Q4 2024 Corsair Gaming Inc Earnings Call
Good afternoon, and welcome to of course, their gaming fourth quarter and full year 'twenty 'twenty four earnings conference call.
As a reminder, today's call is being recorded and your participation implies consent to such recording.
At this time all participants are in a listen only mode. A brief question and answer session will follow the formal presentation.
Speaker Change: If anyone should require operator assistance during the conference. Please press Star then zero on your telephone keypad with that I would now like to turn the call over to Ronald Van Veen of course, Theres, Vice President of Finance and Investor Relations. Thank you Sir please begin.
Speaker Change: Thank you good afternoon, everyone and thank you for joining us for <unk> financial results conference call for the fourth quarter and full year ended December 31st 2024.
Chris Harris: On the call today, we have Corsair C O N E. T law currently Chris Harris, President and Chief operating Officer, and Chief Executive Officer effective July one 2025, and CFO Michael Potter.
Chris Harris: Andy will review highlights from the quarter, followed by cheap and Michael will then review the financials and our outlook. We will then have time for any questions before.
Chris Harris: Before we begin allow me to provide a disclaimer regarding forward looking statements this call, including the Q&A portion of the call May include forward looking statements related to the expected future results of our company.
Chris Harris: There for forward looking statements our actual results may differ materially from our projections due to a number of risks and uncertainties.
<unk> and uncertainties that forward looking statements are subject to are described in our earnings release and other SEC filings note that until our 10-K has been filed these numbers are preliminary.
Chris Harris: Today's remarks will also include references to non-GAAP financial measures additional information, including reconciliation between non-GAAP financial information to the GAAP financial information is provided in our press release, we issued after market close today with that I'll now turn the call over to Andy.
Andy: Thanks for all of them in our last earnings call, we talked about how exciting the future look because of new technology GPU cards around the corner.
Andy: About the success of the Black Cop six launch.
Andy: And about how old the high end of the gaming Tcs market was on hold waiting for these new Gpus.
Andy: So here, we all know in Q1 and its all happening 50.
Andy: 50 series Blackballed Gpus are out in shipping.
Andy: Susie S are lining up to buy components from us to support these GPU cards.
Andy: And G T. A six the most anticipated in hardware demanding game is now inside although still likely a year away.
Andy: Oh gaming business has never looked so strong.
Andy: And we are well into the integration of the fantasy like Sim Racing company.
Andy: Q4 was the start of what we believe will be a strong ramping our business over the next few years.
Andy: Revenue and margins were all strong, especially around black Friday in the latter part of the quarter.
Andy: We ended with a solid quarterly revenue number of $414 million and adjusted EBITDA at $33 million.
Andy: We took over the fantasy like Sim racing business in late September.
Andy: We are even more positive on the finance business and see them racing opportunity.
Andy: Now that we've had a quota to work with them.
Andy: We're getting them fully integrated into our systems and sales and customer support networks and expect this to be a positive revenue and EBITDA driver for us as we move forward.
Andy: We have seen overwhelmingly positive sentiment from the customer base.
Andy: Who are delighted that enthusiast company is now overseeing what we would call the ultimate enthused, yes category.
Andy: We are in contact with many of the F. One teams and other parts of the racing ecosystem.
Andy: And we see the same level of enthusiasm there about finance like joining with <unk>.
Andy: Yeah.
Andy: Cost savings in the unique position that we can offer every part of us embracing solution from the frame the seat the wheels pedals and accessories, so the gaming PC and monitor.
Andy: This gives us huge opportunities to expand our carbon footprint.
And this is a fast growing market with a Netflix series drive to survive, having really opened up F. One racing interest in the U S.
Andy: For all components of memory business, we mentioned in the last earnings call that the high end early adopters were on hold waiting for the new GPU launch now.
Andy: Now they are back and we have immediately seen a rush for high end components that are needed to build the latest gaming Pcs using these new GPU cards.
Andy: The cards are all higher power than before so we immediately see demand for high voltage power supplies and better cooling components, which will drive up a component of I S piece.
Andy: Oh gaming and create a business has been growing all year with 20% year on year numbers.
Andy: It's a fantastic acquisition accelerated this in Q4.
