Corsair at Baird Conference: Strategic Moves in Gaming and AI

On Wednesday, 04 June 2025, Corsair Gaming Inc. (NASDAQ:CRSR) took center stage at the Baird Global Consumer, Technology & Services Conference 2025. The company outlined its strategic direction under the leadership of incoming CEO Tee La. The focus is on product innovation, expanding direct-to-consumer business, and global growth, especially in Asia. While optimistic about growth opportunities, the company is also prepared for potential tariff impacts.

Key Takeaways

• Corsair plans to integrate AI into products and operations to enhance customer experience and efficiency.
• The company sees growth potential in the gaming market, with new GPU releases boosting demand.
• Corsair aims to expand its market share, particularly in Asia, and is exploring M&A opportunities.
• The gamer and creator peripheral segment, with over 40% gross margin, is a key revenue driver.
• The company is managing tariff impacts by shifting production from China to Southeast Asia.

Financial Results

• Gross Margin:

- Gamer and creator segment: 40%+ gross margin

- DIY system and memory segment: 20-30% gross margin

- Overall margins improved due to the growth of the gamer and creator segment

• Revenue:

- Pre-COVID revenue was around $900 million, growing to $1.9 billion rapidly

• Tariffs:

- 19% of the US market was served by China-based production in Q1, expected to drop to single digits by year-end

• Capital Allocation:

- Focus on acquisitions with EBITDA and revenue synergy benefits

Operational Updates

• Strategic Focus:

- Expanding market share and enhancing product innovation

- Scaling direct-to-consumer business and investing in the Asian market

• Market Dynamics:

- Gaming market: Over 3 billion gamers, growing annually

- DIY market: $3 billion total addressable market (TAM), steadily growing

- Sim racing market: $1 billion TAM, double-digit growth annually

• AI Implementation:

- AI used for tech support, marketing, and engineering

- Tech support solution migration to AI improved customer satisfaction

• Product Innovation:

- Launching a full suite of DIY gaming products

- Integrating Stream Deck virtual technology with a gaming mouse

Future Outlook

• Growth Drivers:

- New game releases from 2024-2026 expected to drive momentum

- Gen Z’s shift towards desktop gaming, influenced by Xbox Game Pass

- NVIDIA 5000 and AMD 9000 series launches expected to trigger consumer upgrades

• Channel Expansion:

- Expanding distribution plans for Fanatec

• E-Commerce Evolution:

- Developing a next-generation e-commerce platform to support AI-driven shopping

• Market Expansion:

- Increasing investment in the Asian market to balance regional contributions

Q&A Highlights

• CEO Transition:

- Tee La aims to accelerate growth and maintain strong margin discipline

• Product Innovation:

- Consistent innovation across 25-26 product lines and ecosystem integration

• Tariffs:

- Production shifting from China to Southeast Asia to manage tariff impacts

• Capital Allocation:

- Considering M&A opportunities in broadcasting to complement Elgato

• AI:

- AI integration in products like Stream Deck and teleprompter displays

Readers are encouraged to refer to the full transcript for more detailed insights.

Full transcript - Baird Global Consumer, Technology & Services Conference 2025:

Tee La, CEO, Coursera: Oh, I see it now.

Colin Sebastian, Analyst, Baird: Okay. Well, thank you very much everyone for joining us. We’re very happy to have with us Coursera. And from Coursera, we have CEO, Tee La, and Michael Potter, who is CFO. I’m Colin Sebastian.

I follow Internet, digital media, interactive entertainment at Baird. And, we’re going to begin with a few slides, I believe, and then we’ll turn to q and a. And for those of you in the room, if you see the email address in front of you, feel free to drop an email for a question, which I’ll receive up here and ask anonymously on your behalf if you’d like. Otherwise, I have a list of questions that that I can ask the team as well. So, Tee, why don’t I kick it off to you and we can go through some slides you have.

Tee La, CEO, Coursera: Thank you, Colin. And I just wanna thank everyone for being here today, listening to us. And thank you Colin and the Baird’s team for allowing us this opportunity to present. Just to get started, a little bit about me. My name is Teela and I am going to be the CEO of Coursera starting from July first of this year.

