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2026.09.29 | TB | Consumer | Corsair Product Breadth & Profitable Growth

原标题：Corsair – Turning Product Breadth Into Profitable Growth

#consumer #hardware

Third Bridge · 2026-09-29

Analyst-led • 18 Sep 2026

Companies: LOGN CH, CRSR US, AMZN US, BBY US, SMCI US, RDDT US

Thomas Miller (TM) Chief of Staff to the CTO at Kairos Power LLC

Colin Duncan (CD) — Third Bridge Sector Analyst

Agenda

Key Insights

Introduction

CD [00:00:03]: Welcome to Third Bridge's Interview entitled Corsair – Turning Product Breadth Into Profitable Growth. I'm Colin Duncan, and I'll be facilitating today's Interview with Mr Thomas Miller, former Senior Director of Product Engineering and Quality at Corsair Gaming.

Thomas, before we start today's Interview, please state I agree or I disagree to the following statement: You understand the definition of material non-public information and agree not to disclose any such information, or any other information which is confidential, during this Interview.

TM [00:00:33]: I agree.

CD [00:00:35]: Could you start us off with a brief introduction to your background?

TM [00:00:40]: Specific to Corsair, I was the Senior Director of Product Engineering and Quality. It included all the PLM management from inception. We tracked alongside the design teams all the way to ready for market with the goal of being to help instil lessons learned into new products as they were coming instead of having to deal with it on the backside when we were doing validation testing. My team also ran validation testing for going to full-scale production. We tracked 100 suppliers in Southeast Asia, Mexico, Germany and travelled to manage their quality outputs. We had weekly meetings with many of these, especially when new products were coming out or if there was an issue, we did all the 8D problem solving when there was a quality problem. There's not a product at Corsair and all of their subsidiaries, Fanatec, Drop, Elgato, Origin, Scuf, that we didn't touch.

Questions

00:01:59] Corsair's Q2 2026 results were mixed, with some growth in peripherals offset by weakness in components and systems. What were your main takeaways from the quarter? Where do you see the company trending forwards?

TM [00:02:28]: Yes. My takeaways from the most recent quarter is I'm sure that memory continues to be the driver. Even Corsair started as a memory company, and they do it very well. With all of the AI work that's going on, it's pulled a lot of availability from the market for chips. Corsair is doing their best to keep up with what chips they can get, but it's driven prices. I think they've done a decent job of keeping their prices up with what their costs are, but at the same time, not so high that they're not getting the sales they want because people are still building computers, manufacturers who put together computers still want to do stuff. There's been some trends in PC workstations and other things, but 50% of the business likely is continuing to be chips on average. Right now, it's probably higher than that. It's memory that drives a lot of this growth right now with the surprises of this last quarter. As far as the plan and what Corsair needs to work on to make sure that this doesn't turn back into… That they take their, what is it, USD 13.50 or so on the stock price back to the USD 4 and USD 5 that we were seeing earlier in the year. It's memory, and maybe memory will hold out like this for a long time. If that's the case, good for them. The chip market is always cyclical.

It comes with demand. It's hard to say right now in the US what AI demand will look like one year from now with all the pushback on data centre building and this AI arms race between all the various companies. As that growth either goes to just stable supply chain or falls off on AI side, Corsair is going to have to figure out what's next. They're already on this. They started pushing, what was it, middle to end of last year, 2025, this idea of battle stations. They're not just making a keyboard and then separately a mouse and then separately a headset. The idea is you get one full enthusiast set-up in one place, from the inside of your PC all the way through what your desk looks like, if you're a creator, your creator studio through Elgato and other things, and working to bring a cohesive picture to what they're doing. Some of this is with branding. I think they're doing co-branding with games. One of the earlier ones last year was Fallout 4. Then many others. Under their Drop brand, they had released a lot of Lord of the Rings items for keyboards and other things and mouse mats and a bunch of other stuff. Because they have such a breadth of types of products, it gives them the ability to do not quite small, but decently small runs of things to give people options for their total desk set-up.

00:05:58] What should investors think about the tension between higher memory prices benefiting Corsair's memory revenue and margins, while making complete gaming PCs less-affordable and weakening DIY demand?

TM [00:06:25]: Yes, that's fair. I don't think it's going to weaken DIY demand. I think people are just going to look elsewhere for their memory. They're going to buy cheaper memory from other places instead of the higher-end memory. Maybe they'll rely on older GPUs, second-hand market, whatever it is, but fans didn't get increasingly more expensive. Cases didn't get more expensive, not to anything that matters, power supply units, CPUs, AIO coolers. These didn't get more expensive. It might just be what I suspect is people are just going to stretch the lifetime of their GPUs and their current memory a little longer. They're going to hold on to those DDR4s a little longer and the compatible stuff. Maybe some older motherboards will be sitting around a little longer. Yes, in the most recent non-optimised AAA games with DLSS 5, they're not going to be able to keep up with those, but I also think among the gaming community, people are okay with that. If you look at anyone's Steam account, it's going to be full of the backlog of games that came out 10-15 years ago.

