Turtle Beach : Investor Presentation – March 2020

INVESTOR PRESENTATION

M a r c h 2 0 2 0

SAFE HARBOR

Forward-Looking Information

This presentation includes forward-looking information and statements within the meaning of the federal securities laws. Except for historical information contained in this release, statements in this release may constitute forward-looking statements regarding assumptions, projections, expectations, targets, intentions or beliefs about future events. Statements containing the words "may", "could", "continue", "would", "should", "believe", "expect", "anticipate", "plan", "goal", "estimate", "accelerate", "target", "project", "intend" and similar expressions constitute forward-looking statements. Forward-looking statements involve known and unknown risks and uncertainties, which could cause actual results to differ materially from those contained in any forward-looking statement. Forward-looking statements are based on management's current belief, as well as assumptions made by, and information currently available to, management. While the Company believes that its expectations are based upon reasonable assumptions, there can be no assurances that its goals and strategy will be realized. Numerous factors, including risks and uncertainties, may affect actual results and may cause results to differ materially from those expressed in forward-looking statements made by the Company or on its behalf. Some of these factors include, but are not limited to, risks related to the substantial uncertainties inherent in the acceptance of existing and future products, the difficulty of commercializing and protecting new technology, the impact of competitive products and pricing, general business and economic conditions, including the impact of coronavirus on consumer demands and manufacturing capabilities, the Company's partnerships with influencers, athletes and esports teams. risks associated with the expansion of our business including the implementation of any businesses we acquire, the integration of such businesses within our internal control over financial reporting and operations, our indebtedness, the Company's liquidity, and other factors discussed in our public filings, including the risk factors included in the Company's most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q and the Company's other periodic reports. Except as required by applicable law, including the securities laws of the United States and the rules and regulations of the Securities and Exchange Commission, the Company is under no obligation to publicly update or revise any forward-looking statement after the date of this release whether as a result of new information, future developments or otherwise. This presentation also contains trademarks and trade names that are property of their respective owners.

Non-GAAP Financial Measures

This presentation contains certain financial measures, including adjusted EBITDA, that the Securities and Exchange Commission defines as "non-GAAP financial measures." Management believes that such non-GAAP financial measures, when read in conjunction with the Company's reported results, can provide useful supplemental information for investors analyzing period-to-period comparisons of the

Company's results. "Adjusted EBITDA" is defined by the Company as net income (loss) before interest, taxes, depreciation and amortization, stock-based compensation (non-cash), and certain special items

that we believe are not representative of core operations (e.g., the integration and transaction costs related to the ROCCAT acquisition and the mark-to-market adjustment for the financial instrument obligation and). Non-GAAP financial measures are presented because management uses non-GAAP financial measures to evaluate the Company's operating performance, to perform financial planning, and to determine incentive compensation. Therefore, the Company believes that the presentation of non-GAAP financial measures provides useful supplementary information to, and facilitates additional analysis by, investors. The presented non-GAAP financial measures exclude items that management does not believe reflect the Company's core operating performance because such items are inherently unusual, non- operating, unpredictable, non-recurring, or non-cash. See a reconciliation of non-GAAP results in the appendix.

© 2020 Turtle Beach Corporation. All Rights Reserved.

2

In 2019, Turtle Beach acquired ROCCAT, a leading PC gaming accessories brand, to bring their award-winning product portfolio to more gamers globally.

#1

IN GAMING AUDIO

The Global Market Leader In Console Gaming Headsets for 10 years

40 Million+

Headsets Sold Since 2010

Broad Portfolio

of PC Gaming Accessories

Award Winning Design

and Build Quality

INNOVATION AT

EVERY PRICE POINT

Industry Leading Innovations

Titan Click - Titan Switch - AIMO Intelligent Lighting

3

TURTLE BEACH

#1 CONSOLE GAMING HEADSET BRAND

I N T H E $ 1 . 4 B 1 C O N S O L E H E A D S E T M A R K E T

Best-selling, innovative product portfolio for all levels of gamers with 150+ associated patents

Expanded into PC gaming headsets, keyboards & mice to grow addressable market to $2.7B1

~$235M business generated ~$23M of EBITDA & ~$20M of free cash flow² in 2019

Healthy balance sheet with no long-term debt

Highly experienced board and management team

The best-selling headset of 2019 3

1Newzoo 2019 Peripheral Market estimates - updated in October 2019
2Free cash flow defined as consolidated adjusted EBITDA less capital expenditures, less cash interest.	4
3The NPD Group/Retail Tracking Service/Video Games/Dollars/U.S.& Canada/January-December 2019

