Corsair Gaming, Inc. (NASDAQ:CRSR) Q2 2023 Earnings Call Transcript

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Now the second thing was — the second question was on guidance and what’s got to happen in the environment to hit the high end of our guidance, and I’d say, it’s what we were talking about earlier. We are looking to see how much the market sort of recovers, how much it grows. As I said earlier, it’s significantly above pre-pandemic levels and it feels like we are sort of getting to a point where, generally, the economy is looking at a soft landing and I am already seeing pretty good results from Prime Day, both at Amazon total and our results at Amazon. So it does feel to me as though the market started off being a little underwater from last year, the beginning of the year and now it’s much more neutral. Now if that continues to go positive and goes positive in a large way and we do what we are supposed to do and gain market share and continue to bring our products then I am sure we will be at the higher end, if the market is much flatter then that becomes more difficult.

Unidentified Analyst: Yeah. Yeah. Got it. And maybe just as a follow-up to that, can you maybe just provide some color on where the promotional environment stands with your competitors in the channel and what you are seeing there? Thanks.

Andy Paul: Yeah. So I mean on — in peripherals where that’s a bit more seasonal and a bit more of a spike you tend to get on Prime Day and Black Friday and that sort of thing. There was much less discounting going on with our main competitors than previously and so we actually found that with less discounting, we did a lot better than last year. So that meant that the lower discounts were much more attractive compared to people offering things at half offer, et cetera. So I presume that happened because our competitors were largely taken care of the inventory bubble that they had, they are getting to the point where they didn’t see the need to run clearance all the time.

Unidentified Analyst: Thank you.

Operator: Good-bye. Your next question comes from Doug Creutz with TD Cowen. Please go ahead.

Doug Creutz: Hey. There was a big industry release late in Q2. I just wondered if you could comment to any gains that you think might have helped push either PC builds or peripheral sales? And then just looking ahead to Q3, I think, Starfield is coming out, which is probably a big PC title and just your view on whether that could be an important game in driving PC builds? Thanks.

Andy Paul: Yeah. I think the one that everybody was talking about really was Diablo IV over the last quarter that we think helped. I put in the deck, I don’t know if you have seen that yet, the decks on IR website. There’s about eight new games that we have listed and I think there’s a new rev of Call of Duty coming out at the end of the year, which will be pretty big site, we are paying focus releasing something in September. Yes, Starfield in September. CounterStrike 2 is listed as a summer of 2023. That would be huge. So, yeah, there’s a lot of games. But I think, first half, probably, Diablo was the biggest one and I suspect Call of Duty and CounterStrike for second half.

Michael Potter: I think the most interesting thing is if you look at the required specs for the new games coming up, they are much higher than they have been — if you want to get all the iCandy and the extra features, you are really targeting a much higher spec PC. More memory and much higher end video card, which means more power requirements. So it fits pretty well into the suite of products that we do.

Andy Paul: Yeah. That’s a good point.

Doug Creutz: Great. Thank you.

Operator: [Operator Instructions] Your next question comes from Mario Lu with Barclays. Please go ahead.

Jack Butler: Great. Hi. This is Jack Butler on for Mario. Thanks for taking my questions. I was just wondering whether you could talk a bit more about some of the partnerships you now have in place with content creators a couple of quarters ago. You announced the NICKMERCS partnership. Now we get CouRageJD. I am just curious maybe what sort of response have you seen from the gaming community, specifically, like, if there’s any indicators you are seeing that these partnerships are working? And then maybe how that initiative has evolved or will continue to evolve if there’s any update to how you are thinking about partnerships?

Andy Paul: Yeah. I’d say, well, firstly, I mean, we have got a lot of different partnerships. I mean these are two pretty big names. We have been with NICKMERCS on the SCUF side for some time. CouRageJD is new. But it’s too early to draw any conclusions from how that works. You don’t see a big spike immediately for many of these things. So, yeah, well, I think, as we wait until next earnings or later in the year before we can give you any meaningful data from that.

Jack Butler: Got it. Great. Thanks.

Operator: There are no further questions at this time. I will now turn the call over to Andy Paul.

Andy Paul: Okay. Thank you everybody for joining us on the call today and thanks for the continued support. Any follow-up questions, please contact our Investor Relations Department and we look forward to updating you next quarter. Thank you and have a good evening.

Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you disconnect your lines.

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