I don't think that that's necessarily a problem on that front. I do think it means less people buy memory, but the prices, I think, if you were to put this on a two-axis graph of price of memory and the number of people buying it, the price has risen at a rate that is faster. There's a lot more people still willing to do it. I think the pandemic was a weird time, and I'm sorry to bring this back to that. It led to a bit of a renaissance in PC-building gaming PCs. I'm not saying it was a crazy big renaissance, but it was a renaissance of sorts or a rebirth of the system where people are recognising that, and this feels all over the place, but it's really a systems-level thinking of how everything plays together. PS5 has only put out five new IPs since the PS5 came out for game universes. Xbox is doing less with games that are proprietary to Xbox, and Steam is easy to use. You can apply it on to any computer, and you can go through an entire library of games that are PS5 games or Xbox games or whatever have you. I think that PC gaming has had a bit of a resurgence, especially with chip prices going up, Xbox and PS5 prices have gone up. I don't think that it's necessarily that way, going to be a problem.

00:09:31] Corsair's memory revenue grew 17% in Q2 2026, with management specifically citing North America share gains. What is driving those gains? What do you think is a sustainable memory revenue moving forwards, given what we're seeing with pricing in the space?

TM [00:09:54]: 15-20% growth rates QoQ is not sustainable. I think you'd be better off… Now again, that all is going to depend heavily on the AI market, which is driving the cost of chips. The AI market is very unstable. There's been a lot of public backlash. There's been a lot of concern from communities that have AI data centres or there's plans for AI data centres. Who was it? Again, this is going to feel like it's off out of left field a little bit, but it's not. It's connected. Holtec is a nuclear power company who's working on building small modular reactors, something along the lines of 300MW and 300-600MW of power per data centre, depending on the size of the data centre. They were supposed to IPO this week. They cancelled their IPO, and they cited specifically the volatility in the AI market space. It's even at power companies who… Holtec has been operating nuclear power plants for quite some time, and now they're trying to bring on a new generation of smaller, more agile systems that can be deployed in more places for nuclear power.

They went from last week declaring what their share price was going to be at opening to cancelling their IPO one week later because of volatility in the AI market. With the instability in the AI market, not really knowing what's happening with the growing public concern about these kinds of things, as well as the pushback on what I'll call billionaire-driven decision-making, it's hard to say what the AI market looks like in the future. Because it's hard to say what the AI market looks like in the future, it's hard to say what the chip market looks like in the future. No, 17% is not sustainable growth, which I think everyone could look at and go, that's crazy QoQ. You'd be better looking at the post-pandemic historicals and seeing what's happening with the chip market then as far as growth goes, and Corsair traditionally has underperformed. I'm not saying they're going to go back to underperforming. What I am saying is I think the market has their price at USD 14 or USD 15, I don't remember of what they expect. The market has their price, they're at USD 14-15 is the target. Last year, they were at USD 5. It's not a stable system right now. The growth is a lot really fast.

00:13:07] Corsair's memory gross margin is expected to decline to high teens by Q4 2026 from roughly 23% in Q2. What do you think is a reasonably sustainable margin range across the full memory cycle?

TM [00:13:26]: Margin on memory is always slim. It's a numbers game, it's a volume game because you're trying to ride this line between your cost and what the customer is willing to pay. This has shown that the customer will pay more, but unless the entire market decides the customer is willing to pay more, you're going to be in a bit of a race back to… I don't think it will ever come back to the prices it was before because that's not how things work, but there's going to be a bit of a… It's hard to say how much they'll reduce the prices, but margins are higher right now. They're high because Corsair is able to follow the price up as everybody else raises their prices. Memory traditionally is a 10% or sub-10% margin game.

CD [00:14:22]: You think it roughly declines to around 10%.

TM [00:14:25]: 10-15%, I'm sure they'll come out a little higher than they were before, but they're not going to be in the 25-40% range of peripherals.

00:14:37] How do you think Corsair should manage its inventory and supplier commitments through the current high-price environment?

TM [00:14:55]: As far as how to manage inventory, Corsair, while they sell a decent amount of memory, it still makes up a lot of their business compared to all the other or many of the other markets that chip manufacturers are selling to, Corsair is a small chip buyer. As far as guaranteed sales each year compared to many others, they get a small number of guaranteed chips. Then the rest they're buying at the price effectively that the market says this is worth this, and that's what they have to buy. I think they do a good job of mixing inventory where they can, holding back stuff they paid a little less for so they don't burn through that inventory first. Because of that, they do okay with the inventory management. I think Corsair is always looking for an opportunity to do cost-outs anywhere. If somebody's got a lot of chips and Corsair thinks it's worth sorting through them to grade them all and get them in memory sets, they'll do that. If that means a competitor who's not doing so hot and needs to get rid of their inventory, I think Corsair will jump in and grab that, but there's not that many competitors out there, and it's gotten less over the last few years.

