HONG KONG SAR - Media OutReach - 25 August 2021 - Razer™ ("Razer"
or the "Company", together with its subsidiaries, the
"Group", Hong Kong Stock Code: 1337), the leading global lifestyle brand for
gamers, announces unaudited financial results for the six months ended 30 June
2021 ("1H 2021").
"Razer had a phenomenal first half of
the year. In addition to the ongoing
growth in the broader industry that benefitted our core business segments,
Razer's stellar results were driven by our strong brand position and intensely
loyal user base, our proven capabilities in rolling out innovative,
category-defining products and services, and effective operational execution," said Min-Liang Tan,
Co-Founder and CEO of Razer.
"Looking ahead, the robust momentum in our business, strong
fundamentals and the exciting opportunities we see in the market, give us the confidence
that it is the right timing to further scale our business. We intend to
reinvest part of our full year profits into high potential areas such as Razer
Gold and Razer Fintech, as well as step up investments in new growth
opportunities in the Razer ecosystem. We believe these strategic investments will allow us
to build a greater platform for Razer to achieve
long-term growth ambitions and deliver outstanding value to shareholders."
Key highlights for 1H 2021 earnings
- Record-high Revenue of US$752.0 million with 68.0% year-on-year
driven by robust demand, market share leadership for the Hardware business, and
ongoing growth in the Services segment.
- Gross Profit Margin improved to 27.1%, as compared
with 22.0% for the same period in 2020, primarily due to improving margins in
the Hardware segment.
- Adjusted EBITDA* (a non-GAAP measure) of US$59.5 million, soaring by
1,759.4% year-on-year growth from US$3.2 million for the same period in 2020.
- Net Profit of US$31.3 million, as compared with a Net Loss of
US$17.7 million for the same period in 2020, driven by exceptional revenue
growth, continued gross margin expansion, and productivity improvement.
- Revenue grew 77.0% year-on-year to US$677.3 million.
- Peripherals business has maintained its market leading position for
gaming peripherals across the U.S., Europe, and Asia-Pacific
- Systems business has maintained its market leading position in the
premium gaming laptop segment in the U.S. while growing market share in new
markets outside of the U.S. .
- New gaming growth categories have continued to
gain market share such as broadcast and gaming chairs.
- Total user accounts increased 50.0% year-on-year to approximately 150.0
million with monthly active users surging by over 51.4%.
- The increase was attributable to strong growth across all Software
offerings, boosted by increases in gaming, esports, and livestreaming
- Razer continued its efforts to further enrich user experience and drive
stickiness to the Razer ecosystem:
o During 1H 2021, Razer
Cortex PC Squad Rewards Seasons 6 and 7 continued to drive high engagement with
over 200,000 gamers joining the competition each season. Players logged in a
total of over 3.5 million hours of PC game time each season.
o Razer ChromaTM
RGB continued to reinforce its partner-of-choice position, working with leading
hardware partners through its connected devices programme. As of June 30, 2021, over 180 games and
applications are natively integrated with Razer ChromaTM
RGB Software Development Kit (SDK).
- Services business, comprising of Razer Gold and Razer Fintech, grew 13.8%
year-on-year to US$72.8 million for 1H 2021.
- Gross margin was 41.9% and contributed 15.0% of the Group's gross profit
in 1H 2021.
- Recorded a 13.8% year-on-year
increase in total payment volume ("TPV"), driven primarily by the increase in
the number of transactions conducted through the Razer Gold platform.
- As of June 30,
2021, Razer Gold recorded approximately 30 million registered users, representing
25.3% growth year-on-year.
- Further expanded its footprint and added more channel touchpoints in
places such as Southeast Asia and Latin America covering users from more than
130 countries and more than 5.6 million channel touchpoints.
