Executive Summary

Q1 2025 delivered solid topline and margin expansion: revenue $369.8M (+9.6% YoY), gross margin 27.7% (+200 bps YoY), and adjusted EBITDA $22.6M, with Peripherals growth and a rebound in Components; GAAP diluted EPS was $(0.10) while adjusted EPS was $0.11 .
Versus S&P Global consensus, revenue modestly beat ($369.8M vs $366.2M*) while Primary EPS was a slight miss ($0.11 vs $0.12*); EBITDA comparisons require care as Street “EBITDA” differs from company Adjusted EBITDA ($22.6M vs S&P Global actual 10.9M*) .
Management did not reaffirm FY25 guidance due to tariff uncertainty, but stated the company “remains on track” to achieve the prior ranges if conditions hold; supply chain flexibility and diversified manufacturing limit tariff exposure (≈80% of U.S. sales excluded or ≤10% tariff rates) .
Strategic positives included successful initial Fanatec integration and early AI-enabled product traction; near‑term stock narrative likely hinges on tariff clarity and the NVIDIA GPU refresh cycle’s follow-through into H2 .

What Went Well and What Went Wrong

What Went Well
- “We met our revenue and earnings targets for Q1… with continued growth in the Gamer and Creator Peripherals segment and a rebound in… Gaming Components and Systems” .
- Fanatec integration milestone achieved across e‑commerce, ERP, supply chain, and support; early consumer response “enthusiastic” and retail rollout planned in Q2 .
- Margin expansion: gross margin rose to 27.7% (+200 bps YoY) with improved segment mix and efficiency; CFO: “expansion in margins… reflects our disciplined execution” .
What Went Wrong
- Guidance visibility: management did not reaffirm FY25 outlook given “newly announced tariffs” and potential retaliatory measures, deferring an update until visibility improves .
- GAAP profitability remains pressured (GAAP operating loss $(2.3)M; GAAP diluted EPS $(0.10)); sequential revenue down from Q4 seasonality ($413.6M to $369.8M) .
- Inventory built strategically into quarter end (to mitigate tariff/supply risk) and before Fanatec retail rollout, raising inventories from $260.0M to $276.8M QoQ .

Financial Results

Key P&L (GAAP unless noted)

Metric	Q1 2024	Q4 2024	Q1 2025
Net Revenue ($USD Millions)	$337.3	$413.6	$369.8
Gross Profit ($USD Millions)	$86.6	$108.2	$102.4
Gross Margin %	25.7%	26.2%	27.7%
Operating Income (Loss) ($USD Millions)	$(10.2)	$5.9	$(2.3)
GAAP Diluted EPS ($)	$(0.12)	$0.01	$(0.10)
Adjusted EPS ($)	$0.09	$0.23	$0.11
Adjusted EBITDA ($USD Millions)	$18.0	$33.1	$22.6

Segment Breakdown

Metric	Q1 2024	Q1 2025
Gamer & Creator Peripherals Revenue ($USD Millions)	$107.0	$112.0
Gamer & Creator Peripherals Gross Margin %	40.8%	41.5%
Gaming Components & Systems Revenue ($USD Millions)	$230.3	$257.8
Gaming Components & Systems Gross Margin %	18.7%	21.7%

KPI – Memory and Mix

KPI	Q1 2024	Q1 2025
Memory Revenue ($USD Millions)	$124.9	$141.1
Memory Gross Margin %	14.5%	16.9%

Liquidity and Balance Sheet

Metric	Q4 2024	Q1 2025
Cash & Restricted Cash ($USD Millions)	$109.6	$102.5
Inventory ($USD Millions)	$260.0	$276.8
Term Loan (face value) ($USD Millions)	$149.0 (Q1 snapshot)	$149.0
Net Debt ($USD Millions)	—	$49.2

Versus S&P Global Consensus (Q1 2025)

Metric	Consensus	Actual
Revenue ($USD Millions)	366.2*	369.8*
Primary EPS ($)	0.12*	0.11*
EBITDA ($USD Millions, S&P Global definition)	21.9*	10.9*

Values marked with * retrieved from S&P Global.

Note: Company reports Adjusted EBITDA of $22.6M, which differs in definition from S&P Global’s EBITDA series .

