Turtle Beach Corporation Q1 2023 Earnings Call
Okay.
Welcome to the Turtle Beach first quarter 2023 conference call. My name is Lucy and I will be your operator for today's call.
At this time all participants are in a listen only mode.
Later, we will conduct a question and answer session. During the question and answer session. If you have a question. Please press star one one on your Touchtone phone.
Delivering today's prepared remarks are non executive chairman of the board Terry Jimenez.
Chief Executive Officer, Juergen, Stark and Chief Financial Officer, John Hanson.
Following their prepared remarks, the management team will open the call up for any questions.
As a reminder, the conference is being recorded.
I will now turn the call over to Alex Thomson from Investor Relations, Alex you may begin.
Thank you operator.
On today's call, we will be referring to the press release filed this afternoon that details the company's first quarter 2023 results, which can be downloaded from the investor Relations page at corporate that Turtle Beach Dot Com, where you'll also find the latest earnings presentation that supplements. The information discussed on today's call. Finally, a recording of the call will be available on the investors section.
Of the company's website later today please.
Please be aware that some of the comments made during this call may include forward looking statements within the meaning of the federal Securities laws statements about the company's beliefs and expectations containing words, such as May will could believe expect anticipate and similar expressions constitute forward looking statements. These statements involve risks and uncertainties regarding the company's operations and future results that could.
Cause turtle beach corporations results to differ materially from management's current expectations, while the company believes that its.
Our expectations are based upon reasonable assumptions numerous factors may affect actual results and may cause results to differ materially. So the company encourages you to review the safe Harbor statements and risk factors contained in today's press release and in its filings with the Securities and Exchange Commission, including without limitation. Its annual report on Form 10-K and other purion.
Arctic reports, which identifies specific risk factors that also may cause actual results or events to differ materially from those described in our forward looking statements.
The company does not undertake to publicly update or revise any forward looking statements. After this conference call. The company also notes that on this call. It will be discussing non-GAAP financial information. The company is providing that information as a supplement to information prepared in accordance with accounting principles generally accepted in the United States or GAAP.
Can find a reconciliation of these metrics to the Companys reported GAAP results in the reconciliation tables provided in today's earnings release and presentation.
The company its directors and certain of its executive officers are participants in the solicitation of proxies from the company's shareholders in connection with its 2023 annual meeting the company intends to file a definitive proxy statement and a white proxy card with the SEC in connection with any such solicitation of proxies shareholders are strongly encouraged.
To read the proxy statement accompanying proxy card and all the other documents filed with the SEC carefully and in their entirety when they become available as they will contain important information, including information regarding the identity of the participants and association and their direct and indirect interest by security holdings or otherwise.
Next we will get a statement from Terry Jimenez, the company's nonexecutive chairman of the board of directors.
Thanks, Alex and good afternoon, everyone I'm pleased to make a statement on the call. This afternoon to briefly cover our CEO transition plan and governance actions.
All of which was announced in a press release earlier this week on Monday May <unk>.
The board has taken a series of actions consistent with its commitment to acting in the best interest of its shareholders ensuring best in class governance practices from this the board has implemented a CEO succession plan with the transition date of June 32023.
We separated the chairman and CEO roles going forward.
I was elected as a new independent chairman.
Except that the decision by two long tenured directors Juergen Stark and willing title did not stand for reelection at 2000 at the 2023 annual stockholder meeting.
The board intends to appoint shareholder Representatives and Mr. Cartels place to be nominated for election at the 2023 annual meeting.
The board organize reorganize the composition of the board committees, including New Committee chairs, notably all of whom are women.
And importantly, the board continues to be focused on value enhancing or strategic actions that would be in the interest of all shareholders.
Further details of our announcement can be found in our separate release referenced earlier.
On behalf of the board of directors I want to thank you again for his leadership over the past 10 years.
We're seeing the company's transformation into a leading accessory maker poised for growth across valuable gaming categories. I also want to thank bill Keitel for his many years of service and contributions as a director.
Finally, I am honored to take on the role of Board Chair and we continue working closely with my fellow board members and management to engage with an enhanced value for all turtle Beach shareholders.
I believe there is significant value and upside for the company and its shareholders and I look forward to working with the team and the board to unlock that upside value.
With that I will pass it over to <unk> to cover the first quarter's results.
Good afternoon, everyone and thank you for joining us I'm pleased to discuss our first quarter 2023 results, which came in above expectations and provide the context for our increased 2023 outlook.
