Turtle Beach Corp (TBCH) Business

Item 1 - Business

Our mission is to deliver the ultimate experience to gamers by providing high-quality, high-performance gaming accessories, including headsets, controllers, keyboards, mice, flight and racing simulation hardware, microphones, and more. For over 50 years, we have been a pioneer and key innovator in audio technology, and today we are one of the most recognized brand names in gaming. Headquartered in San Diego, California, we were incorporated in the state of Nevada in 2010, and our stock is traded on the Nasdaq Global Market under the symbol TBCH.

According to retail sales tracking data from The Circana Group (“Circana”), we have been the market share leader in console gaming headsets for 16-years running with a vast portfolio of headsets designed to be multiplatform compatible with the latest Xbox, PlayStation, and Nintendo consoles, as well as for personal computers (“PCs”) and mobile and tablet devices. Our PC product portfolio includes PC gaming headsets, keyboards, mice, microphones, and other PC gaming peripherals, and we expanded our brand beyond gaming headsets to include our gaming controller product line, as well as flight simulation. In 2024, we acquired Performance Designed Products (“PDP”), another leading gaming accessory brand with a robust slate of products, including gaming controllers for all major platforms and licensing deals with popular gaming and entertainment properties.

Gaming Accessories Business

We launched our first gaming headset and the first ever console gaming headset – the X51 – in 2005 and have gone on to become the leading brand in gaming headsets, as well as a top five overall gaming accessory business in the world. We design and market a broad assortment of gaming headsets and audio accessories for Xbox, PlayStation, and Nintendo consoles, as well as for PC, mobile and tablet devices. Our 2024 acquisition of PDP, and prior acquisitions of ROCCAT (2019) and Neat Microphones (2021) expanded our reach into the global markets for PC gaming headsets, keyboards, mice, and other gaming accessories. Additionally, in 2021, we further expanded our reach beyond gaming headsets with the launch of the first Turtle Beach game controllers for Xbox/PC, as well as flight simulation accessories. In 2024, we entered the racing simulation gaming accessory market. Our gaming accessories are distributed globally, with more than 475 thousand points of distribution, including major retailers such as Amazon, Argos, Best Buy, Target, and Walmart.

Our brand offers gamers a broad assortment of gaming accessories available at price tiers ranging from entry-level ~$30 to ultra-premium $650+. These price tiers correspond to customer profiles, beginning with entry-level gamers and progressing through casual, enthusiast, core, as well as with professional streamers, content creators, and competitive esports gamers. Each successive price tier incorporates higher-level features, comfort, and finish. For example, premium headsets typically include features like larger 50mm speakers, metal headbands, memory foam, powerful amplified 3D surround sound, active noise-cancellation, and Bluetooth connectivity. Additional features include mic monitoring which allows you to hear the volume of your own voice inside your headset, gaming audio presets like bass and/or vocal boost, our exclusive Superhuman Hearing® sound setting which delivers a competitive advantage, a removable or flip-to-mute microphone, our proprietary ProSpecs™ glasses-friendly technology, and long-lasting rechargeable batteries.

Gaming consoles like the latest Xbox, PlayStation, and Nintendo Switch systems have evolved into full home entertainment hubs, and mobile tablet devices have become mainstream entertainment platforms with gaming on mobile and tablet devices now representing approximately 50% of the global gaming market. We continue to evolve our product portfolio to reflect how content is consumed. While each Turtle Beach headset is designed for a primary platform, such as a specific console or PC model, nearly all can be used with multiple platforms and are compatible with mobile and tablet devices through a standard 3.5mm jack or Bluetooth connectivity. Additionally, our products are often displayed in multiple in-store sections at retailers. This includes platform-specific gaming aisles for Xbox, PlayStation, Nintendo, PC, Virtual Reality (VR), and mobile and tablet products, as well as displayed on in-store kiosks that allow shoppers to experience each headset’s fit, feel, and audio quality, increasing the prominence of our brand in physical retail locations, as well as online.

