What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-02-26 compared with 2024-02-27 · 455 added, 454 removed, 984 unchanged (48% of the section changed)

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We are a leading global provider and innovator of high-performance products for gamers and digital creators, such as streamers, vloggers and broadcasters, many of which build their own PCs using our components.

Our industry-leading gaming products help digital athletes, from casual gamers to committed professionals, perform at their peak across PC or console platforms, and our streaming products enable creators to produce studio-quality content to share with friends or to broadcast to millions of fans.

Our industry-leading gaming products help digital athletes, from casual gamers to committed professionals, perform at their peak across PC or console platforms, and our streaming products enable creators, particularly streamers, to produce studio-quality content to share with friends or to broadcast to millions of fans.

Our PC components products offer our customers multiple options to build their customized gaming and workstation desktop PCs.

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iCUE for gamers and the Elgato streaming suite for content creators, including our Stream Deck control software, which provide unified, intuitive performance, and aesthetic control and customization across their respective product families.

We also offer digital services to enhance the customer experience by integrating esports, coaching, Elgato's marketplace, customer care and extended warranty into our product offerings.

We 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.

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.

We are committed to continuing to grow in our current markets as well as new markets through the development of innovative technologies and by entering into new categories through organic growth or acquisition.

In recent years, we have entered into several new markets, for example the cameras market for content creators and the gaming monitors market for both gamers and content creators.

Includes our high-performance PSUs, cooling solutions, computer cases, and DRAM modules, as well as high-end prebuilt and custom-built gaming PCs and laptops, and gaming monitors, among others.

In recent years, we have entered into several new markets, for example the camera market for content creators and the sim racing market for gamers.

We continue to expand our product portfolio and in 2024, we launched 78 new products.

In July 2023, we completed the acquisition of Drop for a cash purchase consideration of approximately $13.2 million, net of $0.6 million of cash acquired.

Drop, a community-based e-commerce company headquartered in San Francisco, California, specializes in customized DIY keyboards and keycaps.

We expect this acquisition to give us a leading presence in the personalized keyboards market which is one of the fastest growing trends in the gaming peripheral space as well as allow us to offer specialized Corsair and Elgato products to Drop's enthusiast community.

Drop's operating results are included in our Gamer and Creator Peripherals segment with effect from July 14, 2023.

On September 19, 2024, we completed the acquisition of the Fanatec Business for a purchase consideration of $43.7 million.

Refer to Note 4, “Business Combinations-Fanatec Acquisition” for more information on this transaction.

The Fanatec sim racing product line, which fully complements our gaming PCs, gaming and streaming peripherals, and monitors, is expected to expand our business in these markets.

Based on the external analysts’ and management's estimates, t he total addressable market for sim racing in 2024 is approximately $1 billion.

Fanatec’s results of operations are included in our consolidated statements of operations with effect from September 19, 2024.

Summary of Financial Results

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Our gross margin was 24.9%, 24.7%, and 21.6% for the years ended December 31, 2024, 2023, and 2022, respectively.

We had net income (loss) of $(2.6) million, $(54.4) million, and $101.0 million for the years ended December 31, 2023, 2022, and 2021, respectively.

We had net losses of $85.2 million, $2.6 million, and $54.4 million for the years ended December 31, 2024, 2023, and 2022, respectively.

As of December 31, 2024 and 2023, we had cash and restricted cash, in the aggregate, of $109.6 million and $178.6 million, respectively.

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Our business and financial performance depend significantly on worldwide economic conditions.

We face global macroeconomic challenges including ongoing effects of geopolitical conflicts, such as the ongoing war between Russia and Ukraine, the ongoing conflict in Gaza, including the heightened tensions in the Red Sea, and any potential conflicts between China and Taiwan, supply chain constraints, uncertainty in global financial markets and the risk of a recession, inflationary trends, volatility in exchange rates, lingering impacts from the COVID-19 pandemic and evolving dynamics in the global trade environment.

We continue to face global macroeconomic challenges including the ongoing conflicts in Ukraine and the Middle East, the tensions in the Red Sea, and any potential conflicts between China and Taiwan, supply chain constraints, uncertainty in key financial markets and the risk of a recession, inflationary trends, volatility in exchange rates, evolving dynamics in the global trade environment and changes in laws or policies governing the terms of foreign trade, and in particular increased trade restrictions, tariffs or taxes on imports or exports from or to countries where we manufacture or sell our products.

We also experience seasonality in the sale of our products, which may be affected by general economic conditions.

During 2023, we observed continued market uncertainty and inflationary pressures, however, in the second half of 2023, we have observed some recovery in the markets.

In 2022, we experienced elevated industry wide inventory in our distribution channels stemming from overall demand weakness at that time, which led to us recognizing higher inventory impairment related charges in 2022 in order to rationalize our inventory levels to align with the reduced revenue in the period, however, towards the end of 2022 our inventory level began to stabilize and we exited 2023 with normalized inventory levels.

These market dynamics, which we expect will continue in the short-term, have created new and different demand dynamics in our markets and have had significant impacts on our financial results.

The extent of the impact of macroeconomic conditions and geopolitical tensions on our business, sales, results of operations, cash flows and financial condition will depend on future developments, which are not within our control and are highly uncertain and cannot be predicted.

We will continue to evaluate these risks and uncertainties and further our mitigation plans.

We are exposed to fluctuations in foreign currency exchange rates.

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dollar and the currencies we conduct sales or operate in may negatively impact our financial results.

For example, our net revenue for the year ended December 31, 2022 was in part negatively impacted by the strengthening of the U.S.

dollar against the Euro and the British Pound.

Conversely, the weakening of the U.S.

dollar against the Euro and the British Pound in 2023 contributed partially to the increase in our net revenue for the year ended December 31, 2023 and we saw our sales to the EMEA region increased by approximately 26% in 2023 compared to 2022.

The extent of the impact of macroeconomic conditions, geopolitical tensions and the lingering effects from the COVID-19 pandemic on our business, sales, results of operations, cash flows and financial condition will depend on future developments, which are not within our control and are highly uncertain and cannot be predicted.

We will continue to evaluate these risks and uncertainties and further our mitigation plans.

Impact of Industry Trends .

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Gaming continues to become increasingly social, as streaming viewership becomes more widely adopted along with increasing numbers of content creators.

This trend, which has accelerated in the past few years experienced a setback in 2022 primarily due to challenging macroeconomic conditions and the ongoing war between Russia and Ukraine.

While the gaming peripherals market showed signs of recovery in 2023 in North America and Europe, the streaming market has yet to recover to pre-2022 levels.

As and when it does, we believe that we are well positioned to serve this market with best-in-class tools for content creation.

We expect the overall gaming market to enter a new growth phase in 2024 as we enter a refresh cycle from the surge of consumer spending that occurred during the COVID-19 pandemic.

Specifically, the video gaming industry is experiencing a significant shift and we believe is poised for continued growth and innovation.

The convergence of quality content, console availability, favorable regulatory developments, and the expanded implementation of AI are driving such growth and innovation.

More members of the younger generation are gamers and spend more time on gaming related activities than older generations.

We believe these trends will over time bring more gamers and creators to purchase dedicated hardware and help grow the market for peripheral products.

The growth of these markets will not be linear, as these markets are impacted by macroeconomic and consumer confidence conditions, amongst other conditions.

Our Gaming Components and Systems segment makes components used for self-built PCs and full gaming systems.

The self-built PC market is heavily influenced by the timing of release of new game titles and next-gen CPUs and GPUs, as discussed in the bullet below.

As for the peripherals market, our Gamer and Creator Peripherals segment benefited from an improvement in the peripherals market compared to last year.

We were also able to increase our sales in this segment through expanding our product offerings by adding new products such as our teleprompter offerings, new PC controllers and mobile controllers, and several new keyboards.

We expect this trend in peripheral market improvement and expansion to continue in 2025.

• Introduction of new high-performance computing hardware and sophisticated games .

We believe that the introduction of more powerful CPUs and GPUs that place increased demands on other system components, such as memory, power supply or cooling, has a significant effect on increasing the demand for our products.

In addition, we believe that the introduction and success of games with sophisticated graphics that place increasing demands on system processing speed and capacity and therefore require more powerful CPUs or GPUs, which in turn drives demand for our high-performance gaming components and systems, such as PSUs and cooling solutions, and our gaming PC memory.

In addition, we believe that the introduction and success of games with sophisticated graphics that place increasing demands on system processing speed and capacity and therefore require more powerful CPUs or GPUs, drives demand for our high-performance gaming components and systems, such as PSUs and cooling solutions, and our gaming PC memory.

As a result, our operating results may be materially affected by the timing of, and the rate at which computer hardware companies introduce, new and enhanced CPUs and GPUs, the timing of, and rate at which computer game companies and developers introduce sophisticated new and improved games that require increasingly high levels of system and graphics processing power, and whether these new products and games are widely accepted by gamers.

During 2023, we experienced overall demand increase for our gaming components and systems products primarily driven by the self-built PC market expansion from the increase in availability of new and reasonably priced GPUs and CPUs as well as the release of new game titles.

In 2024, we will be mid-cycle for new GPU platforms and do not expect a similar increase in demand driven by these new GPU platforms until the next substantial GPU launch which is likely to impact 2025.

During 2023, we experienced overall demand increase for our gaming components and systems products primarily driven by the self-built PC market expansion from the increase in availability in late 2022 of new and reasonably priced GPUs and CPUs as well as the release of new game titles.

In 2024, we are mid-cycle for new GPU platforms and as a result, we did not experience a similar increase in demand driven by the new GPU platforms and some highly anticipated game title releases until the next substantial GPU launch in early 2025.

The slowdown in the self-built PC market activity in the first nine months of 2024 led to an overall net decrease in demand for our products in the Gaming Components and Systems segment in 2024 compared to 2023.

Impact of Customer Concentration .

We operate a global sales network that consists primarily of retailers (including e-retailers), as well as distributors we use to access certain retailers.

Further, a limited number of retailers and distributors represent a significant

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portion of our net revenue, with e-retailer Amazon accounting for 30.7%, 26.0%, and 26.7% of our net revenue for 2023, 2022, and 2021, respectively, and sales to our ten largest customers accounting for approximately 55.4%, 52.3%, and 51.7% of our net revenue for the same periods, respectively.

Further, a limited number of retailers and distributors represent a significant portion of our net revenue, with e-retailer Amazon accounting for 30.9%, 30.7%, and 26.0% of our net revenue for 2024, 2023, and 2022, respectively, and sales to our ten largest customers accounting for approximately 53.1%, 55.4%, and 52.3% of our net revenue for the same periods, respectively.

Our customers, including Amazon, typically do not enter into long-term agreements to purchase our products but instead enter into purchase orders with us.

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To help maintain good relationships, we implement initiatives such as our updated packaging design which helps e-retailers such as Amazon process our packages more efficiently.

Further, given our global operations, a significant percentage of our expenses relate to shipping costs.

Our ability to effectively optimize these shipping costs, for example utilizing expensive shipping options such as air freight for smaller packages and more urgent deliveries and more cost-efficient options, such as train or boat, for other shipments, has an impact on our expenses and results of operations.

Further, given our global operations, a significant percentage of our

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expenses relate to shipping costs.

Our ability to effectively optimize these shipping costs, for example utilizing expensive shipping options such as air freight for smaller packages and more urgent deliveries and more cost-efficient options, such as ground or ocean freight, for other shipments, has an impact on our expenses and results of operations.

Impact of New Product Introductions .

Gamers demand new technology and product features, and we expect our ability to accurately anticipate and meet these demands will be one of the main drivers for any future sales growth and market share expansion.

We believe our net revenue was favorably impacted by the release of 108 new products in 2023.

We believe our net revenue in 2024 was favorably impacted by the release of 78 new products in 2024.

While we intend to continue to develop and release new products, there can be no assurance that our new product introductions will have a favorable impact on our operating results or that customers will choose our new products over those of our competitors.

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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.

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.

Historical seasonal patterns may not continue in the future and may be further impacted in the future, by macroeconomic factors, increasing supply constraints, GPU shortages, and shifts in customer behavior.

For example, our revenue seasonality for the third quarter of 2024 was negatively impacted due to a lower demand for our products in the Gaming Components and Systems segment which was primarily attributable to the delayed launches of new, reasonably priced GPUs and CPUs, as well as the postponed releases of new game titles to early 2025.

Impact of Product Mix .

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Impact of Fluctuations in Integrated Circuits Pricing.

Integrated circuits, or ICs, account for most of the cost of producing our high-performance memory products.

ICs account for most of the cost of producing our high-performance memory products.

IC prices are subject to pricing fluctuations which can affect the average sales prices of memory modules, and thus impact our net revenue, and can have an effect on gross margins.

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Cost of Revenue

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and certain allocated costs related to facilities and information technology, or IT, and personnel-related expenses and other operating expenses related to supply chain logistics.

Cost of revenue consists of product costs, including costs of contract manufacturers, inbound freight costs from manufacturers to our distribution hubs as well as inter-hub shipments, cost of materials and overhead, duties and tariffs, warranty replacement cost to process and rework returned items, depreciation of tooling equipment, warehousing costs, excess and obsolete inventory write-downs, and certain allocated costs related to facilities and information technology (“IT”), and personnel-related expenses and other operating expenses related to supply chain logistics.

Operating Expenses

Operating expenses consist of sales, general and administrative expenses and product development expenses.

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Sales, general and administrative.

Sales, general and administrative, or SG&A, expenses represent the largest component of our operating expenses and consist of distribution costs, sales, marketing and other general and administrative costs.

Sales, general and administrative (“SG&A”) expenses represent the largest component of our operating expenses and consist of distribution costs, sales, marketing and other general and administrative costs.

Distribution costs include outbound freight and the costs to operate our distribution hubs.

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Interest Expense

Interest expense consists of interest associated with our debt financing arrangements, including our revolving line of credit, amortization of debt issuance costs and debt discounts, and loss from debt extinguishment, consisting of the write-off of unamortized debt discount and fees associated with the 2021 refinancing of our term loan.

