UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): |
(Exact name of Registrant as Specified in Its Charter)
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
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Trading |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
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. ☐
Item 2.02 Results of Operations and Financial Condition
On November 7, 2023, Corsair Gaming, Inc. (“Corsair” or the “Company”) issued a press release announcing certain of its financial results for the fiscal quarter ended September 30, 2023. The full text of the press release is furnished pursuant to Item 2.02 as Exhibit 99.1 to this Current Report on Form 8-K. A presentation regarding the Company's fiscal quarter ended September 30, 2023 is furnished pursuant to Item 2.02 as Exhibit 99.2 hereto.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit Number |
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Description |
99.1 |
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99.2 |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
The information in this Current Report on Form 8-K and Exhibit 99.1 and Exhibit 99.2 attached hereto shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. The information contained herein and in the accompanying exhibits shall not be incorporated by reference into any filing with the U.S. Securities and Exchange Commission made by Corsair Gaming, Inc., whether made before or after the date hereof, regardless of any general incorporation language in such filing.
1
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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CORSAIR GAMING, INC. |
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Date: November 7, 2023 |
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By: |
/s/ Michael G. Potter |
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Michael G. Potter |
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Chief Financial Officer (Authorized Officer, Principal Financial Officer and Principal Accounting Officer) |
2
Exhibit 99.1
Corsair Gaming Reports Third Quarter 2023 Financial Results; 16.5% Revenue Growth Over Prior Year; Updates Full Year Financial Outlook
Milpitas, CA, November 7, 2023 – Corsair Gaming, Inc. (Nasdaq: CRSR) (“Corsair” or the “Company”), a leading global provider and innovator of high-performance gear for gamers, streamers, content-creators, and gaming PC builders, today announced financial results for the third quarter ended September 30, 2023, and updated its financial outlook for the full year 2023.
Third Quarter 2023 Select Financial Metrics
First Nine Months 2023 Select Financial Metrics
Andy Paul, Chief Executive Officer of Corsair, stated, “We are very pleased to see the continued year-over-year revenue growth and improvement in profitability both for the quarter and year to date. Sales of our core peripherals products have stabilized and are now starting to grow again as our new products gain traction. The robust and successful release of a steady stream of popular new game titles in 2023 is further spurring demand.
Several new key product launches are having an immediate effect on revenue. Our K70 line of keyboards has been refreshed with products that use our own range of switches, and we also released several new higher-end wireless gaming headsets and mice. Our long awaited Elgato Marketplace was just released, where our large installed base of Stream Deck users can buy apps and plug ins from many third-party developers, as well as our own creators. We also launched a new PC controller, the Scuf Envision, a console style controller (for PC use only) and has many additional programmable inputs, which bridges the gap between traditional controllers and a conventional keyboard and mouse. We believe that these types of product launches will help us continue to grow market share as we focus on the needs of competitive gamers.”
Michael G. Potter, Chief Financial Officer of Corsair, stated, “We continued the substantial year-over-year financial improvement that started in the first half of the year. Revenue, gross margin, and adjusted EBITDA all improved over the prior year with very encouraging gross margin recovery in our core peripherals products. We further reduced debt in Q3, and we continue to expect liquidity to remain excellent for the rest of 2023 allowing us to be flexible as opportunities present themselves. Our results include the impact of our recent acquisition of the assets of Drop. We expect to start realizing revenue and cost benefits from our Drop integration efforts early in 2024.”
Financial Outlook
Corsair is updating its outlook for the full year 2023, with tightened ranges. The Company expects revenue growth on a year-over-year basis, despite a softer economic environment as compared to 2022. Corsair continues to expect an improvement for the full year 2023 in adjusted EBITDA led by an improvement in margin, normalized shipping costs, and continued tight operating expense controls. This update includes the impact of the Company’s recent acquisition of the assets of Drop.
Certain non-GAAP measures included in our financial outlook were not reconciled to the comparable GAAP financial measures because the GAAP measures are not accessible on a forward-looking basis. We are unable to reconcile these forward-looking non-GAAP financial measures to the most directly comparable GAAP measures without unreasonable efforts because we are currently unable to predict with a reasonable degree of certainty the type and extent of certain items that would be expected to impact GAAP measures for these periods but would not impact the non-GAAP measures. Such items may include stock-based compensation charges, amortization, and other items. The unavailable information could have a significant impact on our GAAP financial results.