Industry Overview

We operate in a nearly $200.0 billion global games and accessories market, according to Newzoo Peripheral Market Forecast. The global gaming audience now exceeds global cinema and music markets with over 3.5 billion active gamers worldwide. Gaming peripherals, such as headsets, controllers, keyboards, mice, microphones, and flight and racing simulation controls are estimated to be an $11.2 billion business globally.

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The console and PC gaming accessory markets are also driven by major game launches and long-running franchises that encourage players to continually buy equipment and accessories. On Xbox, PlayStation, Nintendo Switch, and PC, flagship games like Call of Duty, Destiny, Star Wars: Battlefront, Grand Theft Auto, Battlefield, and battle royale games like Fortnite, Call of Duty Warzone, Apex Legends, and PlayerUnknown’s Battlegrounds, are examples of major franchises that prominently feature online multiplayer modes that promote player-to-player communication and drive increased demand for gaming headsets, controllers, and more. Many of these established franchises launch new titles annually, leading into the holidays and beyond, and as a result can cause an additional boost to the normally strong holiday sales for gaming accessories. Additionally, some larger franchise games, for example Call of Duty and Fortnite, follow-up with multiple post-launch downloadable content or new content update packs, to keep interest and fan engagement/momentum going for months following a game’s initial release. Many gamers play online where a gaming headset, which includes a microphone, is required because it allows players to communicate with each other in real-time, provides a more immersive experience, and delivers a competitive advantage.

Console Headset Market

In 2025, we were the leading gaming headset manufacturer in the U.S. and other major console markets. We have achieved these global market shares by delivering high-quality products that often include first-to-market innovations, robust features, superior sound, unmatched comfort, and top customer support – all key factors that consumers seek when shopping for a gaming headset.

The global market for console and PC gaming headsets is estimated to be approximately $2.9 billion, according to external market data and internal estimates, reflecting continued growth driven by increasing online multiplayer engagement, content creation, and improvements in technology. PlayStation and Xbox consoles remain among the most significant platforms supporting gaming headset usage, as console-focused headsets continue to integrate features such as wireless connectivity and surround sound optimized for these systems. Consistent with a historical pattern of major new console cycles of roughly seven to eight years, Microsoft and Sony launched their latest consoles, Xbox Series X|S and PlayStation 5, ahead of the 2020 holiday season, and these platforms have sustained an active installed base through 2025. In late 2024, Sony introduced the PS5 Pro system. The next Microsoft and Sony consoles are anticipated to launch within the next 2-3 years.

Nintendo's platform also plays a significant role in the growth of the console headset market. The large installed base of Nintendo Switch systems, combined with the successful launch of the Nintendo Switch 2 in June 2025, increases participation in online, chat-enabled gameplay, thereby expanding the overall addressable market for console gaming headsets.

Controllers Market

The controllers market is estimated at approximately $3.0 billion, according to external market data and internal estimates, and shares the same retail footprint and consumer base as Turtle Beach gaming headsets, creating natural cross-sell opportunities and strong category alignment. We entered the controllers market in 2021 and have since expanded our portfolio across console and PC platforms, with key products including Stealth™ Ultra and Stealth™ Pivot premium controllers, which target the higher value controller segment. The 2024 acquisition of PDP, a leading gaming accessories company with a strong foundation in the controller category, significantly strengthened our scale and competitiveness in controllers. PDP's established expertise and product portfolio, spanning high-value and enthusiast-driven segments, expanded our offerings with products such as the Riffmaster® Wireless Guitar Controller and Victrix® Pro BFG®, Pro FS® Arcade Fight Stick, and Pro KO® Leverless Fight Stick™, positioning us across both premium and value tiers and across multiple controller subcategories.

Industry activity across console platforms, continues to support category growth. Ongoing hardware refresh cycles and the large global installed base, continues to drive engagement across core gaming genres such as multiplayer, esports, fighting games, and rhythm‑based gaming. These trends, along with market forecasts projecting sustained controller demand tied to wireless adoption, haptic feedback innovations, and cross‑platform compatibility, indicate that the controllers category remains an attractive growth opportunity.