Andy: El Gallo business is also doing extraordinarily well with product hit off the products hit and.
Andy: And the stream product line, they'll forming an entirely new category in the market for peripherals as more and more people consider a stream deck as a must have device alongside a keyboard mouse Cameroon microphone.
Andy: Create a products give us the ability to add more and more features for consumers to use and enjoy.
El Gallo: And El Gallo, who has also started to incorporate artificial intelligence into some of our new products to expand these feature sets even more.
El Gallo: We have seen some great wins in all gaming peripheral products with all case 65 wireless keyboard, winning several industry awards and being picked by Apple along with all M 75 wireless mouse to feature in their stores as gaming accessories.
El Gallo: Custom lamps initiative, which gives us the ability to customize products at the one off for short run level.
El Gallo: This is a huge advantage over our competitors.
El Gallo: In summary.
El Gallo: We look forward to a great 2025, and expect continued growth now in the coming years.
El Gallo: Yeah.
Speaker Change: Lastly, we announced today along with earnings that after 31 years at the helm of course that it is time this year for me to retire.
El Gallo: Timing of this will be at the end of the second quarter.
El Gallo: It has been an incredible journey for me to lead the wonderful global team of course there.
El Gallo: And we achieved more than I could ever have imagined.
El Gallo: I look forward to cheering the company on as it continues to innovate and build on its leadership position.
Speaker Change: T Law Cohen, President and C. L O.
Speaker Change: Has been selected by the board to become the new CEO of course that effective July 1st.
Speaker Change: She has been with the company for 14 years now.
Speaker Change: It's been president and C. L O since 2017.
Speaker Change: In that role she has led all the commercial operations and product development functions in the company through a massive growth period.
Speaker Change: So this transition to the CEO role over the next few months will be quite straightforward and well deserved.
Speaker Change: I am very confident he will do a great job, leading the company through its next phase of growth.
Speaker Change: Let me now turn the call over to see before Michael reviews, our financials T. Please go ahead.
Speaker Change: You, Andy I'm honored and excited to have the opportunity to become the Chief Executive Officer of course are as Andy said I have been part of course, they have for 14 years now and loved working with gamers and creators I have been working along side Andy to build a moderate DIY business to now over 30 exciting.
Speaker Change: Patrick Lyons and six great brands growing the company from 300 million to the current level.
Speaker Change: Of course, there my experience banned from running R&D operations to managing product lines that generated over 3 billion in revenue.
Speaker Change: 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.
Speaker Change: 2025, it's an excellent time for course, there with the acquisition of Panasonic and Nvidia 5000 series launch I feel good about starting our next space in at least 10 wins.
Michael: I'll now turn the call over to Michael for every deal.
Michael: Thank you Andy N T.
Michael: 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.
Michael: Throughout 2024, we remain committed to strategically expanding our portfolio investing in innovation, reducing operating costs and debt and strengthening our balance sheet.
Michael: This include the purchase of fan attack and the increased investment Intel got a supply chain.
Michael: Enforcing our capabilities in key growth areas.
Speaker Change: As Andy highlighted we believe we're well positioned to capitalize on healthier demand trends as we returned to growth and expect to continue our disciplined approach to debt reduction in 2025.
Speaker Change: In terms of the specifics Q4, 2024, net revenue was $413.6 million compared to $417.3 million in Q4 2023.
Speaker Change: For the full year 2024, net revenue was 1 billion $316.4 million compared to 1 billion $459 $9 million in 2023.
Speaker Change: European markets contributed 38% of our Q4 2024 revenues compared to 38.4% in Q3 2024, while the APAC region was nine 1% of our Q4 2024 revenues compared to 10, 3% in Q3 2000.
Speaker Change: 24.
Speaker Change: Turning now to our segments.
Speaker Change: 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 407.
Speaker Change: $2 $7 million compared to $394 $9 million for the full year of 2023.
Speaker Change: The gaming components and system segment contributed $244 $1 million of net revenue during the fourth quarter compared to $285 million in Q4 2023.
Speaker Change: Memory products contributed $126 $3 million in Q4, 2024 compared to $145.5 million in Q4 2023.
Speaker Change: For the full year of 2020 for gaming components and systems segment revenue was $843.7 million compared to $1.065 billion for the full year 2023 with memory products contributing $429 $9 million.
