Corsair Gaming, Inc.
−Removed: (also referred to in this document as “Corsair,” “we,” the “company,” or the “registrant”) is a leading global provider and innovator of high-performance gear for gamers, streamers and content creators, many of which build their own PCs using our components.
−Removed: Our industry-leading gaming gear helps digital athletes, from casual gamers to committed professionals, perform at their peak across PC or console platforms, and our streaming gear enables streamers and content creators to produce studio-quality content to share with friends or to broadcast to millions of fans.
+Added: (also referred to in this document as “Corsair,” “we,” the “company,” or the “registrant”) is a leading global provider and innovator of high-performance products for gamers and digital creators such as streamers, Vloggers and broadcasters.
+Added: Our industry-leading gaming products help digital athletes, from casual gamers to committed professionals, perform at their peak across PC or console platforms, and our streaming products enable creators, particularly streamers, to produce studio-quality content to share with friends or to broadcast to millions of fans.
Our PC components products offer our customers multiple options to build their customized gaming and workstation desktop PCs.
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We have built a passionate base of loyal customers due to our brand authenticity and reputation as a provider of innovative and finely engineered products that deliver a high level of performance.
−Removed: Our solution is the most complete suite of gear among our major competitors and addresses the most critical components for both game performance and streaming.
+Added: Our solution is the most complete suite of products among our major competitors and addresses the most critical components for both game performance and streaming.
Our product offering is enhanced by our two proprietary software platforms:
−Removed: iCUE for gamers and Elgato’s streaming suite for streamers and content creators, including our Stream Deck control software.
+Added: 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.
+Added: 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 .
−Removed: Includes our high-performance gaming keyboards, mice, headsets, controllers, and streaming gear, which includes capture cards, Stream Decks, USB microphones, our Facecam streaming camera, studio accessories, and EpocCam software, as well as coaching and training services, among others .
+Added: 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 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.
−Removed: Our gear is sold to end users worldwide through our retail channel or our direct-to-consumer channel.
−Removed: In our retail channel, we distribute our gear either directly to the retailer, such as Amazon and Best Buy, or through distributors.
+Added: Our products are sold to end users worldwide through our retail channel or our direct-to-consumer channel.
+Added: 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.
−Removed: We believe we can continue to grow by offering market-leading gear to gamers, streamers and content 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 eight acquisitions we have completed since 2018.
+Added: 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.
Since traditional arcade games of the 1970s, gaming has evolved into the mainstream and taken a central place in the global entertainment landscape.
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We believe this indicates that the majority of the gaming hardware total addressable market is still consumed by a small percentage of gamers, and as a result, there is significant potential opportunity for gaming hardware sales.
−Removed: Although the gaming industry was negatively impacted in 2022 by global macroeconomic challenges, such as the ongoing war between Russia and Ukraine, the COVID-19 pandemic, volatility in exchange rates, inflationary trends, and evolving dynamics in the global trade environment, there are a number of drivers we believe will fuel the gaming market’s growth in 2023.
−Removed: Technology continues to improve game quality.
−Removed: There is increasing availability and variety of high quality, interactive game content as game publishers use cutting-edge game development engines to rapidly create graphically sophisticated and engaging virtual worlds, many of which can support massive multiplayer experiences.
+Added: 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.
+Added: Specifically, the video gaming industry is experiencing a significant shift and we believe is poised for continued growth and innovation.
+Added: The convergence of quality content, console availability, favorable regulatory developments, and the expanded implementation of artificial intelligence (“AI”) are driving such growth and innovation.
+Added: For instance, with machine learning, a more efficient framework can be generated to build games, which can shorten the game title release cycle.
+Added: More human-like behavior in AI game characters can also make the gaming experience more immersive;
+Added: making future games more advanced and compelling.
+Added: Additionally, AI can be utilized to produce adaptive narrative generation that a nalyzes player choices and interactions,
+Added: Corsair Gaming, Inc.
+Added: | 2023 Form 10-K | 2
+Added: and adapt storylines, quests, and dialogues accordingly.
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.
−Removed: In parallel, digital content creation today has democratized, with content sharing, video-first communication and voice-chat being the norm among creators, viewers and gamers.
−Removed: Gaming content creation and streaming is now ubiquitous, with many active
−Removed: gaming channels on YouTube , and live streaming hours watched across Twitch, YouTube Gaming and Facebook Gaming is growing .
+Added: In parallel, the digital content creator economy continues to thrive, with more content creators monetizing their audiences.
+Added: Gaming content creation and streaming is now ubiquitous, with many active gaming channels on YouTube, and live streaming on Twitch, YouTube and other platforms.
The proliferation of gaming content is attracting new gamers and increasing the performance focus of existing gamers.
−Removed: Beyond success in gaming, applications for streaming gear are proliferating across use cases including podcasting, video blogging, interactive fitness, remote learning, and work-from-home, among others.
−Removed: While emerging, these applications represent a promising avenue for continued expansion of the streaming gear market opportunity.
−Removed: 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 gear.
+Added: 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.
+Added: 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.
+Added: While emerging, these applications represent a promising avenue for continued expansion of the streaming hardware and software market opportunity.
+Added: 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.
−Removed: As in other sports, specialized high-performance gear such as gaming mice, keyboards, headsets and performance controllers allow digital athletes to perform at their best.
+Added: 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.
−Removed: Further, in a world where the ability to create content is democratized and competition for viewer engagement is greater than ever, content creators, particularly streamers, are increasingly seeking ways to maximize the quality of their video capture and broadcasting, which requires specialized high-performance gear.
−Removed: Competitive gamer performance needs are being met with specialized gear, such as ultra-precise optical sensors in gaming mice, very low actuation distances in gaming keyboard switches, customizable rear paddles on performance controllers, liquid cooling solutions for high-performance processors and overclocked DRAM modules to process graphically complex games.
−Removed: Similarly, streamers' broadcast needs are being met with professional audio/visual gear as audience demand for high-quality viewing experiences has grown, and continues to grow, significantly.
−Removed: Further, Stream Deck studio control interfaces have become a mainstay in broadcast setups as gear and software integration has become critical for gamers and streamers who need all their devices to work together harmoniously.
−Removed: Finally, gamers and streamers need the ability to customize their gear, which we believe is best delivered via a software platform that seamlessly unifies control across devices.
−Removed: Our two proprietary software ecosystems cover the broadest range of gaming components, peripherals, and streaming gear, which we believe are unmatched by anything else in the market.
+Added: Further, in a world where the ability to create content is democratized and competition for viewer engagement is greater than ever, content creators, particularly streamers, are increasingly seeking ways to maximize the quality of their video capture and broadcasting, which requires specialized high-performance products.
+Added: Competitive gamer performance needs are being met with the latest technology, such as ultra-precise optical sensors in gaming mice, very low actuation distances in gaming keyboard switches, customizable rear paddles on performance controllers, liquid cooling solutions for high-performance processors and overclocked DRAM modules to process graphically complex games.
+Added: Similarly, creators' broadcast needs are being met with professional audio/visual products as audience demand for high-quality viewing experiences has grown, and continues to grow, significantly.
+Added: Further, Stream Deck studio control interfaces have become a mainstay in broadcast setups as hardware and software integration has become critical for gamers and creators who need all their devices to work together harmoniously.
+Added: Finally, gamers and creators need the ability to customize their products, which we believe is best delivered via a software platform that seamlessly unifies control across devices.
+Added: Our two proprietary software ecosystems cover the broadest range of gaming components, peripherals, and streaming products, which we believe are unmatched by anything else in the market.
Our Competitive Strengths
−Removed: We are a leading global provider and innovator of high-performance gaming gear.
+Added: We are a leading global provider and innovator of high-performance gaming products.
We believe that we have a strong position in our target markets, which consist of gamer and creator peripherals, and gaming components and systems markets, as a result of the following competitive strengths:
• Leading brand recognition for performance drives strong customer loyalty.
−Removed: Since our founding in 1994, we have shipped more than 258 million gaming and streaming products as of December 31, 2022 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.
−Removed: As a result, we believe we have established ourselves as a leading brand among gaming enthusiasts and streamers, many of whom are active and prominent in esports and act as ambassadors for our branded gear.
−Removed: Differentiated, gamer and streamer-centric R&D engine focused on delivering a broad portfolio of high-performing gear, including components for self-built gaming PCs.
−Removed: We are an innovation-driven company with a rigorous development process designed to consistently deliver high-performance and quality gaming and streaming gear to the market.
+Added: 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.
+Added: 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.
+Added: • 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.
+Added: 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.
−Removed: Since our inception, we have concentrated our efforts on helping gamers succeed, which has led us to develop what we believe to be the most complete ecosystem of high-performance gaming gear in the market, which is connected through our iCUE software.
−Removed: We have applied the same ethos to our product development for streaming gear, including the development of streaming software, which helps streamers to optimize their products and maximize their content quality.
−Removed: This includes our Stream Deck software that allows fingertip control of hardware and software.
+Added: Since our inception, we have concentrated our efforts on helping gamers succeed, which has led us to develop what we believe to be the most complete ecosystem of high-performance gaming products in the market, which are connected and controlled through our iCUE software.
+Added: We have applied the same ethos to our product development for creator products, including the development of streaming software, which helps creators, particularly streamers, to optimize their products and maximize their content quality.
+Added: This includes our Stream Deck software that streamlines creators' workflow with near infinite shortcuts and controls via fingertip action.
• Global sales and distribution network.
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In this global network, we have established a multichannel sales model and have long-standing relationships with distributors and retailers globally, as well as direct-to-consumer sales channels.
−Removed: We currently ship to more than 85 countries across six continents, with our gear being sold at leading retailers including Amazon, Best Buy, JD.com, MediaMarkt and Walmart.
+Added: We currently ship to nearly 80
+Added: Corsair Gaming, Inc.
+Added: | 2023 Form 10-K | 3
+Added: countries across six continents, with our products being sold at leading retailers including Amazon, Best Buy, JD.com, MediaMarkt and Walmart.
In 2023, sales to the Americas, EMEA and Asia Pacific represented 51.4%, 35.1% and 13.5%, respectively, of net revenue.
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Key components of our strategy include:
−Removed: Advance as the global leader in high-performance gaming and streaming gear.
−Removed: The gaming and streaming gear 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 gear.
−Removed: We believe our brand name, high-performance gear and market position will allow us to capture a large share of this market growth and we intend to continue to make significant marketing investments in leading streamers, social media influencers and esports teams.
−Removed: Continue to develop innovative, market-leading gaming and streaming gear.
−Removed: We intend to prioritize investment in creating innovative gaming and streaming gear and related software to enhance the customer experience by delivering cutting-edge technology.
−Removed: We have an exceptional engineering team, with approximately 25% of employees and contractors working on software solutions.
−Removed: We believe this strong bench of engineering expertise has helped us introduce 125 different products to the market across our categories in 2022, 141 in 2021, and 40 in 2020.
−Removed: Expand into new gear and services that grow our market opportunity.
−Removed: Since our inception, we have successfully entered a number of new gear categories, including gaming PC peripherals, streaming accessories, console controllers, and prebuilt and custom built gaming PCs and laptops.
+Added: • Advance as the global leader in high-performance gaming and creator products.
+Added: 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.
+Added: We believe our brand name, high-performance products and market position will allow us to capture a large share of this market growth and we intend to continue to make significant marketing investments in leading creators, social media influencers and esports teams.
+Added: • Continue to develop innovative, market-leading gaming and streaming products.
+Added: 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.
+Added: We have an exceptional engineering team and during 2023, approximately one-third of them, including contractors, were working on our software solutions.
+Added: We believe this strong bench of engineering expertise has helped us introduce 108 new products to the market in 2023.
+Added: • Expand into new products and services that grow our market opportunity.
+Added: 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.
As the gaming and content creation landscape continues to evolve, we intend to continue to introduce new products and services to address our customers’ new and changing needs, and to grow our market opportunity.
−Removed: Leverage our software platforms to sell more gear to existing customers.
−Removed: Our software platforms integrate and enhance our ecosystem of gaming and streaming gear, which drives customer loyalty and allows us to successfully sell additional gear to existing customers.
+Added: • Leverage our software platforms to sell more products to existing customers.
+Added: Our software platforms integrate and enhance our ecosystem of gaming and streaming products, which drives customer loyalty and allows us to successfully sell additional products to existing customers.
+Added: 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.
+Added: 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.
−Removed: Through our acquisitions of Origin and SCUF in 2019, we acquired two companies whose sales are primarily generated through direct-to-consumer channels.
−Removed: While sales from this channel are a relatively small contributor to our revenue today, the percentage of such sales has grown consistently and we believe direct-to-consumer sales represent a significant avenue to drive growth by facilitating increased market penetration across our product categories.
−Removed: The mix of direct-to-consumer sales represented 13.7%, 10.7%, and 8.6% of our total revenue for the years ended December 31, 2022, 2021 and 2020, respectively.
+Added: 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.
+Added: 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.
−Removed: As a globally recognized brand, we have a footprint that reaches customers in more than 85 countries.
+Added: 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.
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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.
−Removed: Compared to the average non-Corsair product, our computer cases, cooling solutions, PSUs and high-performance memory commanded price premiums of 23%, 43%, 29% and 22%, respectively, in the United States for the twelve months ended December 31, 2022, according to recent NPD data.
+Added: 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.
+Added: Corsair Gaming, Inc.
+Added: | 2023 Form 10-K | 4
• Selectively pursue complementary acquisitions .
−Removed: We plan to evaluate, and may pursue acquisitions, such as our acquisitions of Elgato, Origin and SCUF, 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.
+Added: 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
−Removed: We design our high-performance gear to address the needs of gamers, streamers and content creators.
+Added: 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.
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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.
−Removed: Our solutions include our high-performance gaming keyboards, mice, headsets, controllers, and streaming gear, which includes capture cards, Stream Decks, USB microphones, our Facecam streaming camera, studio accessories, and EpocCam software, as well as coaching and training services, among others.
+Added: 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 .
−Removed: We develop and sell high-performance gaming components to help gamers, streamers and content creators build their own custom gaming PCs.
+Added: 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 design aesthetic and customizability they demand.
−Removed: Our solutions include our 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: Our solutions include our PSUs, cooling solutions, computer cases, SSD and DRAM modules, as well as high-end prebuilt and custom-built gaming PCs and laptops, and gaming monitors, among others.
• PC Gaming Software .
Our product offering is enhanced by our two proprietary software platforms:
−Removed: iCUE for gamers and Elgato’s streaming suite for streamers and content creators.
+Added: iCUE for gamers and Elgato streaming suite for content creators.
These software platforms provide unified, intuitive performance, and aesthetic control and customization across their respective product families.
−Removed: Our iCUE software platform powers the full range of our gear from a single intuitive interface, providing advanced performance tuning, user customization and system monitoring.
−Removed: By enabling our customers to fine tune the response of our gaming gear to maximize performance and match their personal preferences and styles of play, we believe that iCUE provides a distinct competitive advantage.
+Added: Our iCUE software platform powers the full range of our products from a single intuitive interface, providing advanced performance tuning, user customization and system monitoring.
+Added: 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
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We select these third-party partners through a comprehensive selection process and subject them to rigorous quality controls.
−Removed: We perform extensive in-house testing of our products with the latest CPUs and GPUs to ensure optimal performance and compatibility of our products with the most advanced hardware.
+Added: 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.
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.
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.
−Removed: Our marketing efforts are designed to enhance the Corsair, Elgato, Origin and SCUF brand names, to help us acquire new customers and to increase sales from our existing customers.
+Added: 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.
We have structured our marketing organization to achieve both product- and geography-specific coverage.
−Removed: In addition, our marketing personnel regularly meets with other key industry suppliers such as Intel, AMD, and NVIDIA, 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.
+Added: 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.
We build awareness of our products and brand through advertising campaigns, public relations efforts, marketing development funds and other financial incentives provided to retailers to promote our products, end-user rebates, online social media outreach, online and in-store promotions and merchandising, our website and other efforts.
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We also invest in sponsorships and partnerships with esports events, leagues teams and streaming influencers.
−Removed: We benefit from an active computer gaming community whose members communicate with each other through various online social media such as forums, blogs and social networks, including Facebook, Instagram, Tik-Tok, Twitter and YouTube.
−Removed: In addition to
−Removed: forums hosted by third-party domains, we host a Corsair-branded forum that is accessible via our website.
+Added: We benefit from an active computer gaming community whose members communicate with each other through various online social media such as blogs and social networks, including Facebook, Instagram, TikTok, Twitter and YouTube.
We actively participate in this community, enabling us to communicate directly with our end customers.
−Removed: 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.
+Added: Finally, we regularly publish technical
+Added: Corsair Gaming, Inc.
+Added: | 2023 Form 10-K | 5
+Added: 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.
Sales and Distribution
−Removed: Our gear is purchased by gaming enthusiasts and content creators worldwide through either our e-retail and retail channel or our direct-to-consumer channel.
−Removed: In our e-retail and retail channel, we distribute our gear either directly to resellers or through key distributors.
−Removed: We have also seen a growing demand for our gear within the business-to-business channel since 2020.
−Removed: While we historically have sold our gear directly to consumers through our website, following our acquisitions of Origin and SCUF Gaming in 2019, the volume of direct-to-consumer sales has increased as both of these companies primarily generated sales through direct-to-consumer channels.
