By Yifan Wang
Razer Inc.’s net profit jumped sharply in 2021, driven by strong revenue growth and margin improvement on a demand boom for gaming products and services since the pandemic began.
The company posted net profit of $46.2 million, a more than eightfold increase from $5.6 million in 2020. Razer attributed the sharp earnings jump to “revenue growth, ongoing gross margin expansion and productivity improvement.”
Gross profit margin for 2021 rose to 24.0% from 22.3% a year earlier, thanks to better profitability in gaming hardware sales.
Revenue jumped 33% to $1.62 billion, with solid sales increases across its hardware, software and services segments.
Looking ahead, Razer expects tight electronic-component supplies, high freight rates and logistics disruptions to remain operational challenges throughout the year. The company also warned of a slowdown in top-line growth from 2022 due to the high comparison base in 2021.
Further, the company cautioned that its spending may substantially increase as Razer seeks to expand its hardware offerings and venture into more international markets.
These new businesses “will require additional spending in our operating expenses and may affect the short- to medium-term business performance,” it said.
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