Interest expense consists of interest associated with our debt financing arrangements, including our revolving line of credit, and amortization of debt issuance costs and debt discounts.

Interest Income

Interest income consists of interest earned on interest-bearing accounts.

Interest income consists of interest earned on interest-bearing bank deposits and interest-bearing Bridge Loan, net of amortization of Bridge Loan origination costs.

Other (Expense) Income, Net

Other (expense) income, net consists primarily of our foreign currency exchange gains and losses relating to transactions and remeasurement of asset and liability balances denominated in foreign currencies, net fair value gains and losses from our foreign currency forward contracts, and the impairment loss on available-for-sale security.

Income Tax (Expense) Benefit

Income Tax Benefit (Expense)

We are subject to income taxes in the United States and foreign jurisdictions in which we do business.

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Net Income Attributable to Noncontrolling Interest

Net income attributable to noncontrolling interest represents the share of the net income of iDisplay attributable to the 49% ownership interest of iDisplay we did not acquire.

Net income attributable to noncontrolling interest represents the share of the net income of subsidiaries in which we own less than 100% of the equity attributable to the ownership interest that we did not acquire.

Results of Operations

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Interest income

Other (expense) income, net

Other expense, net

Total other expense, net

Loss before income taxes

Income tax benefit

Income tax benefit (expense)

Net income attributable to noncontrolling interest

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Interest income

Other (expense) income, net

Other expense, net

Total other expense, net

Loss before income taxes

Income tax benefit

Income tax benefit (expense)

Net income attributable to noncontrolling interest

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(in thousands)

Net revenue increased $84.8 million, or 6.2%, in 2023 as compared to 2022.

The increase was due to a 13.6% increase in sales for our Gaming Components and Systems segment, which was partially offset by a 9.8% decrease in sales for our Gamer and Creator Peripherals segment.

Net revenue decreased $143.5 million, or 9.8%, in 2024 as compared to 2023.

The decrease was due to a 20.8% decrease in sales for our Gaming Components and Systems segment, offset partially by a 19.7% increase in sales for our Gamer and Creator Peripherals segment.

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Overall, the demand was higher for most of our components and systems products in 2023 primarily driven by the expansion of self-built PC market due to the increase in availability of new and reasonably priced GPUs and CPUs as well as the release of new game titles.

The decrease in demand for our peripherals products was primarily due to the challenging macroeconomic environment, and also due in part to the pricing pressure in 2023 as our competitors tried to clear their excess inventory in the distribution channels through heavy discounting.

For further discussions specific to our Gaming Components and Systems and Gamer and Creator Peripherals segments, refer to “Segment Results” section below.

Gross Profit and Gross Margin

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(in thousands, except percentages)

Gross margin increased by 3.1% in 2023 as compared to 2022 primarily due to an improvement in product costs from suppliers, lower freight costs and lower inventory impairment and related charges in 2023 as compared to 2022 due to inventory levels normalizing in 2023, and the introduction of new higher margin products.

We expect our gross margin will continue to improve in 2024 primarily due to an expected improved product mix with more sales of our higher margin products in the Gamer and Creator Peripherals segment and lower planned promotional activities.

Gross margin increased by 20 bps in 2024 as compared to 2023.

An improved product mix with more sales in the Gamer and Creator Peripherals segment accounted for 160 bps of the increase in gross margin, which was partially offset by a decrease of 110 bps in gross margin from higher spending on promotional activities as a proportion of net revenue.

Sales, General and Administrative (SG&A)

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SG&A expenses increased $24.7 million, or 8.7%, in 2024 as compared to 2023.

The increase was primarily due to higher personnel-related costs and higher legal expenses, partially offset by lower outbound freight costs, and lower amortization of capitalized cloud computing arrangements implementation costs.

The increase was primarily due to a $9.3 million increase in distribution costs, which was largely attributable to rationalization costs for distribution hubs and increased freight costs, a $8.9 million increase in legal and other professional service expenses, which were mainly attributable to one-time settlement costs and professional services associated with the Fanatec Acquisition, a $2.2 million increase in marketing and advertising costs, a $1.3 million increase in severance and a $1.1 million increase from amortization of capitalized cloud computing arrangements implementation costs.

Product Development

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Product development

Product development expenses decreased $1.2 million, or 1.9%, in 2023 as compared to 2022.

The decrease was primarily due to lower contractors and outsourcing costs and lower amortization of intangible assets.

Interest Expense, Interest Income and Other (Expense) Income, Net

Product development expenses increased $2.3 million, or 3.5%, in 2024 as compared to 2023.

The increase was primarily due to higher personnel-related costs resulting from increase in headcount as well as merit adjustments.

Interest Expense, Interest Income and Other Expense, Net

Years Ended December 31,

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Interest income

Other (expense) income, net

Interest expense increased $7.9 million, or 82.2%, in 2023 as compared to 2022 primarily due to higher interest rates on our Term Loan.

Interest income increased $6.5 million, or 1728.6%, in 2023 as compared to 2022 primarily due to a higher cash deposit balance in 2023 resulting from the proceeds from our underwritten public offering in the fourth quarter of 2022, and, to a lesser extent, due to higher interest rates in 2023.

Other (expense) income, net relates primarily to the gains and losses resulting from the impact of foreign exchange rate changes on our cash, accounts receivable and intercompany balances denominated in currencies other than the functional currencies in our subsidiaries, as well as the net fair value gain and loss related to our foreign currency forward contracts.

Our foreign currency exposure is primarily driven by fluctuations in the foreign currency exchanges rates of the Euro, British Pound and the Chinese Yuan.

The change in other income (expense), net in 2023 as compared to 2022 was primarily due to the impact from the depreciation of the U.S.

dollar against the Euro and British Pound, which was offset partially by the impairment loss incurred in 2022 on our available-for-sale security.

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Income Tax (Expense) Benefit

Other expense, net

Interest expense decreased $4.2 million, or 24.2%, in 2024 as compared to 2023.

The decrease was primarily due to a lower principal balance on our Term Loan combined with lower interest rates on our Term Loan in 2024.

Interest income decreased $3.5 million, or 51.1%, in 2024 as compared to 2023 primarily due to a lower cash balance in our interest-bearing account.

Other expense, net is primarily comprised of foreign exchange gains and losses on cash, accounts receivable and intercompany balances denominated in currencies other than the functional currencies of our subsidiaries.

Our foreign currency exposure is primarily driven by fluctuations in the foreign currency exchanges rates of the Euro, the British Pound and the Chinese Yuan.

The foreign exchange loss in the year ended December 31, 2024 was partially offset by a $2.6 million bargain purchase gain from the Fanatec Acquisition.

Income Tax Benefit (Expense)

Years Ended December 31,

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Loss before income taxes

Income tax benefit

Income tax benefit (expense)

Effective tax rate

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We are subject to income taxes in the United States and foreign jurisdictions in which we do business.

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Accordingly, our effective tax rates will vary depending on the relative proportion of foreign to United States income, the utilization of net operating loss and tax credit carry forwards, changes in geographic mix of income and expense, changes in management’s assessment of matters such as the ability to realize deferred tax assets, and changes in tax laws.

Our effective tax rates were tax benefit of 70.2% and 15.4% for 2023 and 2022, respectively.

The increase in our effective rate was primarily due to the generation of foreign tax credits from foreign income under Subpart F regime, as well as other types of tax credits, which were partially offset by the write-off of certain deferred tax assets mainly due to the deduction limitation under Section 162(m) of the Internal Revenue Code on some of our stock-based compensation expense.

Our effective tax rates were a tax expense of 35.3% and a tax benefit of 70.2% for 2024 and 2023, respectively.

The change in our effective rate was primarily due to a change in the mix of income and losses in the various tax jurisdictions in which we operate, as well as the valuation allowance recorded against our U.S.

federal and state deferred tax assets, which were partially offset by a tax benefit recognized for the transfer of customer relationship intangible asset from Hong Kong to the U.K.

as a result of our global tax restructuring initiative completed on July 1, 2024.

Segment Results

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Gamer and Creator Peripherals Segment

Net revenue of the Gamer and Creator Peripherals segment decreased $42.9 million, or 9.8%, in 2023 as compared to 2022 primarily due to demand softness across a majority of products in this segment driven mainly by a challenging macroeconomic environment, including the adverse impacts from the war between Russia and Ukraine and inflationary pressure on consumer spending.

The decrease in revenue was also due in part to a more competitive pricing environment in 2023 as our competitors tried to clear their excess inventory in the distribution channels through heavy discounting.

Net revenue of the Gamer and Creator Peripherals segment increased $77.8 million, or 19.7%, in 2024 as compared to 2023.

The increase was primarily driven by the success of recent new product launches, increased demand for most of the products in this segment and the inclusion of post-acquisition revenues from our Drop Acquisition in July 2023, and from our Fanatec Acquisition in September 2024.

Gaming Components and Systems Segment

Net revenue of the Gaming Components and Systems segment increased $127.7 million, or 13.6% in 2023 as compared to 2022 due to increases in sales in nearly all product categories, driven mainly by the strong self-built PC market activity triggered by the launch of new, reasonably priced GPUs and CPUs that were readily available and the release of new game titles.

Net revenue of the Gaming Components and Systems segment decreased $221.3 million, or 20.8% in 2024 as compared to 2023.

The demand for our products in this segment is largely driven by the activity in the self-built PC market, which is heavily influenced by the launch of new, reasonably priced GPUs and CPUs, as well as the release of new game titles.

However, in 2024, we were mid-cycle for new GPU platforms, resulting in a relatively flat-to-low market trajectory for the self-built PC market since the beginning of the year.

This led to a greater than anticipated decrease in demand for our products in this segment this year.

Additionally, we experienced a downward adjustment in inventory levels at our channel partners in 2024 compared to an increase in channel inventory levels during the same periods last year, contributing to the lower net revenue in 2024.

Segment Gross Profit and Gross Margin

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Total Gross Profit

Gamer and Creator Peripherals Segment

The gross margin of the Gamer and Creator Peripherals segment increased by 490 bps in 2024 as compared to 2023.

The increase was primarily attributable to a 350 bps increase from a more favorable product mix within this segment, in part due to

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Gamer and Creator Peripherals Segment

The gross margin of the Gamer and Creator Peripherals segment increased 5.1% in 2023 as compared to 2022 primarily due to lower product costs from suppliers, lower freight costs, and lower inventory impairment and related charges, as well as the introduction of new higher margin products, such as the Elgato Facecam Pro.

successful launches of new products with higher average margins, and lower product costs from suppliers, a 80 bps increase from lower inventory reserves, and a 110 bps increase due to lower costs to process inventory returns in the year ended December 31, 2024.

These increases were partially offset by a 50 bps decrease due to higher air freight costs.

Gaming Components and Systems Segment

The gross margin of the Gaming Components and Systems segment increased 3.0% in 2023 as compared to 2022 primarily due an improved product mix with more sales from the higher margin products, lower product costs from suppliers, lower inventory impairment and related charges and lower freight costs and tariffs.

These positive impacts to gross margin were partially offset by higher promotional activities in 2023.

The gross margin of the Gaming Components and Systems segment decreased by 410 bps in 2024 as compared to 2023.

The decrease was primarily attributable to a 190 bps decrease from an unfavorable product mix within this segment and pricing pressures from market competition, a 160 bps decrease from increased promotional activities as a proportion of net revenue, and a 100 bps decrease from factory underutilization and higher inventory reserves.

Liquidity and Capital Resources

Our principal sources of liquidity have been the payments received from customers purchasing our products, the borrowings under our Credit Agreement (defined below) and the net proceeds we received from our underwritten public offerings.

Our principal uses of cash generally will include purchases of inventory, payroll and other operating expenses related to the development and marketing of our products, capital expenditure, repayments of debt and related interest, income tax payments, future investments in business and technology, and selective mergers and acquisitions.

As of December 31, 2023, we had cash and restricted cash, in aggregate of $178.6 million, including $23.2 million held by our foreign subsidiaries.

Amounts held outside of the United States are generally utilized to support our non-U.S.

liquidity needs.

Repatriations of amounts held outside the United States generally will not be taxable from a U.S.

federal tax perspective but may be subject to state income or foreign withholding tax.

We do not expect restrictions or potential taxes incurred on repatriation of amounts held outside of the United States to have a material effect on our overall liquidity, financial condition or results of operations.

We believe that the anticipated cash flows from operations based on our current business outlook, combined with our current levels of cash balances at December 31, 2023, supplemented with the borrowings under our revolving credit facility will be sufficient to fund our principal uses of cash for at least the next twelve months.

We have financed our operations and acquisitions through cash from operations, and when necessary, through debt facilities and issuance of equity securities.

As of December 31, 2024, our principal sources of liquidity were cash and restricted cash, in aggregate of $109.6 million, and our borrowing capacity under the Revolving Facility (as defined under ‘Capital Resources’ below) of $99.8 million.

We have a shelf-registration statement on Form S-3 on file with the SEC, which allows us to offer securities, including common stock, preferred stock and warrants, through August 1, 2025.

As of December 31, 2024, $216.7 million remained available for issuance under the shelf-registration statement.

Our principal uses of cash generally include purchases of inventory, payroll and other operating expenses related to the development and marketing of our products, capital expenditure, repayments of debt and related interest, income tax payments, future investments in business and technology, and selective mergers and acquisitions.

We believe that the anticipated cash flows from operations based on our current business outlook, combined with our current levels of cash balances at December 31, 2024, supplemented with the borrowing capacity under our Revolving Facility, if and as needed, will be sufficient to fund our principal uses of cash for at least the next twelve months.

In the longer term, liquidity will depend to a great extent on our future revenues and our ability to appropriately manage our costs based on the demand for our products.

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There can be no assurance that any such equity or debt financing will be available on favorable terms, or at all.

Our liquidity is subject to various risks including the risks identified in the section titled “Risk Factors” in Item 1A and market risks identified in the section titled “Quantitative and Qualitative Disclosures about Market Risk” in Item 7A, each of which is incorporated herein by reference.