They're going to make deals where they can. This is a market that Corsair has been working in for 30 years at this point. They've been there since near the beginning. They know a lot of people in the industry. They know a lot of the owners of these companies. On those relationships there is how they get things done right now. As that generation turns over, it will be interesting to see if those relationships are able to be maintained, but I think that they're doing the best they can in a world that's turned upside down, in a memory world that's turned upside down because of AI. I think it's hard to plan for that. I'm certain that they're in a day-for-day, week-for-week structure right now, just constantly in a fire drill of trying to find more chips for not too expensive.

00:17:14] What would indicate that the deferred DIY PC demand is beginning to recover?

TM [00:17:19]: That's a great question too. When Nvidia put out the latest chips or the latest GPUs, the 5000 series, that was the traditional thinking is as soon as those 5000 series came out that the DIY PC builds would pick up. They came out at the prices they came out at, quickly sold out the inventory they had, prices went up, and there was no huge increase in the marketplace. The people who wanted to use a 50 Series build had probably been sitting… There were those who were enthusiasts to buy all the newest stuff, but there was also a lot of people who were sitting on a 2000 series or maybe a 3000 series GPU that they were happy to upgrade, but then as the prices got quickly higher and higher on these GPUs that were available, that there wasn't this big shift. There might be a slight uptick. I can't say for sure. I don't always understand how these, what I would consider luxury goods markets work sometimes, but I don't know. If you look at Corsair's PC business and Origin and the Corsair Vengeance series, I don't think there's a lot of proof that there will be a large increase in demand, at least over a sustained period of time. There might be an initial uptick.

00:18:51] Corsair's management highlighted Fanatec, Elgato and GTA VI as additional H2 2026 growth drivers. What might be their potential impact, and how much confident are you in their legitimacy as growth drivers for the company?

TM [00:19:14]: Yes, that's fair. I'll start with Elgato. I think Elgato is a great company. They did a good job early on of cornering as much of the market they could on the creator space for peripherals with microphones, lights, recording devices, stuff to pull direct gaming, your Stream Decks and all these things. I think they did a really great job of making a fully inclusive streamer ecosystem. Now they've started expanding, and they have been for a little while now, but expanding into production studios with lots of tailored-made-for-production-studios things. I think on the Stream Deck side, they've done a great job with their marketplace set-up where if somebody builds out a macro and they can put it up there for free, and so there's lots of opportunity there. It's easy to navigate. A lot of their stuff, I'll say, compared to the rest of Corsair, iCUE is a great programme, but iCUE has a problem of having to be compatible with too many products. Whereas Elgato was able to streamline their product line a little more. Their software isn't as specific as iCUE needs to be for every device. I think that's a big plus for them. As they get into the studio space, if you can go through their LinkedIn posts, that's what a lot of this is, is how people are using Elgato products in the professional world.

The professional recording world, I'm not going to say it has been stagnant, but hasn't made huge leaps and bounds in production rooms and things for quite some time after the advent of digital camera technology. I think Elgato has a real chance of going up against a lot of these traditional suppliers to that market and upsetting several of them. Now on the Fanatec side, a couple of things. Fanatec was a company that was near bankruptcy. They had a lot of great products and were a well-recognised name for quality, but were really bad at a couple of key areas, customer service, return times, the way that they managed repairs, because I think their model before Corsair bought them was a repair-vs-replace model for problems. They got themselves into a hole. They only sold to the one website, their website. A lot of this stuff is very expensive things, and it's just to a very small niche market. I think Corsair has done a decent job of, one, opening up to other sales places. Amazon, they were able to get rid of a lot of backlog of old inventory through the sale of Fanatec stuff under their… Goodness, what's the name of the line, the product line of their used goods, their Revival Series of goods or their… What was the name of the other product? Revival is their refurbished products. That created a lot of sales generations, especially here in the US, for Fanatec products.

Besides opening up for the other markets, they're starting to go through… If you go to the Fanatec website, there's like one million different steering wheels and one million different pedals and things like this. If you're a person who's immersed in that world, maybe it's easy for you to navigate, but for somebody trying to get into the world at such a high price point, it's very difficult. How do I know which steering wheel I need? How do I know which pedal I need? I think that's a thing that needs to be dealt with, is taking that single type of product, steering wheels, and really figuring out what their core market is and where they need to reduce options (1) for manufacturing reasons and (2) just to generate hopefully more sales by making it easier. Fanatec is a hard one because it's a very specific market with sim racing. Corsair has been working to expand that to people who do flight sims, truck driver simulations, farming simulators, all kinds of stuff, but at the end of the day, it's still a fairly high price point to get into a hobby if you're not running specific trainers. It'd be interesting to see if they can get in with people like the Air Force or the Army with some of their simulator work. I would suspect that they're trying to go through some of those avenues because lots of simulator training done in the military, but we'll see.

00:24:25] How sustainable do you think double-digit gamer and creator peripherals growth is for Corsair? What's driving that growth? Is it led by acquired businesses vs organic market share gains?