I’ve been with the company now for twelve years and really working on scaling up the business, delivering a solid business operation, and also a diversified road map. With Andy Paul, who is our retiring CEO, we were working on a lot of MMA opportunity and also looking at, you know, integration where I’m deeply involved with. I have a technical background, so my passion is really into making fantastic product that resonate with our consumers. In terms of our company, we’ve been around for thirty plus year now, and we have a very rich product portfolio that continue to evolve. As you know, the consumers are evolving and the tech are evolving.

And the fact that we are around for this long is because we are very nimble in terms of adapting to the market. We now have a rich product portfolio including gaming, streaming solution, as well as DIY components and performance PC. And with the most recent additions of SimRacing with the acquisition of Fanatec. How we differentiated ourselves is we consider us as a house of enthusiast brands. As you can see here, with six performance brands, We have a pretty extensive ecosystem that backed by hardware, software, and service solution that just work seamlessly together.

And our strength is really in terms of the brand. Right? We are trusted by the enthusiast community for delivering fantastic performance and quality. And we have a deep community ties that has been with us for a long time and we engage with them actively through, you know, just making great products and the influencer network that we have now, you know, up to probably you know six to 8,000 active people talking about our products globally. We recently added a number of executives to drive our business and each category is basically driven by product experts as well as p and l experts.

So this is a big change for us comparing to a few years back where we were growing very rapidly. Before COVID, the revenue was about $900,000,000 going to $1,900,000,000 in a very short amount of time, and this change create a big stress in terms of organization and resource. But at this point, you know, we’re very happy to report that we’re fully staffed and ready to charge. In terms of the market we’re in, I think you probably are well aware that gaming is a pretty big market. Now we have over three billions gamers, right, and growing each year.

And they are using gaming as a social platform and the younger generation tend to game more. The creator economy now has about 200 millions people actively streaming and monetizing, and Elgato is basically the favorite brand for this community. In terms of DIY market is the, you know, is a stable market. Right? About $3,000,000,000 of TAM for where we play and it’s, you know, steadily growing.

Sim racing is a new category for us. We’re excited because with Fanatec, we can participate in about a billion dollars of market TAM and this is a double digit growth each year. On top of that, you know, the younger generation like personalization and customization and this is a capability that we are building up for. The strategic opportunity for us right now is to basically take advantage of the latest momentum in terms of, you know, the gaming, publishers are releasing a lot more titles starting from this year forward on to 2026 with titles like GTA six. And, this has been, you know, long incoming after COVID.

Right? So we feel like the momentum is here now. And, we also see that there is a shift in Gen Z starting to play more games on desktop versus console. And the reason why is that a lot of publishers are starting to open up gaming or popular titles to desktop now starting from Xbox Game Pass. So recent reports from Capcom, for example, are saying that their desktop gaming revenue is now 60% of their business.

So this is actually really good for us. And the other opportunity for us is really stepping up our direct to consumer business. Right? It’s an important category as we wanted to engage directly more with consumers and driving more margin for the business. Last but not least, global expansion is another big category for us because we underserved in Asia market and we are stepping up the investment in Asia just to kind of balance out the three regions.

And with that said, I wanted to say that with all of the capability that we built up up to this point and with me stepping into the company as the new CEO, We have a strong platform to build on and I’m ready to accelerate our company and give the company a good momentum to grow into the next number of years. Thank you.

Colin Sebastian, Analyst, Baird: Thanks a lot, Tee. That was great. And congratulations on on the role, and this is your first investor conference in this stage. So I really appreciate that opportunity. I I think some of the faces you recognize Yes.

Or the team recognizes. Some are new, but I think, you know, given the transition, it might be useful in the context of what you presented around around the outlook, the growth opportunities. Strategically, does your vision or is the company’s roadmap going to change? Is it going to be different than what maybe we heard in the past from Andy?

Tee La, CEO, Coursera: I think that is a good questions. You know, people ask also, know, why me versus someone else? What is it that I bring into the game that’s different than an external candidate, for example? And my answer is always the same. We have a pretty strong foundation to build on and I am very familiar with how we came to where we are today.

