Corsair Gaming, Inc.

Good morning and welcome to Corsair Gaming fourth quarter and full year 2020 earnings conference call. As a reminder, today's call is being recorded and your participation implies consent to such recording. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press pound zero on your telephone keypad. With that, I would like to turn the call over to Ronald Van Veer, Corsair's Vice President of Finance and Investor Relations. Thank you, sir. You may begin.

Thank you. Good morning, everyone, and thank you for joining us for Corsair's Financial Results Conference Call for the fourth quarter ending December 31, 2020. On the call today, we have Corsair CEO Andy Paul and CFO Michael Parr. Before we begin, allow me to provide a disclaimer regarding forward-looking statements. This call, including the Q&A portion of the call, may include forward-looking statements related to the expected future results of our company and are therefore forward-looking statements. Our actual results may differ materially from our projections due to a number of risks and uncertainties. The risks and uncertainties that forward-looking statements are subject to are described in our earnings release and other SEC files. Today's remarks will also include references to non-GAAP financial measures. Additional information, including reconciliation between non-GAAP financial information to the GAAP financial information, is provided in the press release. I would also like to remind everyone that until our 10-K is on file, the 2020 numbers are unaudited. This conference call will be available for replay via webcast through Coursera's investor relations website at ir.coursera.com. Andy will begin with our fourth quarter business highlights and 2021 outlook, and Michael will then take you through a review of the financials before we proceed to Q&A. With that, I'll now turn the call over to Andy.

Thank you, Ronald, and welcome to our Q4 2020 earnings call. While we are very pleased with our record results in the fourth quarter, and indeed all of 2020, which exceeded our expectations as we delivered net revenue growth for the quarter of 70.4% to 556.3 million, adjusted EBITDA growth of 154.7% to 72.5 million, and adjusted earnings of 53 cents per diluted share up 32 cents or 151 percent. For the full year, revenue growth was 52.2 percent to 1.7 billion, adjusted EBITDA growth of 197.5 percent to 213 million, and adjusted earnings of $1.60 per diluted share up $1.25 or 355 percent. The market for gaming and streaming gear over the holiday period showed the same strong trends as previous quarters, with consumers continuing to turn to gaming and streaming while they spend more time at home. All categories showed strong growth compared to Q4 2019, notably including components that gamers are buying to build high-end gaming PCs, as well as gaming and streaming peripherals. Now, this is important because people who step up and build a $2,000 gaming PC are likely going to be committed to buying more peripherals in the future. In December, we saw YouTube reveal that they had 40 million gaming channels, a number that was far higher than most industry watches have been estimating. This underscores our thesis that streaming and sharing video content is becoming a way of life for millennials in the same way as playing video games has become. Looking back over the year, we don't see much evidence of a pull forward in sales. In other words, gamers buying in Q3 what they might have bought in Q4 without COVID. What we do continue to see is more people getting more committed to gaming and streaming and spending on gear to improve their game playing or overall experience. We still see a large white space available in the market where the number of PC gamers who say in surveys that they play PC games regularly is many times higher than our estimates of the number of people actually buying gaming gear. Corsair continued to be supply limited for most of Q4 in almost every category. In other words, our sales could have been substantially higher if we could have manufactured and shipped more products. Towards the end of the quarter, we were able to start filling retail shelves again, and we saw our market share numbers starting to rise in many of our categories. During the quarter, we introduced several new high-performance products, with those released since our last earnings call listed out in detail in the press release. Those include our SCUF-branded H1 customizable wired gaming headset, leveraging our SCUF brand into the headset category, two new keyboards, including the K100 new flagship product, a new wireless mouse powered by Slipstream wireless technology, a new haptic headset, an innovative new range of cases, including the 5000D family of Mid-Tower ATX, with Corsair's rapid route cable management and AirGuide cooling technology, a new family of CPU coolers, new low-profile Vengeance RGB memory kits, the MP600 family of SSDs, and new gaming PCs featuring the new NVIDIA and AMD GPUs, as well as latest Intel and AMD microprocessors. We expect to continue launching new product at a blistering pace, approximately one per week, and use these products to gain market share. Our new microphone, which started shipping in volume in Q3, continues to exceed our sales expectations. It has been a great addition to the Elgato product portfolio. Our gamer and creator segment continues to benefit from the highly acclaimed products that we've launched throughout the year. And I'm pleased to see that sales in this segment more than doubled in Q4 compared to Q4 2019. Lastly, I was also very pleased to recently announce the promotion of T. La to president and COO of Corsair, as well as several executive promotions and hires reporting to T in her new role. With these strategic changes, the company further strengthens its ability to focus and gain market share in every product category that we operate in. Turning now to guidance for the full year of 2021, we are guiding total revenue in the range of 1.8 to 1.95 billion, representing growth of 5.7% to 14.5%, adjusted operating income in the range of 205 million to 220 million, and adjusted EBITDA in the range of 215 million to 230 million. We expect the first half of the year to do well compared to prior year results. The number of people actively gaming and streaming content has dramatically increased, and we expect those people to continue to buy and upgrade new gear. We expect growth in the second half of the year to be more moderate, as we expect a gradual return to activities outside the home. However, we do have many exciting new products that we introduced last year and more planned for this year. and we expect that our new larger customer base want to add these products to their gaming and streaming setups. We will be adding significant resources to the company this year, both in marketing and R&D, as well as infrastructure as we move towards a $2 billion revenue number. We invested substantially into our direct-to-consumer business in 2020, both in people and infrastructure, and we've seen some very promising results from those investments. We've also seen good growth from our software and services area, and we expect to continue to expand these offerings in 2021, both from organic growth and from M&A. In closing, I'm very pleased with our strong fourth quarter results and our progress in 2020 as we expanded our product portfolio, tapping into new and growing markets and drive towards continued growth in 2021. We continue to execute on our strategic growth initiatives, and we remain focused on capitalizing on the tremendous marketing opportunity before us. Thank you for your time and continued support. I'll now turn the call over to Michael to discuss our financial results for the quarter and full year.