UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _________ to _________
Commission File Number:
(Exact Name of Registrant as Specified in its Charter)
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(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer |
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(Address of principal executive offices and zip code) |
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(Registrant’s telephone number, including area code) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of April 28, 2022, the registrant had
Table of Contents
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Page |
PART I. |
2 |
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Item 1. |
2 |
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2 |
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3 |
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Condensed Consolidated Balance Sheets - As of March 31, 2022 and December 31, 2021 |
4 |
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5 |
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6 |
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7 |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
22 |
Item 3. |
34 |
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Item 4. |
35 |
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PART II. |
36 |
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Item 1. |
36 |
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Item 1A. |
36 |
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Item 2. |
67 |
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Item 3. |
67 |
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Item 4. |
67 |
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Item 5. |
67 |
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Item 6. |
68 |
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69 |
i
NOTE ABOUT FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 (the Exchange Act) that reflect our current views with respect to, among other things, our operations and financial performance. These forward-looking statements are included throughout this Quarterly Report and relate to matters such as our industry, business strategy, goals and expectations concerning our market position, future operations, margins, profitability, capital expenditures, liquidity and capital resources and other financial and operating information. We have used the words “anticipate,” “assume,” “believe,” “continue,” “could,” “estimate,” “expect,” “foreseeable,” “future,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “will” and similar terms and phrases to identify the forward-looking statements.
The forward-looking statements contained in this Quarterly Report on Form 10-Q are based on management’s current expectations and are subject to uncertainty and changes in circumstances. There can be no assurance that future developments affecting us will be those that we have anticipated. Actual results may differ materially from these expectations due to changes in global, regional or local economic, business, competitive, market, regulatory and other factors, many of which are beyond our control, including, for example, the COVID-19 pandemic. We believe that these factors include but are not limited to those described under Part II, Item 1A, “Risk Factors” in this Quarterly Report on Form 10-Q. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this Quarterly Report on Form 10-Q. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable securities laws.
1
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited).
Corsair Gaming, Inc.
Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except per share amounts)
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Three Months Ended March 31, |
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2022 |
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2021 |
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Net revenue |
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$ |
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$ |
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Cost of revenue |
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Gross profit |
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Operating expenses: |
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Sales, general and administrative |
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Product development |
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Total operating expenses |
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Operating income (loss) |
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( |
) |
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Other (expense) income: |
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Interest expense |
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( |
) |
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( |
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Other expense, net |
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( |
) |
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( |
) |
Total other expense, net |
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( |
) |
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( |
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Income (loss) before income taxes |
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( |
) |
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Income tax benefit (expense) |
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( |
) |
Net income (loss) |
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( |
) |
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Less: Net loss attributable to noncontrolling interests |
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( |
) |
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— |
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Net income (loss) attributable to Corsair Gaming, Inc. |
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$ |
( |
) |
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$ |
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Calculation of net income (loss) per share attributable to common stockholders of Corsair Gaming, Inc.: |
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Net income (loss) attributable to Corsair Gaming, Inc. |
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$ |
( |
) |
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$ |
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Change in redemption value of redeemable noncontrolling interests |
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( |
) |
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— |
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Net income (loss) attributable to common stockholders of Corsair Gaming, Inc. |
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$ |
( |
) |
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$ |
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Net income (loss) per share attributable to common stockholders of Corsair Gaming, Inc.: |
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Basic |
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$ |
( |
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$ |
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Diluted |
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$ |
( |
) |
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$ |
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Weighted-average common shares outstanding: |
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Basic |
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Diluted |
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The accompanying notes are an integral part of these condensed consolidated financial statements
2
Corsair Gaming, Inc.
Condensed Consolidated Statements of Comprehensive Income (Loss)
(Unaudited, in thousands)
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Three Months Ended March 31, |
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2022 |
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2021 |
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Net income (loss) |
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$ |
( |
) |
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$ |
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Other comprehensive gain (loss): |
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Foreign currency translation adjustments, net of tax benefit of $ three months ended March 31, 2022 and 2021, respectively |
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( |
) |
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Unrealized foreign exchange loss from long-term intercompany loans, net of tax benefit of $ |
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( |
) |
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( |
) |
Comprehensive income (loss) |
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( |
) |
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Less: Comprehensive loss attributable to noncontrolling interests |
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( |
) |
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— |
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Comprehensive income (loss) attributable to Corsair Gaming, Inc. |
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$ |
( |
) |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements
3
Corsair Gaming, Inc.