The foregoing forward-looking statements reflect our expectations as of today's date. Given the number of risk factors, uncertainties and assumptions discussed below, actual results may differ materially. We do not intend to update our financial outlook until our next quarterly results announcement.
Recent Developments
Conference Call and Webcast Information
Corsair will host a conference call to discuss the third quarter 2023 financial results today at 2:00 p.m. Pacific Time. The conference call will be accessible on Corsair’s Investor Relations website at https://ir.corsair.com, or by dialing 1-844-825-9789 (USA) or 1-412-317-5180 (International) with conference ID 10183764. A replay will be available approximately 3 hours after the live call ends on Corsair's Investor Relations website, or through November 14, 2023 by dialing 1-844-512-2921 (USA) or 1-412-317-6671 (International), with passcode 10183764.
About Corsair Gaming, Inc.
CORSAIR (Nasdaq: CRSR) is a leading global developer and manufacturer of high-performance gear and technology for gamers, content creators, and PC enthusiasts. From award-winning PC components and peripherals, to premium streaming equipment and smart ambient lighting, CORSAIR delivers a full
ecosystem of products that work together to enable everyone, from casual gamers to committed professionals, to perform at their very best. Corsair also sells gear under its Elgato brand, which provides premium studio equipment and accessories for content creators, SCUF Gaming brand, which builds custom-designed controllers for competitive gamers, Drop brand, which specializes in personalized keyboard and gaming setup accessories, and ORIGIN PC brand, a builder of custom gaming and workstation desktop PCs.
Forward Looking Statements
Except for the historical information contained herein, the matters set forth in this press release are forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, Corsair’s expectations regarding market headwinds and tailwinds; its expectations regarding 2023; its expectations regarding potential significant revenue and cost opportunities from the integration of Drop’s assets; and its estimated full year 2023 net revenue, adjusted operating income and adjusted EBITDA. Forward-looking statements are based on our management’s beliefs, as well as assumptions made by, and information currently available to them. Because such statements are based on expectations as to future financial and operating results and are not statements of fact, actual results may differ materially from those projected. Factors which may cause actual results to differ materially from current expectations include, but are not limited to: current macroeconomic conditions, including the impacts of high inflation and risk of recession on demand for our products, consumer confidence and financial markets generally; the lingering impacts and future outbreaks of the COVID-19 pandemic and its impacts on our operations and the operations of our manufacturers, retailers and other partners, as well as its impacts on the economy overall, including capital markets; our ability to build and maintain the strength of our brand among gaming and streaming enthusiasts and our ability to continuously develop and successfully market new gear and improvements to existing gear; the introduction and success of new third-party high-performance computer hardware, particularly graphics processing units and central processing units as well as sophisticated new video games; fluctuations in operating results; the risk that we are not able to compete with competitors and/or that the gaming industry, including streaming and esports, does not grow as expected or declines; the loss or inability to attract and retain key management; the impacts from geopolitical events and unrest; delays or disruptions at our or third-parties’ manufacturing and distribution facilities; our ability to successfully integrate any companies or assets we have acquired or may acquire; currency exchange rate fluctuations or international trade disputes resulting in our gear becoming relatively more expensive to our overseas customers or resulting in an increase in our manufacturing costs; and the other factors described under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the Securities and Exchange Commission (“SEC”) and our subsequent filings with the SEC. Copies of each filing may be obtained from us or the SEC. All forward-looking statements reflect our beliefs and assumptions only as of the date of this press release. We undertake no obligation to update forward-looking statements to reflect future events or circumstances. Our results for the quarter ended September 30, 2023 are also not necessarily indicative of our operating results for any future periods.
Use and Reconciliation of Non-GAAP Financial Measures
To supplement the financial results presented in accordance with GAAP, this earnings release presents certain non-GAAP financial information, including adjusted operating income (loss), adjusted net income (loss), adjusted net income (loss) per diluted share and adjusted EBITDA. These are important financial performance measures for us, but are not financial measures as defined by GAAP. The presentation of this non-GAAP financial information is not intended to be considered in isolation of or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.
