Corsair Gaming, Inc.

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 the star key followed by zero on your telephone keypad. With that, I would like to turn the call over to Ronald Van Veen, Corsair's Vice President of Finance and Investor Relations. Thank you. Sir, please go ahead.

Thank you. Good afternoon, everyone, and thank you for joining us for Corsair's Financial Results Conference Call for the second quarter ended June 30th, 2024. On the call today, we have our Corsair CEO, Andy Paul, and CFO, Michael Potter. Andy will review highlights from the quarter. Michael will then review the financials and our outlook. 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 filings. Note that until our 10-Q has been filed, these numbers are preliminary. 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 we issued after the market closed today. With that, I'll now turn the call over to Andy.

Thank you, Ronald, and welcome everyone to our earnings call. Q2 is always the lowest revenue quarter of the year for us, and this year is no exception. Current macroeconomic trends and lengthened refresh cycles have caused this quarter to be weaker than expected. In our two business segments, the gamer and creator segment showed good growth, with revenue up approximately 20% year on year. We've launched some exciting products over the last nine months, which have increased our footprint and market reach. This includes our K65 wireless keyboard, which quickly became best-selling keyboard in the U.S., according to third-party data in Q2. The gaming components and systems segment, which makes components used for self-built PCs and also full gaming systems, was a different story. There we see market dynamics where incredibly exciting new games and gaming hardware technology is on the horizon, but not here yet, which is causing many consumers to hold off with upgrades or new builds. We saw a dip in this components market of approximately 15% year on year. And on top of that, some ASP pressure and channel inventory reduction that altogether led to a year on year drop of 32% in this business segment. To expand on the market trends and conditions, it's helpful to put a five year lens on recent activity. We went through a surge of activity during the COVID lockdown, where third party data showed that the demand for gaming headsets approximately tripled, and the self-built PC market approximately doubled. Three years on, having emerged from the lockdowns, the gaming headset market, which is the best indicator for peripherals, is now roughly double the size it was pre-COVID, while the self-built PC market which we can see from third party data on cases and power supplies, is roughly flat to pre-COVID levels. Refresh cycles are clearly lengthening on high priced items like $2,000 plus gaming PCs. We see GPU cards, which used to be on an 18 to 24 month refresh cycle, have now moved to 24 to 30 months, and some highly anticipated more complex games like Grand Theft Auto 6 have been pushed to 2025, while others like Call of Duty Black Ops 6 are now expected to be released very soon this year. We think that our historical view of a three to five year refresh cycle may now be looking more like four to six years in these current economic conditions. Also weighing on the market is the fact consumers are acting with caution and are getting used to July Prime Day. As a result, sales in the immediate months before Prime Day appear to drop. And as a quick preview, our Prime Day sales in July were quite successful, with most categories overperforming compared to last year. Looking at an overall view of the gaming market, we see that the installed base of gaming hardware post-COVID is at an all-time high. Gaming air has continued to rise generation by generation, And incredibly exciting new games and new AI-packed gaming technology are around the corner. In fact, the gaming hardware space looking into 2025 has never looked more exciting. AI continues to move into every piece of gaming hardware, as we'll be able to use technology to make devices more adaptive and able to customize their settings to a gamer's playing ability. And we expect to see new generation GPU cards within the next six months. In our gamer and creator peripheral segment, as I mentioned before, we are seeing very good growth with revenue up 19.6% year over year. This is the third successive quarter of high teens percentage growth. We are benefiting from a slight improvement in the overall market, combined with our success entering new parts of the market, which will drive our long-term growth. We intend to continue to grow the gamer and creator peripheral segment organically, as well as with strategic acquisitions. We expect this business will become larger than our traditional components business within a few years. This year alone, we launched teleprompters, PC controllers, and mobile controllers, as well as many other innovative new products in the existing categories. We also recently announced our entry into the sim racing market with products which we recently showcased at Computex. Separately, as we noted in today's earnings press release, We remain interested in the sim racing brand Fanatec owned by Endor AG. And though we were disappointed to see the company fall for insolvency, we are still hopeful that we can acquire this company. Moving on to our components and memory businesses, we continue to dominate the market with leading market share in most categories. We intend to continue that trend while running these businesses as efficiently as we can from a cost standpoint. while we wait for the market to recover and return to growth. Overall, our long-term fundamentals remain strong, and we continue to lead. We're positioned to benefit from a strong refresh cycle when the new GPUs launch later this year, and we are excited about continued strong growth in our core gamer and creator peripheral segment. Let me now turn the call over to our CFO, Michael Potter, for details on the financials. Michael, please go ahead.