Corsair Gaming, Inc. (CRSR)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

You should read the following discussion of our financial condition and results of operations in conjunction with the condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q as well as in conjunction with the Risk Factors set forth in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC on February 25, 2026. The following discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of many factors, including but not limited to those discussed under the heading “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025 and below in Item 3, “Quantitative and Qualitative Disclosures about Market Risk”.

Overview

We are a leading global provider and innovator of high-performance products for gamers and digital creators, such as streamers, vloggers, broadcasters, and small and medium businesses, many of whom build their own PCs using our components. Our industry-leading gaming products help digital athletes, from casual gamers to committed professionals, perform at their peak across PC or console platforms, and our streaming products enable creators, particularly streamers, to produce studio-quality content to share with friends or to broadcast to millions of fans. Our PC component products offer our customers multiple options to build their customized gaming and workstation desktop PCs including AI workstations and servers. Our solution is the most complete suite of products that address the most critical components for both game performance and streaming. Our product offering is enhanced by our two proprietary software platforms: iCUE and the Elgato streaming suite for content creators, including our Stream Deck control software, which provide unified, intuitive performance, and aesthetic control and customization across our Corsair hardware ecosystem and Elgato streaming products. We also offer digital services to enhance the customer experience by integrating esports, Elgato's marketplace, customer care and extended warranty into our product offerings.

We group our products into two categories (operating segments):

•
Gamer and Creator Peripherals. Includes our high-performance gaming keyboards, mice, headsets, controllers, and streaming products, which include capture cards, Stream Decks, microphones, teleprompters, and audio interfaces, our Facecam streaming cameras, studio accessories, command center displays, sim racing products, and gaming furniture, among others.

•
Gaming Components and Systems. Includes our high-performance power supply units, cooling solutions, computer cases, and DRAM modules, as well as high-end prebuilt and custom-built gaming PCs and laptops, and AI workstations, among others.

Summary of Financial Results

Our net revenue was $314.3 million and $320.1 million for the three months ended June 30, 2026 and 2025, respectively. Our gross margin was 33.2% and 26.8% for the three months ended June 30, 2026 and 2025, respectively. We had net income of $9.1 million and net loss of $20.3 million for the three months ended June 30, 2026 and 2025, respectively.

As of June 30, 2026, we had cash and restricted cash, in the aggregate of $193.9 million and the principal balance outstanding on our June 2030 Term Loan was $118.8 million. Cash generated from operations was $104.6 million and $48.9 million for the six months ended June 30, 2026 and 2025, respectively.

Key Factors Affecting Our Business

Our results of operations and financial condition are affected by numerous factors, including those discussed under the heading “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025, as well as those described below.

Impact of Macroeconomic Conditions

Our business and financial performance depend significantly on worldwide economic conditions. We continue to face global macroeconomic challenges, including evolving dynamics in the global trade environment, changes in laws or policies governing foreign trade, in particular tariffs, trade restrictions or taxes on imports or exports from or to countries

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where we manufacture or sell our products, inflationary trends, uncertainty in key financial markets, and volatility in exchange rates.

Ongoing geopolitical developments, including conflicts and tensions in the Middle East, Ukraine, the Red Sea region, and between China and Taiwan, have contributed to volatility in global energy prices, transportation costs, and supply chains. These developments may increase our freight, logistics, and other input costs, and may affect consumer spending due to broader economic uncertainty. We continue to monitor these situations and implement mitigation actions; however, their duration, severity, and broader economic consequences remain uncertain.

Since February 2025, the U.S. government has proposed and, in certain cases, implemented new, substantial tariffs on imports to the United States from various countries, including Taiwan, China, and Vietnam, where we manufacture or source our products. Following a February 2026 U.S. Supreme Court ruling invalidating certain tariffs previously imposed under the International Emergency Economic Powers Act (IEEPA) and a subsequent order by the Court of International Trade establishing a refund claims process, we submitted refund claims in April 2026 and have since received and recognized substantially all of the associated refunds totalling $18.1 million including interest earned, of which approximately $15.6 million was recorded as a reduction to cost of goods sold during the second quarter of 2026. Separately, the U.S. federal government has introduced additional trade measures and investigations resulting in new tariffs. While we have taken mitigating actions, including shifting production across jurisdictions, the extent to which these actions will offset the impact of ongoing trade and tariff developments remains uncertain.

