Corsair Gaming (CRSR) risk factors, FY2024 10-K

Other

1. 01Corsair Gaming, Inc. | 2024 Form 10-K | 8
2. 02Our success and growth depend on our ability to continuously improve our existing products and develop and successfully market new products. If we are unable to do so, demand for our current products may decline and new products we introduce may not be successful
3. 03Our growth prospects are, to a certain extent, connected with the ongoing growth of the gaming industry, including live game streaming and esports, and any decline or reduction in the growth or popularity of the gaming industry may seriously harm our business
4. 04We are controlled by a single stockholder, EagleTree, whose interests in our business may be different than yours

Risks Related to Our Business

1. 05Our competitive position and success in the market depend to a significant degree upon our ability to build and maintain the strength of our brands among gaming enthusiasts and creators, and any failure to build and maintain our brands may seriously harm our business
2. 06Corsair Gaming, Inc. | 2024 Form 10-K | 9
3. 07Corsair Gaming, Inc. | 2024 Form 10-K | 10
4. 08Corsair Gaming, Inc. | 2024 Form 10-K | 11
5. 09changes in consumer demographics, tastes and preferences
6. 10our research and development and the products we sell failing to satisfy the increasing high-performance requirements of competitive gamers or streamers
7. 11Currency exchange rate fluctuations could increase our manufacturing costs, or result in our products becoming relatively more expensive to our overseas customers, either of which may seriously harm our business
8. 12liabilities that are denominated in foreign currencies and changes in the value of the U.S. dollar could result in significant increases in our expenses that may seriously harm our business
9. 13Our sales are subject to seasonal fluctuations, which may seriously harm our business. Total unit shipments of our products tend to be higher during the third and fourth quarters of the year
10. 14Our results of operations are subject to substantial quarterly and annual fluctuations, which may adversely affect the market price of our common stock
11. 15Corsair Gaming, Inc. | 2024 Form 10-K | 14
12. 16changes in business cycles that affect the markets in which we sell our products
13. 17Cloud computing may seriously harm our business
14. 18Conditions in the retail and consumer electronics markets may significantly affect our business and could have an adverse effect on our net revenue
15. 19DRAM integrated circuits account for most of the cost of producing our DRAM modules and fluctuations in the market price of DRAM integrated circuits may have a material impact on our net revenue and gross profit
16. 20The ongoing wars in Ukraine and the Middle East could adversely affect our business, financial condition and results of operations
17. 21If we lose or are unable to attract and retain key management, our ability to compete could be seriously harmed and our financial performance could suffer
18. 22We rely on highly skilled personnel and if we are unable to attract, retain or motivate key personnel or hire qualified personnel our business may be seriously harmed
19. 23A significant portion of our net revenue is generated by sales of DRAM modules and any significant decrease in the average selling prices of our DRAM modules would seriously harm our business
20. 24Sales to a limited number of customers represent a significant portion of our net revenue, and the loss of one or more of our key customers may seriously harm our business
21. 25If our proprietary iCUE software or Elgato streaming software suite have any “bugs” or glitches, or if we are unable to update the iCUE software or Elgato streaming software suite to incorporate innovations, our business may be seriously harmed
22. 26The need to continuously develop new products and product improvements increases the risk that our products will contain defects or fail to meet specifications, which may increase our warranty costs and product returns, lead to recalls of products, damage our reputation and seriously harm our business
23. 27While we operate a facility in Taiwan that assembles, tests and packages all of our DRAM modules and certain other products, we rely upon manufacturers in China and Southeast Asia to produce a significant portion of our other products, which exposes us to risks that may seriously harm our business
24. 28Corsair Gaming, Inc. | 2024 Form 10-K | 18
25. 29our costs may be increased and deliveries of our products may be decreased or delayed by trade restrictions; and
26. 30If we do not successfully coordinate the worldwide manufacturing and distribution of our products, we could lose sales
27. 31Our operating results are particularly sensitive to freight costs, and our costs may increase significantly if we are unable to ship and transport finished products efficiently and economically across long distances and international borders, which may seriously harm our business
28. 32Technological developments or other changes in our industry could render our products less competitive or obsolete, which may seriously harm our business
29. 33Corsair Gaming, Inc. | 2024 Form 10-K | 19
30. 34Our indemnification obligations to our customers and suppliers for intellectual property infringement claims could require us to pay substantial amounts and may seriously harm our business
31. 35If we are unable to integrate our products and proprietary software with third-party hardware, operating system software and other products, the functionality of our products would be adversely affected, which may seriously harm our business
32. 36One of our strategies is to grow through acquisitions, which could result in operating difficulties, dilution to our stockholders and other seriously harmful consequences
33. 37Our sponsorship of individuals, teams and events within the gaming community is subject to numerous risks that may seriously harm our business
34. 38Corsair Gaming, Inc. | 2024 Form 10-K | 21
35. 39Indebtedness and the terms of our credit facilities may impair our ability to respond to changing business and economic conditions and may seriously harm our business
36. 40We conduct our operations and sell our products internationally and the effect of business, legal, geopolitical and economic risks associated with international operations may seriously harm our business
37. 41We are subject to taxation-related risks in multiple jurisdictions, and the adoption and interpretation of new tax legislation, tax regulations, tax rulings, or exposure to additional tax liabilities could materially affect our business, financial condition and results of operations
38. 42Corsair Gaming, Inc. | 2024 Form 10-K | 23
39. 43the effects of acquisitions
40. 44Our ability to utilize our net operating losses (“NOLs”) carryforwards and certain other tax attributes may be limited
41. 45System security and data protection breaches, as well as cyber-attacks, could disrupt our operations, reduce our expected revenue and increase our expenses, which may seriously harm our business
42. 46requirements that pose compliance challenges in existing markets as well as new international markets that we seek to enter, potentially requiring additional investment in resources for compliance programs, and impacting business operations and availability of previously available data
43. 47Corsair Gaming, Inc. | 2024 Form 10-K | 26
44. 48We use AI in our business, and challenges relating to the development and use of AI, including generative AI, could result in competitive harm, reputational harm, and legal liability, and adversely affect our results of operations
45. 49We may be adversely affected by the financial condition of retailers and distributors to whom we sell our products and may also be adversely affected by the financial condition of our competitors
46. 50Corsair Gaming, Inc. | 2024 Form 10-K | 27
47. 51Our online operations are subject to numerous risks that may seriously harm our business
48. 52Depending on market and economic conditions in future periods, we may implement restructuring initiatives. As a result of these initiatives, we could incur restructuring charges, lose key personnel and experience disruptions in our operations and difficulties in delivering our products
49. 53Our future success depends to a large degree on our ability to defend the Corsair brand and product family brands such as SCUF, Elgato, Fanatec and iCUE from infringement and, if we are unable to protect our brand and other intellectual property, our business may be seriously harmed
50. 54Corsair Gaming, Inc. | 2024 Form 10-K | 28
51. 55Some of our products contain open source software, which may pose particular risks to our proprietary software and products
52. 56We are, have in the past been, and may in the future be, subject to intellectual property infringement claims, which are costly to defend, could require us to pay damages or royalties and could limit our ability to use certain technologies in the future
53. 57We and our contract manufacturers may be adversely affected by seismic activity or other natural disasters, and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster
54. 58We are subject to various environmental laws, conflict mineral-related provisions of the Dodd-Frank Act and other regulations that could impose substantial costs upon us and may seriously harm our business

