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Thi La

Thank you, Andy. I'm honored and excited to have the opportunity to become the Chief Executive Officer of Corsair.
As Andy said, I have been part of Corsair for 14 years now and love working with gamers and creators. I have been working alongside Andy to build a moderate DIY business to now over 30 exciting product lines and 6 great brands, growing the company from 300 million to the current level. Prior to Corsair, my experience spanned from running R&D operations to managing product lines that generated over $3 billion in revenue.
My passion is to make great products for our enthusiast consumers, and my goal is to put customer first while growing our presence in a robust market. 2025 is an excellent time for Corsair with the acquisition of Fanatec and NVIDIA 5000 series launch. I feel good about starting our next phase under these tailwinds.
Let me now turn the call over to Michael for a review.

Michael Potter

Thank you, Andy and Thi. Our stronger-than-expected performance in Q4 helped us to end the year in a strong financial position, and we had balanced inventory levels in both the channel and our warehouses. Throughout 2024, we remained committed to strategically expanding our portfolio, investing in innovation, reducing operating costs and debt, and strengthening our balance sheet.
This includes the purchase of Fanatec and the increased investment into Elgato's supply chain, reinforcing our capabilities in key growth areas. As Andy highlighted, we believe we're well positioned to capitalize on healthier demand trends as we return to growth and expect to continue our disciplined approach to debt reduction in 2025.
In terms of the specifics, Q4 2024 net revenue was $413.6 million compared to $417.3 million in Q4 2023. For the full year 2024, net revenue was $1316.4 million compared to $1459.9 million in 2023. European markets contributed 38% of our Q4 2024 revenues compared to 38.4% in Q3 2024, while the APAC region was 9.1% of our Q4 2024 revenues compared to 10.3% in Q3 2024.
Turning now to our segments, the gamer and creator peripheral segment contributed $169.6 million of net revenue during the fourth quarter compared to $136.8 million in Q4 2023. For the full year 2024, gamer and creator peripheral segment revenue was $472.7 million compared to $394.9 million for the full year 2023. The gaming components and systems segment contributed $244.1 million of net revenue during the fourth quarter compared to $280.5 million in Q4 2023.
Memory products contributed $126.3 million in Q4 2024 compared to $145.5 million in Q4 2023. For the full year 2024, gaming components and system segment revenue was $843.7 million compared to $1,065 million for the full year 2023, with memory products contributing $429.9 million compared to $517.4 million in 2023.
Overall gross profit in the fourth quarter was $108.2 million compared to $102.7 million in Q4 2023, reflecting the strong growth in our gaming and creator peripheral segment. Gross profit for Q4 includes the impact of $4.2 million of fair value step-up of inventory acquired from the purchase of the Fanatec business. Gross margin increased to 26.2% compared to 24.6% in Q4 2023. For the full year 2024, gross profit was $327.6 million compared to $360.3 million in 2023.
Gross profit in the gamer and creator peripheral segment was $63.9 million compared to $50.9 million in Q4 2023. Gross margin improved to 37.7% compared to 37.2% in Q4 2023. Without the impact of the $4.2 million fair value adjustment, gross profit would have been $68.1 million and gross margin would have been 40.2%. We're pleased with the strength in this business and expect it to continue in 2025.
The gaming components and systems segment gross profit was $44.3 million compared to $51.8 million in Q4 2023, reflecting the lower sales volume. Gross margin was 18.1% compared to 18.5% in Q4 2023. Our memory products gross margins in this segment were 15.3% for the fourth quarter compared to 13.5% in Q4 2023.
Fourth-quarter SG&A expenses were $85.3 million compared to $73.8 million in Q4 2023. Fourth-quarter R&D expenses were $17 million compared to $16.7 million in Q4 2023. We continue to invest in innovation, including our peripherals business and new growth opportunities like sim racing that will help us to accelerate revenue growth.
GAAP operating income in the fourth quarter of 2024 was $5.9 million compared to $12.1 million in Q4 2023. Fourth-quarter adjusted operating income was $31.7 million compared to adjusted operating income of $31.8 million in Q4 2023. Adjusted operating income was $45.7 million for the full year 2024 compared to $85.4 million in 2023. We're pleased to end the year on such a strong note and remain focused on further improvements as we return to our growth mode.
Fourth-quarter net income attributable to common shareholders was $1.3 million or $0.01 per diluted share as compared to net income of $6.2 million or $0.06 per diluted share in Q4 2023. On an adjusted basis, fourth quarter net income was $24.8 million or $0.23 per diluted share compared to an adjusted net income of $23.2 million or $0.22 per share in Q4 2023.
For the full year 2024, adjusted net loss was $2.7 million or $0.03 per diluted share from adjusted net income of $58.3 million or $0.55 per diluted share in 2023. The 2024 results include the adverse effect of a net $32.5 million non-cash charge from a valuation allowance on deferred tax assets.
Finally, fourth-quarter adjusted EBITDA was $33.1 million compared to $33.7 million for Q4 2023. For the full year 2024, adjusted EBITDA was $54.7 million compared to $95.1 million in the year-ago period. As noted earlier, we're pleased to end the year on such a strong note and remain focused on further improvements as we return to our growth mode.
Turning now to our balance sheet, we ended Q4 with a cash balance, including restricted cash, of $109.6 million. We ended the year with inventory up slightly compared to last year, mainly caused by the newly purchased Fanatec business. We continue to expect that under our normal cash cycle, we will have increased cash generation starting in Q1 2025.
We ended Q4 with $174 million of debt at face value, down $25 million year over year. And our $100 million working capital revolver remains undrawn and fully available. Overall, we expect liquidity to remain excellent through 2025, allowing us to be flexible as opportunities present themselves, and we expect to continue to reduce our debt in 2025.
In terms of the full year 2025, we expect revenue growth to improve through the coming year with a further improvement in adjusted EBITDA led by an additional improvement in margin and a rebound in demand for the company's high performance gear for gamers, streamers, content creators, and gaming PC builders.
We expect every quarter in 2025 to be better than 2024, with the biggest year-over-year improvement expected to be in the second quarter, mainly due to the timing of the new NVIDIA GPU launches. As fairly typical in a new GPU launch, initial volumes are lower and expected to ramp throughout Q1. So the year-over-year impact is expected to be less significant in Q1. We're also expecting our typical seasonality with the second-half revenue higher than the first half.
Finally, our current outlook reflects what we believe the impact of the newly announced tariffs in the USA will be after mitigation. As a reminder, we had already moved much of our production of USA-bound products out of China five years ago and had planned further actions in case more or expanded tariffs were announced. Mitigation is always some combination of source location, supplier price adjustments, and price increases.
For the full year 2025, we're expecting total revenue in a range of $1.4 billion to $1.6 billion, adjusted operating income in the range of $67 million to $87 million, and adjusted EBITDA in the range of $80 million to $100 million. Assuming we maintain the same debt and cash balances in 2025, we'd expect to have approximately $2.2 million of net interest expense per quarter.
We're using an effective tax rate of approximately 15% to 17% for 2025. Full-year weighted average diluted shares outstanding of approximately 106 million to 110 million shares.
With that, we're now happy to open the call for questions. Operator, will you please open up the call for Q&A?

