• Live Feeds
    • Press Releases
    • Insider Trading
    • FDA Approvals
    • Analyst Ratings
    • Insider Trading
    • SEC filings
    • Market insights
  • Analyst Ratings
  • Alerts
  • Subscriptions
  • Settings
  • RSS Feeds
Quantisnow Logo
  • Live Feeds
    • Press Releases
    • Insider Trading
    • FDA Approvals
    • Analyst Ratings
    • Insider Trading
    • SEC filings
    • Market insights
  • Analyst Ratings
  • Alerts
  • Subscriptions
  • Settings
  • RSS Feeds
PublishDashboard
    Quantisnow Logo

    © 2025 quantisnow.com
    Democratizing insights since 2022

    Services
    Live news feedsRSS FeedsAlertsPublish with Us
    Company
    AboutQuantisnow PlusContactJobsAI employees
    Legal
    Terms of usePrivacy policyCookie policy

    Turtle Beach Corporation Announces Third Quarter 2024 Results and Raises Full Year Outlook

    11/7/24 4:15:00 PM ET
    $HEAR
    Telecommunications Equipment
    Telecommunications
    Get the next $HEAR alert in real time by email

    – Third Quarter Net Revenue of $94.4 million, up 60% Year-over-Year –

    – Net Income was $3.4 million compared to a Net Loss of ($3.6) in prior year –

    – Adjusted EBITDA was $16.3 million compared to $1.0 in prior year –

    – Raising Full Year 2024 EBITDA Guidance Again on Continued Execution Strength –

    – Repurchased $10.1 Million of Common Shares in the Third Quarter –

    WHITE PLAINS, N.Y., Nov. 07, 2024 (GLOBE NEWSWIRE) -- Turtle Beach Corporation (NASDAQ:HEAR), a leading gaming accessories brand, today reported financial results for the third quarter ended September 30, 2024.

    Third Quarter Highlights

    • Net revenue was $94.4 million, an increase of 60% compared to the prior year period.
    • Net income was $3.4 million or $0.16 per diluted share compared to a net loss of $(3.6) million or $(0.21) net loss per diluted share in the prior year period.
    • Adjusted EBITDA was $16.3 million, an improvement of $15.2 million compared to an Adjusted EBITDA of $1.0 million in the prior year period.

    "We delivered another strong quarter of performance, showcasing the continued momentum in our business, and have made tremendous progress towards the integration of PDP following our transformative acquisition earlier this year. Our third quarter revenue grew 60% year-over-year to $94.4 million, while adjusted EBITDA increased significantly to $16.3 million, reflecting the benefits of our expanded portfolio and operational improvements. Excluding PDP's contributions, our organic revenue grew approximately 15% compared to last year, highlighting the depth of our underlying business and an unwavering focus on execution. The gaming accessories market continues to show robust growth year-to-date, particularly in our core categories. We believe there are still additional synergies to be realized as we continue to optimize our operations," said Cris Keirn, CEO, Turtle Beach Corporation.

    "Our market position continues to strengthen, with notable share gains across key categories. The integration of PDP is exceeding our expectations, and we now anticipate achieving total annual synergies exceeding $13 million, surpassing our initial estimates. Our gross margin expansion of 630 basis points year-over-year to 36.2% demonstrates the success of our cost optimization initiatives and reduced promotional spending."

    "We're excited about our upcoming product pipeline and the continued benefits from our increased scale and diversification. Our visibility regarding continued strong demand for our products ahead of the holiday season and our improved financial performance is reflected in our increased Adjusted EBITDA guidance for the year, as we detail below. We remain focused on driving innovation, operational excellence, and market leadership while delivering value to our shareholders and gaming customers worldwide.