We use adjusted operating income (loss), adjusted net income (loss), adjusted net income (loss) per share and adjusted EBITDA to evaluate our operating performance and trends and make planning decisions. We
believe that these non-GAAP financial measures help identify underlying trends in our business that could otherwise be masked by the effect of the expenses and other items that we exclude in such non-GAAP measures. Accordingly, we believe that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects, and allowing for greater transparency with respect to the key financial metrics used by our management in our financial and operational decision-making. We also present these non-GAAP financial measures because we believe investors, analysts and rating agencies consider it useful in measuring our ability to meet our debt service obligations.
Our use of these terms may vary from that of others in our industry. These non-GAAP financial measures should not be considered as an alternative to net revenue, operating income (loss), net income (loss), cash provided by operating activities, or any other measures derived in accordance with GAAP as measures of operating performance or liquidity. Reconciliations of these measures to the most directly comparable GAAP financial measures are presented in the attached schedules.
We calculate these non-GAAP financial measures as follows:
We encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure and to view these non-GAAP financial measures in conjunction with the related GAAP financial measures.
Investor Relations Contact: Ronald van Veen ir@corsair.com 510-578-1407 |
Media Contact: David Ross david.ross@corsair.com +44 11 8208 0542 |
Corsair Gaming, Inc.
Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except per share amounts)
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Three Months Ended |
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Nine Months Ended |
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2023 |
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2022 |
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2023 |
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2022 |
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Net revenue |
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$ |
363,193 |
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$ |
311,769 |
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$ |
1,042,589 |
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$ |
976,368 |
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Cost of revenue |
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273,840 |
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240,209 |
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785,000 |
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777,593 |
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Gross profit |
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89,353 |
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71,560 |
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257,589 |
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198,775 |
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Operating expenses: |
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Sales, general and administrative |
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74,000 |
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66,932 |
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211,482 |
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216,456 |
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Product development |
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16,111 |
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15,616 |
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48,542 |
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50,752 |
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Total operating expenses |
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90,111 |
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82,548 |
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260,024 |
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267,208 |
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Operating loss |
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(758 |
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(10,988 |
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(2,435 |
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(68,433 |
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Other (expense) income: |
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Interest expense, net |
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(2,529 |
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(2,734 |
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(7,875 |
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(5,689 |
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Other (expense) income, net |
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304 |
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1,662 |
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(1,326 |
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1,796 |
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Total other expense, net |
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(2,225 |
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(1,072 |
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(9,201 |
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(3,893 |
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Loss before income taxes |
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(2,983 |
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(12,060 |
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(11,636 |
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(72,326 |
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Income tax benefit |
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97 |
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6,115 |
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3,023 |
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11,262 |
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Net loss |
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(2,886 |
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(5,945 |
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(8,613 |
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(61,064 |
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Less: Net income attributable to noncontrolling interest |
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193 |
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266 |
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958 |
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33 |
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Net loss attributable to Corsair Gaming, Inc. |
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$ |
(3,079 |
) |
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$ |
(6,211 |
) |
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$ |
(9,571 |
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$ |
(61,097 |
) |
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Calculation of net loss per share attributable to common stockholders of Corsair Gaming, Inc.: |
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Net loss attributable to Corsair Gaming, Inc. |
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$ |
(3,079 |
) |
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$ |
(6,211 |
) |
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$ |
(9,571 |
) |
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$ |
(61,097 |
) |
Change in redemption value of redeemable noncontrolling interest |
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— |
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(2,690 |
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6,535 |
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(12,330 |
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Net loss attributable to common stockholders of Corsair Gaming, Inc. |
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$ |
(3,079 |
) |
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$ |
(8,901 |
) |
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$ |
(3,036 |
) |
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$ |
(73,427 |
) |
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Net loss per share attributable to common stockholders of Corsair Gaming, Inc.: |
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Basic |
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$ |
(0.03 |
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$ |
(0.09 |
) |
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$ |
(0.03 |
) |
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$ |
(0.77 |
) |
Diluted |
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$ |
(0.03 |
) |
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$ |
(0.09 |
) |
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$ |
(0.03 |
) |
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$ |
(0.77 |
) |
Weighted-average common shares outstanding: |
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Basic |
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102,863 |
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95,858 |
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102,288 |
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95,537 |
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Diluted |
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102,863 |
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|
95,858 |
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|
102,288 |
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|
95,537 |
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Corsair Gaming, Inc.
