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What changed in Corsair Gaming, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Corsair Gaming, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+402 added−399 removedSource: 10-K (2025-02-26) vs 10-K (2023-12-31)

Top changes in Corsair Gaming, Inc.'s 2024 10-K

402 paragraphs added · 399 removed · 312 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

58 edited+18 added−7 removed41 unchanged
Biggest changeWe perform extensive in-house testing of our products with the latest technology to ensure optimal performance and compatibility of our products with the most advanced hardware. Our rigorous product development and testing is designed to give us the ability to meet the needs of our end-users consistently with well-designed, high-performance and reliable products.
Biggest changeOur rigorous product development and testing is designed to give us the ability to meet the needs of our end-users consistently with well-designed, high-performance and reliable products. We intend to continue to significantly invest in product development to support the design and development of innovative, high-quality products and solutions to maintain and enhance our competitive position.
Our product offering is enhanced by our two proprietary software platforms: iCUE for gamers and the Elgato streaming suite for content creators, including our Stream Deck control software. These software platforms provide unified, intuitive performance, and aesthetic control and customization across their respective product families.
Our product offering is enhanced by our two proprietary software platforms: iCUE for gamers and the Elgato streaming suite for content creators, including our Stream Deck control software. These software platforms provide unified, intuitive performance, aesthetic control and customization across their respective product families.
Our Industry Since traditional arcade games of the 1970s, gaming has evolved into the mainstream and taken a central place in the global entertainment landscape. According to Activate Research, gaming today represents approximately 14% of all American consumer internet and media activity, surpassing activities such as social media and messaging.
Our Industry Since the traditional arcade games of the 1970s, gaming has evolved into the mainstream and taken a central place in the global entertainment landscape. According to Activate Research, gaming today represents approximately 14% of all American consumer internet and media activity, surpassing activities such as social media and messaging.
In addition, our marketing personnel regularly meets with other key industry suppliers such as Intel, AMD, NVIDIA, and game publishers in order to ensure that our product development efforts appropriately address the needs of their new products and also to discuss trends and changes in the computer technology market.
In addition, our marketing personnel regularly meets with other key industry suppliers such as NVIDIA, Intel, AMD and game publishers in order to ensure that our product development efforts appropriately address the needs of their new products and also to discuss trends and changes in the computer technology market.
We also assemble, test, package and ultimately supply our custom-built PCs and our customized gaming controllers and fully built PCs in our U.S. facility in Atlanta, Georgia. All of the other products we sell are produced at factories operated by third parties located in Asia.
We also assemble, test, package and ultimately supply our custom-built PCs and our customized gaming controllers and fully built PCs from our U.S. facility in Atlanta, Georgia. All of the other products we sell are produced at factories operated by third parties located in Asia.
As in other sports, specialized high-performance products such as gaming mice, keyboards, headsets and performance controllers allow digital athletes to perform at their best. Modern games also require significant processing power to render high-resolution graphics, and reward the speed and precision of user inputs, driving demand for powerful gaming components and systems.
As in other sports, specialized high-performance products such as gaming mice, keyboards, headsets, sim racing products and performance controllers allow digital athletes to perform at their best. Modern games also require significant processing power to render high-resolution graphics, and reward the speed and precision of user inputs, driving demand for powerful gaming components and systems.
In our retail channel, we distribute our products either directly to the retailer, such as Amazon and Best Buy, or through distributors. We believe our brand, scale and global reach provide significant competitive advantages and will allow us to continue to capture a growing share of the expanding gaming and streaming market.
In our retail channel, we distribute our products either directly to the retailer, such as Amazon and Best Buy, or through distributors. We believe our brand, scale and global reach provide significant competitive advantages and will allow us to continue to capture a growing share of the expanding gaming, streaming and sim racing market.
While emerging, these applications represent a promising avenue for continued expansion of the streaming hardware and software market opportunity. Inspiring gamers and creators aim to reach for the next level of performance and content quality, and we seek to meet this need with Corsair solutions. Competitive gaming rewards speed, precision and reliability.
These applications represent a promising avenue for continued expansion of the streaming hardware and software market opportunity. Inspiring gamers and creators aim to reach for the next level of performance and content quality, and we seek to meet this need with Corsair solutions. Competitive gaming rewards speed, precision and reliability.
We intend to prioritize investment in creating innovative gaming and streaming products and related software to enhance the customer experience by delivering cutting-edge technology. We have an exceptional engineering team and during 2023, approximately one-third of them, including contractors, were working on our software solutions.
We intend to prioritize investment in creating innovative gaming and streaming products and related software to enhance the customer experience by delivering cutting-edge technology. We have an exceptional engineering team and during 2024, approximately one-third of them, including contractors, were working on our software solutions.
Audiences are progressively engaging more with gaming content across platforms and finally, there are decreasing barriers to gaming, where more gamers using mobile devices, and the console and PC platforms represent a natural upgrade path for those seeking a more immersive or competitive gaming environment.
Audiences are progressively engaging more with gaming content across platforms and cloud gaming, and finally, there are decreasing barriers to gaming, with more gamers using mobile devices, and the console and PC platforms represent a natural upgrade path for those seeking a more immersive or competitive gaming environment.
Our PC components products offer our customers multiple options to build their customized gaming and workstation desktop PCs. We design and sell high-performance gaming and streaming peripherals, components and systems to enthusiasts globally. We have served the market for over two decades and many of our products maintain leading market share positions, according to external market data and internal estimates.
Our PC components products offer our customers multiple options to build their customized gaming and workstation desktop PCs. We design and sell high-performance gaming and streaming peripherals, components and systems to enthusiasts globally. We have served the market for three decades and many of our products maintain leading market share positions, according to external market data and internal estimates.
Includes our high-performance gaming keyboards, mice, headsets, controllers, and streaming products, which includes capture cards, Stream Decks, microphones and audio interfaces, our Facecam streaming cameras, studio accessories and gaming furniture, among others. • Gaming Components and Systems .
Includes our high-performance gaming keyboards, mice, headsets, controllers, and streaming products, which includes capture cards, Stream Decks, microphones and audio interfaces, our Facecam streaming cameras, studio accessories, sim racing products, and gaming furniture, among others. • Gaming Components and Systems .
We completed the initial public offering, or the IPO, of our common stock in September 2020 and our common stock is listed on the Nasdaq Global Select Market under the symbol “CRSR.” Our principal executive offices are located at 115 N. McCarthy Boulevard, Milpitas, California, 95035, and our telephone number is (510) 657-8747.
We completed the initial public offering (the “IPO”), of our common stock in September 2020 and our common stock is listed on the Nasdaq Global Select Market under the symbol “CRSR.” Our principal executive offices are located at 115 N. McCarthy Boulevard, Milpitas, California, 95035, and our telephone number is (510) 657-8747.
In 2023, 2022 and 2021, e-retailer Amazon accounted for more than 10% of our net revenue, at 30.7%, 26.0%, and 26.7%, respectively. Production and Operations We believe we have developed a global, scalable production and operations infrastructure that allows us to deliver our products promptly and cost-effectively.
In 2024, 2023 and 2022, e-retailer Amazon accounted for more than 10% of our net revenue, at 30.9%, 30.7%, and 26.0%, respectively. Production and Operations We believe we have developed a global and scalable production and operations infrastructure that allows us to deliver our products promptly and cost-effectively.
Human Capital Resources As of December 31, 2023, we employed 2,387 persons, including contractors working full-time in our manufacturing operations as well as contractors supporting our software and IT development. None of our U.S. direct employees is currently represented by a labor union or is covered by a collective bargaining agreement with respect to his or her employment.
Human Capital Resources As of December 31, 2024, we employed 2,567 persons, including contractors working full-time in our manufacturing operations as well as contractors supporting our software and IT development. None of our U.S. direct employees is currently represented by a labor union or is covered by a collective bargaining agreement with respect to his or her employment.
Beyond success in gaming, applications for streaming products are proliferating across use cases including podcasting, video blogging, interactive fitness, remote learning, and work-from-home, among others. In 2023, YouTube with 2 billion monthly active users and Twitch with an average of 2.45 million concurrent viewers, provided creators with platforms to express themselves, connect with followers and earn an income on-line.
Beyond success in gaming, applications for streaming products are proliferating across use cases including podcasting, video blogging, interactive fitness, remote learning, and work-from-home, among others. In 2024, YouTube with 2.7 billion monthly active users and Twitch with an average of 2.5 million concurrent viewers, provided creators with platforms to express themselves, connect with followers and earn an income on-line.
Since our founding in 1994, we have shipped more than 283 million units of gaming and creator products as of December 31, 2023 and actively nurtured a passionate and engaged global customer base by maintaining a long history of delivering innovative, finely engineered products that have expanded the frontiers of gaming performance.
Since our founding in 1994, we have shipped more than 304 million units of gaming and creator products as of December 31, 2024 and actively nurtured a passionate and engaged global customer base by maintaining a long history of delivering innovative, finely engineered products that have expanded the frontiers of gaming performance.
For a discussion of risks attendant to intellectual property rights, see “Risk Factors—Risks Related to our Business—Our future success depends to a large degree upon our ability to defend the Corsair brand and product family brands such as SCUF, Vengeance, K70, Elgato and iCUE from infringement and, if we are unable to protect our brand and other intellectual property, our business may be seriously harmed” and “Risk Factors—Risks Related to our Business—We are, have in the past been, and may in the future be, subject to intellectual property infringement claims, which are costly to defend, could require us to pay damages or royalties and could limit our ability to use certain technologies in the future” in item 1A.
Corsair Gaming, Inc. | 2024 Form 10-K | 7 Table of Contents For a discussion of risks attendant to intellectual property rights, see “Risk Factors—Risks Related to our Business—Our future success depends to a large degree upon our ability to defend the Corsair brand and product family brands such as SCUF, Vengeance, K70, Elgato and iCUE from infringement and, if we are unable to protect our brand and other intellectual property, our business may be seriously harmed” and “Risk Factors—Risks Related to our Business—We are, have in the past been, and may in the future be, subject to intellectual property infringement claims, which are costly to defend, could require us to pay damages or royalties and could limit our ability to use certain technologies in the future” in item 1A.
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 industry-leading gaming products help digital athletes, from casual gamers to committed professionals, perform at their peak across personal computer (“PC”), sim racing and 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.
We believe this strong bench of engineering expertise has helped us introduce 108 new products to the market in 2023. • Expand into new products and services that grow our market opportunity.
We believe this strong bench of engineering expertise has helped us introduce 78 new products to the market in 2024. • Expand into new products and services that grow our market opportunity.
As a result, we believe we have established ourselves as a leading brand among gaming enthusiasts and creators, many of whom are active and prominent in esports and broadcasting, and act as ambassadors for our branded products. • Differentiated, gamer and creator-centric R&D engine focused on delivering a broad portfolio of high-performing products, including components for self-built gaming PCs.
As a result, we believe we have established ourselves as a leading brand among gaming enthusiasts and creators, many of whom are active and prominent in esports and broadcasting, and act as ambassadors for our brands. • Differentiated, gamer and creator-centric research and development (“R&D”) engine focused on delivering a broad portfolio of high-performing products, including components for self-built gaming PCs.
While sales from this channel are a relatively small contributor to our revenue today, the percentage of such sales has grown to be more than 10% of our net revenue for each of the past three years, and we believe direct-to-consumer sales represent a significant avenue to drive growth by facilitating increased market penetration across our product categories. • Continue to grow market share globally.
While sales from these channels are a relatively small contributor to our revenue today, the percentage of such sales has grown to be more than 10% of our net revenue for each of the past three years, and we believe direct-to-consumer sales represent a significant avenue to drive growth by facilitating increased market penetration across our product categories.
Since our inception, we have successfully entered a number of new product categories, including gaming PC peripherals, streaming and creator solutions, console controllers, and prebuilt and custom-built gaming PCs and laptops.
Since our inception, we have successfully entered a number of new product categories, including gaming PC peripherals, streaming and creator solutions, console controllers, prebuilt and custom-built gaming PCs and laptops, and sim racing cockpits, wheels, pedals and accessories.
Includes our high-performance power supply units, or PSUs, 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. Our products are sold to end users worldwide through our retail channel or our direct-to-consumer channel.
Includes our high-performance power supply units (“PSUs”), cooling solutions, computer cases, and dynamic random access memory (“DRAM”) modules, as well as high-end prebuilt and custom-built gaming PCs and laptops, and gaming monitors, among others. Our products are sold to end users worldwide through our retail channel or our direct-to-consumer channel.
We also develop and sell complete high-performance gaming PCs and laptops using our gaming components. Our prebuilt systems and user-built systems are designed to deliver maximum performance, while also providing our customers the design aesthetic and customizability they demand.
We develop and sell high-performance gaming components to help gamers and creators build their own custom gaming PCs. We also develop and sell complete high-performance gaming PCs and laptops using our gaming components. Our prebuilt systems and user-built systems are designed to deliver maximum performance, while also providing our customers the aesthetic design and customizability they demand.
While we historically have sold our products directly to consumers through our website, following our acquisitions of Origin and SCUF Gaming in 2019, and Drop in 2023, the volume of direct-to-consumer sales has increased as both of these companies primarily generated sales through direct-to-consumer channels.
While we historically have sold our products directly to consumers through our website, following our acquisitions of Origin, SCUF, Drop, and Fanatec, the volume of direct-to-consumer sales has increased as all of these companies primarily generated sales through direct-to-consumer channels.
We believe direct-to-consumer sales represent a significant avenue to increase engagement with our customers to drive growth by facilitating increased market penetration across our product categories, and it has grown since 2019.
We believe direct-to-consumer sales represent a significant avenue to increase engagement with our customers to drive growth by facilitating increased market penetration across our product categories.
The gaming and creator product category is benefiting from the growing popularity of competitive gaming and streaming, which are driving an increase in gaming and streaming participants as well as spend per participant on high-performance products.
Key components of our strategy include: • Advance as the global leader in high-performance gaming and creator products. The gaming and creator product category is benefiting from the growing popularity of competitive gaming and streaming, which are driving an increase in gaming and streaming participants as well as spend per participant on high-performance products.
Corsair Gaming, Inc. | 2023 Form 10-K | 6 Table of Contents We believe that the principal competitive factors that affect customer preferences include brand awareness, reputation, breadth and depth of product offering, product performance and quality, design and aesthetics, price, user experience, online product reviews and other value propositions. We believe we compete favorably based on these factors.
We believe that the principal competitive factors that affect customer preferences include brand awareness, reputation, breadth and depth of product offering, product performance and quality, design and aesthetics, price, user experience, online product reviews and other value propositions. We believe we compete favorably based on these factors.
We have organized our sales organization into four major geographic regions—Europe (including the Middle East and North Africa), North America, Latin America and Asia Pacific—and we have local language-speaking sales representatives in the countries that, in the aggregate, generate the majority of our net revenue.
We have structured our sales organization based on location, into four major geographic regions—Europe (including the Middle East and North Africa), North America, Latin America and Asia Pacific—and we have local language-speaking sales representatives in the countries that generate significant amounts of our net revenue.
Finally, we regularly publish technical Corsair Gaming, Inc. | 2023 Form 10-K | 5 Table of Contents and editorial content through various online and print channels and participate in industry trade shows, gaming competitions and other consumer-facing events that provide us with the opportunity to demonstrate our products.
Finally, we regularly publish technical and editorial content through various online and print channels and participate in industry trade shows, gaming competitions and other consumer-facing events that provide us with the opportunity to demonstrate our products.
By enabling our customers to fine tune the response of our gaming products to maximize performance and match their personal preferences and styles of play, we believe that iCUE provides a distinct competitive advantage. Product Development Innovation is a key element of our culture and critical to our success.
By enabling our customers to fine tune the response of our gaming products to maximize performance and match their personal preferences and styles of play, we believe that iCUE provides a distinct competitive advantage.
We are an innovation-driven company with a rigorous development process designed to consistently deliver high-performance and quality gaming and creator products to the market. Our focus on innovation and performance has also earned us significant industry recognition. • Differentiated software-driven ecosystem.
We are an innovation-driven company with a rigorous development process designed to consistently deliver high-performance and quality gaming and creator products to the market. Our focus on innovation and performance has earned us significant industry recognition. Corsair Gaming, Inc. | 2024 Form 10-K | 3 Table of Contents • Differentiated software-driven ecosystem.
Our ability to compete successfully is fundamental to our success in existing and new markets. If we do not compete effectively, demand for our products could decline, our net revenues and gross margin could decrease and we could lose market share, which could seriously harm our business, results of operations and financial condition.
If we do not compete effectively, demand for our products could decline, our net revenues and gross margin could decrease and we could lose market share, which could seriously harm our business, results of operations and financial condition.
