Welcome to the Turtle Beach first quarter 2022 conference call. My name is Daryl, and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. During the question-and-answer session, if you have a question, please press zero then one on your touchtone phone. Delivering today's prepared remarks are Chairman and Chief Executive Officer, Juergen Stark, and Chief Financial Officer, John Hanson. Following their prepared remarks, the management team will open up the call for any questions. As a reminder, this conference call is being recorded. I will now turn the call over to Alex Thompson. Alex, you may begin. Thanks, Daryl. On today's call, we will be referring to the press release filed this afternoon that details the company's first quarter 2022 results, which can be downloaded from the investor relations page at corp.turtlebeach.com, where you'll also find the latest earnings presentation that supplements the information discussed on today's call. Finally, the recording of the call will be available on the investor section of the company's website later today. Please be aware that some of the comments made during this call may include forward-looking statements within the meaning of the federal securities laws. Statements about the company's beliefs and expectations containing words such as may, will, could, believe, expect, anticipate, and similar expressions constitute forward-looking statements. These statements involve risks and uncertainties regarding the company's operations and future results that could cause Turtle Beach Corporation results to differ materially from management's current expectations. While the company believes that its expectations are based upon reasonable assumptions, numerous factors may affect actual results and may cause results to differ materially, so the company encourages you to review the safe harbor statements and risk factors contained in today's press release and in its filings with Securities and Exchange Commission, including, without limitation, its annual report on Form 10-K and other periodic reports, which identify specific risk factors that also may cause actual results or events to differ materially from those described in our forward-looking statements. The company does not undertake to publicly update or revise any forward-looking statements after this conference call. The company also notes that on this call it will be discussing non-GAAP financial information. The company is providing the information as a supplement to information prepared in accordance with accounting principles generally accepted in the United States or GAAP. You can find a reconciliation of these metrics to the company's reported GAAP results in the reconciliation tables provided in today's earnings release and presentation. I would like to inform you that Turtle Beach Corporation has filed a definitive proxy statement and related proxy materials with the SEC in connection with the 2022 annual meeting of stockholders and, in connection therewith, its directors and certain of its executive officers are participants in the solicitation of proxies from our stockholders in connection with such annual meeting. Stockholders of Turtle Beach are strongly encouraged to read such proxy statement and all other related materials filed with the SEC carefully and in their entirety, as they contain important information about the 2022 annual meeting. Now I'll turn the call over to Juergen Stark, the company's Chairman and Chief Executive Officer. Juergen. Good afternoon, everyone, and thank you for joining us. I'm pleased to report that our first quarter results were in line with our expectations as laid out during our last conference call amidst continuing difficult gaming and macro market conditions. We launched and announced innovative wireless products and maintained our leadership position in console gaming headset categories, while also making good progress across our increasingly diversified product portfolio of gaming and creator accessories. We're operating in a significantly different and varied economic environment compared to a year ago, but we have taken measures to stay ahead as we continue to showcase diligent operational execution. During the first quarter, we delivered net revenues of $46.7 million and an Adjusted EBITDA loss of $5.7 million, in line or slightly above our estimates. As we anticipated on our last earnings call, the first quarter was impacted by slower channel replenishments as retailers brought inventories back to normal post-holiday levels. Additional economic factors have constrained growth compared to last year, such as the absence of stimulus checks and more cautionary consumer discretionary spending caused by inflation and the geopolitical concerns stemming from the war in Ukraine. Nonetheless, our ability to meet our projections despite the significantly impacted consumer spending environment is a testament to the strength of our team and the quality of our offerings. It's important to note that our 166% revenue growth in the first quarter of 2021 significantly exceeded the growth rates of underlying gaming markets and of our public peers. The gaming markets continue to show favorable long-term secular trends. Per a Newzoo Global Markets report, it's estimated that by the end of 2022, there will be more than 3 billion global gamers. That's a staggering figure, and we continue to believe that the gaming market remains the market to be a leader in. In the near term, there are obvious headwinds stated above that are impacting the gaming industry and the economy more broadly. In fact, per NPD, first