    "Further, our confidence in Turtle Beach's value creation over the long-term is reflected in our share repurchase program, through which we bought back $10.1 million of stock in the third quarter alone. This repurchase came in addition to the more than $15 million of shares that we repurchased in the second quarter. Combined, the past two quarters mark the largest share repurchase in the history of Turtle Beach, punctuating our continued commitment to return capital to shareholders in conjunction with investing appropriately in the Company. We believe these repurchases represent a strategic investment that underscore our confidence in the Company's future, based on our assessment of the intrinsic value of the shares."

    Share Repurchase Update

    During the third quarter ended September 30, 2024, the Company repurchased approximately 688,000 shares of common stock for an aggregate purchase price of $10.1 million. The Company has repurchased $25.3 million year-to-date, and has $21.3 million remaining to repurchase shares under its share repurchase program which expires on April 9, 2025.  

    Balance Sheet and Cash Flow Summary

    At September 30, 2024, the Company had net debt of $94.1 million, comprised of $107.9 million of borrowings less $13.8 million of cash. Inventories at September 30, 2024 were $102.3 million compared to $44.0 million at December 31, 2023 which now includes PDP. Cash flow used in operations for the nine months ended September 30, 2024 was $8.6 million compared to cash from operations of $7.9 million for the nine months ended September 30, 2023.

    Given the required investment in inventory that the Company undertakes ahead of the holiday season, it is typical that the Company's net debt temporarily increases at the end of the third quarter of each year due to these working capital requirements.

    Outlook

    Turtle Beach is updating its 2024 outlook. The Company is maintaining its guidance for net revenue for the full year ending December 31, 2024, to be between $370 and $380 million. This revenue range translates to 43-47% growth year-over-year.

    The Company currently expects Adjusted EBITDA for the full year ending December 31, 2024, to be between $55 and $58 million, up from the prior range of between $53 million to $56 million compared to $6.5 million of Adjusted EBITDA for 2023.

    Earnings Conference Call and Webcast Details

    Turtle Beach will host a conference call and audio webcast today, November 7, 2024, at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time), during which management will discuss third quarter results and provide commentary on business performance and its current outlook for 2024. A question-and-answer session will follow the prepared remarks.

    The conference call may be accessed by telephone by dialing 800-717-1738 (domestic) or 646-307-1865 (international).

    A live audio webcast of the earnings conference call may be accessed on Turtle Beach's website at www.corp.turtlebeach.com, along with a copy of this press release and an investor slide presentation. An audio replay of the call will be available on the Company's investor relations website for a limited period of time.

    About Turtle Beach Corporation

    Turtle Beach Corporation (the "Company") (www.turtlebeachcorp.com) is one of the world's leading gaming accessory providers. The Company's namesake Turtle Beach brand (www.turtlebeach.com) is known for designing best-selling gaming headsets, top-rated game controllers, award-winning PC gaming peripherals, and groundbreaking gaming simulation accessories. Innovation, first-to-market features, a broad range of products for all types of gamers, and top-rated customer support have made Turtle Beach a fan-favorite brand and the market leader in console gaming audio for over a decade. Turtle Beach Corporation acquired Performance Designed Products LLC (www.pdp.com) in 2024. Turtle Beach's shares are traded on the Nasdaq Exchange under the symbol: HEAR.

    Non-GAAP Financial Measures

    In addition to its reported results, the Company has included in this earnings release certain financial metrics, including Adjusted EBITDA, that the Securities and Exchange Commission define as "non-GAAP financial measures." Management believes that such non-GAAP financial measures, when read in conjunction with the Company's reported results, can provide useful supplemental information for investors analyzing period-to-period comparisons of the Company's results. Non-GAAP financial measures are not an alternative to the Company's GAAP financial results and may not be calculated in the same manner as similar measures presented by other companies. "Adjusted EBITDA" is defined by the Company as net income (loss) before interest, taxes, depreciation and amortization, stock-based compensation (non-cash), and certain non-recurring special items that we believe are not representative of core operations, as further described in Table 4. These non-GAAP financial measures are presented because management uses non-GAAP financial measures to evaluate the Company's operating performance, to perform financial planning, and to determine incentive compensation. Therefore, the Company believes that the presentation of non-GAAP financial measures provides useful supplementary information to, and facilitates additional analysis by, investors. The non-GAAP financial measures included herein exclude items that management does not believe reflect the Company's core operating performance because such items are inherently unusual, non-operating, unpredictable, non-recurring, or non-cash. See a reconciliation of GAAP results to Adjusted EBITDA included as Table 4 below for each of the three and nine months ended September 30, 2023 and September 30, 2024.