Speaker Change: Compared to $517.4 million in 2023.
Speaker Change: 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.
Speaker Change: Gross profit for Q4 includes the impact of $4 $2 million of fair value step up of inventory acquired from the purchase of the fan of Tech business.
Speaker Change: 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 $363 million in 2023.
Speaker Change: Gross profit in the game or in creator peripheral segment was $63 $9 million compared to $59 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 dollars fair value adjustment gross profit would have been $68 $1 million and gross margin would've been 42%.
Speaker Change: We're pleased with the strength in this business and expect it to continue in 2025.
Speaker Change: The gaming components and system segment gross profit was $44.3 million compared to $51.8 million in Q4 of 2023, reflecting the lower sales volume.
Speaker Change: 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.
Speaker Change: Fourth quarter, SG&A expenses were $85 $3 million compared to $73 $8 million in Q4 of 2023.
Speaker Change: Fourth quarter, R&D expenses were $17 million compared to $16.7 million in Q4 2023.
Speaker Change: We continue to invest in innovation, including our peripheral business and new growth opportunities like Sim racing there will help us to accelerate revenue growth.
Speaker Change: GAAP operating income in the fourth quarter of 2024 was $5 $9 million compared to $12 $1 million in Q4 2023.
Speaker Change: Fourth quarter, adjusted operating income was $31.7 million compared to adjusted operating income of $31.8 million in Q4 of 2023.
Speaker Change: Adjusted operating income was $45 $7 million for the full year of 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've returned to a growth mode.
Speaker Change: Fourth quarter net income attributable to common shareholders was $1.3 million or one cent per diluted share as compared to net income of $6 $2 million or six cents per diluted share in Q4 2023.
Speaker Change: On an adjusted basis fourth quarter net income was $24 $8 million or 23 cents per diluted share compared to an adjusted net income of $23 $2 million or 22 cents per share in Q4 2023 for the for year 2024 adjusted net.
Speaker Change: Loss was $2 $7 million or three cents per diluted share from adjusted net income of $58.3 million or 55 cents per diluted share in 2023 to 2024 results include the adverse effect of a net $32.5 million noncash charge from a valuation.
Speaker Change: <unk> on deferred tax assets Phi.
Speaker Change: Finally fourth quarter, adjusted EBITDA was $33 $1 million compared to $33.7 million for Q4 2023 for the full year of 2024, adjusted EBITDA was $54.7 million compared to $95 $1 million in the year ago period.
Speaker Change: As noted earlier, we're pleased to end the year in such a strong note and remain focused on further improvements as we return to a growth mode.
Speaker Change: Turning now to our balance sheet.
Speaker Change: 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 Spanish Tech business. We continue to expect that under our normal cash cycle will have increased cash generation starting in Q1.
Speaker Change: 2025.
Speaker Change: We ended Q4 with $174 million of debt at face value down $25 million year over year, and our 100 million dollar working capital revolver remains undrawn and fully available.
Speaker Change: 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 of 2025, we expect revenue growth to improve through the coming year with a firm.
Speaker Change: Other 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.
Speaker Change: Your improvement expected to be in the second quarter, mainly due to the timing of the new Nvidia GPU launches.
Speaker Change: As fairly typical in a new GPU launch initial volumes are lower than expected to ramp throughout Q1. So the year over year impact is expected to be less significant in Q1.
Speaker Change: We're also expecting our typical seasonality with the second half revenue higher than the first half.
Speaker Change: Finally, our current outlook reflects what we believe the impact of the newly announced tariffs in the USA will be after mitigation.
Speaker Change: 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. There's always some combination of source location supplier price adjustments and price increases for.
Speaker Change: For the full year of 2025, we were expecting.
Speaker Change: Total revenue in the range of $1 $4 billion to $1 $6 billion adjusted operating income in the range of $67 million to $87 million and adjusted EBITA in the range of $80 million to $100 million assuming.
Speaker Change: Assuming we maintain the same debt and cash balances in 2025, we would expect to have approximately $2 $2 million of net interest expense per quarter.
Speaker Change: 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.
Speaker Change: The open up the call for Q&A.
Speaker Change: Thank you.