Guidance Changes

Metric	Period	Previous Guidance (2/12/25)	Current (5/6/25)	Change
Net Revenue	FY 2025	$1.4B–$1.6B	Not reaffirmed; “on track if conditions hold”	Not reaffirmed (conditional)
Adjusted Operating Income	FY 2025	$67M–$87M	Not reaffirmed	Not reaffirmed
Adjusted EBITDA	FY 2025	$80M–$100M	Not reaffirmed	Not reaffirmed

Additional context: Management highlighted supply chain adaptability and low China sourcing for U.S. sales, noting ≈80% of U.S. product sales are excluded from tariffs or ≤10% tariff rates, and only 19% of U.S. imports were sourced from China in Q1 with a planned decline through the year .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3’24 and Q4’24)	Current Period (Q1’25)	Trend
GPU Refresh Cycle	Q3: Late-cycle softness; 2025 expected strong with new NVIDIA GPUs . Q4: Rebound expected as 50‑series ships in H1’25 .	Refresh started; high‑end cards (5090) on allocation; component demand solid .	Improving tailwind
Tariffs/Macro	Limited explicit prior commentary.	Did not reaffirm FY guide; stressed flexibility; ~80% of U.S. sales excluded/≤10% tariff; 19% China sourcing for U.S. (dropping) .	Elevated risk but mitigated
Fanatec Integration (Sim Racing)	Q3: Integration targeted by Q2’25 . Q4: First meaningful revenue; category viewed high-growth .	Initial integration complete; retail rollout in Q2; integration costs mostly behind .	Executing, de‑risking
AI/Productivity Tools	Not a focus in Q3/Q4 PRs.	Elgato AI Prompter and AIcoustic; AI in support/knowledge systems .	Expanding initiatives
Regional Mix	—	Europe 37.2% of revenue; APAC 11.3% (up vs Q4) .	APAC mix increasing
Cost/Margin Discipline	Q3/Q4: cost actions, aim for higher EBITDA margins .	Gross margin +200 bps YoY; SG&A and R&D % slightly down YoY .	Margin trajectory improving

Management Commentary

CEO Andy Paul: “We met our revenue and earnings targets for Q1… continued growth in… Peripherals… and a rebound in… Components and Systems. One… milestone… [was] the successful initial integration of Fanatec…” .
CEO Andy Paul (call): “Elgato is shipping AI‑enhanced tools like the AI Prompter… [and] Wavelink with AIcoustic… We believe AI will become a meaningful growth driver…” .
President/Incoming CEO Thi La: “~45% of our business is in the U.S.… ~80% of our product sales in the U.S. are excluded from tariffs or have tariff rates of 10% or less… only 19% of our U.S. imports were sourced from China, and this number is expected to drop…” .
CFO Michael Potter: “Expansion in margins… reflects our disciplined execution… we… reduced debt… ending Q1 with $102.5M cash (incl. restricted)… and $149M of debt… revolver undrawn” .

Q&A Highlights

GPU cycle strength and recession playbook: Management sees the refresh starting, constrained by high‑end GPU availability in March; in a downturn, home entertainment tends to be relatively resilient; ultimate demand hinges on semiconductor tariff levels .
Segment drivers and tariff pull‑forward: Peripherals growth driven “clearly [by] the Fanatec acquisition”; Components strength not viewed as tariff pull‑forward given GPU availability constraints and timing of tariffs (early April) .
Guidance stance clarified: As per prepared remarks, FY25 not reaffirmed due to tariff uncertainty; integration expenses largely behind, improving forward flexibility .

Estimates Context

S&P Global consensus for Q1 2025: Revenue $366.2M*, Primary EPS $0.12*, EBITDA $21.9M*; Actuals recorded by S&P Global: Revenue $369.8M*, Primary EPS $0.11*, EBITDA $10.9M*. That implies a modest revenue beat, slight EPS miss, and an EBITDA miss on S&P’s definition. Note the company’s reported Adjusted EBITDA was $22.6M, which is not directly comparable to S&P’s EBITDA series .
FY 2025 S&P Global consensus: Revenue $1.458B*, Primary EPS $0.45*; management did not reaffirm company guidance but indicated they remain “on track” if tariff conditions hold .