SG’s Razer nets profit in 2020 for first time, revenue crosses $1b mark

Photo: Razer

Hong Kong-listed gaming company Razer turned profitable in 2020 for the first time since it went public in November 2017 with a GAAP net profit of $0.8 million as its revenue surged.

In 2019, it made a GAAP net loss of $83.5 million. The Singapore-based company said on Thursday that its revenue grew by 48% to $1.2 billion in 2020 from $820.8 million in 2019 due to increased traction in its hardware and software & services businesses.

Its hardware business, which accounted for 89% of the company’s revenue and deals with peripheral items such as mice, keyboards and audio devices, among others, saw a growth of 51.8% to stand at $1.08 billion.

Its software and services segment, which comprised 10.5% of its total revenue, grew 66.8% to $128.4 million. Its total software users grew 54% year-on-year to 123 million users.

Meanwhile, its revenue from other segments fell to $2.5 million in 2020 as the company stopped selling Razer Phones from the beginning of last year.

Its total adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) stood at $44.6 million, compared with a loss of $29.4 million from a year before period.

The group claims to have generated positive cashflow of $621.8 million in 2020, with cash and cash equivalents standing at $508.7 million with no debt.

“Cash flow from operating activities turned positive to $152.9 million. For the year ahead, Razer will launch more hardware products, aim to grow its software user base, and invest in potential acquisitions, the company’s chief strategy officer Li-Meng Lee said.

“We’re looking at potentially making acquisitions that could extend our reach in either the (Southeast Asia) region, or into new emerging or high-growth emerging markets like Latin America, Middle East, Africa,” he added.

Going forward, the company plans to augment its investments in the R&D space besides ramping up share buybacks.

Established in 2015, Razer is a lifestyle brand for gamers and also offers payment services for gamers, youth, millennials. The company forayed into the fintech space in 2018 and now operates a digital payment network.

Last year, it made headlines for bidding for a digital bank license in Singapore but it eventually lost out to a Grab-Singtel consortium and Sea.

The company had indicated its plans to roll out Razer Youth Bank in markets where it already had a strong user base, such as in Malaysia and the Philippines. However, on Wednesday’s earnings call, Lee gave no further updates.

 

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.

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.