During the first quarter, we delivered net revenues of $51 4 million and an adjusted EBITDA loss of $2 3 million.
Year over year revenues are up 10% consistent with the growth prospects strong strategic positioning and progressive recovery of the great gaming market that I articulated in March.
Adjusted EBITDA has improved consistent with our expectation to return to positive adjusted EBITDA after last year's market wide challenges.
After all this business generated $190 million and adjusted EBITDA in the five years from 2017 through 2021.
I'll start with some observations on the state of the market and our business through the first three months of the year.
Both the gaming market and operating environment, having improved compared to last year, when the industry and economy face significant macroeconomic challenges.
Some headwinds still remain such as higher than normal promotional activity and.
<unk> spending caution among consumers given the economic issues at hand, including inflation rising interest rates and the continued threat of recession. However, we are encouraged by the latest industry data as gaming accessories sales benefited from a strong tailwind in council sales.
In fact, Sony reported that Playstation five shipments in Q1 were the highest of any council in gaming history up over 4 million units compared to the year ago period.
<unk> Arcana, formerly known as NPD reported U S counsel headset sell through increased over 7%. Additionally, U S channel inventory improved in Q1.
Our inventory levels are at the lowest since the pandemic surge.
The PC gaming market recovery is trailing council with heavy discounting levels, but we expect this to subside as we progress through the year we're.
We're encouraged by the improvements we are seeing in the gaming market.
Looking at our performance across respective gaming accessory categories. We continue to lead the counsel headset category by far is Turtle Beach Counsel headset brand outperformed the broader headset market growth based on <unk> data.
Our highly acclaimed wireless fell 600 headset continued to be the best selling headsets series by revenue in the quarter and the recurrent 50 X at 50 P. Headsets were the best selling models by units.
Mentioned, our exciting product plans on our call in March and we've recently launched our ultra premium stealth pro multi platform gaming headset, which brings gamers the absolute pinnacle of gaming audio and quality and comfort.
At $3 29, 99, MSRP the stealth pro continues to collect praise from gaming review outlets games radar gave it a five a five rating along with their Editor's Choice award and called it quote a masterpiece of an all in one multi purpose gaming headset and.
Portly this headset line as multi platform working perfectly across Xbox and Playstation councils, as well as PC and for mobile gamers.
While still very early in the launch we are extremely pleased with the response from consumers and resulting early sales which are coming in above our expectations.
Looking at our PC accessories category. The market recovery is lagging council headsets with U S. Chicago reporting PC gaming headsets keyboards, and mice sales down approximately 13% year over year for Q1.
Despite this our rocket brand products have posted year over year sales growth.
All three categories.
We continue to launch compelling new PC gaming products, we released the Magnum minis, 60% gaming keyboard, which has a smaller footprint that is perfect for PC gamers with loud large mouse movements and is fully illuminated with five programmable zone showcasing rockets stunning.
Ammo RGB lighting, we have exciting plans for our PC category ahead, and look forward to continuing our progress.
Our flight simulation game pad controller products performed well during the quarter and we are proud to have our first flight simulation product velocity. One flight launched late 2021 continue to post the number one sales position in the U S for flight simulation products.
The U S game Big game pad controller market was down roughly 13% year over year in Q1, but sales of our products grew over 25%.
We have more exciting product launches in these categories as well.
Our long term strategy of becoming a top provider of gaming accessories across multiple categories and on all platforms is tracking well as shown by the above highlights and our outperformance of the market this quarter.
Our strong brand innovative high quality products and operational execution allows us to capitalize on the additional opportunities created during a market improvement.
This is reflected not only in our first quarter results, but also in our increased outlook of 10% to 12% revenue growth as I will discuss shortly.
I'll now pass it over to John to cover the financials, after which I will provide additional comments on the quarter and outlook John .
Hey, Thanks, Juergen and good afternoon to everyone for the first quarter, we reported revenue of 51 4 million or 10% year over year growth compared to $46 7 million a year ago, reflecting a stronger U S console gaming headset market increased consumer demand and strong.
Product performance the double digit year over year increase is a good start towards the 2023 revenue growth guidance of 10% annual growth we provided in March.
Gross margin in the first quarter was 27, 5% compared to 31% in the year ago period, reflecting higher promotional spend in light of continued competitive discounting, which was partially offset by lower freight and logistics costs.
The higher competitive discounting really started in Q2 last year.
And while it's improving it was a headwind in Q1 as we expected.
