Corsair Gaming, Inc. (NASDAQ:CRSR) Q4 2022 Earnings Call Transcript

Andy Paul: Just to give some color there, Mario, the uncertainties that we face are several, right? We know right now, we’ve got a very, very strong self-built PC market. with more to come. And so we expect that’s going to go on for some time. If it does, it will be stronger in the second half, probably than the first half. We have China which is sort of going through exit of COVID, if you like. And if you remember, whenever he came out of COVID in the U.S. and Europe, the initial reaction was to do lots of vacations and restaurants and that’s things that people were spending money in other places. So that’s yet to come. And so there’s a lot of things like that. Europe; how soon will the Ukraine Russia situation resolve itself, how well inflation work over there. So while we’ve got a very clear sight and feel great about the U.S. I think there’s more uncertainties in Europe and Asia that could affect how the seasonality works.

Operator: Next question comes from Colin Sebastian with Baird.

Unidentified Analyst: It’s Reece on for Colin. I kind of had a 2-part question on Europe. The first part being, could you just kind of frame up where you are in that 26% gross stat versus 2019 relative to the market? And then what’s kind of embedded in the guidance this year for Europe? Is it continued weakness? Or is it something else? And then I think, Andy, in your prepared remarks, if I heard you correctly, you mentioned something around mobile — if you could just touch on that, that would be great.

Michael Potter: So just for normal percentages in the past for Europe, we’re usually in the high 30%, close to the Americas. That went down into the mid-20s at the start of the conflict between Russia and Ukraine. Got back up to about 30% by the end of last year. Assuming that there’s no further deterioration from energy costs or the conflict there, we do expect to have some gradual improvement in Europe through the year but not returning back up to the old levels by the end of next year. But certainly, some strength there.

Andy Paul: Yes. The added color there is that there was more of an inventory adjustment needed in Europe than in the U.S. So what that means is that remember the first question about how do we think about revenue sales out from the channel versus sales in there’s a bigger differential in Europe than there was in the U.S. which therefore affected our revenue mix. In terms of mobile, I’m not sure what the question was. You mean what’s our feeling about mobile gaming?

Unidentified Analyst: Yes. I thought you had mentioned something about mobile gaming product development or I may have heard it incorrectly.

Andy Paul: Yes. No, that’s right. We’ve said previously that there’s a couple as that we’re looking at carefully in the gaming or the interactive entertainment space. One of them is AR and VR, still a little bit early for us to jump into that. And the other one is mobile gaming which we’re watching closely, it’s sort of fairly small market in terms of the accessories. And by accessories, I mean, something that clips onto the phone and allows you to use buttons for a better gaming experience. So we’re looking at that very carefully. Clearly, we have console controllers in our SCUF division, so we know about how that market works. But the vast majority of people playing games on phones are just using the phone screen for inputs. But as that’s developed and some opportunities arise, we’ll certainly jump into that.

Operator: Thank you. I will now turn the call back to the company’s CEO for closing comments.