Turtle Beach Corporation

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Turtle Beach Corporation's second quarter 2025 conference call. At this time, all participants are in listen-only mode. A question and answer session will follow the prepared remarks presentation. As a reminder, the conference is being recorded. I will now turn the call over to Jacques Cornet from the investor relations team. Jacques, you may begin.

Thank you, operator. On today's call, we'll be referring to the press release file this afternoon that details the company's second quarter 2025 results, which is available on the news page of the company's investor relations website, corp.turtlebeach.com, where you'll also find the latest earnings presentation that supplements the information discussed on today's call. Finally, a recording of the call will be available on the events and presentation section of the company's investor relations website later today. Please be aware that some of the comments made during this call may include forward-looking statements within the meaning of the federal securities laws, statements about the company's beliefs and expectations containing words such as may, will, could, believe, expect, anticipate, and similar expressions constitute forward-looking statements. These statements involve risks and uncertainties regarding the company's operations and future results that could cause Turtle Beach Corporation's results to differ materially from management's current expectations. While the company believes that its expectations are based upon reasonable assumptions, numerous factors may affect actual results and may cause results to differ materially So the company encourages you to review the safe harbor statements and risk factors contained in today's press release and in its filings with the Securities and Exchange Commission, including, without limitation, its annual report on Form 10-K and other periodic reports, which identify specific risk factors that also may cause actual results or events to differ materially from those described in our forward-looking statements. The company does not undertake to publicly update or revise any forward-looking statements after this conference call. The company also notes that on this call it will be discussing non-GAAP financial information. The company is providing that information as a supplement to information prepared in accordance with accounting principles generally accepted in the United States or GAAP. You can find a reconciliation of these metrics to the company's reported GAAP results in the reconciliation tables provided in today's earnings release and presentation. Hosting the call today are Chris Kern, Chief Executive Officer, and Mark Weinswig, Chief Financial Officer. With that, I'll turn the call over to Chris. Chris?

Thanks, Jacques. Good afternoon, everyone, and thank you for joining our second quarter 2025 earnings call. Turtle Beach entered Q2 with three primary objectives. First, to deliver Q2 results while navigating a quickly evolving environment and set up a robust structure for the remainder of the year to support our 2025 full year guidance. Second, to advance our capital allocation strategy objectives, including stock buybacks and a reduction of high-cost debt. Third, to pursue a comprehensive refinancing of our credit facilities that would significantly strengthen our capital structure. I'm pleased to report that the company has successfully delivered on all three of these objectives. As a result, our business is well positioned to capitalize on the exciting upcoming gaming cycle that we believe will deliver strong growth in 2026. For the first of our Q2 objectives, Turtle Beach executed on several fronts, working collaboratively with our customers and supply base. Our teams enacted multiple tariff mitigations in Q2, including optimization of cost structures and product mix, selective retail price adjustments, and an expedited shift of some production to Vietnam. We continue to adapt our plans as necessary to improve overall margins and support timely launches for the exciting new gaming accessories we're bringing to market in the coming months. As a result of these actions by the team, we are reiterating our guidance for full year 2025 revenue in the range of $340 million to $360 million with adjusted EBITDA in the range of $47 million to $53 million. As we continue to adjust in this dynamic environment, we have slightly modified our previous supply outlook and now anticipate that less than 15% of our total U.S. supply will be produced in China after Q1, up from approximately 10% as discussed in our previous earnings call. Our reiterated guidance and ongoing mitigations consider the new Vietnam tariff rate of 20%, and we have largely mitigated our exposure to any potential changes in U.S. tariff rates for China. Turning to our next objective of advancing our capital allocation strategy, after announcing a new $75 million share repurchase authorization in May, we amended our prior debt agreement in June to allow for additional share repurchases in the second quarter. In total, we repurchased approximately $5 million of stock at an average purchase price of $13.47. Moving forward, share repurchases will continue to be an integral part of our capital allocation strategy as they underscore our confidence in the future of Turtle Beach and our dedication to returning capital to shareholders. Completion of our third objective was realized in the announcement earlier this week of a comprehensive refinancing of our term loan and credit facility. The new terms include a reduced interest rate of approximately 450 basis points from our prior term loan, an extended term, and greater operational flexibility. This refinancing marks a significant milestone for the company and enables us to realign our financial strategies with our goal of delivering sustained value and growth. Our three pillars of capital allocation, which are investments in organic growth, share repurchases, and accretive M&A remain key areas of focus for us at Turtle Beach. Looking ahead at the gaming accessories markets, as expected, we have seen improvements in year-on-year market comps in Q2. While our guidance still anticipates that the markets for headsets and third-party controllers will remain down for the full year 2025, we are looking forward to continued improvement in comps for the second half of the year and strong growth in 2026, Nintendo Switch 2 set a new record for the most hardware sold in a launch month, and we believe its continued success will provide tailwinds for accessory sales for years to come in this new generation of hardware. The exciting 2026 launch of GTA 6 will be another meaningful growth catalyst with massive expectations for high gamer engagement, which we have seen to be a key driver for gaming accessory purchases. Improving market comps, strong underlying fundamentals of a growing gamer base, and expanding engagement with next-generation systems make us optimistic for the upcoming multi-year growth cycle in the gaming industry. With that, I will now turn the call over to Mark, who will take us through the quarterly financials. Mark?