Razer Delivers Record High Revenue And Net Profit Of US$31 Million For The First Half Of 2021

HARDWARE:

• Revenue grew 77.0% year-on-year to US$677.3 million.
• Peripherals business has maintained its market leading position for
  gaming peripherals across the U.S., Europe, and Asia-Pacific[1]
• Systems business has maintained its market leading position in the
  premium gaming laptop segment in the U.S. while growing market share in new
  markets outside of the U.S.[2] .
• New gaming growth categories have continued to
  gain market share such as broadcast and gaming chairs.

SOFTWARE:

• Total user accounts increased 50.0% year-on-year to approximately 150.0
  million with monthly active users surging by over 51.4%.
• The increase was attributable to strong growth across all Software
  offerings, boosted by increases in gaming, esports, and livestreaming
  activities.
• Razer continued its efforts to further enrich user experience and drive
  stickiness to the Razer ecosystem:
  o   During 1H 2021, Razer
  Cortex PC Squad Rewards Seasons 6 and 7 continued to drive high engagement with
  over 200,000 gamers joining the competition each season. Players logged in a
  total of over 3.5 million hours of PC game time each season.
  o   Razer Chroma^TM
  RGB continued to reinforce its partner-of-choice position, working with leading
  hardware partners through its connected devices programme. As of June 30, 2021, over 180 games and
  applications are natively integrated with Razer Chroma^TM
  RGB Software Development Kit (SDK).

SERVICES:

• Services business, comprising of Razer Gold and Razer Fintech, grew 13.8%
  year-on-year to US$72.8 million for 1H 2021.
• Gross margin was 41.9% and contributed 15.0% of the Group’s gross profit
  in 1H 2021.

RAZER GOLD

• Recorded a 13.8% year-on-year
  increase in total payment volume (“TPV”), driven primarily by the increase in
  the number of transactions conducted through the Razer Gold platform.
• As of June 30,
  2021, Razer Gold recorded approximately 30 million registered users, representing
  25.3% growth year-on-year. 
• Further expanded its footprint and added more channel touchpoints in
  places such as Southeast Asia and Latin America covering users from more than
  130 countries and more than 5.6 million channel touchpoints.
• Reinforced its position to be a partner of choice for content partners
  with over 42,000 digital entertainment titles supported and added popular new
  games.
• Put in place longer-term initiatives that will well-position Razer Gold
  for the next level of growth, such as:
  o   Further increasing Razer
  Gold’s penetration in high growth regions such as Latin America, with its
  gaming market expected to reach US$3.6 billion in 2023.
  o   Bolstering localization strategy in both content
  and channel to cater to the specific tastes and needs of the regions Razer
  operates in.

RAZER FINTECH

• Recorded 63.7% CAGR in TPV over the last 3 years.
• Over 95% of the TPV was driven by Razer Merchant
  Services (“RMS”), the Group’s B2B payment processing business which powers over merchants 60,000 merchants across Southeast Asia.
• RMS has made significant progress in the first half of 2021 in the
  following areas:
  o   TPV: Recorded 79.5% year-on-year growth to US$3.2 billion in 1H 2021, driven mainly by e-commerce marketplace purchases, food deliveries and e-wallet top-ups.
  o   Merchant adoption: Recorded 88.6% year-on-year growth to over 60,000 merchants, coming from the retail, food and beverage industries, and professional/commercial services.
  o   Key licences and network expansion: Strengthened core infrastructure, expanded business footprint, and secured additional licenses across the Southeast Asia region.

ESG

• Formalized its
  commitment to the environment with a 10-year roadmap as part of its
  #GoGreenWithRazer initiative, supported by four main initiatives– green organization, green products, green
  community and green investments.
• Announced
  short-, mid- and long-term plans to bring Razer closer towards building a
  greener future:
  o   By the end of 2021:
  Green Organization: Say no to single-use plastics
  Green Products: Greener packaging
  o   By the end of 2025:
  Green Organization: 100% powered by renewable energy
  Green Products: 100% products are recyclable with Razer
  o   By the end of 2030:
  Green Organization: 100% carbon neutral
  Green Products: Made of 100% recycled and recyclable materials
• As part of the Group’s drive to galvanize its community to contribute and
  support the global green movement, the Group partnered with Conservation
  International in October 2020 and introduced Sneki Snek campaign, led by
  Razer’s fan-favourite sustainability mascot. As of August 25 2021, the Group
  has saved over 500,000 trees. 

INVEST FOR GROWTH

• Razer’s gamer-centric ecosystem has expanded rapidly
  over the last few years, and the Group expects the growth to continue as
  exciting new market opportunities emerge.
• Gaming, esports, and fintech are all on a
  significant growth trajectory as they become more entrenched in people’s lives.
• Key investments area include:
  o   Hardware: additional investments will be allocated for research and development of both existing gaming Peripherals and new Hardware categories.
  o   Software: to develop new services to increase user acquisition, engagement, and retention, explore new monetization initiatives and deepen big data analytics capabilities to drive user acquisition and nurture user activity.
  o   Services:
  Razer Gold: expand into new regions internationally and deepen penetration in high growth regions such as Latin America, Middle East and Southeast Asia, as well as enhance core infrastructure and recruit talent to improve user experience, acquire new users and drive usage/ spending per user.
  Razer Fintech: additional investments will be allocated for continued geographical expansion across SEA, scale TPV aggressively with expanded merchant base, enhance service capabilities for existing customers and M&A/ investments.

FY2021 OUTLOOK

Razer is closely
monitoring the market environment in light of the continued COVID-19 situation,
and intends to carry on the momentum
and strength of its operations and are on track to deliver strong revenue
growth and operational enhancements, while amping up the investments for growth
for full year 2021. 

Its outlook for the full
year will be:

• Strong Revenue
  Growth:
  o   New Hardware product introductions
  o   Growth of Software user base
  o   Continue scaling Services business 
• Continued Operational
  Enhancements:
  o   Track record of cost discipline
  o   Improvement of Hardware margins
  o   Expansion of higher-margin Hardware and Services as part of the revenue mix
• Amp Up Investment
  For Growth:
  o   Reinvesting profits in high potential areas such as Razer Gold and Razer Fintech
  o   Such investments will involve additional spending in operating expenses as we scale our Services business
  o   Step-up investments in new growth opportunities in the Razer ecosystem

For more details, please refer to the 1H 2021 results announcement for
the results of the Group which are published in accordance with the Rules
Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.
Details of Razer’s ESG initiatives can be found on the website: http://www.razer.com/go-green.