−Removed: 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 since 2019, our direct-to-consumer sales have grown consistently each year.
−Removed: 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 (including South Africa)—and we have local language-speaking sales representatives in the countries that, in the aggregate, generate the majority of our net revenue.
+Added: 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.
+Added: In our e-retail and retail channel, we distribute our products either directly to resellers or through key distributors.
+Added: We have also seen a growing demand for our products within the business-to-business channel since 2020.
+Added: 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.
+Added: 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.
+Added: 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 ship our products directly to retailers and distributors and, through distributors, supply our products to thousands of smaller online and brick-and-mortar retailers and to specialist and gaming system integrators and value-added resellers.
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We operate a facility in Taiwan where we assemble, test, package and ultimately supply nearly all of our DRAM modules and a significant portion of our customized gaming controllers, liquid cooling products and prebuilt gaming systems.
−Removed: We also assemble, test, package and ultimately supply our custom-built PCs and our customized gaming controllers in our U.S.
+Added: 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.
−Removed: All of the other gear we sell is produced at factories operated by third parties located in Asia.
+Added: All of the other products we sell are produced at factories operated by third parties located in Asia.
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.
−Removed: Production of most of our high-speed DRAM modules involves testing and speed sorting of both DRAM ICs and modules and retail packing in our facility in Taoyuan, Taiwan.
−Removed: Our ability to test and sort DRAM modules efficiently enables us to grade them and offer high-performance DRAM modules at higher price points.
−Removed: For standard speed DRAM modules, we also procure assembled modules from approved subcontractors and then test and package them in our Taiwan facility.
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.
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We have experienced and expect to continue to experience seasonal fluctuations in sales due to the buying patterns of our customers and spending patterns of gamers.
−Removed: Our net revenue has generally been lower in the first and second calendar quarters due to lower consumer demand following the fourth quarter holiday season and because of the decline in sales that typically occurs in anticipation of the introduction of new or enhanced CPUs, GPUs, and other computer hardware products, which usually take place in the second calendar quarter, and which tend to drive sales in the following two quarters.
−Removed: Further, our net revenue tends to be higher in the third and fourth calendar quarters due to seasonal sales such as “Black Friday” and “Cyber Monday,” as well as “Singles Day” in China, as retailers tend to make purchases in advance of these sales.
+Added: Our net revenue has generally been lower in the first and second calendar quarters due to lower consumer demand following the fourth quarter holiday season and because of the decline in sales that typically occurs in anticipation of the introduction of new or enhanced CPUs, GPUs, and other computer hardware products.
+Added: Further, our net revenue tends to be higher in the third and fourth calendar quarters due to seasonal sales such as “Amazon Prime Day”, “Black Friday” and “Cyber Monday,” as well as “Singles Day” in China, as retailers tend to make purchases in advance of these sales.
Our sales also tend to be higher in the fourth quarter due to the introduction of new consoles and high-profile games in connection with the holiday season.
As a consequence of seasonality, our net revenue for the second calendar quarter is generally the lowest of the year followed by the first calendar quarter.
−Removed: Historical seasonal
−Removed: patterns may not continue in the future and have been impacted , most recently 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.
+Added: 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.
We face intense competition in the markets for all of our products.
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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.
+Added: Corsair Gaming, Inc.
+Added: | 2023 Form 10-K | 6
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.
4 unchanged sentences
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.
−Removed: Our competitors may be in a strong position to respond quickly to new technologies and may be able to design, develop, market, and sell their products more effectively than we can.
−Removed: In addition, some of our competitors are small or mid-sized specialty companies, which may enable them to react to changes in industry trends or consumer preferences or to introduce new or innovative products more quickly than we can.
−Removed: As a result, our product development efforts may not be successful or result in market acceptance of our products.
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.
−Removed: See the risk factor under the heading “Risks Related to our Business— We face intense competition, and if we do not compete effectively, we could lose market share, demand for our gear could decline and our business may be seriously harmed” in Item 1A of this Form 10-K for further details and a summary of our key competitors.
+Added: See the risk factor under the heading “Risks Related to our Business— We face intense competition, and if we do not compete effectively, we could lose market share, demand for our products could decline and our business may be seriously harmed” in Item 1A of this Form 10-K for further details and a summary of our key competitors.
Intellectual Property
2 unchanged sentences
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.
−Removed: As of December 31, 2022, our worldwide intellectual property portfolio consisted of 326 patents issued and 87 patents pending applications, 467 trademarks issued and 56 trademarks pending applications.
+Added: 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 believe that our patents and trademarks and their applications are important for maintaining the competitive differentiation of our products and services, enhancing our freedom of action to sell our products and services in markets in which we choose to participate, and maximizing our return on research and development investments.
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We believe, based on current information that we are in material compliance with environmental laws and regulations applicable to us.
−Removed: However, our failure to comply with present and future requirements under these laws and regulations, or environmental contamination or releases of hazardous materials on our leased premises, as well as through disposal of our products, could cause us to incur substantial costs, including clean-up costs, personal injury and property damage claims, fines and penalties, costs to redesign our products or upgrade our facilities and legal costs, or require us to curtail our operations, any of which could seriously harm our business.
+Added: For a discussion of risks attendant to environment matters, see “Risk Factors-Risks Related to our Business-We are subject to various environmental laws, conflict mineral-related provisions of the Dodd-Frank Act and other regulations that could impose substantial costs upon us and may seriously harm our business”, and “Risk Factors-Risks Related to our Business-Failure to comply with other laws and governmental regulations may seriously harm our business” in Item 1A.
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.
−Removed: None of our direct employees is currently represented by a labor union or is covered by a collective bargaining agreement with respect to his or her employment.
+Added: None of our U.S.
+Added: direct employees is currently represented by a labor union or is covered by a collective bargaining agreement with respect to his or her employment.
+Added: 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.
+Added: Corsair Gaming, Inc.
+Added: | 2023 Form 10-K | 7
Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and additional employees.
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Copies of our reports on Form 10-K, Forms 10-Q, Forms 8-K, and amendments to those reports may also be obtained, free of charge, electronically through our investor relations website located at www.corsair.com as soon as reasonably practical after we file such material with, or furnish it to, the SEC.
−Removed: Risk Factor Summary
+Added: The contents of these websites are not incorporated into this filing.
+Added: Ris k Factor Summary
Below is a summary of the principal factors that make an investment in our common stock speculative or risky.
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Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found below under the heading “Risk Factors” and should be carefully considered, together with other information in this Annual Report on Form 10-K and our other filings with the Securities and Exchange Commission (SEC) before making investment decisions regarding our common stock.
−Removed: Our competitive position and success in the market depend to a significant degree upon our ability to build and maintain the strength of our brand among gaming enthusiasts and any failure to build and maintain our brand may seriously harm our business.
−Removed: Our success and growth depend on our ability to continuously develop and successfully market new gear and improvements.
−Removed: If we are unable to do so, demand for our current gear may decline and new gear we introduce may not be successful.
−Removed: 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
−Removed: sales of our gear.
+Added: • Our competitive position and success in the market depend to a significant degree upon our ability to build and maintain the strength of our brands among gaming enthusiasts, and any failure to build and maintain our brands may seriously harm our business.
+Added: • Our success and growth depend on our ability to continuously develop and successfully market new products and improvements.
+Added: If we are unable to do so, demand for our current products may decline and new products we introduce may not be successful.
+Added: • 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 newly introduced GPUs, CPUs and sophisticated video games are not successful, if the rate at which those products are introduced declines or if such products are not readily available, it may seriously harm our business.
−Removed: We face intense competition, and if we do not compete effectively, we could lose market share, demand for our gear could decline and our business may be seriously harmed.
+Added: • We face intense competition, and if we do not compete effectively, we could lose market share, demand for our products could decline and our business may be seriously harmed.
• If the gaming industry, including streaming and esports, does not grow as expected or declines, our business could be seriously harmed.
−Removed: 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.
−Removed: Currency exchange rate fluctuations could result in our gear becoming relatively more expensive to our overseas customers or increase our manufacturing costs, each of which may seriously harm our business.
−Removed: Total unit shipments of our gear tend to be higher during the third and fourth quarters of the year.
−Removed: As a result, our sales are subject to seasonal fluctuations, which may seriously harm our business.
−Removed: The coronavirus outbreak has had, and could continue to have, a materially disruptive effect on our business.
−Removed: The ongoing war between Russia and Ukraine could adversely affect our business, financial condition and results of operations.
−Removed: We are controlled by a single stockholder, whose interest in our business may be different than yours.
+Added: • Currency exchange rate fluctuations could result in our products becoming relatively more expensive to our overseas customers or increase our manufacturing costs, each of which may seriously harm our business.
+Added: • Our sales are subject to seasonal fluctuations, which may seriously harm our business.
+Added: Total unit shipments of our products tend to be higher during the third and fourth quarters of the year.
+Added: • The ongoing war between Russia and Ukraine and the ongoing conflict in Gaza could adversely affect our business, financial condition and results of operations.
+Added: • We are controlled by a single stockholder, EagleTree, whose interests in our business may be different than yours.
+Added: Corsair Gaming, Inc.
+Added: | 2023 Form 10-K | 8
• 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.
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Risks Related to Our Business
−Removed: Our competitive position and success in the market depend to a significant degree upon our ability to build and maintain the strength of our brands among gaming enthusiasts and streamers, and any failure to build and maintain our brands may seriously harm our business.
−Removed: We regard our brands as a valuable asset, and we consider it essential to both maintaining and strengthening our brands that we be perceived by current and prospective customers as a leading supplier of cutting-edge, high-performance gear for gaming and streaming.
−Removed: This requires that we constantly innovate by introducing new and enhanced gear that achieves significant levels of acceptance among gamers.
+Added: Our competitive position and success in the market depend to a significant degree upon our ability to build and maintain the strength of our brands among gaming enthusiasts and creators, and any failure to build and maintain our brands may seriously harm our business.
+Added: We regard our brands as a valuable asset, and reinforcing our position as a leading supplier of cutting-edge, high-performance products for gaming and streaming is essential to maintaining and strengthening our brands.
+Added: This requires that we constantly innovate by introducing new and enhanced products that achieve significant levels of acceptance among gamers.
We also need to continue to invest in, and devote substantial resources to, advertising, marketing, customer support and other efforts to create and maintain brand recognition and loyalty among our retailer customers, distributors and gamers.
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Additionally, the quality of our customer support is important to our customers, and if we fail to provide adequate levels of customer support or devote substantial resources to customer support, we could lose customers.
−Removed: Our consumers depend on our
−Removed: customer support organization to resolve any issues relating to our gear and products .
−Removed: A high level of support is critical for the successful mar keting of our brands and marketing and sales of our products.
+Added: Our consumers depend on our customer support organization to resolve any issues relating to our products.
+Added: A high level of support is critical for the successful marketing of our brands and marketing and sales of our products.
If we fail to build and maintain our brands, or if we incur substantial expenses in an unsuccessful attempt to build and maintain our brands, our business may be harmed.
Our brands may also be damaged by events such as product recalls, perceived declines in quality or reliability, product shortages, damaging action or conduct of our sponsored esports athletes or content creators and other events, some of which are beyond our control.
−Removed: Our success and growth depend on our ability to continuously develop and successfully market new gear and improvements.
−Removed: If we are unable to do so, demand for our current gear may decline and new gear we introduce may not be successful.
−Removed: The gear we sell, which includes gamer and creator peripherals and gaming components and systems, is characterized by short product life cycles, frequent new product introductions, rapidly changing technology and evolving industry standards.
−Removed: In addition, average selling prices of some of our gear tend to decline as the gear matures, and we expect this trend to continue.
−Removed: As a result, we must continually anticipate and respond to changing gamer requirements, innovate in our current and emerging categories of gear, introduce new gear and enhance existing gear in a timely and efficient manner in order to remain competitive and execute our growth strategy.
−Removed: We believe that the success of our gear depends to a significant degree on our ability to identify new features or category opportunities, anticipate technological developments and market trends and distinguish our gear from those of our competitors.
−Removed: In order to further grow our business, we also will need to quickly develop, manufacture and ship innovative and reliable new gear and enhancements to our existing gear in a cost-effective and timely manner to take advantage of developments in enabling technologies and the introduction of new computer hardware, such as new generations of GPUs and CPUs, and computer games, all of which drive demand for our gear.
−Removed: Further, our growth depends in part on our ability to introduce and successfully market new gear and categories of gear.
−Removed: For example, in the last 24 months, we entered into four large new markets, namely the microphones and cameras markets for content creators, the gaming monitors market and prebuilt gaming laptops market for both gamers and content creators, and in the future, we intend to introduce other gear designed to appeal to these markets.
+Added: Our success and growth depend on our ability to continuously develop and successfully market new products and improvements.
+Added: If we are unable to do so, demand for our current products may decline and new products we introduce may not be successful.
+Added: The products we sell, which include gamer and creator peripherals and gaming components and systems, are characterized by short product life cycles, frequent new product introductions, rapidly changing technology and evolving industry standards.
+Added: In addition, average selling prices of some of our products tend to decline as the products mature, and we expect this trend to continue.
+Added: As a result, we must continually anticipate and respond to changing gamer requirements, innovate in our current and emerging categories of products, introduce new products and enhance existing products in a timely and efficient manner in order to remain competitive and execute our growth strategy.
+Added: We believe that the success of our products depends to a significant degree on our ability to identify new features or category opportunities, anticipate technological developments and market trends and distinguish our products from those of our competitors.
+Added: In order to further grow our business, we also will need to quickly develop, manufacture and ship innovative and reliable new products and enhancements to our existing products in a cost-effective and timely manner to take advantage of developments in enabling technologies and the introduction of new computer hardware, such as new generations of GPUs and CPUs, and computer games, all of which drive demand for our products.
+Added: In recent years, we have entered into several new markets, for example the cameras market for
+Added: Corsair Gaming, Inc.
+Added: | 2023 Form 10-K | 9
+Added: content creators and the gaming monitors market for both gamers and content creators, and in the future, we intend to introduce other products designed to appeal to these markets.
To the extent we do so, we will likely encounter competition from large, well-known consumer electronics and peripherals companies.
−Removed: Some of these companies have significantly greater financial, manufacturing, marketing and other resources than we do and may be able to devote greater resources to the design, development, manufacturing, distribution, promotion, sale and support of their products.
−Removed: We cannot predict whether we will be successful in developing or marketing new gear and categories of gear and, if we fail to do so, our business may be seriously harmed.
−Removed: In addition, we have shifted to a hybrid work model for many of our employees in response to the continuing COVID-19 disruptions.
−Removed: Pursuant to this policy, many of our employees work in the office and at home on designated days.
−Removed: This hybrid work model is relatively new and may impair our ability to maintain a collaborative and innovative culture, and may cause disruptions among our employees, including decreases in productivity, challenges in communications between on-site and off-site employees and, potentially, employee dissatisfaction and attrition.
−Removed: Further, any future attempt to transition away from the hybrid work model to more stringent on-site work requirements may result in employee dissatisfaction and attrition.
−Removed: If we fail to retain key employees, attract new employees or maintain employee productivity as a result of the hybrid work model or an attempt to return to more on-site work, our business could be adversely impacted.
−Removed: The duration and extent of the impact from the coronavirus outbreak on our business depends on future developments that cannot be accurately predicted at this time, such as the severity and transmission rate of the virus, the extent and effectiveness of containment actions and the impact of these and other factors on our employees.
−Removed: If we do not execute on these factors successfully, demand for our current gear may decline and any new gear that we may introduce may not gain widespread acceptance.
−Removed: If this were to occur, our business may be seriously harmed.
−Removed: In addition, if we do not continue to distinguish our gear through distinctive, technologically advanced features and designs, as well as continue to build and strengthen our brand recognition and our access to distribution channels, our business may be seriously harmed.
−Removed: We depend upon the introduction and success of new third-party high-performance computer hardware, particularly GPUs and CPUs, and sophisticated new video games to drive sales of our gear.
−Removed: If newly introduced GPUs, CPUs and sophisticated video games are not successful, if the rate at which those products are introduced declines, or if they are not readily available, it may seriously harm our business.
−Removed: 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, has a significant effect on the demand for our gear.
+Added: Some of these companies have significantly greater financial, manufacturing, marketing and other resources than we do and may be able to devote greater resources to the design, development, manufacture, distribution, promotion, sale and support of their products.
+Added: We cannot predict whether we will be successful in developing or marketing new products and categories of products and, if we fail to do so, our business may be seriously harmed.
+Added: If we do not continue to distinguish our products through distinctive, technologically advanced features and designs, our business may be seriously harmed.
+Added: We depend upon the introduction and success of new third-party high-performance computer hardware, particularly GPUs and CPUs, and sophisticated new video games to drive sales of our products.
+Added: If newly introduced GPUs, CPUs and sophisticated new video games are not successful, if the rate at which those products are introduced declines, or if such products are not readily available, it may seriously harm our business.
+Added: 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.
−Removed: 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
−Removed: 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.
−Removed: Although we believe that, historically, new generations of high-performance GPUs and CPUs have positively affected the demand for our gear, there can be no assurance that this will be the case in the future.