Risks Related to Our Common Stock

1. 59We are controlled by a single stockholder, EagleTree, whose interests in our business may be different than yours
2. 60EagleTree beneficially own at least 20% and less than 30% of our common stock and one director as long as affiliates of EagleTree beneficially own at least 10% and less than 20% of our common stock
3. 61We are a “controlled company” within the meaning of the Nasdaq Global Select Market rules and, as a result, qualify for, and intend to rely on, exemptions from certain corporate governance requirements. You will not have the same protections afforded to stockholders of companies that are subject to such requirements
4. 62our director nominations be made, or recommended to the full board of directors, by our independent directors or by a nominations committee that is composed entirely of independent directors and that we adopt a written charter or board resolution addressing the nominations process
5. 63The market price of our common stock may be volatile and may decline
6. 64changes in general market and economic conditions
7. 65An active, liquid and orderly market for our common stock may not be maintained
8. 66Future sales of our common stock in the public market could cause our stock price to fall
9. 67If we sell shares of our common stock in future financings, stockholders may experience immediate dilution and, as a result, our stock price may decline
10. 68Our amended and restated certificate of incorporation and amended and restated bylaws contain antitakeover provisions that could delay, deter or prevent takeover attempts that stockholders may consider favorable or attempts to replace or remove our management that would be beneficial to our stockholders
11. 69Corsair Gaming, Inc. | 2024 Form 10-K | 32
12. 70Our amended and restated certificate of incorporation and amended and restated bylaws provide that we will indemnify our directors and officers, in each case to the fullest extent permitted by Delaware law
13. 71Corsair Gaming, Inc. | 2024 Form 10-K | 33
14. 72We do not currently intend to pay dividends on our common stock, and, consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock
15. 73If securities or industry analysts do not publish or cease publishing research or reports about our business, if they adversely change their recommendations regarding our shares or if our operating results do not meet their expectations, the market price of our common stock could decline
16. 74Our amended and restated certificate of incorporation contains a provision renouncing our interest and expectancy in certain corporate opportunities
17. 75Corsair Gaming, Inc. | 2024 Form 10-K | 34
18. 76Failure to comply with other laws and governmental regulations may seriously harm our business
19. 77Failure to comply with the U.S. Foreign Corrupt Practices Act, other applicable anti-corruption and anti-bribery laws, and applicable economic and trade sanctions and export control laws could subject us to penalties and other adverse consequences that may seriously harm our business
20. 78Corsair Gaming, Inc. | 2024 Form 10-K | 35
21. 79We incur significant expenses as a result of being a public company, and our management needs to devote substantial time to compliance with our public company responsibilities and corporate governance practices
22. 80Our business could be negatively impacted by corporate citizenship and ESG matters and/or our reporting of such matters