Corsair Gaming, Inc.

Good morning and welcome to the Coursera Gaming second quarter 2021 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 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 now like to turn the call over to Ronald Van Veen, Corsair's Vice President of Finance and Investor Relations. Thank you, sir. Please begin.

Thank you. Good morning, everyone, and thank you for joining us for Corsair's Financial Results Cockpit Scroll for the second quarter ending June 30, 2021. On the call today, we have Corsair CEO Andy Paul, CFO Michael Potter. 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 findings. 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 10Q is on file, the Q2 2021 numbers are preliminary. This conference call will be available for replay via webcast through the Corsair's investor relations website at ir.corsair.com. Andy will begin with our second quarter business highlights. 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 Q2 21 earnings call. Well, overall, I'm very pleased with our Q2 performance, where we delivered net revenue growth of 24% to $473 million today. as well as 24% gross profit growth to $130 million, which is our best second quarter ever. Our results highlight the strength of the underlying fundamentals of our business as gamers continue to purchase and upgrade their gear, even as entertainment outside of the home and travel began to open back up. We experience growth in every category, despite key component shortages in the market, such as graphics cards for enthusiastable gaming PCs, as well as semiconductor shortages, logistics issues, and port delays. We are now at a $2 billion run rate compared to our 2019 revenue of $1.1 billion, which speaks to the strong momentum in our business. We therefore are continuing to expand our resources and invest heavily in R&D, marketing, and infrastructure. We're extremely excited by the recent launch of our first camera, which has received an overwhelmingly positive response from the creator community. We've launched over 75 new products so far this year, which is just an astounding pace of innovation. Our new Elgato camera, called FaceCam, is designed specifically for streamers and content creators and outputs uncompressed 1080p video at 60 frames a second, which is, of course, significantly higher quality than a standard webcam. It has many features similar to a DLSR camera with software that controls contrast, white balance, zoom, et cetera. And all those settings can be stored in the camera, again, unlike a standard webcam. FaceCam also features a multi-layer coated lens and a high-end Sony camera. We also introduced our 7000 series full tower case, which allows for multiple radiators so that an ultimate gaming PC can be built for maximum performance. And the Virtuoso RGB XT, our new flagship gaming headset, offering incredible sound and impeccable clarity now includes Bluetooth as well as our proprietary Slipstream low-latency wireless connection. NPD data continues to show year-over-year growth in the gaming peripherals market with recent data showing keyboard and mice growing faster than headsets. We believe this is further evidence to support our conviction that as gamers spend more time playing games and improving their skills, they will want to upgrade to better gear that is designed specifically for gaming. We continue to observe that the market for gaming gear is at an early stage of evolution. The average annual growth pre-COVID for PC gaming peripherals have been running at about 24% per year in the US and a similar rate in Western Europe, where we're able to collect detailed market data. Now, in 2020, with lockdown, this increased to approximately 80%. These growth numbers are substantially higher than either the increase in new gamers to the market or the rate of growth in video game software. So what we believe is happening is that after people learn to play PC games for a while and get good at them, they start to want better specialized gaming gear. And because the market is still at an early stage and the penetration is so low, that's why we are seeing such high growth rates in gaming hardware due to the low base. If we look at gaming headsets, which is the most widely purchased peripheral, then only 20% of gamers playing premium games in the U.S., have bought those in the last three years, which is roughly the refresh cycle, with the other 80% yet to come to the market. So our belief is that the situation in 2020 and early 21, where gamers clearly spent more time in their homes learning to play games better, that should establish a higher base of consumers ready to step up and upgrade their gaming setup, which includes peripherals as well as gaming PCs. Headsets tend to be the first peripheral that gamers buy to make the game more immersive, but as skill improves, the next purchase tends to be high-performance gaming mice and keyboards. The market for gaming PCs and laptops in the last 12 months has been phenomenal, one of the fastest growing consumer electronics categories, according to NPD. High-end graphics cards were very difficult to buy in the last six months, And we believe there is a large number of gaming enthusiasts who are in the wings waiting to build a new PC on top of the elevated numbers of people that actually did build a new gaming rig. In creator peripherals, we continue to be the market leader in video capture cards and lighting. Our Wave microphone, which we launched last year, has gained significant market share quickly. Our Stream Deck has now become the standard for home broadcasting, and we now have several apps from third parties that can use Stream Deck. Turning now to our outlook for the year, the guidance for the fall year of 2021 remains unchanged from Q1, with total revenue in the range of $1.9 billion to $2.1 billion, representing growth of 11.6% to 23.4%, adjusted operating income in the range of $235 to $255 million, and adjusted EBITDA in the range of $245 to $265 million. 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.

