Tech

Razer CEO says firm has seen 'great growth,' is investing in new businesses

Key Points
  • Gaming hardware firm Razer has seen "great growth" both in the periods before and after its public debut in Hong Kong two years ago, according to the company's co-founder and CEO, Min Liang Tan.
  • But the company's stock has languished in the markets since making a highly anticipated debut in November 2017. As of Wednesday's close, Hong Kong-listed shares of Razer were sitting more than 62% below their IPO price of 3.88 Hong Kong dollars.
  • Asked if Razer wants to get to profitability, Tan said: "Absolutely," adding that the firm has a "clear path" toward achieving that aim.
Min-Liang Tan, Co-founder & CEO, Razer, on Centre Stage during day one of RISE 2019 at the Hong Kong Convention and Exhibition Centre in Hong Kong.
Stephen McCarthy | Sportsfile | Getty Images

Gaming hardware firm Razer has seen "great growth" both in the periods before and after its public debut in Hong Kong two years ago, according to the company's co-founder and CEO, Min-Liang Tan.

"We've been growing with a very high trajectory," Tan told CNBC's "Squawk Box" on Thursday.

"We've always had a very profitable core," he said. "And what we've done is take the profits from that core and we have been investing in new businesses … and categories."

In the first half of the year, the company reported $303.7 million in hardware revenue versus just $35.7 million from services. But Razer has said it plans to expand its services, which are typically higher margin businesses than hardware, its core revenue stream.

But the company's stock has languished in the markets since making a highly anticipated debut in November 2017.

As of Wednesday's close, Hong Kong-listed shares of Razer were sitting more than 62% below their IPO price of 3.88 Hong Kong dollars. The stock, however, has climbed back from its January lows, which coincided with a broader market sell-off.

Still, Tan said the proceeds raised from the public offering has left Razer with a "massive" war chest, adding that the company has no debt and is "really looking ahead for additional growth in the gaming market."

Razer has said its growth initiatives include: financial technology, mobile and cloud gaming, esports and the George Lucas-founded audio company, THX.

In its earnings report for the first half of 2019, Razer posted a net loss of $47.7 million, an improvement over the $57.1 loss it saw in the same period a year ago.

Asked if Razer wants to get to profitability, Tan said: "Absolutely," adding that the firm has a "clear path" toward achieving that aim.

"What we want to do is to maintain that very high growth and then show that we've got this great profitable core and also show to the market to say: 'Hey guys, look at this'," he added.

Tan appears to have his sights on attracting youths and millennials, a segment he described as "highly underserved," using the field of financial services as an example to illustrate his point.

"These are massive opportunities," he said.