Turtle Beach (HEAR) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenue was $56.4 million, essentially flat year-over-year, reflecting conservative inventory management and softer market demand.

• Gross margin improved to 38.8%, up 660 basis points year-over-year, primarily due to $4.3 million in tariff refunds recognized as a reduction in cost of goods sold.

• Net loss widened to $7.3 million from $2.9 million in the prior year, mainly due to increased marketing and interest expenses.

• Adjusted EBITDA turned positive at $1.3 million, compared to a $3.0 million loss in Q2 2025, reflecting improved margins and cost controls.

• Significant product launches included Stealth Pro II and the first officially licensed wireless headset for Nintendo Switch 2, driving share gains in premium headsets and Nintendo controllers.

Financial highlights

• Q2 2026 revenue: $56.4 million, nearly flat versus $56.8 million in Q2 2025.

• Gross margin: 38.8% (Q2 2026), up from 32.2% (Q2 2025), benefiting from tariff refunds.

• Operating expenses increased to $24.9 million (44% of revenue), up from $18.6 million (33% of revenue) last year, mainly due to higher marketing and G&A costs.

• Net loss: $7.3 million (Q2 2026), $2.9 million (Q2 2025); diluted EPS: $(0.38) (Q2 2026), $(0.14) (Q2 2025).

• Adjusted EBITDA: $1.3 million (Q2 2026), -$3.0 million (Q2 2025); operating cash inflow was $6.5 million, versus an outflow of $3.1 million last year.

Outlook and guidance

• Full-year 2026 revenue guidance reaffirmed at $335–$355 million, with adjusted EBITDA expected between $44–$48 million.

• Revenue is expected to be more heavily weighted to the second half due to new product launches and major game releases like GTA VI.

• Gross margins are expected to remain in the mid to high 30% range for the remainder of the year.

• Management expects sufficient liquidity for short- and long-term needs, supported by cash, credit facility availability, and operating cash flows.

• Long-term targets include 10%+ revenue CAGR and adjusted EBITDA margins in the mid-to-high teens.