But I also think that we’re ready for a new chapter and my vision is really to be able to accelerate the company and driving growth consistently as well as applying a strong discipline on margin. And where I think we want to focus on is three things. The first thing is expanding our footprint in terms of market share and products and that’s where we’re gonna be stepping up product innovation. And with the executive team that we now staffed out, we will be able to increase the cadence of new products introduction and that will really help accelerate our revenue. And the second thing that we wanted to kind of focus on is the direct to consumer business and the consumer engagement.

As you know, we see the consumer shifting over to more argenic AI, you know, shopping behavior. Meaning, you used to go look for things like, I’m looking for a keyboard or a mouse or whatever technology you’re looking for. Going forward, you’ll be like, I need to do this certain task and I’m looking for a keyboard that looks like this and can do these things. And a lot of it is gonna be done through maybe ChatGPT or something like that. And our e commerce platform definitely needs to be evolving in order to support that trend and a lot of our investment will be moving into that direction.

It also gives us an opportunity to engage with the consumer at a different level. And third is is gonna really improve our margin stack by working and converting consumer directly versus going through our traditional channel. And the third thing is basically scaling up and expanding our categories. For example, we just acquired Fanatec and this product line and this brand is highly desirable by the channel and everyone is super excited to have the opportunity to distribute Phenotype product globally. So the first thing for us to do is channel expansion for new categories.

And the second thing is as mentioned before, stepping up Asia investment so that we can actually leverage a margin sorry, a region that is really, you know, growing quite a bit recently in terms of gaming.

Colin Sebastian, Analyst, Baird: And when you the first point you made on product innovation and accelerating that. I mean, from my standpoint, Corsair has a lot of new product every year. It’s it’s almost hard to keep up with it all. Yeah. How how do what does that mean in terms of acceleration and and how quickly does that happen?

Tee La, CEO, Coursera: Yes. So I think that we have a total of like twenty five, twenty six product lines at this point. And while we are very strong in certain categories like power supply or DRAM or, you know, streaming product line, but not every single one of them is carrying the same cadence as we should versus the market, and the innovation behind them is not consistent across every single product line. So the point right here is with the new level of executives that we brought in, we’re gonna be able to drive that consistency across every single product line. The next thing is the ecosystem integration.

So if you look at right now each brand sort of stands on its own. The important part is for us to develop tech stack that we can actually leverage across the entire product lines and basically create a value for consumers that make everything work seamlessly together. So there will be investment in terms of ecosystem that you will see coming from us starting from simple things like, we take a gaming mouse and then we integrate the Stream Deck, the virtual Stream Deck technology. And what you can do with this product is you can experience a level of use case that never done before. Right?

So gamers and creators, everyone gave us extremely good feedback after Computex in terms of, you know, this is something that solve a lot of their use case that, know, they truly appreciate and we wanted to do more of Right.

Colin Sebastian, Analyst, Baird: Okay. Well, I’m gonna come back to Computex in a second. Yes. Michael, you also talked about margins and so there’s always a balance between investment and margins. And maybe if you could address two two elements of margins.

One is just what we see more recently, for example, on the gross margin side, and then when there’s a an effort to drive more product innovation, but also expand margins, how do you how do you plan for that, and how does that play out over time?

Michael Potter, CFO, Coursera: Yeah. So part of the reason why our total margins are better is because our gamer and creative peripheral segment has grown faster, and that’s higher margin, so it drops more margin into the consolidated number. Structurally, in the background, we’ve worked very hard in our product design to design our products to be more resilient to the normal discounting cycle and to deliver the features that are wanted at the right cost. Yep. So we’re able to actually make, you know, better money today than we were in the past by very carefully designing the products upfront.

So that’s made a pretty big difference for us. Innovation, obviously you have to invest in R and D and somewhat in marketing to get the word out for it, but new products tend to have better margins when they first come out as well. So the more often you refresh your product mix and get new products out in front of the consumers, the better you’re able to support that higher margin. So we’ve done a better job in the last couple of years of doing that, and you can see the results in the record margins we had in our Gamer and Creator peripheral segment. The last thing is, as Tee mentioned, we’re doing more to D2C, and there is a higher margin if you don’t have a channel margin in between you and the customer.