quarter U.S. video game accessory spending declined 16%, console headset market was down over 35%, and PC accessories markets were down about 25%. Major European markets fared better, but were also down. In addition to consumer spending caution across all major markets, the lack of stimulus checks, which drove significant incremental spending in the first half of last year, contributed to difficult market comps. As I mentioned, our history of outperforming the market in boom times, like first quarter 2022, makes our comp even more challenging. While these factors will curb the gaming industry's growth as compared to last year, short-term consumer caution can create pent-up demand, and the long-term opportunity remains attractive. We're hard at work to continue to produce great products which attract gamers at all price points and very much look at these times as an opportunity to prepare our product portfolio and business for the coming market upswing, exactly as we've done in past challenging periods. Our console gaming headsets continue to perform well in the first quarter. Per NPD, three of the top five best-selling Xbox headsets and five out of the top 10 best-selling PlayStation headsets were Turtle Beach products. This is before our new wireless headsets hit retail. We've been the number one gaming console headset provider for 12 years running, and customers know that we deliver innovative, high-quality headsets for every level of gamer. Looking at new product launches, we unveiled the Stealth 600 Gen 2 MAX and Stealth 600 Gen 2 USB for Xbox as new entries in our industry best-selling gaming headset series. The new Stealth 600 Gen 2 MAX model adds multi-platform capability and a massive best-in-class 48-hour battery life to one of the industry's top-selling products. The Stealth 600 Gen 2 MAX offers gamers all the same features that made it a best-selling product since it came out, like powerful game sound, crystal clear chat, comfort, and key proprietary features like Superhuman Hearing. The Max model now connects to Xbox Series X and S, Xbox One, PS5, PS4, Nintendo Switch, Windows PCs, and Macs. The new multi-platform Max model will be available for $129.99 MSRP when it launches this weekend. We're also launching the new Stealth 600 Gen 2 USB, which keeps everything fans love about the series, including its attractive $99.99 MSRP, but also extends battery life by 60% to 24+ hours. Equally exciting, we're launching a Max version of our acclaimed 700 series, also one of the industry's top-selling gaming headsets. The all-new Stealth 700 Gen 2 MAX for Xbox ups battery life to 40+ hours and is also fully multi-platform. It includes Bluetooth connectivity to iOS and Android mobile devices and to customized settings via the mobile app. This new 700 series basically works on every modern gaming platform, including mobile. These upgraded features, of course, are in addition to the premium gaming audio and comfort features that's made the 700 series the best-selling premium gaming headset for years. As we've commented on prior earnings calls, the semiconductor shortages severely impacted our wireless headset sales. These Stealth 600 and 700 launches, and more are coming, are the result of significant engineering efforts to transition off of highly constrained wireless semiconductor platforms and onto semiconductor platforms with better availability, all while also delivering best-in-class battery life and multi-platform capability, which is becoming increasingly important to gamers. We boosted our presence in mobile gaming space with the launch of the Scout Air and SYN Buds Air true wireless gaming earbuds designed for console and PC gamers on the go. We also introduced a wired set of gaming earbuds, the SYN Buds Core, in January. The mobile gaming market grew to more than $90 billion in 2021, and we're continuing to expand our portfolio of mobile gaming products so gamers on iOS, Android, and Nintendo Switch can capitalize on the game-winning advantage of using Turtle Beach and ROCCAT gear. More mobile gaming products are coming. Next from Turtle Beach in Q1, we launched the Recon Air. This is a $40 wireless chat-only headset designed for gamers who already have a great sound system and only need a headset to chat with friends and/or taunt other players. It's also a great wireless Bluetooth headset for audio or video conferencing. In fact, this is my go-to audio product for video conferencing when I'm traveling. The Recon Air has precisely tuned noise-canceling mic to ensure your voice comes in clearly and to minimize background distractions, plus a rechargeable 10-hour battery life. There are versions for Xbox or PlayStation and compatibility with Windows PCs and Mac and Bluetooth-enabled iOS and Android devices. For our award-winning ROCCAT brand, we continue to grow our lineup of stunning PC accessories. First, we released the Kone XP PC gaming mouse, which we designed to be the perfect size mouse with stunning 3D RGB lighting, a variety of customizable buttons, and made with our latest tech so PC gamers can win with style and confidence. Additionally, we revealed the ROCCAT Burst Pro Air as the premium wireless addition to its fan favorite Burst family of lightweight PC gaming mice. Our wired Burst Pro was well-received by first-person shooter players who prefer an ergonomic and symmetrical mouse, and we're excited to now offer gamers who prefer wireless all the same benefits with the Burst Pro Air. Both new mice feature stunning RGB lighting. If you look at our lineup of ROCCAT products, you'll understand why I can't get