We also experience seasonality in the sale of our products, which may be affected by general economic conditions. The extent of the impact of macroeconomic conditions and geopolitical tensions on our business, sales, results of operations, cash flows and financial condition will depend on future developments, which are not within our control and are highly uncertain and cannot be predicted. We will continue to evaluate these risks and uncertainties and further our mitigation plans.

We are exposed to fluctuations in foreign currency exchange rates. As a result of our foreign sales and operations, we have revenue, payroll and other operating expenses denominated in foreign currencies, in particular the Euro, British Pound, Taiwan Dollar, and Chinese Yuan. Unfavorable movement in the exchange rate between the U.S. dollar and the currencies we conduct sales or operate in may negatively impact our financial results.

Impact of Industry Trends

Our results of operations and financial condition are impacted by industry trends in the gaming market, including:

•
Increasing gamer and creators engagement. We believe that gaming’s increasing time share of global entertainment consumption will drive continued growth in spending on both games and gaming products. Gaming continues to become increasingly social, as streaming viewership becomes more widely adopted along with increasing numbers of content creators. More members of the younger generation are gamers and spend more time on gaming related activities than older generations. We believe these trends will over time bring more gamers and creators to purchase dedicated hardware and help grow the market for peripheral products. The growth of these markets will not be linear, as these markets are impacted by macroeconomic and consumer confidence, amongst other conditions. Our Gaming Components and Systems segment makes components used for self-built PCs and full gaming systems. The self-built PC market is heavily influenced by the timing of release of new game titles and next-generation CPUs and GPUs, as discussed in the bullet below. In our Gamer and Creator Peripherals segment, we expect continued contribution from our Fanatec product portfolio, which broadens our sim racing offerings and complements our broader ecosystem of gaming and streaming products. On August 3, 2026, we acquired substantially all of the assets of Trak Racer, which designs, manufactures, distributes and sells racing, flight, motorcycle and other simulation cockpits, chassis, rigs and related peripherals and accessories, pursuant to an asset purchase agreement. The acquisition expands our sim racing product offerings and provides us with immediate access to a larger addressable market. Trak Racer will operate as a sub-brand under Fanatec. In addition, we acquired a minority interest in Bitfocus AS, a Norwegian software company specializing in production automation and control software for streaming, broadcast, and live event workflows. This investment supports our strategy of deepening the integration between our hardware and software ecosystem, including through planned integration with our Stream Deck platform, and provides us with exposure to the broader professional streaming and content creation software market. See Note 14, Subsequent Events, for additional details.

•
Introduction of new high-performance computing hardware and sophisticated games. We believe that the introduction of more powerful CPUs and GPUs that place increased demands on other system components, such as memory, power supply units or cooling, has a significant effect on increasing the demand for our products. In addition, we believe that the introduction and success of games with sophisticated graphics that place increasing demands on system processing speed and capacity and therefore require more powerful

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CPUs or GPUs, drives demand for our high-performance gaming components and systems, such as power supply units and cooling solutions, and our gaming PC memory. Because our product portfolio is purpose-built to support high-performance CPUs and GPUs through advanced cooling and power delivery solutions, we believe we are well positioned to benefit from this ongoing market evolution toward more demanding computing and gaming workloads. Demand for our product and our operating results may be affected by the timing and pace of new CPU and GPU launches, as well as the introduction and adoption of new game titles that require higher levels of system performance. For example, following the early 2025 launch of the latest generation of GPUs, we experienced a period of elevated demand as enthusiasts upgraded their systems to support new architectures. In 2026, we expect demand to reflect mid-cycle conditions, as the market anticipates potential hardware refreshes and major software titles scheduled for release in late 2026 and 2027. However, the timing and market acceptance of these new products, as well as the ongoing impact of component costs on hardware affordability, may continue to influence the rate of consumer upgrades.

•
Global semiconductor shortage. We continue to observe significant constraints in the global supply of semiconductors, particularly memory components, driven in part by demand associated with the buildout of AI infrastructure, which are materially impacting the broader hardware market. These dynamics have resulted in a substantial increase in memory prices.