TM [00:24:42]: Great question. I've got the website up here. One thing they've done is they've been opening up a little bit on the types of products they sell. Corsair didn't traditionally sell things like microphones, but if you go up there, a big thing on their website right now is this Voxara microphone. They've been driving more of this ecosystem thing, which helps where I can get my entire set-up up on iCUE. They can all work together, and they've been doing a decent job of that, replacing some older keyboards and mice that were known to have issues with newer models and sunsetting some of those older ones. I think this is all good. I do think that there's been a bit of growth here because of chip prices and people are like, "Well, I can't upgrade my PC, but I can upgrade the rest of my set and not go broke doing so." I think some of the growth is coming from that. Maybe some of it from branding, things like their Call of Duty branding and things like that. What did they do? The Novablade, which was a new thing, like a Hit Box kind of set-up for people who play those kinds of games. They've done a little bit of growth in types of products.

They've done a lot of work on the ecosystem side of things, even incorporating Elgato products into some of the keyboards, like virtual Stream Decks and the little LCD screens they've been adding to keyboards and some other things. I think there's a lot of good work there. They've been really engaging on social media. I think if you go to their subreddit, you'll find that their design and project management teams, even customer service teams, are super engaged there. I think that helps a little bit of, hey, I got this problem, somebody posts on Reddit. If there's already a solution, either the other people in the subreddit will respond or someone from Corsair will say, "Hey, here's a solution, here's a website link." If there isn't a solution, the team gets it into the backlog of problems that need to be dealt with. There's a lot of work that's been done, I think, to increase brand quality perceptions instead of letting things drop off like a lot of companies have done in the past with customer service, where they keep doing cost-outs. They're driving costs down as much as they can to try to maintain margins steady without having to raise prices, but then quality suffers. I'm not saying that Corsair is immune to that, but I also think because they target on the upper-end, very enthusiast-heavy market, they do get to continue to produce quality products, and they're very engaging.

CD [00:27:51]: Do you expect double-digit growth to be sustainable moving forwards for this segment?

TM [00:27:56]: No. Again, I think a lot of this is driven by chips because, like I said, chip prices are high, which makes memory prices high, GPU prices high, even CPUs getting more expensive, that people are finding other ways to upgrade their set-up and seeing more things like the integrated stuff of Elgato and Corsair in the way they work together. No, I don't think double digits is sustainable. That has not historically been what Corsair has been able to maintain, especially when you've got competitors like Logitech who just own a larger portion of the market because of their price points.

00:28:40] How are Corsair's core keyboards, mice, headsets, Scuf controllers, etc performing? Which specific categories do you think offer the greatest growth opportunities? What's the main growth vector for them?

TM [00:28:56]: Great question. I'd probably say audio. Audio products are probably the one that they can do the most work in to grow more into the market, making products that don't just appeal to gamers, but if you look at, what is it, the Virtuoso series of headsets with the detachable microphone, they're great headsets. They sound great. You can take the microphone off, so it doesn't feel as much like a gaming headset. Whereas your Void V2s, they've got a microphone that's just stuck there. It clearly is a gaming headset. I think this is a space they can do better in. Keyboards and mice, I think, have a problem of too many products and too many with overlapping use cases. I think that will hamper them unless they clean that up a bit.

00:29:59] Where do you think Corsair is genuinely differentiated from Logitech, Razer or lower-priced competitors? Where is the company most vulnerable competitively vs them?

TM [00:30:11]: Always at the lower end, they're most vulnerable. If I were to look at a base-level set-up, and this is because Corsair goes after gamers for the most part, gamers and creators. They're not going for the office sets of keyboards and mice. Logitech can always outperform them there. Logitech has better brand recognition. That goes a long way. Logitech even has… Gamers still, to some extent, go to traditional stores to buy things. If you walk into a Best Buy and go look at the Logitech section of any Best Buy compared to the Corsair section, or a Micro Center, same thing. Micro Center does a little better of treating all products fairly equally, but walk into a Walmart on the lower end, what do you see? Corsair products, there's a couple of them, and they're mixed in with your SteelSeries and all your other competitors, whereas Logitech has a whole rack of stuff all off on its own. At the retail side, it's very hard. Then if you go to Amazon, where if people aren't buying direct from the website and you go to Amazon, what you're met with is just, in my opinion, a lot of confusion. I'm on Amazon now, and if I type in Corsair headset, and I have to go through all these products, what I'm seeing first is prices. That's what I'm seeing.