away from the adjective stunning. For our creator microphones, we've now launched a total of four high-quality USB and XLR microphones in the U.S., and are just launching the Neat brand flexibilities. The King Bee II and the Worker Bee II XLR microphones along with the Bumblebee II and Skyline continue to wow reviewers and consumers alike for the quality of products and the prices they are available for. Neat's flagship King Bee II XLR microphone offers studio grade performance and comes with its own pop filter and shock mount all for a $169.99 MSRP that feels like about half of what you'd pay for a similarly equipped competitor product. The $99 Bumblebee II USB mic features a 25 mm capsule, the largest in its class, along with the latest electronics to ensure your voice sounds clear. We have more exciting products across all categories coming this year and the expansion of our product portfolio outside of console gaming headsets is going very well. I'll now pass it over John to cover financials after which I'll provide further commentary on the quarter and outlook. And before we wrap up prepared remarks, I'll also address some of the questions we have received from investors regarding the board's approach to M&A and strategic alternatives based on the disclosures we made in a recent shareholder communication. John? Hey, thanks, Juergen, and good afternoon, everyone. For the first quarter, we reported net revenue of $46.7 million, slightly above our expectations compared to $93.1 million a year ago, where the company's revenues were up 166% year-over-year as a result of exceptional consumer demand across console headsets and PC gaming accessories, and our significant outperformance of the market and peers. Q1 2022 was 33% above Q1 of 2020 as a useful reference. Gross margin in the first quarter was 30.1% compared to 37.5% of the year ago period, due to significantly higher freight costs, fixed cost deleveraging, and more normalized promotional credits, partially offset by business mix. Gross margins in Q1 2022 were somewhat above expectations due to lower volume-based program and product spend. Operating expenses in the first quarter were $22.3 million compared to $22.6 million in the year-ago period. The decrease was primarily driven by lower revenue-based sales spend and lower marketing spend, partially offset by higher product development expenses to support portfolio and geographic expansions versus the comparable period. Our first quarter Adjusted EBITDA loss was modestly better than expectations as we reported $5.7 million compared to Adjusted EBITDA of $15.3 million in the year-ago period. The year-over-year variance in the modestly higher than expected gross margin result is primarily driven by the items I've covered above. Adjusted net loss for the first quarter of 2022 was $6.3 million or $0.39 per diluted share compared to adjusted net income of $9.4 million or $0.52 per diluted share in the year ago period. We expect our effective tax rate for the full year to be 25%. Cash used for operating activities in the first quarter was $13.3 million compared to cash flow from operations of $21.1 million in the year ago period. The decrease was primarily due to lower net earnings and working capital deployed to mitigate current and potential supply constraints. Turning to the balance sheet, at March 31, 2022, we had $23.7 million of cash and cash equivalents with zero debt, including no borrowings on our revolving credit line. Inventory at March 31, 2022, were $117.4 million compared to $59.1 million a year ago. Elevated inventory levels are a reflection of continued significantly longer shipping lead times as well as intentionally higher target inventory levels to absorb COVID-driven supply chain disruptions that we've experienced many times over the past two years. That said, we expect inventories to build modestly during the summer, given seasonal loading prior to the holidays, but be significantly lower by year-end. Now I'll turn the call back over to Juergen for additional comments. Juergen? Thanks, John. As we said, we're pleased to have delivered first quarter results in line with our expectations, which again demonstrate our ability to execute well in a challenging macro environment. As I mentioned earlier, retail sell-through was down significantly in the 20s or even 30s% year-over-year across console and PC accessory businesses due to the absence of stimulus checks and lingering stay-at-home orders that significantly contribute to heightened numbers in the first half of 2021. Additionally, as John covered, retailers have reduced their inventories throughout the first quarter, and competitive discounting and promotions have been much higher than normal, particularly in the PC categories. Still, I'm pleased to note that our PC accessories business executed the plan in the quarter, as did our overall business. We expect the overall gaming markets to continue to be challenged through second quarter, where we expect our revenues to be flat to slightly up sequentially from the first quarter. We continue to expect the second half of the year to show strong growth, particularly Q4, given the launch of new AAA games in advance of the holiday season, expectation of less constraints on console supplies, recovery in consumer retail dynamics, including some potential pent-up demand, as well as the impact of our expanded portfolio in console, PC, simulation, controllers, and microphones, all of which have exciting product launches coming yet this year. Given this, we are maintaining our full-year 2022 outlook and expect revenue to