Speaker Change: We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone.
Speaker Change: If you are using a speakerphone. Please pick up your handset before pressing the keys if at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.
Speaker Change: At this time, we will pause momentarily to assemble our roster.
Speaker Change: And your first question today will come from Aaron Lee with Macquarie. Please go ahead.
Speaker Change: Right.
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 probably against somewhere in the industry in the future.
Aaron Lee: Wanted to start with maybe the finished take 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 directly of course correct that asset.
Aaron Lee: And along those lines can you also talk a bit more about your expectations for this business is growth in 2025.
Aaron Lee: Yeah, well, thanks for the kind words.
Aaron Lee: Those are the integration we are largely through it.
Aaron Lee: The two pops right, one was to sort out the customer service aspect.
Aaron Lee: We've largely done that and the second part of it is to integrate them in with our systems.
Aaron Lee: Some of that is just sort of a nice to have like putting them in with our financial system. So you can track things better.
Aaron Lee: The other part of it is just better logistics, so we're getting there.
Aaron Lee:
Aaron Lee: I think in terms of Getty.
Aaron Lee: Getting them back to where they were were pretty much there now.
Aaron Lee: 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 a net worth of people that actually build the complete Sim weeks for <unk>.
Aaron Lee: So those are the things, we're looking forward to but I would say.
Aaron Lee: Having discussed it with our wholesale wholesaler channel and our retailers.
Aaron Lee: Everyone is super excited about this opportunity.
Aaron Lee: That's great to hear and then.
I wanted to touch on partnerships over the last couple of quarters, you've announced a major partnerships with Activision and Apple can you just talk about how these partnerships have impacted the business, whether it's you know.
Aaron Lee: Brand awareness sales volumes anything like that to help us understand.
Aaron Lee: Partnerships like these just kind of flow through the business. Thank you.
Speaker Change: Yeah, I'll turn that one over to tea, because she's been mostly involved in the partnership activity and the Apple lets say you want to take that yes. Thank you Erin for the question.
Aaron Lee: Well, we are pretty pleased with.
Aaron Lee: Hello.
Aaron Lee: Picking us.
Aaron Lee: Exclusive partners.
Aaron Lee: Range.
Aaron Lee: And during the holiday season.
Aaron Lee: E launch at the call of duty.
Aaron Lee: Yeah.
Aaron Lee: We see significant traffic increase coming to our website.
More information about it.
Aaron Lee: And then second level is high so we see this as a very valuable marketing relationship or multi years and we're looking for additional.
Aaron Lee: Between the two companies.
Aaron Lee: The next wave.
Aaron Lee: Launches.
Aaron Lee: But with regards to the Apple relationship we are happy with.
Aaron Lee: The results during the holiday season.
Aaron Lee: From a gaming brand perspective.
We brought you know really good value to the relationship.
Aaron Lee: Apple and of course there.
Aaron Lee: The holiday results.
Andy: Great and I appreciate it thanks, Andy and thank you T looking forward to working with you.
Aaron Lee: Thank you.
Speaker Change: And your next question today will come from George Wang with Barclays. Please go ahead.
George Wang: Oh, Hey, Hey, Andy I think thanks for working with you in the past and I wish you all the best and a T.
Speaker Change: Come to that does the CEO position and look forward to working with you in the future.
George Wang: Two quick ones firstly.
Speaker Change: Obviously, you know top of mind in terms of the Juicy refresh in the first half.
Speaker Change: And especially kind of a bit more selling momentum into the second quarter.
Speaker Change: Can you kind of unpack and maybe give more color just in terms of the cadence kind of who you know you gave a range for revenue.
Speaker Change: No no and at the high end. It just just curious kind of whats going to drive us towards the high end of the guidance for the full year and just how to think about the cadence for that so that GPU refresh.
Speaker Change: Yeah. So look this is a we've been talking a lot about the fact that there's a lot of pent up demand for this GPU fresh refresh the way I was thinking about it was.
Speaker Change: All the you know anytime you look back or you look across at what people are using you know we always talk about the average yeah.
Speaker Change: The average refreshed time being sort of three to five years, the gaming stuff, but those that's an average and it's gonna be people with 10 year old gear and seven year old game I think it will happen before COVID-19 or Covid was all the people with old gear renewed it and so we've had sort of a skewed distribution since COVID-19.