We believe we can continue to grow by offering market-leading products to gamers and creators, expanding the breadth of our product suite to meet the needs of our customers, growing our worldwide market share, continuing to invest in marketing, product innovation and sales, and selectively pursuing accretive acquisitions, such as the nine acquisitions we have completed since 2018.
We believe we can continue to grow by offering market-leading products to gamers, creators, and sim racing enthusiasts, expanding the breadth of our product suite to meet the needs of our customers, continuing to invest in marketing, product innovation and sales, and selectively pursuing accretive acquisitions, such as the ten acquisitions we have completed since 2018, including the recent Fanatec acquisition in September 2024.
Sales and Distribution Our products are purchased by gaming enthusiasts and content creators worldwide through either our e-retail and retail channel or our direct-to-consumer channel. In our e-retail and retail channel, we distribute our products either directly to resellers or through key distributors. We have also seen a growing demand for our products within the business-to-business channel since 2020.
Sales and Distribution Our products are purchased by gaming enthusiasts and content creators worldwide through either our e-retail and retail channel or our direct-to-consumer channel. In our e-retail and retail channel, we distribute our products either directly to resellers or through key distributors.
Our gamer and creator peripherals seek to provide the fastest, highest fidelity, and most seamless interface between digital athletes and their game, and content creators and their viewers.
We have a diversified product portfolio, with 34 primary product lines. • Gamer and Creator Peripherals . Our gamer and creator peripherals seek to provide the fastest, highest fidelity, and most seamless interface between digital athletes and their game, and content creators and their viewers.
In 2023, we launched Elgato Marketplace for creators as a platform for consumers and makers to buy or monetize Stream Deck digital assets from plugins to profiles such as icon pack, emojis and voice effects, among others.
In 2023, we launched Elgato Marketplace (“Marketplace”) as a platform for consumers and makers to buy or monetize Stream Deck digital assets from plugins to profiles such as icon pack, emojis and voice effects, among others. The Marketplace is growing and has surpassed one million accounts as of December 31, 2024.
Our solutions include our high-performance gaming keyboards, mice, headsets, controllers, and streaming products, which includes capture cards, Stream Decks, microphones and audio interfaces, our Facecam streaming cameras, studio accessories, and gaming furniture, among others. • Gaming Components and Systems . We develop and sell high-performance gaming components to help gamers and creators build their own custom gaming PCs.
Our solutions include our high-performance gaming keyboards, mice, headsets, controllers, and streaming products, which includes capture cards, Stream Decks, microphones and audio interfaces, our Facecam streaming cameras, studio accessories, sim racing products, and gaming furniture, among others. • Gaming Components and Systems .
Through our acquisitions of Origin and SCUF in 2019, and Drop in 2023, we acquired three companies whose sales are primarily generated through direct-to-consumer channels.
We are investing in our e-commerce capabilities and in-app experience to drive direct sales. Through our acquisitions of Origin and SCUF in 2019, Drop in 2023 and Fanatec in 2024, we acquired four companies whose sales are primarily generated through direct-to-consumer channels.
International employees in several European countries covered by statutory collective bargaining agreements represent approximately 2% of our total employee population. To date we have not experienced any work stoppages, and we consider our relationship with our employees to be good.
International employees in several European countries covered by statutory collective bargaining agreements represent approximately 1.3% of our total employee population. To date we have not experienced any work stoppages, and we consider our relationship with our employees to be good. Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and additional employees.
To help our customers perform at their peak, whether in game or on camera, we have developed the industry’s most complete integrated ecosystem of gamer and creator peripherals and gaming components and systems. We have a diversified product portfolio, with 30 primary product lines. • Gamer and Creator Peripherals .
Our Solutions We design our high-performance products to address the needs of gamers and creators. To help our customers perform at their peak, whether in game or on camera, we have developed the industry’s most complete integrated ecosystem of gamer and creator peripherals and gaming components and systems.
We view the Asia Pacific region as a long-term growth opportunity and recently invested in our local sales force and regional management to build out distributor networks and retail partnerships. • Leverage our brand, software integration and superior product quality to support a pricing premium in the gaming PC components category.
We view the Asia Pacific region as a long-term growth opportunity and recently invested in our local sales force and regional management to build out distributor networks and retail partnerships. • Leverage our brand, software integration and superior product quality to pursue market share in the higher-end categories of all our product segments, where we can command a premium on pricing and improve our margins, and quality of earnings.
Specifically, the video gaming industry is experiencing a significant shift and we believe is poised for continued growth and innovation. The convergence of quality content, console availability, favorable regulatory developments, and the expanded implementation of artificial intelligence (“AI”) are driving such growth and innovation.
The video gaming industry has experienced a significant shift and we believe it is poised for continued growth Corsair Gaming, Inc. | 2024 Form 10-K | 2 Table of Contents and innovation. The convergence of quality content, console availability, favorable regulatory developments, and the expanded implementation of AI are driving such growth and innovation.
We rely on a combination of copyright, trademark, patent and other intellectual property laws and confidentiality procedures and contractual provisions such as non-disclosure terms to protect our intellectual property. As of December 31, 2023, our worldwide intellectual property portfolio consisted of 334 patents issued and 77 patents pending applications, 499 trademarks registered and 50 trademarks pending applications.
We rely on a combination of copyright, trademark, patent and other intellectual property laws and confidentiality procedures and contractual provisions such as non-disclosure terms to protect our intellectual property.
As a globally recognized brand, we have a footprint that reaches customers in nearly 80 countries. We will continue to invest in enhancing our sales and distribution infrastructure to expand our leadership position in the Americas and Europe.
We will continue to invest in enhancing our sales and distribution infrastructure to expand our leadership position in the Americas and Europe.
In addition, we outsource storage and shipping to several third-party logistics providers around the world which allows us to reduce order fulfillment time, reduce shipping costs and improve inventory flexibility. In addition to our production capabilities, our corporate planning process places particular emphasis on driving efficiencies in demand forecasting, supply chain planning, procurement cycle time, freight costs and inventory management.
In addition, we outsource storage and shipping to several third-party logistics providers around the world which allows us to reduce order fulfillment time, reduce shipping costs and improve inventory flexibility.
We operate in markets that are characterized by rapid technological change, constant price pressure, rapid product obsolescence, evolving industry standards and new demands for features and performance. We experience aggressive price competition and other promotional activities by competitors, including in response to declines in consumer demand and excess product supply or as competitors seek to gain market share.
We experience aggressive price competition and other promotional activities from competitors, including in response to declines in consumer demand and excess product supply or as competitors seek to gain market share.
Historical seasonal patterns may not continue in the future and have been impacted, for example, in 2020 and 2021, and may be further impacted in the future, by macroeconomic factors, increasing supply constraints, GPU shortages, shifts in customer behavior and the continuing impacts of the COVID-19 pandemic. Competition We face intense competition in the markets for all of our products.
Historical seasonal patterns may not continue in the future and may be further impacted in the future, by macroeconomic factors, increasing supply constraints, GPU shortages, and shifts in customer behavior.
In addition, because of the continuing convergence of the markets for computing devices and consumer electronics, we expect greater competition in the future from well-established consumer electronics companies. Many of our current and potential competitors, some of which are large, multi-national businesses, have substantially greater financial, technical, sales, marketing, personnel and other resources and greater brand recognition than we have.
Many of our current and potential competitors, some of which are large, multi-national businesses, have substantially greater financial, technical, sales, marketing, personnel and other resources, and have greater brand recognition than we have. Our ability to compete successfully is fundamental to our success in existing and new markets.
Our product development efforts focus on broadening our portfolio with innovative, value-added products that provide gamers with more immersive experiences. This process begins with the initial market analysis and product definition phase, where we use deep knowledge of consumer preferences and feedback to decide the exact specifications of new products desired by our end-users.
This process begins with the initial market analysis and product definition phase, where we use our deep knowledge of consumer preferences and feedback to decide the exact specifications of new products desired by our end-users. We then leverage third-party manufacturers and, in some cases, engineering and design firms to help us design, prototype and fabricate our products.
We intend to continue to significantly invest in product development to support the design and development of innovative, high-quality products and solutions to maintain and enhance our competitive position. Marketing Our marketing efforts are designed to enhance the Corsair, Elgato, Origin, SCUF and Drop brand names, to help us acquire new customers and to increase sales from our existing customers.
Marketing Our marketing efforts are designed to enhance the Corsair, Elgato, Origin, SCUF, Drop and Fanatec brand names, to help us acquire new customers and to increase sales from our existing customers. We have structured our marketing organization to achieve both product- and geography-specific coverage.
We currently ship to nearly 80 Corsair Gaming, Inc. | 2023 Form 10-K | 3 Table of Contents countries across six continents, with our products being sold at leading retailers including Amazon, Best Buy, JD.com, MediaMarkt and Walmart.
We currently ship to nearly 80 countries across six continents, with our products being sold at leading retailers including Amazon, Best Buy, JD.com, MediaMarkt and Walmart. In 2024, sales to the Americas, EMEA and Asia Pacific represented 52.9%, 36.2% and 10.9% of net revenue, respectively. • Management team of visionary leaders with deep industry experience and proven ability to execute.
Our Growth Strategy We intend to grow our business by increasing value to our customers, expanding our market opportunity and further differentiating ourselves from competitors. Key components of our strategy include: • Advance as the global leader in high-performance gaming and creator products.
We have a strong management team of experienced and talented executives with a track record of execution and deep industry knowledge. Our Growth Strategy We intend to grow our business by increasing value to our customers, expanding our market opportunity and further differentiating ourselves from competitors.
We then leverage third-party manufacturers and, in some cases, engineering and design firms to help us design, prototype and fabricate our products. We select these third-party partners through a comprehensive selection process and subject them to rigorous quality controls.
We select these third-party partners through a comprehensive selection process and subject them to rigorous quality controls. We perform extensive in-house testing of our products with the latest technology to ensure optimal performance and compatibility of our products with the most advanced hardware.
Although the gaming industry was negatively impacted in 2023 by global macroeconomic challenges, such as the ongoing war between Russia and Ukraine and most recently, the Gaza conflict, volatility in exchange rates, inflationary trends, weak consumer confidence globally and evolving dynamics in the global trade environment, there are a number of drivers we believe will fuel the gaming market’s growth in 2024.
The gaming hardware industry was negatively impacted in 2024 by continuing global macroeconomic challenges, such as the ongoing conflicts in Ukraine and the Middle East, volatility in exchange rates, inflationary trends, weak consumer confidence globally and evolving dynamics in the global trade environment, as well as a delay in the launch of new graphics cards beyond the typical two-year refresh cycle, and in the release of several new and awaited game titles to early 2025.
We plan to evaluate, and may pursue acquisitions, such as our acquisitions of Elgato, Origin, SCUF and Drop, which we believe strengthen our capabilities in existing segments as well as diversify our product offerings, broaden our end-user base or expand our geographic presence. Our Solutions We design our high-performance products to address the needs of gamers and creators.
We plan to continue to evaluate and pursue acquisitions where we have an advantage over our smaller competitors in buying attractive M&A targets. Our acquisitions of Elgato, Origin, SCUF, Drop and recently Fanatec have strengthened our capabilities in existing segments as well as diversified our product offerings, broadened our end-user customer base and expanded our geographic presence.
Additionally, AI can be utilized to produce adaptive narrative generation that a nalyzes player choices and interactions, Corsair Gaming, Inc. | 2023 Form 10-K | 2 Table of Contents and adapt storylines, quests, and dialogues accordingly.
Additionally, AI can be utilized to produce adaptive narrative generation that analyzes player choices and interactions, and adapt storylines, quests, and dialogues accordingly. The integration of Virtual Reality (“VR”) and Augmented Reality (“AR”) technology is taking game development to new heights as it blends real and virtual worlds in new ways.
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Further, based on external market data, in the fourth quarter of 2023, it was estimated that the worldwide gaming community consisted of approximately 1.6 billion casual PC gamers, 245 million regular PC gamers and 32 million PC gaming enthusiasts.
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The Fanatec sim racing product line fully complements our gaming PCs, gaming and streaming peripherals, and monitors, is expected to expand our business in these markets. Based on the external analysts' and management's estimates, t he total addressable market for sim racing in 2024 is approximately $1 billion.
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In 2023, sales to the Americas, EMEA and Asia Pacific represented 51.4%, 35.1% and 13.5%, respectively, of net revenue. • Management team of visionary leaders with deep industry experience and proven ability to execute. We have a strong management team of experienced and talented executives with a track record of execution and deep industry knowledge.
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There are a number of drivers we believe will fuel the gaming market’s growth in 2025. Primary among them is the launch of the new graphics cards in the first quarter of 2025, after an extended cycle of 2.5 years.
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The launch of Elgato Marketplace is expected to enrich the experience for Stream Deck users which will in turn help to accelerate the unit sales and installed base of Stream Deck hardware. • Strengthen relationships with end-users by increasing direct-to-consumer sales.
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The new cards are expected to use Blackwell artificial intelligence (“AI”) chips that will be able to hit high frame rate gaming at 4K and possibly 8K with ray tracing enabled, supported by AI frame generation for smoother gameplay.
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In the gaming PC components category, our revenue and margins have benefited from higher pricing versus the rest of the market, which we expect to continue as we invest in our brand and product portfolio.
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We will aim to increase our presence and reach in this category, thus increasing our mix of high margin products and expanding and diversifying our categories.
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Compared to the average non-Corsair product, our computer cases, cooling solutions, PSUs and high-performance memory commanded price premiums of 13%, 36%, 30% and 13%, respectively, in the United States in 2023, according to recent NPD data. Corsair Gaming, Inc. | 2023 Form 10-K | 4 Table of Contents • Selectively pursue complementary acquisitions .
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We launched our Corsair custom lab where we offer consumers the ability to customize their new purchase of systems, components and peripherals products in multiple patterns and genres.
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We have structured our marketing organization to achieve both product- and geography-specific coverage.
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It serves primarily as a free app marketplace, while allowing us and third-party creators to charge for certain downloads as needed. The launch of the Marketplace has enriched the experience for Stream Deck users which in turn has helped drive sales and installed base of Stream Deck hardware.
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Corsair Gaming, Inc. | 2023 Form 10-K | 7 Table of Contents Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and additional employees.
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We expect to be able to grow app sales as Corsair internal and third-party creators develop more compelling apps and content. • Expand our industry partnerships with other parts of the gaming ecosystem, including other hardware manufacturers and game publishers.
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We believe our partner ecosystem contributes to the overall customer experience, and has the potential to attract more customers to Corsair. We intend to deepen our relationships with our current partners and expand our partner ecosystem by collaborating with our partners in the area of product design, thereby providing our customers access to a more cohesive gaming ecosystem.
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As an example, in 2024, we were selected as the exclusive launch Corsair Gaming, Inc. | 2024 Form 10-K | 4 Table of Contents partner for the Activision Call of Duty Black Ops Six game title, a multi-year, multi-product partnership involving a strong collaboration on marketing activations and Corsair branded products.
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For the Black Ops Six game launch, we showcased Call of Duty-themed products from many of our product categories, and the success of the game title is helping drive product sales. • Strengthen relationships with end-users by increasing direct-to-consumer sales, while continuing to strengthen relationships with existing retail channel partners, through whom we currently sell most of our products.
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We also expect that our partnerships with third-party retailers will continue to be an important part of our ecosystem. We will continue to seek retail partners that can deliver differentiated in-store and e-commerce experiences to support customer demand for product demonstrations.
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In 2024, 2023 and 2022, we generated 57.4%, 56.8%, and 51.9%, respectively, of our total net revenue through channel partners. • Continue to grow market share globally. As a globally recognized brand, we have a footprint that reaches customers in nearly 80 countries.
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Our push into the sim racing category with our recent acquisition of Fanatec is part of this growth strategy. We expect that this acquisition will solidify Corsair’s position as a strong contender in this space, that is known for accelerating growth. • Selectively pursue complementary acquisitions .
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Corsair Gaming, Inc. | 2024 Form 10-K | 5 Table of Contents Product Development Innovation is a key element of our culture and critical to our success. Our product development efforts focus on broadening our portfolio with innovative, value-added products that provide gamers with more immersive experiences.