Condensed Consolidated Balance Sheets
(Unaudited, in thousands, except per share amounts)
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March 31, 2022 |
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December 31, 2021 |
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Assets |
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Current assets: |
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Cash |
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$ |
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$ |
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Restricted cash |
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Accounts receivable, net |
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Inventories |
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Prepaid expenses and other current assets |
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Total current assets |
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Restricted cash, noncurrent |
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Property and equipment, net |
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Goodwill |
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Intangible assets, net |
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Other assets |
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Total assets |
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$ |
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$ |
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Liabilities |
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Current liabilities: |
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Debt maturing within one year |
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$ |
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$ |
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Accounts payable |
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Other liabilities and accrued expenses |
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Total current liabilities |
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Long-term debt |
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Deferred tax liabilities |
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Other liabilities, noncurrent |
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Total liabilities |
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Commitments and Contingencies (Note 9) |
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Temporary equity |
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Redeemable noncontrolling interests |
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— |
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Permanent equity |
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Corsair Gaming, Inc. stockholders’ equity: |
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Preferred stock, $ and outstanding as of March 31, 2022 and December 31, 2021, respectively |
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Common stock, $ shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively |
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Additional paid-in capital |
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Retained earnings |
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Accumulated other comprehensive loss |
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( |
) |
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( |
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Total Corsair Gaming, Inc. stockholders’ equity |
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Nonredeemable noncontrolling interests |
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— |
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Total permanent equity |
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Total liabilities, temporary equity and permanent equity |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements
4
Corsair Gaming, Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(Unaudited, in thousands)
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Three Months Ended March 31, 2022 |
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Common Stock |
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Additional Paid-in |
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Retained |
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Accumulated Other Comprehensive |
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Total Corsair Gaming, Inc. Stockholders’ |
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Nonredeemable Noncontrolling |
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Total Permanent |
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Shares |
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Amount |
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Capital |
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Earnings |
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Loss |
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Equity |
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Interests |
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Equity |
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Balance as of December 31, 2021 |
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
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$ |
— |
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$ |
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Issuance of common stock in relation to business acquisition |
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— |
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— |
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— |
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Noncontrolling interests from business combination |
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— |
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— |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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( |
) |
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— |
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( |
) |
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( |
) |
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( |
) |
Other comprehensive loss |
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— |
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— |
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— |
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— |
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( |
) |
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( |
) |
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( |
) |
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( |
) |
Change in redemption value of redeemable NCI |
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— |
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— |
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— |
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( |
) |
|
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— |
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( |
) |
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— |
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( |
) |
Issuance of common stock in connection with employee equity incentive plans |
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— |
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— |
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— |
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— |
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Shares withheld related to net share settlement |
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( |
) |
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— |
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( |
) |
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— |
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— |
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( |
) |
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— |
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( |
) |
Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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Balance as of March 31, 2022 |
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
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$ |
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$ |
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Three Months Ended March 31, 2021 |
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Common Stock |
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Additional Paid-in |
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Retained Earnings (Accumulated |
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Accumulated Other Comprehensive |
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Total Corsair Gaming, Inc. Stockholders’ |
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Nonredeemable Noncontrolling |
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Total Permanent |
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Shares |
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Amount |
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Capital |
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Deficit) |
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Income (Loss) |
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Equity |
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Interests |
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Equity |
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Balance as of December 31, 2020 |
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$ |
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$ |
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$ |
( |
) |
|
$ |
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$ |
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$ |
— |
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$ |
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Net income |
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— |
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— |
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— |
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— |
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— |
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Other comprehensive loss |
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— |
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— |
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— |
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— |
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( |
) |
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( |
) |
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— |
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( |
) |
Issuance of common stock in connection with employee equity incentive plans |
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— |
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— |
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— |
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— |
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Stock-based compensation |
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— |
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— |
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|
|
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— |
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— |
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— |
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Balance as of March 31, 2021 |
|
|
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$ |
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$ |
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$ |
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$ |
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|
$ |
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|
|
$ |
— |
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|
$ |
|
|
The accompanying notes are an integral part of these condensed consolidated financial statements
5
Corsair Gaming, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
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Three Months Ended March 31, |
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2022 |
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2021 |
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Cash flows from operating activities: |
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Net income (loss) |
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$ |
( |
) |
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$ |
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Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
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Stock-based compensation |
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Depreciation |
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Amortization of intangible assets |
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Debt issuance costs amortization |
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Loss on debt extinguishment |
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— |
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Deferred income taxes |
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( |
) |
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( |
) |
Other |
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Changes in operating assets and liabilities: |
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Accounts receivable |
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( |
) |
Inventories |
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( |
) |
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( |
) |
Prepaid expenses and other assets |
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( |
) |
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( |
) |
Accounts payable |
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( |
) |
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( |
) |
Other liabilities and accrued expenses |
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( |
) |
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Net cash provided by (used in) operating activities |
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( |
) |
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Cash flows from investing activities: |
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Acquisition of business, net of cash acquired |
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( |
) |
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( |
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Payment of deferred contingent consideration |
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— |
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( |
) |
Purchase of property and equipment |
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( |
) |
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( |
) |
Net cash used in investing activities |
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( |
) |
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( |
) |
Cash flows from financing activities: |
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Repayment of debt |
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( |
) |
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( |
) |
Borrowing from line of credit |
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— |
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Repayment of line of credit |
|
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( |
) |
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— |
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Payment of contingent consideration |
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( |
) |
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— |
|
Proceeds from issuance of shares through employee equity incentive plans |
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Payment of taxes related to net share settlement of equity awards |
|
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( |
) |
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— |
|
Net cash used in financing activities |
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( |
) |
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( |
) |
Effect of exchange rate changes on cash |
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( |
) |
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Net decrease in cash and restricted cash |
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|
( |
) |
|
|
( |
) |
Cash and restricted cash at the beginning of the period |
|
|
|
|
|
|
|
|
Cash and restricted cash at the end of the period |
|
$ |
|
|
|
$ |
|
|
Supplemental cash flow disclosures: |
|
|
|
|
|
|
|
|
Cash paid for interest |
|
$ |
|
|
|
$ |
|
|
Cash paid for income taxes |
|
|
|
|
|
|
|
|
Supplemental schedule of non-cash investing and financing activities: |
|
|
|
|
|
|
|
|
Equipment purchased and unpaid at period end |
|
$ |
|
|
|
$ |
|
|
Right-of-use assets obtained in exchange for operating lease liabilities |
|
|
|
|
|
|
|
|
Deferred and contingent purchase consideration related to business acquisitions |
|
|
— |
|
|
|
|
|
The accompanying notes are an integral part of these condensed consolidated financial statements
6
Corsair Gaming, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. Description of Business
Description of Business
Corsair Gaming, Inc., a Delaware corporation, together with its subsidiaries (collectively, “Corsair” the “Company”, “we”, “us”, or “our”), is a global provider and innovator of high-performance gear for gamers, streamers and content creators, many of which build their own PCs using our components.
Corsair is organized into
|