Matthew Mccartney

Matthew McCartney sought clarification on whether Corsair's 2026 guidance for memory margins implies a flat trajectory, asked about the current memory inventory position, and requested a baseline and potential targets for Elgato's recurring revenue stream.

Answer

CFO Gordon Mattingly clarified that the components segment is expected to have relatively flat gross margins year-over-year for 2026, with only modest lift compared to steady state in the latter part of the year. CEO Thi La confirmed comfort with the current memory inventory position based on Q1 and full-year projections. Regarding Elgato, Thi La mentioned over 2 million active users on the marketplace and that the company is working to construct a recurring revenue model, with current revenue being 'meaningful,' but further details would be available in a couple of quarters.

Matthew McCartney with Wedbush Securities sought clarification on whether Corsair's 2026 guidance embeds a margin lift specifically for the memory side of the business. He also inquired about the company's current memory inventory position, especially given the reported increase in shortages. Finally, he asked for a baseline of Elgato's current recurring revenue, including percentages and potential targets.

Answer

CFO Gordon Mattingly clarified that the guidance assumes relatively flat gross margins year-over-year for the components segment, with only modest gross margin lift compared to steady state in the latter part of the year, reflecting near-term visibility. CEO Thi La stated that Corsair is comfortable with its current memory inventory position relative to the Q1 and full-year projections. Regarding Elgato's recurring revenue, Thi La mentioned over 2 million active users on the Elgato Marketplace and that the task for the next six months is to construct a recurring revenue model, with current revenue being meaningful enough to pursue this strategy, but further details would be available in a couple of quarters.

Matthew Mccartney from Wedbush Securities Inc. questioned the reasons for the outsized decline in the online channel and asked for a breakdown of the drivers behind the higher average revenue per smart bed.

Answer

CEO Shelly Ibach attributed the online channel's weakness to pressure at the low end of the product line, specifically the Classic series. She stated that the increase in average revenue was primarily driven by a favorable product mix from the successful high-end Climate series, while total promotional spending as a percent of net sales remained flat year-over-year.

Asked about the company's confidence in achieving profitability next year without assuming a market recovery, and inquired about performance during the Labor Day period relative to the industry.

Answer

Confidence in 2025 profitability stems from gross margin improvements and restructuring benefits, not from assumed volume growth. The company believes it is outperforming the industry year-to-date, as its sales are down less than 2% compared to a competitor's 10% decline.