THE LEADER IN CONSOLE GAMING HEADSETS

#1 GAMING HEADSET	HIGHER REVENUE SHARE
PROVIDER FOR XBOX & PLAYSTATION	THAN NEXT 3 PLAYERS COMBINED

	US & CANADA CONSOLE		WHY & HOW
Other	GAMING HEADSET
REVENUE SHARE
56.6%	2019	43.4%

4 OF TOP 5 SELLERS	13 OF TOP 20 SELLERS
OVERALL ARE TURTLE BEACH	OVERALL ARE TURTLE BEACH

STRONG BRAND & REPUTATION

Among Gamers, Retailers, Gaming Industry

PRODUCT FOR EVERY GAMER

Entry Level to Professional

PRODUCT INNOVATIONS

And Unique Features - Many patented

260K+ POINTS OF DISTRIBUTION

50 Countries

STRONG PARTNERSHIPS

With Leading Esports Teams & Influencers

OVER 10 YEARS EXPERIENCE

Gaming Headsets & with Xbox & PlayStation

154 ISSUED PATENTS

60 Pending1

Source: The NPD Group/Retail Tracking Service/Video Games/Dollars/U.S.& Canada/January-December 2019
1Counts only patents related to headsets (not including additional patents from ROCCAT and HyperSound)	5

CONSOLE HEADSETS:

Console Headsets: $1.4B Addressable Market

TURTLE BEACH IS ALREADY AMONG THE TOP 4 PLAYERS IN THE $4.1B GLOBAL GAMING ACCESSORY MARKET

Keyboards

$765M

		Console
		Headsets
	GLOBAL GAMING	$1,388M
Mice	ACCESSORY
MARKET
$689M	$4,135M1

PC Headsets

$1,292M

Americas & Europe are 65% of the market

260+K Points of Distribution Across 50 Countries Brick & Mortar Accounts For 80%+ Retail Sales2

Where Consumers Can Try The Headsets

1Newzoo October 2019 Peripheral Market estimates
2Turtle Beach estimates 80+% of North American console industry headset sales are via brick & mortar retailers	6

GREAT HEADSETS

		"One of the best wireless headsets you
		can own for Xbox One."
		- WIRED
"This $40 headset is worth every penny."
- Windows Central

"9/10.A quality piece of hardware
that justifies its price."
- Game Informer	7

2020 XBOX & PS4 HEADSET LINEUP

STEP-UP FEATURE FROM

PREVIOUS SERIES

- All headsets compatible with next-gen consoles

	XBOX ONE | PS4™ PRO | PS4™
	NINTENDO SWITCH ™ | MOBILE
XBOX ONE	$129.95 MSRP*
$149.95 MSRP

XBOX ONE | PS4™ PRO | PS4™

NINTENDO SWITCH ™ | MOBILE

$14.95 MSRP*

40mm Driver

Open Earcup

Mono

					XBOX ONE		50mm Nanoclear™ Drivers
					Active Noise-
				XBOX ONE | PS4™ PRO | PS4™		Cancellation	Cooling Aerofit™
				$99.95 MSRP
				NINTENDO SWITCH ™ | MOBILE	Bluetooth® with	Cushions
			XBOX ONE | PS4™ PRO | PS4™	$79.95 MSRP*	Xbox Wireless	App Control
			NINTENDO SWITCH ™ | MOBILE		Metal Headband
						Xbox Wireless
			$59.95 MSRP*		Windows Sonic
				ProSpecs™	Surround Sound	Windows Sonic	Floating Headpad
		XBOX ONE | PS4™ PRO | PS4™	Amplified
	XBOX ONE | PS4™ PRO | PS4™	NINTENDO SWITCH ™ | MOBILE		Superhuman Hearing®	Surround Sound
			50mm Drivers
XBOX ONE | PS4™ PRO | PS4™	NINTENDO SWITCH ™ | MOBILE				Superhuman Hearing®	TruSpeak™ Pro
	$39.95 MSRP*	Bass Boost		ProSpecs™
NINTENDO SWITCH ™ | MOBILE	$24.95 MSRP*			Gaming Mic
			EQ Modes		ProSpecs™
$29.95 MSRP*		Flip-to-Mute Mic	Memory Foam
40mm Drivers		50mm Drivers		Elite Two-Year Warranty
			40+ Hour Battery		50mm Drivers
Stereo		Synthetic Leather
Synthetic Leather	Metal-Reinforced		EQ Modes		Swappable Deco Plates
			Amplified		EQ Modes
Removable Microphone		Lightweight Design	Mic Monitoring
Lightweight Design		Amplified	Amplified
					ProSpecs™
				Metal-Reinforced
Inline Controls	Removable Microphone	40mm Drivers	12+Hour Battery	Mic Monitoring
	Mic Monitoring
Mobile Multifunction	Inline Controls	High-Sensitivity Mic	Flip-to-Mute Mic	Mic Monitoring	Flip-to-Mute Mic		Inline Controls
Button		Flip-to-Mute Mic