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Corsair Gaming, Inc. | 2024 Form 10-K | 6 Table of Contents In addition to our production capabilities, our corporate planning process places particular emphasis on driving efficiencies in demand forecasting, supply chain planning, procurement cycle times, freight costs and inventory management.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeHowever, the continued growth of the video gaming industry will depend on numerous factors, many of which are beyond our control, including but not limited to: • the rate of growth of PCs and gaming consoles or the migration of gamers to mobile devices and tablets away from PCs, which historically have been the core focus of our business; • the continued growth of streaming, including its popularity among fans and aspiring content creators and how it impacts their desire to purchase high-performance gaming and streaming products; • the continued growth of esports, including its increasing popularity among fans and amateur esports athletes and how it impacts their desire to purchase high-performance gaming products; • general economic conditions, particularly economic conditions adversely affecting discretionary consumer spending; • social perceptions of gaming, especially those related to the impact of gaming on health and social development; • the introduction of legislation or other regulatory restrictions on gaming, such as restrictions addressing violence in video games and addiction to video games, also referred to as Gaming Disorder by the World Health Organization; • the relative availability and popularity of other forms of entertainment; and • changes in consumer demographics, tastes and preferences.
Biggest changeHowever, the continued growth of the gaming industry will depend on numerous factors, many of which are beyond our control, including but not limited to: • the continued growth of streaming, including its popularity among fans and aspiring content creators and how it impacts their desire to purchase high-performance gaming and streaming products; • the continued growth of esports, including its increasing popularity among fans and amateur esports athletes and how it impacts their desire to purchase high-performance gaming products; • general economic conditions, particularly economic conditions adversely affecting discretionary consumer spending; • social perceptions of gaming, especially those related to the impact of gaming on health and social development; • the introduction of legislation or other regulatory restrictions on gaming and broadcast of live streaming or esports, including restrictions addressing violence in video games and addiction to video games, also referred to as Gaming Disorder by the World Health Organization; • economics or monetization of esports performing below expectations, ultimately causing a decrease in outside investments in esports; • reduced accessibility of streaming and other gaming video content, whether due to platform fragmentation, the erection of paywalls, or otherwise; • the relative availability and popularity of other forms of entertainment which could result in diverting consumer interest away from watching live or streamed broadcasts of competitors playing video games; and • changes in consumer demographics, tastes and preferences.
We experience aggressive price competition and other promotional activities by competitors, including in response to declines in consumer demand and excess product supply or as competitors seek to gain market share. We provide a variety of financial incentive programs to our customers, including special pricing arrangements, promotions, rebates and volume-based incentives, among others.
We experience aggressive price competition and other promotional activities by competitors in response to declines in consumer demand and excess product supply, or as competitors seek to gain market share. We provide a variety of financial incentive programs to our customers, including special pricing arrangements, promotions, rebates and volume-based incentives, among others.
We may periodically have to respond to claims and litigate these types of indemnification obligations. Any such indemnification claims could require us to make substantial settlement, damages or royalty payments or result in our incurring substantial legal costs. Our insurance does not cover intellectual property infringement.
We may periodically have to respond to claims and litigate these types of indemnification obligations. Any such indemnification obligations could require us to make substantial settlement, damages or royalty payments or result in our incurring substantial legal costs. Our insurance does not cover intellectual property infringement.
In addition, the Organization for Economic Co-Operation and Development (the “OECD”) has released guidance and blueprints covering various topics, including a global minimum effective tax rate of 15% on certain corporate groups known as “Pillar Two”, and rules governing transfer pricing, country-by-country reporting, and definitional changes to permanent establishment that could ultimately impact our tax liabilities as those guidance and blueprints are potentially implemented in various jurisdictions.
In addition, the Organization for Economic Co-Operation and Development (“OECD”) has released guidance and blueprints covering various topics, including a global minimum effective tax rate of 15% on certain corporate groups known as “Pillar Two”, and rules governing transfer pricing, country-by-country reporting, and definitional changes to permanent establishment that could ultimately impact our tax liabilities as those guidance and blueprints are potentially implemented in various jurisdictions.
We are a “controlled company” within the meaning of the Nasdaq Global Select Market rules and, as a result, will qualify for, and intend to rely on, exemptions from certain corporate governance requirements. You will not have the same protections afforded to stockholders of companies that are subject to such requirements.
We are a “controlled company” within the meaning of the Nasdaq Global Select Market rules and, as a result, qualify for, and intend to rely on, exemptions from certain corporate governance requirements. You will not have the same protections afforded to stockholders of companies that are subject to such requirements.
For example, our amended and restated certificate of incorporation and amended and restated bylaws include anti-takeover provisions that: • authorize our board of directors, without further action by the stockholders, to issue preferred stock in one or more series and, with respect to each series, to fix the number of shares constituting that series and to establish the rights and other terms of that series, which may include dividend and liquidation rights and preferences, conversion rights and voting rights; • require that actions to be taken by our stockholders may only be taken at an annual or special meeting of our stockholders and not be taken by majority written consent when EagleTree owns less than a majority of our outstanding common stock; • specify that special meetings of our stockholders can be called only by the Secretary at the direction of our board of directors or the Chairman of our board of directors and not by our stockholders or any other persons when EagleTree owns less than a majority of our outstanding common stock; • establish advance notice procedures for stockholders to submit nominations of candidates for election to our board of directors and other proposals to be brought before a stockholders meeting; • provide that directors may be removed only for cause and only by the affirmative vote of at least 66-2/3% in voting power of the then-outstanding shares of capital stock of our company when EagleTree owns less than 50% in voting power of our stock entitled to vote at an election of directors; • provide for the sole power of the board of directors, or EagleTree in the case of a vacancy of one of their respective board designees, to fill any vacancy on the board of directors, whether such vacancy occurs as a result of an increase in the number of directors or otherwise; • divide our board of directors into three classes, serving staggered terms of three years each; • do not give the holders of our common stock cumulative voting rights with respect to the election of directors, which means that the holders of a majority of our outstanding shares of common stock can elect all directors standing for election; • require the affirmative vote by the holders of at least two-thirds of the combined voting power of all shares of our outstanding capital stock entitled to vote generally in the election of our directors (voting as a single class) in order to amend certain provisions of our certificate of incorporation or bylaws, including those provisions changing the size of the board of directors, the removal of certain directors, the availability of action by majority written consent of the stockholders or the restriction on business combinations with interested stockholders, among others; and Corsair Gaming, Inc. | 2023 Form 10-K | 32 Table of Contents • when EagleTree owns less than a majority of our outstanding common stock, require the affirmative vote by the holders of at least two-thirds of the combined voting power of all shares of our outstanding capital stock entitled to vote generally in the election of our directors (voting as a single class) for any amendment, alteration, change, addition, rescission or repeal of our amended and restated certificate of incorporation.
For example, our amended and restated certificate of incorporation and amended and restated bylaws include anti-takeover provisions that: • authorize our board of directors, without further action by the stockholders, to issue preferred stock in one or more series and, with respect to each series, to fix the number of shares constituting that series and to establish the rights and other terms of that series, which may include dividend and liquidation rights and preferences, conversion rights and voting rights; • require that actions to be taken by our stockholders may only be taken at an annual or special meeting of our stockholders and not be taken by majority written consent when EagleTree owns less than a majority of our outstanding common stock; Corsair Gaming, Inc. | 2024 Form 10-K | 32 Table of Contents • specify that special meetings of our stockholders can be called only by the Secretary at the direction of our board of directors or the Chairman of our board of directors and not by our stockholders or any other persons when EagleTree owns less than a majority of our outstanding common stock; • establish advance notice procedures for stockholders to submit nominations of candidates for election to our board of directors and other proposals to be brought before a stockholders meeting; • provide that directors may be removed only for cause and only by the affirmative vote of at least 66-2/3% in voting power of the then-outstanding shares of capital stock of our company when EagleTree owns less than 50% in voting power of our stock entitled to vote at an election of directors; • provide for the sole power of the board of directors, or EagleTree in the case of a vacancy of one of their respective board designees, to fill any vacancy on the board of directors, whether such vacancy occurs as a result of an increase in the number of directors or otherwise; • divide our board of directors into three classes, serving staggered terms of three years each; • do not give the holders of our common stock cumulative voting rights with respect to the election of directors, which means that the holders of a majority of our outstanding shares of common stock can elect all directors standing for election; • require the affirmative vote by the holders of at least two-thirds of the combined voting power of all shares of our outstanding capital stock entitled to vote generally in the election of our directors (voting as a single class) in order to amend certain provisions of our certificate of incorporation or bylaws, including those provisions changing the size of the board of directors, the removal of certain directors, the availability of action by majority written consent of the stockholders or the restriction on business combinations with interested stockholders, among others; and • when EagleTree owns less than a majority of our outstanding common stock, require the affirmative vote by the holders of at least two-thirds of the combined voting power of all shares of our outstanding capital stock entitled to vote generally in the election of our directors (voting as a single class) for any amendment, alteration, change, addition, rescission or repeal of our amended and restated certificate of incorporation.
Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, or the Code, if a corporation undergoes an “ownership change,” generally defined as a greater than 50 percentage point change (by value) in its equity ownership by certain stockholders over a three-year period, the corporation’s ability to use its pre-change NOL carryforwards and other pre-change tax attributes (such as research and development tax credits) to offset its post-change income or taxes may be limited.
Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “Code”), if a corporation undergoes an “ownership change,” generally defined as a greater than 50 percentage point change (by value) in its equity ownership by certain stockholders over a three-year period, the corporation’s ability to use its pre-change NOL carryforwards and other pre-change tax attributes (such as research and development tax credits) to offset its post-change income or taxes may be limited.
As a result, our business results can be materially affected by the frequency with which new high-performance hardware products are introduced by these independent third parties, whether these products achieve widespread acceptance among gamers, whether such products are readily available at affordable prices and whether additional memory, enhanced PSUs or cooling solutions, new computer cases or other peripheral devices are necessary to support those products.
As a result, our business results can be materially affected by the timing and frequency with which new high-performance hardware products are introduced by these independent third parties, whether these products achieve widespread acceptance among gamers, whether such products are readily available at affordable prices and whether additional memory, enhanced PSUs or cooling solutions, new computer cases or other peripheral devices are necessary to support those products.
We have taken steps to put in place safeguards designed to protect the security of all the information we process and that our providers process on our behalf, but despite these efforts, we cannot guarantee that we or our providers will not suffer harmful security breaches, cyber-attacks, acts of vandalism, computer viruses, malware, ransomware, denial-of-service attacks, human error issues or other similar events that lead to misplaced or lost information, programming and/or other similar issues.
We have taken steps to put in place safeguards designed to protect the security of all the Confidential Information we process and that our providers process on our behalf, but despite these efforts, we cannot guarantee that we or our providers will not suffer harmful security breaches, cyber-attacks, acts of vandalism, computer viruses, malware, ransomware, denial-of-service attacks, human error issues or other similar events that lead to misplaced or lost information, programming and/or other similar issues.
Likewise, shortages or interruptions in the supply of products or components, including disruptions of shipping lanes or divergence from shipping lanes due to geopolitical events, including recent attacks in the Red Sea, or any inability to procure these products or components from alternate sources at acceptable prices in a timely manner, could delay shipments to our customers and increase our costs, any of which may seriously harm our business.
Likewise, shortages or interruptions in the supply of products or components, including disruptions of shipping lanes or divergence from shipping lanes due to geopolitical events, including recent disruptions in the Red Sea, or any inability to procure these products or components from alternate sources at acceptable prices in a timely manner, could delay shipments to our customers and increase our costs, any of which may seriously harm our business.
Use of open source software may entail greater risks than use of third-party commercial software, as open source licensors generally do not provide support, updates, warranties or other contractual protections regarding infringement claims or the quality of the code, and the wide availability of source code to components used in our products could expose us to security vulnerabilities.
Use of open source software may entail greater risks than use of third-party commercial software, as open source licensors generally do not provide support, updates, warranties or other contractual protections regarding infringement claims or the quality of the code, and the wide availability of source code for open source software components used in our products could expose us to security vulnerabilities.
Any violations of these anti-corruption and anti-bribery or trade sanctions and export controls laws and regulations, or even allegations of such violations, can lead to an investigation and/or enforcement action, which could disrupt our operations, may expose us to reputational harm, involve significant management distraction and lead to significant costs and expenses, including legal fees.
Any violations of these anti-corruption and anti-bribery or economic and trade sanctions and export controls laws and regulations, or even allegations of such violations, can lead to an investigation and/or enforcement action, which could disrupt our operations, may expose us to reputational harm, involve significant management distraction and lead to significant costs and expenses, including legal fees.
In addition to technological developments directly relating to our products, more generalized changes in technology may have a significant effect on our operating results. For example, our business could be seriously harmed by rapid, wholesale changes in technology in or affecting the markets in which we compete or widespread adoption of cloud computing.
Technological factors . In addition to technological developments directly relating to our products, more generalized changes in technology may have a significant effect on our operating results. For example, our business could be seriously harmed by rapid, wholesale changes in technology in or affecting the markets in which we compete or widespread adoption of cloud computing.
Most of the third-party facilities where our products and some of the components used in our products is manufactured are located in China, Taiwan, Southeast Asia and other areas that are known for seismic activity and other natural disasters. Earthquakes in any of the foregoing areas may also result in tsunamis. We do not carry earthquake insurance.
Most of the third-party facilities where our products and some of the components used in our products are manufactured are located in China, Taiwan, Southeast Asia and other areas that are known for seismic activity and other natural disasters. Earthquakes in any of the foregoing areas may also result in tsunamis. We do not carry earthquake insurance.
While we have implemented policies, internal controls and other measures reasonably designed to promote compliance with applicable anti-corruption and anti-bribery and trade sanctions and export control laws and regulations, our employees, representatives, distributors or agents may engage in improper conduct for which we might be held responsible.
While we have implemented policies, internal controls and other measures reasonably designed to promote compliance with applicable anti-corruption and anti-bribery and economic and trade sanctions and export control laws and regulations, our employees, representatives, distributors or agents may engage in improper conduct for which we might be held responsible.
If cloud computing is widely accepted, the demand for high-performance computer gaming hardware products such as the PC high-performance memory, prebuilt and custom gaming PCs and laptops, and other PC gaming components we sell, could diminish significantly. As a result, if cloud computing gaming were to become widely adopted, such adoption could seriously harm our business.
If cloud computing is widely adopted, the demand for high-performance computer gaming hardware products such as the PC high-performance memory, prebuilt and custom gaming PCs and laptops, and other PC gaming components we sell, could diminish significantly. As a result, if cloud computing gaming were to become widely adopted, such adoption could seriously harm our business.
In addition, various other countries where we do business have implemented or plan to implement the “Pillar Two” global corporate minimum tax rate in 2024 and are also actively considering changes to their tax laws to adopt certain parts of the OECD’s proposals.
In addition, various other countries where we do business have implemented or plan to implement the “Pillar Two” global corporate minimum tax rate in 2024 and 2025 and are also actively considering changes to their tax laws to adopt certain parts of the OECD’s proposals.
The extent and duration of the military action, sanctions and any resulting market disruptions could be significant and could potentially have substantial impact on the global economy and our business for an unknown period of time. Any of the abovementioned factors could affect our business, financial condition and results of operations.
The extent and duration of the military action, sanctions and any resulting market disruptions could be significant and could potentially have a substantial impact on the global economy and our business for an unknown period of time. Any of the abovementioned factors could affect our business, financial condition and results of operations.
However, should supply from any of these vendors be limited, there can be no assurance that we would be able to meet our needs by purchasing DRAM ICs produced by other manufacturers or from agents and distributors.
Should supply from any of these vendors be limited, there can be no assurance that we would be able to meet our needs by purchasing DRAM ICs produced by other manufacturers or from agents and distributors.
We are also subject to legislation in Europe and the U.K., such as the European Union General Data Protection Regulation (the “EU GDPR”), and to the United Kingdom General Data Protection Regulation and Data Protection Act 2018 (the “UK GDPR,” and together with the EU GDPR, the “GDPR”).
We are also subject to legislation in Europe and the U.K., such as the European Union General Data Protection Regulation (the “EU GDPR”) and to the United Kingdom General Data Protection Regulation and Data Protection Act 2018 (the “UK GDPR”, and together with the EU GDPR, the “GDPR”).
The EU GDPR and UK GDPR also regulate cross-border transfers of personal information out of the EEA and the U.K. Recent legal developments in Europe have created uncertainty regarding transfers of data from the EEA and the U.K. to the U.S. and other jurisdictions.
The EU GDPR and UK GDPR also regulate cross-border transfers of personal information out of the EEA and the U.K. Legal developments in Europe have created uncertainty regarding transfers of data from the EEA and the U.K. to the U.S. and other jurisdictions.
These providers may also experience breaches and attacks to their products which may impact our systems. Data security breaches may also result from non-technical means, such as actions by an employee with access to our systems.
These providers may also experience breaches and attacks to their products which may impact our systems. Data security breaches may also result from non-technical means, such as actions by an employee with access to our IT Systems.
Foreign Corrupt Practices Act, other applicable anti-corruption and anti-bribery laws, and applicable trade sanctions and export control laws could subject us to penalties and other adverse consequences that may seriously harm our business.