Speaker Change: But if you think about it we're now three years exactly since the start of Covid or almost two years and with five years say five years from the beginning of it three years to the end of it. So we know right into that point, where the big Bulge.
Speaker Change: <unk> is really ready to upgrade and so I think theres been huge anticipation.
Speaker Change: With a 50 series cards and I think it's it's funny watching the media comparing the 50 series College with 40 series cards, but.
Speaker Change: That's not what consumers are thinking about most consumers have got you know 20 series 30 series cards, and so they're gonna be upgrading five year old get so in terms of the cadence you know we don't know exactly.
Speaker Change: What Nvidia has plans, though I mean, they they've been sold out a fairly limited quantities in January those are sold out in hours and so I think that the big volume is going to be when the 50 70, and 50 72, I guess what else you got shift to more affordable.
Speaker Change: One so I think in terms of volume for us is gonna be gradual pick up through the year.
Speaker Change: I'd say for the last two months, we've been kind of sold out.
Speaker Change: Some of our components Skus, you know power supplies and memory. So we're seeing pretty good I'm, putting that activity in terms of the channel bringing products in but I think it's going to you know I think we're looking forward here.
Speaker Change: The next two years of solid refresh activity.
Speaker Change: Think about it there's not going to be a one quarter blip or anything like that.
Speaker Change: Okay great.
Speaker Change: Put up in terms of the margin.
Speaker Change: Prepared remarks, he got pump all margin improvement you know, especially you kind of a cyclical recovery.
Why components in there.
Speaker Change: And the margin trends for the peripherals, maybe you can impact kind of Blue Cross both ends of the spectrum and any other lever you guys can pull to kind of floating improve EBITDA margin for the time Tony.
Speaker Change: Well look I think.
Speaker Change: We have a target of mid mid Twenty's gross margin on the whole components category.
Speaker Change: And we were doing well.
Speaker Change: In terms of steadily growing those I think post COVID-19 has been very challenging because anytime you get a demand that's a little less than expected.
Speaker Change: Both because of the you know big activity and Covid, but also just because there was a little bit of inflation going on.
Speaker Change: Well a lot of inflation going on so some people's wallets through a bit stretched and each time you get that then competitors that are a little less well often us tends to be.
Speaker Change: It's good for cash and we will discount so I think in a in a more buoyant market that we're looking forward to we should be much better off a much more stable inventory and demand and so I would expect that we bounce back pretty quickly to Oh.
Speaker Change: Target or we expected our gross margins.
Speaker Change: And you know tease me working feverishly, but it seems to get these things back on track. So I think when you actually look at the.
Speaker Change: Expected EBITDA for this year compared to last year as much of that is coming from improved margins than it is from a.
Speaker Change: The revenue improvement.
Speaker Change: Okay great.
Speaker Change: Back to the queue.
Speaker Change: Thanks again.
Speaker Change: Yeah.
Speaker Change: Again, if you have a question. Please press star and then one.
Speaker Change: And your next question today will come from Doug <unk> with TD Cowen. Please go ahead.
Doug: Hey, Thank you you mentioned that your guidance incorporates the expected impact of the tariffs I was just curious if you think that kind of relative to.
Speaker Change: So your competitors, if you're sort of relatively better positioned or worst positioned with tariffs could it be a competitive advantage any any color you can give them that would be great. Thank you.
Speaker Change: Well, there's two parts to that I'll I'll give you a general sense and then she can give you a much more detailed view of where we stand on tariffs it really depends on the industry.
Speaker Change: And what we sold the last time tariffs came into play which were mostly of course against China.
Speaker Change: Yeah third of our business is memory, which we built in Taiwan. The chips are not made in China.
Speaker Change: Many of our competitors than what had assembly plants in China.
Speaker Change: For example.
Speaker Change: So.
You know it depends competitor by competitor and segment by segment to be quite honest with you I mean.
Speaker Change: Some of the peripheral categories.
Speaker Change: We've already got a lot of our production outside of China. So a lot of competitors. So I don't think other than in 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 get a yes or no tariff, there's really not a new problem for of course, especially tariffs from China. So.