10mm Drivers

Stereo

Stereo

40mm Drivers

Flip-to-Mute Mic

15+ Hour Battery

10+ Hour Battery

Stereo

Entry-Level Gamer	Casual Gamer	Enthusiast Gamer	Core Gamer	Esports
< 4 hours per week	4-6 hours per week	7-15 hours per week	16+ hours per week

*MSRP subject to change.	8

ROCCAT

ROCCAT is Turtle Beach's brand of gaming mice, keyboards, headsets & software for PC gamers

ROCCAT acquisition added good base of award-winningmice & keyboards with unique innovations, integrated lighting & PC software

ROCCAT's Hamburg, Germany-based studio has an innovative product & engineering team with deep experience in PC mice &

keyboards

ROCCAT has strong brand presence in Germany, good awareness across EU, & is currently expanding in NA & major Asian markets

Turtle Beach plans to invest ~$9M over next two years in portfolio

expansion & ROCCAT brand development

FIRM HANDSHAKES FROM THE BEST, TO THE BEST FROM DR DISRESPECT

FEB. 2020 - ROCCAT Partnership

9

"The best all-around gaming mouse on

the market today." - T3.com (Feb. 2020)

"4.5/5.A piece of beauty."

• Tech Radar (Oct. 2019)

10

INVESTING TO DRIVE GROWTH

GLOBAL GAMING ACCESSORY MARKET: $4,135M
Mice		8 Mice
$689M		Expand Portfolio
	2020-2021
Keyboards		4 Keyboards
$765M		Expand Portfolio
	2020-2021
PC Headsets		2 Headsets
$1,292M	3 Headsets	Revise and Expand
Portfolio
		2020-2021
Console Headsets
$1,388M	20 Headsets

$2.7B Market To Further Penetrate

Plans to Invest ~$9M In Portfolio Expansion And ROCCAT Brand

Development

Goal Is To Build

Incremental $100M Business

$1.4B In Historic TB

Addressable Market

We lead this market by

far

Goal Is To Continue

Leadership

Source (for market sizes): Newzoo Report 2019 Peripheral Market estimates	11
Note: model counts above represent core models only, not all variants or SKUs.

GLOBAL GAMING

$4.9B

5.0

4.5$4.1B 1.0m

4.0

3.5				0.8m						0.9m
			0.7m
3.0
2.5
			1.3m						1.5m
2.0
1.5
1.0
			1.4m						1.5m
0.5
0.0
	2019					2021
				CONSOLE		PC		MICE		KEYBOARDS

TAM GROWTH 2019 - 2021

+18%	Strong overall gaming
accessories growth
+24%	Expanding keyboard
lineup and geographies
+25%	Expanding mouse
portfolio and geographies
+20%	Building into
PC headset category
+10%	Turtle Beach #1 in
console gaming audio

today

Source: Newzoo Peripheral Revenue Forecasts October 2019

12

WE PARTNER WITH LEADING TEAMS

Over 821M Gamers and 195M esports fans in the Americas and Europe1

Ali-A (28M+ Reach)	Dr. Disrespect	Mr Savage (5M+ Reach)	Castro_1021
(7.5M+ Reach)	(5.5M+ Reach)

Romelu Lukaku	Kevin De Bruyne	Josh Hart	Kevin Porter Jr.
(Inter Milan & Belgium,	(Man City & Belgium,	(New Orleans Pelicans,	(Cleveland Cavaliers,
11M Reach)	16M Reach)	1.1M Reach)	375k Reach)

HECZ	Scump	MrBBoy45	Mae
(2.5M+ Reach)	(5.8M Reach)	(2.5M+ Reach)	(1M+ Reach)

Houston Outlaws	Astralis	Chicago Huntsmen
Franchise team in Activision	4-time Major Champions and	Franchise team in
Blizzard's OWL	#1 CS:GO team	Activision Blizzard's CDL

Official Audio Partner	Exclusive Gaming Partner	TIDAL Partnership
Free Subscriptions w/Purchase At
EA Sports FIFA 20 Champions Cup	Jay Z's Made In America Festival
TurtleBeach.com
Titles shown represent games played by our partner esports teams and influencers and do not indicate a partnership with the publisher	13
1Newzoo 2020 Global Esports and Global Games Market Report QU January 2020

