Turtle Beach Reports 25.8% Revenue Decline in Q2 2025, Operating Loss Improves

Turtle Beach Corporation reported a decline in financial performance for the second quarter of 2025, with net revenue of $56.8 million, down 25.8% from $76.5 million in the same period last year. For the first half of 2025, total revenue reached $120.7 million, a decrease of 8.8% compared to $132.3 million in the first half of 2024. The company's gross profit for the second quarter was $18.3 million, resulting in a gross margin of 32.2%, an increase from 30.2% in the prior year, attributed to a reduction in costs related to inventory adjustments and tariffs.

Operating expenses for the second quarter decreased significantly to $18.6 million from $27.2 million a year earlier, primarily due to a $6 million insurance recovery related to inventory losses. The company reported an operating loss of $329,000 for the quarter, an improvement from a loss of $4.1 million in the same period last year. The net loss for the quarter was $2.9 million, compared to a net loss of $7.5 million in the second quarter of 2024. The loss per share for the quarter was $(0.14), an improvement from $(0.35) in the previous year.

In terms of strategic developments, Turtle Beach completed the acquisition of Performance Designed Products LLC (PDP) in March 2024, which has since contributed to the company's product offerings. PDP's revenue was integrated into Turtle Beach's financials, with $21.8 million and $27.7 million reported for the three and six months ended June 30, 2024, respectively. The acquisition has allowed Turtle Beach to expand its product line beyond headsets to include gaming controllers and other accessories.

Operationally, Turtle Beach has seen fluctuations in customer demand, particularly in the gaming accessories market, which has been impacted by broader economic conditions and changing consumer preferences. The company reported a decrease in accounts receivable from $93.1 million at the end of 2024 to $36.4 million as of June 30, 2025, indicating a reduction in sales volume. Additionally, inventory levels increased to $76.8 million from $71.3 million, reflecting adjustments in response to market conditions.

Looking ahead, Turtle Beach anticipates continued challenges in the gaming accessories market due to fluctuating demand and economic pressures. The company remains focused on leveraging its expanded product portfolio and improving operational efficiencies to enhance profitability. Management believes that current cash reserves, along with available credit facilities, will be sufficient to support ongoing operations and strategic initiatives in the near term.