HEAR - Turtle Beach soars 22% on Q3 beat despite narrowed FY22 outlook

Turtle Beach ( NASDAQ: HEAR ) stock rose ~22% on Friday after Q3 results beat estimates.

Non-GAAP EPS was -$0.47, compared to $0.26 in Q3 2021. Net revenue fell -39% Y/Y to $51.30M.

The video game headset maker said the revenue decline reflected lower demand as consumers cut back discretionary spend and continued reduction in retailer inventories above and beyond the sell-through decline.

At Sept. 30, the company had $10.5M of cash and $44.6M outstanding on its revolver, compared to $28.1M in cash and no outstanding debt at Sept. 30, 2021.

Outlook :

Chairman and CEO Juergen Stark said the company expects factors, such as consumer spending caution, channel inventory compression, abnormally high competitive discounting, and exorbitant freight rates, that impacted its business in 2022 to subside in 2023.

"That, combined with strong new product launches and our proactive reductions in spend, should enable us to return to revenue growth and positive EBITDA in 2023 even if consumer demand remains subdued," added Juergen Stark.

Turtle expects net revenues for fiscal year 2022 of ~$250M ( consensus $253.07M) The company's prior revenue forecast during Q2 results was in the range of $250M to $275M.

Turtle expects adjusted EPS loss of ~$1.35 (consensus -$1.31).

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