Turtle Beach: a little sandy
TBCH
By Esteban Tesson
In 2024, the American gaming headset specialist made a major acquisition and diversified its offering. Despite improved results, market expectations have not been fully met.
Turtle Beach made a major strategic shift in 2024. The company fully assimilated the activities of Roccat, a German brand specializing in gaming keyboards, while launching its Turtle Beach VelocityOne subsidiary, dedicated to accessories for flight and racing simulators. But it was above all the acquisition of PDP, a renowned manufacturer of premium controllers, that represented a key turning point.
Mitigated results
Although the brand posted record figures, it struggled to fully convince investors. Sales came in at $372m, below the $380m expected by Wedbush analysts. Profits, too, came in at $16.2m, compared with the $20-21m forecast.
However, EBITDA exceeded expectations, coming in at $35.7m, above the forecast of $32.1m. This result is largely attributable to the successful integration of PDP, which should enable Turtle Beach to reach $400m in revenues by 2025, according to Michael Pachter's analysis. The company expects its margins to rise, with EBITDA estimated at between $68m and $72m, i.e. up by between 21% and 28%.
Outlook to watch
Michael Pachter is optimistic about Turtle Beach's future, betting on the ripple effect caused by the release of Nintendo Switch 2 and GTA 6. A new console generally stimulates the purchase of accessories, while a blockbuster like GTA 6 could push players to invest in new headsets and controllers.
However, this forecast is based on the assumption that Rockstar's game will be released without delay, which is far from guaranteed. In addition, Turtle Beach has to contend with trade tensions and rising tariffs, while part of its production has been relocated to China to optimize costs. While the company maintains its growth ambitions, macroeconomic instability could nevertheless complicate its long-term projections.
Esteban Tesson