    By providing full year 2024 Adjusted EBITDA guidance, the Company provided its expectation of a forward-looking non-GAAP financial measure. Information reconciling full year 2024 Adjusted EBITDA to its most directly comparable GAAP financial measure, net income (loss), is unavailable to the Company without unreasonable effort due to the variability, complexity, and lack of visibility with respect to certain reconciling items between Adjusted EBITDA and net income (loss), including other income (expense), provision for income taxes and stock-based compensation. These items cannot be reasonably and accurately predicted without the investment of undue time, cost and other resources and, accordingly, a reconciliation of the Company's Adjusted EBITDA outlook to its net income (loss) outlook for such periods is not provided. These reconciling items could be material to the Company's actual results for such periods.

    Cautionary Note on Forward-Looking Statements

    This press release includes forward-looking information and statements within the meaning of the federal securities laws. Except for historical information contained in this release, statements in this release may constitute forward-looking statements regarding assumptions, projections, expectations, targets, intentions, or beliefs about future events. Statements containing the words "may", "could", "would", "should", "believe", "expect", "anticipate", "plan", "estimate", "target", "goal", "project", "intend" and similar expressions, or the negatives thereof, constitute forward-looking statements. Forward-looking statements are only predictions and are not guarantees of performance. Forward-looking statements involve known and unknown risks and uncertainties, which could cause actual results to differ materially from those contained in any forward-looking statement. The inclusion of such information should not be regarded as a representation by the Company, or any person, that the objectives of the Company will be achieved. Forward-looking statements are based on management's current beliefs and expectations, as well as assumptions made by, and information currently available to, management.

    While the Company believes that its expectations are based upon reasonable assumptions, there can be no assurances that its goals and strategy will be realized. Numerous factors, including risks and uncertainties, may affect actual results and may cause results to differ materially from those expressed in forward-looking statements made by the Company or on its behalf. Some of these factors include, but are not limited to, risks related to logistic and supply chain challenges and costs, the substantial uncertainties inherent in the acceptance of existing and future products, the difficulty of commercializing and protecting new technology, the impact of competitive products and pricing, general business and economic conditions, risks associated with the expansion of our business including the integration of any businesses we acquire and the integration of such businesses within our internal control over financial reporting and operations, our indebtedness, liquidity, and other factors discussed in our public filings, including the risk factors included in the Company's most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, and the Company's other periodic reports filed with the Securities and Exchange Commission. Except as required by applicable law, including the securities laws of the United States and the rules and regulations of the Securities and Exchange Commission, the Company is under no obligation to publicly update or revise any forward-looking statement after the date of this release whether as a result of new information, future developments or otherwise.

    CONTACTS

    Investors:

    [email protected]

    (646) 277-1285

    Public Relations & Media:

    MacLean Marshall

    Sr. Director, Global Communications

    Turtle Beach Corporation

    (858) 914-5093

    [email protected]

     
    Turtle Beach Corporation

    Condensed Consolidated Statements of Operations

    (in thousands, except per-share data)

    (unaudited)

    Table 1.