Thanks, Andy, and good morning, everyone. During the second quarter, we delivered net revenue of $472.9 million, an increase of 24.3% compared to $380.4 million in Q2 2020. The gamer and creator peripheral segment provided $155.2 million of net revenue during the second quarter, an increase of 40.9% from $110.1 million in Q2 2020, driven by strong growth across all product categories, including sales of our SCUF-branded console products. The Gamer and Creator Purpose segment net revenue contributed 32.8% of total net revenue, an increase of 390 basis points from 28.9% in Q2 2020. The gaming components and systems segment provided $317.7 million of net revenue during the second quarter, an increase of 17.6% from $270.3 million in Q2 2020, primarily driven by strong growth across all product categories as consumers continue to buy and build gaming PCs. Of this revenue, memory products contributed $158.7 million. Gross profit in the second quarter increased by 24.1% to $130.4 million from $105.1 million in Q2 2020, which is the second quarter record. The increase over Q2 2020 was primarily driven by increased revenues. Gross profit margin remained flat at 27.6%. The positive impacts of mixed shift towards the gamer and creative purpose segment was offset by significant increases in logistic costs, particularly ocean freight. The gamer and creative peripheral segment gross profit was $54.6 million, an increase of $15.9 million from $38.7 million in Q2 2020, primarily driven by an increase in revenue in the same periods. Gross profit margin was 35.2%, flat with Q2 2020. We continue to see a mix shift as gamer and creative peripherals contributed 41.9% of total gross profit in Q2 2021 as compared to 36.9% in Q2 2020. This remains a great overall story and formula for continued overall margin expansion as our fastest growing and highest margin segment also sits in our largest market. The gaming components and systems segment gross profit of $75.7 million, an increase of $9.4 million from $66.3 million in Q2 2020, was primarily driven by an increase in revenue in the same periods. Gross profit margin decreased to 23.8% from 24.5% in Q2 2020, primarily due to freight costs. Gaming components and systems contributed 58.1% of the total gross profit in Q2 2021, as compared to 63.1% in Q2 2020. Our memory project margin in this segment was 17.7% for the quarter. Second quarter SG&A expenses were $80.2 million, an increase of $23.3 million, or 41.1%, compared to $56.8 million in Q2 2020, primarily driven by an increase in outbound freight costs due to increase in revenue, an increase due to expenses related to being a public company, and an increase in personnel-related expenses. Second quarter product development expenses were $15.5 million, an increase of $3.6 million, or 30.8%, compared to $11.8 million in Q2 2020, primarily driven by an increase in personnel related expenses as we continue to focus on bringing an increasing number of products to the market. Operating income in the second quarter of 2021 was $34.7 million, a decrease of $1.7 million from $36.4 million in Q2 2020. Adjusted operating income in the second quarter of 2021 was $49.3 million, an increase of $1.9 million from $47.4 million in Q2 2020. Second quarter net income was $27.7 million, or 28 cents per diluted share, as compared to net income of $22.6 million, or 26 cents per diluted share in Q2 2020. Second quarter adjusted net income was $35.7 million, or 36 cents per diluted share, as compared to adjusted net income of $32.3 million, or 37 cents per diluted share in Q2 2020. Adjusted EBITDA for Q2 2021 was $51.6 million, an increase of $2 million, or 4%, compared to $49.6 million for Q2 2020, resulting in an adjusted EBITDA margin of 10.9%, a decrease of 210 basis points for year-over-year. Turning now to our balance sheet. We continue to convert our strong financial performance into an opportunity to further strengthen our balance sheet. In Q2 2021, we generated $31.6 million in cash from operations and used it to reduce debt by an additional $25 million, with face value now at $274 million and net debt at $139.4 million, resulting in a net leverage ratio of 0.5. We did this while growing quickly and leaving sufficient resources to further accelerate growth in the future. We expect to continue to reduce debt in 2021, subject to business conditions and any need for additional growth capital. We're also looking to reduce the carrying costs of our existing debt significantly. As of June 20th, 2021, we had $48.6 million capacity under a revolving credit facility, total gap long-term debt of $270 million, and cash excluding restricted cash of $134.6 million. The additional modeling details underlying our outlook remain the same as we discussed in our first quarter earnings call, with the exception of a now further reduced interest expense and a slightly lower effective tax rate due to deductibility of options exercise. For ease, I'll repeat them. We expect gross margins to slightly improve year over year and operating expense to increase, as well to support our higher revenue level. The need to continue to innovate at a larger scale and a full year of public company costs. Assuming no further debt pay down, we now expect interest expense of approximately $4.1 million per quarter. As noted, we've already paid down $53 million of our debt and expect to pay down approximately an additional $47 million for a total of $100 million of debt reduction in 2021, subject to business conditions and any need for additional growth capital. The $4 million patent trial win in Q1 2021 is not in our outlook. This amount could vary depending on what the judge rules, is subject to appeal, and the timing of recognition of a gain, if any, is uncertain at this time. An effective tax rate of approximately 20% to 22% for 2021, and full year weighted average diluted shares outstanding of approximately 100 to 102 million shares. Overall, we're pleased with the continued progress we have made in our strategic initiatives and performance of the business. We grew in Q2 2021, and we are expecting growth in revenue and adjusted operating income and adjusted EBITDA for 2021. With the exception of a number of our premium products with high semiconductor content, the channel is much better stock now. And with Prime Day at the end of Q2, coupled with the upcoming holiday season, we expect a more normal promotional environment. In Q2, shipping expenses were much higher than normal, and we expect that to continue for the rest of 2021. Finally, memory chip prices started moving down near the end of Q2, and that normally lowers margins on our memory products while prices are moving down. These are expected to somewhat counterbalance the strong demands we have from our loyal existing and new customers. With that, we're now happy to open the call for questions. Operator, will you please open up the line for Q&A?

