Gaming titan Razer expects a swing to profit in “banner year” 2020

Hong Kong-listed gaming titan Razer boosted its profit guidance on Monday, saying it now expects to post an adjusted profit before tax for 2020.

That would be a swing from a year ago when the company posted adjusted loss before income tax of $40.3 million, the gaming hardware and software maker said in a filing to the Hong Kong stock exchange.

Adjusted profit before tax is a non-GAAP (generally accepted accounting principles) measure. Razer, dual-headquartered in the US and Singapore, said it’s been using the measurement since the 2019 financial year.

Min-Liang Tan, co-founder and CEO of Razer, said the company was set for a “banner year”. “We have seen continued growth momentum in our ecosystem of hardware, software, and services as a result of dominant brand position, strong consumer demand, and user base expansion,” Tan said in the statement.

“We have seen a very positive reception for our new products and services and our peripherals business has seen significant growth due to market share gains,” he added.

Like its peers, Razer is likely a beneficiary of the lifestyle and work changes spurred by the global COVID-19 pandemic. Globally, lockdowns to stem the pandemic have created an increased demand for home entertainment, including gaming, e-commerce, and digital payments, especially in places with low banking penetration.

Unlike many industries, gaming can be considered counter-cyclical, as unemployment may boost the time spent playing games.

In its results for the first half of 2020, Razer reported that its total user accounts in the software business increased 42.8 per cent on-year to around 100 million, while monthly active users climbed more than 45 per cent by end-June.

The expectation of a full-year adjusted profit, which came after evaluating the preliminary results for the September quarter, was on projected revenue growth of at least 30 per cent for the year, Razer said. The company doesn’t release quarterly earnings.

The company said its gaming peripherals business kept a market-leading position, while taking market share from competitors. It also maintained a No.1 positioning in the US premium gaming laptop segment. Gross profit margins for the hardware segment also improved, it said.

In addition, the total payment volume for its Razer Gold and Razer Fintech segments posted strong growth in the quarter ended 30 September, Razer said.

Razer had reported first half total payment volume for Razer Fintech — including Razer Merchant Services, which is the B2B fintech arm, and Razer Pay, which is the B2C fintech segment — of $1.8 billion, up 114.3 per cent on-year.

For the first half of 2020, Razer’s reported revenue climbed 25.3 per cent on-year to $447.5 million, beating expectations.

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.