, which will drive market acceleration and benefit their business.
Q:What are the drivers for improving the mix from DTC (Direct-to-Consumer) to 20% of revenue, and are there longer-term targets?
A:The company aims to grow DTC to 25% of revenue, up from 18% previously and now at 20%. Drivers include M&A activities, product strategy, increased marketing investment, opening a retail store in the Bay Area, and AI e-commerce investments.
Q:What types of applications are gaining traction in the Elgato Marketplace, and what is the longer-term opportunity?
A:Applications gaining traction include content creation (e.g., Adobe Photoshop), gaming, broadcasting, voice and video control, and streaming software. The Stream Deck platform is flexible, allowing diverse use cases. The company sees strong user activity and is focused on curating and publishing content efficiently.
Q:Review of Unclear Management Responses
A:No questions were avoided or lacked clarity in the responses provided by the management.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AI compute
AI development
AI workstation
CEO Thi
Championship Miami
Chief Executive
DSP control
Definitions reconciliation
Director afternoon
Elgato Marketplace
Elgato marketplace
Investor Relations
Officer
availability
brand
consumer
demand
discipline
discussion
dynamic
ecosystem
expectation
factor
gaming
hardware
headwind
improvement
integration
measure
momentum Elgato
nature
press release
profitability
segment
software
top
workflow
CRSR Transcript
Corsair Gaming, Inc. (CRSR) Q1 2026 Earnings Call Transcript
Positive5-8
The earnings call highlights strong financial performance with record gross margins and EPS improvement. The share repurchase plan and growth in the direct-to-consumer channel are positive signals. Despite the cautious outlook for the Gaming Components segment due to semiconductor shortages, the overall guidance and market strategy, including AI market penetration, remain optimistic. The Q&A session did not reveal significant negative sentiment, supporting a positive outlook. Given the small market cap, the stock is likely to react positively, potentially within the 2% to 8% range.
Corsair Gaming, Inc. (CRSR) Q4 2025 Earnings Call Transcript
Positive2-13
The earnings call highlights strong financial performance with significant year-over-year growth in gross profit and adjusted EBITDA. Despite a conservative guidance due to semiconductor shortages, the company shows optimism in its strategic investments and debt reduction. The Q&A section reveals positive analyst sentiment, with growth driven by organic expansion in product categories. The market cap suggests a moderate reaction, leading to a positive stock price movement prediction of 2% to 8% over the next two weeks.
Corsair Gaming, Inc. (CRSR) Presents at Barclays 23rd Annual Global Technology Conference Transcript
Neutral12-10
Corsair Gaming, Inc. (CRSR) Q3 2025 Earnings Call Transcript
Positive11-4
The earnings call reveals strong financial performance with significant improvements in operating income, net loss reduction, and EBITDA growth. The Q&A section highlights positive sentiment towards consumer spending, inventory management, and market expansion. Despite some conservatism in memory guidance and tariff impacts, the company shows confidence in mitigating these challenges. The market cap suggests moderate stock reaction, but overall positive financials and strategic insights indicate a likely stock price increase in the next two weeks.
CRSR Slides
Corsair Q4 2025 presentation slides: 62% EBITDA growth despite peripherals slowdown2026-02-12
Corsair Q3 2025 slides show strong growth amid missed earnings forecasts2025-11-04
Corsair Q2 2025 slides: revenue jumps 22.5% on GPU-driven upgrade cycle2025-08-07
Corsair Q1 2025 slides: revenue grows 9.6%, margins expand across segments2025-05-06
CRSR Report
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They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