If a Void RGB Elite Wireless is USD 89.99 and a Void V2 Wireless is USD 89.99, I don't understand what the difference is between them. Even if I click on them, the wording of the things is just not great. If you're comparing them to other things, Corsair Virtuosos are USD 200 right now on Amazon which is the last generation. If I compare them to the Sennheisers that are advertised right next to them, they're USD 20 cheaper, and Sennheiser is a better-known name. How do I compare an HS80 Max to a SteelSeries headset? What am I looking for, or a Logitech headset? It's a little difficult to understand what makes a headset better. What's the difference between a USD 220 headset and an USD 80 headset or a USD 160 headset? The price differences imply that one is better than the others, but then I look at the reviews. Virtuoso Max Wireless, 3.6 stars. Of course, there are Void V2s, 4.2 stars, and then an HS80 Max is four stars. Their most expensive product line has the worst reviews. I don't think it's because of pricing. I think audio is a place that they could spend some time, get some more quality, especially at the upper ends, built in, and on the lower end, try to do a little bit with what Logitech is doing and offer some box sets of an entire ecosystem.

If you want to get somebody hooked on Corsair, get them hooked on your ecosystem. Take a set of HS35 Wireless headset that retails for USD 60 and package it with K55 keyboard, the baseline keyboard, and a mouse that's a USD 20 or USD 30 wireless or wired mouse. For bundling it together for about USD 150, you've potentially just hooked somebody on your product line because they just had to install iCUE for all three of those products to do firmware updates, as well as to be able to do their RGB changes and all these things, and it gets people hooked on those kinds of things. Anyway, the lower end on all of those product lines, I think they can be better at getting it out there, getting it advertised. Then on the upper end, they need to spend some time on quality, specifically on the headset side.

00:34:26] How much pricing power does Corsair retain without weakening its premium positioning?

TM [00:34:31]: I think they're at the whim of Amazon. I think so many of their sales are running through Amazon that they… If you look at their sales figures in their reports, in their reporting, Amazon makes up a substantial part of their sales. If they want to remain competitive, they've got to remain competitive against everybody else through Amazon. I can't tell you the percentage of things that come through the website, but Amazon drives prices at Corsair.

CD [00:35:05]: I saw D2C sales represent approximately 20% of revenue against a 25% target.

TM [00:35:11]: Yes.

CD [00:35:13]: How does the economics of increasing that mix work after customer acquisition, fulfilment, etc and how does that compare to using third-party channels such as Amazon?

TM [00:35:25]: Yes. If you look at things like Amazon and Best Buy, which are especially… On the Scuf side, for instance, a tonne of sales go through Best Buy. Somebody goes to a Best Buy to look at all the different controllers and they see the Scufs right there, and that's where a lot of sales happen, but then you look at the return policies of Best Buy and Amazon. It's incredibly easy. The barrier to entry can be a little high, getting iCUE downloaded, getting your set-up going, especially for Scuf controllers through their… They're all over the place generationally. Some of them use iCUE, some of the newer stuff doesn't, and it has a standalone firmware updater and a non-iCUE system to update your key bindings or your trigger bindings on your thing. They're jumping all over the place with how they run the product line there. They make great controllers. In fact, I have a couple of them sitting around here that I use, but I've got three controllers in three different ways I have to update firmware. Sorry, trying to get back to the heart of your question. Best Buy's return policy is effectively accept anything within 30 days, and then people can also pay to get longer warranties, and a lot of that ends up back on Corsair's plate. The same thing with Amazon. Anything you can get returned for any reason within the 30-day window.

A lot of that reason often is a perfectly working product comes back, and it's just because the barrier of entry of getting to operation. Sales through the website work better in that sense of you have to then go through the Corsair system, which is very responsive, very, very quick on it, of, "Hey, thanks for the problem. Have you tried this?" It makes you go through the, "Hey, let me teach you how to use iCUE as you go." The return policies of different groups, where the sales paths are, in an ideal world, of course, they would be able to sell the majority of their stuff through their website because then customers get the education that goes with it. We're in an age where everyone wants everything to be plug and play. I'm an older guy. I'm in my 40s, so older for gaming, but we had to go through the process of learning something new every time something came out. You just expect that there will be a thing that you don't understand that you need to figure out. You got to go to the website. You got to read the how-tos. Whereas a lot of your customers want to go the Logitech way of, I plug this dongle in, this one dongle to run all my Logitech devices, and they just work. On the Corsair side, there's a little bit of work that has to be done.

00:38:28] How large is the opportunity for Corsair to expand Stream Deck and Elgato beyond current creation into professional productivity and enterprise workflows?

TM [00:38:42]: I think it's huge. I don't work with Corsair any longer, but I'm a Chief of Staff at a nuclear power start-up, and I use a Stream Deck every day for so many things because so many reports, dashboards, things I need to look at. It's not just the professional recording and creator world or production world. In-office opportunities are things like I think Stream Deck is a great product that has so much ability to get into so many markets that Elgato, I think, is often the most profitable side of the business for Corsair and will continue to be for quite some time as they do their job and their marketing teams do a great job of continuing to make sure quality products are coming out, but then also that people are finding ways to get them in and get them working in their set-ups.

CD [00:39:44]: Do software and marketplace revenue offer greater economic opportunity, or does it happen indirectly through hardware attachment, customer retention and cross-selling?