- Reinforced its position to be a partner of choice for content partners
with over 42,000 digital entertainment titles supported and added popular new
- Put in place longer-term initiatives that will well-position Razer Gold
for the next level of growth, such as:
o Further increasing Razer
Gold's penetration in high growth regions such as Latin America, with its
gaming market expected to reach US$3.6 billion in 2023.
o Bolstering localization strategy in both content
and channel to cater to the specific tastes and needs of the regions Razer
- Recorded 63.7% CAGR in TPV over the last 3 years.
- Over 95% of the TPV was driven by Razer Merchant
Services ("RMS"), the Group's B2B payment processing business which powers over merchants 60,000 merchants across Southeast Asia.
- RMS has made significant progress in the first half of 2021 in the
o TPV: Recorded 79.5% year-on-year growth to US$3.2 billion in 1H 2021, driven mainly by e-commerce marketplace purchases, food deliveries and e-wallet top-ups.
o Merchant adoption: Recorded 88.6% year-on-year growth to over 60,000 merchants, coming from the retail, food and beverage industries, and professional/commercial services.
o Key licences and network expansion: Strengthened core infrastructure, expanded business footprint, and secured additional licenses across the Southeast Asia region.
- Formalized its
commitment to the environment with a 10-year roadmap as part of its
#GoGreenWithRazer initiative, supported by four main initiatives– green organization, green products, green
community and green investments.
short-, mid- and long-term plans to bring Razer closer towards building a
o By the end of 2021:
Green Organization: Say no to single-use plastics
Green Products: Greener packaging
o By the end of 2025:
Green Organization: 100% powered by renewable energy
Green Products: 100% products are recyclable with Razer
o By the end of 2030:
Green Organization: 100% carbon neutral
Green Products: Made of 100% recycled and recyclable materials
- As part of the Group's drive to galvanize its community to contribute and
support the global green movement, the Group partnered with Conservation
International in October 2020 and introduced Sneki Snek campaign, led by
Razer's fan-favourite sustainability mascot. As of August 25 2021, the Group
has saved over 500,000 trees.
INVEST FOR GROWTH
- Razer's gamer-centric ecosystem has expanded rapidly
over the last few years, and the Group expects the growth to continue as
exciting new market opportunities emerge.
- Gaming, esports, and fintech are all on a
significant growth trajectory as they become more entrenched in people's lives.
- Key investments area include:
o Hardware: additional investments will be allocated for research and development of both existing gaming Peripherals and new Hardware categories.
o Software: to develop new services to increase user acquisition, engagement, and retention, explore new monetization initiatives and deepen big data analytics capabilities to drive user acquisition and nurture user activity.
Razer Gold: expand into new regions internationally and deepen penetration in high growth regions such as Latin America, Middle East and Southeast Asia, as well as enhance core infrastructure and recruit talent to improve user experience, acquire new users and drive usage/ spending per user.
Razer Fintech: additional investments will be allocated for continued geographical expansion across SEA, scale TPV aggressively with expanded merchant base, enhance service capabilities for existing customers and M&A/ investments.
Razer is closely
monitoring the market environment in light of the continued COVID-19 situation,
and intends to carry on the momentum
and strength of its operations and are on track to deliver strong revenue
growth and operational enhancements, while amping up the investments for growth
for full year 2021.
Its outlook for the full
year will be:
- Strong Revenue
o New Hardware product introductions
o Growth of Software user base
o Continue scaling Services business
- Continued Operational
o Track record of cost discipline
o Improvement of Hardware margins
o Expansion of higher-margin Hardware and Services as part of the revenue mix
- Amp Up Investment
o Reinvesting profits in high potential areas such as Razer Gold and Razer Fintech
o Such investments will involve additional spending in operating expenses as we scale our Services business
o Step-up investments in new growth opportunities in the Razer ecosystem
For more details, please refer to the 1H 2021 results announcement for
the results of the Group which are published in accordance with the Rules
Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.
Details of Razer's ESG initiatives can be found on the website: http://www.razer.com/go-green.
* The Group defines adjusted EBITDA as profit/(loss)
from operations added back with depreciation and amortisation, share-based
compensation expense, restructuring expense, and merger and acquisitions
  Internal
sources and market research