Foreign Corrupt Practices Act, other applicable anti-corruption and anti-bribery laws, and applicable economic and trade sanctions and export control laws could subject us to penalties and other adverse consequences that may seriously harm our business.
As of December 31, 2023, this provision of our amended and restated certificate of incorporation relates only to the EagleTree director designees. These potential conflicts of interest could seriously harm our business if attractive corporate opportunities are allocated by EagleTree to itself or its respective portfolio companies, funds or other affiliates instead of to us.
As of December 31, 2024, this provision of our amended and restated certificate of incorporation relates only to the EagleTree director designees. These potential conflicts of interest could seriously harm our business if attractive corporate opportunities are allocated by EagleTree to itself or its respective portfolio companies, funds or other affiliates instead of to us.
Our indemnification obligations to our customers and suppliers for intellectual property infringement claims could require us to pay substantial amounts and may seriously harm our business. We indemnify a limited number of retailer customers for damages and costs which may arise if our products infringe third-party patents or other proprietary rights.
Our indemnification obligations to our customers and suppliers for intellectual property infringement claims could require us to pay substantial amounts and may seriously harm our business. We are obligated to indemnify a limited number of retailer customers for damages and costs which may arise if our products infringe third-party patents or other proprietary rights.
If we are unable to protect and enforce our trademarks, domain names, copyrights, patents and other intellectual property rights, or prevent third parties from infringing upon them, our business may be seriously harmed. We have taken steps in the past to enforce our intellectual property rights and expect to continue to do so in the future.
If we are unable to protect and enforce our trademarks, domain names, copyrights, patents, trade secrets and other intellectual property rights, or prevent third parties from infringing upon them, our business may be seriously harmed. We have taken steps in the past to enforce our intellectual property rights and expect to continue to do so in the future.
Actual or perceived breaches of our security measures, those of third-parties or the accidental loss, inadvertent disclosure or unapproved dissemination of proprietary, personal, sensitive or confidential information about us, our partners, our customers or third parties have exposed, and, in the future, could expose us and other affected parties to a risk of loss or misuse of this information, resulting in litigation (including class actions) and potential liability, paying damages, regulatory inquiries, investigations or actions, damage to our brand and reputation or other serious harm to our business.
Actual or perceived breaches of our security measures, those of third-parties or the accidental loss, inadvertent disclosure or unapproved dissemination of Confidential Information about us, our partners, our customers or third parties have exposed, and, in the future, could expose us and other affected parties to a risk of loss or misuse of this information, resulting in litigation (including class actions) and potential liability, paying damages, regulatory inquiries, investigations or actions, damage to our brand and reputation or other serious harm to our business.
In addition, other intellectual property laws or our confidentiality procedures and contractual provisions may not adequately protect our intellectual property and others may independently develop similar technology, duplicate our products, or design around any intellectual property rights we may have. Any of these events may seriously harm our business.
In addition, other intellectual property laws or our confidentiality procedures and contractual provisions may not adequately protect our intellectual property and trade secrets, and others may independently develop similar technology, duplicate our products, or design around any intellectual property rights we may have. Any of these events may seriously harm our business.
Our result of operations may be materially adversely affected by factors that directly affect our business and the competitive conditions in our markets, including the following: • changes in demand for our lower margin products relative to demand for our higher margin products; Corsair Gaming, Inc. | 2023 Form 10-K | 13 Table of Contents • introduction or enhancement of products by us and our competitors, and market acceptance of these new or enhanced products; • loss of significant retail customers, cancellations or reductions of orders and product returns; • fluctuations in average selling prices of and demand for our products; • change in demand for our products due to our products having higher price-points than products supplied by our competitors; • discounts and price reductions offered by our competitors; • a delay, reduction or cessation of deliveries from one or more of the third parties that manufacture our products; • increased costs or shortages of our products or components used in our products; • changes in the frequency with which new high-performance computer hardware, particularly GPUs and CPUs, and sophisticated new computer games that drive demand for additional DRAM modules, higher wattage PSUs, enhanced cooling solutions and peripherals are introduced; • fluctuations in the available supply of high-performance computer hardware resulting in the increased costs to gamers, which could ultimately lead to decreased demand for our gaming products, due to factors such as component supply shortages or gamers purchasing GPUs for non-gaming purposes such as cryptocurrency mining; • the war between Russia and Ukraine resulting in shipments of resources from these countries being delayed, or even ceasing, which could cause the GPU shortage to last longer as the production of GPUs requires resources that come from these countries such as highly purified neon gas and palladium, of which Ukraine and Russia, respectively, are the world’s leading exporters; • potential changes in trade relations or the implementation of export sanctions, in particular any sanctions between the United States and China; • unexpected changes in laws, including tax and trade laws, and regulatory requirements; • delays or problems in our introduction of new products; • delays or problems in the shipment or delivery of products to customers; • changes in freight costs; • changes in purchasing patterns by the distributors and retailers to which we sell our products; • seasonal electronics product purchasing patterns by our retail and distributor customers, as well as the gamers and creators that purchase their products directly from us; • competitive pressures resulting in, among other things, lower selling prices or loss of market share; and • cost and adverse outcomes of litigation, governmental proceedings or any proceedings to protect our brand or other intellectual property.
Our result of operations may be materially adversely affected by factors that directly affect our business and the competitive conditions in our markets, including the following: • changes in demand for our lower margin products relative to demand for our higher margin products; • introduction or enhancement of products by us and our competitors, and market acceptance of these new or enhanced products; • loss of significant retail customers, cancellations or reductions of orders and product returns; • fluctuations in average selling prices of and demand for our products; • change in demand for our products due to our products having higher price-points than products supplied by our competitors; • discounts and price reductions offered by our competitors; • a delay, reduction or cessation of deliveries from one or more of the third parties that manufacture our products; • increased costs or shortages of our products or components used in our products; • changes in the frequency and timing with which new high-performance computer hardware, particularly GPUs and CPUs, and sophisticated new computer games that drive demand for additional DRAM modules, higher wattage PSUs, enhanced cooling solutions and peripherals are introduced; • fluctuations in the available supply of high-performance computer hardware resulting in the increased costs to gamers, which could ultimately lead to decreased demand for our gaming products, due to factors such as component supply shortages or consumers purchasing GPUs for non-gaming purposes such as cryptocurrency mining; • the war between Russia and Ukraine resulting in shipments of resources from these countries being delayed, or even ceasing, which could cause the GPU shortage to last longer as the production of GPUs requires resources that come from these countries such as highly purified neon gas and palladium, of which Ukraine and Russia, respectively, are the world’s leading exporters; • potential changes in trade relations or the implementation of export sanctions, in particular any sanctions between the United States and China; • unexpected changes in laws, including tax and trade laws, and regulatory requirements; • delays or problems in our introduction of new products; • delays or problems in the shipment or delivery of products to customers; • changes in freight costs; • changes in purchasing patterns by the distributors and retailers to which we sell our products; • seasonal electronics product purchasing patterns by our retail and distributor customers, as well as the gamers and creators that purchase their products directly from us; • competitive pressures resulting in, among other things, lower selling prices or loss of market share; and • cost and adverse outcomes of litigation, governmental proceedings or any proceedings to protect our brand or other intellectual property.
We believe that the introduction of more powerful GPUs, CPUs and similar computer hardware that place increased demands on other system components, such as memory, power supply units or PSUs or cooling solutions, has a significant effect on the demand for our products. The manufacturers of those products are large, public, independent companies that we do not influence or control.
We believe that the introduction of more powerful GPUs, CPUs and similar computer hardware that place increased demands on other system components, such as memory, PSUs or cooling solutions, has a significant effect on the demand for our products. The manufacturers of those products are large, public, independent companies that we do not influence or control.
Through cloud computing, gamers will be able to access and play graphically sophisticated games that they may not be able to otherwise play on a PC that is not fully equipped with the necessary, and often expensive, hardware.
Through cloud computing, gamers are able to access and play graphically sophisticated games that they may not be able to otherwise play on a PC that is not fully equipped with the necessary, and often expensive, hardware.
The market for these ICs is highly competitive and cyclical. Prices of DRAM ICs have historically been subject to volatility over relatively short periods of time due to a number of factors, including imbalances in supply and demand. We expect these fluctuations will recur in the future, which could seriously harm our business.
The market for these ICs is highly competitive and cyclical. Prices of DRAM ICs have historically been subject to volatility over relatively short periods of time due to a number of factors, including imbalances in supply and demand. These fluctuations have occurred in the past and we expect they will recur in the future, which could seriously harm our business.
Our performance depends to a significant degree upon the contributions of our management team, particularly Andrew J. Paul, our co-founder, Chief Executive Officer and Director. If we lose the services of one or more of our key executives, we may not be able to successfully manage our business, meet competitive challenges or achieve our growth objectives.
Our performance depends to a significant degree upon the contributions of our management team, particularly our co-founder, Chief Executive Officer and Director. If we lose the services of one or more of our key executives, we may not be able to successfully manage our business, meet competitive challenges or achieve our growth objectives.
In addition, our business must be conducted in compliance with applicable trade sanctions and export control laws and regulations, such as those administered and enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control, or OFAC, the U.S. Department of State, the U.S. Department of Commerce, the United Nations Security Council and other relevant authorities.
In addition, our business must be conducted in compliance with applicable trade sanctions and export control laws and regulations, such as those administered and enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”), the U.S. Department of State, the U.S. Department of Commerce, the United Nations Security Council and other relevant authorities.
EagleTree controls a majority of the voting power of our outstanding common stock. As a result, we are a “controlled company” within the meaning of the corporate governance standards of the Nasdaq Global Select Market, or Nasdaq.
EagleTree controls a majority of the voting power of our outstanding common stock. As a result, we are a “controlled company” within the meaning of the corporate governance standards of the Nasdaq Global Select Market (“Nasdaq”).
Threat actors may include experienced computer programmers, opportunistic hackers and hacktivists, state-sponsored organizations and employees who, due to malfeasance or error, may penetrate our security controls and misappropriate or compromise our confidential information or that of our employees or third parties, which in turn, may create system disruptions or cause shutdowns.
Threat actors may include experienced computer programmers, opportunistic hackers and hacktivists, state-sponsored organizations and employees who, due to malfeasance or error, may penetrate our security controls and misappropriate or compromise our Confidential Information or that of our employees or third parties, which in turn, may create disruptions to our IT Systems or cause shutdowns.
Further, even if we detect any bugs or other glitches in the iCUE software or our Elgato streaming software suite we may be unable to update the affected software effectively to remediate these problems.
Further, even if we detect any bugs or other glitches in the iCUE software or our Elgato streaming software suite we may be unable to effectively remediate these problems.
Further, because we carry inventory of DRAM ICs and DRAM modules at our facility in Taiwan, fluctuations in the market price of these ICs can have an effect on our gross margin. For example, declines in the prices of these ICs and their related products have tended to have a negative short-term impact on gross margin of our DRAM modules.
Further, because we carry inventory of DRAM ICs and DRAM modules, fluctuations in the market price of these ICs can have an effect on our gross margin. For example, declines in the prices of these ICs and their related products have tended to have a negative short-term impact on gross margin of our DRAM modules.
While we have taken various measures to help ensure that our policies, processes and systems are in compliance with our obligations, we cannot guarantee that regulators or consumers will agree with our approach to compliance and any failure to protect the confidentiality of client information could adversely affect our reputation, lead to private litigation against us, and require additional investment in resources, impact strategies and availability of previously useful data, any of which could materially and adversely affect our business, operating results and financial condition.
While we have taken various measures to help ensure that our policies, processes and systems are in compliance with our obligations, we cannot guarantee that regulators or consumers will agree with our approach to compliance and any failure to protect the confidentiality of client information could adversely affect our reputation, lead to private litigation (including class actions) against us, and require additional investment in resources, impact strategies and availability of previously available data, any of which could materially and adversely affect our business, operating results and financial condition.
We have opted out of Section 203 of the Delaware General Corporation Law, or DGCL, which prevents stockholders holding more than 15% of our outstanding common stock from engaging in certain business combinations involving us unless certain conditions are satisfied.
We have opted out of Section 203 of the Delaware General Corporation Law (the “DGCL”), which prevents stockholders holding more than 15% of our outstanding common stock from engaging in certain business combinations involving us unless certain conditions are satisfied.
DRAM integrated circuits account for most of the cost of producing our DRAM modules and fluctuations in the market price of DRAM integrated circuits may have a material impact on our net revenue and gross profit. DRAM integrated circuits, or ICs, account for most of the cost of producing our DRAM modules.
DRAM integrated circuits account for most of the cost of producing our DRAM modules and fluctuations in the market price of DRAM integrated circuits may have a material impact on our net revenue and gross profit. DRAM integrated circuits (“ICs”) account for most of the cost of producing our DRAM modules.
Moreover, our credit facilities are secured by substantially all of our assets (including capital stock of our subsidiaries), except assets of our foreign subsidiaries and shares of some of our foreign subsidiaries, and if we are unable to pay indebtedness secured by collateral when due, whether at maturity or if declared due and payable by the lender following a default, the lender generally has the right to seize and sell the collateral securing that indebtedness.
Moreover, our credit facilities are secured by substantially all of our assets (including capital stock of most of our subsidiaries), but excluding assets of some of our foreign subsidiaries, and if we are unable to pay indebtedness secured by collateral when due, whether at maturity or if declared due and payable by the lender following a default, the lender generally has the right to seize and sell the collateral securing that indebtedness.
Additionally, for portions of our IT infrastructure, including business management and communication software products, we rely on products and services provided by third parties, a number of which process personal information on our behalf.
For portions of our IT Systems, including business management and communication software products, we rely on products and services provided by third parties, a number of which process personal information on our behalf.
Our operations, properties and the products we sell are subject to a variety of U.S. and foreign environmental laws and regulations governing, among other things, air emissions, wastewater discharges, management and disposal of hazardous and non-hazardous materials and waste, and remediation of releases of hazardous materials.
Our operations, properties and the products we sell are subject to a variety of U.S. and foreign environmental laws and regulations governing, among other things, product energy efficiency standards, air emissions, wastewater discharges, management and disposal of hazardous and non-hazardous materials and waste, and remediation of releases of hazardous materials.
Delaware law provides that a corporation may indemnify such person if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the registrant and, with respect to any criminal proceeding, had no reasonable cause to believe such person’s conduct was unlawful; • we may, in our discretion, indemnify employees and agents in those circumstances where indemnification is permitted by applicable law; • we are required to advance expenses, as incurred, to our directors and officers in connection with defending a proceeding, except that such directors or officers shall undertake to repay such advances if it is ultimately determined that such person is not entitled to indemnification; • we will not be obligated pursuant to our amended and restated bylaws to indemnify a person with respect to proceedings initiated by that person against us or our other indemnitees, except with respect to proceedings authorized by our board of directors or brought to enforce a right to indemnification; • the rights conferred in our amended and restated bylaws are not exclusive, and we are authorized to enter into indemnification agreements with our directors, officers, employees and agents and to obtain insurance to indemnify such persons; and • we may not retroactively amend our amended and restated bylaw provisions to reduce our indemnification obligations to directors, officers, employees and agents.
Delaware law provides that a corporation may indemnify such person if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of our company and, with respect to any criminal proceeding, had no reasonable cause to believe such person’s conduct was unlawful; • we may, in our discretion, indemnify employees and agents in those circumstances where indemnification is permitted by applicable law; • we are required to advance expenses, as incurred, to our directors and officers in connection with defending a proceeding, except that such directors or officers shall undertake to repay such advances if it is ultimately determined that such person is not entitled to indemnification; • we will not be obligated pursuant to our amended and restated bylaws to indemnify a person with respect to proceedings initiated by that person against us or our other indemnitees, except with respect to proceedings authorized by our board of directors or brought to enforce a right to indemnification; Corsair Gaming, Inc. | 2024 Form 10-K | 33 Table of Contents • the rights conferred in our amended and restated bylaws are not exclusive, and we are authorized to enter into indemnification agreements with our directors, officers, employees and agents and to obtain insurance to indemnify such persons; and • we may not retroactively amend our amended and restated bylaw provisions to reduce our indemnification obligations to directors, officers, employees and agents.
If we are unable to do so, demand for our current products may decline and new products we introduce may not be successful. • We depend upon the introduction and success of new third-party high-performance computer hardware, particularly graphics processing units, or GPUs, and central processing units, or CPUs, and sophisticated new video games to drive sales of our products.
If we are unable to do so, demand for our current products may decline and new products we introduce may not be successful. • We depend upon the introduction and success of new third-party high-performance computer hardware, particularly graphics processing units (“GPUs”), and central processing units (“CPUs”), and sophisticated new video games to drive sales of our products.