With an expanded product portfolio and enhanced innovation pipeline following the PDP acquisition, we believe we are well positioned to capture additional share in the global controllers market as consumer interest and platform ecosystems continue to evolve.

PC Accessories Market

The market for PC gaming mice, keyboards, and microphones is estimated to be approximately $3.9 billion, according to external market data and internal estimates. PC gaming continues to be a main gaming platform in the U.S. and internationally, similarly driven by popular AAA game launches, PC-specific esports leagues, teams, and players, content creators, and influencers, and with the introduction of cross-platform play – where PC gamers can play online against other gamers playing the same game on an Xbox, PlayStation, or Nintendo Switch. While most games are available on multiple platforms, gaming on PC offers advantages including improved graphics, increased speed and precision of mouse/keyboard controls, and the ability for deeper customization. Gaming mice and keyboards are engineered to provide gamers with high-end performance and a superior gaming experience through features such as fast key and button response times, improved

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materials and build quality, comfortable ergonomic designs, programmable keys and buttons, and software suites to customize and control devices and settings.

PC gaming mice come in a variety of different ergonomic and symmetrical shapes and sizes, are available in both wired and wireless models, offer different optical or laser sensor options and responsiveness, and often feature integrated RGB LED lighting and software to unify the lighting with other devices for a visually consistent PC gaming appearance. Similarly, PC gaming keyboards often deliver a competitive advantage by offering options for ultra-responsive mechanical and optical key switches that feel and sound different, as well as customizable lighting.

Our PC gaming headsets, keyboards, and mice span price tiers ranging from low-to-high for entry-level to professional gamers, with each successive price tiers adding features and build quality. We seek to infuse differentiation and innovation into our PC products, including our own design for keyboard and mouse switches, innovative RGB LED lighting, and extensive ergonomic design testing and modeling.

Simulation Accessories Market

The market for simulation accessories is estimated to be approximately $1.4 billion, according to external market data and internal estimates. Flight and racing simulation are more dominant on higher-end PCs able to deliver the most realistic visuals. However, jumps in visual quality made possible in the latest consoles and games have made flight simulation on Xbox and PlayStation more accessible. For example, in 2020 Microsoft redefined the graphics flight simulation gamers can expect while playing with the launch of the latest generation of its flight simulation games and, in subsequent years, Microsoft expanded the game to Xbox Series X|S, Xbox One, and for lower-end gaming PCs, and mobile gaming via Xbox Cloud.

Long-running popular flight simulations like Flight Simulator 2024, X-Plane, and others allow pilots to learn to fly and pilot various aircraft through picture-perfect skies and scenery, with typical flight simulation accessories including yokes and pedals, combat flightsticks, and Hands-On Throttle And Stick ("HOTAS") controllers. The flight simulation market is niche, but with a dedicated, older fanbase willing to spend more on accessories to create the ultimate flight simulation setups, with a variety of expert pilots and creators showcasing their latest content on YouTube and other mediums. We launched the original VelocityOne Flight® universal control system in 2021, followed by the VelocityOne® Rudder and VelocityOneStand in 2022, the VelocityOne Flightstick in 2023, and the VelocityOne Flightdeck H.O.T.A.S. controller in 2024.

Racing simulation follows a similar trajectory as flight simulation. The audience of racing simulation gamers is also dedicated, slightly older and willing to spend more on creating high-end racing simulation setups predominantly on PC, but also on consoles. There is also a variety of long-running, successful racing game franchises including Forza, Assetto Corsa, and more that allow drivers to get behind the wheel and experience the rush of racing. Typical racing simulation accessories include wheel and pedal setups, swappable steering wheels, shifters, handbrakes and more, ranging in price from lower cost entry-level gear available for a couple of hundred dollars (~$200), to ultra-premium, high-end custom-built simulation racing setups that cost thousands of dollars. Racing simulation fans also regularly create their own content to share with the racing simulation community. We introduced our first VelocityOne Race® racing simulation wheel and pedals setup in 2024, as well as the follow-up add-on VelocityOne Multi-Shift shifter/handbrake in early 2025. In the latter portion of 2025, we released the VelocityOne KD3 wheel and pedals system, the F-RX formula wheel for hardcore simulation racers on Xbox and PC and the Racer wireless racing wheel.