Question and Answer Session

Operator

Thank you. We will now begin the question-and-answer session. (Operator Instructions)
Aaron Lee, Macquarie.

Aaron Lee

Thanks for taking my question. Andy, congratulations on a storied career. It was great working with you, and I hope we'll be seeing you pop up again somewhere in the industry in the future.
I want to start with maybe the Fanatec acquisition. Sorry if I missed this earlier, but is that still on track to be done by the second quarter? And what items are still ahead to work through as you course-correct that asset? And along those lines, can you also talk a bit more about your expectations for this business's growth in 2025?

Andrew Paul

Yeah. Well, thanks for the kind words, Aaron. So in terms of the integration, we are largely through it. Two parts, right? One was to sort out the customer service aspects. We've largely done that, and the second part of it is to integrate them in with our systems. Some of that is just sort of nice to have like putting them in with our financial systems, so you can track things better. The other part of it is just better logistics. So we're getting there.
I think in terms of getting them back to where they were, we're pretty much there now. However, the potential of expansion is really what we're working on now, and that's a combination of re-engaging with -- or engaging with retail, which they hadn't done before, and secondly, engaging with the network of people that actually build the complete sim rigs for customers.
So those are things we're looking forward to. But I would say that having discussed it with our wholesales channel and our retailers, everyone is super excited about this opportunity.

Aaron Lee

That's great to hear. And then, wanted to touch on partnerships. Over the last couple of quarters, you've announced some major partnerships with Activision and Apple. Can you just talk about how these partnerships have impacted the business, whether it's increased brand awareness, sales volumes, anything like that to help us understand how partnerships like these just kind of flow through the business? Thank you.