As the enforcement landscape further develops, and supervisory authorities issue further guidance on personal information export mechanisms, we could suffer additional costs, complaints and/or regulatory investigations or fines; we may have to stop using certain tools and vendors and make other operational changes; we may have to implement revised standard contractual Corsair Gaming, Inc. | 2023 Form 10-K | 26 Table of Contents clauses for existing intragroup, customer and vendor arrangements within required time frames; and/or if we are otherwise unable to transfer personal data between and among countries and regions in which we operate, it could affect the manner in which we provide our services, the geographical location or segregation of our relevant systems and operations, and could adversely affect our business, operations or financial results.
As the enforcement landscape further develops, and supervisory authorities issue further guidance on personal information export mechanisms, we could suffer additional costs, complaints and/or regulatory investigations or fines; we may have to stop using certain tools and vendors and make other operational changes; we may have to implement revised standard contractual clauses for existing intragroup, customer and vendor arrangements within required time frames; and/or if we are otherwise unable to transfer personal data between and among countries and regions in which we operate, it could affect the manner in which we provide our services, the geographical location or segregation of our relevant systems and operations, and could adversely affect our business, operations or financial results.
In addition, production at facilities located in China, Taiwan or Southeast Asia, including our own manufacturing, testing and packaging facility in Taiwan, and deliveries from those facilities, may be adversely affected by tensions, hostilities or trade disputes involving China, Taiwan, the United States or other countries.
Production at facilities located in China, Taiwan or Southeast Asia, including our own facility in Taiwan, and deliveries from those facilities, may be adversely affected by tensions, hostilities or trade disputes involving China, Taiwan, the United States or other countries.
These threat actors may also develop and deploy viruses, worms, bugs, ransomware and other malicious software programs that attack or otherwise exploit security vulnerabilities in our systems using increasingly sophisticated techniques and tools – including artificial intelligence – that circumvent security controls, evade detection and remove forensic evidence.
These threat actors may also develop and deploy viruses, worms, bugs, ransomware and other malicious software programs that attack or otherwise exploit security vulnerabilities in our IT Systems using increasingly sophisticated techniques – including phishing and social engineering – and tools – including artificial intelligence – that can circumvent security controls, evade detection and remove forensic evidence.
The fact that all of these facilities, manufacturers, suppliers and factories are concentrated in China, Taiwan and countries in Southeast Asia exposes us to numerous risks.
The fact that all of these facilities, manufacturers, suppliers and factories are concentrated in China, Taiwan and countries in Southeast Asia exposes us to geopolitical risks in these areas.
Institutional, individual, and other investors, proxy advisory services, regulatory authorities, consumers and other stakeholders are increasingly focused on environmental, social and governance, or ESG, practices of companies.
Institutional, individual, and other investors, proxy advisory services, regulatory authorities, consumers and other stakeholders are increasingly focused on environmental, social and governance (“ESG”) practices of companies.
If we cannot license or develop technologies for any infringing aspects of our business, we may be forced to halt sales of our products incorporating the infringing technologies and may be unable to compete effectively. Any of these results may seriously harm our business.
If we cannot license or develop technologies for any infringing aspects of our business, we may be forced to halt sales of our products incorporating the infringing technologies and may be unable to compete effectively.
Under these rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including requirements that: • a majority of our board of directors consist of “independent directors” as defined under the rules of Nasdaq; • our board of directors have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee purpose and responsibilities; and Corsair Gaming, Inc. | 2023 Form 10-K | 30 Table of Contents • our director nominations be made, or recommended to the full board of directors, by our independent directors or by a nominations committee that is composed entirely of independent directors and that we adopt a written charter or board resolution addressing the nominations process.
Under these rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including requirements that: • a majority of our board of directors consist of “independent directors” as defined under the rules of Nasdaq; • our board of directors have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee purpose and responsibilities; and • our director nominations be made, or recommended to the full board of directors, by our independent directors or by a nominations committee that is composed entirely of independent directors and that we adopt a written charter or board resolution addressing the nominations process.
The expansion of our business will require us to protect our trademarks, domain names, copyrights, patents and other intellectual property rights in an increasing number of jurisdictions, a process that is expensive and sometimes requires litigation.
The expansion of our business will require us to protect our trademarks, domain names, copyrights, patents, trade secrets and other intellectual property rights in an increasing number of jurisdictions, a process that is expensive and sometimes requires litigation or other enforcement proceedings.
Indebtedness and the terms of our credit facilities may impair our ability to respond to changing business and economic conditions and may seriously harm our business. We had $199.0 million of indebtedness as of December 31, 2023.
Indebtedness and the terms of our credit facilities may impair our ability to respond to changing business and economic conditions and may seriously harm our business. We had $174.0 million of indebtedness as of December 31, 2024.
Sales to a limited number of customers represent a significant portion of our net revenue, and the loss of one or more of our key customers may seriously harm our business. In 2023 and 2022, sales to Amazon accounted for 30.7% and 26.0% of our net revenue, respectively.
Sales to a limited number of customers represent a significant portion of our net revenue, and the loss of one or more of our key customers may seriously harm our business. In 2024 and 2023, sales to Amazon accounted for 30.9% and 30.7% of our net revenue, respectively.
Further, pursuant to the terms of an Investor Rights Agreement between us and EagleTree, EagleTree has the right, among other things, to designate the chairman of our board of directors, as well as the right to nominate up to five out of eight directors to our board of directors as long as affiliates of EagleTree beneficially own at least 50% of our common stock, four directors as long as affiliates of EagleTree beneficially own at least 40% and less than 50% of our common stock, three directors as long as affiliates of EagleTree beneficially own at least 30% and less than 40% of our common stock, two directors as long as affiliates of EagleTree beneficially own at least 20% and less than 30% of our common stock and one director as long as affiliates of EagleTree beneficially own at least 10% and less than 20% of our common stock.
Further, pursuant to the terms of an Investor Rights Agreement between us and EagleTree, EagleTree has the right, among other things, to designate the chairman of our board of directors, as well as the right to nominate up to five out of eight directors to our board of directors as long as affiliates of EagleTree beneficially own at least 50% of our common stock, four directors as long as affiliates of EagleTree beneficially own at least 40% and less than 50% of our common stock, three directors as long as affiliates of EagleTree beneficially own at least 30% and less than 40% of our common stock, two directors as long as affiliates of Corsair Gaming, Inc. | 2024 Form 10-K | 30 Table of Contents EagleTree beneficially own at least 20% and less than 30% of our common stock and one director as long as affiliates of EagleTree beneficially own at least 10% and less than 20% of our common stock.
Risks Related to Our Common Stock We are controlled by a single stockholder, EagleTree, whose interests in our business may be different than yours. As of December 31, 2023, EagleTree beneficially owned approximately 54.5% of our common stock and is able to control our affairs in all cases.
Risks Related to Our Common Stock We are controlled by a single stockholder, EagleTree, whose interests in our business may be different than yours. As of December 31, 2024, EagleTree beneficially owned approximately 53.7% of our common stock and is able to control our affairs in all cases.
Any such disruptions may also magnify the impact of other risks described in this Annual Report on Form 10-K. Corsair Gaming, Inc. | 2023 Form 10-K | 16 Table of Contents If we lose or are unable to attract and retain key management, our ability to compete could be seriously harmed and our financial performance could suffer.
Any such disruptions may also magnify the impact of other risks described in this Annual Report on Form 10-K. If we lose or are unable to attract and retain key management, our ability to compete could be seriously harmed and our financial performance could suffer.
Sales to our ten largest customers accounted for 55.4% and 52.3% of our net revenue in 2023 and 2022, 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 from time to time.
Sales to our ten largest customers accounted for 53.1% and 55.4% of our net revenue in 2024 and 2023, 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 from time to time.
Foreign Corrupt Practices Act, or the FCPA, as well as the anti-corruption and anti-bribery laws in the countries where we do business.
Foreign Corrupt Practices Act (the “FCPA”), as well as the anti-corruption and anti-bribery laws in the countries where we do business.
Health crises, like the COVID-19 pandemic, have led, and could lead, to quarantines or labor shortages, which may impact the output of key suppliers because of longer production and shipping times, and increased supply, shipping and logistics costs, each of which have historically negatively impacted our gross margins, as well as the need to purchase long-lead time items ahead of demand due to supply constraints.
Health crises, including pandemics, have led, and could lead, to quarantines or labor shortages, which may impact the output of key suppliers because of longer production and shipping times, higher product costs, and increased shipping and logistics costs, each of which have historically negatively impacted our gross margins, as well as the need to purchase long-lead time items ahead of demand due to supply constraints.
The market price of our common stock could be subject to wide fluctuations in response to a broad and diverse range of factors, including those described elsewhere in this “Risk Factors” section and the following: • variations in our operating performance and the performance of our competitors; • actual or anticipated fluctuations in our quarterly or annual operating results; • changes in estimates or recommendations by securities analysts concerning us or our competitors; • publication of research reports by securities analysts about us or our competitors or our industry; • our failure or the failure of our competitors to meet analysts’ estimates or guidance that we or our competitors may give to the market; • additions and departures of key personnel; • strategic decisions by us or our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments or changes in business strategy; • developments of new technologies or other innovations; • the passage of legislation or other regulatory developments affecting us or our industry; • speculation in the press or investment community; • changes in accounting principles; • the outbreak of epidemics or pandemics, such as the COVID-19 pandemic; • natural disasters, terrorist acts, acts of war or periods of widespread civil unrest, such as any military actions taken as a result of the war between Russia and Ukraine and the war between Israel and Hamas; and • changes in general market and economic conditions.
The market price of our common stock could be subject to wide fluctuations in response to a broad and diverse range of factors, including those described elsewhere in this “Risk Factors” section and the following: • variations in our operating performance and the performance of our competitors; • actual or anticipated fluctuations in our quarterly or annual operating results; • changes in estimates or recommendations by securities analysts concerning us or our competitors; • publication of research reports by securities analysts about us or our competitors or our industry; • our failure or the failure of our competitors to meet analysts’ estimates or guidance that we or our competitors may give to the market; • additions and departures of key personnel; • strategic decisions by us or our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments or changes in business strategy; Corsair Gaming, Inc. | 2024 Form 10-K | 31 Table of Contents • developments of new technologies or other innovations; • the passage of legislation or other regulatory developments affecting us or our industry; • speculation in the press or investment community; • changes in accounting principles; • the outbreak of epidemics or pandemics; • natural disasters, terrorist acts, acts of war or periods of widespread civil unrest, such as any military actions taken as a result of the military conflicts in Ukraine and the Middle East; and • changes in general market and economic conditions.
Our ability to compete successfully is fundamental to our success in existing and new markets. We believe that the principal competitive factors in our markets include performance, reliability, brand and associated style and image, time to market with new emerging technologies, early identification of emerging opportunities, interoperability of products and responsive customer support on a worldwide basis.
We believe that the principal competitive factors in our markets include performance, reliability, brand and associated style and image, time to market with new emerging technologies, early identification of emerging opportunities, interoperability of products and responsive customer support on a worldwide basis.
Our future success depends to a large degree on our ability to defend the Corsair brand and product family brands such as SCUF, Elgato and iCUE from infringement and, if we are unable to protect our brand and other intellectual property, our business may be seriously harmed. We consider the Corsair brand to be one of our most valuable assets.
Our future success depends to a large degree on our ability to defend the Corsair brand and product family brands such as SCUF, Elgato, Fanatec and iCUE from infringement and, if we are unable to protect our brand and other intellectual property, our business may be seriously harmed.
If we, or our employees, representatives, distributors or agents acting on our behalf, are found to have engaged in practices that violate these laws and regulations, we could suffer severe fines and penalties, profit disgorgement, injunctions on future conduct, securities litigation, bans on transacting government business, delisting from securities exchanges and other consequences that may seriously harm our business, financial condition and results of operations.
If we, or our employees, representatives, distributors or agents acting on our behalf, are found to have engaged in practices that violate these laws and regulations, we could suffer severe fines and penalties, profit disgorgement, injunctions on future conduct, securities litigation, bans on transacting government business, delisting from securities exchanges and other consequences that may seriously Corsair Gaming, Inc. | 2024 Form 10-K | 35 Table of Contents harm our business, financial condition and results of operations.
Although the length, impact and outcome of the war is highly unpredictable, this war has contributed to significant market and other disruptions, including significant volatility in commodity prices and supply of energy resources, instability in financial markets, supply chain interruptions, political and social instability, changes in consumer or purchaser preferences as well as an increase in cyberattacks and espionage.
Although the length, impact and outcome of these wars are highly unpredictable, these wars have contributed to significant market and other disruptions, including significant volatility in commodity prices and supply of energy resources, instability in financial markets, supply chain interruptions, political and social instability, changes in consumer or purchaser preferences as well as an increase in cyberattacks and espionage.
We have limited manufacturing facilities that only assemble our DRAM modules, custom built PCs, custom cooling and controllers, we have no guaranteed sources of supply of products or components and we depend upon a small number of Corsair Gaming, Inc. | 2023 Form 10-K | 17 Table of Contents manufacturers, some of which are exclusive or single-source suppliers, to supply our products, each of which may result in product or component shortages, delayed deliveries and quality control problems.
We have limited manufacturing facilities that only assemble our DRAM modules, custom built PCs, custom cooling and controllers, we have no guaranteed sources of supply of products or components and we depend upon a small number of manufacturers, some of which are exclusive or single-source suppliers, to supply our products, each of which may result in product or component shortages, delayed deliveries and quality control problems.
Many other states are currently reviewing or proposing the need for greater regulation of the collection, sharing, use and other processing of information related to individuals for marketing purposes or otherwise and there remains increased interest at the federal level as well, reflecting a trend towards more stringent data privacy legislation.
The enactment of the CCPA has prompted a wave of similar legislative developments in other states and many other states are currently reviewing or proposing the need for greater regulation of the collection, sharing, use and other processing of information related to individuals for marketing purposes or otherwise and there remains increased interest at the federal level as well, reflecting a trend towards more stringent data privacy legislation.
We also consider the Elgato, Origin, SCUF brands and iCUE proprietary technology brands. Our future success depends to a large degree upon our ability to defend the Corsair brand, proprietary technology brands and product family brands from infringement and to protect our other intellectual property.
We consider the Corsair brand to be one of our most valuable assets. We also consider the Elgato, Origin, SCUF, Fanatec brands and iCUE proprietary technology brands. Our future success depends to a large degree upon our ability to defend the Corsair brand, proprietary technology brands and product family brands from infringement and to protect our other intellectual property.
If one of our exclusive or single-source manufacturers were to stop production, or experience product quality or shortage issues, we may be unable to locate or engage a suitable replacement on terms we consider acceptable and, in any event, there would likely be significant delays and considerable costs involved in transitioning production to a new manufacturer.
If one of our exclusive or single-source manufacturers were to stop production, or experience product quality or shortage issues, we may be unable to locate or engage a suitable replacement on terms we Corsair Gaming, Inc. | 2024 Form 10-K | 17 Table of Contents consider acceptable and, in any event, there would likely be significant delays and considerable costs involved in transitioning production to a new manufacturer.
As a result, such restrictions could limit, perhaps substantially, the amount of indebtedness we are permitted to borrow under other debt arrangements.
As a result, such restrictions could limit, perhaps substantially, the amount of permitted indebtedness under other debt arrangements.
If the trend of increasing proceedings by litigants and enforcement by regulators of the strict approach in recent guidance and decisions continues, this could lead to substantial costs, require significant systems changes, limit the effectiveness of our marketing activities, divert the attention of our technology personnel, adversely affect our margins, increase costs and subject us to additional liabilities.
If the trend of increasing proceedings by litigants and enforcement by regulators of the strict approach in recent guidance and decisions continues, this could lead to substantial costs, require significant systems changes, limit the effectiveness of Corsair Gaming, Inc. | 2024 Form 10-K | 26 Table of Contents our marketing activities, divert the attention of our technology personnel, adversely affect our margins, increase costs and subject us to additional liabilities.
There can be no assurance that we will not breach the covenants or other terms of our credit facilities or any other debt instruments in the future and, if Corsair Gaming, Inc. | 2023 Form 10-K | 22 Table of Contents a breach occurs, there can be no assurance that we will be able to obtain necessary waivers or amendments from the lender or to refinance the related indebtedness on terms we find acceptable, or at all.
There can be no assurance that we will not breach the covenants or other terms of our credit facilities or any other debt instruments in the future and, if a breach occurs, there can be no assurance that we will be able to obtain necessary waivers or amendments from the lender or to refinance the related indebtedness on terms we find acceptable, or at all.
In addition, we generally pay our employees located outside the United States in the local currency and, as a result of our foreign sales and operations, we have other expenses, assets and liabilities that are denominated in foreign currencies and changes in the value of the U.S. dollar could result in significant increases in our expenses that may seriously harm our business.