be approximately flat, ±5%, from record 2021 levels. Again, I'm pleased with the strong execution we've displayed in Q1, and there's a lot in store these next three quarters. Taking a step back, we continue to execute on a clearly defined plan to leverage the strong trends in the gaming market and capitalize on the opportunities ahead. The gaming sector remains the market to be in, with a total addressable market of $180 billion that's expected to reach north of $200 billion by 2024. Our diverse portfolio and proven strong consumer demand for our products have extended our markets by over $7 billion in the past three years and positioned us well for future success. Here are our key priorities. First, continue to lead the console gaming headsets market, where we have maintained market share of 40%+ in the U.S. for 12 consecutive years, driven by great products, valuable innovations, a go-to brand, and strong execution. I'm very excited about our new wireless models, both those we've announced and those still pending. Second, continue to expand our PC gaming portfolio of headsets, keyboards, and mice and grow our share in that $3.8 billion PC accessories market. The acquisition of ROCCAT mid-2019 for $11 million has enabled us to build a business that has nearly doubled each year since then, already generating more than 10 x the purchase price in cumulative revenues. When we pitched the ROCCAT deal to the board, we said we expect it will accelerate our ability to build a sizable PC business by several years, and it's done exactly that. Third, drive continued growth in the gamepad controller, gaming simulation accessories, and microphone categories that we entered in 2021. These products further expand the markets we serve and fully leverage the core competencies of the company. We have exciting new products coming in these categories later this year as well. Fourth, continue to identify and selectively pursue other growth opportunities. Our business expansion across product categories and geographies is performing well, and we continue to look for organic growth and acquisition opportunities to expand our addressable markets and drive growth in line with our 10%-20% annual growth target. We continue to target roughly $100 million in revenues outside of our console headset business for 2022 and expect those new businesses to generate a positive contribution to EBITDA already this year. Obviously, it takes investments to enter and grow new categories, and these investments have enabled us to go from roughly zero in early 2019 to over $70 million in 2021 in these new category revenues. Balancing these investments to fuel our growth over time while still delivering peer competitive EBITDA margins, like the 10% EBITDA margin last year in line with a peer who is 5x our size, is a key point of focus in our annual operational planning and in how we strive to execute over time. The successful execution of that strategy has enabled us to significantly outgrow the console headset market. Expansion outside of console headsets also reduces our dependency on that market, which has a cyclical nature that has created annual growth rates varying from + 71% to - 22%. Our very large share of the console headset market makes it nearly impossible for us to move our top line significantly differently from the overall console headset market. Last year is a great example. The console headset market was down roughly 5%, but we were able to grow modestly. In addition, we correctly predicted that multi-platform gaming would become increasingly important, driving a blurring of the lines between console headsets and PC headsets. Good anticipation of these factors was part of the drive to acquire ROCCAT in 2019, with the strong capabilities and skills in PC accessories significantly accelerating our ability to produce and take share of the market with compelling PC products. These category expansion efforts, therefore, not only worked out well financially, but also have a favorable impact on our strategic positioning. While there will always be periods of economic downturn, gaming market weakness, or operationally difficult environments, like we've seen multiple times over the past decade, gaming is and remains a great market to be a leader in. Our successful efforts to maintain our strong leadership in console headsets while significantly expanding our product market categories have us positioned well for the future, both in terms of participating with the long-term tailwinds in gaming and also in continuing to grow revenues. Our ability to operate with a very high level of productivity at well over $1 million in revenue per employee means growing revenues is the best way to grow earnings over time. In combination with our strategic and operational goals, we're delivering on the long-term financial goals that we regularly communicate. Specifically, we strive to deliver 10%-20% top-line growth over time, and notably, our five-year revenue CAGR is more than 16%. Generate peer competitive EBITDA margins while investing for growth, targeting 10% and growing over time as we gain operating leverage via revenue growth. Leverage our strong balance sheet to provide flexibility to pursue organic or acquisition-based investment to support our growth strategy while keeping an eye on opportunities to return capital to shareholders as we've done historically. Before I open up the call to Q&A, I wanted to address some questions we've received about the board's approach to strategic alternatives, given disclosures we made in our letter to stockholders on April 25, 2022. I believe