−Removed: For example, the introduction of a new generation of highly efficient GPUs and CPUs that require less power or that generate less heat than prior generations may reduce the demand for both our power supply units and cooling solutions.
+Added: 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.
+Added: Although we believe that, historically, new generations of high-performance GPUs and CPUs have positively affected the demand for our products, there can be no assurance that this will be the case in the future.
+Added: For example, the introduction of a new generation of highly efficient GPUs and CPUs that require less power or that generate less heat than prior generations may reduce the demand for both our PSUs and cooling solutions.
In the past, semiconductor and computer hardware companies have typically introduced new products annually, generally in the second calendar quarter, which has tended to drive our sales in the following two quarters.
−Removed: If computer hardware companies do not continue to regularly introduce new and enhanced GPUs, CPUs and other products that place increasing demands on system memory and processing speed, require larger power supply units or cooling solutions or that otherwise drive demand for computer cases and other peripherals, or if gamers do not accept those products, our business may be seriously harmed.
−Removed: We also believe that sales of our gear are driven by conditions in the computer gaming industry.
−Removed: In particular, we believe that our business depends on the introduction and success of computer games with sophisticated graphics that place greater demands on system processing speed and capacity and therefore require more powerful GPUs or CPUs, which in turn drives demand for our DRAM modules, PSUs, cooling systems and other components and peripherals.
+Added: If computer hardware companies do not continue to regularly introduce new and enhanced GPUs, CPUs and other products that place increasing demands on system memory and processing speed, require larger PSUs or cooling solutions or that otherwise drive demand for computer cases and other peripherals, or if gamers do not accept those products, our business may be seriously harmed.
+Added: We also believe that sales of our products are driven by conditions in the computer gaming industry.
+Added: In particular, we believe that our business depends on the introduction and success of computer games with sophisticated graphics that place greater demands on system processing speed and capacity and therefore require more powerful GPUs or CPUs, which in turn drives demand for our DRAM modules, PSUs, cooling solutions and other components and peripherals.
Likewise, we believe that the continued introduction and market acceptance of new or enhanced versions of computer games helps sustain consumer interest in computer gaming generally.
−Removed: The demand for our gear would likely decline, perhaps substantially, if computer game companies and developers do not introduce and successfully market sophisticated new and improved games that require increasingly high levels of system and graphics processing power on an ongoing basis or if demand for computer games among computer gaming enthusiasts or conditions in the computer gaming industry deteriorate for any reason.
+Added: The demand for our products would likely decline, perhaps substantially, if computer game companies and developers do not introduce and successfully market sophisticated new and improved games that require increasingly high levels of system and graphics processing power on an ongoing basis or if demand for computer games among computer gaming enthusiasts or conditions in the computer gaming industry deteriorate for any reason.
As a result, our sales and other operating results fluctuate due to conditions in the market for computer games, and downturns in this market may seriously harm our business.
−Removed: We face intense competition, and if we do not compete effectively, we could lose market share, demand for our gear could decline and our business may be seriously harmed.
−Removed: We face intense competition in the markets for all of our gear.
+Added: We face intense competition, and if we do not compete effectively, we could lose market share, demand for our products could decline and our business may be seriously harmed.
+Added: We face intense competition in the markets for all of our products.
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.
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Our competitors may be in a stronger position to respond quickly to new technologies and may be able to design, develop, market and sell their products more effectively than we can.
−Removed: In addition, some of our competitors are small or mid-sized specialty companies that can react to changes in industry trends or consumer preferences or to introduce new or innovative products more quickly than we can.
−Removed: As a result, our product development efforts may not be successful or result in market acceptance of our gear.
+Added: In addition, some of our competitors are small or mid-sized specialty companies that can react to changes in industry trends or consumer preferences or
+Added: Corsair Gaming, Inc.
+Added: | 2023 Form 10-K | 10
+Added: introduce new or innovative products more quickly than we can.
+Added: As a result, our product development efforts may not be successful or result in market acceptance of our products.
Our primary competitors include:
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Our primary competitors in the market for headset and related audio products include Logitech, Razer, Steel Series and HP through its HyperX brand.
−Removed: Our primary competitors in the gamer and creator streaming gear market include Logitech, following its acquisition of Blue Microphones, and AVerMedia.
+Added: Our primary competitors in the gamer and creator streaming products market include Logitech, following its acquisition of Blue Microphones, and AVerMedia.
Our primary competitors in the performance controller market include Microsoft and Logitech.
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Competitors in new markets .
−Removed: We are considering introducing new gear for gamers or streamers and content creators and, to the extent we introduce gear in new categories, we will likely experience substantial competition from additional companies, including
−Removed: large computer gaming and streaming peripherals and consumer electronics companies with global brand recognition and significantly greater resources than ours.
+Added: We are considering introducing new products for gamers and creators and, to the extent we introduce products in new categories, we will likely experience substantial competition from additional companies, including large computer gaming and streaming peripherals and consumer electronics companies with global brand recognition and significantly greater resources than ours.
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.
−Removed: If we do not compete effectively, demand for our gear could decline, our net revenue and gross margin could decrease and we could lose market share, which may seriously harm our business.
−Removed: Further, our ability to successfully compete depends in large part on our ability to compete on price for our high-performance gear.
−Removed: Much of the gear we sell is priced higher than products offered by our competitors.
−Removed: If gamers or streamers are not willing to pay the higher price point for our gear, we will either need to discount our gear or our sales volume could decrease.
+Added: If we do not compete effectively, demand for our products could decline, our net revenue and gross margin could decrease and we could lose market share, which may seriously harm our business.
+Added: Further, our ability to successfully compete depends in large part on our ability to compete on price for our high-performance products.
+Added: Much of the products we sell is priced higher than products offered by our competitors.
+Added: If gamers or creators are not willing to pay the higher price point for our products, we will either need to discount our products or our sales volume could decrease.
In either event, our business could be seriously harmed.
−Removed: If gaming, including streaming and esports, does not grow as expected or declines our business could be seriously harmed.
+Added: If the gaming industry, including streaming and esports, does not grow as expected or declines our business could be seriously harmed.
Over the past three decades, gaming has grown from a relatively niche industry to a significant segment of the global entertainment industry with a wide following across various demographic groups globally.
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• 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;
−Removed: 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 gear;
−Removed: 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 gear;
+Added: • 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;
+Added: • 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;
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• changes in consumer demographics, tastes and preferences.
−Removed: We generate a significant portion of our net revenue from gaming-related gear.
+Added: We generate a significant portion of our net revenue from gaming-related products.
As a result, any decline or slowdown in the growth of the gaming industry or the declining popularity of the gaming industry could materially and adversely affect our business.
−Removed: We have no specific plans to attract gamers who use only mobile devices or tablets and we have no plans to develop gear specifically designed for gamers who use mobile devices or tablets.
−Removed: As a result, if gamers migrate to mobile devices or tablets and away from PCs and consoles, our business may be seriously harmed.
+Added: We have no specific plans to attract gamers who use only mobile devices or tablets and we have no plans to develop products specifically designed for gamers who use mobile devices or tablets.
+Added: As a result, if gamers migrate to mobile devices or tablets and
+Added: Corsair Gaming, Inc.
+Added: | 2023 Form 10-K | 11
+Added: away from PCs and consoles, our business may be seriously harmed.
In addition, there can be no assurance that the active demographics in gaming will continue to buy into and drive the growth in gamer culture and the games industry overall nor can there be any assurance that gaming will expand into new demographics that will drive growth.
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Our growth prospects are, to a certain extent, connected with the ongoing growth of live game streaming and esports and any reduction in the growth or popularity of live game streaming or esports may seriously harm our business.
−Removed: The success of our business depends on live game streaming and esports driving significant growth in the high-performance gaming and content streaming market, which could prompt strong growth in the sales of our gear.
−Removed: However, there are a number of
−Removed: factors which could result in the esports or live game streaming markets having limited or negative impact on our sales and overall growth.
+Added: The success of our business depends on live game streaming and esports driving significant growth in the high-performance gaming and content streaming market, which could prompt strong growth in the sales of our products.
+Added: 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.
These factors include:
• our competitors marketing products that gain broader acceptance among game streamers, esports participants and content creators;
−Removed: esports amateurs and/or spectators not purchasing our gear that is utilized by esports athletes and teams or streamers and content creators, including the esports athletes and teams, and streamers we sponsor;
−Removed: the popularity of esports games that do not utilize any of our gear, for example games that run on mobile devices or tablets that replace more traditional esports;
−Removed: our research and development and the gear we sell failing to satisfy the increasing high-performance requirements of competitive gamers or streamers.
+Added: • esports amateurs and/or spectators not purchasing our products that is utilized by esports athletes and teams or streamers and content creators, including the esports athletes and teams, and streamers we sponsor;
+Added: • the popularity of esports games that do not utilize any of our products, for example games that run on mobile devices or tablets that replace more traditional esports;
+Added: • our research and development and the products we sell failing to satisfy the increasing high-performance requirements of competitive gamers or streamers.
Further, there are a number of factors which could result in the growth in live game streaming or the esports markets stagnating, or even decreasing.
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If one or more of the above factors are realized, our business may be seriously harmed.
−Removed: 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.
−Removed: Our performance depends to a significant degree upon the contributions of our management team, particularly Andrew J.
−Removed: Paul, our co-founder, Chief Executive Officer and Director.
−Removed: 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.
−Removed: To the extent that our business grows, we will need to attract and retain additional qualified management personnel in a timely manner, and we may not be able to do so.
−Removed: We rely on highly skilled personnel and if we are unable to attract, retain or motivate key personnel or hire qualified personnel our business may be seriously harmed.
−Removed: Our performance is largely dependent on the talents and efforts of highly skilled individuals, particularly our marketing personnel, sales force, electrical engineers, mechanical engineers and computer professionals.
−Removed: Our future success depends on our continuing ability to identify, hire, develop, motivate and retain highly skilled personnel and, if we are unable to hire and train a sufficient number of qualified employees for any reason, we may not be able to implement our current initiatives or grow, or our business may contract and we may lose market share.
−Removed: Moreover, certain of our competitors or other technology businesses may seek to hire our employees.
−Removed: There can be no assurance that our stock-based and other compensation will provide adequate incentives to attract, retain and motivate employees in the future, particularly if the market price of our common stock does not increase or declines.
−Removed: If we do not succeed in attracting, retaining and motivating highly qualified personnel, our business may be seriously harmed.
−Removed: Further, we also face significant competition for employees, particularly in the San Francisco Bay Area where our headquarters are located, and as a result, skilled employees in this competitive geographic location can often command higher compensation and may be difficult to hire.
−Removed: In addition, Russia’s invasion of Ukraine, poor relations between the United States and Russia, and sanctions by the United States and the European Union against Russia could have an adverse impact on our research and development efforts as we outsource significant research and development activities to companies in Ukraine.
−Removed: Currency exchange rate fluctuations could result in our gear becoming relatively more expensive to our overseas customers or increase our manufacturing costs, each of which may seriously harm our business.
+Added: Currency exchange rate fluctuations could result in our products becoming relatively more expensive to our overseas customers or increase our manufacturing costs, each of which may seriously harm our business.
Our international sales and our operations in foreign countries subject us to risks associated with fluctuating currency exchange rates.
−Removed: Because sales of our gear is denominated primarily in U.S.
+Added: Because the pricing of our products is denominated primarily in U.S.
dollars, an increase in the value of the U.S.
−Removed: dollar relative to the currency used in the countries where our gear is sold has and may continue to result in an increase in the price of our gear in those countries, which has and may continue to lead to a reduction in sales in such countries.
+Added: dollar relative to the currency used in the countries where our products are sold has and may continue to result in an increase in the price of our products in those countries, which has and may continue to lead to a reduction in sales in such countries.
Likewise, because we pay our suppliers and third-party manufacturers, most of which are located outside of the United States, primarily in U.S.
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Supply chain issues, including scarcity of raw materials or other components to produce our products and limited ability to control or influence our procurement process, could increase costs or cause a delay in our ability to produce our products, and could adversely affect our future results of operations and our overall financial performance.
−Removed: We and our manufacturers rely on an extended third-party supply chain and the availability of raw materials to produce a significant amount of our gear.
−Removed: From time to time we have experienced product shortages due to both disruptions in supply from the third parties that manufacture or supply our gear and our inability or the inability of these third-party manufacturers to obtain necessary components, and we may experience similar shortages in the future.
−Removed: A reduction or interruption in supply, including interruptions due to the ongoing COVID-19 pandemic or geopolitical unrest beyond our control, an inability to procure quality raw materials in a cost effective manner and constrain volatile materials costs, a failure to monitor contract compliance to ensure and sustain sourcing savings, a failure to procure adequate inventory or raw materials from our suppliers or regulatory changes may lead to delays in manufacturing and increases in costs.
−Removed: Moreover, procurement of many components used in our gear is generally the responsibility of the third parties that manufacture our gear, and we therefore have limited or no ability to control or influence the procurement process or to monitor the quality of components.
+Added: We and our manufacturers rely on an extended third-party supply chain and the availability of raw materials to produce a significant amount of our products.
+Added: From time to time we have experienced product shortages due to both disruptions in supply from the third parties that manufacture or supply our products and our inability or the inability of these third-party manufacturers to obtain necessary components, and we may experience similar shortages in the future.
+Added: A reduction or interruption in supply, including interruptions due to the COVID-19 pandemic or geopolitical unrest beyond our control, an inability to procure quality raw materials in
+Added: Corsair Gaming, Inc.
+Added: | 2023 Form 10-K | 12
+Added: a cost-effective manner and constrain volatile materials costs, a failure to monitor contract compliance to ensure and sustain sourcing savings, a failure to procure adequate inventory or raw materials from our suppliers or regulatory changes may lead to delays in manufacturing and increases in costs.
+Added: Moreover, procurement of many components used in our products is generally the responsibility of the third parties that manufacture our products, and we therefore have limited or no ability to control or influence the procurement process or to monitor the quality of components.
Our manufacturers or suppliers may provide us with products or components that do not perform reliably or do not meet our quality standards or performance specifications, are susceptible to early failure or contain other defects.
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Component suppliers may suffer from poor financial conditions, which can lead to business failure for the supplier or consolidation within a particular industry, further limiting our ability to obtain sufficient quantities of components on commercially reasonable terms.
−Removed: Health crises, like the ongoing 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.
+Added: 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.
Any disruption in or termination of our relationships with any of our manufacturers or suppliers or our inability to develop relationships with new manufacturers or suppliers as and when required would cause delays, disruptions or reductions in product shipment and may require product redesigns, all of which could damage relationships with our customers, seriously harm our brand, increase our costs and otherwise seriously harm our business.
−Removed: Likewise, shortages or interruptions in the supply of products or components, 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.
+Added: 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.
If our customers experience delays or unavailability of our products due to our inability to obtain certain components, this may negatively impact our customers’ ordering patterns.
Accordingly, if our supply of components for a new or existing product were delayed or constrained, or if an outsourcing partner delayed shipments of completed products to us, our financial condition and operating results could be materially adversely affected.
−Removed: Total unit shipments of our gear have historically been higher during the third and fourth quarters of the year.
−Removed: As a result, our sales may be subject to seasonal fluctuations, which may seriously harm our business.
−Removed: We have experienced and expect to continue to experience seasonal fluctuations in sales due to the spending patterns of gamers who purchase our gear.
+Added: Our sales are subject to seasonal fluctuations, which may seriously harm our business.
+Added: Total unit shipments of our products tend to be higher during the third and fourth quarters of the year.
+Added: We have experienced and expect to continue to experience seasonal fluctuations in sales due to the spending patterns of gamers who purchase our products.
Our total unit shipments have generally been lowest in the first and second calendar quarters due to lower sales following the fourth quarter holiday season and because of the decline in sales that typically occurs in anticipation of the introduction of new or enhanced GPUs, CPUs and other computer hardware products, which usually takes place in the second calendar quarter, and which tends to drive sales in the following two quarters.
−Removed: As a consequence of seasonality, our total unit
−Removed: shipments for the second calendar quarter are generally the lowest of the year, followed by total unit shipments for the first calendar quarter.
−Removed: As a result, our total unit shipments are subject to seasonal fluctuations, which may seriously harm our business.
−Removed: Historical seasonal patterns may not continue in the future and have been impacted , most recently 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 .
+Added: As a consequence of seasonality, our total unit shipments for the second calendar quarter are generally the lowest of the year, followed by total unit shipments for the first calendar quarter.
+Added: Our total unit shipments are thus subject to seasonal fluctuations, which may seriously harm our business.
+Added: Historical seasonal patterns have been impacted in the past, and may be further impacted in the future, by macroeconomic factors, increasing supply constraints, GPU shortages, and shifts in customer behavior and the impacts of the COVID-19 pandemic.
Our results of operations are subject to substantial quarterly and annual fluctuations, which may adversely affect the market price of our common stock.
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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:
−Removed: changes in demand for our lower margin products relative to demand for our higher margin gear;
+Added: • changes in demand for our lower margin products relative to demand for our higher margin products;
+Added: Corsair Gaming, Inc.