In addition, we generally pay our employees located outside the United States in the local currency and, as a result of our foreign sales and operations, we have other expenses, assets and Corsair Gaming, Inc. | 2024 Form 10-K | 12 Table of Contents liabilities that are denominated in foreign currencies and changes in the value of the U.S. dollar could result in significant increases in our expenses that may seriously harm our business.
Moreover, if one of our distributors or retailer customers experiences financial distress or bankruptcy, they may be required to liquidate their inventory of our products, or similar products that compete with our products, at reduced prices, which can result in substantial over-supply and reduced demand for our products over the short term.
Moreover, if one of our Corsair Gaming, Inc. | 2024 Form 10-K | 27 Table of Contents distributors or retailer customers experiences financial distress or bankruptcy, they may be required to liquidate their inventory of our products, or similar products that compete with our products, at reduced prices, which can result in substantial over-supply and reduced demand for our products over the short term.
However, there are a number of factors which could result in the esports or live game streaming markets having limited or negative impact on our sales and overall growth.
In addition, there could be any number of factors which could result in the esports or live game streaming markets having limited or negative impact on our sales and overall growth.
While we were in compliance with all applicable financial covenants under our credit facilities as of December 31, 2023, there can be no assurance that we will not breach these financial covenants in our credit facilities in the future or other covenants in our future credit facilities.
While we were in compliance with all applicable financial covenants under our credit facilities as of December 31, 2024, there can be no assurance that we will not breach these financial covenants in our existing and future credit facilities.
We have faced claims that we have infringed, or that our use of components or products supplied to us by third parties have infringed, patents or other intellectual property rights of others in the past and may in the future face similar claims.
In the past, we have faced claims that we have infringed, misappropriated or otherwise violated third party intellectual property rights and that our use of components or products supplied to us by third parties have infringed, misappropriated or otherwise violated third party intellectual property rights, and we may face similar claims in the future.
Likewise, our independent registered public accounting firm is required to provide an Corsair Gaming, Inc. | 2023 Form 10-K | 35 Table of Contents attestation report on the effectiveness of our internal controls over financial reporting in our Annual Reports on Form 10-K.
Likewise, our independent registered public accounting firm is required to provide an attestation report on the effectiveness of our internal controls over financial reporting in our Annual Reports on Form 10-K.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur management team’s experience includes security certifications in International Information System Security Certification Consortium (“ISC2”), Information Systems Audit and Control Association (“ISACA”) and The International Council of E-Commerce Consultants (“EC-Council”).
Biggest changeThe CIO has over 20 years’ experience managing the cybersecurity function across multiple companies. The information security team’s experience includes security certifications in International Information System Security Certification Consortium (“ISC2”), Information Systems Audit and Control Association (“ISACA”) and The International Council of E-Commerce Consultants (“EC-Council”). We have a security incident response framework in place.
Our management team, including our Chief Executive Officer, Chief Financial Officer, Chief Information Officer, and Vice President and General Counsel, is responsible for assessing and managing our material risks from cybersecurity threats. The team has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants.
Our management team, including our Chief Executive Officer, Chief Financial Officer, Chief Information Officer (the “CIO”), and Vice President and General Counsel, is responsible for assessing and managing our material risks from cybersecurity threats. The team has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants.
In addition, management updates the Committee, as necessary, regarding any material cybersecurity incidents, as well as any incidents with lesser impact potential. The Committee reports to the full Board regarding its activities, including those related to cybersecurity. The full Board also receives briefings from management on our cyber risk management program.
In addition, management updates the Committee, as necessary, regarding any material cybersecurity incidents, as well as, where it deems appropriate, any incidents with lesser impact potential. The Committee reports to the full Board regarding its activities, including those related to cybersecurity. The full Board also receives briefings from management on our cyber risk management program.
Item 1C. Cybersecurity. Risk management and strategy We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information. Our cybersecurity risk management program includes a cybersecurity incident response plan.
Item 1C. Cybersecurity. Corsair Gaming, Inc. | 2024 Form 10-K | 36 Table of Contents Risk management and strategy We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information. Our cybersecurity risk management program includes a cybersecurity incident response plan.
Our cybersecurity risk management program is integrated into our overall enterprise risk management program, and shares Corsair Gaming, Inc. | 2023 Form 10-K | 36 Table of Contents common methodologies, reporting channels and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas.
Our cybersecurity risk management program is integrated into our overall enterprise risk management program, and shares common methodologies, reporting channels and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas.
We are in the process of implementing a process to oversee and identify risks from using third-party service providers, suppliers and vendors who have access to our critical systems and information.
Our work on developing and implementing a process to oversee and identify risks from using third-party service providers, suppliers and vendors who have access to our critical systems and information is ongoing .
Added
This is part of the process we employ to inform our management and Board of Directors about and to monitor the prevention, detection, mitigation, and remediation of cybersecurity incidents. Our cybersecurity framework includes regular compliance assessments of our policies and standards in relation to applicable state and federal statutes and regulations.
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Corsair Gaming, Inc. | 2024 Form 10-K | 37 Table of Contents

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe believe that the facilities that we currently occupy are adequate for our current needs and that suitable additional space will be available, as needed, to accommodate the presently foreseeable expansion of our operations. Corsair Gaming, Inc. | 2023 Form 10-K | 37 Table of Contents
Biggest changeWe believe that the facilities that we currently occupy are adequate for our current needs and that suitable additional space will be available, as needed, to accommodate the presently foreseeable expansion of our operations.
In addition, we have approximately 306,000 square feet of space dedicated to us in our contracts with various third-party distribution centers in California and China for additional warehouses to store our inventory. Both our Gamer and Creator Peripherals segment and Gaming Components and Systems segment utilize substantially each of our leased facilities.
In addition, we have approximately 327,000 square feet of space dedicated to us in our contracts with various third-party distribution centers in California and China for additional warehouses to store our inventory. Both our Gamer and Creator Peripherals segment and Gaming Components and Systems segment utilize substantially each of our leased facilities.
Our total property leases as of December 31, 2023, which expire at various dates through August 2032, are for an aggregate of approximately 694,000 square feet (including the Milpitas headquarters lease).
Our total property leases as of December 31, 2024, which expire at various dates through August 2032, are for an aggregate of approximately 706,000 square feet (including the Milpitas headquarters lease).

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Item 4. Mine Saf ety Disclosures. Not applicable. Corsair Gaming, Inc. | 2023 Form 10-K | 38 Table of Contents PAR T II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeHolders According to the records of our transfer agent, there were 18 holders of record of our common stock on February 12, 2024. Because many of such shares are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders.
Biggest changeHolders According to the records of our transfer agent, there were 19 holders of record of our common stock on February 13, 2025. Because many of such shares are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders.
The graph below compares (i) the cumulative total stockholder return on our common stock from September 23, 2020 (the date our common stock commenced trading on Nasdaq Global Select Market) through December 31, 2023 with (ii) the cumulative total return of the Nasdaq Composite Index and the S&P Information Technology Index over the same period, assuming the investment of $100 in our common stock and in both of the indices on September 23, 2020 and the reinvestments of dividends, if any.
The graph below compares (i) the cumulative total stockholder return on our common stock from September 23, 2020 (the date our common stock commenced trading on Nasdaq Global Select Market) through December 31, 2024 with (ii) the cumulative total return of the Nasdaq Composite Index and the S&P Information Technology Index over the same period, assuming the investment of $100 in our common stock and in both of the indices on September 23, 2020 and the reinvestments of dividends, if any.
Corsair Gaming, Inc. | 2023 Form 10-K | 39 Table of Contents Unregistered Sales of Equity Securities None. Issuer Purchases of Equity Securities None.
Corsair Gaming, Inc. | 2024 Form 10-K | 39 Table of Contents Unregistered Sales of Equity Securities None. Issuer Purchases of Equity Securities None.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeYears Ended December 31, 2023 2022 (in thousands) Net revenue $ 1,459,875 $ 1,375,098 Cost of revenue 1,099,612 1,078,466 Gross profit 360,263 296,632 Operating expenses: Sales, general and administrative 285,313 284,932 Product development 65,261 66,493 Total operating expenses 350,574 351,425 Operating income (loss) 9,689 (54,793 ) Other (expense) income: Interest expense (17,420 ) (9,560 ) Interest income 6,839 374 Other (expense) income, net (2,587 ) 213 Total other expense, net (13,168 ) (8,973 ) Loss before income taxes (3,479 ) (63,766 ) Income tax benefit 2,442 9,820 Net loss (1,037 ) (53,946 ) Less: Net income attributable to noncontrolling interest 1,553 442 Net loss attributable to Corsair Gaming, Inc. $ (2,590 ) $ (54,388 ) Years Ended December 31, 2023 2022 Net revenue 100.0 % 100.0 % Cost of revenue 75.3 78.4 Gross profit 24.7 21.6 Operating expenses: Sales, general and administrative 19.5 20.7 Product development 4.5 4.8 Total operating expenses 24.0 25.5 Operating income (loss) 0.7 (3.9 ) Other (expense) income: Interest expense (1.2 ) (0.7 ) Interest income 0.5 0.0 Other (expense) income, net (0.2 ) 0.0 Total other expense, net (0.9 ) (0.7 ) Loss before income taxes (0.2 ) (4.6 ) Income tax benefit 0.2 0.7 Net loss 0.0 (3.9 ) Less: Net income attributable to noncontrolling interest 0.1 0.0 Net loss attributable to Corsair Gaming, Inc.
Biggest changeYears Ended December 31, 2024 2023 (in thousands) Net revenue $ 1,316,379 $ 1,459,875 Cost of revenue 988,782 1,099,612 Gross profit 327,597 360,263 Operating expenses: Sales, general and administrative 310,008 285,313 Product development 67,543 65,261 Total operating expenses 377,551 350,574 Operating income (loss) (49,954 ) 9,689 Other (expense) income: Interest expense (13,207 ) (17,420 ) Interest income 3,347 6,839 Other expense, net (1,844 ) (2,587 ) Total other expense, net (11,704 ) (13,168 ) Loss before income taxes (61,658 ) (3,479 ) Income tax benefit (expense) (21,736 ) 2,442 Net loss (83,394 ) (1,037 ) Less: Net income attributable to noncontrolling interest 1,787 1,553 Net loss attributable to Corsair Gaming, Inc. $ (85,181 ) $ (2,590 ) Years Ended December 31, 2024 2023 Net revenue 100.0 % 100.0 % Cost of revenue 75.1 75.3 Gross profit 24.9 24.7 Operating expenses: Sales, general and administrative 23.6 19.5 Product development 5.1 4.5 Total operating expenses 28.7 24.0 Operating income (loss) (3.8 ) 0.7 Other (expense) income: Interest expense (1.0 ) (1.2 ) Interest income 0.3 0.5 Other expense, net (0.1 ) (0.2 ) Total other expense, net (0.8 ) (0.9 ) Loss before income taxes (4.6 ) (0.2 ) Income tax benefit (expense) (1.7 ) 0.2 Net loss (6.3 ) (0.0 ) Less: Net income attributable to noncontrolling interest 0.1 0.1 Net loss attributable to Corsair Gaming, Inc.
Income Tax (Expense) Benefit We are subject to income taxes in the United States and foreign jurisdictions in which we do business. These foreign jurisdictions have statutory tax rates different from those in the United States.
Income Tax Benefit (Expense) We are subject to income taxes in the United States and foreign jurisdictions in which we do business. These foreign jurisdictions have statutory tax rates different from those in the United States.
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. Impact of Fluctuations in Integrated Circuits Pricing. Integrated circuits, or ICs, account for most of the cost of producing our high-performance memory products.
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. Impact of Fluctuations in Integrated Circuits Pricing. ICs account for most of the cost of producing our high-performance memory products.
Our principal uses of cash generally will 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.
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.
We also offer digital services to enhance the customer experience by integrating esports, coaching, Elgato's marketplace, customer care and extended warranty into our product offerings. We group our products into two categories (operating segments): • Gamer and Creator Peripherals.
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. We group our products into two categories (operating segments): • Gamer and Creator Peripherals.
Key Factors Affecting Our Business Our results of operations and financial condition are affected by numerous factors, including those discussed in the section titled “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K and those described below. Corsair Gaming, Inc. | 2023 Form 10-K | 41 Table of Contents Impact of Macroeconomic Conditions.
Key Factors Affecting Our Business Our results of operations and financial condition are affected by numerous factors, including those discussed in the section titled “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K and those described below. Corsair Gaming, Inc. | 2024 Form 10-K | 41 Table of Contents Impact of Macroeconomic Conditions.
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, which in turn drives demand for our high-performance gaming components and systems, such as PSUs and cooling solutions, and our gaming PC memory.
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 PSUs and cooling solutions, and our gaming PC memory.
For a discussion of the year ended December 31, 2022 compared to the year ended December 31, 2021, please refer to Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations ” in our Annual Report on Form 10-K filed with the SEC on February 27, 2023.
For a discussion of the year ended December 31, 2023 compared to the year ended December 31, 2022, please refer to Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations ” in our Annual Report on Form 10-K filed with the SEC on February 27, 2024.
See Note 8 “Debt” to our consolidated financial statements for more information. (2) Amounts represent an estimate of purchase obligations related to inventory. (3) Amounts represent contractual obligations from our operating leases for offices and warehouse spaces. (4) Amounts represent non-cancelable obligations related to capital expenditures, software licenses, marketing and other activities.
See Note 7 “Debt” to our consolidated financial statements for more information. (2) Amounts represent an estimate of purchase obligations related to inventory. (3) Amounts represent contractual obligations from our operating leases for offices and warehouse spaces. (4) Amounts represent non-cancelable obligations related to capital expenditures, software licenses, marketing and other activities.
Critical Accounting Polices and Estimates 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.
Critical Accounting Policies and Estimates 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 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 to produce studio-quality content to share with friends or to broadcast to millions of fans.
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.
During 2023, we experienced overall demand increase for our gaming components and systems products primarily driven by the self-built PC market expansion from the increase in availability of new and reasonably priced GPUs and CPUs as well as the release of new game titles.
During 2023, we experienced overall demand increase for our gaming components and systems products primarily driven by the self-built PC market expansion from the increase in availability in late 2022 of new and reasonably priced GPUs and CPUs as well as the release of new game titles.
Corsair Gaming, Inc. | 2023 Form 10-K | 44 Table of Contents The following tables set forth the components of our consolidated statements of operations, in dollars and as a percentage of total net revenue, for each of the periods presented.
Corsair Gaming, Inc. | 2024 Form 10-K | 44 Table of Contents The following tables set forth the components of our consolidated statements of operations, in dollars and as a percentage of total net revenue, for each of the periods presented.
Cash Flows from Financing Activities Net cash used in financing activities was $37.4 million for 2023 and consisted primarily of $41.0 million repayment of debt, $1.4 million payment of taxes related to net share settlement of equity awards, and $1.0 million payment of dividends to noncontrolling interest.
Net cash used in financing activities was $37.4 million for 2023 and consisted primarily of $41.0 million repayment of debt, $1.4 million payment of taxes related to net share settlement of equity awards, and $1.0 million payment of dividends to noncontrolling interest.
Includes our high-performance gaming keyboards, mice, headsets, controllers, and streaming products, which includes capture cards, Stream Decks, microphones and audio interfaces, our Facecam streaming cameras, studio accessories, and gaming furniture, among others. • Gaming Components and Systems.
Includes our high-performance gaming keyboards, mice, headsets, controllers, and streaming products, which includes capture cards, Stream Decks, microphones and audio interfaces, our Facecam streaming cameras, studio accessories, sim racing products, and gaming furniture, among others. • Gaming Components and Systems.
Cash Flows from Investing Activities Cash used in investing activities was $27.0 million for 2023 and consisted of $14.2 million for the Drop acquisition (net of cash acquired), and $12.8 million capital expenditure, primarily for equipment and software.
Cash used in investing activities was $27.0 million for 2023 and consisted of $14.2 million for the Drop Acquisition (net of cash acquired), and $12.8 million capital expenditure, primarily for equipment and software.
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.
Impact of Product Mix . 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.
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 was favorably impacted by the release of 108 new products in 2023.
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 in 2024 was favorably impacted by the release of 78 new products in 2024.
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 train or boat, for other shipments, has an impact on our expenses and results of operations. Impact of New Product Introductions .
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. Impact of New Product Introductions .
Results of Operations In this section, we discuss the results of our operations for the year ended December 31, 2023, compared to the year ended December 31, 2022.
Results of Operations In this section, we discuss the results of our operations for the year ended December 31, 2024, compared to the year ended December 31, 2023.