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion of our financial condition and results of operations in conjunction with the consolidated financial statements and the related notes included elsewhere in this Annual Report on Form 10-K. The following discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from such forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Annual Report on Form 10-K, particularly in the section Item 1A, “Risk Factors” and below in Item 7A, “Quantitative and Qualitative Disclosures about Market Risk”.

Overview

We are a leading global provider and innovator of high-performance products for gamers and digital creators, such as streamers, vloggers and broadcasters, many of which build their own PCs using our components. Our industry-leading gaming products help digital athletes, from casual gamers to committed professionals, perform at their peak across PC or console platforms, and our streaming products enable creators, particularly streamers, to produce studio-quality content to share with friends or to broadcast to millions of fans. Our PC components products offer our customers multiple options to build their customized gaming and workstation desktop PCs. Our solution is the most complete suite of products that address the most critical components for both game performance and streaming. Our product offering is enhanced by our two proprietary software platforms: iCUE and the Elgato streaming suite for content creators, including our Stream Deck control software, which provide unified, intuitive performance, aesthetic control and customization across our Corsair hardware ecosystem and Elgato streaming products. We also offer digital services to enhance the customer experience by integrating esports, Elgato's marketplace, customer care and extended warranty into our product offerings.

We group our products into two categories (operating segments):

•
Gamer and Creator Peripherals. Includes our high-performance gaming keyboards, mice, headsets, controllers, and streaming products, which includes capture cards, Stream Decks, microphones, teleprompters, and audio interfaces, our Facecam streaming cameras, studio accessories, command center displays, sim racing products, and gaming furniture, among others.

•
Gaming Components and Systems. Includes our high-performance power supply units, cooling solutions, computer cases, and DRAM modules, as well as high-end prebuilt and custom-built gaming PCs and laptops, and AI workstations, among others.

We are committed to continuing to grow in our current markets as well as new markets through the development of innovative technologies and by entering into new categories through organic growth or acquisitions. In recent years, we have entered into several new markets, for example the camera market for content creators and the sim racing market for gamers. We continue to expand our product portfolio and in 2025, we launched 105 new products.

On September 19, 2024, we completed the acquisition of the Fanatec Business for $43.7 million. The Fanatec sim racing product line, which fully complements our gaming PCs, gaming and streaming peripherals, has expanded our business in these markets. Fanatec’s results of operations are included in our consolidated statements of operations with effect from September 19, 2024.

Summary of Financial Results

Our net revenue was $1,472.5 million, $1,316.4 million, and $1,459.9 million for the years ended December 31, 2025, 2024, and 2023, respectively. Our gross margin was 28.9%, 24.9%, and 24.7% for the years ended December 31, 2025, 2024, and 2023, respectively. We had net losses of $16.2 million, $85.2 million, and $2.6 million for the years ended December 31, 2025, 2024, and 2023, respectively.

As of December 31, 2025 and 2024, we had cash and restricted cash, in the aggregate, of $98.8 million and $109.6 million, respectively. Net cash provided by operating activities was $50.1 million, $35.9 million, and $89.2 million for the years ended December 31, 2025, 2024, and 2023, respectively.

Further information on our industry, our market opportunity and competitive strengths is presented in Part I, Item 1, “Business” of this Annual Report on Form 10-K.

Key Factors Affecting Our Business

Our results of operations and financial condition are affected by numerous factors, including those discussed in the section titled “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K and those described below.

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Impact of Macroeconomic Conditions. Our business and financial performance depend significantly on worldwide economic conditions. We continue to face global macroeconomic challenges including evolving dynamics in the global trade environment and changes in laws or policies governing the terms of foreign trade, in particular increased trade restrictions, tariffs or taxes on imports or exports from or to countries where we manufacture or sell our products, inflationary trends, uncertainty in key financial markets, and volatility in exchange rates. Other geopolitical concerns continue such as the effects of the ongoing conflicts in Ukraine and the Middle East, the tensions in the Red Sea, and any potential conflicts between China and Taiwan, and the resulting supply chain constraints.