+Added: | 2023 Form 10-K | 13
• 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;
−Removed: fluctuations in average selling prices of and demand for our gear;
−Removed: change in demand for our gear due to our gear having higher price-points than products supplied by our competitors;
+Added: • fluctuations in average selling prices of and demand for our products;
+Added: • 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;
−Removed: a delay, reduction or cessation of deliveries from one or more of the third parties that manufacture our gear;
−Removed: increased costs or shortages of our gear or components used in our gear;
+Added: • a delay, reduction or cessation of deliveries from one or more of the third parties that manufacture our products;
+Added: • 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;
−Removed: 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 gear, due to factors such as component supply shortages or gamers purchasing GPUs for non-gaming purposes such as cryptocurrency mining;
−Removed: the war between Russia and the 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;
+Added: • 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;
+Added: • 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;
−Removed: delays or problems in our introduction of new gear;
−Removed: delays or problems in the shipment or delivery of gear to customers;
+Added: • delays or problems in our introduction of new products;
+Added: • delays or problems in the shipment or delivery of products to customers;
• changes in freight costs;
−Removed: changes in purchasing patterns by the distributors and retailers to which we sell our gear;
−Removed: seasonal electronics product purchasing patterns by our retail and distributor customers, as well as the gamers and streamers that purchase their gear directly from us;
+Added: • changes in purchasing patterns by the distributors and retailers to which we sell our products;
+Added: • 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;
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• fluctuations in currency exchange rates;
−Removed: outbreaks of pandemics, such as the novel coronavirus;
+Added: • global pandemics, such as the COVID-19, or other public health crises;
• the impact of political instability, natural disasters, war and/or events of terrorism, such as the war between Russia and Ukraine, and the corresponding tensions created from such conflict between Russia, the United States and countries in Europe as well as other countries such as China;
−Removed: macro-economic fluctuations in the United States and global economies, including those that impact discretionary consumer spending such as may result from the COVID-19 coronavirus outbreak, increased interest rates or increased inflation;
−Removed: changes in business cycles that affect the markets in which we sell our gear;
−Removed: the effect of fluctuations in interest rates on consumer disposable income.
+Added: • macro-economic fluctuations in the United States and global economies, including those that impact discretionary consumer spending such as fluctuations that resulted from the COVID-19 pandemic, changes in interest rates or inflation;
+Added: • changes in business cycles that affect the markets in which we sell our products;
+Added: Corsair Gaming, Inc.
+Added: | 2023 Form 10-K | 14
Technological factors .
−Removed: In addition to technological developments directly relating to our gear, more generalized changes in technology may have a significant effect on our operating results.
+Added: 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.
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Conditions in the retail and consumer electronics markets may significantly affect our business and could have an adverse effect on our net revenue.
−Removed: We derive most of our revenue from higher priced gear sold through online and brick-and-mortar retailers to gamers, and we are vulnerable to declines in consumer spending due to, among other things, depressed economic conditions, high inflation, reductions in disposable income (as a result of high inflation or otherwise) and other factors that affect the retail and consumer electronics markets generally.
+Added: We derive most of our revenue from higher priced products sold through online and brick-and-mortar retailers to gamers, and we are vulnerable to declines in consumer spending due to, among other things, depressed economic conditions, high inflation, weak consumer confidence, reductions in disposable income (as a result of high inflation or otherwise) and other factors that affect the retail and consumer electronics markets generally.
In addition, our revenues are attributable to sales of high-performance gamer and creator peripherals and gaming components and systems, all of which are products that are geared to the computer gaming market which, like other consumer electronic markets, is susceptible to the adverse effects of poor economic conditions.
−Removed: Other significant negative effects could include limited growth or reductions in worldwide sales of products that incorporate DRAM modules, such as PCs, smartphones and servers, resulting in excess supply in the worldwide DRAM market and reduced demand for our gear from our customers as they limit or lower their spending and inventory levels.
−Removed: Adverse economic conditions may
−Removed: also reduce our cash flow due to delays in customer payments, increase the risk of customer bankruptcy or business failures and result in increases in bad debt write-offs and receivables reserves.
+Added: Other significant negative effects could include limited growth or reductions in worldwide sales of products that incorporate DRAM modules, such as PCs, smartphones and servers, resulting in excess supply in the worldwide DRAM market and reduced demand for our products from our customers as they limit or lower their spending and inventory levels.
+Added: Adverse economic conditions may also reduce our cash flow due to delays in customer payments, increase the risk of customer bankruptcy or business failures and result in increases in bad debt write-offs and receivables reserves.
Other negative effects on our business resulting from adverse economic conditions worldwide may include:
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• increased risk of excess and obsolete inventories, which may require write-downs or impairment charges, such as the $22.5 million inventory impairment and related charges recognized during the second quarter of 2022;
−Removed: financial distress or bankruptcy of key suppliers or third-party manufacturers, resulting in insufficient product quantities to meet demand or increases in the cost of producing our gear;
+Added: • financial distress or bankruptcy of key suppliers or third-party manufacturers, resulting in insufficient product quantities to meet demand or increases in the cost of producing our products;
• financial distress or bankruptcy of key distributors, resellers or retailers.
−Removed: Depressed economic conditions, whether in our key regional markets or globally, could result in a decline in both product prices and the demand for our gear, which may seriously harm our business.
+Added: Depressed economic conditions, whether in our key regional markets or globally, could result in a decline in both product prices and the demand for our products, which may seriously harm our business.
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.
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For example, changes in the selling prices of our DRAM modules can have a substantial impact on our net revenue as our performance memory products represents a significant portion of our overall net revenue.
−Removed: In addition, declines in the market price of ICs enable our competitors to lower prices and we will likely be forced to lower our product prices in order to compete effectively which could have an adverse effect on our net revenue.
+Added: In addition, declines in the market price of ICs enable our competitors to lower prices and we will likely be forced to lower our product prices in order to
+Added: Corsair Gaming, Inc.
+Added: | 2023 Form 10-K | 15
+Added: compete effectively which could have an adverse effect on our net revenue.
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.
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Further, there are a limited number of companies capable of producing the high-speed DRAM ICs required for our high-performance DRAM modules, and any inability to procure the requisite quantities and quality of DRAM ICs could reduce our production of DRAM modules and could seriously harm our business.
−Removed: The coronavirus outbreak has had, and could continue to have, a materially disruptive effect on our business.
−Removed: The COVID-19 disease has spread globally and has resulted in authorities implementing numerous measures to try to contain the virus, such as travel bans and restrictions, quarantines, shelter-in-place orders and shutdowns.
−Removed: The spread of COVID-19 has harmed and future outbreaks of COVID-19 could continue to harm, our business.
−Removed: Current and potential impacts include, but are not limited to, the following:
−Removed: Strict COVID-19 pandemic-related safety measures in Asia, for example, where many of our products and the components and subcomponents used in the manufacture of our gear created, have created, and could in the future create, supply chain disruptions for our gear;
−Removed: extended employee absences could negatively impact our business, including potential reductions in the availability of the sales team to complete sales and delays in deliverables and timelines within our engineering and support functions;
−Removed: fluctuations in foreign exchange rates could make our products less competitive in a price-sensitive environment for our non-US customers;
−Removed: significant disruption of global financial markets, reducing our ability to access capital, which could in the future negatively affect our liquidity, including our ability to repay the indebtedness outstanding from our credit facilities.
−Removed: Starting in early 2020 in connection with the COVID-19 pandemic, we experienced an increase in demand for our gear as more people were under shelter-in-place restrictions, which limited people’s access to alternative forms of entertainment and social interaction, and thus increased the demand for home entertainment and connecting with others through content creation at the start of the pandemic.
−Removed: In contrast, as shelter-in-place and other similar restrictions were eased beginning in 2021, many consumers returned to other alternative forms of entertainment and interaction.
−Removed: This in turn has resulted in a decline in demand for our products since the second half of 2021.
−Removed: The extent to which the COVID-19 outbreak, including the spread of more contagious and deadly variants, ultimately impacts our business, results of operations, cash flows and financial condition will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to, the continued duration and spread of the outbreak, its severity, the actions to contain the virus or treat its impact, and how quickly and to what extent normal economic and operating conditions can resume after healthy and safety restrictions are put in place from time to time.
−Removed: Since the outbreak of the COVID-19 pandemic, we have experienced, and may continue to experience significant impacts to our business as a result of its continuing global economic impact, including any economic downturn or recession that has occurred or may occur in the future.
−Removed: The ongoing war between Russia and Ukraine could adversely affect our business, financial condition and results of operations.
+Added: The ongoing war between Russia and Ukraine and the ongoing conflict in Gaza could adversely affect our business, financial condition and results of operations.
In February 2022, Russian military forces invaded Ukraine.
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The situation is rapidly evolving as a result of the war in Ukraine, and the United States, the European Union and other countries may implement additional sanctions, export controls or other measures against Russia, Belarus and other countries, regions, officials, individuals or industries in the respective territories.
−Removed: In response to Russia’s invasion of Ukraine and the aforementioned sanctions, with effect from February 2022, we ceased the sale of all of our gear in Russia.
+Added: In response to Russia’s invasion of Ukraine and the aforementioned sanctions, with effect from February 2022, we ceased the sale of all of our products in Russia.
While we do not expect this decision to have a material adverse effect on our business, results of operations or financial condition, such sanctions and other measures, as well as the existing and potential further responses from Russia or other countries to such sanctions, tensions and military actions, could adversely affect the global economy and financial markets and could adversely affect our business, financial condition and results of operations.
−Removed: In addition, the war, sanctions against Russia and Russia’s drastic reduction to the supply of natural gas to Europe in response to sanctions has and could continue to negatively impact the production and sales of consumer electronics due to a variety of factors such as lower consumer confidence, increase the ongoing disruption of supply chains, worsen the current semiconductor chip shortage since Russia and Ukraine are critical suppliers of neon gas and palladium used in chip production, exacerbate energy shortages and high energy prices, and increase cybersecurity threats.
−Removed: These impacts have adversely impacted our operations, sales and profitability, and could continue to do so.
−Removed: We are actively monitoring the situation in Ukraine and assessing its impact on our business, including our suppliers and customers.
−Removed: We have no way to predict the progress or outcome of the war in Ukraine or its impacts in Ukraine, Russia or Belarus as the war, and any resulting government reactions, are rapidly developing and are beyond our control.
−Removed: The extent and duration of the military action, sanctions and 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.
+Added: In addition, the war, sanctions against Russia and Russia’s drastic reduction to the supply of natural gas to Europe in response to sanctions had in the past, and could in the future, negatively impact the production and sales of consumer electronics due to a variety of factors such as lower consumer confidence, disruption of supply chains, semiconductor chip shortage since Russia and Ukraine are critical suppliers of neon gas and palladium used in chip production, energy shortages and high energy prices, and cybersecurity threats.
+Added: These factors have in the past adversely impacted our operations, sales and profitability, and could do so in the future.
+Added: Separately, on October 7, 2023, Hamas, a U.S.-designated terrorist organization, launched a series of coordinated attacks from the Gaza Strip onto Israel.
+Added: On October 8, 2023, Israel formally declared war on Hamas, and the armed conflict is ongoing as of the date of this filing.
+Added: Hostilities between Israel and Hamas could escalate and involve surrounding countries in the Middle East.
+Added: Furthermore, following Hamas’ attack on Israel, the Houthi movement, which controls parts of Yemen, launched a number of attacks on marine vessels in the Red Sea.
+Added: The Red Sea is an important maritime route for international trade.
+Added: As a result of such disruptions, we may experience in the future extended lead times, delays in supplier deliveries, and increased freight costs.
+Added: The risk of ongoing supply disruptions may further result in delayed deliveries of our products.
+Added: We are actively monitoring the situation in Ukraine and the ongoing conflict in Gaza and assessing the impacts on our business, including our suppliers and customers.
+Added: We have no way to predict the progress or outcome of the war in Ukraine or its impacts in Ukraine, Russia or Belarus, or of the conflict in the Israel-Gaza regions and any potential increases in hostilities in the Middle East, as these situations, and any resulting government reactions, are constantly evolving and are beyond our control.
+Added: 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.
Any such disruptions may also magnify the impact of other risks described in this Annual Report on Form 10-K.
+Added: Corsair Gaming, Inc.
+Added: | 2023 Form 10-K | 16
+Added: 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.
+Added: Our performance depends to a significant degree upon the contributions of our management team, particularly Andrew J.
+Added: Paul, our co-founder, Chief Executive Officer and Director.
+Added: 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.
+Added: To the extent that our business grows, we will need to attract and retain additional qualified management personnel in a timely manner, and we may not be able to do so.
+Added: We rely on highly skilled personnel and if we are unable to attract, retain or motivate key personnel or hire qualified personnel our business may be seriously harmed.
+Added: Our performance is largely dependent on the talents and efforts of highly skilled individuals, particularly our marketing personnel, sales force, electrical engineers, mechanical engineers and computer professionals.
+Added: Our future success depends on our continuing ability to identify, hire, develop, motivate and retain highly skilled personnel and, if we are unable to hire and train a sufficient number of qualified employees for any reason, we may not be able to implement our current initiatives or grow, or our business may contract and we may lose market share.
+Added: Moreover, certain of our competitors or other technology businesses may seek to hire our employees.
+Added: There can be no assurance that our stock-based and other compensation will provide adequate incentives to attract, retain and motivate employees in the future, particularly if the market price of our common stock does not increase or declines.
+Added: If we do not succeed in attracting, retaining and motivating highly qualified personnel, our business may be seriously harmed.
+Added: Further, we also face significant competition for employees, particularly in the San Francisco Bay Area where our headquarters are located, and as a result, skilled employees in this competitive geographic location can often command higher compensation and may be difficult to hire.
+Added: In addition, Russia’s invasion of Ukraine, poor relations between the United States and Russia, and sanctions by the United States and the European Union against Russia could have an adverse impact on our research and development efforts as we outsource significant research and development activities to companies in Ukraine.
A significant portion of our net revenue is generated by sales of DRAM modules and any significant decrease in the average selling prices of our DRAM modules would seriously harm our business.
A significant percentage of our net revenue is generated by sales of DRAM modules.
−Removed: In particular, net revenue generated by sales of DRAM modules accounted for a total of 34.3% and 28.5% of our net revenue in 2022 and 2021, respectively.
+Added: In particular, net revenue generated by sales of DRAM modules accounted for a total of 31.2% and 34.3% of our net revenue for the years ended December 31, 2023 and 2022, respectively.
As a result, any significant decrease in average selling prices of our DRAM modules, whether as a result of declining market prices of DRAM ICs or for any other reason, would seriously harm our business.
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Sales to our ten largest customers accounted for 55.4% and 52.3% of our net revenue in 2023 and 2022, respectively.
−Removed: Our customers, including Amazon, typically do not enter into long-term agreements to purchase our gear but instead enter into purchase orders with us from time to time.
+Added: 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.
These purchase orders may generally be cancelled and orders can be reduced or postponed by the customer.
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Further, while we maintain accounts receivables insurance for many of our customers, we do not maintain such coverage for Amazon and others.
−Removed: As a result, if either Amazon or others were to default on its payment to us, and if we were to have substantial accounts receivables balances with such customers outstanding, we would not be covered by such insurance, and our business may be seriously harmed.
−Removed: If the financial condition of a key customer weakens, if a key customer stops purchasing our gear, or if uncertainty regarding demand for our gear causes a key customer to reduce their orders and marketing of our gear, our business could be seriously harmed.
+Added: As a result, if either Amazon or others were to default on their payment to us, and if we were to have substantial accounts receivables balances with such customers outstanding, we would not be covered by insurance, and our business may be seriously harmed.
+Added: If the financial condition of a key customer weakens, if a key customer stops purchasing our products, or if uncertainty regarding demand for our products causes a key customer to reduce their orders and marketing of our products, our business could be seriously harmed.
A decision by one or more of our key customers to reduce, delay or cancel its orders from us, either as a result of industry conditions or specific events relating to a particular customer or failure or inability to pay amounts owed to us in a timely manner, or at all, may seriously harm our business.
In addition, because of our reliance on key customers, the loss of one or more key customers as a result of bankruptcy or liquidation or otherwise, and the resulting loss of sales, may seriously harm our business.
−Removed: Additionally, some of our customer agreements contain “most favored nation” clauses.
−Removed: 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 gear, each of which may result in product or component shortages, delayed deliveries and quality control problems.
−Removed: We maintain limited manufacturing facilities that only assemble certain products such as our DRAM modules, custom built PCs, custom cooling and performance controllers, and as a result, we depend entirely upon third parties to manufacture and supply the gear we sell and the components used in our gear such as gaming peripherals and gaming components.
−Removed: Our gear that is manufactured by outsourced parties is generally produced by a limited number of manufacturers and in some instances is purchased on a purchase order basis.
+Added: 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
+Added: Corsair Gaming, Inc.
+Added: | 2023 Form 10-K | 17
+Added: 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.
+Added: We maintain limited manufacturing facilities that only assemble certain products such as our DRAM modules, custom built PCs, custom cooling and performance controllers, and as a result, we depend entirely upon third parties to manufacture and supply the products we sell and the components used in our products such as gaming peripherals and gaming components.
+Added: Our products that are manufactured by outsourced parties are generally produced by a limited number of manufacturers and in some instances is purchased on a purchase order basis.
