Razer turns profitable in 2020, posts $1.2b in revenue

Singapore-born gaming titan Razer said it hit a record high of US$1.2 billion in revenue in FYE 2020 (financial year ending December 2020), representing a 48% year-on-year growth that was driven by high hardware demands. This growth helped the company turn profitable last year, posting a GAAP (generally accepted accounting principles) net profit of US$800,000, compared to a loss of US$83.5 million the year prior.

In Razer’s earnings call, its chief strategy officer and Razer Fintech CEO Li Meng Lee said that the company achieved a compound annual growth rate (CAGR) of 32.9% last year since its 2017 public listing.

Razer CEO Min-Liang Tan / Photo credit: Razer

Cashflow from operating activities turned positive to stand at US$152.9 million, driven by strong operating profits, efficient working capital management, and cash discipline, the company said in a statement. It was also able to end the year with a cash balance of over US$600 million, with no debt.

According to the company’s latest earnings release, Razer’s hardware segment accounted for over US$1 billion of its total revenues.

Razer attributed this to the strong growth of its peripheral businesses, which include the mouse, keyboard, and headset categories. It also saw further expansion across areas such as mobile and cloud gaming, console gaming, livestreaming products, and gaming chairs.

Razer’s services segment, which houses its Razer Gold and Razer Fintech businesses, has also seen increased revenues in 2020, growing 66.8% year on year to reach US$128.4 million. Gross margins for the segment stood at 43.8% and accounted for 20.8% of Razer’s gross profit.

For its software segment, Razer said that total user accounts increased by 53.8% year on year to approximately 123 million, with monthly active users surging by over 68.2%. This surge includes users of its game launcher Razer Cortex, internet of things platform Razer Synapse, and system lighting hub Razer Chroma.

Moving forward, Razer said it will continue monitoring the market situation, given the ongoing Covid-19 pandemic, and its initiatives to drive continued profitability, which include new hardware introductions, improvement of its hardware margins, investments, and merger and acquisition activities, among others.

“We intend to carry on the momentum and the strength of our operations into 2021 as we continue to seek to deliver both outsized revenue growth and continued profitability in 2021 and beyond,” said Razer co-founder and CEO Min-Liang Tan.