Other (Expense) Income, Net Other (expense) income, net consists primarily of our foreign currency exchange gains and losses relating to transactions and remeasurement of asset and liability balances denominated in foreign currencies, net fair value gains and losses from our foreign currency forward contracts, and the impairment loss on available-for-sale security.
Other (Expense) Income, Net Other (expense) income, net consists primarily of our foreign currency exchange gains and losses relating to transactions and remeasurement of asset and liability balances denominated in foreign currencies, net fair value gains and losses from our foreign currency forward contracts, and the impairment loss on available-for-sale security, offset by bargain purchase gain from business acquisition.
Cost of Revenue Cost of revenue consists of product costs, including costs of contract manufacturers, inbound freight costs from manufacturers to our distribution hubs as well as inter-hub shipments, cost of materials and overhead, duties and tariffs, warranty replacement cost to process and rework returned items, depreciation of tooling equipment, warehousing costs, excess and obsolete inventory write-downs, Corsair Gaming, Inc. | 2023 Form 10-K | 43 Table of Contents and certain allocated costs related to facilities and information technology, or IT, and personnel-related expenses and other operating expenses related to supply chain logistics.
Cost of Revenue Cost of revenue consists of product costs, including costs of contract manufacturers, inbound freight costs from manufacturers to our distribution hubs as well as inter-hub shipments, cost of materials and overhead, duties and tariffs, warranty replacement cost to process and rework returned items, depreciation of tooling equipment, warehousing costs, excess and obsolete inventory write-downs, and certain allocated costs related to facilities and information technology (“IT”), and personnel-related expenses and other operating expenses related to supply chain logistics.
The new Credit Agreement provides for a total commitment of $350.0 million, consisting of a $100.0 million revolving credit facility and a $250.0 million term loan facility.
The Credit Agreement provides for a total commitment of $350.0 million, consisting of a $100.0 million revolving credit facility (the “Revolving Facility”) and a $250.0 million term loan facility (the “Term Loan”).
As of December 31, 2023, we had $2.6 million in non-current income tax payable, including interest and penalties, related to our income tax liability for uncertain tax positions.
As of December 31, 2024, we had $3.5 million in non-current income tax payable, including interest and penalties, related to our income tax liability for uncertain tax positions.
We believe that the anticipated cash flows from operations based on our current business outlook, combined with our current levels of cash balances at December 31, 2023, supplemented with the borrowings under our revolving credit facility will be sufficient to fund our principal uses of cash for at least the next twelve months.
We believe that the anticipated cash flows from operations based on our current business outlook, combined with our current levels of cash balances at December 31, 2024, supplemented with the borrowing capacity under our Revolving Facility, if and as needed, will be sufficient to fund our principal uses of cash for at least the next twelve months.
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 consolidated financial statements, as well as the Corsair Gaming, Inc. | 2023 Form 10-K | 50 Table of Contents reported amounts of revenue and expenses during the reporting periods.
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 consolidated financial statements, as well as the reported amounts of revenue and expenses during the reporting periods.
Corsair Gaming, Inc. | 2023 Form 10-K | 46 Table of Contents Income Tax (Expense) Benefit Years Ended December 31, 2023 2022 (in thousands, except percentages) Loss before income taxes $ (3,479 ) $ (63,766 ) Income tax benefit 2,442 9,820 Effective tax rate 70.2 % 15.4 % We are subject to income taxes in the United States and foreign jurisdictions in which we do business.
Income Tax Benefit (Expense) Years Ended December 31, 2024 2023 (in thousands, except percentages) Loss before income taxes $ (61,658 ) $ (3,479 ) Income tax benefit (expense) (21,736 ) 2,442 Effective tax rate (35.3 )% 70.2 % Corsair Gaming, Inc. | 2024 Form 10-K | 46 Table of Contents We are subject to income taxes in the United States and foreign jurisdictions in which we do business.
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.
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 Corsair Gaming, Inc. | 2024 Form 10-K | 42 Table of Contents expenses relate to shipping costs.
Additionally, the commitment fee on the unused portion of the Revolving Facility was amended to range from 0.2% to 0.4% based on our total net leverage ratio.
Additionally, the commitment fees on the unused portion of the Revolving Facility ranges from 0.2% to 0.4% based on our total net leverage ratio.
The increase was due to a 13.6% increase in sales for our Gaming Components and Systems segment, which was partially offset by a 9.8% decrease in sales for our Gamer and Creator Peripherals segment.
The decrease was due to a 20.8% decrease in sales for our Gaming Components and Systems segment, offset partially by a 19.7% increase in sales for our Gamer and Creator Peripherals segment.
Our obligations under the Credit Agreement are guaranteed by substantially all of our U.S. subsidiaries and secured by a security interest in substantially all assets of the Company and the guarantor subsidiaries, subject to certain exceptions detailed in the Credit Agreement and related ancillary documentation.
Corsair Gaming, Inc. | 2024 Form 10-K | 49 Table of Contents Our obligations under the Credit Agreement are guaranteed by substantially all of our U.S. subsidiaries and secured by a security interest in substantially all assets of the Company and the guarantor subsidiaries, subject to certain exceptions detailed in the Credit Agreement and related ancillary documentation.
Recent Accounting Pronouncements Refer to Note 2 to the consolidated financial statements included in this Annual Report on Form 10-K for recent accounting pronouncements adopted and to be adopted.
Corsair Gaming, Inc. | 2024 Form 10-K | 50 Table of Contents Recent Accounting Pronouncements Refer to Note 2 to the consolidated financial statements included in this Annual Report on Form 10-K for recent accounting pronouncements adopted and to be adopted.
Further, a limited number of retailers and distributors represent a significant Corsair Gaming, Inc. | 2023 Form 10-K | 42 Table of Contents portion of our net revenue, with e-retailer Amazon accounting for 30.7%, 26.0%, and 26.7% of our net revenue for 2023, 2022, and 2021, respectively, and sales to our ten largest customers accounting for approximately 55.4%, 52.3%, and 51.7% of our net revenue for the same periods, respectively.
Further, a limited number of retailers and distributors represent a significant portion of our net revenue, with e-retailer Amazon accounting for 30.9%, 30.7%, and 26.0% of our net revenue for 2024, 2023, and 2022, respectively, and sales to our ten largest customers accounting for approximately 53.1%, 55.4%, and 52.3% of our net revenue for the same periods, respectively.
Consequently, following the First Amendment, the Term Loan and Revolving Facility will each bear interest at our election at either (a) BSBY plus a percentage spread (ranging from 1.25% to 2.25%) based on our total net leverage ratio, or (b) the base rate (as described in the Credit Agreement as the greatest of (i) the prime rate, (ii) the federal funds rate plus 0.50% and (iii) one-month BSBY plus 1.0%) plus a percentage spread (ranging from 0.25% to 1.25%) based on our total net leverage ratio.
According to the provisions in the Third Amendment to the Credit Agreement (“Third Amendment”), beginning 2024, the Term Loan and the Revolving Facility carry interest at our election at either (a) Bloomberg Short-Term Bank Yield Index rate (“BSBY”) plus a percentage spread (ranging from 1.25% to 2.25%) based on our total net leverage ratio, or (b) the base rate (as described in the Credit Agreement as the greatest of (i) the prime rate, (ii) the federal funds rate plus 0.50% and (iii) one-month BSBY plus 1.0%) plus a percentage spread (ranging from 0.25% to 1.25%) based on our total net leverage ratio.
The extent of the impact of macroeconomic conditions, geopolitical tensions and the lingering effects from the COVID-19 pandemic 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 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.
Sales, General and Administrative (SG&A) Years Ended December 31, 2023 2022 (in thousands) Sales, general and administrative $ 285,313 $ 284,932 SG&A expenses increased $0.4 million, or 0.1%, in 2023 as compared to 2022.
Sales, General and Administrative (SG&A) Years Ended December 31, 2024 2023 (in thousands) Sales, general and administrative $ 310,008 $ 285,313 SG&A expenses increased $24.7 million, or 8.7%, in 2024 as compared to 2023.
(0.1 )% (3.9 )% Comparison of Years Ended December 31, 2023 and 2022 Net Revenue Years Ended December 31, 2023 2022 (in thousands) Net revenue $ 1,459,875 $ 1,375,098 Net revenue increased $84.8 million, or 6.2%, in 2023 as compared to 2022.
(6.4 )% (0.1 )% Comparison of Years Ended December 31, 2024 and 2023 Net Revenue Years Ended December 31, 2024 2023 (in thousands) Net revenue $ 1,316,379 $ 1,459,875 Net revenue decreased $143.5 million, or 9.8%, in 2024 as compared to 2023.
These cash outflows were partially offset by proceeds received from the issuance of shares through the employee equity incentive plans of $7.4 million. We did not borrow from our revolving credit facility in 2023.
These cash outflows were partially offset by proceeds received from the issuance of shares through the employee equity incentive plans of $7.4 million. We did not borrow from our revolving credit facility in 2023. Capital Resources On September 3, 2021, we refinanced the First Lien Credit and Guaranty Agreement with a new Credit Agreement (as amended, the “Credit Agreement”).
Our effective tax rates were tax benefit of 70.2% and 15.4% for 2023 and 2022, respectively.
Our effective tax rates were a tax expense of 35.3% and a tax benefit of 70.2% for 2024 and 2023, respectively.
Net cash provided by operating activities was $66.4 million for 2022 and consisted of non-cash adjustments of $58.8 million and a net cash inflow of $61.5 million from changes in our net operating assets and liabilities, offset partially by a net loss of $53.9 million.
Net cash provided by operating activities was $89.2 million for 2023 and consisted of non-cash adjustments of $79.5 million and a net cash inflow of $10.7 million from changes in our net operating assets and liabilities, offset partially by a net loss of $1.0 million.
Historical seasonal patterns may not continue in the future and have been impacted, for example, in 2020 and 2021, and may be further impacted in the future, by macroeconomic factors, increasing supply constraints, GPU shortages, shifts in customer behavior and the continuing impacts of the COVID-19 pandemic. Impact of Product Mix .
Historical seasonal patterns may not continue in the future and may be further impacted in the future, by macroeconomic factors, increasing supply constraints, GPU shortages, and shifts in customer behavior.
As of December 31, 2023 and 2022, we had cash and restricted cash, in the aggregate, of $178.6 million and $147.8 million, respectively. Net cash provided by operating activities was $89.2 million, $66.4 million, and $20.2 million for the years ended December 31, 2023, 2022, and 2021, respectively.
We had net losses of $85.2 million, $2.6 million, and $54.4 million for the years ended December 31, 2024, 2023, and 2022, respectively. As of December 31, 2024 and 2023, we had cash and restricted cash, in the aggregate, of $109.6 million and $178.6 million, respectively.
The non-cash adjustments consisted primarily of depreciation and amortization and stock-based compensation expense, which were partially offset by changes in deferred income taxes. The net cash inflow from changes in our net operating assets and liabilities was primarily related to a decrease in inventory purchases and decrease in account receivables.
The non-cash adjustments consisted primarily of depreciation and amortization and stock-based compensation expense, which were partially offset by changes in deferred income taxes.
Liquidity The following table summarizes our cash flows for the periods indicated (in thousands): Years Ended December 31, 2023 2022 Net cash provided by (used in): Operating activities $ 89,153 $ 66,389 Investing activities (26,981 ) (47,034 ) Financing activities (37,387 ) 72,609 Corsair Gaming, Inc. | 2023 Form 10-K | 48 Table of Contents Cash Flows from Operating Activities Net cash provided by operating activities was $89.2 million for 2023 and consisted of non-cash adjustments of $79.5 million and a net cash inflow of $10.7 million from changes in our net operating assets and liabilities, offset partially by a net loss of $1.0 million.
Liquidity The following table summarizes our cash flows for the periods indicated (in thousands): Years Ended December 31, 2024 2023 Net cash provided by (used in): Operating activities $ 35,877 $ 89,153 Investing activities (52,705 ) (26,981 ) Financing activities (50,680 ) (37,387 ) Cash Flows from Operating Activities Net cash provided by operating activities was $35.9 million for 2024 and consisted net loss of $83.4 million, offset by non-cash adjustments of $97.0 million and a net cash inflow of $22.3 million from changes in our net operating assets and liabilities.
Net Income Attributable to Noncontrolling Interest Net income attributable to noncontrolling interest represents the share of the net income of iDisplay attributable to the 49% ownership interest of iDisplay we did not acquire.
Net Income Attributable to Noncontrolling Interest Net income attributable to noncontrolling interest represents the share of the net income of subsidiaries in which we own less than 100% of the equity attributable to the ownership interest that we did not acquire.
We are committed to continuing to grow in our current markets as well as new markets through the development of innovative technologies and by entering into new categories through organic growth or acquisition.
Includes our high-performance PSUs, 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. We are committed to continuing to grow in our current markets as well as new markets through the development of innovative technologies and by entering into new categories through organic growth or acquisitions.
As of December 31, 2023, we were not in default under the Credit Agreement. As of December 31, 2023, the total principal outstanding of the Term Loan was $199.0 million and the available and uncommitted capacity under the Revolving Credit Facility was $100 million.
We prepaid $12.5 million and $34.1 million of the Term Loan principal in the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024, the total principal outstanding of the Term Loan was $174.0 million and the available and uncommitted capacity under the Revolving Facility was $99.8 million. The Credit Agreement has a variable rate structure.
Segment Gross Profit and Gross Margin The following table sets forth our gross profit expressed in dollars (thousands) and gross margin (which we define as gross profit as a percentage of net revenue) by segment: Years Ended December 31, 2023 2022 Gamer and Creator Peripherals Segment $ 132,982 33.7 % $ 125,079 28.6 % Gaming Components and Systems Segment Memory Products 77,436 15.0 75,236 14.9 Other Component Products 149,845 27.4 96,317 22.3 227,281 21.3 171,553 18.3 Total Gross Profit $ 360,263 24.7 % $ 296,632 21.6 % Corsair Gaming, Inc. | 2023 Form 10-K | 47 Table of Contents Gamer and Creator Peripherals Segment The gross margin of the Gamer and Creator Peripherals segment increased 5.1% in 2023 as compared to 2022 primarily due to lower product costs from suppliers, lower freight costs, and lower inventory impairment and related charges, as well as the introduction of new higher margin products, such as the Elgato Facecam Pro.
Segment Gross Profit and Gross Margin The following table sets forth our gross profit expressed in dollars (thousands) and gross margin (which we define as gross profit as a percentage of net revenue) by segment: Years Ended December 31, 2024 2023 Gamer and Creator Peripherals Segment $ 182,293 38.6 % $ 132,982 33.7 % Gaming Components and Systems Segment Memory Products 57,179 13.3 77,436 15.0 Other Component Products 88,125 21.3 149,845 27.4 145,304 17.2 227,281 21.3 Total Gross Profit $ 327,597 24.9 % $ 360,263 24.7 % Gamer and Creator Peripherals Segment The gross margin of the Gamer and Creator Peripherals segment increased by 490 bps in 2024 as compared to 2023.
Our foreign currency exposure is primarily driven by fluctuations in the foreign currency exchanges rates of the Euro, British Pound and the Chinese Yuan.
Other expense, net is 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 the foreign currency exchanges rates of the Euro, the British Pound and the Chinese Yuan.
Our gross margin was 24.7%, 21.6%, and 27.0% for the years ended December 31, 2023, 2022, and 2021, respectively. We had net income (loss) of $(2.6) million, $(54.4) million, and $101.0 million for the years ended December 31, 2023, 2022, and 2021, respectively.
Summary of Financial Results Our net revenue was $1,316.4 million, $1,459.9 million, and $1,375.1 million for the years ended December 31, 2024, 2023, and 2022, respectively. Our gross margin was 24.9%, 24.7%, and 21.6% for the years ended December 31, 2024, 2023, and 2022, respectively.
Segment Results Segment Net Revenue The following table sets forth our net revenue by segment expressed both in dollars (thousands) and as a percentage of net revenue: Years Ended December 31, 2023 2022 Gamer and Creator Peripherals Segment $ 394,881 27.0 % $ 437,817 31.8 % Gaming Components and Systems Segment Memory Products 517,416 35.5 504,589 36.7 Other Component Products 547,578 37.5 432,692 31.5 1,064,994 73.0 937,281 68.2 Total Net Revenue $ 1,459,875 100.0 % $ 1,375,098 100.0 % Gamer and Creator Peripherals Segment Net revenue of the Gamer and Creator Peripherals segment decreased $42.9 million, or 9.8%, in 2023 as compared to 2022 primarily due to demand softness across a majority of products in this segment driven mainly by a challenging macroeconomic environment, including the adverse impacts from the war between Russia and Ukraine and inflationary pressure on consumer spending.