The following table summarizes our cash flows for the periods indicated (in thousands):

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Financing activities

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Cash Flows from Operating Activities

Net cash provided by operating activities was $35.9 million for 2024 and consisted net loss of $83.4 million, offset by non-cash adjustments of $97.0 million and a net cash inflow of $22.3 million from changes in our net operating assets and liabilities.

The non-cash adjustments consisted primarily of depreciation and amortization, stock-based compensation expense, as well as changes in deferred income taxes, partially offset by a bargain purchase gain from the Fanatec Acquisition.

The net cash inflow from changes in our net operating assets and liabilities was primarily related to a decrease in account receivables from lower revenue in 2024 and a decrease in inventories from our efforts to normalize inventory levels.

These cash inflows were partially offset by a decrease in accounts payable mainly due to timing of payments.

Net cash provided by operating activities was $89.2 million for 2023 and consisted of non-cash adjustments of $79.5 million and a net cash inflow of $10.7 million from changes in our net operating assets and liabilities, offset partially by a net loss of $1.0 million.

The non-cash adjustments consisted primarily of depreciation and amortization and stock-based compensation expense, which were partially offset by changes in deferred income taxes.

The net cash inflow from changes in our net operating assets and liabilities was primarily related to an increase in accounts payable mainly due to timing of payments and purchases.

The net cash inflow from changes in our net operating assets and liabilities was

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primarily related to an increase in accounts payable mainly due to timing of payments and purchases.

These cash inflows were partially offset by an increase in inventory purchases and account receivables driven by increase in revenue in 2023.

Net cash provided by operating activities was $66.4 million for 2022 and consisted of non-cash adjustments of $58.8 million and a net cash inflow of $61.5 million from changes in our net operating assets and liabilities, offset partially by a net loss of $53.9 million.

The non-cash adjustments consisted primarily of depreciation and amortization and stock-based compensation expense, which were partially offset by changes in deferred income taxes.

The net cash inflow from changes in our net operating assets and liabilities was primarily related to a decrease in inventory purchases and decrease in account receivables.

These cash inflows were partially offset by a decrease in accounts payable mainly due to timing of payments and purchases as well as a decrease in the accrual for sales returns, customer incentives, freight costs and bonus expenses.

Cash Flows from Investing Activities

Cash used in investing activities was $52.7 million for 2024 and primarily consisted of $43.1 million cash used for the Fanatec Acquisition, net of cash acquired (refer to Note 4, “Business Combinations” for more information on the Fanatec Acquisition), $9.8 million of capital expenditure, partially offset by $1.0 million cash received from escrow for the purchase price adjustment related to the Drop Acquisition.

Cash used in investing activities was $27.0 million for 2023 and consisted of $14.2 million for the Drop Acquisition (net of cash acquired), and $12.8 million capital expenditure, primarily for equipment and software.

Cash used in investing activities was $47.0 million for 2022 and consisted of $26.3 million capital expenditure including renovation and furnishing of our headquarters in Milpitas, California, as well as purchases of equipment and software, $19.5 million for the iDisplay acquisition (net of cash acquired), and $1.0 million for the investment in an available-for-sale convertible note.

Cash Flows from Financing Activities

Net cash used in financing activities was $50.7 million for 2024 and primarily consisted of $25.0 million repayment of debt, $19.8 million purchase of additional ownership interest in iDisplay (refer to Note 16, "Redeemable Noncontrolling Interest" for more information on the additional ownership interest purchase), $4.9 million settlement of deferred consideration related to a 2019 business acquisition, $5.8 million payment of dividends to noncontrolling interest, and $0.6 million payment of taxes related to net share settlement of equity awards, partially offset by $5.4 million proceeds received from the issuance of shares through the employee equity incentive plans.

During the year ended December 31, 2024, we borrowed $25.0 million from our Revolving Facility to fund our operations and the full amount was repaid within the same period.

Net cash used in financing activities was $37.4 million for 2023 and consisted primarily of $41.0 million repayment of debt, $1.4 million payment of taxes related to net share settlement of equity awards, and $1.0 million payment of dividends to noncontrolling interest.

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We did not borrow from our revolving credit facility in 2023.

Net cash provided by financing activities was $72.6 million for 2022 and consisted primarily of $81.7 million net proceeds from the issuance of common stock in connection with our underwritten public offering in the fourth quarter of 2022 pursuant to the 2022 Shelf Registration Statement, and $7.0 million proceeds received from the issuance of shares through our employee equity incentive plans.

These cash inflows were partially offset by $9.5 million repayment of debt and debt issuance costs, $4.3 million payment of dividends to noncontrolling interest, and $1.5 million payment of taxes related to net share settlement of equity awards.

During 2022, we also borrowed $701.5 million from our revolving credit facility to fund our operations, and the full amount was repaid in 2022.

Capital Resources

Credit Agreement (Term Loan and Revolving Credit Facility)

On September 3, 2021, we refinanced the First Lien Credit and Guaranty Agreement with a new Credit Agreement.

The new Credit Agreement provides for a total commitment of $350.0 million, consisting of a $100.0 million revolving credit facility and a $250.0 million term loan facility.

On September 3, 2021, we refinanced the First Lien Credit and Guaranty Agreement with a new Credit Agreement (as amended, the “Credit Agreement”).

The Credit Agreement provides for a total commitment of $350.0 million, consisting of a $100.0 million revolving credit facility (the “Revolving Facility”) and a $250.0 million term loan facility (the “Term Loan”).

The Credit Agreement is available for a period of five years, maturing September 2026, and provides for additional incremental facilities up to a maximum aggregate principal amount of $250.0 million, subject to the satisfaction of certain conditions.

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We prepaid $12.5 million and $34.1 million of the Term Loan principal in the years ended December 31, 2024 and 2023, respectively.

The Term Loan and Revolving Facility under the Credit Agreement will each bear interest at our election, either (a) LIBOR plus a percentage spread (ranging from 1.25% to 2.0%) based on our total net leverage ratio, or (b) the base rate (described in the Credit Agreement as the greatest of (i) the prime rate, (ii) the federal funds rate plus 0.50% and (iii) one-month LIBOR plus 1.0%) plus a percentage spread (ranging from 0.25% to 1.0%) based on our total net leverage ratio.

The Credit Agreement also requires the payment of a commitment fee on the daily unused portion of the Revolving Facility, which initially ranged from 0.2% to 0.35% based on our total net leverage ratio.

Our obligations under the Credit Agreement are guaranteed by substantially all of our U.S.

subsidiaries and secured by a security interest in substantially all assets of the Company and the guarantor subsidiaries, subject to certain exceptions detailed in the Credit Agreement and related ancillary documentation.

As of December 31, 2024, the total principal outstanding of the Term Loan was $174.0 million and the available and uncommitted capacity under the Revolving Facility was $99.8 million.

The Credit Agreement has a variable rate structure.

According to the provisions in the Third Amendment to the Credit Agreement (“Third Amendment”), beginning 2024, the Term Loan and the Revolving Facility carry interest at our election at either (a) Bloomberg Short-Term Bank Yield Index rate (“BSBY”) plus a percentage spread (ranging from 1.25% to 2.25%) based on our total net leverage ratio, or (b) the base rate (as described in the Credit Agreement as the greatest of (i) the prime rate, (ii) the federal funds rate plus 0.50% and (iii) one-month BSBY plus 1.0%) plus a percentage spread (ranging from 0.25% to 1.25%) based on our total net leverage ratio.

Additionally, the commitment fees on the unused portion of the Revolving Facility ranges from 0.2% to 0.4% based on our total net leverage ratio.

On August 19, 2024, we entered into a Fourth Amendment (the “Fourth Amendment”) to the Credit Agreement, which provides for, among other things, (i) effectuates the transition of the underlying variable interest rate from the BSBY to a forward-looking interest rate based on the Secured Overnight Financing Rate (“SOFR”), with no change to the applicable margin percentage spread, but with the addition of a rate spread adjustment in the amount of 0.10% per annum, (ii) increases the letter of credit sublimit from $15 million to $65 million and (iii) the issuance of letters of credit denominated in Euro.

The Credit Agreement contains covenants with which we must comply during the term of the agreement, which we believe are ordinary and standard for agreements of this nature, including the maintenance of a maximum Consolidated Total Net Leverage Ratio (“CTNL Ratio”) and a minimum Consolidated Interest Coverage Ratio (“CIC Ratio”) (as defined in the Credit Agreement).

According to the provisions in the Third Amendment, beginning 2024, we are required to maintain a maximum CTNL Ratio of 3.00 to 1.00 and a minimum CIC ratio of 3.00 to 1.00, with the provision that the maximum CTNL Ratio can be temporarily increased to 3.50 to 1.00 upon the occurrence of a Qualified Acquisition (as defined in, and subject to the requirements of the Credit Agreement).

As of December 31, 2024, we were not in default under the Credit Agreement.

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On June 30, 2022, we entered into a First Amendment of the Credit Agreement (“First Amendment”) which, among other changes, resulted in the Bloomberg Short-Term Bank Yield Index rate (“BSBY”) being utilized as a replacement rate for LIBOR.

Consequently, following the First Amendment, the Term Loan and Revolving Facility will each bear interest at our election at either (a) BSBY plus a percentage spread (ranging from 1.25% to 2.25%) based on our total net leverage ratio, or (b) the base rate (as described in the Credit Agreement as the greatest of (i) the prime rate, (ii) the federal funds rate plus 0.50% and (iii) one-month BSBY plus 1.0%) plus a percentage spread (ranging from 0.25% to 1.25%) based on our total net leverage ratio.

provided, that upon the occurrence of a Qualified Acquisition (as defined in the Credit Agreement), such ratio can be increased to 3.50 to 1.00 temporarily provided all the requirements set forth in the Credit Agreement are met.

Additionally, the commitment fee on the unused portion of the Revolving Facility was amended to range from 0.2% to 0.4% based on our total net leverage ratio.

On November 28, 2022, we entered into a Third Amendment (“Third Amendment”) to the Credit Agreement which provides for, among other things:

(i) a decrease in the required minimum Consolidated Interest Coverage Ratio to 2.50 to 1.00 for the quarters ending on and after March 31, 2023 through and including December 31, 2023;

(ii) an increase in the maximum permitted Consolidated Total Net Leverage Ratio to 3.75 to 1.00 for the quarters ending December 31, 2022 and March 31, 2023, stepping down to 3.50 to 1.00 for the quarter ending June 30, 2023, and 3.25 to 1.00 for the quarters ending September 30, 2023 and December 31, 2023;

and (iii) a modified pricing grid providing for an increased margin (ranging from 1.50% per annum to 3.25% per annum for loans bearing interest at the BSBY rate, and 0.50% per annum to 2.25% per annum for loans bearing interest at the base rate, in each case depending on our total net leverage ratio) for the period of December 31, 2022 through December 31, 2023.

Additionally, the commitment fee on the unused portion of the Revolving Facility was amended to range from 0.25% to 0.5% based on our total net leverage ratio, for the period of December 31, 2022 through December 31, 2023.

According to the provision in the Third Amendment, with effect from January 1, 2024, the aforementioned amended terms will revert back to the terms as amended by the First Amendment, including the required minimum Consolidated Interest Coverage Ratio, the required maximum permitted Consolidated Total Net Leverage Ratio, the interest rate margin and the commitment fee on the unused portion of the Revolving Facility.

As of December 31, 2023, we were not in default under the Credit Agreement.

As of December 31, 2023, the total principal outstanding of the Term Loan was $199.0 million and the available and uncommitted capacity under the Revolving Credit Facility was $100 million.

Our obligations under the Credit Agreement are guaranteed by substantially all of our U.S.

Contractual Cash and Other Obligations

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therefore, such amounts are not included in the contractual cash obligation table above.

Critical Accounting Polices and Estimates

Critical Accounting Policies and Estimates

A critical accounting policy is defined as one that has both a material impact on our financial condition and results of operations and requires us to make difficult, complex and/or subjective judgments, often as a result of the need to make estimates about matters that are inherently uncertain.

Our consolidated financial statements are prepared in accordance with U.S.

Generally Accepted Accounting Principles (“GAAP”), which requires us to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the consolidated financial statements, as well as the

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reported amounts of revenue and expenses during the reporting periods.

Our estimates are based on our historical experience and on various other factors that we believe to be applicable and evaluate them on an ongoing basis to ensure they remain reasonable under current conditions.

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The accrual estimates are based on actual sales data, historical experience, forecasted incentives, anticipated volume of future purchases, and inventory levels in the channel.

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Recent Accounting Pronouncements

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Our cash is held for working capital purposes.

As of December 31, 2023, under the Credit Agreement, we had a $199.0 million Term Loan outstanding (face value), and the Term Loan bears variable market interest rates, primarily BSBY.

As of December 31, 2024, under the Credit Agreement, we had a $174.0 million Term Loan outstanding (face value), and the Term Loan bears variable market interest rates, primarily SOFR, effective from September 2024.

A significant change in these market interest rates may adversely affect our operating results.

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These forward contracts generally mature within two to four months, and we do not enter into foreign currency forward contracts for trading purposes.

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outstanding notional principal amount was $44.3 million and $23.4 million as of December 31, 2023 and 2022, respectively.

The outstanding notional principal amount was $35.2 million and $44.3 million as of December 31, 2024 and 2023, respectively.

The gains or losses on these contracts are recognized in earnings based on the changes in fair value of the foreign currency forward contracts.

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Corsair Gaming, Inc.:

Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting

We have audited the accompanying consolidated balance sheets of Corsair Gaming, Inc and subsidiaries (the Company) as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2023, and the related notes (collectively, the consolidated financial statements).

We also have audited the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2023, in conformity with U.S.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Corsair Gaming, Inc.

and subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2024, in conformity with U.S.

generally accepted accounting principles.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 26, 2025 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audits also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in

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accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Transaction price in contracts with customers

As discussed in Note 2 to the consolidated financial statements, the transaction price received by the Company from sales to distributors and retailers is net of variable consideration that may include product returns and customer incentives.