As mentioned previously freight costs continue to decline and we have already started seeing the benefit in this quarter with higher sales accelerating the inventory pace to lower rates and actual rates tracking a bit lower than expected.
Operating expenses in the first quarter were $20 6 million compared to $22 3 million in the in the year ago period.
First quarter recurring operating expenses declined nearly 13% year over year, which was primarily driven by the expense management initiatives, we undertook in 2022 as well as lower marketing spend to align with our product launch and sales plans.
Our first quarter adjusted EBITDA loss was $2 3 million compared to a loss of $5 7 million in the year ago period. The year over year improvement is primarily driven by higher revenue as well as the operating expense management initiatives. We implemented last year, we are on plan.
To generate adjusted EBITDA improvements throughout the year non.
non-GAAP net loss for the first quarter was $4 4 million or <unk> 27 per diluted share compared to non-GAAP net loss of $6 3 million or <unk> 39 per diluted share in the year ago period, we expect our effective tax rate for the full year to be approximately <unk> <unk>.
20%.
Turning to the balance sheet at March 31, 2023, we had $26 million of cash and no outstanding borrowings on our revolving credit line in.
Inventory at March 31, 2023 were $65 2 million compared to $117 4 million at March 31 of 2022 worth, noting and as Juergen mentioned, our inventory levels at quarter end are at their lowest levels since the Panther.
<unk> search.
Cash flow from operations was $28 8 million in the quarter, which was an improvement of $42 million.
Year over year, and now I will turn the call back over to Juergen for additional comments.
Organ.
Thanks, John .
As I said, we're pleased to deliver first quarter results above our expectations, particularly given the still challenging environment, which demonstrates our team's commitment to executing well on our strategy and an improving gaming market.
On our March call I discussed the positive underlying trends in gaming I'll reiterate a few.
According to news new the number of global gamers is expected to grow by $335 million through $2 25.
Gamers are also spending more on gaming hardware with annual spend per game are up over 20% since 2020.
Even in last year slump consumer spending on video game hardware content and accessories, all continue to trend well above pre pandemic levels throughout the year.
We also remain encouraged by the higher quality slate of AAA games with several setting franchise records and the strong outlook for games this year.
We continue to expect new generation, Xbox and Playstation supply to significantly improve with DSC forecasting a 60% increase in Playstation five sales for 2023 versus 2020 to Sony.
Sony setting an all time shipment record versus all counsels in Q1 is a great start.
As we communicated on our last call. We continue to expect a progressive improvement in our financial performance in light of a healthier gaming market and strong portfolio of existing and new products.
Given our performance in Q1 and positive outlook for the year, we are increasing our revenue outlook to a range of 265 to 270 million, which would reflect growth of 10% to 12%.
This is mainly driven by our expected outperformance of gaming markets in specific categories.
The share gains in the first quarter provided a good start on that and the phenomenal launch of our ultra premium stealth pro multiplatform headset as well as the exciting launches yet to come are expected to contribute.
We are increasing our adjusted EBITDA guidance to a range of six to 8 million driven by an increase in expected revenues and continued tight cost management as.
As we've noted this still includes significant headwinds, which we expect will abate as we progress through the year and therefore provide for a much better level of profitability in 2024.
For Q2, we expect a similar level of revenues as Q1 and somewhat higher marketing spend to support the recently launched stealth pro line.
As I said I am pleased with the strong execution, we displayed in the first three months of the year and the positive momentum that has created for the balance of the year.
As we say every quarter gaming is a great market to be a leader and we continue to position ourselves to capitalize on the additional opportunities as the market recovers. The key pillars of our strategy remain intact first continue to lead in the $1 4 billion console gaming headset market.
Where we have maintained leadership by far for over 13 consecutive years. In addition to the recent stealth pro launch and we have a very strong portfolio of plan through 2024 to expand our market leadership position.
Second continue to expand our PC gaming portfolio of headsets keyboards, and mice and grow our share in the $3 2 billion dollar PC accessories market.
As multi platform gaming trends continue to rise we feel we're in a good position to offer gamers the portfolio of accessories for all platform experiences while the PC accessories market was very challenged for all participants to this past year. We are encouraged by our share gains this year and have exciting plans for this.
Category well into 2024.
Third drive continued expansion and growth in our gamepad controller and simulation products that we successfully entered in 2021. These adjacent gaming accessory categories allow us to leverage the core competencies of Turtle Beach and expand the markets, we can generate revenues from and fourth.