So that’s also helped lift our margins up somewhat.

Tee La, CEO, Coursera: Yeah. I also wanted to add to that is we wanted our gaming and creator segment to be the majority of the contribution for the business because that’s the category that we’re generating about 40 plus gross margin. While the DIY system and memory segment of the business is more like the 20 to 30. So as we continue to expand our investment into gaming and creators, that’s gonna really help the margin.

Colin Sebastian, Analyst, Baird: Well, let’s let’s talk about what’s happening near term then on on that front. Yeah. I mean, clearly, diversification in the business is is a very positive move, but these are also cyclical businesses to a degree, and the demand and the supply for gaming GPUs is is, you know, a big topic right now, and you guys had a really good start to the year, but the business is tied to some extent to to that cycle. So, you know, maybe talk about how you think over the remaining, you know, months of the year that dynamic play out with the GPUs, with supplies, and then what you’re seeing on the demand side.

Tee La, CEO, Coursera: Yes. For this year, we actually feel like it’s the beginning of another very good upgrade cycle for consumers for a number of reasons. So the first one is, of course, with NVIDIA five thousand series launch, it triggers consumer upgrades in terms of, you know, higher wattage power supply, larger capacity memories, and so on and so forth. But what’s also interesting this year is AMD is coming into play with their own GPU lineup of the 9,000 series, and it delivers actually really good gaming performance at a reasonable price. And this particular situation has not happened in a long time.

So we feel like there’s a little bit of a less dependencies on just Nvidia cadence. The third thing is if you look at when everyone is upgrading their system and they’re gonna feel like the need to actually upgrade the rest of the hardware like gaming peripherals as well as gaming streaming devices. The gaming market, as mentioned early on, we see the momentum is picking up because if you look at the game release calendars from now until the rest of the year and way into ’26, there are so much more compelling titles. So on that side, you know, we see that is happening. And between the momentum of the DIY upgrade cycle, AMD coming into play and gaming market momentum is picking up because of game releases.

That’s something that we see is gonna last us for you know, I think it would feel like we’re gonna go back to pre COVID where that cadence is more consistent. Right.

Colin Sebastian, Analyst, Baird: And is there how does that downstream impact on the peripheral side of the business work? When you sell more systems memory at the front end of the cycle and then then over time there’s a margin and mix benefit benefit as as it hits the other side.

Tee La, CEO, Coursera: Yeah. So, you know, when we we saw that naturally when someone upgrade their PC, there is a desire to upgrade the rest of the, you know, connected device, I would say. The younger generation tend to like to personalize, customize, and making everything looks good. If you look at the picture that we show here, right, you know, five years ago, it’s a pretty plain desktop and we actually don’t have many product to participate in that ecosystem. To fast forward to now, you’ll see that a lot of our young consumers wanted to build an entire desktop that is just matching the personality, so they can express themselves.

This is where they spend the most of their time. And back to the early conversation on a lot of console player are moving into desktop. One of the reason is this as well. And, you know, we are at the center of, you know, customization as well as, you know, the desktop experience with all of the connected device. So naturally, you wanted to make sure that everything works well together and match well together.

Colin Sebastian, Analyst, Baird: Yeah. It looks great. I need to get

Tee La, CEO, Coursera: This is a series and it’s actually one of the popular designs and preferred design by our, you know, community.

Colin Sebastian, Analyst, Baird: Well, there are a couple of obligatory topics, Michael. I almost hate to bring up tariffs, but I’m actually curious. I mean, you’ve quantified, I believe, this already, but, you know, as you sort of review that for the audience, given that you’ve already moved production and and I think strategically, you’re pretty well aligned with this, does it actually ultimately become an advantage if your competition has to raise prices? So I guess there are two parts to that question, the tariff impact and then potentially, you know, how that flows through from a competitive standpoint.