TM [00:39:54]: I think expanding into different markets is going to be the main driver for now. The marketplace is great, but… I'm not saying that Elgato is not making money off the marketplace, but I think that's intended more as an opportunity for people to share things than it is as a way for revenue generation for Elgato. The expansion into new markets is really where it's at. There's more creators every day also. Their creator opportunities are growing… Things like TikTok and Instagram are a bit cyclical, where some people are able to stay relevant for quite some time and others, they're coming up, they're doing well. They're expanding their set-up. They're doing well, they're doing well, they're doing well, and they drop off, and the next generation, on a TikTok scale, comes up for things like that, but the expanding markets, I think, is a big one. Stream Deck has so many great uses. Elgato's other systems have so many great uses that I think that's what's going to drive growth most.

CD [00:40:59]: The marketplace revenue and transactions more than doubled in H1 2026…

TM [00:41:08]: Yes, that's because Elgato started selling things directly more through marketplace. Yes, there is an opportunity there in marketplace. If Elgato wants, if that's where they want to put their thinking, that is a great opportunity to make money. Let me make it easy for you to get your whole set-up done. Here, you can buy this package of additional prebuilt macros, and it makes it easier for you to get in and get your job done. It's a great idea.

00:41:42] What do you think would demonstrate that marketplace is becoming financially meaningful rather than just driving engagement?

TM [00:41:52]: I don't have any idea of the individual numbers for things they're selling on marketplace right now through Elgato, so I can't really give a numerical-based answer here, but the idea is this is how a lot of companies make money. You find a way to monetise a specific aspect of your products, but you do it in a way that doesn't… You still want everything to be free-to-play, if that makes sense, but then for those customers who are more deep-diving in or people who don't want to build their own macros and things like that, you found a segment where you can make additional revenue. That can grow for a certain period of time, but eventually, that will top out like all of these things do. Then you'll have a steady income from that, but it will be hard to force more growth unless you sell to more people. In the end, I think diversifying the markets that they're in for the use of their products will be the long-term way to drive growth.

00:43:12] How much room is there for Fanatec – based off the recent momentum – to improve its products, availability and geographic distribution?

TM [00:43:27]: I still think there's a lot of momentum. I think there's growth in the sim racing market here in the US. More people are getting into it. More people are getting into what was traditionally considered a European sport with F1, especially with things like the Las Vegas race becoming more and more prominent, and people know about these things now. There's growth to be had there. Also, as they work into other sim markets, you can get a lot done. Fanatec makes the best wheelbases out there. This is my honest opinion after having toured tonnes of factories, sat down and tried a tonne of other people's wheelbases. I think Fanatec makes some of the best products out there when it comes to the standards, wheelbases, pedals. They certainly, I think, make the best cockpit with their latest series that came out, goodness, what's it called? I don't know. It's all some type of tubing. It looks fantastic. It's solid. You can get up to three monitors built on to the thing. Again, it's a full ecosystem. It's a one-stop-shop supplier, especially since it's coupled with Corsair.

I think there's a lot of opportunity there. That market, however, is not going to ever be a huge market. Sim racing is, by its nature, an expensive hobby. Even a baseline set-up from Fanatec of steering wheel, wheelbase, pedals can get up towards the USD 1,000 mark if you decide this is what you want to do, whereas you've got other brands like Logitech who have cheaper offerings for the entry level. They're not great, but people who are just getting into sim racing don't know that yet. They'll go for the price point while they try to decide if this is something they want to do long term.

00:45:41] Fanatec has historically experienced product quality or fulfilment and customer support problems. Do you think those issues would be difficult to resolve?

TM [00:45:55]: No. I think they did an initial job, a lot of the initial feedback after Corsair got them, and it takes a little while to change these systems. Again, Reddit is a wealth of information if you can scrape it for Corsair and their companies because it's a tonne of just honest customer feedback. Yes, there's some standard internet shenanigans in there, but there's a tonne of information there as a way to engage with customer sentiment. There was a lot of hope that Corsair, with what is considered a great customer service experience, could come in and fix that aspect of Fanatec, fix the shipping times by opening up more hubs the Fanatec stuff is sold through instead of a single hub in Germany, opening up more markets to buy Fanatec products through, and then the customer service side, getting spare parts to be a bigger thing. A lot of times, a customer loves their USD 500, USD 900 wheelbase, but they've lost one specific screw that, if we're being honest, they could go buy at a Home Depot or another improvement store, but they don't know that. Having it available as a thing that can be purchased on the website is fantastic because no one is going to look at their USD 900 wheelbase set-up and go, "Because I don't have the screw, I can't use it. Let me buy another USD 900 wheelbase."

I think that's a great opportunity. I think there's more clarity in shipping and delivery now for Fanatec than there was before, where it was kind of a who knew when it was going to show up kind of game. They've been able to fold Fanatec suppliers into their supplier network and drive the thoughts that Corsair has on quality. I think Fanatec was very much still in a start-up mindset where there are a lot of things that they decided just not to put the time and energy into. While they did have a quality team, it was using some very outdated practices and some very… The goal is to get the numbers of products-out kind of thoughts, as opposed to getting the right products out with the right quality. I think there's been big improvements there. I think you'll see this only continue to improve as they get more and more folded into the Corsair way of doing things.