For example, each model of our gaming keyboards, gaming mice, gaming headsets, computer cases, PSUs and cooling solutions is produced by a single manufacturer.
We do not have long-term supply agreements with most of our manufacturers and suppliers.
−Removed: In addition, we carry limited inventory of our gear, and the loss of one or more of these manufacturers or suppliers, or a significant decline in production or deliveries by any of them, could significantly limit our shipments of gear or prevent us from shipping that gear entirely.
−Removed: 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 before we were able to transition production to a new manufacturer and potentially significant costs associated with that transition.
+Added: In addition, we carry limited inventory of our products, and the loss of one or more of these manufacturers or suppliers, or a significant decline in production or deliveries by any of them, could significantly limit our shipments of products or prevent us from shipping the products entirely.
+Added: 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 our proprietary iCUE software or Elgato streaming software suite have any “bugs” or glitches, or if we are unable to update the iCUE software or Elgato streaming software suite to incorporate innovations, our business may be seriously harmed.
−Removed: Because most of the gear we sell is linked through either our iCUE software or our Elgato streaming software suite, “bugs” or other glitches in the software may cause it to not perform reliably, meet our quality standards or meet performance specifications.
+Added: Because most of the products we sell are linked through either our iCUE software or our Elgato streaming software suite, “bugs” or other glitches in the software may cause it to not perform reliably, meet our quality standards or meet performance specifications.
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.
−Removed: In addition, in order for us to stay competitive, we need to update the iCUE software, Elgato streaming software suite and any other software utilized by our gear, to incorporate innovations and other changes to address gamers and content creators’ changing needs.
+Added: In addition, in order for us to stay competitive, we need to update the iCUE software, Elgato streaming software suite and any other software utilized by our products, to incorporate innovations and other changes to address gamers and content creators’ changing needs.
If we are unable to update the iCUE software or our Elgato streaming software suite to include such updates or address any bugs or glitches, its use to gamers and content creators may be substantially diminished, which could seriously harm our business.
−Removed: The need to continuously develop new gear and product improvements increases the risk that our gear will contain defects or fail to meet specifications, which may increase our warranty costs and product returns, lead to recalls of gear, damage our reputation and seriously harm our business.
−Removed: Gear that does not meet specifications or that contains, or is perceived by our customers or gamers to contain, defects could impose significant costs on us or seriously harm our business.
−Removed: Our gear may suffer from design flaws, quality control problems in the manufacturing process or components that are defective or do not meet our quality standards.
−Removed: Moreover, the markets we serve are characterized by rapidly changing technology and intense competition and the pressure to continuously develop new gear and improvements and bring that gear and improvements to market quickly heightens the risks that our gear will be subject to both quality control and design problems.
−Removed: Because we largely rely on third parties to manufacture our gear and the components that are used in our gear, our ability to control the quality of the manufacturing process and the components that are used to manufacture our gear is limited.
+Added: The need to continuously develop new products and product improvements increases the risk that our products will contain defects or fail to meet specifications, which may increase our warranty costs and product returns, lead to recalls of products, damage our reputation and seriously harm our business.
+Added: Products that do not meet specifications or that contain, or are perceived by our customers or gamers to contain, defects could impose significant costs on us or seriously harm our business.
+Added: Our products may suffer from design flaws, quality control problems in the manufacturing process or components that are defective or do not meet our quality standards.
+Added: Moreover, the markets we serve are characterized by rapidly changing technology and intense competition and the pressure to continuously develop new products and improvements and bring such products and improvements to market quickly heightens the risks that our products will be subject to both quality control and design problems.
+Added: Because we largely rely on third parties to manufacture our products and the components that are used in our products, our ability to control the quality of the manufacturing process and the components that are used to manufacture our products is limited.
Product quality issues, whether as a result of design or manufacturing flaws or the use of components that are not of the requisite quality or do not meet our specifications, could result in product recalls, product redesign efforts, lost revenue, loss of reputation, and significant warranty and other expenses.
In that regard, we have previously voluntarily recalled the SF-series PSUs.
−Removed: Recalls of gear and warranty-related issues can be costly, cause damage to our reputation and result in increased expenses, lost revenue and production delays.
−Removed: We may also be required to compensate customers for costs incurred or damages caused by defective gear.
−Removed: If we incur warranty or product redesign costs, institute recalls of gear or suffer damage to our reputation as a result of defective gear, our business could be seriously harmed.
+Added: Recalls of products and warranty-related issues can be costly, cause damage to our reputation and result in increased expenses, lost revenue and production delays.
+Added: We may also be required to compensate customers for costs incurred or damages caused by defective products.
+Added: If we incur warranty or product redesign costs, institute recalls of products or suffer damage to our reputation as a result of defective products, our business could be seriously harmed.
While we operate a facility in Taiwan that assembles, tests and packages all of our DRAM modules and certain other products, we rely upon manufacturers in China and Southeast Asia to produce a significant portion of our other products, which exposes us to risks that may seriously harm our business.
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We also assemble, test, package and ultimately supply our custom-built PCs and our customized gaming controllers in our U.S.
−Removed: All of the other gear we sell, including the components used to assemble our DRAM modules, are produced at factories operated by third parties located in China, Taiwan and countries in Southeast Asia.
+Added: All of the other products we sell, including the components used to assemble our DRAM modules, are produced at factories operated by third parties located in China, Taiwan and countries in Southeast Asia.
+Added: Further, a majority of the world’s semiconductors, in particular the advanced ones often used in gaming PCs are manufactured in Taiwan.
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.
−Removed: We believe one of the most significant risks associated with this concentration is that production may be interrupted or limited because of labor shortages in southern China, restrictive health and safety measures in response to ongoing COVID-19 outbreaks and by strains on the local infrastructure.
+Added: Corsair Gaming, Inc.
+Added: | 2023 Form 10-K | 18
+Added: We believe one of the most significant risks associated with this concentration is that production may be interrupted or limited because of labor shortages in southern China, restrictive health and safety measures in response to the COVID-19 pandemic and by strains on the local infrastructure.
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.
−Removed: There is considerable potential political instability in Taiwan related to its disputes with China.
−Removed: In addition, political instability in countries in Southeast Asia where we source certain components, such as Thailand, could result in delays in shipments or our inability to source certain critical components for our products.
+Added: There is potential for considerable political instability in Taiwan related to its disputes with China, including China’s threats to potentially annex Taiwan.
+Added: In addition, political instability in countries in Southeast Asia such as Thailand where we source certain components, could result in delays in shipments or our inability to source certain critical components for our products.
Although we do not do business in North Korea, any future increase in tensions between South Korea and North Korea, such as an outbreak or escalation of military hostilities, or between Taiwan and China could materially adversely affect our operations in Asia or the global economy, which in turn may seriously harm our business.
Other risks resulting from this concentration of our manufacturing facilities and our suppliers in China, Taiwan and Southeast Asia include the following:
−Removed: the interpretation and enforcement of China’s laws continues to evolve, which may make it more difficult for us to obtain a reliable supply of our gear at predictable costs;
+Added: • the interpretation and enforcement of China’s laws continues to evolve, which may make it more difficult for us to obtain a reliable supply of our products at predictable costs;
• these facilities are located in regions that may be affected by earthquakes, typhoons, other natural disasters, pandemic outbreaks, political instability, military actions, power outages or other conditions that may cause a disruption in supply;
−Removed: our costs may be increased and deliveries of our gear may be decreased or delayed by trade restrictions;
−Removed: our reliance on foreign manufacturers and suppliers exposes us to other risks of doing business internationally, some of which are described below under “We conduct our operations and sell our gear internationally and the effect of business, legal and political risks associated with international operations may seriously harm our business.”
−Removed: In addition, if significant tariffs or other restrictions are placed on Chinese imports or any related counter-measures are taken by China, our business may be seriously harmed if such tariffs or counter-measures affect the manufacturing costs of any of our gear.
+Added: • our costs may be increased and deliveries of our products may be decreased or delayed by trade restrictions;
+Added: • our reliance on foreign manufacturers and suppliers exposes us to other risks of doing business internationally, some of which are described below under “We conduct our operations and sell our products internationally and the effect of business, legal and political risks associated with international operations may seriously harm our business.”
+Added: In addition, if significant tariffs or other restrictions are placed on Chinese imports or any related counter-measures are taken by China, our business may be seriously harmed if such tariffs or counter-measures affect the manufacturing costs of any of our products.
Further, such tariffs could adversely impact our gross profits if we cannot pass the increased costs incurred as a result of these tariffs through to our consumers, or if the resulting increased prices result in a decrease in consumer demand.
The occurrence of any one or more of these risks may seriously harm our business.
−Removed: If we do not successfully coordinate the worldwide manufacturing and distribution of our gear, we could lose sales.
−Removed: Our business requires that we coordinate the manufacturing and distribution of our gear over a significant portion of the world.
−Removed: We rely upon third parties to manufacture our gear and to transport and distribute our gear to our customers.
−Removed: If we do not successfully coordinate the timely and efficient manufacturing and distribution of our gear, our costs may increase, we may experience a build-up in inventory, we may not be able to deliver sufficient quantities to meet customer demand and we could lose sales, each of which could seriously harm our business.
+Added: If we do not successfully coordinate the worldwide manufacturing and distribution of our products, we could lose sales.
+Added: Our business requires that we coordinate the manufacturing and distribution of our products over a significant portion of the world.
+Added: We rely upon third parties to manufacture our products and to transport and distribute our products to our customers.
+Added: If we do not successfully coordinate the timely and efficient manufacturing and distribution of our products, our costs may increase, we may experience a build-up in inventory, we may not be able to deliver sufficient quantities to meet customer demand and we could lose sales, each of which could seriously harm our business.
Our operating results are particularly sensitive to freight costs, and our costs may increase significantly if we are unable to ship and transport finished products efficiently and economically across long distances and international borders, which may seriously harm our business.
−Removed: The majority of our gear is manufactured in Asia, and we transport significant volumes of finished products across long distances and international borders.
+Added: The majority of our products are manufactured in Asia, and we transport significant volumes of finished products across long distances and international borders.
As a result, our operating results can be significantly affected by changes in transportation costs.
In that regard, although we ship our DRAM modules, which have selling prices that are relatively high compared to their size and weight, by air, we generally use ocean freight to ship our other products because of their relatively low selling prices compared to their size and weight.
−Removed: If we underestimate the demand for any of the products we ship by ocean freight, or if deliveries of those products to us by our manufacturers are delayed or interrupted, we may be required to ship those products by air in order to fill orders on a timely basis.
+Added: If we underestimate the demand for any of the products we ship by ocean freight, or if deliveries of those products to us by our manufacturers are delayed or interrupted, we may be required to ship those products by air in order to fulfill orders on a timely basis.
Shipping larger or heavier items, such as cases or PSUs, by air is significantly more expensive than using ocean freight.
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If demand for air or ocean freight should increase substantially, it could make it difficult for us to procure sufficient cargo transportation space at prices we consider acceptable, or at all.
−Removed: Increases in our freight expenses, or any inability to ship our gear as and when required, may seriously harm our business.
−Removed: Because our gear must cross international borders, we are subject to risk of delay if our documentation does not comply with customs rules and regulations or for similar reasons.
−Removed: In addition, any increases in customs duties or tariffs, as a result of changes to existing trade agreements between countries or otherwise, could increase our costs or the final cost of our gear to our retailer customers or gamers or decrease our margins.
+Added: Increases in our freight expenses, or any inability to ship our products as and when required, may seriously harm our business.
+Added: Because our products must cross international borders, we are subject to risk of delay if our documentation does not comply with customs rules and regulations or for similar reasons.
+Added: In addition, any increases in customs duties or tariffs, as a result of changes to existing trade agreements between countries or otherwise, could increase our costs or the final cost of our products to our retailer
+Added: Corsair Gaming, Inc.
+Added: | 2023 Form 10-K | 19
+Added: customers or gamers or decrease our margins.
The laws governing customs and tariffs in many countries are complex, subject to many interpretations and often include substantial penalties for non-compliance.
−Removed: Technological developments or other changes in our industry could render our gear less competitive or obsolete, which may seriously harm our business.
+Added: Technological developments or other changes in our industry could render our products less competitive or obsolete, which may seriously harm our business.
Our industry is characterized by rapidly evolving technology and standards.
−Removed: These technological developments require us to integrate new technology and standards into our gear, create new and relevant categories of gear and adapt to changing business models in a timely manner.
+Added: These technological developments require us to integrate new technology and standards into our products, create new and relevant categories of products and adapt to changing business models in a timely manner.
Our competitors may develop or acquire alternative and competing technologies and standards that could allow them to create new and disruptive products or produce similar competitive products at lower costs of production.
−Removed: Advances in the development of gaming, computing and audiovisual technology could render our gear less competitive or obsolete.
+Added: Advances in the development of gaming, computing and audiovisual technology could render our products less competitive or obsolete.
For example, the emergence of augmented reality and virtual reality headsets could render certain of our gamer and creator peripherals such as keyboards and mice less relevant, similar to how cloud computing could drastically reduce the need for gaming components and systems.
−Removed: If we are unable to provide new gear for augmented or virtual reality devices or to address other technological trends, our business may be seriously harmed.
−Removed: In addition, government authorities and industry organizations may adopt new standards that apply to our gear.
+Added: If we are unable to provide new products for augmented or virtual reality devices or to address other technological trends, our business may be seriously harmed.
+Added: In addition, government authorities and industry organizations may adopt new standards that apply to our products.
As a result, we may need to invest significant resources in research and development to maintain our market position, keep pace with technological changes and compete effectively.
−Removed: Our product development expenses were $66.5 million and $60.3 million in 2022 and 2021, respectively, representing 4.8% and 3.2% of our net revenue for these periods, respectively.
−Removed: Our failure to improve our gear, create new and relevant categories of gear and adapt to changing business models in a timely manner may seriously harm our business.
+Added: Our product development expenses were $65.3 million and $66.5 million for the years ended December 31, 2023 and 2022, respectively, representing 4.5% and 4.8% of our net revenue for these periods, respectively.
+Added: Our failure to improve our products, create new and relevant categories of products and adapt to changing business models in a timely manner may seriously harm our business.
In addition, Russia’s invasion of Ukraine, poor relations between the United States and Russia, and sanctions by the United States and the European Union against Russia could have an adverse impact on our research and development efforts as we outsource significant research and development activities to companies in Ukraine.
−Removed: We order most of our gear from third-party manufacturers based on our forecasts of future demand and targeted inventory levels, which exposes us to the risk of both product shortages, which may result in lost sales and higher expenses, and excess inventory, which may require us to sell our gear at substantial discounts and lead to write-offs.
−Removed: We depend upon our product forecasts to make decisions regarding investments of our resources and production levels of our gear.
−Removed: Because of the lead time necessary to manufacture our gear and the fact that we usually have little or no advance notice of customer orders, we must order our gear from third-party manufacturers and therefore commit to substantial purchases prior to obtaining orders for those products from our customers.
+Added: We order most of our products from third-party manufacturers based on our forecasts of future demand and targeted inventory levels, which exposes us to the risk of both product shortages, which may result in lost sales and higher expenses, and excess inventory, which may require us to sell our products at substantial discounts and lead to write-offs.
+Added: We depend upon our product forecasts to make decisions regarding investments of our resources and production levels of our products.
+Added: Because of the lead time necessary to manufacture our products and the fact that we usually have little or no advance notice of customer orders, we must order our products from third-party manufacturers, committing to substantial purchases prior to obtaining orders for those products from our customers.
This makes it difficult for us to adjust our inventory levels if orders fall below our expectations.
−Removed: Our failure to predict low demand for product can result in excess inventory, as well as lower cash flows and lower margins if we were unable to sell a product or if we were required to lower product prices in order to reduce inventories, and may also result in inventory write-downs such as the $22.5 million inventory impairment and related charges recognized during the second quarter of 2022 .
+Added: Our failure to predict low demand for our products could result in excess inventory, as well as lower cash flows and lower margins if we were unable to sell a product or if we were required to lower product prices in order to reduce inventories, and may also result in inventory write-downs such as the $22.5 million inventory impairment and related charges recognized during the second quarter of 2022.
In addition, the cancellation or reduction of orders by our customers may also result in excess inventory.
−Removed: On the other hand, if actual orders exceed our expectations, we may need to incur additional costs, such as higher shipping costs for air freight or other expedited delivery or higher product costs for expedited manufacturing, in order to deliver sufficient quantities of products to meet customer orders on a timely basis or we may be unable to fill some orders altogether.
−Removed: In addition, many of the types of gear we sell have short product life cycles, so a failure to accurately predict and meet demand for products can result in lost sales that we may be unable to recover in subsequent periods.
−Removed: These short life cycles also make it more likely that slow moving or excess inventory may become obsolete, requiring us to sell our gear at significant discounts or write off entirely excess or obsolete inventory.
−Removed: Any failure to deliver gear in quantities sufficient to satisfy demand can also seriously harm our reputation with both our retailer customers and end-consumers.
−Removed: Over the past few years, we have expanded the number and type of gear we sell, and the geographic markets in which we sell them, and we will endeavor to further expand our product portfolio and sales reach.
−Removed: The growth of our product portfolio and the markets in which we sell our gear has increased the difficulty of accurately forecasting product demand.