The transaction price received by the Company from sales to distributors and retailers is net of variable consideration that may include product returns and customer incentives.

Estimates of expected future product returns are recorded based on historical return rates, among other factors.

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We identified the evaluation of the transaction price in contracts with customers as a critical audit matter.

Subjective auditor judgment was required to evaluate changes in conditions and events affecting (1) the Company’s historical return rates, and (2) the length of time between when a sale occurs and a return is processed, which are used to determine accrued reserves for sales returns.

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sales returns.

In addition, subjective auditor judgment was required to evaluate the reliability of data used to determine certain accrued reserves for customer incentive programs.

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We evaluated the reliability of data used to determine certain accrued reserves for customer incentive programs by (a) selecting a sample of incentives recorded during the year and (1) comparing the key inputs to correspondence with customers and customer agreements, and (2) recalculating the total incentive amount and comparing it to the incentive recorded;

and (b) selecting a sample of claims recorded during the year and comparing them to correspondence with customers and to the incentive recorded.

and (b) selecting a sample of claims recorded during the year and comparing them to correspondence with customers to the incentive recorded.

We have served as the Company’s auditor since 2007.

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Total other expense, net

Income (loss) before income taxes

Loss before income taxes

Income tax benefit (expense)

Net income (loss)

Net income attributable to noncontrolling interest

Net income (loss) attributable to Corsair Gaming, Inc.

Net loss attributable to Corsair Gaming, Inc.

Calculation of net income (loss) per share attributable to common stockholders of Corsair Gaming, Inc.:

Net income (loss) attributable to Corsair Gaming, Inc.

Net loss attributable to Corsair Gaming, Inc.

Change in redemption value of redeemable noncontrolling interest

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Years Ended December 31,

Net income (loss)

Other comprehensive income (loss):

Foreign currency translation adjustments, net of tax benefit (expense) of $ 181 , $( 6 ) and $ 344 for the years ended December 31, 2024, 2023 and 2022, respectively

Unrealized foreign exchange gain (loss) from long-term intercompany loans, net of tax benefit (expense) of $( 319 ), $ 182 and $ 76 for the years ended December 31, 2023, 2022, and 2021, respectively

Unrealized foreign exchange loss from long-term intercompany loans, net of tax benefit (expense) of $ 330 , $( 319 ) and $ 182 for the years ended December 31, 2024, 2023 and 2022, respectively

Comprehensive income (loss)

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Additional paid-in capital

Retained earnings

Retained earnings (accumulated deficit)

Accumulated other comprehensive loss

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Balance as of December 31, 2021

Other comprehensive loss

Issuance of common stock in connection with employee equity incentive plans

Shares withheld related to net share settlement

Stock-based compensation

Balance as of December 31, 2021

Net income (loss)

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Balance as of December 31, 2023

Net income (loss)

Other comprehensive loss

Change in redemption value of redeemable noncontrolling interest

Dividend paid to nonredeemable noncontrolling interest

Purchase of additional ownership interest (refer to Note 16)

Reclassification to temporary equity (refer to Note 16)

Issuance of common stock in connection with employee equity incentive plans

Shares withheld related to net share settlement

Stock-based compensation

Balance as of December 31, 2024

The accompanying notes are an integral part of these consolidated financial statements.

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Cash flows from operating activities:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by

Adjustments to reconcile net loss to net cash provided by

operating activities:

Stock-based compensation

Debt issuance costs amortization

Loss on debt extinguishment

Deferred income taxes

Bargain purchase gain on business acquisition

Deferred income taxes, net of valuation allowance

Changes in operating assets and liabilities:

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Acquisition of businesses, net of cash acquired

Payment of deferred and contingent consideration

Purchase of property and equipment

Purchase of intangible asset

Payment of deferred and contingent consideration

Purchase price adjustment related to business acquisition

Payment of bridge loan origination costs related to business acquisition

Investment in available-for-sale convertible note

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Repayment of line of credit

Purchase of additional ownership interest

Proceeds from public offering, net of underwriting discounts and commissions

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Dividend paid to noncontrolling interest

Payment of contingent consideration

Payment of deferred and contingent consideration

Net cash provided by (used in) financing activities

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Issuance of common stock relating to business acquisition

Purchase consideration related to business acquisition

Receivable for business acquisition purchase price adjustment

Deferred purchase consideration related to business acquisitions

The accompanying notes are an integral part of these consolidated financial statements.

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• Gamer and Creator Peripherals .

Includes our high-performance gaming keyboards, mice, headsets, controllers, and our 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, DRAM modules, as well as high-end prebuilt and custom-built gaming PCs and laptops, and gaming monitors, among others .

Includes our high-performance PSUs, cooling solutions, computer cases, DRAM modules, as well as high-end prebuilt and custom-built gaming PCs and laptops, and gaming monitors, among others .

Summary of Significant Accounting Policies

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Under the VOE model, we consolidate the entity if we determine that we have a controlling financial interest in the entity through our ownership of greater than 50% of the outstanding voting shares of the entity and that other equity holders do not have substantive voting, participating or liquidation rights.

On January 1, 2022, we completed the acquisition of a 51 % ownership stake in Elgato iDisplay Holdings LTD.

and its related companies (together “iDisplay”).

(See Note 5, “Business Combination - iDisplay Acquisition” for more information).

We have determined that iDisplay does not qualify as a VIE and Corsair has a controlling financial interest in iDisplay under the VOE model and therefore, iDisplay is fully consolidated with Corsair with effect from January 1, 2022.

Use of Estimates

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We determine revenue recognition through the following five-step approach:

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• identification of the contract, or contracts, with the customer

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• determination of the transaction price

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• allocation of the transaction price to the performance obligations in the contract, and

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During the years ended December 31, 2024, 2023 and 2022, we did not recognize any material revenue adjustments related to performance obligations satisfied in prior periods as a result of changes in estimated variable consideration.

Because the majority of the performance obligations in our contracts with customers relate to contracts with a duration of less than one year , we have elected

Because the majority of the performance obligations in our contracts with customers relate to contracts with a duration of less than one year , we have elected to apply the optional exemption to not disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period.

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to apply the optional exemption to not disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period.

Contract liabilities are recorded when cash payments are received or due in advance of performance, primarily for our webstore sales and extended warranty subscriptions.

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Stock-Based Compensation

We measure and recognize compensation for all stock-based compensation awards, including stock options, stock purchase rights and restricted stock units (“RSU”), based upon the grant-date fair value of those awards.

We measure and recognize compensation for all stock-based compensation awards, including stock options, stock purchase rights, restricted stock units (“RSU”) and performance stock units (“PSU”), based upon the grant-date fair value of those awards.

The grant-date fair value of our stock options and stock purchase rights is estimated using a Black-Scholes-Merton option-pricing model.

The fair value of our RSUs is calculated based on the market value of our stock at the grant date.

Stock-based compensation is recognized on a straight-line basis over the requisite service period and we have elected to recognize actual forfeitures by reducing the stock-based compensation in the same period as the forfeitures occur.

Operating segments are based on components of a company that engage in business activity that earn revenue and incur expenses and (a) whose operating results are regularly reviewed by its chief operating decision maker (“CODM”) to make decisions about resource allocation and performance and (b) for which discrete financial information is available.

We have two reportable segments:

• Gamer and Creator Peripherals .

• Gaming Components and Systems .

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Our CODM is determined to be Corsair’s Chief Executive Officer.

The results of the reportable segments are derived directly from our reporting system and are based on the methods of internal reporting which are not necessarily in conformity with GAAP.

The segmental net revenue and gross profit are used to evaluate the performance of, and allocate resources to, each of the segments.

The fair values of our RSUs and PSUs are calculated based on the market value of our stock at the grant date.

For stock options, stock purchase rights and RSUs, stock-based compensation is recognized on a straight-line basis over the requisite service period and we have elected to recognize actual forfeitures by reducing the stock-based compensation in the same period as the forfeitures occur.

For PSUs, the stock-based compensation is recognized using the accelerated attribution method over the requisite service period, and it is based on the estimated number of shares that is considered probable of vesting.

Adjustments to the compensation expense will be made in each reporting period based on changes in our estimate of the number of PSUs that are probable of vesting.

Cash and Restricted Cash

Total restricted cash was $ 2.9 million as of December 31, 2023 and 2022.

Total restricted cash was $ 2.6 million and $ 2.9 million as of December 31, 2024 and 2023, respectively.

The restricted cash serves as collateral for certain bank guarantees, customer deposits and security deposits.

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We estimate an allowance for credit losses by using a combination of relevant information including historical loss information, adjusted to take into account current market conditions and our customers’ financial condition, the amount of any receivables in dispute, the current receivables aging, and the current payment terms.

Due from Factor

On September 29, 2022, one of our fully consolidated subsidiaries entered into an accounts receivable factoring agreement (“Factoring Agreement ” ) with a third-party financial institution (“Factor ” ).

The Factoring Agreement was terminated on October 2, 2023 and we no longer sell our customers' receivables to the Factor.

The outstanding balance of $ 0.3 million due from Factor as of December 31, 2023 was subsequently collected in January 2024.

Transactions under the Factoring Agreement were accounted for as sales of accounts receivable, and the receivables sold were removed from the consolidated balance sheet at the time of the sales transaction.

During the years ended December 31, 2023 and 2022, we sold receivables of $ 244.0 million and $ 175.1 million to the Factor, respectively, and we also received cash proceeds of $ 334.1 million and $ 83.4 million from the Factor, respectively.

The proceeds received from the sales of accounts receivable were classified as an operating cash flow in the consolidated statement of cash flows.

The cost of factoring was included in sales, general and administrative expenses in our consolidated statements of operations and the amounts incurred in the years ended December 31, 2023 and 2022 were immaterial.

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Concentration of Credit Risk

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As of December 31, 2024, two customers represented 41.8 % and 14.2 % of our accounts receivable, net balance, respectively.

As of December 31, 2022, the Factor and one other customer represented 38.6 % and 23.4 % of our accounts receivable, net balance, respectively.

One customer represented 30.7 %, 26.0 % and 26.7 % of our consolidated net revenue for the years ended December 31, 2023, 2022 and 2021.

No other customer represented 10% or more of our consolidated net revenue for these periods.

As of December 31, 2023, two customers represented 42.9 % and 18.5 % of our accounts receivable, net balance, respectively.

Inventories primarily consist of finished goods and to a lesser extent component parts, which are purchased from contract manufacturers and component suppliers.

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We may be required to write down the value of inventory if estimates of future demand and market conditions indicate estimated excess or obsolete inventory.

In 2022, we experienced a buildup of excess inventory in the distribution channels as the demand from our customers was negatively impacted, primarily due to unfavorable macroeconomic conditions and also because more entertainment options became available as a result of the easing of COVID-19 shelter-in-place restrictions.

However, towards the end of 2022, our inventory level began to stabilize through our concerted effort to normalize the inventory balance.

We recognized inventory impairment related charges of $ 11.5 million, $ 25.5 million, and $ 7.9 million for the years ended December 31, 2023, 2022, and 2021, respectively.

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Property and Equipment, net

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In addition, our real estate leases typically contain variable payments for office common area maintenance and these costs are also expensed as incurred.

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Fair Value of Financial Instruments

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Fair value accounting is applied to all financial assets and liabilities that are recognized or disclosed at fair value in our consolidated financial statements on a recurring basis.

Our financial instruments, including cash, restricted cash, accounts receivable,

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accounts payable, borrowings from credit lines and other liabilities and accrued expenses approximate fair value due to their short-term maturities.

Our financial instruments, including cash, restricted cash, accounts receivable, accounts payable, borrowings under credit facility, and other liabilities and accrued expenses approximate fair value due to their short-term maturities.

Our financial assets and liabilities that were measured at fair value on a recurring basis consisted of foreign currency forward contracts and the fair values of these contracts, which were classified as Level 2 of the fair value hierarchy, were based on similar exchange traded derivatives and the related asset or liability.

The balances of our financial assets and liabilities as of December 31, 2024 and 2023 were not material.

The fair value of our debt, including current maturities, was estimated using Level 2 inputs.

Refer to Note 7 “Debt” for disclosure on the fair value of our debt.

Business Combinations

We account for business combinations using the acquisition method of accounting, which requires that the assets acquired, liabilities assumed, contractual contingencies and contingent consideration are recorded at the date of acquisition at their respective fair values.

Goodwill is recorded when consideration paid in a purchase acquisition exceeds the fair value of the net assets acquired.

Amounts recorded in a business combination may change during the measurement period, which is a period not to exceed one year from the date of acquisition, as additional information about conditions existing at the acquisition date becomes available.

We account for acquisitions that meet the definition of a business under ASC 805, Business Combinations , by using the acquisition method of accounting, which requires the purchase consideration be allocated to the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed on acquisition date.

Any excess of the purchase consideration over the fair value of the net assets acquired is recorded as goodwill on the consolidated balance sheet.

Alternatively, in an instance where the fair value of the net assets acquired exceeds the purchase consideration, we record a bargain purchase gain in the consolidated statement of operations at the date of acquisition.

Determining the fair value of assets acquired and liabilities assumed requires management’s judgment, and the utilization of independent valuation experts as well as the use of significant estimates and assumptions with respect to the timing and amounts of future cash inflows and outflows, discount rates, market prices and asset lives, among other items.

The judgments made in the determination of the estimated fair value assigned to the assets acquired and liabilities assumed, as well as the estimated useful life of each asset and the duration of each liability, can materially impact the financial statements in periods after acquisition, such as through depreciation and amortization expense.

While we use our best estimates and assumptions as a part of the purchase price allocation to accurately value assets acquired and liabilities assumed at the acquisition date, these estimates are inherently uncertain and subject to refinement.

As a result, during the remeasurement period, which may extend for up to one year from the acquisition date, adjustments to the assets acquired and liabilities assumed may be recorded, with the corresponding offset to goodwill or bargain purchase gain.