00:48:19] Where do quality and reliability problems most commonly arise for Corsair across its portfolio, and which metrics best indicate whether performance is improving?

TM [00:48:30]: That's a great question. This is a simplification, but there's a couple of things. Peripherals in general. If I go and I look at mice here on the website, and I look specifically at a couple of traditionally good sellers for them, but if you… Let me find one. They've thankfully streamlined their mice portfolio recently, but for a long time, there were issues with soft touch, that matte-black rubber stuff that ends up on things like mice or gaming controllers. There's these big known quality issues with, over time, that stuff breaks down and gets sticky, but why put it on something that's in constant contact with someone's hand all the time and things like this? Headsets have issues with headband strength, especially for people who are taking them off, putting them on all the time. There's a lot of opportunity there. Keyboards, they just have a lot of moving parts. It only takes one small chip inside the system to make five of your keys, or more or less, not function suddenly. You can't just replace those. There's stuff like that that will continue to be quality issues especially with mechanical keyboards. If I had to pick a product line that probably was the worst off, I would say chairs, but chairs also don't drive a lot of sales. I think the gaming chair as an industry is a little rough.

00:50:31] How concentrated is Corsair's component supplier and ODM [original design manufacturer] base? Is its manufacturing footprint flexible when costs or quality problems arise?

TM [00:50:45]: It's flexible enough. They don't traditionally go single-source on anything. There are still major suppliers for things. There's a primary and a secondary. Corsair spends an awful lot of time developing those secondary suppliers to get their quality up, to keep prices down, so that way there's constant price tension for competitors, for suppliers. They manage a lot of their supply chain with personal touch, people on the ground in China, in Vietnam, who are at these factories once one week or once every two weeks, watching product lines, engaging with the quality teams there. I think Corsair is very engaged on this. They're constantly bringing up new suppliers to keep prices as low as possible. I think they're really good at this.

00:51:44] Who are the target customers for Corsair's AI Workstation 300? Which workloads provide a compelling reason to purchase a dedicated local AI system?

TM [00:52:05]: Great question. The AI 300, I think, is pointed at consumers or small businesses to some extent, for people who want to have a local LLM that does specific tasks. You want to train your own to do stuff. I'll tell you a use case I used it for was I took an open-source LLM. I localised a version that wasn't talking to anything for the most part and then used it to scrape Reddit and comments, do sentiment modelling, get a tonne of customer feedback in that way, turn it into actionable feedback of specific issues, get all kinds of charts and dashboards you can get out of that data on what customers are experiencing, how it goes in with our current upgrade plans and all these things. If you got USD 4,700 to drop on a computer, it does a great job for local LLMs. This is meant for individuals more than it is businesses, but you could network a bunch of these together and have a fairly complex network for not too expensive.

00:53:26] What proprietary value does Corsair contribute beyond assembling third-party processors, memory and storage, and how defensible could the company's position in AI workstations become?

TM [00:53:38]: I think they need to do some more expansion. AI 300s were, I think, a first foray into what's out there. I think as they get into the larger Corsair Pro type market, this is now more Corsair is talking to businesses about this stuff of being able to put in servers and workstations that are AI-driven. I think a lot of what Corsair brings to it is, one, trying to get a whole package together, so you've got everything right here instead of having to work through multiple different vendors. Corsair has a lot of ability with high memory and high-end memory and high-memory-usage things, but this is a big marketplace right now. I don't think winners and losers have been chosen yet as companies try to figure out what their AI strategies are.

The price point is hard for a lot of these things because of the sheer amount of memory it needs and GPU and CPU energy and time and stuff. With some of these things, like the 300, depending on what model you're running, if you're running the latest GPT stuff, you're going through 35 tokens per second. You're burning through them fast. Your spend gets really high, really fast. Then on the AI larger Pro stuff, it's even crazier. Again, just the same as I was saying earlier in the call about memory, that AI, it's volatile right now. I think on the AI workstation side, it's hard to say what's going to happen right now for anybody.

00:55:25] How do you think Corsair's offering compares vs systems from Dell, HP, Lenovo, Supermicro and specialist workstation vendors in terms of price, performance, software service, etc?

TM [00:55:36]: I'd put them on par with Supermicro. I think what you're going to find from your Dells and your HPs and those is you're going to have… These are huge companies. Every customer is going to be treated as just one part of many. With Corsair, you're going to get better customer relations, a lot more personal touches. I do think Corsair offers a product on par with Supermicro, and I do think it's better than Dells and HPs and others, but at a higher price point.

00:56:08] What enterprise capabilities would Corsair need to build before Corsair Pro becomes a credible B2B platform?