Michael Potter, CFO, Coursera: Yes. When we reported Q1, we said about 19% of our US market is served by China based production. And that was just projecting what it was in that quarter. Actually, by the end of the year, it’s going to be easily into the single digits. We had already moved we’re already planning to move a bunch of the other stuff out anyways before the latest tariffs came in.

We manufacture across Southeast Asia as well, so we would be impacted depending on which country it happens to be. So most of our planning is actually what are the different scenarios we have to use depending on where the tariffs ultimately end up in. And of course, as everybody knows, there was super high tariffs announced in the beginning and then suddenly scaled down, and then an exemption for semiconductor and electronics, applies to most of the products we make. So the actual tariffs we’ve been paying is much smaller than the initial shock numbers that were announced. So it’s not impacting us so directly right now.

There’s a few products that were subject to the 10% reciprocal tariff, but that’s a little bit easier to deal with than the higher amount. So we’re dealing with it. So I think we’re in quite good position. We don’t actually make a lot of things ourselves, and even our own factories are very capex light. So if we had to move location, we’re not abandoning a factory with with made a big capital investment.

And I believe looking at the numbers that our competition has put out, we’re actually better positioned than they are in locations and the way we do it that have much lower tariffs. So that should help us. And, you know, pricing wise, you know, is based on features and demand, and you hope you get your costs right. So as long as our features are really great and the demand is good, I think we’ll be okay on the pricing front as well, particularly since we so far have sidestepped most of the impact of tariffs.

Colin Sebastian, Analyst, Baird: The the channel is interesting as well. The other Andy, Andy Jassy, talks about Amazon not absorbing those costs, and suppliers will will have to do that. Is that is that something that you perceive as accurate that that retailers will be able to avoid those to some degree?

Tee La, CEO, Coursera: I think with our business so far, the relationship with our channel partners is a constructive one. We discussed what is the right things to do for the consumer and we share this responsibility in terms of pricing promotion. What’s important is really trying to balance between sales velocity as well as the pricing strategy. And so far we’ve been pretty supported by our channel partners in terms of where we need to go. And as Michael mentioned that the impact for us is not significant, so the conversation tends to be a lot easier.

Colin Sebastian, Analyst, Baird: Yeah. No doubt. So turning to something a little a little more fun. Yes. Let’s talk about Computex because I know you were there.

Right?

Tee La, CEO, Coursera: Yes. I was.

Colin Sebastian, Analyst, Baird: And I don’t did you see Jensen there? Or is he around?

Tee La, CEO, Coursera: Or I see him from afar. And he’s a very popular man nowadays, you know, with lots of followers.

Colin Sebastian, Analyst, Baird: But could you maybe talk about what what you saw there from the Corsair product suite that that you’re most excited about and what we should be looking at and thinking about for the the product rollout?

Tee La, CEO, Coursera: Absolutely. So this is actually one of the most exciting Computex for us in a long time. And one of the reason is that is the most part of releases that we’ve ever done in our history. So we have a full suite of DIY gaming products that got so many recognition in terms of innovative innovations and best of show awards. And on the gaming side, actually, what is even more exciting is when we launched the Scimitar gaming mouse and the Xenion companion display combining with the Elgato Virtual Stream Deck.

And as I mentioned before, this solution is also well recognized and appreciated by the community and there were already a ton of YouTube videos talking about how amazing the use cases for the streamers and gamers. And then the last one is we sat down with our channel partners and share our fan of tech, you know, distribution plan for the second half in terms of expansion. And everyone was giving us basically standing ovation for making the brand and the product available because they know the brand is well loved and the second thing is the market is you know, growing very quickly.

Colin Sebastian, Analyst, Baird: Alright. Well, good stuff. Look forward to seeing more of that. I’d like to ask either one of you, I guess, around capital allocation. I mean, you’ve made some interesting acquisitions.

You know, you have the balance sheet obviously. What what are the priorities with capital allocation now and and how you see that kind of playing out? And are there obvious pieces that you in the portfolio that you feel like need to be filled?

