The recent spike in Turtle Beach Corp. (NASDAQ: HEAR)’s shares tells of how the stock is increasingly coming into the view of a growing number of investors. If you are wondering why, the answer could be lying in Apple Inc. (NASDAQ: AAPL)’s recent announcement.
Apple is planning to host a media event on September 7 in San Francisco. The company didn’t say what exactly will be happening at the event, but it is widely speculation that the event is for the launch of iPhone 7.
Turtle Beach Corp. (NASDAQ: HEAR) is in the business of selling headsets with a wide range of application, including in gaming consoles and smartphones. As such, the launch of iPhone 7 is expected to widen the market for Turtle Beach’s headset products.
Something you might want to keep in mind is that Turtle Beach Corp. (NASDAQ: HEAR) is the leading seller of third-party headsets. The company reported in 2Q2016 that its headset business continues to perform strongly, both in terms of unit sales and market share gain.
Selling to the console market has been a major driver of growth in Turtle Beach’s headset business, but smartphone is another promising market. That explains why the rumored launch of iPhone 7 can be seen putting Turtle Beach in the spotlight.
How Turtle Beach fared in 2Q2016
Turtle Beach posted EPS loss of $0.23, outpacing the consensus estimate that called for EPS loss of $0.24. Consolidated revenue of $29.4 million for the quarter rose 30% YoY and surpassed the consensus estimate by $4.46 million.
The double-digits increase in topline figure was supported by 29% increase in headset sales. The management attributed the strong performance in the headset unit to strong demand for Turtle Beach’s Next-Gen headset line. As such, Next-Gen headsets generated 91% of the revenue that Turtle Beach reported in 2Q.
Because Next-Gen headsets are high margin products, Turtle Beach Corp. (NASDAQ: HEAR) said its gross margin for the quarter increased to 17.4% from 15% in the same period last year.
Market share acquisition – Turtle Beach Corp. (NASDAQ: HEAR)
Turtle Beach Corp. (NASDAQ: HEAR) said that Next-Gen portfolio is helping it to gain market share. Despite its already strong market share in headset space, Turtle Beach still management to grab more share of the market in 1H2016.
The company appears to be banking on product innovation and growth of console and smartphone markets to fuel growth in its headsets unit.