Turtle Beach Corp
For the period ended Dec 31, 2025. Filed Mar 12, 2026.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 12, 2026
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Item 8. Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Turtle Beach Corporation (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated March 12, 2026 expressed an adverse opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
| Measurement of variable consideration: Cash-Based Incentive Programs | |
| Description of the Matter | As described in Note 2 of the consolidated financial statements, the Company provides cash-based incentive programs, including cash discounts, quantity rebates and price concessions, which results in variable consideration. As of December 31, 2025, the Company has recognized an allowance for cash-based incentives of $29.6 million in “accounts receivable, net” on the consolidated balance sheet. Auditing the Company’s measurement of variable consideration related to cash-based incentives is complex because the calculation is determined based on significant management assumptions with respect to the expected performance of the customers, types and levels of promotions, forecasted claims from the customers and forecasted economic trends in comparison to historical trends, when applicable. Changes in these assumptions can have a significant impact on the amount of revenue recognized. |
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| How We Addressed the Matter in Our Audit | To test the allowance for cash-based incentives, we obtained an understanding of the Company’s process of estimating variable consideration related to its cash-based incentive programs and tested the completeness and accuracy of the underlying data supporting the significant assumptions mentioned above. In addition, among other audit procedures, we performed a retrospective review of the allowance, evaluated the assumptions by comparing them to historical trends and third-party information, and performed transactional testing of customer claim activity. |
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| Measurement of variable consideration: Sales Return Reserve | |
| Description of the Matter | As described in Note 2 of the consolidated financial statements, the Company provides certain customers product return rights, which results in variable consideration. As of December 31, 2025, the Company has recognized an allowance for sales returns of $8.4 million in “accounts receivable, net” on the consolidated balance sheet. Auditing the measurement of variable consideration related to sales returns is complex because the calculation is determined based on significant management assumptions with respect to customer return activity trends based on the historical trends and forecasted economic trends in comparison to historical trends, when applicable. Changes in these assumptions can have a significant impact on the amount of the revenue recognized. |
| How We Addressed the Matter in Our Audit | To test the allowance for sales return reserve, we obtained an understanding of the Company’s process of estimating variable consideration related to sales returns and tested the completeness and accuracy of the underlying data supporting the significant assumptions mentioned above. In addition, among other audit procedures, we performed a retrospective review of the allowance, evaluated the assumptions by comparing them to historical trends, and performed transactional testing of sales returns. Additionally, we tested whether the introduction of new products or new customer contracts could have a material impact on the allowance at period end. |
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2023.
New York, New York
March 12, 2026
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