Tee La, CEO, Coursera: Yes. So for us right now, we just finished, you know, a couple of acquisition that we’re gonna basically leverage that and drive forward. But in terms of m and a opportunity for us is really looking at different vertical, for example. Elgato as a product roadmap just released the studio stream deck and this solution is well loved by the the major studios around the world. For example, conversation with people like Amazon Studio, Netflix and things like that to use our solution.

But we are more a consumer company and we don’t have a dedicated sales force for broadcasting industry, for example. So it it’s not, you know, unreasonable for us to consider something that makes sense there. And the second thing is, you know, as we continue to scale up our gaming and creative segment, anything that we can bolt on that benefits EBITDA as well as revenue with good synergy, you know, we wouldn’t say no to. Right? So hopefully that answer your questions.

Colin Sebastian, Analyst, Baird: Yeah. So turn to the audience. Any questions before I ask another obligatory question? But feel free to shout it out, and I’ll repeat it for the audience. Okay.

Second obligatory question, AI, big theme obviously at the conference. So curious for a company like Coursera Yes. Internally, how you’re using AI, generative AI

Tee La, CEO, Coursera: Yes.

Colin Sebastian, Analyst, Baird: Tools, assistance agents, if if that we if we can say that already at Corsair. And then secondly, externally. Yeah. You know, how whether it’s custom product customization or other other relationships with with your community. Yeah.

What are the applications?

Tee La, CEO, Coursera: So for us AI internally, we already migrate our tech support solution over to AI. So that really generate, you know, a big boost in CSAT score. We also moving a lot of marketing capability over to AI such as translation, content creation, and storyboarding at the, you know, start level and then with people curating the content. In terms of engineering, we roll out AI capability for software development as well as that validation, which allow us to cover a lot more point of cases and boost quality. From an external perspective, as mentioned early on, we built AI into products such as a stream deck, such as the, you know, the teleprompter display and our audio solution where it can just automatically detect your environment and tune the audio profile accordingly.

And we will continue to integrate more AI stack into our products going forward. From an ecommerce standpoint, of course, mentioned early on, it’s something that we need to consider in terms of building out the next generation ecommerce platform.

Colin Sebastian, Analyst, Baird: Michael, does this help margins when you are cutting costs with customer support and other internal operations?

Michael Potter, CFO, Coursera: I mean, it helps EBITDA margin, obviously, because most of that’s not built into our cost of goods sold. So, yeah, it does help ultimately. But what it really does is it drives further engagement with the company. When the customers are happy, I mean, if they have a problem and they need to contact customer support or a question, the better we serve them, the more likely they are to stay with us as a customer and and keep that engagement going. Yeah.

So it’s very valuable not just to look purely at the cost savings you might get, which are some, but also how it really improves the customer experience. Like Keith talked about earlier, if the buying experience is better and they can build what they wanna buy, it makes them more likely to stick with us as well. So that’s important.

Tee La, CEO, Coursera: Yeah. And I also wanted to add that from a scalability standpoint, for us to go from 1 and a half to 2 to 3 billions, if we wanted to generate a lot more margin, we shouldn’t be hiring people endlessly. Right? So for example, for tech support, we were able to scale with not hiring anybody at all. So that’s really our strategy is to keep OpEx fairly flat while growing revenue.

Colin Sebastian, Analyst, Baird: Tee, you mentioned the video game market a couple of times and GTA specifically. What did the push out of GTA mean for you guys, if anything?

Tee La, CEO, Coursera: Not a whole lot because we didn’t build it into our number to begin, which is because of the cadence of their announcement. But we’re excited because we think it’s gonna make a difference for us especially things like Elgato product line. If you search like, how do you play GTA six on PC, the Elgato, you know, capture cards came up as the recommendation. Right? So this is back to, you know, how people search for stuff nowadays through it, AgenTik AI and we’re glad that we have an engine to actually feed into that.

Colin Sebastian, Analyst, Baird: Excellent. Well, thank you both very much for being here. Appreciate the time. And for anyone who’d like to follow-up with the company or with me around Coursera, very happy to make that connection as well. Yeah.

Thank you.

Tee La, CEO, Coursera: Thank you everyone for listening. Thank you.

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