Andrew Paul

Yeah, I'll turn that one over to Thi, because she's been mostly involved in the partnership activity in the Apple. Thi, you want to take that?

Thi La

Yes. Thank you, Aaron, for the questions, and thank you, Andy. We are pretty pleased with the Call of Duty franchise picking us as a strategic exclusive partners for the full product range. And during the holiday season, after the launch of the Call of Duty: Black Ops 6, we see significant traffic increase coming to our website to look for information products, and the excitement level is high. So we see this as a very valuable marketing relationship for multi-years, and we're looking for additional participation between the two companies on the next wave of game launches.
With regards to the Apple relationship, we are happy with the results during the holiday season. We think that from a gaming brand perspective, we brought really good value to the relationship, and Apple and Corsair are happy with the holiday results.

Aaron Lee

Great. And I appreciate it. Thanks, Andy, and thank you, Thi. Looking forward to working with you.

Operator

George Wang, Barclays.

George Wang

Hey, Andy. Thanks for working with you in the past and wish you all the best. And Thi, welcome to the CEO position and look forward to working with you in the future.
Just two quick ones, firstly, obviously, top of mind in terms of the GPU refresh in the first half and especially kind of a bit more selling momentum into the second quarter, can you unpack and maybe give more color just in terms of cadence -- you get a range for the revenue, low end and the high end. Just curious what could the drive towards the high end of the guidance for the full year and just how to think about the cadence for the GPU refresh.

Andrew Paul

Yeah. So look, we've been talking for a while about the fact that there's a lot of pent-up demand for this GPU refresh. The way I was thinking about it was that all the -- any time you look back or you look across at what people are using, we always talk about the average refresh time being sort of three to five years for gaming stuff, but of course, that's an average. And there's going to be people with 10-year-old gear and 7-year-old gear.
I think what happened before COVID or at COVID was all the people with old gear renewed it. And so we've had sort of a skewed distribution since COVID. But if you think about it, we're now three years exactly since the start of COVID, or almost three years. And we're five years -- so five years from the beginning of it, three years from the end of it. So we're now right into that point where the big bulge is really ready to upgrade.
And so I think there's been huge anticipation with the 50 series cards. And I think it's funny watching the media comparing the 50 series cards with 40 series cards, but that's not what consumers are thinking about. Most consumers have got 20 series and 30 series cards. And so they're going to be upgrading five-year-old gear.
So in terms of the cadence, we don't know exactly what NVIDIA's plans are. I mean, they've been sold out -- fairly limited quantities in January; those were sold out in hours. And so I think that the big volume is going to be when the 5070 and 5070 Ti start to get shipped, the more affordable ones.
So I think in terms of volume for us, it's going to be gradual pick-up through the year. At the moment, I'd say for the last two months we've been kind of sold out on some of our components skews, power supplies and memory. So we're seeing pretty good activity in terms of the channel bringing products in, but I think it's going to -- I think we're looking forward here to the next two years of solid refresh activity, the way I think about it. It's not going to be a one-quarter blip or anything like that.

George Wang

Okay, great. Just a follow-up in terms of the margins. In the prepared remarks, you guys talk about margin improvement, especially kind of a cyclical recovery on the DIY components and continuing the margin trends for the peripherals. Maybe you can unpack kind of across both end of the spectrum and any other lever you guys can pull to kind of further improve EBITDA margin for 2025.

Andrew Paul

Well, look, I think we have a target of mid-20s gross margin on the whole components category. And we were doing well in terms of steadily growing those. I think post-COVID has been very challenging, because any time you get a demand that's a little less than expected, both because of the big activity in COVID, but also just because there's a little bit of inflation going on -- well, a lot of inflation going on, so some people's wallets are a bit stretched -- any time you get that, then competitors that are a little less well off than us tend to be desperate for cash and will discount.
So I think in in a more buoyant market that we're looking forward to, we should be much better off, much more stable inventory and demand. And so I would expect that we bounce back pretty quickly to our target or expected gross margins. And Thi has been working previously with the team to get these things back on track. So I think when you actually look at the expected EBITDA for this year compared to last year, as much of that is coming from improved margins than it is from revenue improvement.

Operator

(Operator Instructions)
Doug Creutz, TD Cowen.

Doug Creutz

Hey, thank you. You mentioned that your guidance incorporates the expected impact of the tariffs. I'm just curious if you think that kind of relative to your competitors, if you're relatively better positioned or worse positioned with tariffs. Could it be a competitive advantage? Any color you can give on that would be great. Thank you.