GEN 8 CONSOLE

Gen 7 Xbox (Nov 2013)

Gen 8 Xbox (2020)

Gen 7 PlayStation (Nov 2013)

Gen 8 PlayStation (2020)

Xbox Series X (announced E3/June 2019)	PlayStation 5/PS5 (announced April 2019)
Release: Holiday 2020 (expected November)	Release: Holiday 2020 (expected November)
Price: $499 (expected)	Price: $499
• Backward compatibility	• Backward compatibility (to be confirmed by Sony)
• Major power increase/faster game access/reduced load times	• Major power increase/faster game access/reduced load times
• Will support up to 8K resolution	• Will support up to 8K resolution
• 3D Spatial Sound (to be confirmed by MSFT, headset required)	• 3D Spatial Sound (headset required)
• Project xCloud game streaming service	• PlayStation Now streaming/focus on AAA titles

Source: Microsoft and Sony announcements	14

XBOX AND PLAYSTATION

PlayStation and Xbox Console Unit Sales

40

(in millions)	30
SalesUnit	20
Hardware	10

0

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Gen 6 Gen 7 Gen 8

Source : DFC Intelligence September 2019 Worldwide Video Game Market Forecasts

"With the launch of new systems and continued sales for existing console we forecast Microsoft and Sony combined hardware sales will set records in 2021 and 2022"

David Cole, Head DFC Intelligence, Video games industry analyst

• Console transition has typically created a market decline the year prior to transition, an increase late in the year of new console launch, and then several years of accelerated growth post-launch
• Accessories typically follow same pattern with some lag as some users will wait on new accessory purchases, particularly at the high- end prior to launch and then upgrading accelerates post-launch
• Turtle Beach expects the console gaming headset market to be down ~11% in 2020, followed by mid to high single digit growth in 2021 and 2022
• DFC predicts the combined XB and PS hardware unit sales for Gen 7 and Gen 8 in the first three years of launch to be higher than the combined sales of Gen 6 and Gen 7 in the first three years, setting another record
• DFC predicts Active Installed Base (AIB) of Gen 8 in the first four years of launch to be slightly higher than AIB of Gen 7
• Nintendo is not included; a new system core from Nintendo could

substantially increase overall market potential

15

REVENUE & ADJUSTED EBITDA PROFILE

Company Revenues¹

Adjusted EBITDA2

Millions				Millions
	$287M				$57.7M
		$235M	$214M-
		$224M
$149M
						$22.8
							Includes ~$9M
							of growth
				$11.6M			investments
							$5-$10M
2017	2018	2019	2020E¹	2017	2018	2019	2020E¹

1Guidance updated on March 10, 2020.
2See appendix for a reconciliation of non-GAAP measures.	16

BALANCE SHEET

Capitalization

	At 12-31-18	At 12-31-19
Cash & Equivalents	$7.1M	$8.2M
Inventories	$49.5M	$45.7M
Revolver (asset-based)	$37.4M	$15.7M
Total Debt	$37.4M	$15.7M
Leverage Ratio¹	0.1x	0.4x

Balance Sheet Improvements

• Fully repaid all term loans and subordinated notes in Dec 2018 with operating cash flow.
• ROCCAT purchase price of $12.7M funded with cash and borrowings under revolver.
• Repurchased 271,300 shares for $2.5M, or average of $9.30 per share since April 2019.
• Inventory decline driven by revenue trends, channel inventories believed to be appropriate.

1Defined as total term loans outstanding and average trailing twelve month revolving debt, divided by consolidated trailing twelve month adjusted EBITDA.

17

2020 OUTLOOK¹

	2020	2020 Commentary
Net		Console gaming headset market decline ahead of new console
$214-$224M	launches, partially offset by continued growth in our PC & other
Revenue
	gaming accessory revenues
Gross
Low 30%	Increased freight, continued tariffs on some products, & ~1%
Margin	impact of NRE/certification costs for new product development
Adj.		Includes ~$9M investment to expand PC product portfolio,
$5M-$10M	continue ROCCAT brand development & expansion into new
EBITDA
	geographies
Diluted
~15.0M
Shares
GAAP EPS	$(0.13)-$(0.46)	Reflects above factors including growth investment, also
anticipates modest provision for income taxes.
Adj. EPS²		Reflects above factors, excludes ROCCAT transaction &
$(0.12)-$(0.45)	integration costs, also anticipates modest provision for income
		taxes.

1Guidance updated on March 10, 2020.