Upon conclusion of the measurement period or final determination of the fair values of assets acquired and liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the consolidated statements of operations rather than adjusted through goodwill or bargain purchase gain.

We include the results of operations of the acquired business in the consolidated financial statements prospectively from the date of acquisition.

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In reviewing impairment, we have the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not (greater than 50 %) that the estimated fair value of a reporting unit is less than its carrying amount.

We also may elect not to perform the qualitative assessment and, instead, proceed directly to the quantitative impairment test.

We also may elect not to perform

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the qualitative assessment and, instead, proceed directly to the quantitative impairment test.

The ultimate outcome of the goodwill impairment review for a reporting unit should be the same whether we choose to perform the qualitative assessment or proceed directly to the quantitative impairment test.

A qualitative assessment requires that we consider events or circumstances including macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, changes in management or key personnel, changes in strategy, changes in customers, changes in the composition or carrying amount of a reporting segment’s net assets and changes in our stock price.

If, after assessing the totality of events or circumstances, we determine that it is more likely than not that the fair values of our reporting units are greater than the carrying amounts, then the quantitative goodwill impairment test is not performed.

For the 2023 annual impairment test, we elected to perform the qualitative assessment for both goodwill and indefinite-lived intangible assets and determined that an impairment was not more likely than not for both assets and no further analysis was required.

During the three months ended September 30, 2024, the sustained decline in our stock price, combined with a reduction in our revenue forecasts, was considered a triggering event indicating that it was possible that the fair value of our reporting units could be less than their carrying amounts, including goodwill.

As a result, we performed an interim quantitative goodwill impairment test as of September 30, 2024 using a combination of the income valuation approach and market approach methodologies.

The determination of the fair value of the reporting units using the aforementioned methodologies requires significant estimates and assumptions, including but not limited to, discount rate, terminal growth rates, market multiple data from selected guideline companies, and management's internal forecasts.

Management determined that the fair values of the reporting units were not less than their respective carrying amounts.

As of September 30, 2024, the indicated fair value was in excess of carrying value for our Component and Systems, Peripherals, and Memory reporting units by approximately 23 %, 35 % and 194 %, respectively.

As a result of the goodwill triggering event described above, we also performed an interim impairment test for our indefinite-lived intangible asset and our finite-lived intangible assets as of September 30, 2024.

The fair value of our indefinite-lived intangible assets was determined based on the relief from royalty method and the recoverability of our finite-lived intangible assets was determined based on the undiscounted cash flows method.

No impairment resulted from these interim impairment tests.

Since the interim quantitative goodwill and indefinite-lived intangible asset impairment tests were conducted as of September 30, 2024, which was only one day from our annual impairment test date of October 1, we do not believe that an annual goodwill and indefinite-lived intangible asset testing at October 1, 2024 would be necessary.

We have not recorded any impairment charges related to goodwill or indefinite-lived intangible assets for any prior periods.

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The estimate of the costs to fulfill our warranty obligations is based on historical experience and expectations of future costs to repair or replace.

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Foreign Currency

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Monetary assets or liabilities denominated in currencies other than the functional currency are remeasured using exchange rates prevailing on the balance sheet date.

Foreign currency remeasurement gains and (losses), net is included in other (expense) income, net in the consolidated statements of operations and the amounts were $( 1.2 ) million, $( 1.4 ) million and $( 6.3 ) million for the years ended December 31, 2023, 2022 and 2021, respectively.

Foreign currency remeasurement gains and (losses), net is included in other (expense) income, net in the consolidated statements of operations and the amounts were $( 5.4 ) million, $( 1.2 ) million and $( 1.4 ) million for the years

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ended December 31, 2024, 2023 and 2022, respectively.

These amounts do not include the change in fair value of our foreign currency forward contracts.

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Noncontrolling Interest

We have included both redeemable noncontrolling interest and noncontrolling interest in our consolidated balance sheet in connection with our consolidation of the 51 % ownership of iDisplay.

We had both redeemable and nonredeemable noncontrolling interests in connection with our partial ownership of iDisplay.

Redeemable noncontrolling interest that is redeemable and not solely within our control is classified within temporary equity in the consolidated balance sheets.

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(See Note 11 “Net Income (Loss) Per Share” and Note 16 “Redeemable Noncontrolling Interest” for more information).

In addition, we have noncontrolling interest recorded at carrying value which do not have redemption features and are classified within permanent equity in our consolidated balance sheet.

In addition, as of December 31, 2023, we had noncontrolling interest recorded at carrying value which did not have redemption features and was classified within permanent equity in our consolidated balance sheet.

Income taxes are accounted for under the asset and liability method.

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We consider many factors when evaluating and estimating our tax positions and tax benefits, which may require periodic adjustments.

Interest charges and penalties related to unrecognized tax benefits are recognized as a component of the income tax (expense) benefit.

Interest charges and penalties related to unrecognized tax benefits are recognized as a component of the income tax benefit (expense).

Net Income (Loss) per Share

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Diluted net income per share is computed based on the weighted-average number of shares outstanding during the period, adjusted to include the incremental shares expected to be issued for assumed exercise of options under the treasury stock method.

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Recently Adopted Accounting Pronouncements

Recently Issued Accounting Pronouncements, Not Yet Adopted

In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No.

2023-07, Segment Reporting (Topic 280):

Improvement to Reportable Segment Disclosure .

This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the CODM and included within each reported measure of a segment's profit or loss.

2023-07 , Segment Reporting (Topic 280) - Improvement to Reportable Segment Disclosure.

This ASU updates the reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of a segment's profit or loss.

This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment's profit or loss in assessing segment performance and deciding how to allocate resources.

The ASU will be effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements.

This ASU will likely result in us including the additional required disclosures, when adopted.

We are currently evaluating the provisions of this ASU and expect to adopt them for the year ended December 31, 2024.

The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

We adopted this standard in the fourth quarter of 2024.

See Note 14 “Segment and Geographic Information and Major Customers” for further detail.

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Recently Issued Accounting Pronouncements, Not Yet Adopted

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures .

2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures.

This ASU requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as additional information on income tax paid.

The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024, with early adoption permitted.

This ASU will result in the required additional disclosures being included in our consolidated financial statements, when adopted.

This ASU will result in additional required disclosures in our consolidated financial statements, when adopted.

We are currently evaluating the provisions of this ASU and expect to adopt them for the year ended December 31, 2025.

Fair Value Measurement

The balances of our financial assets that were measured at fair value on a recurring basis as of December 31, 2023 and 2022 were not material.

The following tables summarize the balances of our financial liabilities (in thousands) that were measured at fair value on a recurring basis, and indicate the fair value hierarchy of the valuation inputs utilized to determine such fair value :

December 31, 2023

Foreign currency forward contracts (1)

Total liabilities

December 31, 2022

Deferred cash consideration in connection with a business acquisition—SCUF (2)

Foreign currency forward contracts (1)

Total liabilities

(1) The fair values of the forward contracts were based on similar exchange traded derivatives and the related asset or liability is included within Level 2 of the fair value hierarchy .

(2) In December 2019, one of our subsidiaries entered into an Agreement and Plan of Merger with Scuf Holdings, Inc.

and its subsidiaries (collectively, “SCUF”) and acquired 100% of their equity interests (the “SCUF Acquisition”).

The fair value of the SCUF contingent consideration was determined based on the estimates of acquired tax benefits owed to SCUF’s sellers according to the merger agreement, and these estimates represent a level 3 fair value measurement.

The $ 1.0 million liability as of December 31, 2022 was finalized and this amount was paid in 2023 .

In November 2024, the FASB issued ASU No.

2024-03, Income Statement (Topic 220) - Reporting Comprehensive Income - Expense Disaggregation Disclosures:

Disaggregation of Income Statement Expenses.

This ASU requires additional disclosures about the nature of expenses included in the income statement, such as purchases of inventory, employee compensation and depreciation.

This ASU 2024-03 is effective for annual periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, with early adoption permitted.

We are currently evaluating the provisions of this ASU and expect to adopt them for the year ended December 31, 2027.

Derivative Financial Instruments

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We do no t enter into derivative instruments for trading purposes.

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The foreign currency forward contracts generally mature within two to four months .

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Business Combinations

Fanatec Acquisition

On September 13, 2024, one of our subsidiaries, Corsair GmbH (“GmbH”) executed an Asset Purchase Agreement (“APA”) to purchase the business (the “Fanatec Business”) of Endor AG (“Endor”), which includes certain assets and all the personnel of Endor, as well as the equity interests of certain of Endor’s subsidiaries.

Endor AG was a German public entity that created the leading end-to-end premium Fanatec sim racing product line.

The Fanatec sim racing product line, which fully complements our sim racing chassis, gaming PCs, gaming and streaming peripherals, and monitors, will expand our product offerings in these markets.

The Fanatec APA was consummated on September 19, 2024 (the “Fanatec Acquisition Date”) for a cash purchase consideration of approximately $ 43.7 million, net of $ 4.5 million of cash acquired.

Prior to the Fanatec acquisition, another of our subsidiaries, Corsair Components Ltd (“CCL”), entered into a Bridge Loan Agreement (“Bridge Loan”) in May 2024 and a Debtor-In-Possession Loan Agreement (“DIP Loan”) in September 2024 with Endor to provide short-term financing for Endor's operations in connection with our intent to acquire the Fanatec Business through a German restructuring process.

Pursuant to the terms of the APA, the total principal and interest owed by Endor to CCL as of the Fanatec Acquisition Date for the Bridge Loan and DIP Loan of approximately $ 16.6 million, in aggregate, was set-off against the purchase price, and accordingly, on the Fanatec Acquisition Date, GmbH paid CCL $ 16.6 million cash to settle the Bridge Loan and DIP Loan (including interest of $ 0.6 million), on behalf of Endor.

GmbH paid the remaining $ 31.6 million purchase consideration to Endor in cash on the Fanatec Acquisition Date.

Because the Fanatec acquisition met the definition of a business, it has been accounted for as a business combination using the acquisition method of accounting.

Fanatec’s results of operations are included in our consolidated statements of operations with effect from September 19, 2024.

The following table summarizes the preliminary allocation of the purchase consideration to the estimated fair value of the assets acquired and liabilities assumed as of the Fanatec Acquisition Date with measurement period adjustments through December 31, 2024.

The primary areas of the purchase price allocation that are not yet finalized consist of income tax and indirect tax considerations and the validation of certain prepayments and inventory values, accounts payables and accrued liabilities.

We will continue to reflect measurement period adjustments to purchase price allocation, if any, in the period in which the adjustments are recognized.

Final determination of the fair values may result in adjustments to the values presented in the following table (in thousands):

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Amounts Previously Recognized as of Acquisition Date (1)

Measurement Period Adjustments

Amounts Recognized as of Acquisition Date (as adjusted)

Prepaid and other assets

Property and equipment

Identifiable intangible assets

Accounts payable

Accrued liabilities

Deferred tax liabilities

Total identified net assets acquired

Bargain purchase gain (2)

Purchase consideration, net of cash acquired

(1) As previously reported in our Form 10-Q for the quarter ended September 30, 2024.

(2) During the fourth quarter of 2024, as a result of certain measurement period adjustments, the $ 46.3 million fair value of the net identifiable assets acquired exceeded the total purchase consideration of $ 43.7 million.

Accordingly, we recognized a bargain purchase gain of $ 2.6 million, within “ other (expense) income, net ” in our consolidated statements of operations in the year ended December 31, 2024.

We believe the bargain purchase gain was primarily attributable to Endor's distressed financial position and lack of financing options available to avoid liquidation.

The fair value of the working capital related items, as well as the fair value of property and equipment approximated their book values at the Fanatec Acquisition Date.

The fair value of the inventories was estimated by major category, at an estimate of net realizable value, which we believe approximates the price a market participant could achieve in a current sale.

The difference between the fair value of the inventories and the book value recorded on the Fanatec Acquisition Date was $ 5.4 million, of which we recognized $ 4.7 million in “cost of revenue” in our consolidated statements of operations for the year ended December 31, 2024, upon the sale of the acquired inventory.

The $ 15.1 million identifiable intangible assets acquired include trade name of $ 11.3 million and product technology of $ 3.8 million.

The fair values of the identified intangible assets were estimated primarily using the income approach and were based on inputs that are not observable in the market which we consider to be Level 3 inputs.

These intangible assets are being amortized over their estimated useful lives, ranging from 6 to 15 years, using the straight-line method of amortization.

The identifiable intangible assets acquired are deductible for tax purposes.

The acquisition-related costs incurred in the year ended December 31, 2024 was $ 2.7 million, and these amounts are included in sales and general and administrative expenses in the consolidated statements of operations.

Unaudited Pro Forma Financial Information

Pro forma information is not included because the effects of the Fanatec Acquisition were not material to our consolidated statements of operations for the periods presented.

Drop Acquisition

On July 14, 2023 (the “Acquisition Date”), we completed the acquisition of the assets and business of Massdrop Inc.

On July 14, 2023 (the “Drop Acquisition Date”), we completed the acquisition of the assets and business of Massdrop Inc.

(“Drop”), including the assumption of trade payables and certain accrued liabilities (the “Drop Acquisition”) for a cash purchase consideration of approximately $ 14.2 million, net of $ 0.6 million of cash acquired.

On January 29, 2024, in connection with a joint release letter executed between us and Drop's seller, we received a refund of $ 1.0 million from the escrow funds in relation to the purchase price adjustment for net working capital.

On January 29, 2024, in connection with a joint release letter executed between us and Drop's seller, we received a refund of $ 1.0 million from escrow funds in relation to a purchase price adjustment for net working capital.

With this refund, total purchase consideration, net of cash acquired, decreased to $ 13.2 million.

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Drop’s results of operations are included in our consolidated statements of operations with effect from July 14, 2023.

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The Drop Acquisition was accounted for as a business combination under the acquisition method of accounting.

