Turtle Beach Reports Second Quarter 2022 Results – Turtle Beach Corporation

Leading gaming accessory maker Turtle Beach Corporation (Nasdaq: HEAR), reported financial results for the second quarter ended June 30, 2022.

Second Quarter Summary vs Year-Ago Period:

  • Second quarter net revenue was $41.3 million, compared to $78.6 million a year ago, reflecting a challenging macroeconomic environment vs. a near record quarter last year;
  • Second quarter net loss was $(17.8) million, or $(1.08) per diluted share, compared to net income of $1.7 million, or $0.09 per diluted share; and
  • Second quarter adjusted EBITDA was $(12.1) million compared to $5.0 million.

Management Commentary

“While the underlying trends in the gaming market remain strong, our second quarter results were impacted by ongoing macroeconomic headwinds impacting many companies, including a decline in consumer discretionary spending driven by rising inflation, channel inventory reductions, global supply chain challenges, and a strong dollar,” said Juergen Stark, CEO and Chairman, Turtle Beach Corporation. “Despite these challenges, we are focused on what we can control and have taken proactive actions to reduce operating expenses while launching new products across our increasingly diverse portfolio, consistent with our broader strategy. Our business expansion across non-console headset categories continued to show strong results as it grew to over 25% of overall net revenue in the second quarter.

“Our industry-leading gaming products remain highly attractive to gamers at all price points, and in the second quarter we announced upgrades to our Stealth wireless gaming headsets which have gained share in premium price tiers and contributed to a nice share jump in June. We’ve also launched new products within our ROCCAT PC accessories brand where we are seeing a meaningful increase in recent sales with new in-line displays at Best Buy. As the economic and operating challenges persist, we remain confident in the gaming market as a whole and believe we can capitalize on the strong, long-term secular trends over time. Gaming trends are historically favorable in economic downturns and may lead to pent-up demand that drives additional upswing when consumer spending behavior recovers. Current retail inventory conservatism, which is having a significant incremental impact on revenues, also tends to create an incremental positive impact when consumer demand swings up.

“We continue to have strong conviction that the gaming market remains highly attractive with ample opportunities ahead, and we expect to roll out new gaming products within our diverse portfolio in the second half of 2022 that will position us to capture more share as the gaming market improves. As we move forward, we remain committed to delivering high-quality products with features that gamers love, while diligently managing the business both for the current environment and to position us for long-term success and value creation.”

Second Quarter 2022 Financial Results

Net revenue in the second quarter of 2022 was $41.3 million, compared to a near record $78.6 million in the elevated period a year ago, where strong demand for the Company’s products was driven by stay-at-home orders, government stimulus payments and a strong gaming accessories market.

Gross margin in the second quarter of 2022 was 19.1% versus 36.5% in the year-ago quarter. The decrease was primarily due to higher promotional credits driven by more aggressive competitive pricing actions to reduce inventory levels, business mix, significantly higher freight costs, volume-driven fixed cost deleveraging and higher warehouse costs to ensure product supply.

Operating expenses in the second quarter of 2022 were $29.3 million compared to $28.3 million in the year-ago quarter, including $6.8M …….

Source: https://corp.turtlebeach.com/2022/08/08/turtle-beach-reports-second-quarter-2022-results/


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