Since February 2025, the U.S. government has proposed and in certain cases implemented new, substantial tariffs on imports to the United States from various countries, including Taiwan, China and Vietnam, where we manufacture or source our products. These tariffs and any retaliatory actions from other countries have created a volatile environment for global trade. As a global company with a flexible and multi-location manufacturing base, we are actively working to mitigate the potential supply chain challenges. Our products are manufactured in several countries, including the United States, through a combination of our own factories and a network of reliable assembly subcontractors, and we have in the past demonstrated our ability to shift production locations with minimal disruptions to our business. While we mitigated the impact of new tariffs on our business to some extent during the year ended December 31, 2025, there can be no assurances that we will continue to be as effective in mitigating any negative impacts arising from the evolving global trade regulation and tariff landscape. We expect the global trade and tariff environment to remain volatile and we are actively monitoring developments in global trade and tariffs and will continue to evaluate the potential impact on our business and financial condition, as well as on our suppliers, and the actions we may take to mitigate any impact.

We also experience seasonality in the sale of our products, which may be affected by general economic conditions. The extent of the impact of macroeconomic conditions and geopolitical tensions on our business, sales, results of operations, cash flows and financial condition will depend on future developments, which are not within our control and are highly uncertain and cannot be predicted. We will continue to evaluate these risks and uncertainties and further our mitigation plans.

We are exposed to fluctuations in foreign currency exchange rates. As a result of our foreign sales and operations, we have revenue, payroll and other operating expenses denominated in foreign currencies, in particular the Euro, British Pound, Taiwan Dollar, and Chinese Yuan. Unfavorable movement in the exchange rate between the U.S. dollar and the currencies we conduct sales or operate in may negatively impact our financial results.

Impact of Industry Trends. Our results of operations and financial condition are impacted by industry trends in the gaming market, including:

•
Increasing gaming engagement. We believe that gaming’s increasing time share of global entertainment consumption will drive continued growth in spending on both games and gaming products. Gaming continues to become increasingly social, as streaming viewership becomes more widely adopted along with increasing numbers of content creators. More members of the younger generation are gamers and spend more time on gaming related activities than older generations. We believe these trends will over time bring more gamers and creators to purchase dedicated hardware and help grow the market for peripheral products. The growth of these markets will not be linear, as these markets are impacted by macroeconomic and consumer confidence, amongst other conditions. Our Gaming Components and Systems segment makes components used for self-built PCs and full gaming systems. The self-built PC market is heavily influenced by the timing of release of new game titles and next-generation CPUs and GPUs, as discussed in the bullet below. As for our Gamer and Creator peripherals segment, we saw continued growth from last year, primarily from our acquisition and integration of the new Fanatec business, which fully complements our sim racing chassis, gaming PCs, and gaming and streaming peripherals, and has expanded our product offerings in these markets. Continuing into 2026, we believe our Fanatec products will continue to draw key specialist retailers, further expanding our reach in the enthusiast gaming market.

•
Introduction of new high-performance computing hardware and sophisticated games. We believe that the introduction of more powerful CPUs and GPUs that place increased demands on other system components, such as memory, PSUs or cooling, has a significant effect on increasing the demand for our products. In addition, we believe that the introduction and success of games with sophisticated graphics that place increasing demands on system processing speed and capacity and therefore require more powerful CPUs or GPUs, drives demand for our high-performance gaming components and systems, such as power supply units and cooling solutions, and our gaming PC memory. As a result, our operating results may be materially affected by the timing of, and the rate at which computer hardware companies introduce, new and enhanced CPUs and GPUs, the timing of, and rate at which computer game companies and developers introduce sophisticated new and improved games that require increasingly high levels of system and graphics processing power, and whether these new products and games are widely accepted by gamers. Following a period of elevated demand in 2023, driven by increased GPU availability and popular game launches, demand moderated during 2024 as we entered into a mid-cycle period for new GPU platforms. In early 2025, the launch of the latest generation of GPUs contributed to

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increased demand for our gaming components and systems products. Demand in 2026 may be more consistent with mid-cycle conditions rather than the elevated demand typically experienced following major platform launches.

•
Global semiconductor shortage. We are currently observing significant constraints in the global supply of seminconductors driven by the proliferation of AI infrastructure, which are materially impacting the broader hardware market. Heightened demand for these components has driven commodity prices to high levels, resulting in a substantial increase in the market price of DRAM modules. We believe these elevated costs act as a barrier to entry for the budget-segment of the self-built PC market and may negatively impact our results in the near term. However, our core market position is centered on the enthusiast-level PC builder, a demographic that historically demonstrates less price sensitivity than the broader mark

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