Turtle Beach Corporation · NASDAQ:TBCH
Turtle Beach — Q1 2024 Earnings Presentation
29 slides from Turtle Beach's earnings presentation, May 7, 2024
Slide 1: First Quarter 2024 Earnings Presentation
FIRST QUARTER 2024 EARNINGS PRESENTATION NASDAQ: HEAR | MAY 7, 2024
Slide 2: Safe Harbor Statement & Important Information
Ku | SAFE HARBOR STATEMENT & IMPORTANT INFORMATION Forward-Looking Information and Statements This presentation, including the appendix, includes forward-looking information and statements within the meaning of the federal securities laws. Except for historical information contained in this release,
Slide 3: Products & Best News
RODUCTS & EST NEWS
Slide 4: Redesigned Stealth 600 & New Stealth 500 Wireless Headsets
t | WIRELESS MULTIPLATFORM GAMING HEADSETS Raise Your Rank with Turtle Beach's Redesigned Stealth 600 & New Stealth 500 In mid-April, Turtle Beach unveiled a redesigned Stealth G00 multiplatform wireless headset. The new 600's now offer gamers Turtle Beach's exclusive 50mm Nanoclear drivers, wireles
Slide 5: New Turtle Beach PC Gaming Peripherals
r | INTRODUCING THE TURTLE BEACH VULCAN II TKL PRO, BURST II AIR MOUSE, & ATLAS AIR PC GAMING HEADSET Raise Your Rank on PC with New Turtle Beach PC Gaming Peripherals In April, Turtle Beach debuted new PC gaming peripherals launching May 2024, The new PC gear is headlined by the Turtle Beach Vulcan
Slide 6: VelocityOne Race Racing Simulation System
t | UNIVERSAL WHEEL & PEDAL RACING SIMULATION SYSTEM Ky TURTLE BEACH Grab the Wheel and Floor It VelocityOne Race launched late February 2024 as Turtle Beach's initial entry into the racing simulation gaming accessories market. Designed for racing sim fans on Xbox and PC, this groundbreaking wheel &
Slide 7: VelocityOne Flightdeck HOTAS Flight Simulation System
t | COMBAT HOTAS FLIGHT SIMULATION CONTROL SYSTEM WY TURTLE BEACH’ Become the Top Gun with All the Right Stuff RU LE I Designed for air and space flight combat fans on Windows TH E FIG HT! PCs, Turtle Beach's VelocityOne Flightdeck HOTAS (Hands On Throttle And Stick) Controller was unveiled late Dec
Slide 8: Turtle Beach Acquires PDP
Y TURTLE BEACH ACQUIRES PDP HIGHLY ACCRETIVE ACQUISTION GREATLY EXPANDS PORTFOLIO, STRENGTHENS PROFITABILITY, & MEANINGFULLY ENHANCES COMPANY SIZE Turtle Beach's Acquisition of PDP Establishes a Powerhouse in Hardware Gaming Accessories with Leadership in Console Headsets & Controllers In late March
Slide 9: RIFFMASTER Wireless Guitar Controller
t | WIRELESS GUITAR CONTROLLER BUILT F R G I G Grip it and RIFF it with the New compatible doe Bandi el RIFFMASTER Wireless Guitar Controller Fortni Festival In late April, Turtle Beach and PDP launched the RIFFMASTER -— the first guitar controller designed for today's rhythm-action gamers in nearly
Slide 10: New Princess Peach Accessories
Y GRAND PRIX PEACH REMATCH GLOW WIRELESS GAME CONTROLLER FOR NINTENDO SWITCH Steal the Spotlight with New Princess Peach Accessories In March, Turtle Beach and PDP expanded their line of officially-licensed Nintendo accessories with new Peach- themed products timed to the launch of the new Princess
Slide 11: Financials & Outlook
NCIALS & UTLOOK
Slide 12: First Quarter 2024 Key Results
CY | FIRST QUARTER 2024 KEY RESULTS Strong US Video Games Market in March 2024 and Q1 2024 + Consumer spending on video games content, hardware, and accessories was up 6% for Q1 2024, and 4% in Q1 2024 RESULTS March 2024 over the same period last year. vs. Q1 2023 Net Revenue +8.6% YOY $55.8M vs. $5
Slide 13: Quarterly Financial Review
@Y | QUARTERLY FINANCIAL REVIEW $ Millions (except per-share data) CS Q12024 Commentary Revenue $511 $55.8 Reflects increased demand for controller and simulation products [and the acquisition of PDP) Year-over-year improvement primarily driven by lower freight costs, Gross Margin 27.5% 31.8% produc
Slide 14: Balance Sheet
@Y | BALANCE SHEET Cash & Cash Equivalents Inventories Revolver (asset-based) Term Loan Net Debt (debt less cash) Balance Sheet Highlights S Millions As of March 31, 2023 $20.6 $65.2 $0.0 $0.0 $(20.6) As of March 31, 2024 $17.8 $69.5 $0.0 $49.9 $32.1 lance Sheet Comments * Inventory increased from t
Slide 15: 2024 Guidance