Certainly. We will now begin the question and answer session. To join the question queue, you may press star then 1 on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then 2. We will pause for a moment as callers join the queue. The first question comes from Drew Crum with Stifle. Please go ahead.

Okay. Hey, guys. Good morning. I'm wondering if you're willing to address your competitive performance in the quarter, whether you added or lost share during the period. And then separately, any guidance you can give concerning revenue and adjusted EBITDA phasing by quarter in the second half? Thanks.

Well, let's start with the, I think the second part is when we know. But the first part of the question, we actually did pretty well in Q2. It varies by product type. But in general, we did quite well in components. In peripherals, we stayed roughly even. And I think, as you probably have gathered, the situation that us and most of our competitors are in right now is trying to get enough products in from Asia that's now very expensive containers. And so... We also have, as you know, semiconductor shortages. So what we've been faced with over the year is we tend to have high market share on our high ASP categories and lower market share on very low ASP categories. In other words, we're not typically an entry-level player. And so the initial surge last year was a lot of entry-level products. And so that changed the dynamics a little bit. But now we're starting to get some more supply of our higher ASP, high semiconductor content products. It's helping with market share.

In terms of the guidance for by quarter, we don't give quarter guidance. We give annual guidance. Last call, when asked a similar question, we pointed to seasonality. For example, second quarter tends to be one of the lower quarters of the year. And you have to take into account timing of things like Prime Day and such as well. But normally the second half is stronger than the first half for normal seasonality. And normally you tend to sort of ramp as you come out of the summer and as you go into the holiday season.

Got it. Okay, thanks, guys.

The next question comes from Mario Lu with Barclays.

Please go ahead.

Great. Thanks for taking the question. So, yeah, I know you guys only got it for folio numbers, but since the 2Q revenue came in a little bit below the street, just curious how it performed relative to your own expectations. Any strengths or weaknesses within certain product lines that is worth highlighting? Thanks.