The fair values assigned to assets acquired and liabilities assumed are based on management's best estimates and assumptions.

Our purchase accounting is preliminary as of the date of this Annual Report on Form 10-K, pending finalization of the completeness of certain acquired assets and assumed liabilities.

We expect to finalize the purchase accounting as soon as practicable, but not later than one year from the Acquisition Date, and do not expect material purchase accounting adjustments in future periods.

The following table summarizes the preliminary allocation of the Drop Acquisition purchase consideration (including the $ 1.0 million purchase price adjustment) to the assets acquired and liabilities assumed at the Acquisition Date (in thousands):

The final allocation of the Drop Acquisition purchase consideration to the estimated fair value of the assets acquired and liabilities assumed, inclusive of immaterial measurement period adjustments, was as follows (in thousands):

Accounts receivable

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Purchase consideration, net of cash acquired

The fair value of certain working capital related items, including accounts receivable, prepaid and other assets, accounts payable and accrued liabilities, as well as the fair value of property and equipment approximated their book values at the Acquisition Date.

The fair value of the inventories was estimated by major category, at net realizable value, which we believe approximates the price a market participant could achieve in a current sale.

The difference between the fair value of the inventories and the book value recorded on the Acquisition Date was $ 2.0 million, and $ 1.5 million has been recognized in cost of revenue in the consolidated statements of operations for the year ended December 31, 2023 upon the sale of the acquired inventory .

The difference between the fair value of the inventories and the book value recorded on the Drop Acquisition Date was $ 2.0 million, of which we recognized $ 0.5 million and $ 1.5 million in “cost of revenue” in our consolidated statements of operations for the year ended December 31, 2024 and 2023, respectively, upon the sale of the acquired inventory.

The goodwill of $ 6.0 million represents the expansion of our market presence by utilizing Drop's strength in direct consumer reach as well as the ability to expand the customizable keyboard and keycap market.

The goodwill is deductible for tax purposes and is assigned to our Gaming Peripherals reporting unit.

The goodwill is deductible for tax purposes and is assigned to our Peripherals reporting unit.

The $ 9.2 million identifiable intangible assets acquired include developed technology of $ 5.2 million, trade name of $ 2.3 million and domain name of $ 1.7 million.

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The identifiable intangible assets acquired are deductible for tax purposes.

The acquisition-related costs are included in sales, general and administrative expenses in our consolidated statements of operations and the amounts incurred in 2023 were no t material.

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The acquisition-related costs are included in sales, general and administrative expenses in our consolidated statements of operations and the amounts incurred in the years ended December 31, 2024 and 2023 were no t material.

Unaudited Pro Forma Financial Information

Pro forma financial information is not included because the effects of the Drop Acquisition were not material to our consolidated statements of operations for the periods presented.

iDisplay Acquisition

On January 1, 2022 (the “Closing” or “Closing Date”), we completed the acquisition of a 51 % ownership stake in iDisplay (the “iDisplay Acquisition”), a leader in electronic development and design specializing in display technology, headquartered in Taiwan.

The fair value consideration for iDisplay was $ 36.4 million, including $ 21.9 million in cash and the issuance of 690,333 shares of our common stock with a fair value of $ 14.5 million at Closing Date.

The consideration was reduced for the effective 51 % settlement of a pre-existing contractual accounts payable balance owed to iDisplay of $ 3.5 million.

The iDisplay Acquisition has allowed us to direct the development and integration of iDisplay’s display-based touch-screen technologies into our products for gamers and creators.

iDisplay’s results of operations are fully consolidated with Corsair with effect from January 1, 2022.

The acquisition-related costs incurred in 2022 were no t material.

There were no additional acquisition-related costs incurred after 2022.

The seller of iDisplay (the “iDisplay Seller”) has retained a 49 % noncontrolling interest in iDisplay.

Under the Shareholders Agreement between Corsair and the iDisplay Seller, a put option was provided to the iDisplay Seller and a call option was provided to Corsair for the option to transfer (i) 14 % ownership interest in iDisplay to Corsair upon the first anniversary of the Closing and (ii) an additional 15 % of ownership interest in iDisplay to Corsair upon the second anniversary of the Closing.

Both put and call options expire on January 1, 2025 .

The exercise price of the put option and the call option is based on multiples of iDisplay’s trailing twelve-month earnings before interest, income tax, depreciation and amortization (“TTM EBITDA”) less any debt.

The 29 % noncontrolling interest subject to the put option is considered a redeemable noncontrolling interest (“RNCI ”).

See Note 2, “Summary of Significant Accounting Policies – Noncontrolling Interest” and Note 17, “Redeemable Noncontrolling Interest” for more information regarding such RNCI.

The fair value of the 49 % noncontrolling interest was estimated to be $ 29.6 million at Closing Date.

The control premium was based on an analysis considering similar market transactions involving control premiums, as well as factors specific to iDisplay, including its significant customer concentration .

Subsequent to the iDisplay Acquisition Closing Date, we recorded measurement period adjustments which increased goodwill by $ 1.0 million and decreased identifiable intangible assets and deferred liabilities by $ 1.1 million and $ 0.1 million, respectively.

The final allocation of the iDisplay Acquisition purchase consideration to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date was as follows (in thousands) :

Accounts receivable

Prepaid and other assets

Operating lease right-of-use asset

Property and equipment

Identifiable intangible assets

Total assets acquired

Accounts payable

Deferred tax liabilities

Accrued liabilities

Operating lease liabilities

Total liabilities assumed

Net assets acquired

Noncontrolling interest

Fair value of consideration transferred

Purchase consideration:

Corsair common stock

Fair value of consideration transferred

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The fair value of the inventories was estimated by major category, at net realizable value, which we believe approximates the price a market participant could achieve in a current sale.

The difference between the fair value of the inventories and the book value recorded by iDisplay on the acquisition date was no t material .

The goodwill recognized for the iDisplay Acquisition, which is the excess of the purchase consideration over the fair value of the identifiable intangible assets and the net tangible assets and liabilities acquired, has been estimated to be $ 33.0 million, of which $ 29.3 million and $ 3.7 million are assigned to our Gaming Peripherals reporting unit and Gaming Components reporting unit, respectively.

We believe goodwill represents the strengthening of our supply chain with display-based touch-screen technologies into our products for gamers and creators, and the ability to design and generate new technologies to enhance the features of our products .

A portion of the identifiable intangible assets are not deductible for tax purposes for which a $ 4.6 million deferred tax liability has been estimated at the date of acquisition for the difference between the book and tax bases of these assets.

The goodwill is not deductible for tax purposes .

Valuation of identified intangible assets

The following table summarizes the valuation of the identifiable intangible assets acquired in the iDisplay Acquisition and the estimate of their respective useful lives as of the Closing Date, including subsequent measurement period adjustments:

(In thousands)

Patent portfolio

Supplier relationships

Developed technology

Total identifiable intangible assets

The fair value of patent portfolio was estimated using the relief from royalty approach and the economic useful life was determined based on the average product life cycle of the products manufactured by iDisplay.

The supplier relationships intangible asset represents the value assigned to the relationship iDisplay had established over the years with a broad network of suppliers and OEMs that have been crucial to the quality and magnitude of iDisplay manufacturing capability.

The fair value of supplier relationships was estimated using the multi-period excess earnings approach and the economic useful life was determined to be aligned with the estimated useful life of the developed technology acquired from iDisplay.

The developed technology intangible asset represents unpatented propriety technologies, such as hardware designs and architectures and process technologies used in the on-going research and design of the products manufactured by iDisplay.

The fair value of developed technology was estimated using the income approach and the economic useful life was based on the technology cycle of the products manufactured, as well as the cash flows anticipated over the forecasted periods.

The valuations of the intangible assets were calculated with the assistance of a third-party valuation firm.

The fair values of these intangibles were valued based on long-term cash flow projections, which we consider to be Level 3 inputs .

Goodwill and Intangible Assets

We have four reporting units:

Gaming Peripherals, Gaming Components, Gaming Memory and Gaming Systems.

The Gamer and Creator Peripherals segment includes the Gaming Peripherals reporting unit.

The Gaming Components and Systems segment includes the Gaming Components, Gaming Memory and Gaming Systems reporting units.

We used to have four reporting units:

Peripherals, Components, Memory and Systems.

The Gamer and Creator Peripherals segment includes the Peripherals reporting unit.

The Gaming Components and Systems segment includes the Components, Memory and Systems reporting units.

Due to a change in business strategies, with effect from July 1, 2024, the Systems reporting unit and the Components reporting unit within the Gaming Components and Systems segment were combined (referred to as the Component and Systems reporting unit) because they now satisfy the aggregation criteria under the applicable accounting guidance.

Therefore, with effect from July 1, 2024, we have three reporting units:

Peripherals, Components and Systems, and Memory.

The Gamer and Creator Peripherals segment includes the Peripherals reporting unit.

The Gaming Components and Systems segment includes the Components and Systems reporting unit, and the Memory reporting unit.

Since the composition of our other reporting units, the Peripherals reporting unit and the Memory reporting unit, did not change, the carrying value of the goodwill for the Component and Systems reporting was determined as the sum of the goodwill carrying value for the Components reporting unit and the Systems reporting unit as of July 1, 2024.

Corsair Gaming, Inc.

| 2024 Form 10-K | 69

T he following table summarizes the changes in the carrying amount of goodwill by reportable segment (in thousands):

The following table summarizes the changes in the carrying amount of goodwill by reportable segment (in thousands):

December 31, 2022

Addition from business acquisition

Purchase price adjustment

Measurement period adjustments

1 unchanged sentence

December 31, 2023

Addition from business acquisition

Purchase price adjustment

Measurement period adjustments

42 unchanged sentences

Deferred tax asset

Corsair Gaming, Inc.

| 2024 Form 10-K | 71

Accrued reserves for customer incentive programs

Accrued reserves for sales returns

Accrued payroll and related expenses

Operating lease liabilities, current

Accrued freight expenses

Accrued payroll and related expenses

Sales and use tax and value-added tax payable

Operating lease liabilities, current

Contract liabilities

Accrued warranty

Income tax payable

Contract liabilities

Accrued legal expense

Other liabilities and accrued expenses

1 unchanged sentence

Other liabilities, noncurrent

Corsair Gaming, Inc.

| 2023 Form 10-K | 73

Our debt consisted of the following (in thousands):

On September 3, 2021, we refinanced the First Lien Credit and Guaranty Agreement with a new Credit Agreement (as amended, the “Credit Agreement”).

The Credit Agreement provides for a $ 100.0 million five-year revolving credit facility (“Revolving Facility”) and a $ 250.0 million five-year term loan facility (“Term Loan”), with each maturing in September 2026 .

The Credit Agreement also permits, subject to conditions stated therein, additional incremental facilities in a maximum aggregate principal amount not to exceed $ 250.0 million.

We may prepay the Term Loan and the Revolving Facility at any time without premium or penalty.

We prepaid $ 12.5 million and $ 34.1 million of the Term Loan principal in the years ended December 31, 2024 and 2023, respectively.

The following table presents the carrying value of our Term Loan (in thousands):

Term Loan (variable rate) due September 2026

2 unchanged sentences

Long-term debt, net

First Lien Credit and Guaranty Agreement (Extinguished in 2021)

In August 2017, we entered into a syndicated First Lien Credit and Guaranty Agreement (“First Lien”) with various financial institutions, initially providing a $ 235 million term loan (“First Lien Term Loan”) and subsequently increased by $ 240 million, in aggregate, primarily to fund various business acquisitions and operational needs.

I n September 2021, the outstanding balance of the First Lien Term Loan of $ 248.5 million was fully prepaid with the proceeds from the Term Loan (defined below), and as a result, all obligations and covenants thereunder were terminated.

Credit Agreement

On September 3, 2021, we entered into a Credit Agreement (as amended, the “Credit Agreement”) which provides for a $ 100.0 million five-year revolving credit facility (“Revolving Facility”) and a $ 250.0 million five-year term loan facility (“Term Loan”), with each maturing in September 2026 .

The Credit Agreement also permits, subject to conditions stated therein, additional incremental facilities in a maximum aggregate principal amount not to exceed $ 250.0 million.

We may prepay the Term Loan and the Revolving Facility at any time without premium or penalty.

In the years ended December 31, 2023 and 2022, we prepaid $ 34.1 million and $ 3.8 million of the Term Loan principal, respectively.

The Term Loan and Revolving Facility under the Credit Agreement initially carried interest at the Company’s election at either (a) LIBOR plus a percentage spread (ranging from 1.25 % to 2.0 %) based on our total net leverage ratio, or (b) the base rate (described in the Credit Agreement as the greatest of (i) the prime rate, (ii) the federal funds rate plus 0.50 % and (iii) one-month LIBOR plus 1.0 %) plus a percentage spread (ranging from 0.25 % to 1.0 %) based on our net leverage ratio.

The Credit Agreement contains covenants with which we must comply during the term of the agreement, which we believe are ordinary and standard for agreements of this nature.

The financial covenants include the maintenance of a maximum Consolidated Total Net Leverage Ratio of 3.00 to 1.00 and a minimum Consolidated Interest Coverage Ratio of 3.00 to 1.00 (as defined in the Credit Agreement).

The Credit Agreement also includes events of default customary for facilities of this nature and upon the occurrence of such events of default, among other things, all outstanding amounts under the Credit Agreement may be accelerated and/or the lenders’ commitments terminated.

In addition, upon the occurrence of certain events of default, the interest on the Term loan and Revolving Facility can be increased by 2.0 %.

Our obligations under the Credit Agreement are guaranteed by substantially all of our U.S.

On June 30, 2022, we entered into a First Amendment of the Credit Agreement (“First Amendment”), which among other changes resulted in the Bloomberg Short-Term Bank Yield Index rate (“BSBY”) being utilized as a replacement rate for LIBOR.