for a while that the public markets don't value us properly. I also believe that there is more volatility in the stock price than there should be, despite the way we've consistently run the business and delivered on results. The Board has been fully aligned with this, which is why we've stated many times that the Board continues to be open to strategic alternatives that maximize shareholder value. I've also stated that we don't need any external prompting for this, and we don't. To that end, the Board and I have extensive experience and openness to strategic alternatives. In fact, we have engaged in banker-led proactive outreach processes to potential acquirers on three separate occasions in the past five years. In the most recent of those efforts, we retained a banker in late 2020 to engage in outreach to third parties, outreach that started in early 2021. In the spring of 2021, we made the decision to switch bankers and engage Bank of America to continue our outreach efforts. Since that time, we've engaged with the most logical potential strategic buyers as well as select financial sponsors. Given our experience with two prior rounds of outreach, we know the most logical prospects well. Along with our financial advisors during this third round of outreach, we have been in contact with 29 potential acquirers, signed 10 NDAs, and held nine management meetings. Throughout the course of this extensive engagement that began early last year, we received feedback from prospective buyers and their advisors. In a number of cases, we heard that they were unable to move forward because we had too much reliance on console gaming headsets and the cyclicality that comes with that. I mentioned console market growth rates historically of +71% to -22% earlier. We had received the same feedback in the prior two rounds of outreach, which is one of the many reasons we pursued our value-creating diversification strategy. In the prior two rounds of outreach, we reached an outcome that resulted in bids that would not have been attractive to shareholders. In both cases, like today, the stock price was low based on overall market conditions, and we subsequently drove higher value for shareholders than the bids offered. The reality is that the best way for us to create value for shareholders, including in the context of a future transaction, is to continue to execute our strategy while remaining open to engagement with potential acquirers. Our extensive experience reaching out to prospective buyers now in three rounds is also why, among other reasons, we believe publicly announcing a formal sale process is not advantageous and may not result in the best deal for our shareholders. It is also not advantageous to disclose the status of these types of discussions. However, we are doing so now based on shareholder feedback, seeking to understand the board's view regarding strategic alternatives. As is always the case, there are no guarantees that discussions of this nature will result in a transaction. The Board's openness to value-maximizing opportunities also included our full and good faith engagement with Donerail, where we tried repeatedly to establish their financing and make their bid real and actionable. Despite our efforts, Donerail could not or would not verify their financing, unlike credible potential buyers. Additionally, it is important to note that feedback from multiple prospective acquirers has been that Donerail's dissemination of false and misleading information about the company, which started mid-2021, has unfortunately deterred and discouraged them from advancing discussions with us. It should now be fully clear that this Board, including myself, has been and continues to be fully open to strategic alternatives if they can create shareholder value. As mentioned, we continue to believe that the best way to create value, whether it's stand-alone or via strategic alternatives, is to drive the execution of our strategy to grow and diversify the business and increase earnings over time. Exactly as we've done and will continue to do. I again want to extend my thanks to the entire Turtle Beach team. We're very pleased with our start to 2022, and our team continues to keep us in a position to meet and exceed our long-term goals. Their dedication, productivity, and strong execution drives this business forward. Thank you to the collective Turtle Beach team. With that, let's turn to our Q&A, sticking to the quarter and the business. If anyone has a question, you can press zero then one on your touchtone phone. Once again, if you have a question, it's zero then one on your touchtone phone. Our first question comes from Drew Crum. Go ahead. Okay. Thanks. Hey, guys. Good afternoon. First question on the second quarter sales guidance, expecting it to be flattish versus 1Q. Can you talk about some of the puts and takes there? And then separately, Juergen, can you address your commentary in more detail around the net positive contributions to EBITDA for the new businesses? Thanks. Sure. As we mentioned, Drew, in the prepared remarks, we expect Q2 to be roughly flat to up slightly to Q1. That's basically a result of the continued kind of economic pressures and overall gaming market weakness, which we expect to abate, you know, as we get into Q3 and then produce a very good growth rate, starting in Q3 but then in Q4. It really is driven by the, you know, surrounding macro, both gaming and economic conditions. On your question on positive net contribution margin, net contribution to EBITDA, so that's for the $100 million that we're targeting this year