Continued to identify and selectively evaluate other growth opportunities to increase our addressable markets, including new product categories and expansion in target geographies as we have with Korea and Japan.
As I said on our March call in March. This strategy has and will continue to enable us to take full advantage of the compelling long term trends in the global gaming market and fulfill our objective to drive profitable growth.
Our goal is to continue to create shareholder value by executing on our strategy and delivering on our long term targets of 10% annual growth at 10% adjusted EBITDA margins.
Given that I will be stepping down on June 30. This will be my last turtle Beach earnings call.
I'd like to first thank bill Keitel for his valuable contributions over the past nine years I still recall being told we quote never be able to get him onto our board given his stature as one of the most highly regarded CFO is in the country.
Thank you Bill.
Thank you as well to an amazing team here at Turtle Beach, it's been an honor to lead the company for over 10 years with the excellent team in place here. This is a good time for me and a good time for the company to make a transition.
In the past 10 years, we've worked ourselves out of a debt laden balance sheet and managed through multiple years with challenging market conditions, including 2022.
We've executed well through as the Opco analysts put it quote violent demand supply swings, including significantly outperforming the market in the 2018 for ignite and 2020 pandemic driven surges.
This team has led our continued dominance in council headsets, while diversifying into adjacent gaming categories to enable our long term growth our current business and portfolio plans through 2024 are the most exciting we've ever had.
I am confident the business is well positioned for success and in good hands to drive value creation going forward for all of our stakeholders.
While I am excited to have time to spend on other activities I will really miss the team and the company.
With that let's turn to our Q&A.
Thank you we will now begin the question and answer session.
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Our first question.
It comes from the line of Mark Argento of Lake Street. Your question. Please mark.
Okay.
Hey, Thank you and.
Congrats on the new.
A new chapter.
So on working with the company over the last 10 years, but.
Looking forward to the next chapter and hopefully get to.
Variance a little bit more of a good country.
Airplane and do a little bit more flying so exciting times for you but.
Awesome.
Just wanted to drill in a little bit on a couple of things that stuck out to me in the quarter.
In particular the inventory levels.
Seems like you guys worked inventories.
<unk> fairly nicely I guess the question is.
In terms of refill cycles.
You feel like you've got enough inventory here as hopefully things pick back up going throughout the year.
Yes, Thanks, Mark and I appreciate your comments, you're one of the folks I'm also going to Miss frankly after.
More than nine years of working together and I certainly appreciate your great coverage of the company.
On the inventory so our inventory lowest level since the pandemic surge.
Starting in April 2020, so we're in a good position it'll still we still plan to end the year with with lower inventory, but it will come up depending on holiday load.
In the next couple of quarters.
Functional phasing, yes, just.
Phasing of the revenues and the load in.
Okay.
Alright, and then in terms of.
In terms of the overall buying patterns.
Obviously, some pretty good.
Tom's wholesales here in the front half of the year whats the typical attach rate in.
In terms of when you see our comps will get sold through and you could actually attach of hubs out there so should we see.
More and more of a pick up Q3 Q4 as you know.
More of a 2020 corvette.
Yes, Thats a good question there is a percent of consumers, who will buy a counsel and accessorize it mainly the new.
Some of the new entrants, that's not a huge effect, but it does have an effect and I think the the much better supply situation for Playstation for sure setting quarter record, which was quite a surprise.
As well as Xbox.
Tribute to the over 7% growth that we saw in the U S had a council headsets.
And we do expect that the council supply will continue to improve I think frankly, they're out of that.
Out of the phase of the council constraints and that certainly will have.
A positive effect on the market this year.
Great and just one last one in terms of gross margins nice improvement.
So to kind of where we were where our model loans.
Whats kind of the new normal would you think in terms of kind of run rate gross margins.
I call it not a highly promotional about more kind of a normalized environment.
Yes. Good question Im glad Youre, asking we are maintaining our long term target of mid Thirty's gross margins right. This year, we expect still expect 28% to 30% gross margins and that's really driven by.
Continued freight costs that are higher than normal, but rapidly coming down. So that's a very reliable improvement that I think will be well past going into 2024.
And higher competitive discounting, which still remains some in council and more severe I would say in PC that we also expect to improve over time, but those two things are going to have an effect.
Still about $10 million.
On the gross margin line and 10 million on the EBIT line that I'm hopeful going into 2024 will be kind of completely out of our system.
Great appreciate it and again good luck.