TM [00:56:21]: It's a great question. Sorry, I'm formulating an answer here. You caught me off guard on this one. On the AI workstations, if you were to go to their website and look at the prices for where you can find prices, these are going anywhere from USD 2,000 for a very baseline AI 300 preconfigured to USD 50,000 for a FlexPrime. This is going to have to be a lot of business and corp development that Corsair has not traditionally done. They're trying to break into a space where Corsair hasn't done a lot of work going out and getting a company to jump on board and get a deal in place and contracts for, okay, we're going to be your supplier for AI workstations for the next three years at this price point. This is not a thing they do. It's not a thing they've traditionally done. Memory has been a sale direct to customer, or built into their own gaming PCs, maybe a little bit of licensing it out where Corsair was selling memory to other PC builders, but these were all small mom-and-pop shops, or it was something like an Origin that then became part of the Corsair family. This is not an area that Corsair has traditionally done. It's an area they're not going to be good at out of the gate.

00:58:03] What milestones do you think would indicate that Corsair Pro can become a financially meaningful business after 2027?

TM [00:58:15]: Do you have numbers on how large their PC, their prebuilt PC business or custom PC business is compared to the overall?

CD [00:58:23]: I do not at hand, no.

TM [00:58:28]: It's not high, those numbers. They're high price points. This is an area Corsair struggles. If you look at the returns on just standard PCs, some of which can get into the USD 8,000-10,000 range on some of the higher-end Origin stuff, customer service on that end and the cost of customer service are high. Corsair needs to figure out a better way to do service for PCs and, in this case, these AI workstations, that doesn't require the shipping back and forth of everything, the full-on replacement of parts. This is not an area that Corsair is traditionally good at. They're good at the individual level of components. They're good at the individual level on peripherals, but their costs are very high for repair or replacement of PCs, and this is where they're going to struggle the most there as well. I think this is a hard one to quantify, but until they come up with a better system for that and develop, like I said, their business dev team better to do these kinds of things, this is where they're going to struggle. It's not the product itself that's the problem. It's their ability to support the product and their ability to get the products sold. It's a good product.

00:59:48] Taking everything we've talked about together and looking at Corsair as a whole, what do you think is a realistic annual revenue growth range for the company over the next 2-3 years?

TM [01:00:04]: Corsair as a whole?

CD [01:00:05]: Yes.

TM [01:00:08]: If you look at their public announcements, they're always shooting… The year they acquired Fanatec, was that last year? I think they came out and said 20% growth is what they were shooting for YoY, which is a huge target. 20% growth is crazy. Now they hit it because of what the chip market is doing, but at the end of the day, to sustain 20% growth is rough. I think, you can probably stay in the 15-20% range for the near term. For the long term, the 5-10% range, but I think Corsair struggles to grow without putting out new… Or consuming new product lines and expanding into new markets. The internal growth through their traditional products is difficult for them.

CD [01:01:09]: You think closer to 10% moving forwards after that.

TM [01:01:14]: I think so on average, but that is what I would guess.

CD [01:01:32]: ≈ Do you expect the revenue guidance growth to be in line there, or do you expect that to be growing at 10% or less?

TM [00:00:33]: That's fair. Yes, that's a fair question. Yes, let me step back and look at it from the framework of dollars instead of sentiment. Yes, I think you can look at the historical numbers, not just last year and this year, and you can make your own assumptions. What you would get into is probably, I was being optimistic, probably on the 5% side at most because, again, this is a high-end market and the economy is not great for a lot of consumers, and especially consumers who had a lot of extra cash to burn on things that are, at the end of the day, luxury. The amount of customers there is becoming less with time right now and not more. I think individual product lines can still see in that 10-20% range, but as a whole, you're right. I think it's on the lower end.

01:02:57] Corsair reported a roughly 33% consolidated gross margin for Q2 2026. The company got some temporary benefits – 500bp from a tariff refund. Outside of that, is there any room for additional structural margin improvement? Do you expect it to be in that area, or decrease?

TM [01:03:16]: I expect it to go down a bit. I don't know the historical numbers off the top of my head, but again, I think this is being driven largely by sales of chips and not by growth in their better markets for margin, like peripherals. Yes. Unless they can start growing more on the peripheral side, which is their volume kind of sales outside of things like fans and power supplies. To be clear, power supplies are a huge sales point for Corsair. They're known for quality in power supplies and things like this. You can't sustain the growth that chips has shown you and the margin that chips has shown you right now because people are going to stop spending USD 1,000 for a GPU when they could buy an entire PS5 or a next-generation thing for the same price. They've got to firm up their peripherals market. They've got to grow their peripherals and some components like fans and power supplies. Maybe what I would think would be better for Corsair is to, let's get some Corsair products in some other brands' PCs on the lower end, get some name recognition out there. Couple with a company like iBuyPower or any of these other companies that are selling at Costco in volume for prebuilt PCs that are considered gaming PCs, and try to get some brand recognition through that market, bring more people in, so that way their peripherals business can do better.

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