for the new categories. We've been asked that multiple times by investors, which is why we included the information today. Let me start with, you know, we run these businesses in a fully integrated way. They're all gaming accessories. They all leverage supply chain, sales, many parts of marketing and obviously, all of the G&A functions. That said, we are able to and regularly look at the contribution margin of those businesses as part of our annual planning process. We do this so that we have a good sense of how our return on investment is tracking from these new activities, from these new categories. The way we do that is, while many functions are shared, there are also dedicated resources for each of the businesses, in particular, parts of product management and engineering functions, as well as obviously dedicated marketing funds, website funds, those types of things to support the product launches, the brand, all that. We assign all of those costs to the businesses, obviously under their gross margin line. We even, by the way, take if we have accounting that's dedicated to one of the businesses, that's put in there. We basically try to take all directly associated costs that we can identify and put them into the businesses. If that number is positive, which we expect it to be this year, that then makes a positive contribution to the rest of the business because the rest of the cost basically would not materially change if we didn't have those new businesses. That's how we do that calculation. It's quite robust, and as I said, it is a core part of our annual planning process and the board's approval of our annual operating plan. Very helpful. Thanks, Juergen. Once again, if you have a question, you can press zero then one on your touchtone phone. Our next question comes from Franco Granda. Frank, go ahead. Hi, good afternoon, everyone. Congratulations on the results, and thanks for taking my questions here. Juergen, you were talking about, you know, your guidance for the year and talking about consumer confidence being low. You know, can you talk about the business dynamics in Europe perhaps? You know, it's a 20% business for you, and we have some of your peers here talking about diminishing customer confidence in the region as a result of the war. Yeah. As we mentioned, and I think we have over 20% of the business in international. I think it's closer to 30%, Franco. The market and gaming conditions we're seeing are really spanning all of North America and Europe. Europe actually fared somewhat better in the overall gaming market year-over-year comps. Part of that is probably because of the stimulus checks had an additional benefit in the United States. While countries in Europe had similar items, they may have had a bigger impact in the U.S. You know, the trends we're seeing are really across the board, including in Europe, and we expect them to continue, although, you know, as we commented, to the extent that and we believe this is happening, consumers are holding back on purchases given concerns about inflation, concerns about the war and all that will typically produce some pent-up demand over time as they wait. When they start feeling better, they will then, you know, eventually they'll need to wanna upgrade their headset, replace their products, all of that. You know, we continue to have a view that the second half of the year, and particularly Q4, will benefit from a revival of the consumer demand, some pent-up demand, as well as the specific gaming market items like the new AAA launches, the hopefully less constraint on console supplies, as well as our own new product launches which will all be kicking in as we get into Q4 should produce, you know, very positive growth for the second half of the year. All right. Thank you for all the color there. You also talked about obviously the elevated inventory levels here and how they're expected to rise during the summer months. I guess can you talk about the ASPs of those products in the inventory? Are those some that are, you know, across the range similar to your portfolio, or are you focusing on some of the lower end to drive sales at the end of the year? No, Franco, the inventory increase is driven by a couple of things. First one is shipping times are four-six weeks longer than normal. No matter what you do, no matter what your target internal inventory levels are, you just have to carry that much more inventory because it's all on freighters on the way over to the various countries. The second main driver is that we have a higher level of targeted weeks of supply in our own inventory. That's the inventory that's in the warehouses in the various regions. That inventory is what gets used to respond to increases in demand and you know, basically provides a buffer. That target level of inventory is. It has been intentionally higher than normal because of the supply disruptions we've seen many times over the past two years. Factories will shut down, there'll be clogged up ports that even add to the shipping times, all of those types of things. Those are the two main drivers of the increased inventory. The inventory is very reflective of our overall portfolio, versus somehow, you know, focused on specific products or price points, because both of those impacts affect everything we're doing, not just certain products. Lastly, that inventory level we expect to creep up a bit in the next two quarters. It's kind of normal as we increase the shipments in preparation for the holiday. We do expect and have a focus on ending the year at a much lower level of inventory as we dial back