Thanks, Mark Thank you Mark.
Thank you.
Our next question.
Yeah.
Comes from the line of Martin Yang of Opco Your.
Your line is open Martin.
Hi, Thank you for taking my question.
Again, it's been phone company, hopefully we will definitely miss.
Mr Yu.
In future calls.
I first want to ask about.
<unk> pro products, it's been a while since you are.
<unk> took a position in the ultra high premium segments.
So two questions on that first why does it take so long for you to address this segment again.
And then the second question is.
How meaningful is this segment to you or to sort of beach.
Yeah. Thanks Martin.
A long time ago, we dominated the highest price tier as well.
And.
We have had.
Have and continue that really lead by far the mid in the upper mid tier, but youre right. We havent been in that highest tier and I will tell you we have had plans.
For a more than a year and a half two years to reenter that market. The reason we haven't done it is because the pandemic created such a headache with semiconductors that we had to divert engineering to re platform wireless headsets and.
Essentially protect that very large revenue stream.
For the business, which we did successfully but call. It an emergency redirection of R&D that really started late in 2020, and and continued through 2021, frankly that forced us to divert.
Resources from.
From the stealth pro and so we just as a matter of priorities.
I had to make that move and frankly, we're very excited that at long last we can take.
Takeover.
What we think will be the king of wireless in the premium tier and certainly the reviewers.
Some of them are even saying that is a fair claim that theyre, making king of wireless so very excited the top tier is about I believe about 12% of the revenues for the overall market, so it's meaningful and given that.
We've had no share above 212% all of the share gains will be accretive to the overall economics of the business and our overall market share.
Got it. Thank you for details on my second question is about potential new products.
Your view on new emerging.
Product categories.
I'm, referring to the handheld gaming trends, where steam debt plus other.
PC like getting counts in cloud.
<unk>.
<unk> are emerging in the market it seems to have searches.
Positive initial feedback from the players do you have a view on that.
Sort of beach, where to play a role in that segment what are the angles.
Yes.
<unk> the question so.
We are not focused right now on developing our own.
Council handheld or otherwise our simple view is the more places people can game and the easier. It is for them to game the more opportunity we have to sell all of our accessories, particularly headsets, which are just as useful on those platforms or cloud gaming if you will.
To play multiplayer.
I would also note that we've released some mobile gaming.
Products that work very well with mobile, but don't have any immediate plans to enter.
Very complex.
Hardware Council category itself at this time I will say.
Thank you I appreciate the answer.
Thanks Martin.
Thank you.
Our next question.
Comes from the line of Sean Mcgowan of Roth <unk>. Your question. Please Sean.
Thank you.
Hey, guys.
Yes, let me start off to Europe by saying it is going to be weird.
Governance company without you at the helm.
You before you even there before the apparel market.
The stuff and then work with side by side, writing a lot of these press releases, so it's going to be unusual.
Wish you the best.
Yes, So let me jump in first with a clarification question on the market being up but did you say seven 7% and as that console only or does that console and PC.
From from <unk>.
Tom I Wonder if the dollar sales.
Yes arcata.
<unk>. Thanks for the kind remarks, Shaun I remember, our very first interactions quite well actually and I'll Miss working with you as well.
So the counsel headset is up seven 7% that's U S counsel gaming headsets.
The PC category headsets keyboards, and mice kind of varied some down more.
Some down less but came in in the U S at about 13%.
Down versus up for Council.
And those are U S numbers in general.
Europe .
Is faring worse than the U S.
The market is down they're not in every in <unk>.
Every case and every country in Europe , but generally I think Europe is recovering more slowly from a gaming and macroeconomic standpoint.
Thank you.
Following up on Mark's question before.
Most margin so pretty.
Pretty clear on what your expectations are could be.
That kind of mid Thirty's rate for the fourth quarter as you exit the year I know, there's a lot of operating leverage within that gross margin line.
I think we certainly the Q4 should have better.
Always has better margins are typically has better margins because of the operating leverage we gain on the fixed opex costs.
And again I think that a lot of the headwinds on gross margin should hopefully be out of our system.
By the time, we were.
Entering 2024, I would definitely expect gross margins in Q4 to be.
Into the <unk> for sure, but maybe not quite at the mid 30% level, depending on what happens with discounting in.
Mainly discount because I think the freight rates will be largely passed by that time.
Okay, Great that's helpful.
Frankly, it was one of them.
Im pushing on that and I have a little bit of trouble getting to eight.
