Turtle Beach (HEAR) Q2 2025 earnings summary

Executive summary

• Q2 2025 net revenue was $56.8 million, with gross margin rising to 32.2% from 30.2% year-over-year, supported by cost optimization and insurance recoveries.

• Net loss for Q2 2025 was $2.9 million, improved from $7.5 million in Q2 2024, with Adjusted EBITDA at negative $3.0 million.

• Achieved all Q2 objectives, including advancing capital allocation, completing refinancing, and executing $5 million in share repurchases under a $75 million authorization.

• Gained market share in gaming headsets and peripherals, with several top-selling products and strong Nintendo-related sales.

• Positioned for growth in 2026, supported by new gaming hardware launches and anticipated high gamer engagement.

Financial highlights

• Q2 2025 revenue was $56.8 million, down from $76.5 million year-over-year, but in line with guidance.

• Gross margin improved to 32.2% from 30.2% year-over-year, aided by cost initiatives and insurance recovery.

• Net loss for Q2 2025 was $2.9 million ($0.14/share), compared to net income of $7.5 million in Q2 2024.

• Adjusted EBITDA for Q2 2025 was negative $3.0 million, down from $3.0 million in the prior year.

• Realized a $6 million insurance recovery related to prior inventory loss.

Outlook and guidance

• Full-year 2025 revenue guidance reiterated at $340–$360 million and Adjusted EBITDA at $47–$53 million.

• Expect two-thirds of annual revenue in the second half of 2025, with Q3 contributing about 23%.

• Gross margins for Q3 expected to return to mid to high 30s.

• Guidance assumes gaming accessories market declines in 2025, with growth resuming in 2026, driven by new hardware and major game releases.

• Management expects current cash, credit facility, and operating cash flows to be sufficient for short- and long-term needs.