Segment Results Segment Net Revenue The following table sets forth our net revenue by segment expressed both in dollars (thousands) and as a percentage of net revenue: Years Ended December 31, 2024 2023 Gamer and Creator Peripherals Segment $ 472,729 35.9 % $ 394,881 27.0 % Gaming Components and Systems Segment Memory Products 429,916 32.7 517,416 35.5 Other Component Products 413,734 31.4 547,578 37.5 843,650 64.1 1,064,994 73.0 Total Net Revenue $ 1,316,379 100.0 % $ 1,459,875 100.0 % Gamer and Creator Peripherals Segment Net revenue of the Gamer and Creator Peripherals segment increased $77.8 million, or 19.7%, in 2024 as compared to 2023.
Further information on our industry, our market opportunity and competitive strengths is presented in Part I, Item 1, “Business” of this Annual Report on Form 10-K.
Net cash provided by operating activities was $35.9 million, $89.2 million, and $66.4 million for the years ended December 31, 2024, 2023, and 2022, respectively. Further information on our industry, our market opportunity and competitive strengths is presented in Part I, Item 1, “Business” of this Annual Report on Form 10-K.
In recent years, we have entered into several new markets, for example the cameras market for content creators and the gaming monitors market for both gamers and content creators. We continue to expand our product portfolio and in 2023, we launched 108 new products.
In recent years, we have entered into several new markets, for example the camera market for content creators and the sim racing market for gamers. We continue to expand our product portfolio and in 2024, we launched 78 new products. On September 19, 2024, we completed the acquisition of the Fanatec Business for a purchase consideration of $43.7 million.
We face global macroeconomic challenges including ongoing effects of geopolitical conflicts, such as the ongoing war between Russia and Ukraine, the ongoing conflict in Gaza, including the heightened tensions in the Red Sea, and any potential conflicts between China and Taiwan, supply chain constraints, uncertainty in global financial markets and the risk of a recession, inflationary trends, volatility in exchange rates, lingering impacts from the COVID-19 pandemic and evolving dynamics in the global trade environment.
We continue to face global macroeconomic challenges including the ongoing conflicts in Ukraine and the Middle East, the tensions in the Red Sea, and any potential conflicts between China and Taiwan, supply chain constraints, uncertainty in key financial markets and the risk of a recession, inflationary trends, volatility in exchange rates, evolving dynamics in the global trade environment and changes in laws or policies governing the terms of foreign trade, and in particular increased trade restrictions, tariffs or taxes on imports or exports from or to countries where we manufacture or sell our products.
Contractual Cash and Other Obligations The following table summarizes our contractual cash and other obligations as of December 31, 2023 (in thousands): Payments Due by Period Total Less than 1 Year 1-3 Years 3-5 Years More than 5 Years Debt principal and interest payments (1) $ 226,470 $ 25,092 $ 201,378 $ — $ — Inventory-related purchase obligations (2) 117,682 117,682 — — — Operating lease obligations (3) 56,460 10,201 15,621 12,425 18,213 Other purchase obligations (4) 9,495 9,142 353 — — Total $ 410,107 $ 162,117 $ 217,352 $ 12,425 $ 18,213 (1) Amounts represent the principal cash payments as of December 31, 2023, of our Term Loan based on the repayment schedule according to the Credit Agreement and the expected interest payments associated with the Term Loan.
Contractual Cash and Other Obligations The following table summarizes our contractual cash and other obligations as of December 31, 2024 (in thousands): Payments Due by Period Total Less than 1 Year 1-3 Years 3-5 Years More than 5 Years Debt principal and interest payments (1) $ 189,313 $ 21,996 $ 167,317 $ — $ — Inventory-related purchase obligations (2) 78,698 78,698 — — — Operating lease obligations (3) 73,901 16,697 20,717 15,537 20,950 Other purchase obligations (4) 7,209 5,713 1,041 280 175 Total $ 349,121 $ 123,104 $ 189,075 $ 15,817 $ 21,125 (1) Amounts represent the principal cash payments as of December 31, 2024, of our Term Loan based on the repayment schedule according to the Credit Agreement and the expected interest payments associated with the Term Loan.
The non-cash adjustments consisted primarily of depreciation and amortization and stock-based compensation expense, which were partially offset by changes in deferred income taxes. The net cash inflow from changes in our net operating assets and liabilities was primarily related to an increase in accounts payable mainly due to timing of payments and purchases.
The net cash inflow from changes in our net operating assets and liabilities was Corsair Gaming, Inc. | 2024 Form 10-K | 48 Table of Contents primarily related to an increase in accounts payable mainly due to timing of payments and purchases.
Interest Expense, Interest Income and Other (Expense) Income, Net Years Ended December 31, 2023 2022 (in thousands) Interest expense $ (17,420 ) $ (9,560 ) Interest income 6,839 374 Other (expense) income, net (2,587 ) 213 Interest expense increased $7.9 million, or 82.2%, in 2023 as compared to 2022 primarily due to higher interest rates on our Term Loan.
Interest Expense, Interest Income and Other Expense, Net Years Ended December 31, 2024 2023 (in thousands) Interest expense $ (13,207 ) $ (17,420 ) Interest income 3,347 6,839 Other expense, net (1,844 ) (2,587 ) Interest expense decreased $4.2 million, or 24.2%, in 2024 as compared to 2023.
In 2024, we will be mid-cycle for new GPU platforms and do not expect a similar increase in demand driven by these new GPU platforms until the next substantial GPU launch which is likely to impact 2025. Impact of Customer Concentration .
In 2024, we are mid-cycle for new GPU platforms and as a result, we did not experience a similar increase in demand driven by the new GPU platforms and some highly anticipated game title releases until the next substantial GPU launch in early 2025.
Interest Expense Interest expense consists of interest associated with our debt financing arrangements, including our revolving line of credit, amortization of debt issuance costs and debt discounts, and loss from debt extinguishment, consisting of the write-off of unamortized debt discount and fees associated with the 2021 refinancing of our term loan.
Interest Expense Interest expense consists of interest associated with our debt financing arrangements, including our revolving line of credit, and amortization of debt issuance costs and debt discounts. Interest Income Interest income consists of interest earned on interest-bearing bank deposits and interest-bearing Bridge Loan, net of amortization of Bridge Loan origination costs.
Operating Expenses Operating expenses consist of sales, general and administrative expenses and product development expenses. Sales, general and administrative. Sales, general and administrative, or SG&A, expenses represent the largest component of our operating expenses and consist of distribution costs, sales, marketing and other general and administrative costs. Distribution costs include outbound freight and the costs to operate our distribution hubs.
Operating Expenses Operating expenses consist of sales, general and administrative expenses and product development expenses. Corsair Gaming, Inc. | 2024 Form 10-K | 43 Table of Contents Sales, general and administrative. Sales, general and administrative (“SG&A”) expenses represent the largest component of our operating expenses and consist of distribution costs, sales, marketing and other general and administrative costs.
As a result of our foreign sales and operations, we have revenue, payroll and other operating expenses denominated in foreign currencies, in particular the Chinese Yuan, Euro and British Pound. 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.
We will continue to evaluate these risks and uncertainties and further our mitigation plans. 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 Chinese Yuan, Euro and British Pound.
We will continue to evaluate these risks and uncertainties and further our mitigation plans. Impact of Industry Trends . Our results of operations and financial condition are impacted by industry trends in the gaming market, including: • Increasing gaming engagement .
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. Impact of Industry Trends . Our results of operations and financial condition are impacted by industry trends in the gaming market, including: • Increasing gaming engagement .
The increase was primarily due to higher personnel-related costs and higher legal expenses, partially offset by lower outbound freight costs, and lower amortization of capitalized cloud computing arrangements implementation costs. Product Development Years Ended December 31, 2023 2022 (in thousands) Product development $ 65,261 $ 66,493 Product development expenses decreased $1.2 million, or 1.9%, in 2023 as compared to 2022.
Product Development Years Ended December 31, 2024 2023 (in thousands) Product development $ 67,543 $ 65,261 Product development expenses increased $2.3 million, or 3.5%, in 2024 as compared to 2023. The increase was primarily due to higher personnel-related costs resulting from increase in headcount as well as merit adjustments.
Corsair Gaming, Inc. | 2023 Form 10-K | 45 Table of Contents Overall, the demand was higher for most of our components and systems products in 2023 primarily driven by the expansion of self-built PC market due to the increase in availability of new and reasonably priced GPUs and CPUs as well as the release of new game titles.
The demand for our products in this segment is largely driven by the activity in the self-built PC market, which is heavily influenced by the launch of new, reasonably priced GPUs and CPUs, as well as the release of new game titles.
Gross Profit and Gross Margin Years Ended December 31, 2023 2022 (in thousands, except percentages) Gross profit $ 360,263 $ 296,632 Gross margin 24.7 % 21.6 % Gross margin increased by 3.1% in 2023 as compared to 2022 primarily due to an improvement in product costs from suppliers, lower freight costs and lower inventory impairment and related charges in 2023 as compared to 2022 due to inventory levels normalizing in 2023, and the introduction of new higher margin products.
Gross Profit and Gross Margin Years Ended December 31, 2024 2023 (in thousands, except percentages) Gross profit $ 327,597 $ 360,263 Gross margin 24.9 % 24.7 % Gross margin increased by 20 bps in 2024 as compared to 2023.
We expect our gross margin will continue to improve in 2024 primarily due to an expected improved product mix with more sales of our higher margin products in the Gamer and Creator Peripherals segment and lower planned promotional activities.
An improved product mix with more sales in the Gamer and Creator Peripherals segment accounted for 160 bps of the increase in gross margin, which was partially offset by a decrease of 110 bps in gross margin from higher spending on promotional activities as a proportion of net revenue.
These cash inflows were partially offset by a decrease in accounts payable mainly due to timing of payments and purchases as well as a decrease in the accrual for sales returns, customer incentives, freight costs and bonus expenses.
The net cash inflow from changes in our net operating assets and liabilities was primarily related to a decrease in account receivables from lower revenue in 2024 and a decrease in inventories from our efforts to normalize inventory levels. These cash inflows were partially offset by a decrease in accounts payable mainly due to timing of payments.
In addition, pursuant to the First Amendment, the maximum permitted Consolidated Total Net Leverage Ratio was also amended to increase to 3.50 to 1.00 between the quarters ending September 30, 2022 through and including March 31, 2023, and such ratio will revert to 3.00 to 1.00 from the quarter ended June 30, 2023 and each quarter thereafter; provided, that upon the occurrence of a Qualified Acquisition (as defined in the Credit Agreement), such ratio can be increased to 3.50 to 1.00 temporarily provided all the requirements set forth in the Credit Agreement are met.
According to the provisions in the Third Amendment, beginning 2024, we are required to maintain a maximum CTNL Ratio of 3.00 to 1.00 and a minimum CIC ratio of 3.00 to 1.00, with the provision that the maximum CTNL Ratio can be temporarily increased to 3.50 to 1.00 upon the occurrence of a Qualified Acquisition (as defined in, and subject to the requirements of the Credit Agreement).
Removed
Includes our high-performance power supply units, or PSUs, 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.
Added
Refer to Note 4, “Business Combinations-Fanatec Acquisition” for more information on this transaction. The Fanatec sim racing product line, which fully complements our gaming PCs, gaming and streaming peripherals, and monitors, is expected to expand our business in these markets.
Removed
In July 2023, we completed the acquisition of Drop for a cash purchase consideration of approximately $13.2 million, net of $0.6 million of cash acquired. Drop, a community-based e-commerce company headquartered in San Francisco, California, specializes in customized DIY keyboards and keycaps.
Added
Based on the external analysts’ and management's estimates, t he total addressable market for sim racing in 2024 is approximately $1 billion. Fanatec’s results of operations are included in our consolidated statements of operations with effect from September 19, 2024.
Removed
We expect this acquisition to give us a leading presence in the personalized keyboards market which is one of the fastest growing trends in the gaming peripheral space as well as allow us to offer specialized Corsair and Elgato products to Drop's enthusiast community.
Added
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.
Removed
Drop's operating results are included in our Gamer and Creator Peripherals segment with effect from July 14, 2023. Summary of Financial Results Our net revenue was $1,459.9 million, $1,375.1 million, and $1,904.1 million for the years ended December 31, 2023, 2022, and 2021, respectively.
Added
The growth of these markets will not be linear, as these markets are impacted by macroeconomic and consumer confidence conditions, amongst other conditions. Our Gaming Components and Systems segment makes components used for self-built PCs and full gaming systems.
Removed
We also experience seasonality in the sale of our products which may be affected by general economic conditions. During 2023, we observed continued market uncertainty and inflationary pressures, however, in the second half of 2023, we have observed some recovery in the markets.
Added
The self-built PC market is heavily influenced by the timing of release of new game titles and next-gen CPUs and GPUs, as discussed in the bullet below. As for the peripherals market, our Gamer and Creator Peripherals segment benefited from an improvement in the peripherals market compared to last year.
Removed
In 2022, we experienced elevated industry wide inventory in our distribution channels stemming from overall demand weakness at that time, which led to us recognizing higher inventory impairment related charges in 2022 in order to rationalize our inventory levels to align with the reduced revenue in the period, however, towards the end of 2022 our inventory level began to stabilize and we exited 2023 with normalized inventory levels.
Added
We were also able to increase our sales in this segment through expanding our product offerings by adding new products such as our teleprompter offerings, new PC controllers and mobile controllers, and several new keyboards. We expect this trend in peripheral market improvement and expansion to continue in 2025. • Introduction of new high-performance computing hardware and sophisticated games .

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe Corsair Gaming, Inc. | 2023 Form 10-K | 51 Table of Contents outstanding notional principal amount was $44.3 million and $23.4 million as of December 31, 2023 and 2022, respectively. The gains or losses on these contracts are recognized in earnings based on the changes in fair value of the foreign currency forward contracts.
Biggest changeThe outstanding notional principal amount was $35.2 million and $44.3 million as of December 31, 2024 and 2023, respectively. The gains or losses on these contracts are recognized in earnings based on the changes in fair value of the foreign currency forward contracts.
Our market risk exposure is primarily a result of fluctuations in interest rates and foreign currency exchange rates. Interest Rate Risk As of December 31, 2023, we had cash and restricted cash of $178.6 million, which consisted primarily of bank deposits. Our cash is held for working capital purposes.
Our market risk exposure is primarily a result of fluctuations in interest rates and foreign currency exchange rates. Interest Rate Risk As of December 31, 2024, we had cash and restricted cash of $109.6 million, which consisted primarily of bank deposits. Our cash is held for working capital purposes.
A hypothetical ten percent change in exchange rates between foreign currencies and the U.S. dollar would increase or decrease our gains or losses on foreign currency exchange of approximately $1.9 million in our consolidated financial statements for the year ended December 31, 2023. Corsair Gaming, Inc. | 2023 Form 10-K | 52 Table of Contents
A hypothetical ten percent change in exchange rates between foreign currencies and the U.S. dollar would increase or decrease our gains or losses on foreign currency exchange of approximately $1.3 million in our consolidated financial statements for the year ended December 31, 2024. Corsair Gaming, Inc. | 2024 Form 10-K | 51 Table of Contents
The net impact of changes in foreign currency rates, including the net gains or (losses) on the forward currency contracts, recognized in other (expense) income, net was $(2.8) million, $1.0 million, and $(5.8) million, for the years ended December 31, 2023, 2022, and 2021, respectively.
The net impact of changes in foreign currency rates, including the net gains or (losses) on the forward currency contracts, recognized in other (expense) income, net was $(4.6) million, $(2.8) million, and $1.0 million, for the years ended December 31, 2024, 2023, and 2022, respectively.
As of December 31, 2023, a hypothetical 100 basis point change in interest rates would result in a change to interest expense for the next twelve months by approximately $2.2 million. Foreign Currency Risk Approximately 18.2% of our net revenue in 2023 was denominated in foreign currencies, primarily Euro and GBP.
As of December 31, 2024, a hypothetical 100 basis point change in interest rates would result in a change to interest expense for the next twelve months by approximately $1.7 million. Foreign Currency Risk Approximately 21.3% of our net revenue in 2024 was denominated in foreign currencies, primarily Euro and GBP.
As of December 31, 2023, under the Credit Agreement, we had a $199.0 million Term Loan outstanding (face value), and the Term Loan bears variable market interest rates, primarily BSBY. A significant change in these market interest rates may adversely affect our operating results.
As of December 31, 2024, under the Credit Agreement, we had a $174.0 million Term Loan outstanding (face value), and the Term Loan bears variable market interest rates, primarily SOFR, effective from September 2024. A significant change in these market interest rates may adversely affect our operating results.

Other CRSR 10-K year-over-year comparisons