−Removed: We have in the past experienced significant differences between our forecasts and actual demand for our gear and expect similar differences in the future.
+Added: On the other hand, if actual orders exceed our expectations, we may need to incur additional costs, such as higher shipping costs for air freight or other expedited delivery or higher product costs for expedited manufacturing, in order to deliver sufficient quantities of products to meet customer orders on a timely basis or we may be unable to fulfill some orders altogether.
+Added: In addition, many of the types of products we sell have short product life cycles, so a failure to accurately predict and meet demand for products can result in lost sales that we may be unable to recover in subsequent periods.
+Added: These short life cycles also make it more likely that slow moving or excess inventory may become obsolete, requiring us to sell our products at significant discounts or write off entirely excess or obsolete inventory.
+Added: Any failure to deliver products in quantities sufficient to satisfy demand can also seriously harm our reputation with both our retailer customers and end-consumers.
+Added: Over the past few years, we have expanded, and we will continue to expand our product portfolio and sales reach.
+Added: The growth of our product portfolio and the markets in which we sell our products has increased the difficulty of accurately forecasting product demand.
+Added: We have in the past experienced significant differences between our forecasts and actual demand for our products and expect similar differences in the future.
If we do not accurately predict product demand, our business may be seriously harmed.
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.
−Removed: We indemnify a limited number of retailer customers for damages and costs which may arise if our gear infringe third-party patents or other proprietary rights.
+Added: 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.
We may periodically have to respond to claims and litigate these types of indemnification obligations.
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Our insurance does not cover intellectual property infringement.
−Removed: The potential amount of future payments to defend lawsuits or settle or otherwise satisfy indemnified claims under any of these indemnification provisions may be unlimited.
−Removed: We also have replacement obligations for product warranty claims relating to our gear.
+Added: The potential amount of future payments to defend lawsuits or settle or otherwise satisfy indemnified claims under any of these indemnification provisions may be
+Added: Corsair Gaming, Inc.
+Added: | 2023 Form 10-K | 20
+Added: We also have replacement obligations for product warranty claims relating to our products.
Our insurance does not cover such claims.
Claims for intellectual property infringement and product warranty claims may seriously harm our business.
−Removed: From time to time, we pay licensing fees in settlement of certain intellectual property infringement claims made by third parties.
−Removed: There can be no assurance that licensing fees paid under these circumstances will not seriously harm our business.
−Removed: If we are unable to integrate our gear and proprietary software with third-party hardware, operating system software and other products, the functionality of our gear would be adversely affected, which may seriously harm our business.
−Removed: The functionality of some of our gear depends on our ability to integrate that gear with the hardware, operating system software and related products of providers such as Intel, AMD, NVIDIA, Microsoft, Sony and Asus, among others.
−Removed: We rely to a certain extent on the relationships we have with those companies in developing our gear and resolving issues.
−Removed: There can be no assurance that those relationships will be maintained or that those or other companies will continue to provide the necessary information and support to allow us to develop gear that integrates with their products or that third party developers will continue to develop plugins for and integrations with our proprietary software.
−Removed: If integration with the products of those or other companies becomes more difficult, our gear would likely be more difficult to use or may not be compatible with key hardware, operating systems or other products, which would seriously harm our reputation and the utility and desirability of our gear, and, as a result, would seriously harm our business.
+Added: From time to time, we pay licensing fees in settlement of certain intellectual property infringement claims made by third parties, which may not be available on commercially acceptable terms.
+Added: Therefore, there can be no assurance that licensing fees paid under these circumstances will not seriously harm our business.
+Added: If we are unable to integrate our products and proprietary software with third-party hardware, operating system software and other products, the functionality of our products would be adversely affected, which may seriously harm our business.
+Added: The functionality of some of our products depends on our ability to integrate those products with the hardware, operating system software and related products of providers such as Intel, AMD, NVIDIA, Microsoft, Sony and Asus, among others.
+Added: We rely to a certain extent on the relationships we have with those companies in developing our products and resolving issues.
+Added: There can be no assurance that those relationships will be maintained or that those or other companies will continue to provide the necessary information and support to allow us to develop products that integrate with their products or that third party developers will continue to develop plugins for and integrations with our proprietary software.
+Added: If integration with the products of those or other companies becomes more difficult, our products would likely be more difficult to use or may not be compatible with key hardware, operating systems or other products, which would seriously harm our reputation and the utility and desirability of our products, and, as a result, would seriously harm our business.
One of our strategies is to grow through acquisitions, which could result in operating difficulties, dilution to our stockholders and other seriously harmful consequences.
One of our strategies is to grow through acquisitions and we may also seek to grow through other strategic transactions such as alliances and joint ventures.
−Removed: In particular, we believe that our future growth depends in part on our ability to enhance our existing
−Removed: product lines and introduce new gear and categories of gear through acquisitions and other strategic transactions.
+Added: In particular, we believe that our future growth depends in part on our ability to enhance our existing product lines and introduce new products and categories of products through acquisitions and other strategic transactions.
There is substantial competition for attractive acquisitions and other strategic transactions, and we may not be successful in completing any such acquisitions or other strategic transactions in the future.
If we are successful in making any acquisition or strategic transaction, we may be unable to integrate the acquired business effectively or may incur unanticipated expenditures, which could seriously harm our business.
−Removed: The COVID-19 pandemic may make integration of these businesses even more difficult.
Acquisitions and strategic transactions can involve a wide variety of risks depending upon, among other things, the specific business or assets being acquired or the specific terms of any transaction.
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These sponsored events and individuals are associated with our brand and represent our commitment to the gaming community.
−Removed: There can be no assurance that we will be able to maintain our existing relationships with any of our sponsored individuals or teams in the future or that we will be able to attract new highly visible gamers to endorse our gear.
+Added: There can be no assurance that we will be able to maintain our existing relationships with any of our sponsored individuals or teams in the future or that we will be able to attract new highly visible gamers to endorse our products.
Additionally, certain individuals or teams with greater access to capital may increase the cost of certain sponsorships to levels we may choose not to match.
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We need substantial working capital to operate our business, and we rely to a significant degree upon credit extended by our manufacturers and suppliers and borrowings under our revolving credit facility to meet our working capital needs.
−Removed: If we are unable to meet our working capital needs, we may be required to reduce expenses or product purchases, or delay the development, commercialization and marketing of our gear, which would seriously harm our business.
+Added: Corsair Gaming, Inc.
+Added: | 2023 Form 10-K | 21
+Added: unable to meet our working capital needs, we may be required to reduce expenses or product purchases, or delay the development, commercialization and marketing of our products, which would seriously harm our business.
We need substantial working capital to operate our business.
We rely to a significant degree upon credit extended by many of our manufacturers and suppliers in order to meet our working capital needs.
−Removed: Credit terms vary from vendor to vendor but typically allow us zero to 120 days to pay for the products.
−Removed: However, notwithstanding the foregoing, there are instances when we are required to pay for gear in advance of it being manufactured and delivered to us.
+Added: Credit terms vary from vendor to vendor but typically vendors allow us zero to 120 days to pay for the products.
+Added: However, notwithstanding the foregoing, there are instances when we are required to pay for products in advance of them being manufactured and delivered to us.
We may also utilize borrowings under our revolving credit facility to provide working capital, and access to external debt financing has historically been and will likely continue to be very important to us.
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Additional financing may not be available on terms acceptable to us or at all.
−Removed: In particular, our access to other debt financing is limited by the negative covenant in our credit agreement restricting our ability to incur other indebtedness, as well as the financial covenants therein prohibiting our Consolidated Total Net Leverage Ratio from exceeding 3.75 to 1.0 from the quarter ending December 31, 2022 through and including March 31, 2023, 3.5 to 1.0 for the quarter ending June 30, 2023, 3.25 to 1.0 from the quarter ending September 30, 2023 through and including December 31, 2023, and not exceeding 3.0 to 1.0 from the quarter ended March 31, 2024 and each quarter thereafter or our Consolidated Interest Coverage Ratio being less than 3.0 to 1.0 for the quarter ending December 31, 2022, 2.5 to 1.0 from the quarter ending March 31, 2023 through and including December 31, 2023, and 3.0 to 1.0 from the quarter ended March 31, 2024 and each quarter thereafter (both tested quarterly on a trailing four fiscal quarter basis).
+Added: In particular, our access to other debt financing is limited by the negative covenant in our credit agreement restricting our ability to incur other indebtedness, as well as the financial covenants therein prohibiting our Consolidated Total Net Leverage Ratio from exceeding 3.25 to 1.00 for the quarter ended December 31, 2023, and 3.00 to 1.00 from the quarter ending March 31, 2024 and each quarter thereafter or our Consolidated Interest Coverage Ratio being less than 2.50 to 1.00 for the quarter ended December 31, 2023, and 3.00 to 1.00 from the quarter ending March 31, 2024 and each quarter thereafter (both tested quarterly on a trailing four fiscal quarter basis).
As a result, such restrictions could limit, perhaps substantially, the amount of indebtedness we are permitted to borrow under other debt arrangements.
To the extent we incur additional indebtedness under our revolving credit facility or are required to incur indebtedness from other sources (if available and if permitted by the credit facility) to provide working capital, it could increase our interest expense and expose us to other risks of leverage.
−Removed: Any inability to meet our working capital or other cash needs as and when required would likely seriously harm our business, results of operations and financial condition and adversely affect our growth prospects and stock price and could require, among other things, that we reduce expenses, which might require us to reduce shipments of our gear or our inventory levels substantially or to delay or curtail the development, commercialization and marketing of our gear.
+Added: Any inability to meet our working capital or other cash needs as and when required would likely seriously harm our business, results of operations and financial condition and adversely affect our growth prospects and stock price and could require, among other things, that we reduce expenses, which might require us to reduce shipments of our products or our inventory levels substantially or to delay or curtail the development, commercialization and marketing of our products.
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.
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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.
−Removed: 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.
+Added: 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
+Added: Corsair Gaming, Inc.
+Added: | 2023 Form 10-K | 22
+Added: 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.
As a result, any breach or default of this nature may seriously harm our business.
Restrictions under our credit facilities .
−Removed: We must comply with covenants under our current credit facilities, which require the maintenance of a maximum Consolidated Total Net Leverage Ratio of 3.75 to 1.0 from the quarter ending December 31, 2022 through and including March 31, 2023, 3.5 to .1.0 for the quarter ending June 30, 2023, 3.25 to 1.0 from the quarter ending September 30, 2023 through and including December 31, 2023, and not exceeding 3.0 to 1.0 from the quarter ended March 31, 2024 and each quarter thereafter and a minimum Consolidated Interest Coverage Ratio of 3.0 to 1.0 for the quarter ending December 31, 2022, 2.5 to 1.0 from the quarter ending March 31, 2023 through and including December 31, 2023, and not less than 3.0 to 1.0 from the quarter ended March 31, 2024 and each quarter thereafter (as defined in our credit facilities).
+Added: We must comply with covenants under our current credit facilities, which require the maintenance of a maximum Consolidated Total Net Leverage Ratio of 3.25 to 1.00 for the quarter ended December 31, 2023, and 3.00 to 1.00 from the quarter ending March 31, 2024 and each quarter thereafter and a minimum Consolidated Interest Coverage Ratio of 2.50 to 1.00 for the quarter ended December 31, 2023, and 3.00 to 1.00 from the quarter ending March 31, 2024 and each quarter thereafter (as defined in our credit facilities).
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.
Our credit facilities also include covenants that limit or restrict our ability to, among other things, incur liens on our properties, make acquisitions and other investments and sell assets, in each case, subject to specified exceptions.
−Removed: In addition to the covenants described in the preceding sentence, we are also prohibited from incurring indebtedness other than debt owed to the lenders under our credit facilities, debt associated with certain liens permitted by our credit facilities, certain subordinated debt and other specified
+Added: In addition to the covenants described in the preceding paragraph, we are also prohibited from incurring indebtedness other than debt owed to the lenders under our credit facilities, debt associated with certain liens permitted by our credit facilities, certain subordinated debt and other specified exceptions.
Our credit facilities also contain restrictions on our ability to pay dividends or make distributions in respect of our common stock or redemptions or repurchases of our common stock.
−Removed: We conduct our operations and sell our gear internationally and the effect of business, legal and political risks associated with international operations may seriously harm our business.
+Added: We conduct our operations and sell our products internationally and the effect of business, legal, geopolitical and economic risks associated with international operations may seriously harm our business.
Sales to customers outside the United States accounted for 54.8% and 54.6% our net revenue in 2023 and 2022, respectively.
−Removed: In addition, substantially all of the gear that we sell is manufactured at facilities in Asia.
+Added: In addition, substantially all of the products that we sell are manufactured at facilities in Asia.
Our international sales and operations are subject to a wide range of risks, which may vary from country to country or region to region.
3 unchanged sentences
• political and economic instability;
−Removed: problems with the transportation or delivery of our gear;
+Added: • problems with the transportation or delivery of our products;
• issues arising from cultural or language differences and labor unrest;
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• difficulties enforcing our contractual and intellectual property rights, especially in those foreign countries that do not respect and protect intellectual property rights to the same extent as the United States and European countries;
−Removed: the risk that trade to or from some foreign countries, or companies in foreign countries that manufacture our gear or supply components that are used in our gear, may be affected by political tensions, trade disputes and similar matters, particularly between China and Taiwan, China and the United States, Russia and Ukraine, and the United States and Russia;
+Added: • the risk that trade to or from some foreign countries, or companies in foreign countries that manufacture our products or supply components that are used in our products, may be affected by political tensions, trade disputes and similar matters, particularly between China and Taiwan, China and the United States, Russia and Ukraine, the United States and Russia, and Israel and Hamas;
• United States and foreign trade restrictions, including those that may limit the importation of technology or components to or from various countries or impose tariffs or quotas;
−Removed: difficulties or increased costs in establishing sales and distribution channels in unfamiliar markets, with their own market characteristics and competition;
+Added: • difficulties or increased costs in establishing sales and distribution channels in unfamiliar markets, with local market characteristics and competition;
• imposition of currency exchange controls or taxes that make it impracticable or costly to repatriate funds from foreign countries.
+Added: Corsair Gaming, Inc.
+Added: | 2023 Form 10-K | 23
To the extent we successfully execute our strategy of expanding into new geographic areas, these and similar risks will increase.
6 unchanged sentences
Tax authorities are increasingly scrutinizing the tax positions of multinational companies.
−Removed: or other foreign tax authorities change applicable tax laws, or if there is a change in
−Removed: interpretation of existing law, our overall liability could increase, and our business, financial condition and results of operations may be harmed.
+Added: or other foreign tax authorities change applicable tax laws, or if there is a change in interpretation of existing law, our overall liability could increase, and our business, financial condition and results of operations may be harmed.
In particular, the U.S.
−Removed: government may enact significant changes to the taxation of business entities including, among others, an increase in the corporate income tax rate, the imposition of minimum taxes or surtaxes on certain types of income, significant changes to the taxation of income derived from international operations, and an addition of further limitations on the deductibility of business interest.
+Added: government may enact significant changes to the taxation of business entities.
For example, beginning in 2022, the Tax Cuts and Jobs Act of 2017 requires U.S.
1 unchanged sentence
Any such expenditures attributable to research conducted outside the United States must be capitalized and amortized over a 15-year period.
−Removed: In addition, the Inflation Reduction Act of 2022 recently became law and imposes a minimum tax on certain corporations with book income of at least $1 billion, subject to certain adjustments, and a 1% excise tax on certain stock buybacks and similar corporate actions.
−Removed: In addition, the Organization for Economic Co-Operation and Development has released guidance and blueprints covering various topics, including a global minimum effective tax rate 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.
+Added: In addition, the Inflation Reduction Act of 2022 imposes a minimum tax of 15% on certain corporations with book income of at least $1 billion, subject to certain adjustments, and a 1% excise tax on certain stock buybacks and similar corporate actions.
+Added: While certain other draft legislation has been proposed in the U.S., the likelihood of any proposed changes to the tax law being enacted or implemented is unclear, and we are currently unable to predict whether such changes will occur.
+Added: If any such changes are implemented, we are currently unable to predict the ultimate impact on our business and therefore there can be no assurance our business will not be adversely affected.
+Added: 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.
+Added: For example, on December 12, 2022, the European Union member states agreed to implement the “Pillar Two” global corporate minimum tax rate as of January 1, 2024.
+Added: 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.
+Added: The enactment of this and similar legislation could significantly increase our tax obligations in many countries where we do business.
Our effective tax rate could also increase due to several factors, including:
8 unchanged sentences
Finally, because we have substantial operations in a number of locations worldwide, tax authorities in various jurisdictions may raise questions concerning matters such as transfer pricing, whether revenues or expenses should be attributed to particular countries, the presence or absence of permanent establishments in particular countries and similar matters.
−Removed: In addition, we have engaged in a number of material restructuring transactions in various jurisdictions, and the tax positions we have adopted in connection with these restructuring transactions may be subject to challenge.
+Added: In addition, we have engaged in a number of material restructuring transactions in various jurisdictions, and the tax positions we have adopted in connection with these
+Added: Corsair Gaming, Inc.
+Added: | 2023 Form 10-K | 24
+Added: restructuring transactions may be subject to challenge.
