Razer Reports First Profit Since 2014 After Record Year
(Bloomberg) -- Razer Inc. surpassed forecasts and its annual revenue high mark as it recorded its first profit since 2014.
The gaming peripherals maker posted $5.63 million in net income off $1.2 billion in revenue in the year to Dec. 31. Both were above analysts’ expectations, with the pandemic-afflicted 2020 spurring demand for PC gear that saw Razer’s sales rise 48%.
Most of Razer’s income comes from hardware, with that unit contributing $1.08 billion in sales. Beside its core business of gaming keyboards, mice and other accessories, the company also offers a lineup of laptops under its systems division, which it says has grown its market share outside of the U.S.
“We will seek to deliver outsized revenue growth and continued profitability in 2021” by focusing on hardware products with higher margins among other efforts, Razer Chief Strategy Officer Lee Limeng said during a conference call on Wednesday.
This year is likely to be tough for Razer and other gaming peripheral makers because of the high base set in 2020, said Matthew Kanterman, an analyst at Bloomberg Intelligence.
“Looking beyond, as gamers continue to adopt more premium hardware and as live streaming demand continues to rise, premium brands such as Razer are set to capture more market share and outperform the market’s roughly 10% growth rate in 2022 and beyond,” Kanterman said.
- Peripherals sales rose to $773.2 million in 2020, accounting for 64% of total revenue. In 2019, they accounted for 54% of the company’s sales.
- Razer Gold, a digital entertainment payment service, had more than 26 million registered users at the end of 2020, up 24% from a year earlier.
- Razer Fintech generated $4.3 billion in total payment volume in 2020, doubling from a year ago, aided by online shopping and digital entertainment consumption.
- After its failed bid to obtain a digital banking license in Singapore, Razer Fintech is looking at opportunities in Southeast Asia and emerging markets in Latin America, the Middle East and Africa, Lee said.
- Razer shares lost 1.3% in Hong Kong after falling as much as 3.5% earlier on Wednesday.
- Razer Posts Profit for First Time Since Going Public; Beats Est.
- Cashflow from operating activities turned positive to $152.9 million, aided by operating profits and better working capital and cash management.
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