Business Strategy

We continue to build on our brand’s awareness, innovation, superior audio technology and high-quality products, and further promote and expand the brand in certain geographic regions to increase sales and profitability. Our strategy focuses on the following:

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Continue to Advance Our Turtle Beach Brand. We believe Turtle Beach’s reputation among gamers is a competitive advantage, and that our success is attributable to our emphasis on creating the highest quality, most innovative products, and leveraging our extensive global distribution footprint to deliver these products to more gamers around the world.

We continue to invest the resources necessary to maintain and expand our capability to manufacture better value product lines that incorporate the latest technologies, resulting in more products serving more price tiers. We will continue to advance the best-selling Turtle Beach gaming audio business forward with new headsets like the Stealth Pro™, Atlas™ Air, and latest Stealth 700 and Stealth 600 models and will continue expanding our game controllers and gaming simulation accessory markets with products like the Stealth Ultra and Stealth Pivot, and Victrix Pro BFG controllers and Victrix Pro fight sticks, and additional VelocityOne fight and racing simulation accessories.

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Continued Product Line Expansion and Revenue Growth in Controllers/Simulation Markets. We intend to increase our available markets by continuing to develop internally, or through partnerships or acquisitions, products in new gaming accessory categories outside console gaming headsets – the market we have led for 16 years, like game controllers and simulation. In March 2024, we

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announced the transformational acquisition of PDP that combined two leading gaming accessory companies with industry-leading teams, significant product momentum and proven track records of delivering profitable growth. This acquisition substantially increased our product portfolio, including our brand’s reach into the controller category with PDP’s leading game controllers.

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Targeted Geographic Expansion. We will continue efforts for further growth, specifically in select markets as we look to deliver Turtle Beach products to an even wider audience of global gamers in 2025 and beyond.

To maintain and/or improve our competitive position in our markets we continue to focus on the following:

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delivering innovative, high quality gaming headsets that provide superior game and chat audio, premium comfort, and advanced features designed to help gamers have a deeply immersive experience;

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delivering innovations in speed, precision, RGB LED lighting and form factor in PC gaming keyboards, mice, and other gaming categories that can leverage those capabilities;

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expanding our product lines in game controllers and gaming simulation accessories, reaching into additional categories including mobile controllers and racing simulation products;

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growing our position at key retailers with products available in multiple locations throughout retailers;

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investing in our ecommerce platforms to drive profitable growth by expanding customer reach, and creating differentiated customer experiences;

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maintaining our strategic relationships, and continuing investment in partnerships, which we believe provide the Turtle Beach brand with a larger presence with consumers and create opportunities for retailers to carry our products; and

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leveraging high-quality technical support and delivering a customer service experience that exceeds consumer expectations and drives brand loyalty.

Intellectual Property

We operate in an industry where innovation, investment in new ideas, and protection of resulting intellectual property rights are critical to success. With a 50-year history as pioneers in PC and gaming audio, Turtle Beach has a substantial base of IP assets with over 400 patents on current and future product development.

As a third-party gaming accessory company, certain technology used in gaming consoles requires a license to enable products to connect to the respective platform. Wireless connections on certain gaming console platforms require licenses and/or the purchase of proprietary chips to integrate into the locked chat audio. The Company believes it currently has the necessary licenses, as well as the ability to obtain the necessary licenses, to produce compatible products.

Supply Chain and Operations

We have a network of suppliers in Asia that manufacture products to meet the quality standards sought by our customers and our cost objectives. We have worked closely with component, manufacturing, and global logistic partners to build a supply chain that we consider dependable, scalable, and efficient to provide high-quality, reliable products employing leading cost management practices. The use of outsourced manufacturing facilities is designed to take advantage of specific expertise and allow for flexibility and scalability to respond to both seasonality and changing demands for our products.

We believe we have strong, long-term relationships with our suppliers and that, subject to the discussion in Item 1A,“Risk Factors” and Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources,” we expect to continue to be able to obtain a sufficient supply of quality products on satisfactory terms.