Accordingly, a material assessment by a tax authority in any jurisdiction could require that we make significant cash payments without reimbursement.
8 unchanged sentences
System security and data protection breaches, as well as cyber-attacks, could disrupt our operations, reduce our expected revenue and increase our expenses, which may seriously harm our business.
−Removed: Security breaches, computer malware and cyber-attacks have become more prevalent and sophisticated in recent years.
+Added: We rely on the reasonably secure processing of personal, confidential and other sensitive information in our computer systems, hardware, software, technology infrastructure and online sites and networks as well as those provided by third parties, collectively IT Systems.
+Added: Security breaches, computer malware and cyber-attacks have become more prevalent and sophisticated in recent years, creating an evolving landscape of cybersecurity risks that threaten the confidentiality, integrity and availability of our IT systems and data that we and our providers process.
These threats are constantly evolving, making it increasingly difficult to successfully defend against them or implement adequate preventative measures.
−Removed: These malicious attempts have occurred on our systems in the past and are expected to occur in the future.
−Removed: Experienced computer programmers, hackers and employees 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.
−Removed: These hackers may also develop and deploy viruses, worms and other malicious software programs that attack or otherwise exploit security vulnerabilities in our systems.
−Removed: We have taken steps to put in place safeguards designed to protect the security of all the information we process, but despite these efforts, we cannot guarantee that we will not suffer successful 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.
−Removed: For example, in early 2021, we discovered the exploitation by hackers of our subsidiary SCUF’s servers, which may have enabled such hackers to collect information provided by our customers, including payment card information, which is handled by our third-party ecommerce service provider.
−Removed: Such hackers utilized the credentials we had provided to another third-party to inject a script, which was active for a limited amount of time, that collected this information provided by customers.
−Removed: Additionally, for portions of our information technology 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.
+Added: These malicious attacks have occurred on our IT Systems in the past and are expected to occur in the future.
+Added: 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.
+Added: 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.
+Added: Further, we offer the flexibility to work remotely, which introduces heightened cybersecurity risks as remote working environments can be less secure and more susceptible to cyber-attacks due to cybersecurity risks associated with managing remote computing assets and security vulnerabilities that are present in many non-corporate and home networks.
+Added: 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.
+Added: 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.
There can be no assurance that the privacy and security related measures and safeguards we have put in place in relation to these third parties will be effective to protect us and/or the relevant personal information from the risks associated with the third-party storage, transmission and other processing of such information.
1 unchanged sentence
Data security breaches may also result from non-technical means, such as actions by an employee with access to our systems.
−Removed: To defend against security threats, both to our internal systems and those of our customers, we must continuously engineer more secure products and enhance security and reliability features, which may result in increased expenses.
−Removed: Actual or perceived breaches of our security measures, those of third-parties or the accidental loss, inadvertent disclosure or unapproved dissemination of proprietary information or 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 and potential liability, paying damages, regulatory inquiries, investigations or actions, damage to our brand and reputation or other serious harm to our business.
+Added: To defend against security threats, both to our internal systems and those of our customers, we must continuously engineer more secure products and enhance security and reliability features, which may result in increased expenses, and does not guarantee that we will be able to anticipate, detect, investigate, remediate or recover from cybersecurity incidents and attacks or avoid a material adverse impact to our IT Systems, data or business.
+Added: 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.
Due to concerns about data security and integrity, a growing number of legislative and regulatory bodies have adopted breach notification and other requirements in the event that information subject to such laws is accessed by unauthorized persons.
−Removed: Complying with the numerous and complex regulations in the event of a data security breach could be expensive and difficult, and failure to comply with these regulations could subject us to regulatory scrutiny and additional liability.
+Added: Complying with the numerous and complex regulations in the event of a data security breach could be expensive and difficult, and failure to comply with these regulations could subject us to regulatory
+Added: Corsair Gaming, Inc.
+Added: | 2023 Form 10-K | 25
+Added: scrutiny and additional liability.
We may also be contractually required to notify customers or other counterparties of a security incident, including a data security breach.
5 unchanged sentences
federal and state and foreign laws, regulations and industry standards relating to data privacy and security, and our failure or perceived failure to comply as well as actions by regulatory authorities or changes in legislation and regulation in the jurisdictions in which we operate could have a material adverse effect on our business.
−Removed: In connection with certain of our gear, we collect information related to our gamers and streamers.
−Removed: This information is increasingly subject to legislation and regulations in numerous jurisdictions around the world.
+Added: In connection with certain of our products, we collect information related to our gamers and creators.
+Added: This information is increasingly subject to an ever-evolving patchwork of legislation, regulations and industry standards in numerous jurisdictions around the world.
Government actions are typically intended to protect the privacy and security of personal information and its collection, storage, transmission, use and distribution in or from the governing jurisdiction and other processing.
−Removed: In addition, because various jurisdictions have different laws and regulations concerning the use, storage, transmission and other processing of such information, we may face requirements that pose compliance challenges in existing markets as well as new international markets that we seek to enter.
−Removed: We are subject to a variety of laws, regulations, and industry standards that relate to the collection, storing, disclosing, using, transfer or other processing and protecting of data about individuals.
−Removed: These laws and regulations constantly evolve and remain subject to significant change.
−Removed: In addition, the application and interpretation of these laws and regulations are often uncertain.
−Removed: Because we store, process and use data, some of which contain personal data, we are subject to complex and evolving federal, state and local laws and regulations regarding data privacy and data security.
−Removed: federal and state governments and agencies may in the future enact
−Removed: new legislation and promulgate new regulations governing collection, use, disclosure, storage, transmission , destruction or other processing of personal data and other information.
−Removed: New privacy laws add additional complexity, requirements, restrictions and potential legal risk, require additional investment in resources for compliance programs, and could impact trading strategies and availability of previously useful data.
+Added: and foreign governments and agencies may in the future enact new legislation and promulgate new regulations governing collection, use, disclosure, storage, transmission, destruction or other processing of personal data and other information.
+Added: As such, and because various jurisdictions have different laws and regulations concerning the use, storage, transmission and other processing of such information, we may face requirements that pose compliance challenges in existing markets as well as new international markets that we seek to enter, potentially requiring additional investment in resources for compliance programs, and impacting business operations and availability of previously useful data.
For example, in the United States, the Federal Trade Commission and state regulators enforce a variety of data privacy issues, such as promises made in privacy policies or failures to appropriately protect information about individuals, as unfair or deceptive acts or practices in or affecting commerce in violation of the Federal Trade Commission Act or similar state laws.
In addition, the California Consumer Privacy Act, as amended by the California Privacy Rights Act (the “CCPA”) creates individual privacy rights for California consumers and increases the privacy and security obligations of entities handling certain information about individuals.
−Removed: For example, the CCPA gives California residents rights to access, delete or correct their personal information, opt out of certain personal information use and disclosure and receive detailed information about how their personal information is used.
+Added: For example, the CCPA gives California residents rights to access, delete or correct their personal information and opt out of certain processing of personal information.
Failure to comply with the CCPA creates additional risks including enforcement by the California Attorney General or the California Privacy Protection Agency, limited private rights of actions for certain data breaches and damage to reputation.
−Removed: Since the CCPA went into effect, comprehensive privacy statutes that share similarities with the CCPA have been enacted in Virginia, Colorado, Connecticut and Utah.
−Removed: 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.
−Removed: In Europe and the U.K., we are also subject to foreign legislation, 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”).
+Added: Since the CCPA went into effect, comprehensive privacy statutes that share similarities with the CCPA have been enacted in Virginia, Colorado, Connecticut, Utah and other states.
+Added: 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.
+Added: 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 GDPR imposes comprehensive data privacy compliance obligations in relation to our collection, processing, sharing, disclosure, transfer and other use of personal information, including a principal of accountability and the obligation to demonstrate compliance through policies, procedures, training and audit.
3 unchanged sentences
complying with rights for data subjects with regard to their personal information (including access, erasure (the right to be “forgotten”) and portability);
−Removed: ensuring appropriate safeguards are in place where personal data is transferred out of the European Economic Area (“EEA”) and the U.K.;
limitations on retention of personal information;
−Removed: and introducing mandatory data breach notification requirements to regulators (and in certain cases, individuals).
+Added: and mandatory data breach notification requirements to regulators (and in certain cases, individuals).
The EU GDPR and UK GDPR also regulate cross-border transfers of personal information out of the EEA and the U.K.
−Removed: Specifically, on July 16, 2020, the Court of Justice of the European Union (“CJEU”) invalidated Decision 2016/1250 on the adequacy of the protection provided by the EU-U.S.
+Added: Recent legal developments in Europe have created uncertainty regarding transfers of data from the EEA and the U.K.
+Added: and other jurisdictions.
+Added: For example, in 2020, the Court of Justice of the European Union (“CJEU”) invalidated Decision 2016/1250 on the adequacy of the protection provided by the EU-U.S.
Privacy Shield Framework (the “Privacy Shield”), under which personal information could be transferred from the EEA (and the U.K.) to relevant self-certified U.S.
The CJEU further noted that reliance on the standard contractual clauses (a standard form of contract approved by the European Commission as an adequate personal data transfer mechanism and potential alternative to the Privacy Shield) alone may not necessarily be sufficient in all circumstances and that transfers must be assessed on a case-by-case basis.
−Removed: However, President Joe Biden, on October 7, 2022, signed an executive order to implement the new EU-US Data Privacy Framework.
−Removed: The new EU-US Data Privacy Framework addresses issues raised in Schrems II, that led the CJEU to invalidate the EU’s adequacy decision for the EU-US Privacy Shield.
−Removed: President Biden’s signed executive order has given impetus to the European Commission to prepare a new draft adequacy decision in relation to the US, and then launch its adoption procedure.
−Removed: Once the European Commission has adopted the final adequacy decision, expected in March 2023, data can flow freely from the EU to US companies that are certified under the new Privacy Shield framework (“EU-US Data Privacy Protection Framework”).
−Removed: Further, the European Commission’s adoption of the final adequacy decision will allow us to rely on the newest standard contractual clauses of June 4, 2021, already implemented in our intragroup, customer and vendor agreements.
−Removed: Notwithstanding the above, 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;
+Added: In 2022, President Joe Biden signed an executive order to implement the new EU-US Data Privacy Framework, which have been effective transfer mechanisms to self-certified US entities under the framework (and the U.K.
+Added: extension) since July 2023 and October 2023, respectively (“EU-US Data Privacy Protection Framework”).
+Added: We rely on the newest standard contractual clauses of June 4, 2021, for our intragroup, customer and vendor agreements.
+Added: Notwithstanding the above, we expect the existing legal complexity and uncertainty regarding international personal data transfers to continue.
+Added: 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;
−Removed: we may have to implement revised standard contractual clauses for existing intragroup, customer and vendor arrangements within required time frames;
+Added: we may have to implement revised standard contractual
+Added: Corsair Gaming, Inc.
+Added: | 2023 Form 10-K | 26
+Added: 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.
−Removed: We are also subject to evolving EU and U.K.
−Removed: privacy laws on cookies, tracking technologies and e-marketing.
−Removed: In the EU and the U.K.
+Added: We are also subject to evolving privacy laws on cookies, tracking technologies and e-marketing.
+Added: For example, in the EU and the U.K.
under national laws derived from the ePrivacy Directive, informed consent is required for the placement of a cookie or similar technologies on a user’s device and for direct electronic marketing.
The GDPR also imposes conditions on obtaining valid consent for cookies, such as a prohibition on pre-checked consents and a requirement to ensure separate consents are sought for each type of cookie or similar technology.
−Removed: Recent European court and regulator decisions are driving increased attention to cookies and tracking
−Removed: technologies.
−Removed: If the trend of increasing 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.
−Removed: In light of the complex and evolving nature of EU, EU Member State and U .
−Removed: privacy laws on cookies and tracking technologies , it may lead to broader restrictions and impairments on our marketing and personalization activities and may negatively impact our efforts to understand users .
−Removed: Compliance with existing and emerging privacy and cybersecurity laws, regulations and industry standards could result in increased compliance costs and/or lead to changes in business practices and policies, 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.
−Removed: W e may also face civil claims including representative actions and other class action type litigation (where individuals have suffered harm), potentially amounting to significant compensation or damages liabilities, as well as associated costs, diversion of internal resources, and reputational harm.
−Removed: We may be adversely affected by the financial condition of retailers and distributors to whom we sell our gear and may also be adversely affected by the financial condition of our competitors.
+Added: and European court and regulator decisions are driving increased attention to cookies and tracking technologies.
+Added: 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.
+Added: In light of the complex and evolving nature of privacy laws on cookies and tracking technologies, it may lead to broader restrictions and impairments on our marketing and personalization activities and may negatively impact our efforts to understand users.
+Added: Compliance with existing and emerging privacy and cybersecurity laws, regulations and industry standards could result in increased compliance costs and/or lead to changes in business practices and policies.
+Added: 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.
+Added: We may also face civil claims including representative actions and other class action type litigation (where individuals have suffered harm), potentially amounting to significant compensation or damages liabilities, as well as associated costs, diversion of internal resources, and reputational harm.
+Added: We may be adversely affected by the financial condition of retailers and distributors to whom we sell our products and may also be adversely affected by the financial condition of our competitors.
Retailers and distributors of consumer electronics products have, from time to time, experienced significant fluctuations in their businesses and some of them have become insolvent.
−Removed: A retailer or distributor experiencing such difficulties will generally not purchase and sell as much of our gear as it would under normal circumstances and may cancel orders.
+Added: A retailer or distributor experiencing such difficulties will generally not purchase and sell as many of our products as it would under normal circumstances and may cancel orders.
In addition, a retailer or distributor experiencing financial difficulties generally increases our exposure to uncollectible receivables.
−Removed: Moreover, if one of our distributor or retailer customers experiences financial distress or bankruptcy, they may be required to liquidate their inventory of our gear, or similar products that compete with our gear, at reduced prices, which can result in substantial over-supply and reduced demand for our gear over the short term.
+Added: 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.
If any of these circumstances were to occur, it could seriously harm our business.
Likewise, our competitors may from time to time experience similar financial difficulties or may elect to terminate their sales of certain products.
−Removed: If one of our competitors experiences financial distress or bankruptcy and is forced to liquidate inventory or exits a product line and disposes of inventory at reduced prices, this may also result in over-supply of and reduced demand for our gear and could have a short-term adverse effect on our results of operations and financial condition.
+Added: If any of our competitors experience financial distress or bankruptcy and are forced to liquidate inventory or exit a product line and disposes of inventory at reduced prices, this may also result in over-supply of and reduced demand for our products and could have a short-term adverse effect on our results of operations and financial condition.
Our online operations are subject to numerous risks that may seriously harm our business.
5 unchanged sentences
Any failure, or perceived failure, by us to comply with any of these laws or regulations could result in damage to our reputation, a loss in business and proceedings or actions against us by governmental entities or others.
−Removed: Any such proceeding or action could hurt our reputation, force us to spend significant amounts in defense of these proceedings, distract our management, increase our costs of doing business and decrease the use of our sites by gamers, streamers and suppliers and may result in the imposition of monetary liability.
+Added: Any such proceeding or action could hurt our reputation, force us to spend significant amounts in defense of these proceedings, distract our management, increase our costs of doing business and decrease the use of our sites by gamers and creators and may result in the imposition of monetary liability.
In addition, our online stores are partially handled by a third-party ecommerce service provider.
We rely on this service provider to handle, among other things, payment and processing of online sales.
−Removed: If the service provider does not perform these functions satisfactorily, we may find another third-party service provider or undertake such operations ourselves, but we may not be able to successfully do either.
+Added: If the service provider does not perform these functions satisfactorily, we may find another third-party service provider or undertake such operations ourselves, but we may not be able to
+Added: Corsair Gaming, Inc.
+Added: | 2023 Form 10-K | 27
+Added: successfully do either.
In either case, our online sales and our customer service reputation could be adversely affected which, in turn, may seriously harm our business.
1 unchanged sentence
Depending on market and economic conditions in future periods, we may implement restructuring initiatives.
−Removed: As a result of these initiatives, we could incur restructuring charges, lose key personnel and experience disruptions in our operations and difficulties in delivering our gear.
+Added: As a result of these initiatives, we could incur restructuring charges, lose key personnel and experience disruptions in our operations and difficulties in delivering our products.
We are required to test goodwill, intangible assets and other long-lived assets for recoverability and may be required to record charges if there are indicators of impairment, and we have in the past recognized impairment charges.
−Removed: As of December 31 , 2022, we had approximately $ 347.7 million of goodwill, $ 216.
−Removed: 3 million of intangible assets and $ 84.2 million of other long-lived assets.
+Added: As of December 31, 2023, we had approximately $354.7 million of goodwill, $188.0 million of intangible assets and $74.9 million of other long-lived assets.
One of our strategies is to grow through acquisitions of other businesses or technologies and, if we are successful in doing so, these acquisitions may result in goodwill and other long-lived assets.
−Removed: The risk that we will be required to recognize impairment charges is also heightened by the fact that the life cycles of much of the gear we sell are relatively short, which increases the possibility that we may be required to recognize impairment charges for obsolete inventory.