Segment Information
(Unaudited, in thousands, except percentages)
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Three Months Ended |
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Nine Months Ended |
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2023 |
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2022 |
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2023 |
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2022 |
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Net revenue: |
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Gamer and Creator Peripherals |
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$ |
90,356 |
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$ |
96,848 |
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$ |
258,053 |
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$ |
319,985 |
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Gaming Components and Systems |
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272,837 |
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214,921 |
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784,536 |
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|
656,383 |
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Total Net revenue |
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$ |
363,193 |
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$ |
311,769 |
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$ |
1,042,589 |
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$ |
976,368 |
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Gross Profit: |
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Gamer and Creator Peripherals |
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$ |
29,928 |
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$ |
31,790 |
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$ |
82,085 |
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$ |
85,405 |
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Gaming Components and Systems |
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59,425 |
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39,770 |
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175,504 |
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113,370 |
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Total Gross Profit |
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$ |
89,353 |
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$ |
71,560 |
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$ |
257,589 |
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$ |
198,775 |
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Gross Margin: |
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Gamer and Creator Peripherals |
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33.1 |
% |
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32.8 |
% |
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31.8 |
% |
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26.7 |
% |
Gaming Components and Systems |
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21.8 |
% |
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18.5 |
% |
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22.4 |
% |
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17.3 |
% |
Total Gross Margin |
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24.6 |
% |
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23.0 |
% |
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24.7 |
% |
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20.4 |
% |
Corsair Gaming, Inc.
Condensed Consolidated Balance Sheets
(Unaudited, in thousands)
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September 30, |
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December 31, |
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Assets |
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Current assets: |
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Cash and restricted cash |
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$ |
147,532 |
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$ |
153,827 |
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Accounts receivable, net |
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251,079 |
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|
235,656 |
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Inventories |
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235,556 |
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|
192,717 |
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Prepaid expenses and other current assets |
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45,206 |
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|
40,593 |
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Total current assets |
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679,373 |
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|
622,793 |
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Restricted cash, noncurrent |
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|
238 |
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|
233 |
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Property and equipment, net |
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|
33,070 |
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|
34,927 |
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Goodwill |
|
|
354,865 |
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|
347,747 |
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Intangibles assets, net |
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|
196,493 |
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|
216,255 |
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Other assets |
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|
74,110 |
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|
75,290 |
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Total assets |
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$ |
1,338,149 |
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$ |
1,297,245 |
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Liabilities |
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Current liabilities: |
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Debt maturing within one year, net |