Yeah, I think the most obvious thing is that we talked about semiconductor shortages, and that's not just related to components that we buy, you know, semiconductors to go into our components. So, as you probably know, there's been a huge shortage of high-end CPUs and graphics cards. So it's actually been quite difficult for the most extreme gamers that are building these $2,000, $3,000, $4,000 gaming PCs. It's been difficult for them to build. And so we actually think we've got a huge amount of people waiting in the wings to build as these cards start to become available. So what we saw happen was that NVIDIA, and to a certain extent AMD, allocated a lot more product into the finished PC manufacturers, you know, Alienware, Dell, et cetera, and not so much product into Amazon and the retail segments. So that's now starting to change. So the point is, the component side of our business, we had quite a few headwinds with not all the components being available to let people build PCs. The peripheral market is still pretty strong. And at the moment, the MPD data is showing that peripherals are, you know, same size, in some cases, bigger than last year. So we're now lapping, you know, COVID quarters. And streaming continues to be very strong. So hopefully that gives you a slight indication of what's going on.

That's helpful. Thanks, Andy.

The next question comes from Matt Cabral with Credit Suisse. Please go ahead.

Yeah, thank you. You guys have called out supply constraints and logistics issues several times already. I'm just wondering if there's any way to quantify the impact of both of those factors, both as we think about revenue in the quarter as well as kind of looking further down at gross margin.

Yeah, I mean, it's really difficult to give an exact number because...

Certainly, it's in the tens of millions, but we haven't gone through and done the math to see exactly what we thought we would have shipped if we'd had full supply and our competitors had full supply. I think the biggest issue right now numerically is probably the lack of graphics cards that's holding back the component market and stopping people building PCs. The second issue, you know, is that we're really not yet in a situation where our highest-end products or high-SP products are fully in stock. And then we have, you know, very expensive freight to deal with. Some of the freight costs obviously get offset Because, you know, as we introduce new products, we're able to adjust pricing and some of our competitors. But it's meaningful numbers.

Got it. And then just a follow-up, if I could. I guess trying to understand how to think about normalized profitability for the business. I guess if I... If I look at EBITDA over the last 12 months, you guys have been a little bit above 13% versus if I go back before COVID, you know, prior to 2020, it was more like mid to high single digits. And I know things have changed. There's been M&A and, you know, obviously the big surge in demand over the past year. I guess I'm just trying to think through what steady state profitability is for the business and You know, if it is higher than that pre-COVID baseline, I guess help us just understand the factors underneath that.

Yeah, I think, you know, we've always said that we wanted to be in the, you know, in the low teens and perhaps get to the mid-teens. Obviously, we had a little bit of a tailwind last year with the market ramping up faster than we could possibly expand the business. Right now, we're at a fairly hefty... expansion mode in terms of R&D and marketing because the business has got so much bigger. So we're not, you know, we're nowhere near sort of a mature business to tell you that, you know, we've got an exact target in mind. But somewhere in that range is how we try to manage the business.

So that would be above pre-COVID levels, but not right now today the same level as Q1, which we talked about in the Q1 that that was a particularly strong quarter and we hadn't finished investing in the business yet. But we think that what we did in Q1 is achievable. We just need to grow the business more and keep putting out good high margin products and they'll help. Also, I'll note that we are seeing a shift towards more higher margin gamer and creator peripherals, which continued in Q2, and that's going to be lifting our margins overall over time. So that should be a good tailwind for us for margins going forward.

Thank you.

The next question comes from Tom Forte with DA Davidson.

Please go ahead.

Great, thanks. So I have four questions. They're quick. I'll go one at a time. So the first one is, on the pressure, cost pressure from logistics, how should I think about it? Is this leaning into air because of demand, or is it, how should I think about the cost? Can you give a little more, I guess, granularity?

So I think last year it was a lot of air freight. That's right. Because, you know, we were so short on the supply. the most recent quarter it's more just the cost of containers so um the cost of containers is probably three to four times now what it was two years ago um and we certainly expect that's going to be somewhat of a temporary uh situation um otherwise we'll be starting up container companies but uh probably for you know until the whole consumer electronics um surge you know, dies down, you know, I expect that to continue for some time. But it's extraordinarily high levels at the moment.

Thank you. Yep, very helpful, Andy. All right, so then the second question is, when you think about the cost pressure then from logistics, how should we think about your ability and your interest in taking price across your portfolio?