      Three Months Ended  Nine Months Ended 
      September 30,  September 30,  September 30,  September 30, 
      2024  2023  2024  2023 
    Net revenue  $94,363   $59,158   $226,689   $158,584 
    Cost of revenue   60,232    41,469    151,696    114,884 
    Gross profit   34,131    17,689    74,993    43,700 
    Operating expenses:            
    Selling and marketing   13,535    10,583    36,289    30,457 
    Research and development   4,311    4,380    12,802    12,670 
    General and administrative   6,352    5,243    19,489    25,375 
    Acquisition-related cost   3,510    -    9,814    - 
    Total operating expenses   27,708    20,206    78,394    68,502 
    Operating income (loss)   6,423    (2,517)   (3,401)   (24,802)
    Interest expense   2,712    107    5,082    253 
    Other non-operating expense, net   252    481    974    799 
    Income (loss) before income tax   3,459    (3,105)   (9,457)   (25,854)
    Income tax expense (benefit)   46    501    (5,501)   377 
    Net income (loss)  $3,413   $(3,606)  $(3,956)  $(26,231)
                 
    Net income (loss) per share            
    Basic  $0.17   $(0.21)  $(0.20)  $(1.54)
    Diluted  $0.16   $(0.21)  $(0.20)  $(1.54)
    Weighted average number of shares:            
    Basic   20,553    17,345    20,050    17,029 
    Diluted   21,501    17,345    20,050    17,029 



     
    Turtle Beach Corporation

    Condensed Consolidated Balance Sheets

    (in thousands, except par value and share amounts)
    Table 2.       



      September 30,  December 31, 
      2024  2023 
      (unaudited)    
    ASSETS   
    Current Assets:      
    Cash and cash equivalents  $13,803   $18,726 
    Accounts receivable, net   70,703    54,390 
    Inventories   102,263    44,019 
    Prepaid expenses and other current assets   9,686    7,720 
    Total Current Assets   196,455    124,855 
    Property and equipment, net   5,753    4,824 
    Goodwill   56,700    10,686 
    Intangible assets, net   44,544    1,734 
    Other assets   9,749    7,868 
    Total Assets  $313,201   $149,967 
    LIABILITIES AND STOCKHOLDERS' EQUITY      
    Current Liabilities:      
    Revolving credit facility  $58,626   $— 
    Accounts payable   66,394    26,908 
    Other current liabilities   30,689    29,424 
    Total Current Liabilities   155,709    56,332 
    Debt, non-current   45,696    — 
    Income tax payable   1,489    1,546 
    Other liabilities   8,488    7,012 
    Total Liabilities   211,382    64,890 
    Commitments and Contingencies      
    Stockholders' Equity      
    Common stock   20    18 
    Additional paid-in capital   239,345    220,185 
    Accumulated deficit   (138,233)   (134,277)
    Accumulated other comprehensive loss   687    (849)
    Total Stockholders' Equity   101,819    85,077 
    Total Liabilities and Stockholders' Equity  $313,201   $149,967 



     
    Turtle Beach Corporation

    Condensed Consolidated Statements of Cash Flows

    (in thousands)

    (unaudited)
    Table 3.