+Added: The risk that we will be required to recognize impairment charges is also heightened by the fact that the life cycles of much of the products we sell are relatively short, which increases the possibility that we may be required to recognize impairment charges for obsolete inventory.
Impairment charges will adversely affect our operating results and could seriously harm our business.
−Removed: Our future success depends to a large degree on 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.
+Added: 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.
−Removed: We also consider the Elgato, Origin, and SCUF brands, proprietary technology brands such as iCUE and Slipstream, and major product family brands such as Corsair ONE, Dark Core, Dominator, Glaive, Harpoon, Ironclaw, K70, K100, Nightsword, Scimitar, Vengeance, Virtuoso and Void to be important to our business.
+Added: 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 rely on a combination of copyright, trademark, patent and other intellectual property laws and confidentiality procedures and contractual provisions such as nondisclosure terms to protect our intellectual property.
−Removed: Although we hold a trademark registration on the Corsair name in the United States and a number of other countries, the Corsair name does not have trademark protection in other parts of the world, including some major markets, and we may be unable to register the Corsair name as a trademark in some countries.
−Removed: Likewise, we hold a trademark registration on certain brands such as K70 only in the United States, Australia and New Zealand and therefore such brands do not have trademark protection in other parts of the world.
−Removed: If third parties misappropriate or infringe on our brands or we are unable to protect our brands, or if third parties use the Corsair, Corsair ONE, Dark Core, Dominator, Elgato, Glaive, Harpoon, iCUE, Ironclaw, K70, K100, Nightsword, Origin, SCUF, Slipstream, Scimitar, Vengeance, Virtuoso and Void brand names, or other brand names we maintain, to sell their products in countries where we do not have trademark protection, it may seriously harm our business.
We hold a limited number of patents and pending patent applications.
It is possible that any patent owned by us will be invalidated, deemed unenforceable, circumvented or challenged and that our pending or any future patent applications will not be granted.
−Removed: 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 gear, or design around any intellectual property rights we may have.
+Added: 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.
4 unchanged sentences
We have taken steps in the past to enforce our intellectual property rights and expect to continue to do so in the future.
−Removed: However, it may not be practical or cost-effective for us to enforce our rights with respect to certain items of intellectual property rights fully, or at all, particularly in developing countries where the enforcement of intellectual property rights may be more difficult than in the United States.
+Added: However, it may not be practical or cost-effective for us to enforce our rights with respect to certain items of intellectual property fully, or at all, particularly in developing countries where the enforcement of intellectual property rights may be more difficult than in the United States.
It is also possible that, given the costs of obtaining patent protection, we may choose not to seek patent protection for certain items of intellectual property that may later turn out to be important.
3 unchanged sentences
Further, the terms of many open source licenses have not been interpreted by U.S.
−Removed: courts, and there is a risk that such licenses could be construed in a
−Removed: manner that imposes unanticipated conditions or restrictions on our ability to market or commercialize our products.
+Added: courts, and there is a risk that such licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to market or commercialize our products.
As a result, we may face claims from third parties claiming ownership of what we believe to be open source software.
−Removed: In addition, by the terms of some open source licenses, under certain conditions, we could be required to release our proprietary source code, and to make our proprietary software available under open source licenses, including authorizing further modification and redistribution.
+Added: In addition, by the terms of some open source licenses, under certain conditions, we could be required to release our proprietary source code, and to make our
+Added: Corsair Gaming, Inc.
+Added: | 2023 Form 10-K | 28
+Added: proprietary software available under open source licenses, including authorizing further modification and redistribution.
These claims or requirements could result in litigation and could require us to purchase a costly license or cease offering the implicated products unless and until we can re-engineer them to avoid infringement or release of our proprietary source code.
8 unchanged sentences
For example, in the past we have settled claims relating to infringement allegations and agreed to make royalty or license payments in connection with such settlements.
−Removed: An adverse determination could require that we pay damages, which could be substantial, or stop using technologies found to be in violation of a third-party’s rights and could prevent us from selling some of our gear.
+Added: An adverse determination could require that we pay damages, which could be substantial, or stop using technologies found to be in violation of a third-party’s rights and could prevent us from selling some of our products.
In order to avoid these restrictions, we may have to seek a license for the technology.
1 unchanged sentence
As a result, we may be required to develop alternative non-infringing technologies, which could require significant effort and expense and might not be successful or, if alternative non-infringing technologies already exist, we may be required to license those technologies from third parties, which may be expensive or impossible.
−Removed: If we cannot license or develop technologies for any infringing aspects of our business, we may be forced to halt sales of our gear incorporating the infringing technologies and may be unable to compete effectively.
+Added: 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.
3 unchanged sentences
In addition, typhoons and other severe weather systems frequently affect Taiwan.
−Removed: Most of the third-party facilities where our gear and some of the components used in our gear is manufactured are located in China, Taiwan, Southeast Asia and other areas that are known for seismic activity and other natural disasters.
+Added: 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.
2 unchanged sentences
We are subject to various environmental laws, conflict mineral-related provisions of the Dodd-Frank Act and other regulations that could impose substantial costs upon us and may seriously harm our business.
−Removed: Our operations, properties and the gear we sell are subject to a variety of U.S.
+Added: 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.
−Removed: Our failure to comply with present and future requirements under these laws and regulations, or environmental contamination or releases of hazardous materials on our leased premises, as well as through disposal of our gear, could cause us to incur substantial costs, including clean-up costs, personal injury and property damage claims, fines and penalties, costs to redesign our gear or upgrade our facilities and legal costs, or require us to curtail our operations.
−Removed: Environmental contamination or releases of hazardous materials may also subject us to claims of property damage or personal injury, which could result in litigation and require us to make substantial payments to satisfy adverse judgments or
−Removed: pay settlements.
+Added: Our failure to comply with present and future requirements under these laws and regulations, or environmental contamination or releases of hazardous materials on our leased premises, as well as through disposal of our products, could cause us to incur substantial costs, including clean-up costs, personal injury and property damage claims, fines and penalties, costs to redesign our products or upgrade our facilities and legal costs, or require us to curtail our operations.
+Added: Environmental contamination or releases of hazardous materials may also subject us to claims of property damage or personal injury, which could result in litigation and require us to make substantial payments to satisfy adverse judgments or pay settlements.
Liability under environmental laws can be joint and several and without regard to comparative fault.
We also expect that our operations will be affected by new environmental laws and regulations on an ongoing basis, which will likely result in additional costs.
−Removed: Environmental laws and regulations could also require that we redesign our gear or change how our gear is made, any of which could seriously harm our business.
−Removed: The costs of complying with environmental laws and regulations or the effect of any claims or liability concerning or resulting from noncompliance or environmental contamination could also seriously harm our business.
+Added: Environmental laws and regulations could also require that we redesign our products or change how our products are made, any of which could seriously harm our business.
+Added: The costs of complying with environmental laws and regulations
+Added: Corsair Gaming, Inc.
+Added: | 2023 Form 10-K | 29
+Added: or the effect of any claims or liability concerning or resulting from noncompliance or environmental contamination could also seriously harm our business.
Under the Dodd-Frank Act, the SEC adopted disclosure and reporting requirements for companies that use “conflict” minerals originating from the Democratic Republic of Congo or adjoining countries.
−Removed: We continue to incur costs associated with complying with these requirements, such as costs related to developing internal controls for the due diligence process, determining the source of any conflict minerals used in our gear, auditing the process and reporting to our customers and the SEC.
+Added: We continue to incur costs associated with complying with these requirements, such as costs related to developing internal controls for the due diligence process, determining the source of any conflict minerals used in our products, auditing the process and reporting to our customers and the SEC.
In addition to the SEC regulation, the European Union, China and other jurisdictions are developing new policies focused on conflict minerals that may impact and increase the cost of our compliance program.
Also, since our supply chain is complex, we may face reputational challenges if we are unable to sufficiently verify the origins of the subject minerals.
−Removed: Moreover, we are likely to encounter challenges to satisfy those customers who require that all of the components of our gear are certified as “conflict free.” If we cannot satisfy these customers, they may choose a competitor’s products.
+Added: Moreover, we are likely to encounter challenges to satisfy those customers who require that all of the components of our products are certified as “conflict free.” If we cannot satisfy these customers, they may choose a competitor’s products.
federal government has issued new policies for federal procurement focused on eradicating the practice of forced labor and human trafficking.
−Removed: In addition, the United Kingdom and the State of California have issued laws that require us to disclose our policy and practices for identifying and eliminating forced labor and human trafficking in our supply chain.
+Added: In addition, the U.K.
+Added: and the State of California have issued laws that require us to disclose our policy and practices for identifying and eliminating forced labor and human trafficking in our supply chain.
While we have a policy and management systems to identify and avoid these practices in our supply chain, we cannot guarantee that our suppliers will always be in conformance to these laws and expectations.
1 unchanged sentence
Risks Related to Our Common Stock
−Removed: We are controlled by EagleTree, whose interests in our business may be different than yours.
+Added: 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.
6 unchanged sentences
EagleTree may acquire or seek to acquire assets that we seek to acquire and, as a result, those acquisition opportunities may not be available to us or may be more expensive for us to pursue.
−Removed: We are a “controlled company” within the meaning of the Nasdaq rules and, as a result, will qualify for, and intend to rely on, exemptions from certain corporate governance requirements.
+Added: 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.
1 unchanged sentence
As a result, we are a “controlled company” within the meaning of the corporate governance standards of the Nasdaq Global Select Market, or Nasdaq.
−Removed: Under these rules, a
−Removed: 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:
+Added: 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;
+Added: Corsair Gaming, Inc.
+Added: | 2023 Form 10-K | 30
• 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.
18 unchanged sentences
• changes in accounting principles;
−Removed: the outbreak of epidemics or pandemics, such as the coronavirus pandemic;
−Removed: 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;
+Added: • the outbreak of epidemics or pandemics, such as the COVID-19 pandemic;
+Added: • 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;
• changes in general market and economic conditions.
2 unchanged sentences
An active, liquid and orderly market for our common stock may not be maintained.
−Removed: Our stock only recently began trading on Nasdaq, but we can provide no assurance that we will be able to maintain an active trading market on Nasdaq or any other exchange in the future.
+Added: While our stock is available to be traded on Nasdaq, we can provide no assurance that we will be able to maintain an active trading market on Nasdaq or any other exchange in the future.
If an active market for our common stock is not maintained, it may be difficult for our stockholders to sell shares without depressing the market price for the shares or at all.
−Removed: An inactive market may also impair our ability to raise capital by selling shares and may impair our ability to acquire other businesses, applications, or technologies using our shares as consideration.
+Added: An inactive market may also impair our ability to raise capital by selling shares and may impair our ability to acquire other businesses, applications, or technologies and attract and retain employees using our shares as consideration.
Future sales of our common stock in the public market could cause our stock price to fall.
−Removed: If our existing stockholders sell, or indicate an intention to sell, substantial amounts of our common stock in the public, the trading price of our common stock could decline.
−Removed: Based upon the number of shares outstanding as of December 31, 2022, we had outstanding a total of 101.4 million shares of common stock.
+Added: If our existing stockholders sell, or indicate an intention to sell, substantial amounts of our common stock in the public market, the trading price of our common stock could decline.
+Added: Based upon the number of shares outstanding as of December 31, 2023, we had
+Added: Corsair Gaming, Inc.
+Added: | 2023 Form 10-K | 31
+Added: outstanding a total of 103.3 million shares of common stock.
Of these shares, all of the shares of our common stock sold in the initial public offering, in the secondary offering in January 2021 and in the primary offering in November 2022, are freely tradable, without restriction, in the public market.
17 unchanged sentences
• 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;
−Removed: 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
−Removed: 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;
+Added: • 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;
+Added: Corsair Gaming, Inc.
+Added: | 2023 Form 10-K | 32
• 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.
15 unchanged sentences
We currently intend to invest our future earnings, if any, to fund our growth.
−Removed: Therefore, you are not likely to receive any dividends on your common stock for
−Removed: the foreseeable future.
+Added: Therefore, you are not likely to receive any dividends on your common stock for the foreseeable future.
Since we do not intend to pay dividends, your ability to receive a return on your investment will depend on any future appreciation in the market value of our common stock.
4 unchanged sentences
Moreover, if one or more of the analysts who cover our company downgrade our common stock or if our operating results or prospects do not meet their expectations, the market price of our common stock could decline.
+Added: Corsair Gaming, Inc.
+Added: | 2023 Form 10-K | 33
Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
24 unchanged sentences
An adverse outcome in any such litigation could require us to pay damages, which may include punitive damages, attorneys’ fees and costs.
+Added: Corsair Gaming, Inc.
+Added: | 2023 Form 10-K | 34
As a result, noncompliance or any related enforcement or civil actions could result in governmental sanctions and possible civil or criminal litigation, which could seriously harm our business and result in a significant diversion of management’s attention and resources.
1 unchanged sentence
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.
−Removed: Our gear is manufactured and/or assembled in China and, Taiwan, where we maintain a manufacturing facility, as well as countries in Southeast Asia, and we sell our gear in many countries outside of the United States.
+Added: Our products are manufactured and/or assembled in China and, Taiwan, where we maintain a manufacturing facility, as well as countries in Southeast Asia, and we sell our products in many countries outside of the United States.
Our operations are subject to the U.S.
23 unchanged sentences
In addition, as a public company we are required to document and test our internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act so that our management can certify as to the effectiveness of our internal controls over financial reporting.
−Removed: 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 .
+Added: Likewise, our independent registered public accounting firm is required to provide an
+Added: Corsair Gaming, Inc.
+Added: | 2023 Form 10-K | 35
+Added: attestation report on the effectiveness of our internal controls over financial reporting in our Annual Reports on Form 10-K.
If our management is unable to certify the effectiveness of our internal controls or if our independent registered public accounting firm cannot deliver a report attesting to the effectiveness of our internal controls over financial reporting, or if we identify or fail to remediate material weaknesses in our internal controls, we could be subject to regulatory scrutiny and a loss of public confidence, which could seriously harm our reputation and the market price of our common stock.
9 unchanged sentences
If these requirements divert the attention of our management and personnel from other business concerns, they could seriously harm our business, financial condition and results of operations.
−Removed: The increased costs will decrease our net income or increase our net loss, and may require us to reduce costs in other areas of our business or increase the prices of our gear.
+Added: The increased costs will decrease our net income or increase our net loss and may require us to reduce costs in other areas of our business or increase the prices of our products.
For example, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to incur substantial costs to maintain the same or similar coverage.
5 unchanged sentences
As we look to respond to evolving standards for identifying, measuring, and reporting ESG metrics, our efforts may result in a significant increase in costs and may nevertheless not meet investor or other stakeholder expectations and evolving standards or regulatory requirements, which may negatively impact our financial results, our reputation, our ability to attract or retain employees, our attractiveness as a service provider, investment, or business partner, or expose us to government enforcement actions, private litigation, and actions by stockholders or stakeholders.
−Removed: Unresolved Staff Comments.
+Added: Unresolve d Staff Comments.
+Added: Cybersecurity.
+Added: Risk management and strategy
+Added: We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information.
+Added: Our cybersecurity risk management program includes a cybersecurity incident response plan.
+Added: We design and assess our program based on the National Institute of Standards and Technology Cybersecurity Framework (“NIST CSF”).
+Added: This does not imply that we meet any particular technical standards, specifications, or requirements, only that we use the NIST CSF as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business.
+Added: Our cybersecurity risk management program is integrated into our overall enterprise risk management program, and shares
+Added: Corsair Gaming, Inc.
+Added: | 2023 Form 10-K | 36
+Added: 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.
+Added: Our cybersecurity risk management program includes:
+Added: • risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise IT environment;
+Added: • a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents;
+Added: • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security controls;
+Added: • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents.
+Added: 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.
+Added: We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition.
+Added: Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee (“Committee”) oversight of cybersecurity and other information technology risks.
+Added: The Committee oversees management’s implementation of our cybersecurity risk management program.
+Added: The Committee receives quarterly reports from management on our cybersecurity risks.
+Added: In addition, management updates the Committee, as necessary, regarding any material cybersecurity incidents, as well as any incidents with lesser impact potential.
+Added: The Committee reports to the full Board regarding its activities, including those related to cybersecurity.
+Added: The full Board also receives briefings from management on our cyber risk management program.
+Added: Board members receive presentations on cybersecurity topics from our CIO, internal security staff or external experts as part of the Board’s continuing education on topics that impact public companies.
+Added: 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.
+Added: 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.
+Added: Our 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”).
+Added: Our management team supervises efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel;
+Added: threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us;
+Added: and alerts and reports produced by security tools deployed in the IT environment.
+Added: Our current principal executive office is located in Milpitas, California and consists of approximately 118,000 square feet of space under a lease that expires in August 2032.
+Added: We also lease manufacturing and warehousing facilities in Georgia, Florida, Netherlands and Taiwan, as well as properties in various parts of the United States, Europe and Asia for our product development, sales and service support and administrative functions.
+Added: 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).
+Added: 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.
+Added: Both our Gamer and Creator Peripherals segment and Gaming Components and Systems segment utilize substantially each of our leased facilities.
+Added: We 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.
+Added: Corsair Gaming, Inc.
+Added: | 2023 Form 10-K | 37
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.