Andrew Paul

Well, there's two parts to that. I'll give you a general sense, and then Thi can give you a much more detailed view of where we stand on tariffs. It really depends on the industry and what we saw the last time tariffs came into play, which were mostly, of course, against China.
A third of our business is memory, which we build in Taiwan. The chips are not made in China. Many of our competitors then had assembly plants in China, for example. So it depends competitor by competitor and segment by segment, to be quite honest with you.
Some of the peripheral categories, we've already got a lot of production outside of China, so have our competitors. So I don't think other than some very specific areas, we're going to be any better or worse off than our competitors, but we're in pretty good shape. So do you want to just give a --

Thi La

Yeah. So tariff is really not a new problem for Corsair there, especially tariffs from China. So we've been working around the clock since the past four years to mitigate the supply chains so that we don't have any significant impact.
Now for some of the newer ones, for example, Mexico, Canada potential tariffs, we actually don't have any factory location in both of those countries versus maybe other manufacturer or OEMs who had invested in those countries in recent years. So at this point we feel comfortable with the current guidance. Of course, depending on the news coming out next -- and that might change the picture -- but at the moment, we feel pretty good about our supply chain.

Doug Creutz

Great. Thank you and congratulations, both to Andy and Thi.

Operator

Colin Sebastian, Baird.

Colin Loyet

Hey. This is Colin Loyet on for Colin Sebastian. Thanks for taking our questions. Just two from us. So the commentary in the release around the shaping of the rebounded components was helpful. So just kind of on that, our first question would be around components. How beneficial do you think NVIDIA's AI services business is for Corsair? For example, are you seeing people pair Corsair products with their products kind of in that sense?
And then our second question stepping back and looking at the broader video game market, have you seen any games recently kind of spur purchases of either peripherals or components, or do you think it's going to be more back-half weighted with the likes of GTA 6 and games like that? Thank you.

Andrew Paul

Yeah. Let's take the second question first. We're going to come back to the first one, because I didn't quite hear it.
But in terms of new games, I mean, there's been a steady stream of games. What we really haven't had for the last year or two is what we could call a Fortnite moment or a PUBG moment. So people are typically playing older games, and I think for our component business and for people looking at new cards, obviously, that tends to depend on new games that are super demanding, right, that you need high performance graphics in order to get 60 frames a second. Games like Fortnite tend to drive headset sales and keyboard sales.
But if you look at, if you actually look at the numbers, across the last five years, peripheral sales are substantially up, like 50% or 60% up compared to pre-COVID. So more people are gaming, but they're not -- yeah, not all gaming on new games. So the activity around PC builds or gaming PC builds is roughly on par with pre-COVID now. And obviously, we know that there was a little bit of a pull-forward from '22 to '24 in '20 and '21. So that's why we expect this refresh to build up and give us a little bit of growth in that area.
But yeah, GTA 6 is probably the one everyone's talking about, and we'll get a glimpse of that, I think, later on in the year for console. My understanding now it's going to come out in the fall for console and then early '26 for a PC.
Now the first part of the question in terms of NVIDIA AI helping or affecting our components sales, I didn't quite understand. Maybe you can give me that one again.

Colin Loyet

Yeah. So for example, people are training AI models with H100, et cetera. Are you seeing people use Corsair products in their training data centers or facilities?

Andrew Paul

Oh, I see what you're saying. So look, we have not targeted data centers. I mean, we sell products that are premium for consumers. If you're putting together a data center, once you've bought the graphics cards, everything else is just treated as a volume purchase at the lowest price. So I wouldn't think about that.
I tell you what we have seen, though, is that there's a lot of people, we're seeing building workstations with standard graphics cards or two graphics cards to start playing around with AI models.

Thi La

Machine learning.

Andrew Paul

Yeah. So I actually do think there's going to be a little bit of a demand from that, but we can't really size it at the moment.

Colin Loyet

Okay, that's great. And yeah, congrats, Andy. I really appreciate it.

Operator

(Operator Instructions)
Seeing no further questions, it will conclude our question-and-answer session. I would like to turn the conference back over to Andy Paul, President and CEO, for any closing remarks.

Andrew Paul

Thank you. So thank you, everybody, for joining us on the call today and for your continued support. If you've got any follow-up questions, please contact our Investor Relations department. And we look forward to updating you next quarter. Thank you and have a good evening.

Operator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.