8 million the upper end of your guidance range on EBITDA without that particularly since.
I think we are assuming a lot of reduction in G&A.
The size of what might happen going forward.
But.
I'd be willing to cut it that much so it sounds like gross margin is going to be better.
But you it seems like the level that we saw G&A in the first quarter is that indicative of what we should expect each quarter going forward or could it be lower.
G&A the marketing costs will go up a bit in Q2.
And then we will be will be roughly stable a little bit higher in terms of marketing for Q3, and then Q4 will go up.
The low single digit millions just because that is a much heavier marketing period right.
Okay.
Alright thats helpful. Thanks, a lot.
John .
So soon.
Right.
Thank you.
Our next.
<unk>.
Comes from the line of drew Crum of Stifel. Please go ahead drew.
Okay. Thanks, Good afternoon in your again best of luck it was a pleasure.
Maybe just to follow up on a question that Mark asked earlier and I'm not sure I got the <unk>.
Right answer here, but.
What is your sense juergen around retailers.
Willingness to take on more product following a period of Destocking do you have good visibility on the second half a conviction that retailers are going to come back and restock shelves.
And then I have a follow up.
Sure. So we are seeing a I would say a little less conservatism from retailers and some in particular are realizing that they're in stock levels suffer when their inventory levels are too low and are making some moves but in general I think the retailers are still cautious.
So.
The Q1 results came in based on sell through in a bit of less conservatism on the retail inventory side, particularly with a few.
We do expect that.
They will remain somewhat conservative on inventory until they really see multiple quarters of a rebound there not at such a low level that they are out of stock or things like that.
But.
Our guidance does not forecast some heavy restocking by the channel during the year, it's really largely driven by the assumption that the market will be roughly flat, maybe up a bit depending on the category.
The product launches, we've made and those coming will allow us to drive share gains and outperformed the market and deliver 10% 12% revenue growth.
Got it okay.
And then you mentioned the promotional activity in the PC category.
Do you have excess of inventory there or.
Are you lean on inventory.
Youre just using promotions.
Maintain or gain share.
John I think you mentioned that the promotional spend that really spiked in <unk> last year.
Once you anniversary that should we assume that this will be gross margin neutral to positive by the second half. Thanks.
Yes. Good good good question. So <unk> is obviously a much much smaller part of our business, but we are still working to reduce our inventory levels and PC as I believe many others in the category are.
As evidenced by many of the large market share players driving still very heavy promotions and as a smaller player promotional activities by the large player really has has makes our life more difficult in terms of moving our inventory levels down and driving sell through.
It was very encouraging as I mentioned to see that the PC market in the U S were down significantly, but we actually generated growth in all three categories. Despite the heavy continued heavy competitive discounting we do believe that that will subside as we go through the year hard to tell if that will.
<unk> by Q4, Q4 is obviously a key quarter to move tonnage so to speak so it really depends on how much progress everybody is able to make between now and Q4 in terms of what they may still need to do or not need to do in Q4 in terms of discounting.
Got it okay. Thanks, guys.
Sure. Thanks drew.
Thank you again to ask a question. Please press star one one on your Touchtone phone again Thats Star one one on your Touchtone phone to ask a question.
Our next question.
Comes from the line of Jack Cordero of Maxim Group. Please go ahead Jack.
Hi, This is Jeff they're calling in for Jack Vander Ark. Thanks for taking my question.
I might have missed this but last quarter, you mentioned expectation for non console product mix.
Target was about I think 25% overall I was wondering if you could give any color what that was for <unk> 'twenty three and then given the slightly improved guidance is that still the expectation for the full year. Thank you.
Yes. So we are not going to provide this every quarter. We will provide the annual results because of the quarterly results, we will move up and down a bit depending on the mix and in particular, depending on which product launch win but.
Our share gains across all of our categories.
And in many of our markets. We're obviously very encouraging and we're pleased with the continued success of the diversification of the business and remain on track to have.
2025, plus percent of our business outside of counsel headsets this year.
Okay, that's great.
Helpful color that's all for me. Thank you.
Thanks Jack.
Thank you we have no further questions at this time now I'll turn the call back over to year against Stark for closing remarks Juergen.
Thank you it's been a pleasure.
Hosting these calls I'll Miss the team and the analysts.
And doing these calls with John .
And thank you again for your participation and interest in our company.
Thank you ladies and gentlemen. This concludes today's conference. Thank you for participating you may now disconnect.
Okay.
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