Corsair Gaming, Inc.

Good afternoon and welcome to the Corsair Gaming second quarter 2022 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 now like to turn the call over to Ronald VanVeen, Corsair's Vice President of Finance and Investor Relations. Thank you. Sarah, you may begin.

Thank you. Good afternoon, everyone, and thank you for joining us for Corsair's Financial Results Conference Call for the second quarter ending June 30, 2022. On the call today, we have our Corsair CEO, Andy Paul, and CFO, Michael Potter. any review highlights from the second quarter and the business environment. Michael will then review the financials and our outlook, and we will then have time for any questions. 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 remark will also include reference 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 we issued after the market closed today. With that, I'll now turn the call over to Andy.

Thank you, Ronald, and welcome, everybody, to our Q2 2022 earnings call. The first half of 2022 has been challenging from a macro perspective, but on the other hand, we have recently started to see encouraging signs with a reduction in supply chain lead time, shipping costs coming down, and consumer activity picking up. Our revenues for the second quarter came in at $284 million, below our expectations entering the quarter, but this does not reflect the purchases of consumers from our retailers, which was significantly higher. As the channel inventory level normalizes, we will see a return to more balanced sell-in versus sell-through and stronger growth. We spent much of the second quarter helping our channel partners reduce inventory, which was ordered on long lead times, and when the inventory arrived, the consumer demand in the first half was less than forecasted. This is consistent with the broader macro weaknesses that have been widely discussed. This was especially prevalent in Europe, where the shipping lead times were longest, and immediately after the start of the Russia and Ukraine war, demand dropped due to lingering consumer concerns about that war and about rising energy prices. As we mentioned in our previous earnings calls, the supply chain situation of last year also caused many of the key components that gaming enthusiasts need to build their gaming platforms have become either unavailable or prohibitively expensive. This in turn caused many consumers to hold off building new gaming PCs. I'm pleased to report that the shortages are now generally over, and the most expensive items, graphics cards and CPUs, are now readily available. So we see consumers starting to build and upgrade their gaming PCs again at higher levels than last year as we move into the second half. This is more in line with the strong underlying fundamentals of our long-term business and why we remain so excited about our long-term opportunities. In fact, during Amazon Prime Week this year, which moved to July, we saw significant growth in this area with only modest increase in promotional spending. And consumer sales for components used to build gaming PCs were higher than last year in both Europe and the US. We expect this trend to continue now during the second half. Our inventory levels in the channel and in our warehouses is now coming down to more reasonable levels. And we expect that during the second half, our revenues will be more in line with consumer sales out from our channel partners. Let me take a minute now to update you on some of our significant new products introduced in the second quarter. The most notable is our announcement of our new gaming laptop, the Voyager A1600, designed in partnership with AMD, which combines high-performance gaming features with streaming technology from our Elgato division. While the majority of our revenue in the past has come from enthusiasts who like to build their PC gaming platforms from components, there is a growing market for gaming laptops. In fact, it's the fastest growing area in gaming platforms. This laptop has been the single highest R&D investment in our company's history, and we expect that we will see significant growth in our pre-built gaming platforms due to this launch, and we plan to start shipments during the third quarter. We also launched a new gaming keyboard, the K70 Mini, a 60% keyboard designed to allow gamers to customize switches and keycaps And this is an area that we see significant growth in the market. And we also launched a partnership with NVIDIA where we incorporated the new broadcast suite of software onto our streaming products, allowing streamers to significantly enhance their broadcast quality. We are looking forward to the release of new graphics cards from NVIDIA and new CPU platforms from AMD during the second half. which we believe will stimulate new platform builds and increase gaming hardware purchases. While there was clearly a surge of activity in consumer spending in 2020 and 2021 due to people spending more time at home during the COVID pandemic, we now see that spending is higher now than before the pandemic started in almost every category that we're in. which indicates that new gamers continue to come into the market looking for products that help their gaming experience. This all leads us to be very encouraged for an exciting 2023 and continued growth. Let me now turn the call over to our CFO, Michael Potter, for details on the financials. Michael, please go ahead.