Consequently, following the First Amendment, the Term Loan and Revolving Facility will each bear interest at the Company’s election at either (a) BSBY plus a percentage spread (ranging from 1.25 % to 2.25 %) based on our total net leverage ratio, or (b) the base rate (as described in the Credit Agreement as the greatest of (i) the prime rate, (ii) the federal funds rate plus 0.50 % and (iii) one-month BSBY plus 1.0 %) plus a percentage spread (ranging from 0.25 % to 1.25 %) based on our total net leverage ratio.

In addition, pursuant to the First Amendment, the maximum permitted Consolidated Total Net Leverage Ratio was also amended to increase to 3.50 to 1.00 between the quarters ending September 30, 2022 through and including March 31, 2023, and such ratio was to revert to 3.00 to 1.00 from the quarter ended June 30, 2023 and each quarter thereafter, provided that, upon the occurrence of a Qualified Acquisition (as defined in the Credit Agreement), such ratio can be increased to 3.50 to 1.00 temporarily provided all the requirements set forth in the Credit Agreement are met.

Additionally, the commitment fee on the unused portion of the Revolving Facility was amended to range from 0.2 % to 0.4 % based on our total net leverage ratio.

As of December 31, 2024, the estimated fair value of the Term Loan, which we have classified as a Level 2 financial instrument, was approximately $ 176.9 million.

As of December 31, 2024 and 2023, we had $ 99.8 million unused capacity under the Revolving Facility.

The Credit Agreement has a variable rate structure.

According to the provisions in the Third Amendment to the Credit Agreement (“Third Amendment”), beginning 2024, the Term Loan and the Revolving Facility carry interest at our election at either (a) Bloomberg Short-Term Bank Yield Index rate (“BSBY”) plus a percentage spread (ranging from 1.25 % to 2.25 %) based on our total net leverage ratio, or (b) the base rate (as described in the Credit Agreement as the greatest of (i) the prime rate, (ii) the federal funds rate plus 0.50 % and (iii) one-month BSBY plus 1.0 %) plus a percentage spread (ranging from 0.25 % to 1.25 %) based on our total net leverage ratio.

Additionally, the commitment fees on the unused portion of the Revolving Facility ranges from 0.2 % to 0.4 % based on our total net leverage ratio.

On August 19, 2024, we entered into a Fourth Amendment (the “Fourth Amendment”) to the Credit Agreement, which provides for, among other things, (i) effectuates the transition of the underlying variable interest rate from the BSBY to a forward-looking interest rate based on the Secured Overnight Financing Rate (“SOFR”), with no change to the applicable margin percentage spread, but with the addition of a rate spread adjustment in the amount of 0.10 % per annum, (ii) increases the letter of credit sublimit from $ 15 million to $ 65 million and (iii) the issuance of letters of credit denominated in Euro.

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| 2024 Form 10-K | 72

On September 29, 2022, we entered into an accounts receivable Factoring Agreement with a Factor.

See Note 2, “Summary of Significant Accounting Policies – Accounts Receivable, Net” for balances receivable under the Factoring Agreement.

In connection with the Factoring Agreement, we also entered into (i) a Second Amendment (“Second Amendment”) to the Credit Agreement to permit the transactions contemplated by the Factoring Agreement and (ii) an Assignment of Factoring Proceeds and Intercreditor Agreement with the Factor and the administrative agent under the Credit Agreement to establish the respective rights of the Factor and the Credit Agreement Agent in and to the related factoring collateral.

On November 28, 2022, we entered into a Third Amendment (“Third Amendment”) to the Credit Agreement that provides for, among other things, (i) a decrease in the required minimum Consolidated Interest Coverage Ratio to 2.50 to 1.00 for the quarters ending on and after March 31, 2023 through and including December 31, 2023, (ii) an increase in the maximum permitted Consolidated Total Net Leverage Ratio to 3.75 to 1.00 for the quarters ending December 31, 2022 and March 31, 2023, stepping down to 3.50 to 1.00 for the quarter ending June 30, 2023, and 3.25 to 1.00 for the quarters ending September 30, 2023 and December 31, 2023, and (iii) a modified pricing grid providing for an increased margin (ranging from 1.50 % per annum to 3.25 % per annum for loans bearing interest at the BSBY rate, and 0.50 % per annum to 2.25 % per annum for loans bearing interest at the base rate, in each case depending on the Company’s total net leverage ratio) for the period of December 31, 2022 through December 31, 2023.

Additionally, t he commitment fee on the unused portion of the Revolving Facility was amended to range from 0.25 % to 0.5 % based on our total net leverage ratio, for the period of December 31, 2022 through December 31, 2023.

According to the provision in the Third Amendment, with effect from January 1, 2024, the aforementioned amended terms will revert back to the terms as amended by the First Amendment, including the permitted minimum Consolidated Interest Coverage Ratio, the permitted maximum Consolidated Total Net Leverage Ratio, the interest rate margin and the commitment fee on the unused portion of the Revolving Facility.

The First, Second and Third Amendment were all accounted for as debt modifications.

The effective interest rate of our Term Loan, inclusive of the debt discount and debt issuance costs, was approximately 6.8 %, 7.4 % and 3.3 % for the years ended December 31, 2024, 2023 and 2022, respectively.

As of December 31, 2024, we were not in default under the Credit Agreement.

As of December 31, 2023 and December 31, 2022, we had $ 100.0 million unused capacity under the Revolving Facility.

As of December 31, 2023 and December 31, 2022, the carrying value of our Term Loan was $ 198.2 million and $ 238.7 million, respectively.

The estimated fair value of the Term Loan as of December 31, 2023, which we have classified as a Level 2 financial instrument, was approximately $ 197.6 million.

The effective interest rate inclusive of the debt discount and debt issuance costs for the Term Loan was approximately 7.4 %, 3.3 % and 1.4 % for the years ended December 31, 2023, 2022 and 2021, respectively.

Our obligations under the Credit Agreement are guaranteed by substantially all of our U.S.

The following table summarizes the interest expense recognized for all periods presented (in thousands):

Years Ended December 31,

First Lien Credit and Guaranty Agreement:

Contractual interest expense for term loan

Amortization of debt discount and issuance cost

Loss on debt extinguishment

Credit Agreement:

4 unchanged sentences

The future principal payments under our total long-term debt as of December 31, 2024 are as follows (in thousands):

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| 2023 Form 10-K | 75

Commitments and Contingencies

2 unchanged sentences

Beginning of the period

Balance assumed from business acquisitions

Warranty provision related to products shipped

3 unchanged sentences

In the normal course of business, we enter into various purchase commitments for goods or services.

Our long-term non-cancelable purchase commitments consist primarily of multi-year contractual arrangements relating to subscriptions for cloud computing hosting arrangements for our enterprise resource planning (“ERP”) system and the related support services .

The total long-term non-cancelable purchase commitments as of December 31, 2023 was as follows (in thousands):

Our total non-cancelable long-term purchase commitments outstanding as of December 31, 2022 was $ 3.8 million.

Our long-term non-cancelable purchase commitments consist primarily of multi-year contractual arrangements relating to subscriptions for our enterprise resource planning system and the related support services, in addition to commitments related to other cloud computing hosting arrangements .

Total long-term non-cancelable purchase commitments as of December 31, 2024 and 2023 was $ 1.6 million and $ 1.5 million, respectively.

Letters of Credit

There were no letters of credit outstanding as of December 31, 2023 and 2022, respectively.

Letters of credit outstanding as of December 31, 2024 and 2023 were $ 0.2 million and nil , respectively.

No amounts have been drawn upon the letters of credit for the years ended December 31, 2024, 2023 and 2022.

Corsair Gaming, Inc.

| 2024 Form 10-K | 73

Legal Proceedings

12 unchanged sentences

There were no shares of preferred stock outstanding as of December 31, 2024 and 2023.

Corsair Gaming, Inc.

| 2023 Form 10-K | 76

Shelf-Registration Statement

3 unchanged sentences

We will not receive any of the proceeds from the sale of the shares registered by the selling securityholders.

In November 2022, we sold 4,545,455 shares of common stock at a price of $ 16.50 per share in a registered underwritten public offering pursuant to the 2022 Shelf Registration Statement.

Following the partial exercise in December 2022 by the underwriters of their option to purchase additional shares, we sold an additional 500,000 shares.

The total proceeds from the underwritten public offering, net of underwriting discounts, commission and offering expenses, were approximately $ 81.0 million .

During the year ended December 31, 2023, there were no shares issued pursuant to the 2022 Shelf Registration Statement.

As of December 31, 2024, $ 216.7 million remained available for issuance under the 2022 Shelf Registration Statement.

14 unchanged sentences

Stock options expire ten years from date of grant.

In February 2024, we granted 327,000 shares of PSUs to certain senior members of our management team under the 2020 Equity Incentive Plan, with weighted-average grant date fair value of $ 13.54 per share.

The vesting of PSUs is conditional upon the achievement of certain internal financial targets for the year ended December 31, 2024 (the “Performance Period” ) , as measured as soon as administratively practicable within a 60-day period following the end of the Performance Period (the “Determination Date”).

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| 2024 Form 10-K | 74

If these targets are met, the PSUs would vest over a three-year service period.

However, the financial targets for the Performance Period were not met and according to the terms of this PSU grant, the PSUs were forfeited on the Determination Date, which was February 5, 2025.

Employee Stock Purchase Plan

5 unchanged sentences

As of December 31, 2024, there were 2,879,291 shares reserved for future issuance under the ESPP.

Corsair Gaming, Inc.

| 2023 Form 10-K | 77

Stock Options Activities

19 unchanged sentences

The total fair value of RSUs vested in the years ended December 31, 2024, 2023 and 2022 was $ 8.1 million, $ 13.2 million and $ 4.5 million, respectively.

Corsair Gaming, Inc.

| 2024 Form 10-K | 75

Stock-based Compensation

13 unchanged sentences

Total unrecognized stock-based compensation expense

Corsair Gaming, Inc.

| 2023 Form 10-K | 78

(1) As of December 31, 2024, the financial targets for the PSUs was not achieved.

As such, no PSU stock-based compensation expense was recognized in 2024, and there is no unrecognized stock-based compensation expense remaining as of December 31, 2024.

Valuation Assumptions

We estimate the fair value of the stock options at the date of grant using the Black-Scholes-Merton pricing model, with the following valuation assumptions and values:

We estimate the fair value of the stock options at the date of grant using the Black-Scholes-Merton pricing model, with the following valuation assumptions:

Years Ended December 31,

9 unchanged sentences

1.67 % - 2.93 %

We estimate the fair value of the shares under the ESPP at the date of grant using the Black-Scholes-Merton pricing model, with the following valuation assumptions and inputs:

We estimate the fair value of the shares under the ESPP at the date of grant using the Black-Scholes-Merton pricing model, with the following valuation assumptions:

Years Ended December 31,

14 unchanged sentences

Starting in 2023, the expected volatility is estimated using the average volatility of our common stock and the stocks of comparable public companies within our industry.

Corsair Gaming, Inc.

| 2024 Form 10-K | 76

Risk-Free Interest Rate —The risk-free interest rate is based on the U.S.

5 unchanged sentences

Years Ended December 31,

Net income (loss)

Net income attributable to noncontrolling interest

Net income (loss) attributable to Corsair Gaming, Inc.

Net loss attributable to Corsair Gaming, Inc.

Change in redemption value of redeemable noncontrolling interest

5 unchanged sentences

Anti-dilutive potential common shares (1)

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| 2023 Form 10-K | 79

(1) Potential common share equivalents were not included in the calculation of diluted net income (loss) per share as the effect would have been anti-dilutive.

Income (loss) before income tax consisted of the following (in thousands):

Loss before income tax consisted of the following (in thousands):

Years Ended December 31,

Income (loss) before income tax

Loss before income tax

Income tax benefit (expense) consisted of the following (in thousands):

4 unchanged sentences

Income tax benefit (expense)

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| 2024 Form 10-K | 77

The income tax benefit (expense) differs from the amount computed by applying the U.S.

5 unchanged sentences

Research and development credits

Tax impact from intercompany transfer of intangible assets

Tax impact from entity dissolution

Change in valuation allowance

Change in tax rate on deferred tax assets

Section 162(m) limitation

Deferred tax assets adjustments

Stock base compensation

Income tax benefit (expense)

The major drivers for the change in tax benefit (expense) in 2023 as compared to 2022 were the generation of foreign tax credits due to foreign income under Subpart F regime as well as other types of tax credits, which were partially offset by the write-off of certain deferred tax assets mainly due to the deduction limitation under Section 162(m) of the Internal Revenue Code on some of our stock-based compensation expense.

The major drivers for the change in tax benefit (expense) in 2022 as compared to 2021 were the decrease in excess tax benefits from stock-based compensation because of a lower volume of options exercised by employees due to the decline in our stock price in 2022, and the change in the mix of income and losses in the various tax jurisdictions in which we operate.

The major drivers for the change in tax benefit (expense) in 2024 as compared to 2023 were the change in the mix of income and losses in the various tax jurisdictions in which we operate, as well as the valuation allowance recorded against our U.S.

federal and state deferred tax assets, which were partially offset by a tax benefit recognized for the transfer of customer relationship intangible asset from Hong Kong to U.K.

as a result of our global tax restructuring initiative completed on July 1, 2024.

The major drivers for the change in tax expense in 2023 as compared to 2022 were the generation of foreign tax credits due to foreign income under Subpart F regime as well as other types of tax credits, which were partially offset by the write-off of certain deferred tax assets mainly due to the deduction limitation under Section 162(m) of the Internal Revenue Code on some of our stock-based compensation expense.

We were not subject to any tax holidays or tax holiday terminations subject to disclosure during these periods that impacted earnings per share.

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| 2023 Form 10-K | 80

Components of d eferred tax assets and liabilities consisted of the following (in thousands):

1 unchanged sentence

Accrued expenses and reserves

Lease liabilities

Stock-based compensation

7 unchanged sentences

Intangible assets

Right-of-use assets

Depreciation & amortization

Net deferred tax assets

We have established a valuation allowance of $ 1.3 million each as of December 31, 2023 and 2022, against our net deferred tax assets.