Retail Distribution

Our products are sold in over 40 countries by retailers such as Amazon, Argos, Best Buy, GameStop, Target, and Walmart. We often have a broader assortment and more shelf space than competitors at video game and electronics retailers, which we believe reinforces the brand’s authenticity with gaming enthusiasts, and our presence in mass channel retailers enable the brand to reach a wider audience of casual gamers. Our established presence on Amazon and other online retail sites, and positive consumer product ratings on those sites, increases the search visibility of our products and helps to influence both online and in-store sales.

Turtle Beach Europe, Ltd. (“TB Europe”), located in the U.K., serves as a primary sales office for the European market and has strengthened our international operations with support for sales, marketing, customer service and distribution.

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Our website, www.turtlebeach.com, is an important focal point for our product sales and marketing efforts, serving as a destination for consumers to learn about the brands and products we sell, and as a place to maintain ongoing interactivity. Information contained on our website is not incorporated by reference herein unless specifically stated therein.

Customers

Our business customer base is comprised primarily of large retailers and distributors, both domestic and international.

Our four largest individual customers accounted for approximately 66% of our gross sales in 2025, five individual customers accounted for approximately 69% of our gross sales in 2024, and 69% of our gross sales in 2023. During 2025, our three largest customers - Walmart, Amazon, and Best Buy - each accounted for between 14% to 28% of our consolidated gross sales.

Seasonality

Our business is seasonal with a significant portion of sales and profits typically occurring around the holiday period. Historically, more than 45% of revenues are generated during the period from September through December as new products are introduced and consumers engage in holiday shopping. In addition, launches of major new online multiplayer games, and specific retailer purchasing behavior, can drive significant revenue shifts between months and quarters in a given year.

Human Capital

As of December 31, 2025, Turtle Beach had 290 employees, of which 268 were full-time salaried employees, with the remaining being contracted employees.

Corporate Culture

We are focused on creating a corporate culture of integrity and respect, with the goal of working together to drive our business to be creative, innovative, and competitive. To achieve these objectives, we have adopted and regularly communicate to our employees the following core values:

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Leadership: We take initiative and lead in our respective roles. We lead by example.

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Teamwork: We work as a team and value diversity. We win together and lose together.

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Excellence: We take pride in our work and seek excellence in everything we do.

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Integrity: We are honest, direct, and transparent in all interactions.

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Innovation: We innovate to deliver better products and constantly improve every aspect of our company.

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Execution: We do what we say we will do and take personal accountability for our commitments.

We maintain a highly collaborative company culture in which team members feel a sense of pride and that their input is sought after and valued. We believe our culture is a long-term competitive advantage for us, fuels our ability to execute, and is a critical underpinning of our employee talent strategy.

We are further committed to developing team members professionally by leveraging our Intellectual Capital ("IC") process. The IC process includes constructive reviews and various talent and leadership development initiatives conducted by the management team and provided throughout an employee’s career.

We conduct employee culture surveys annually to monitor employee engagement and satisfaction, while identifying opportunities to enhance organizational effectiveness, refine our people-focused initiatives, and support long-term talent development. We take pride in our strong team member satisfaction, and we continuously seek to ensure our employees feel valued and proud to be a part of the Turtle Beach team.

Compensation and Benefits

We provide competitive compensation and benefits programs for our employees. In addition to salaries, these programs (which vary by employee level and by the country where the employees are located) include, among other items, bonuses, equity-based compensation awards, retirement plans, healthcare and insurance benefits, health savings and flexible spending accounts, paid time off, advocacy resources, flexible work schedules and employee assistance programs.

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Available Information

We make available free of charge on and through our corporate website, http://corp.turtlebeach.com, our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements, and all amendments to those filings as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. We have included the above corporate website address throughout this report as inactive textual references only. The information contained on or accessible through our corporate website is not incorporated by reference in this Annual Report and should not be considered part of this Annual Report.

In addition, the SEC maintains a website that contains reports, proxy statements, and other information about issuers, such as Turtle Beach, who file electronically within the SEC. The address of the website is www.sec.gov.