Ku | 2024 GUIDANCE 2024 GUIDANCE’ Net Revenue!) Adj. EBITDA $370M - $3880M $51M - S54M up 43% - 47% up $44M - S47M vs. 2023 vs. 2023 Strong Q1 2024 Results: Combined console & PC headset markets up 18% with Turtle Beach leading the market. Gaming controllers up nearly 20% with PDP and Turtle Beach o
Slide 16: Fueling Position as 2nd Largest 3rd Party Gaming Accessories Maker
t | TO FUEL TURTLE BEACH'S POSITION AS THE 2ND LARGEST 3RD PARTY GAMING ACCESSORIES MAKER Continue Leadership in Expand Turtle Beach Brand in PC Continue Growt! Continue Growth in Flight & Gaming Headsets Gaming Accessories & Microphones Gamepads/Controllers Racing Simulation Accessories Revenue EBI
Slide 17: Long-Term Targets
v | Revenue 10%+ CAGR Gross Margins % Mid-high 30's Adjusted EBITDA 15%+ Margins Maintain leadership in gaming headsets and controllers Continue to drive growth in adjacent accessories categories Proactively manage operating expenses
Slide 18: Appendix
PPENDIX
Slide 19: GAAP Net Income to Adjusted EBITDA Reconciliation
Y GAAP NET INCOME TO ADJUSTED EBITDA RECONCILIATION FIRST QUARTER 2024 COMPARED TO 2023 Three Months Ended March 31, 2024 March 31, 2023 Net Income (Loss. S155 S(6,705) Interest expense 150 163 Depreciation and amortization 1,476 1,242 Stock-based compensation 1,105 1,959 Income tax expense (benefit
Slide 20: Turtle Beach and PDP
WY TURTLE BEACH x PoP , ’ y IS Vite
Slide 21: Premier Gaming Accessories Platform with Established Retail Relationships
v| Premier Gaming Accessories Platform with Established Retail Relationships Innovative Product Portfolio Augmented by Attractive Nintendo & PlayStation Licensing Agreement Multifaceted Design Capabilities with a Robust Product Pipeline Effective "Good, Better, Best" Pricing Strategy Driving Cross C
Slide 22: Turtle Beach's Broad Portfolio with Strong Innovation & Design
Ku | TURTLE BEACH'S BROAD PORTFOLIO WITH STRONG INNOVATION & DESIGN... @,; 0» > 0 a Stealth Pro Ultra Stealth 700 Gen 2 MAX Stealth 600 Premium Multiplatform Premium Multiplatform Multiplatform Wireless Headset Wireless Headset Wireless Headset G Stealth Ultra Premium Wireless Controller for Xbox &
Slide 23: PDP Differentiated Product Offering
[rack Nintendo Switch Oled Rematch Controller Nintendo Switch White Afterglow Wave Wireless Controller PP Gee (3 S Nintendo Switch Link Rock Candy Controller Nintendo Switch Tails Seaside Hill Zone Realmz Wireless Controller PSS, PS4 & PC Victrix Pro BFG Wireless Controller Xbox Series XIS & PC Purp
Slide 24: Acquisition Rationale: Highly Complementary to PDP
v | e Significantly grows breadth of controllers and other incremental product categories e Strengthens attractive licensed portfolios including valuable Nintendo and Sony partnerships e Expands product offering including licensed models within core console headsets e Adds $115 — $120 million of pro
Slide 25: Transaction Overview
@Y | TRANSACTION OVERVIEW Following our comprehensive strategic review, Turtle Beach announces the highly accre’ improve profitability, and meaningfully enhance scale. Strategic Rationale Consideration, Funding and Structure Financial Accretion Combines two gaming leaders with best-in-class teams, s
Slide 26: Pro Forma Company Financial Estimate Overview
Pro Forma Company Financial Estimate Overview $390M — $410M NTM Net Revenue (Q2 2024 — Q1 2025) $115M — $120M 1S* Full Four Quarters Net Revenue $22m - $28M NTM Adjusted EBITDA, Including Partial Synergies S60M - S65M NTM Adjusted EBITDA (92 2024 - Q12025) $S10M - $12M of Annual More Diversified Cos
Slide 27: Pro Forma Capitalization and 2024 Estimates
~21.1M Shares Outstanding S50M Total Debt (SOM drawn on ABL, S50M of a new Term Loan) $6.5M Cash on Balance Sheet $370M — S380M 2024E Net Revenue, assuming 9-months of PDP contributions $51M — $54M 2024E Adjusted EBITDA, assuming 9-months of PDP contributions and partial synergies Net Debt / Adjuste
Slide 28: Investor Relations Contacts
Investor Relations: Turtle Beach: Alex Thompson MacLean Marshall Gateway Group Sr. Director, Global Communications +1 (949) 574-3860 Turtle Beach Corporation HEAR@gateway-grp.com +1 (310) 431-6215 maclean.marshall@turtlebeach.com
Slide 29: Thank You
SSS —_ THANK YOU