      Nine Months Ended 
      September 30,

    2024
      September 30,

    2023
     
      (in thousands) 
    CASH FLOWS FROM OPERATING ACTIVITIES      
    Net loss $(3,956) $(26,231)
    Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:      
    Depreciation and amortization  3,261   2,912 
    Costs recognized on sale of acquired inventory  2,085   — 
    Amortization of intangible assets  4,843   761 
    Amortization of debt financing costs  625   108 
    Stock-based compensation  3,447   8,554 
    Deferred income taxes  (6,739)  (178)
    Change in sales returns reserve  1,369   (2,473)
    Provision for obsolete inventory  4,690   200 
    Loss on impairment of asset  753   — 
    Changes in operating assets and liabilities, net of acquisitions:      
    Accounts receivable  4,344   12,563 
    Inventories  (43,597)  (4,986)
    Accounts payable  30,050   19,072 
    Prepaid expenses and other assets  127   385 
    Income taxes payable  485   126 
    Other liabilities  (10,340)  (2,869)
    Net cash provided (used for) by operating activities  (8,553)  7,944 
    CASH FLOWS FROM INVESTING ACTIVITIES      
    Purchases of property and equipment  (3,392)  (1,924)
    Acquisition of a business, net of cash acquired  (77,294)  — 
    Net cash used for investing activities  (80,686)  (1,924)
    CASH FLOWS FROM FINANCING ACTIVITIES      
    Borrowings on revolving credit facilities  242,609   149,995 
    Repayment of revolving credit facilities  (183,983)  (155,787)
    Proceeds of term loan  50,000   — 
    Repayment of term loan  (729)  — 
    Proceeds from exercise of stock options and warrants  3,004   1,718 
    Repurchase of common stock  (25,339)  (974)
    Debt issuance costs  (2,897)  (80)
    Net cash provided by (used for) financing activities  82,665   (5,128)
    Effect of exchange rate changes on cash and cash equivalents  1,651   52 
    Net increase (decrease) in cash and cash equivalents  (4,923)  944 
    Cash and cash equivalents - beginning of period  18,726   11,396 
    Cash and cash equivalents - end of period $13,803  $12,340 



     
    Turtle Beach Corporation

    GAAP to Adjusted EBITDA Reconciliation

    (in thousands)
    Table 4.



      Three Months Ended  Nine Months Ended 
      September 30,  September 30, 
      2024  2023  2024  2023 
      (in thousands) 
    Net loss $3,413  $(3,606) $(3,956) $(26,231)
    Interest expense  2,712   107   5,082   253 
    Depreciation and amortization  3,322   1,212   8,104   3,673 
    Stock-based compensation  1,496   1,625   3,447   8,554 
    Income tax benefit (1)  46   501   (5,501)  377 
    Restructuring expense (2)  910   1,104   1,657   1,104 
    CEO transition related costs (3)  —   —   —   2,874 
    Business transaction expense (4)  3,510   —   9,814   — 
    Incremental costs on acquired inventory (5)  833   —   2,084   — 
    Proxy contest and other (6)  26   94   30   1,936 
    Adjusted EBITDA $16,268  $1,037  $20,761  $(7,460)

    (1)  An income tax benefit of $7.0 million was recorded in the three months ended March 31, 2024 as a result of the reversal of a portion of the Company's deferred tax asset valuation allowance.

    (2)  Restructuring charges are expenses that are paid in connection with reorganization of our operations. These costs primarily include severance and related benefits.

    (3)  CEO transition related expense includes one-time costs associated with the separation of its former CEO. Such costs included severance, bonus, medical benefits and the tax impact of accelerated vesting of stock-based compensation.

    (4)  Business transaction expense includes one-time costs we incurred in connection with acquisitions including warehouse lease impairment, professional fees such as legal and accounting along with other certain integration related costs.

    (5)  Costs relate to the step up of acquired PDP finished goods inventory to fair market value as required under GAAP purchase accounting. This step up in value over original cost is recorded as a charge to cost of revenue as such inventory is sold.

    (6)  Proxy contest and other primarily includes one-time legal and other professional fees associated with proxy challenges presented by certain shareholder activists.



    Primary Logo

    Get the next $HEAR alert in real time by email

    Chat with this insight

    Save time and jump to the most important pieces.

    Recent Analyst Ratings for
    $HEAR

    DatePrice TargetRatingAnalyst
    8/9/2024$17.00Perform → Outperform
    Oppenheimer
    5/5/2023$10.00 → $16.00Buy
    Maxim Group
    11/28/2022$18.00Buy
    ROTH Capital
    8/9/2022$25.00 → $14.00Buy → Neutral
    DA Davidson
    8/9/2022Outperform → Perform
    Oppenheimer
    5/17/2022$27.00Neutral → Outperform
    Wedbush
    3/4/2022$34.00 → $30.00Buy
    Stifel
    3/1/2022$27.00 → $24.00Outperform → Neutral
    Wedbush
    More analyst ratings