Speaker Change: We've been working around the clock in the past.
Speaker Change: To mitigate the supply chain. So that we don't have any significant impact now for some of the newer ones for example.
Speaker Change: Oh, Canada potential tariffs, we actually don't have any factory relocation and both of those countries.
Speaker Change: Versus maybe other manufacturer of Oems, who had invested in those countries in recent years. So at this point, we feel comfortable with the guidance.
Speaker Change: Of course, you know 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.
Speaker Change: Great. Thank you and congratulations both to Andy and tea.
Speaker Change: Thank you.
Speaker Change: Yeah.
Speaker Change: Your next question today will come from Colin Sebastian with Baird. Please go ahead.
Yeah.
Speaker Change: Hey, this is calling on for Colin Sebastian Thanks for taking my question just two from my side of the commentary in the release around on the SAPIEN have to read the article clinic with how it was helpful. So I'm just kind of on that our first question would be you know around component how beneficial do you think Nvidia AI services.
Speaker Change: Of course there for example are you seeing people you know per course their products with their products either in that sense and then our second question kind of stepping back and look at the broader video game market have you seen any games recently kind of spur purchases of other peripheral components or do you think it's going to be more back.
Speaker Change: Half weighted with the likes of GTA sex and.
Speaker Change: Games like that thank you.
Speaker Change: Yeah, let's take the second question first we're gonna 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.
Speaker Change: Well, we really haven't had for the last year or two is what we would call a fortnight moment or pub G moment, so people that typically playing older games.
Speaker Change: And I think our component business and for people looking at new cards.
Speaker Change: Obviously that tends to depend on new games that are super demanding right.
Speaker Change: Need high performance graphics in order to get 60 frames, a second games like Fortnite tend to drive headset sales and keyboard sales.
Speaker Change: But if you look at if you actually look at the numbers.
Speaker Change: You know across the last five years the.
Speaker Change: Peripheral sales is substantially alpha like 50, or 60% up compared to pre COVID-19 so multiple of gaming.
Speaker Change: But then no yeah no games new games, so so the activity around.
Speaker Change: P C builds or gaming PC builds is roughly on par with pre COVID-19 now.
Speaker Change: And obviously, we know that there was a little bit of a pull forward from <unk>.
Speaker Change: 22 to 24 in 2020 one so.
Speaker Change: That's why we expect this refreshed to you know to build up and can you give us a little bit of growth in the in that area, but yeah. GTA six is probably the one that was talking about.
Speaker Change: And will get a glimpse of that I think later on in the year for Council.
Speaker Change: Now, it's going to come out in the fall for counsel them then.
Speaker Change: Early 'twenty six for a P C.
Speaker Change: Now the first part of the question in terms of Nvidia AI.
Speaker Change: Helping all affecting all component sales I didnt quite understand maybe you can.
Speaker Change: Give me that one again.
Speaker Change: Yeah. So for example, if people are you know train AI models with no H 100 et cetera are you seeing people use them of course are no products, and they're causing a trade data centers or facilities.
Speaker Change: Oh, I see what you're saying look we have not targeted data data centers I mean, we sell products at a premium to consumers. If you put them together in a data center.
Speaker Change: Once you bought the graphics cards everything else is just treat it as a volume purchase at the lowest price so I wouldn't.
Speaker Change: Think about that I tell you what we have seen though is that there's a lot of people.
Speaker Change: We're seeing building workstations with standard graphics causal to graphics cards to start playing around with AI model. Yeah. So I actually do think there's going to be a little bit of a demand from that but we cant really size it at the moment.
Speaker Change: Okay, that's great and yeah, Congrats Andy I really appreciate it.
Speaker Change: Again, if you have a question. Please press star and then one.
Speaker Change: Please standby as we poll for questions.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: Seeing no further questions. This 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.
Speaker Change: Yeah.
Andy Paul: Thank you. So thank you everybody for joining us on the call today.
Andy Paul: And for your continued support if you got any follow up questions. Please contact our Investor Relations Department.
Andy Paul: And we look forward to updating you next quarter. Thank you and have a good evening.
Andy Paul: Yeah.
Andy Paul: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Andy Paul: Okay.
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Andy Paul: Yeah.
Andy Paul: [noise].