Yeah, so that's a good question. And this all depends on the timeframe, right? And the same is true with our competitors. So if we see cost increases in, you know, that are fundamental, that are going to stay there, we obviously adjust that into the pricing. If we see cost increases that are temporary, it's difficult to go and adjust, you know, retail MSRP price points, you know, on a short-term basis. So, you know, we're looking at that. But so far we haven't made any huge changes. And obviously it's a bit of a mixture because a lot of our bigger retailers are buying from us directly in Asia and then paying for the containers themselves. But so far we haven't, and in fact most of our competitors haven't made any wholesale changes in MSRP. I think the general sense is that we're going to weather it for the next couple of quarters until We see what the natural level is. But the container prices right now are very elevated, and they almost certainly would have to come down by the end of the year, if not before.

Good. All right, so last two. So from our vantage point, when we think about secular shifts, we really see this self-broadcasting as accelerating. There's a lot of anxiety among investors on tough compares for gaming platforms. but this secular shift towards consumer self-broadcasting, using your products to help them broadcast when they play Fortnite, things like that. So I guess, do you agree with that assertion that that trend is accelerating? And then what are the implications for Corsair?

Well, look, we've just doubled down, right? We announced our first camera last week, and that's clearly the biggest part of the self-forecasting, as you say. We call it self-forecasting, live streaming, or whatever. But the biggest part of that TAM is the camera. And so we've literally jumped into that. It's probably close to a billion-dollar market TAM that we've never been in before. So not only is that market continuing to grow, but we've increased our footprint. Now, as you probably realize, there's some parts of the self-forecasting market that gets a little bit confused with people at home doing zoom calls and so uh we think that the vast majority of the products that we sell are actually going into you know gamers and content creators rather than home offices um but clearly you know some products get bought by by that and that market will certainly be uh be dying down so i think what we're going to see with the uh you know with streaming and content creators is a There's a strong tailwind from the secular shift to people sharing content and streaming, and a little bit of a headwind from those people that were buying, you know, microphones and cameras for their home office.

All right. So Andy, sorry, now you made me have a fifth question. So before I get to my last, how should we think about the relative gross profit margin of the camera versus the rest of your portfolio?

The camera is a brand-new product, so usually when you're ramping a new product into the channel, it's a little lower margin than it'll achieve when it's a little bit more normalized. But it's right in line with the other creator peripherals, so it's much higher than the corporate average.

Excellent. All right, last question, and thanks for taking all my questions. So you talked a little about it, but how is your performance on Prime Day this year? And historically, has that been an important sales day for Corsair?

Sorry, Tom, can you repeat that? I missed the performance on Prime Day.

Yeah, sorry, Andy.

Oh, so Prime Day.

How is your performance on Prime Day and historically is that important sales day for you?

Yeah, so it can be. This year actually, you know, was not a great Prime Day for Amazon, as you probably know. And mostly because for us, a lot of the products that we'd normally line up for Prime Day sales were pretty light on stock. So we actually didn't participate heavily in Prime Day. And actually, a lot of our competitors were in the same situation. So it ended up being less important this year than it normally is. Let's put it that way.

Great. So Andy, Michael, Ronald, thanks for taking my questions. Thanks.

The next question comes from Tim Nolan with Macquarie. Please go ahead.

Hey guys, thanks. This is Sean on for Tim. My question's around the product cycle. So you've launched 75 products this year so far. Any more comments on the release cycle in the back half, as well as anything on uses outside of gaming? I know we talked about live streaming a bit, but anything on general streaming, et cetera? Thanks.

Yeah, I think we're going to stay on that pace. We've built up a pretty good momentum and as we keep adding more categories, you know, they all have to be refreshed and new categories come in. So I wouldn't expect that pace to change. If anything, it may accelerate. And in terms of new categories or things we're doubling down on, clearly, look, we've just introduced our first camera. So, you know, you'll see more of those over the next year or two. you'll see more microphones. So yeah, we still think that the biggest growth out of all the segments we're in is in streaming, and we want to own that market. Most of the component areas were in refresh mode, and in the peripheral market, we still have a few price points that we're not present in. So still some more TAM that we can increase our footprint sizing.

