In This Article:
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Revenue: $76.5 million, up 59% year over year.
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Gross Margin: 30.2%, a 540 basis point improvement from last year.
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Adjusted EBITDA: $3 million, an improvement of $8.7 million compared to the same quarter last year.
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Operating Expenses: $27.2 million, including $1.4 million in acquisition-related costs.
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Net Debt: $61.2 million, comprised of $73.6 million of outstanding debt and $12.5 million of cash.
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Inventory: $73.3 million at quarter end, with PDP contributing $23.8 million.
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Share Repurchase: Approximately $15.2 million repurchased, nearly 1 million shares at an average price of $15.97 per share.
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Full Year Revenue Guidance: Expected between $370 million and $380 million.
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Full Year Adjusted EBITDA Guidance: Raised to a range of $53 million to $56 million.
Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Turtle Beach Corp (NASDAQ:HEAR) reported a robust revenue growth of 59% year over year for the second quarter, reaching $76.5 million.
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The company's acquisition of PDP has contributed significantly to its revenue growth and diversification, with non-PDP revenue also growing by 15%.
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Gross margin improved by 540 basis points to 30.2% compared to the previous year, driven by lower product costs and efficient promotional spending.
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The company raised its full-year 2024 adjusted EBITDA guidance to a range of $53 million to $56 million, reflecting strong profitability.
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Turtle Beach Corp (NASDAQ:HEAR) executed the largest share repurchase in its history, buying back approximately $15 million of its stock, indicating confidence in its future trajectory.
Negative Points
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The integration of PDP, while ahead of schedule, still involves ongoing costs and efforts, which may impact short-term financials.
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The gaming hardware market, particularly for Nintendo, is experiencing a slowdown, which could affect PDP's performance in the near term.
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Despite the strong revenue growth, the company still carries a net debt of $61.2 million, which includes a term loan for the PDP acquisition.
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The company's share in the headset market dipped slightly in the first half of the year due to channel inventory adjustments.
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There are ongoing integration-related expenses expected throughout 2024, which could affect the company's operating expenses.
Q & A Highlights
Q: Cris, would you say that the retail inventory now is balanced? Or could we see some additional inventory kind of restock flowing into the third quarter as well? A: Cristopher Keirn, CEO: The retail channel is in a healthy shape. We've transitioned in Q2 by straining and then reloading it with new wireless and PC products. The RIFFMASTER inventory is balanced globally. Retailers are comfortable with current levels, and any changes will likely occur at the end of Q3 and into Q4.