Razer swings to $31m profit in first half of 2021

Razer, the Singapore-born gaming titan, said its revenue came in at an all-time high in the first half of the year. The result was driven by the continued growth of its hardware and fintech offerings.

The company said it saw a 68% growth in total revenue, which stood at US$752 million in the first half of fiscal 2021 (H1 2021), compared with US$447.5 million a year ago.

The record revenue figure propped up the firm’s bottom line in the reported period as it swung to a profit of US$31.3 million from a loss of US$17 million in the first half last year. The result comes after Razer turned profitable in 2020.

Razer co-founder and CEO Min-Liang Tan / Photo credit: Razer

Razer’s gross profit margin – The difference between sales and the cost of the goods as a percentage of net sales – improved to 27.1%, compared with 22.0% in the first half of 2020. This was mainly due to an upswing in margins in its hardware segment.

The company said that it’s hardware segment brought in US$677.3 million in revenue. The segment’s figures comprise income from peripheral offerings such as mice and keyboards as well as laptops and gaming chairs. The segment clocked a 77% growth in revenue year-on-year, having logged US$382.7 million in H1 2020.

The gaming and lifestyle firm’s services segment, which umbrellas Razer Gold and Razer Fintech, also grew during the first half, registering a 13.8% jump to US$72.8 million. This was partly due to an increase in transactions conducted through Razer Gold, the company’s gaming credits offering. As of the end of June this year, Razer Gold had about 30 million registered users, representing a 25.3% growth year-on-year.

Meanwhile, the company said its digital payment network Razer Fintech has recorded a 63.7% CAGR (compound annual growth rate) in total payment volume over the last three years, 95% of which was driven by its business-to-business payment processing arm Razer Merchant Services.

In the first half of 2021, merchant services total payment volume rose 79.5% to US$3.2 billion, fueled primarily by ecommerce marketplace purchases, food deliveries, and e-wallet top-ups.

Razer plans to further expand across its core segments as it looks to invest in hardware research and development, new software services, fresh markets for Razer Gold, and wider Southeast Asian expansion for Razer Fintech. With these plans, the company expects to report “strong revenue growth and operational enhancements” in its full-year results.

“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,” said Min-Liang Tan, co-founder and CEO of Razer.

During the reported period, Razer also formalized its 10-year environmental, social, and governance roadmap, which includes the formation of the Razer Green Fund, a US$50 million fund for investments in environmental and sustainability startups.