Net deferred tax (liabilities) assets

We have established a valuation allowance of $ 43.7 million and $ 1.3 million as of December 31, 2024 and 2023, respectively, against our net deferred tax assets.

We determine valuation allowance on deferred tax assets by considering both positive and negative evidence in order to ascertain whether it is more likely than not that deferred tax assets will be realized.

Realization of deferred tax assets is dependent upon the generation of future taxable income, if any, the timing and amount of which are uncertain.

The $ 1.3 million valuation allowance balance as of December 31, 2023 was established against the deferred tax asset related to foreign tax credits of $ 1.0 million and the remainder $ 0.3 million was against the deferred tax asset related to the NOL from our China operations.

As of December 31, 2023, we had net operating loss carry forwards for federal, state and foreign tax purposes of $ 1.1 million, $ 37.4 million, and $ 10.2 million, respectively.

The federal, state and foreign net operating losses will begin to expire starting in 2037 , 2030 , and 2028 , respectively.

As defined under Internal Revenue Code Section 382, certain tax attributes are subject to an annual limitation as a result of our change in ownership in August 2017.

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| 2024 Form 10-K | 78

In the third quarter of 2024, we have reached a cumulative loss position over the previous three years, and with consideration of other negative evidence, we concluded that U.S.

federal and state deferred tax assets are not more likely than not to be realizable.

As a result of the foregoing, a full valuation allowance of $ 42.5 million was recorded in the year ended December 31, 2024.

The remaining $ 1.2 million valuation allowance was against the deferred tax asset related to the NOL from the newly acquired entity as part of our Fanatec Acquisition.

As of December 31, 2024, we had NOL carry forwards for federal, state and foreign tax purposes of $ 4.7 million, $ 42.7 million, and $ 6.4 million, respectively.

The federal NOL will be carried forward indefinitely.

The state and foreign NOL will begin to expire starting in 2041 and 2028 , respectively.

As defined under Internal Revenue Code Section 382 (“Section 382”), certain tax attributes are subject to an annual limitation as a result of our change in ownership in August 2017.

In August 2017, we acquired the interests of the operating subsidiaries from Corsair Components (Cayman) Ltd.

We do not expect our tax attributes to be materially affected by the annual limitation.

In September 2024, as part of the Fanatec Acquisition, Corsair GmbH acquired the interest of Endor AG, a German stock corporation, and its non-German direct subsidiaries.

Section 382 is not expected to have a material impact on our ability to utilize NOLs generated by predecessor companies before the Fanatec Acquisition Date.

Changes in gross unrecognized tax benefits, excluding interest and penalties, as a result of uncertain tax positions were as follows (in thousands):

8 unchanged sentences

federal government, various U.S.

states and foreign jurisdictions including Canada, China, France, Germany, Hong Kong, Japan, Luxembourg, Netherlands, Singapore, Slovenia, Taiwan, United Kingdom and Vietnam.

states and foreign jurisdictions including Australia, Canada, China, France, Germany, Hong Kong, Japan, Luxembourg, Netherlands, Singapore, Slovenia, Taiwan, U.K.

Our tax returns in the U.S., various U.S.

states and foreign jurisdictions remain open to examination from 2014 to 2023 .

Corsair Gaming, Inc.

| 2023 Form 10-K | 81

Accumulated Other Comprehensive Loss

5 unchanged sentences

Total accumulated other comprehensive loss attributable to Corsair Gaming, Inc.

Segment and Geographic Information

The table below summarizes the financial information for each reportable segment (in thousands):

Years Ended December 31,

Segment and Geographic Information and Major Customers

By this definition, we have identified our Chief Executive Officer as the CODM.

We operate and report in two segments:

• Gamer and Creator Peripherals .

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| 2024 Form 10-K | 79

• Gaming Components and Systems .

Total net revenue

Includes our high-performance PSUs, cooling solutions, computer cases, DRAM modules, as well as high-end prebuilt and custom-built gaming PCs and laptops, and gaming monitors, among others.

We believe that this structure reflects our current operational and financial management, and that it provides the best structure for us to focus on growth opportunities while maintaining financial discipline.

Our CODM reviews net revenue, and gross profit of these segments on a regular basis to evaluate the performance of, and allocates resources to, each of the two segments.

The CODM considers budget-to-actual variances on a monthly basis when making decisions about allocating resources to the segments.

Our CODM manages assets on a total company basis, not by operating segments, therefore segmental asset information is not presented.

Segment Profit and Loss

The tables below present the reportable segment profit and loss measure - segment gross profit for each of the periods presented (in thousands):

For the year ended December 31, 2024

Gamer and Creator Peripherals

Gaming Components and Systems

Total gross profit

The CODM manages assets on a total company basis, not by operating segments;

therefore, asset information and capital expenditures by operating segments are not presented.

Net revenue (1)

Inventory costs (2)

Other segment items (3)

Total cost of revenue

For the year ended December 31, 2023

Gamer and Creator Peripherals

Gaming Components and Systems

Net revenue (1)

Inventory costs (2)

Other segment items (3)

Total cost of revenue

For the year ended December 31, 2022

Gamer and Creator Peripherals

Gaming Components and Systems

Net revenue (1)

Inventory costs (2)

Other segment items (3)

Total cost of revenue

(1) There are no intersegment revenues between the reportable segments in the periods presented.

(2) Represents the significant expense in the reportable segment ’ s profit or loss measure (i.e., gross profit), aligning with the segment-level information that is regularly provided to our CODM.

Total inventory costs for the reportable segment includes cost of purchases from contract manufactures, and capitalized direct overhead costs recognized in cost of revenue for the periods presented.

(3) Represents other segment items including inbound freight costs, duties and tariffs, warranty replacement cost to process and rework returned items, overhead and excess and obsolete inventory write-downs, and other costs.

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| 2024 Form 10-K | 80

Revenue by Major Customer

The following table sets forth the customers that individually comprised 10% or more of our total net revenue for the periods presented:

Years Ended December 31,

* Customer represents less than 10 % of our total net revenue in the period presented.

Revenue by Major Products

The following table sets forth our net revenue by major product category for the periods presented (in thousands):

Years Ended December 31,

Gamer and Creator Peripherals segment

Gaming Peripherals products

Gaming Components and Systems segment

Memory products

Other Component products

Total net revenue

Geographic Information

1 unchanged sentence

Years Ended December 31,

United States (U.S.)

Americas (excluding U.S.) (1)

Europe and Middle East (1)

Asia Pacific (1)

Total net revenue

Revenues from sales to customers in the United States represented 45 % , 45 % and 38 % for the years ended December 31, 2023, 2022 and 2021, respectively.

No other single country represented 10 % or more of total net revenue during these periods.

(1) No individual country, other than disclosed above, represented 10% or more of our consolidated net revenue in the periods presented.

Our long-lived assets consist of property and equipment, net and operating lease right-of-use assets, which are summarized by geographic area as follows (in thousands):

United States

Other countries

Total long-lived assets

(1) No geographic area, other than disclosed above, represented 10% or more of our total long-lived assets in the periods presented.

Our lease portfolio consists primarily of real estate facilities for manufacturing, distribution, warehousing and office use purposes under operating leases.

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| 2023 Form 10-K | 82

The components of lease expenses were as follows (in thousands):

3 unchanged sentences

Total lease expense

Corsair Gaming, Inc.

| 2024 Form 10-K | 81

Supplemental cash flow information related to operating leases was as follows (in thousands):

9 unchanged sentences

Redeemable Noncontrolling Interest (“RNCI”)

Under the Shareholders Agreement between Corsair and the iDisplay Seller a put option was provided to the iDisplay Seller to transfer to Corsair (i) 14 % of their ownership interest in iDisplay upon the first anniversary of the Closing Date of the iDisplay Acquisition, and (ii) an additional 15 % of their ownership interest in iDisplay upon the second anniversary of the Closing Date.

The put option will expire after January 1, 2025 .

As of December 31, 2023, the iDisplay Seller has not exercised the put option for the transfer of the first 14 % of their ownership interest to Corsair.

The exercise price of the put option is based on multiples of iDisplay’s historical TTM EBITDA less any debt.

The put option makes this portion of the noncontrolling interest redeemable and therefore, the RNCI is classified as temporary equity on our consolidated balance sheets and carried at the greater of the initial carrying amount, increased or decreased, for the RNCI share of comprehensive income (loss), contributions and distributions, or the redemption value.

The change in redemption value is recognized through retained earnings.

RNCI, included in temporary equity on our consolidated balance sheet, of $ 15.1 million and $ 15.9 million as of December 31, 2024 and 2023, represented 19 % and 29 % interest in Elgato iDisplay Holdings LTD.

and its related companies (together “iDisplay”), respectively, that were not acquired by Corsair.

In addition, we have a nonredeemable noncontrolling interest (“Non-RNCI”) in iDisplay recorded at carrying value which does not have redemption features and is classified within permanent equity in our consolidated balance sheet of $ 10.5 million as of December 31, 2023, representing a 20 % interest in iDisplay not acquired by Corsair.

As a result of the Additional Purchase Transaction, as described below, we did no t have any Non-RNCI outstanding at December 31, 2024.

RNCI that is redeemable and not solely within our control is classified within temporary equity in our consolidated balance sheet.

RNCI is measured at the greater of the redemption value, or the carrying value before giving effect to the redemption feature.

The redemption value is calculated based on the formula stipulated in the Shareholders Agreement between the iDisplay Seller and Corsair and including the amounts for dividends not currently declared or paid, for which the payment is not solely within our control.

The redemption value is remeasured each quarter and changes in the value are recognized immediately.

Any resulting change in the value of the RNCI is recognized through retained earnings and this adjustment also impacts the net income or loss attributable to common stockholders of Corsair Gaming, Inc used in the net income (loss) per share calculation.

On January 1, 2022, we acquired a 51 % controlling interest in iDisplay and entered into a Shareholders Agreement (the “SHA”) with the iDisplay Seller which provided a put option to the iDisplay Seller to sell and a call option for us to purchase up to 29 % of the remaining interests in iDisplay.

The exercise price of the put and call option under the SHA is based on certain prescribed multiples of iDisplay’s historical TTM EBITDA less any debt.

Corsair and the iDisplay Seller did not exercise their call or put option under the SHA, but instead on July 1, 2024 (the “Execution Date”), Corsair entered into a Share Purchase Amendment Agreement (the “SPAA”) with the iDisplay Seller to purchase an additional 30 % ownership stake in iDisplay for a cash consideration of $ 19.8 million (the “Additional Purchase Transaction”).

The closing conditions of the SPAA were completed on July 8, 2024 (the “Closing Date”) along with our payment of the cash consideration.

As a result, our total ownership stake in iDisplay increased from 51 % to 81 %, and correspondingly, iDisplay Seller's ownership interest in iDisplay decreased from 49 % to 19 %.

The SPAA also replaced the call option and put option in the SHA with new options.

Under the SPAA, a put option (the “Put Option”) was provided to the iDisplay Seller to sell up to 19 % of the remaining ownership interest in iDisplay to Corsair within one year after the fifth anniversary date of the Execution Date, and a call option (the “Call Option”) was provided to Corsair to purchase up to 19 % of the remaining ownership interest in iDisplay at any time after the second anniversary of the Execution Date.

The exercise price of the Put Option and Call Option remain the same as the terms defined in the SHA.

In addition, if the founder of iDisplay ceases to serve as the manager of iDisplay, voluntarily or with cause, we are entitled to an irrevocable call option to purchase up to 19 % ownership interest in iDisplay at any time during the five years after the Execution Date and the exercise price is based on a prescribed multiple of TTM EBITDA.

Corsair Gaming, Inc.

| 2024 Form 10-K | 82

According to the applicable accounting guidance, purchase of noncontrolling interest that does not result in a change in control of the subsidiary is accounted for as equity transaction.

Since we continue to maintain control of iDisplay after the Additional Purchase Transaction, the net deficit of $ 1.6 million, net of tax impact, between the consideration paid for the additional 30 % ownership stake and its carrying value as of the Closing Date was recognized as an adjustment to our additional paid-in capital in 2024.

Additionally, according to the SPAA, the remaining 19 % interest in iDisplay not acquired by Corsair is subject to redemption by the iDisplay Seller through the Put Option.

Since the redemption is not solely within our control, the carrying value of the remaining 19 % interest in iDisplay is classified as temporary equity in our consolidated balance sheet effective from the Closing Date.

The following table presents the changes in RNCI for the periods presented (in thousands):

1 unchanged sentence

Balance at beginning of period

Initial carrying amount estimated at iDisplay's Closing Date

Share of net income

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Change in redemption value

Purchase of additional ownership interest

Balance at end of period

Corsair Gaming, Inc.

| 2023 Form 10-K | 83

(1) These amounts represent increases or (decreases) in redemption value over the carrying value for the respective periods.

These amounts were recorded as an offset to retained earnings impacting the net income (loss) used in the calculation of net income (loss) per share attributable to common stockholders of Corsair Gaming, Inc.

for these periods.

(1) This amount represents the reclassification of 19% ownership of iDisplay from noncontrolling interest (presented within permanent equity) to RNCI (presented within temporary equity), effective on the Closing Date of the Additional Purchase Transaction as further described above .

Related-Party Transactions

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Such services are provided without charge, other than for the reimbursement of travel and out-of-pocket expense as set forth in the management services agreement.

Total travel and out-of-pocket expenses incurred were $ 147 thousand, $ 23 thousand and nil for the years ended December 31, 2023, 2022 and 2021, respectively.

Total travel and out-of-pocket expenses incurred were $ 271 thousand, $ 147 thousand and $ 23 thousand for the years ended December 31, 2024, 2023 and 2022, respectively.

The amount owed to the majority owner for such expenses was $ 55 thousand and $ 35 thousand as of December 31, 2024 and 2023, respectively.

3 unchanged sentences

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.

What changed 10-K

Item 7. Management’s Discussion and Analysis