Turtle Beach Corp ((TBCH)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Turtle Beach’s recent earnings call presented a balanced outlook, highlighting both achievements and challenges. The company celebrated significant milestones, such as successful refinancing and strong product launches, while also addressing hurdles like revenue decline and increased tariffs. The restated guidance and cost management efforts suggest optimism for future growth.
Successful Achievement of Key Objectives
Turtle Beach successfully achieved its three primary objectives for the second quarter. These included meeting Q2 results, advancing its capital allocation strategy through stock buybacks, and refinancing credit facilities to bolster its capital structure.
Record Launch of Nintendo Switch 2
The launch of Nintendo Switch 2 set a new record for hardware sales in a launch month. This success is anticipated to provide long-term benefits for accessory sales, contributing positively to Turtle Beach’s future revenue streams.
Refinancing of Credit Facilities
The company completed a refinancing of its term loan and credit facility, significantly reducing the interest rate by approximately 450 basis points. This move is expected to save over $2 million annually, strengthening Turtle Beach’s financial position.
Improvement in Gross Margins
Turtle Beach reported an improvement in gross margins, which rose to 32% from 30% in the previous year. This demonstrates the effectiveness of the company’s cost optimization initiatives.
Share Repurchase Program
During the second quarter, Turtle Beach repurchased approximately $5 million worth of stock. A new $75 million share repurchase authorization is now in place, reflecting the company’s commitment to returning value to shareholders.
Revenue Decline
The second quarter saw a revenue decline to $56.8 million, attributed to challenging market conditions in the gaming accessories industry. This decline impacted the company’s financial performance.
Adjusted EBITDA Loss
Turtle Beach reported a second quarter 2025 adjusted EBITDA loss of $3 million, primarily due to lower revenues. This underscores the challenges faced by the company in the current market environment.
Increased Vietnam Tariff
The increase in the Vietnam tariff rate to 20% was incorporated into revised guidance and affected the company’s cost structures, posing an additional challenge to its financial performance.
Forward-Looking Guidance
Turtle Beach reiterated its full-year guidance for 2025, projecting revenue between $340 million to $360 million and adjusted EBITDA ranging from $47 million to $53 million. Despite current challenges, the company remains optimistic about future growth, driven by the launch of Nintendo Switch 2 and the anticipated release of GTA 6, which are expected to fuel strong growth in 2026.
In summary, Turtle Beach’s earnings call reflected a balanced sentiment, with notable achievements in refinancing and product launches countered by revenue challenges and increased tariffs. The company’s forward-looking guidance remains optimistic, with expectations of growth fueled by strategic launches and cost management efforts.