Gaming headset and audio accessory brand Turtle Beach broke records in the second quarter of fiscal 2018, it announced on Monday. Net revenue, net income, and earnings before interest, taxes, depreciation, and amortization (EBITDA) were the highest levels for any second quarter since the company went public in 2014.
Turtle Beach’s net revenue increased 218% to $60.8 million from $19.1 million during the same period last year. This was due to continued strong market demand for console gaming headsets and Turtle Beach’s increase in market share over the last year, the company said. Net income was up significantly to $6.3 million, or $0.40 per share, compared to a net loss of ($7.1) million, or $(0.57) per share, in Q2 2017. Meanwhile, adjusted EBITDA increased $12.6 million to $9.8 million from a loss of $(2.8) million.
Turtle Beach told Variety in May the success of battle royale games “Fortnite” and “PlayerUnknown’s Battlegrounds” is having a halo effect on headphone sales. At one point, the company was selling so many headsets it had to spend more than $4 million on air-freighting new stock into the country.
“The strong start to 2018 has only gained momentum in the second quarter, with another period of record results, enabling us to recently pay down $5 million of our subordinated debt from cash flow,” said Turtle Beach CEO Juergen Stark. “Our growth continues to be driven by a healthy console gaming headset market and our market share gains. The successes of ‘Fortnite’ and ‘PlayerUnknown’s Battlegrounds,’ and their innovative battle royale format, has driven new gamers into the market at significantly higher headset attach rates than we have experienced in the past. In addition, our better-than-expected execution in keeping up with consumer demand for our products allowed us to exceed our expectations.”
Turtle Beach is now significantly raising its 2018 financial outlook due to its record-breaking first half, Stark said. It expects net revenue to increase 81% to approximately $65 million in the third quarter compared to $36 million in Q3 2017. Net income is expected to rise to $0.44 per share compared to a net loss of $(0.04) per share during the same period last year, while adjusted EBITDA is expected to more than triple to approximately $11 million.
For the full fiscal 2018 year, which ends in March, Turtle Beach now expects net revenue to increase 71% to approximately $255 million, up from $205 million in its May outlook. Net income is now expected to rise to $1.95 per share and adjusted EBITDA in 2018 is now expected to be $45 million, up from $26 million in its May outlook.