on some of the higher target inventory levels. We expect some of the, you know, supply disruptions to abate over time. All right. Thanks for all the color, Juergen. If anyone has a question, it's zero, then one. Our next question comes from Mark Argento. Mark, go ahead. Hey, Juergen. Hey, John. Just a couple of quick ones. I know you had talked a little bit about the new categories and hopefully being EBITDA positive. On the gross margin side of the house, are those products typically run at a higher gross margin than the traditional console on a normalized basis? Or maybe help us think through how the gross margin does some of those products shake out. You know, thanks, Mark, and nice to have you on. Across the categories, it's pretty comparable. You know, we have console gaming headsets that vary in gross margins, you know, with a target of mid-30s overall, which is driven by the type of product it is, the price point that it's competing in, all of that. The same would apply to the new categories. There are a range of gross margins in there, but on average, they're similar or within a few percentage points of the console gaming headset business. Great. That's helpful. Then, just one quick follow-up. When you think about hardware availability, so console hardware availability as we transition, you know, through this next cycle, you know, what do you have baked in your model in terms of expectations for availability of, you know, PlayStation and Xboxes throughout the year? You know, if supply chains loosen up and more, you know, hardware is available, how could that impact your business? Sure. Our expectation is that the supply constraints will abate, you know, significantly by the time we get into holiday. Not that we don't expect shipping times to go down a lot or anything like that. The abatement, our expected, you know, improvement in performance on supply on Xbox and PlayStation is mainly driven by the fact that we've all been in this environment now for, you know, well over a year. Our lead times for ordering semiconductors, all that, they're like, they're crazy high, but they're no longer impeding our supply because we're used to it, and we put the orders in well in advance. We expect that, you know, Microsoft and Sony will be doing the same thing. As that takes effect, the supply constraints should ease. We can't predict it for sure, obviously, but that's certainly what we're assuming in the numbers. I would, you know, I think that's a reasonable assumption. Great. Thanks, guys. Thanks, Mark. Yeah. Thanks, Mark. Our next question comes from Martin Yang. Go ahead, Martin. Thank you for taking my question. Hi, Juergen. I have two questions for you. First, can you maybe talk about any potential read on impact you have from the China shutdowns in the second quarter? Do you see any lasting impact on either of you or your direct suppliers or, customers? Hi, Martin. Yeah, very good question and very, very timely. We have a fantastic operations team, and that team has managed to work around the constraints and the disruptions. So we have not seen anything major. It's always a risk, by the way, if you know, shutdowns happen for an extended period of time or something. That's the exact reason why we carry somewhat higher level of inventory than we normally would because those risks are still out there. But I really have to, you know, say kudos to the operations team for managing. You know, it's been a highly volatile market now for two years. Got it. Thank you. Another question on maybe your interpretation of where channel inventory is at. You sort of alluded to retailers are reducing inventory in Q1. How does the channel inventory look like to you now, especially comparing to historical levels, for instance, in 2019? Yeah. Overall, the channel inventories did come down quite a bit in Q1, exactly as we expected. That by the way, you always have a double effect on sales, like company revenues. When the market is declining, you have decreased sell-through, which affects revenues, and then you have retailers that are reducing their inventory to stay at the same target level, weeks of inventory. You have the exact opposite effect when the market goes back up. They not only need to supply increased sell-through, they need to also increase their inventory levels to stay at six, nine, 12 weeks of inventory. We definitely saw the reduction part of that happen in Q1. The channel inventory levels are overall at a reasonable level for the, you know, the market sell-through that we're seeing right now. We, you know, again, we did see those channel inventories come down a lot during Q1, as I suspect they have for other participants in the market as well. Do you expect that to be down further in the second quarter? I think it's hard to judge, by the way, because part of the question relies on whether retailers, you know, how they react to the market trends. You know, historically, they have in some cases overreacted, like cut back inventory too far in a downturn, put too much on in an upturn. We don't know for sure, but their inventory levels for the current level of sell-through are pretty reasonable. You know, beyond that, we can't really anticipate what they might do. Got it. Thank you for the insight. That concludes our question and answer session. I'll now turn it back to Juergen Stark for closing remarks. Thank you. We look forward to speaking with our investors and analysts again following Q2. We appreciate your interest in the company and your support as fellow shareholders. Thank you. Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.