Hong Kong-listed gaming lifestyle brand Razer reported a record high revenue of US$1.2 billion ($1.61 billion) for FY2020 ended December, representing 48% growth y-o-y.
Revenue growth was driven primarily by its hardware segment, which grew 51.8% y-o-y to US$1.08 billion. The group maintained its market-leading position for gaming peripherals such as mice, keyboards, and headsets in the US, Europe, Asia-Pacific, and China.
Razer’s gross profit margin for FY2020 increased to 22.3% from 20.5% previously, driven by improving margins in the hardware segment and increased contribution of the higher-margin services segment which comprises Razer Gold and Razer Fintech. The services segment saw revenue growth of 66.8% y-o-y to US$128.4 million for FY2020, with gross profit margins of 43.8%.
In addition, for its software segment, Razer saw total user accounts increase by 53.8% y-o-y to approximately 123 million with monthly active users surging by over 68.2%, driven by strong growth across all software offerings in light of increased gaming, esports and live streaming activities.
The strong revenue growth and improved margins enabled Razer to turn profitable for FY2020 with a net profit of US$0.8 million (based on generally accepted accounting principles, or GAAP), which it says is "ahead of all expectations", compared to a loss of US$83.5 million in FY2019.
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Cash flow from operating activities turned positive to US$152.9 million from a negative cash flow of US$38.5 million the year before, which Razer attributes to operating profits, efficient working capital management and cash discipline.
As at Dec 31, 2020, cash balance stood at over US$600 million with no debt.
Min-Liang Tan, co-founder and CEO of Razer, says that 2020 marked an inflection point for the group.
“Despite the global market uncertainty caused by the Covid-19 pandemic, Razer crossed the US$1 billion revenue milestone and turned profitable on a GAAP basis, ahead of all expectations,” he says.
Tan also highlighted Razer’s Environmental, Social and Corporate Governance (ESG) initiative.
“We are not just fully compliant with the ESG standards set out by the Hong Kong Stock Exchange but have gone above and beyond to outline how we, as one of the largest youth and millennial brands in the world, intend to contribute towards a more sustainable future in our #GoGreenWithRazer manifesto,” he says.
