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.