Overall Assumptions:

• Console gaming headset market declines roughly 11% with softer market ahead of expected new Xbox and PlayStation console launches and then growth in Q4 after launch (and into 2021-2022)
• Expected supply recovery from Coronavirus based on current, forward- looking supply commitments with some cushion for increased freight costs factored in
• Gross margin reflects increased freight, continued tariffs impacting some products, and accommodate higher NRE and certifications for new product launches
• Investment of ~$9 million to expand PC portfolio over the next two years and build ROCCAT brand

18

LONG-TERM FINANCIAL TARGETS

MetricTarget

Revenue $

10-20% CAGR

Gross Margins %

Mid 30's

EBITDA $

15-30% CAGR

Maintain leadership position in console gaming headsets

Drive growth in PC gaming headsets, keyboards, and mice (leveraging ROCCAT brand and portfolio)

Maintain disciplined spending with investments for growth

Leverage brand, skills, and global footprint to enter new categories over time (organic and M&A)

19

CONTACT US

INVESTOR RELATIONS:	PR/Media Contact:
Cody Slach/Sean McGowan	Maclean Marshall
Gateway	Turtle Beach
949.574.3860	858.914.5093
[e-mail]	[e-mail]

COMPANY WEBSITES

www.turtlebeachcorp.com | www.turtlebeach.com | www.roccat.org

APPENDIX

217

EXPERIENCED BOARD OF DIRECTORS

Juergen Stark

Chairman & CEO

William Keitel

Lead Independent Director

Dr. Andrew Wolfe, PhD

Director

Gregory Ballard

Director

Kelly Thompson

Director

• COO of Motorola Mobility's mobile business
• 10 years as Principal at McKinsey & Company, Inc.
• MBA, Harvard Business School
• Former CFO of Qualcomm Incorporated (NASDAQ: QCOM)
• During his tenure, Qualcomm grew revenues from ~$800M to ~$25B
• Held senior financial roles at Nortel (OTC: NRTLQ) & Pepsico (NYSE: PEP)
• Founder & principal of Wolfe Consulting
• Former Chief Technology Officer for SONICblue, Inc.
• Expert in IP strategy and licensing
• General partner with Eleven Ventures
• Former senior VP for mobile & social games at Warner Bros.
• Former CEO of Glu Mobile, former board member with DTS
• Former SVP and COO, Samsclub.com
• Former SVP Merchandising, Planning, and Marketplace for Walmart.com
• 10 years in management positions at Gap, Inc.

22

EXPERIENCED MANAGEMENT TEAM

Juergen Stark Chairman & CEO

• COO Of Motorola Mobility's Mobile Business
• 10 Years As Principal At Mckinsey & Company

John Hanson CFO

• EVP & CFO at Dialogic
• CFO at One Communications Corp

Cris Keirn SVP, Global Sales

• Led headset transition as VP of business planning & strategy
• 17 years with Motorola in product management, operations, quality & customer relations

Megan Wynne General Counsel

• 5 years with I-Flow, a Kimberly-Clark Health Care Company
• 13 years with Morris Polich & Purdy law firm

Andrew Lilien VP, Marketing

Rene Korte General Manager, PC Products

• Founder of ROCCAT GmbH and CEO for 12 years
• VP Europe for RAZER
• Professional gamer and founder of MTW esports team

Matt Seymour VP, Product Management

• 20+ years in the Consumer Electronics industry
• Previously with Sony leading television portfolio planning & development, product marketing

Joe Stachula CTO & VP, Product Development

• 20+ years in consumer electronics
• 12 years at Plantronics engineering audio headsets

Jose Rosado SVP, Global Operations

• Former Sr. Director, Global Supply Chain Operations for HP
• 22 years of supply chain management with Motorola, ON Semiconductor, HP, Cisco

• 20+ years of brand, consumer & retail marketing experience
• Past experience at ESPN, Fleer Trading Cards & National
  Media Group

GAAP TO ADJUSTED EBITDA RECONCILIATION
	December 31, 2019	December 31, 2018	December 31, 2017
Consolidated
Net Income (Loss)	17,944	39,190	(3,248)
Depreciation	4,556	3,954	4,074
Amortization of intangibles	642	303	348
Interest	929	5,335	7,916
Taxes	(6,237)	1,737	593
Stock Compensation	3,558	1,877	1,430
Restructuring Expense	-	-	533
Goodwill Impairment	-	-	-
Business Transaction Expense	3,516	-	(79)
Change in Fair Value of Contingent Consideration	(471)	-	-
Unrealized loss on financial instrument obligation	(1,601)	5,291	-
Adj EBITDA	22,836	57,687	11,567
			24