I think just generally, right, there's been some new consoles that have come out. So you would expect that Scuf would have new console controllers at some point. And there's obviously a newer memory standard that's going in more towards the end of the year. And we've been in the lead for memory, particularly gaming memory, forever. So you would expect to see something for that as well. But really, it's continually innovating in our existing portfolio and increasing our TAM. We have a new microphone product that lets you use your own XLR microphone, but take advantage of our great software that Elgato's put together. That's the Wave XLR that just came out. And even Stream Deck, which is selling very well for us and is very well liked in the market, we came up with a newer version that's a little bit better form factor. and a little bit easier for people to use in different uses because it seems that more and more people are discovering Stream Deck and want to use it not just for streaming but for other applications as well.

Great, thanks.

The next question comes from Doug Krutz with Cohen.

Please go ahead.

Thanks. A lot of concern in the market right now about what's going on over in China with respect to the government's sort of actions and words about video games. Can you remind us how big of a percent of your business China is and whether you're seeing anything in terms of your business there recently?

Not related to what you're talking about. We haven't seen the effect. China is... Five, six percent, something like that, of our business.

We're not very heavy in gaming peripherals. We're more components in China than gaming peripherals directly. And it's more impacted by the DIY market and how that's going. And we don't obviously sell game software, so we wouldn't be as affected by that type of pronouncement from the government. China's never been a big gaming market in terms of culture compared to, you know, U.S. and Europe and other parts in Asia.

Okay, thank you.

Once again, if you have a question, please press star, then one.

The next question comes from Rod Hall with Goldman Sachs. Please go ahead.

Yeah, hi, thanks for the question. I wanted to just check on inventory level, like where you're out of stock, what types of products. It looks to me just doing a cursory search, like maybe power supplies are short. But I'm just curious what things you're having a hard time putting on shelves or populating inventory with.

Yeah, that's a good question. For sure, high-end power supplies You know, very low in stock, and that's more a reflection of, you know, obviously some increased demand, but just the difficulty with building them because of semiconductor shortages. Typically, it's the high-end products. We were out of stock on our flagship keyboard for the longest time. We've now finally got that back in a reasonable stock position. We're not where we'd like to be on our high-end headsets, but we're getting there. So, you know, there's a steady increase in inventory, but certainly I would say not yet at targets for the products that really make a difference in market share.

Okay, thanks, Andy. Oh, Michael, were you going to say something? No.

Andy answered the question. Yeah, okay.

I wanted to just check. I expected to see the same thing with headsets, but I did a quick Amazon search, and it seems like they're in stock there. I'm curious, in what channels are you having the hardest time keeping inventories? Is it physical channels, like Best Buy, that sort of thing? Or where would we expect to see the inventory light? And then as we move into the holiday season, do you think you'll have enough product on shelves by then, or do you think this will just persist right on through the end of the year for you?

No, I think we're going to gradually get back into good shape. So the first question, we obviously have inventory targets on every single skill. And in places like Best Buy or, you know, Target or Walmart, you know, we've got targets for every store. And typically there's, you know, three or four Products in some stores, depending, you know, popular stores have a few more. So oftentimes you may be able to find it in stock, but if there's only one there instead of four, for example, then we're way under target. And that'll cause them to be out of stock certain days, you know, a number of days in a month. So that's the way we think about it. You know, if you're searching on Best Buy and something's out of stock, that's a real problem. So...

And the second part of the question was, I mean, we've been talking about, like, what... Go ahead.

When you might have the inventory in stock, you know, in the channel, will you be there for the holiday season, or do you think this will, you know, continue to be a problem by then?

Well, obviously, it depends on the demand versus supply, but I certainly hope so. I mean, we've spent the last year ramping up the supply lines, And so certainly I would expect so. Great, okay, thank you. I mean, basically what we think the current demand looks like, yeah, should be okay.

All right, thanks a lot.

This concludes the question and answer session. I would like to turn the conference back over to Andy Paul for any closing remarks.

Yeah, thanks. So, look, as we've stated before, we're at the forefront of a massively growing market centered around gaming, esports, and streaming. I actually went back recently to look at our pre-IPO forecasts, what we were thinking then, and I realized that our current and projected business levels is where we expected to be in 2023 or 2024. So, clearly, the market has accelerated to a new spending level. We remain focused and committed to giving gamers and streamers the tools they need to play the best game, produce the best content, and have fun doing it. Thanks for your interest in Corsair, and thanks for joining us on the call today.

This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.