Razer sees 33% year-on-year growth in latest results
Razer has released its full-year results for the financial year ended December 31 2021, seeing 33.3% year-on-year growth driven by pandemic demand.
The company recorded a revenue of US$1.6 million which it says can be attributed to the pandemic, a market share increase for its hardware business, and a continued expansion of channels and content for its services business.
"As we navigate the uncertainties and challenges attributable to geopolitical tensions, macro environment as well as the ongoing COVID-19 pandemic, we expect the lingering industry-wide supply chain shocks to continue to have an ongoing impact on our business, with freight and logistics to remain a challenge through 2022," Razer co-founder and CEO Min-Liang Tan says.
"On the demand front, we saw a deceleration in the growth momentum for our products and services since the second half of 2021 compared to exceptional growth in the prior year, we expect this trend to continue through 2022 as a result of the high base effect seen in 2021."
Razer's key financial highlights for 2021 are:
- Gross Profit Margin increased to 24.0% from 22.3% in the previous year, driven by the ongoing expansion of Hardware margins, partially offset by the sudden spike in freight rates due to industry-wide supply chain and logistics challenges.
- Adjusted EBITDA (a non-GAAP measure) was US$96.1 million, an increase of 115.5% from US$44.6 million in the previous year.
- Net Profit was US$43.4 million, compared to US$0.8 million in the previous year, driven by revenue growth, ongoing gross margin expansion and productivity improvement.
- Hardware revenue saw a 34.0% year-on-year increase to US$1,452.4 million.
- Peripherals business maintained its position in gaming peripherals across the US, Europe and Asia-Pacific regions, fueled by the market launch of multiple additions across its flagship keyboard and mouse product lines.
- Systems business maintained its position in the US premium gaming laptop segment while growing its market share in new markets outside of the US.
- Razer also made further inroads to expand the company's hardware growth categories, in particular gaming chairs, console and broadcaster products.
- Total software user accounts increased 44.1% year-on-year to approximately 177.7 million, with monthly active users rising by more than 30.0%.
- Razer said this increase was due to solid growth across its software offerings, reinforced by increases in gaming, rewarded play and live streaming activities.
- Razer's services business, comprising of Razer Gold and Razer Fintech, grew 26.6% year-on-year to US$162.5 million. Additionally, the gross margin was 38.5% and contributed 16.1% of the Group's gross profit.
Furthermore, the company introduced its ten-year sustainability plan to protect and preserve the environment through #GoGreenWithRazer.
Razer has seen significant progress in achieving its ESG goals, including upgrading its upcoming sustainability report to GRI Core standards, and making its first disclosure under the Carbon Disclosure Project, ensuring transparency through disclosure of environmental data.
Moreover, the company joined the Science Based Targets Initiative with a commitment to set decarbonisation targets by keeping to a less than 1.5°C climate scenario and achieving net carbon neutrality by 2030.
This included addressing climate-related risks in Razer's enterprise risk management process by proactively recognising and mitigating potential impact from these risks.
Founded in 2005, Razer designs and manufactures hardware, software and services for gamers worldwide.
Razer has 18 offices worldwide and is dual-headquartered in Irvine (California) and Singapore, with regional headquarters in Hamburg and Shanghai.
Additionally, the company is listed on the Hong Kong Stock Exchange.
"Looking ahead, we will continue to invest into new growth areas and to build out Razer's unique gaming ecosystem.
"However, before we start to see the fruits, these growth areas will take time to fully realise and it will require additional spending in our operating expenses and may affect the short- to medium-term business performance."