|
$ |
12,130 |
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$ |
6,495 |
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Accounts payable |
|
|
215,456 |
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|
172,033 |
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Other liabilities and accrued expenses |
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|
167,136 |
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|
164,470 |
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Total current liabilities |
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394,722 |
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|
342,998 |
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Long-term debt, net |
|
|
210,573 |
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|
232,170 |
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Deferred tax liabilities |
|
|
15,415 |
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|
18,054 |
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Other liabilities, noncurrent |
|
|
42,764 |
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|
48,589 |
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Total liabilities |
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|
663,474 |
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|
641,811 |
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Temporary equity |
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|
|
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Redeemable noncontrolling interest |
|
|
14,647 |
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|
21,367 |
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Permanent equity |
|
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Corsair Gaming, Inc. stockholders’ equity: |
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|
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Common stock and additional paid-in capital |
|
|
622,438 |
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|
593,496 |
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Retained earnings |
|
|
34,187 |
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|
37,223 |
|
Accumulated other comprehensive loss |
|
|
(6,699 |
) |
|
(6,881 |
) |
Total Corsair Gaming, Inc. stockholders' equity |
|
|
649,926 |
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|
623,838 |
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Nonredeemable noncontrolling interest |
|
|
10,102 |
|
|
10,229 |
|
Total permanent equity |
|
|
660,028 |
|
|
634,067 |
|
Total liabilities, temporary equity and permanent equity |
|
$ |
1,338,149 |
|
$ |
1,297,245 |
|
Corsair Gaming, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
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|
2023 |
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2022 |
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|
2023 |
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|
2022 |
|
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|
||||
Cash flows from operating activities: |
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Net loss |
|
$ |
(2,886 |
) |
|
$ |
(5,945 |
) |
|
$ |
(8,613 |
) |
|
$ |
(61,064 |
) |
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Stock-based compensation |
|
|
7,825 |
|
|
|
5,643 |
|
|
|
23,245 |
|
|
|
16,877 |
|
Depreciation |
|
|
3,083 |
|
|
|
2,546 |
|
|
|
9,016 |
|
|
|
7,695 |
|
Amortization |
|
|
9,507 |
|
|
|
10,352 |
|
|
|
29,005 |
|
|
|
33,924 |
|
Deferred income taxes |
|
|
(2,025 |
) |
|
|
(8,732 |
) |
|
|
(7,724 |
) |
|
|
(19,552 |
) |
Other |
|
|
211 |
|
|
|
(1,092 |
) |
|
|
2,493 |
|
|
|
1,995 |
|
Changes in operating assets and liabilities: |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Accounts receivable |
|
|
(31,996 |
) |
|
|
13,316 |
|
|
|
(18,070 |
) |
|
|
133,362 |
|
Inventories |
|
|
(16,110 |
) |
|
|
43,812 |
|
|
|
(35,452 |
) |
|
|
54,371 |
|
Prepaid expenses and other assets |
|
|
1,036 |
|
|
|
2,349 |
|
|
|
(4,551 |
) |
|
|
(7,132 |
) |
Accounts payable |
|
|
12,727 |
|
|
|
(30,595 |
) |
|
|
38,287 |
|
|
|
(74,091 |
) |
Other liabilities and accrued expenses |
|
|
6,716 |
|
|
|
3,437 |
|
|
|
4,424 |
|
|
|
(41,243 |
) |
Net cash (used in) provided by operating activities |
|
|
(11,912 |
) |
|
|
35,091 |
|
|
|
32,060 |
|
|
|
45,142 |
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Acquisition of business, net of cash acquired |
|
|
(14,220 |
) |
|
|
— |
|
|
|
(14,220 |
) |
|
|
(19,534 |
) |
Payment of deferred consideration |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(95 |
) |
Purchase of property and equipment |
|
|
(3,327 |
) |
|
|
(7,929 |
) |
|
|
(10,784 |
) |
|
|
(19,850 |
) |
Investment in available-for-sale convertible note |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,000 |
) |
Net cash used in investing activities |
|
|
(17,547 |
) |
|
|
(7,929 |
) |
|
|
(25,004 |
) |
|
|
(40,479 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Repayment of debt and debt issuance costs |
|
|
(5,000 |
) |
|
|
(1,267 |
) |
|
|
(16,250 |
) |
|
|
(4,017 |
) |
Borrowing from line of credit |
|
|
— |
|
|
|
223,000 |
|
|
|
— |
|
|
|
626,000 |
|
Repayment of line of credit |
|
|
— |
|
|
|
(223,000 |
) |
|
|
— |
|
|
|
(626,000 |
) |
Payment of other offering costs |
|
|
— |
|
|
|
— |
|
|
|
(497 |
) |
|
|
— |
|
Payment of contingent consideration |
|
|
— |
|
|
|
— |
|
|
|
(950 |
) |
|
|
(438 |
) |
Proceeds from issuance of shares through employee equity incentive plans |
|
|
411 |
|
|
|
624 |
|
|
|
6,790 |
|
|
|
4,132 |
|
Payment of taxes related to net share settlement of equity awards |
|
|
(531 |
) |
|
|
(402 |
) |
|
|
(1,318 |
) |
|
|
(1,399 |
) |
Dividends paid to noncontrolling interest |
|
|
(980 |
) |
|
|
(2,205 |
) |
|
|
(980 |
) |
|
|
(2,205 |
) |
Net cash used in financing activities |
|
|
(6,100 |
) |
|
|
(3,250 |
) |
|
|
(13,205 |
) |
|
|
(3,927 |
) |
Effect of exchange rate changes on cash |
|
|
(683 |
) |
|
|
(932 |
) |
|
|
(141 |
) |
|
|
(4,434 |
) |
Net increase (decrease) in cash and restricted cash |
|
|
(36,242 |
) |
|
|
22,980 |
|
|
|
(6,290 |
) |
|
|
(3,698 |
) |
Cash and restricted cash at the beginning of the period |
|
|
184,012 |
|
|
|
38,702 |
|
|
|
154,060 |
|
|
|
65,380 |
|
Cash and restricted cash at the end of the period |
|
$ |
147,770 |
|
|
$ |
61,682 |
|
|
$ |
147,770 |
|
|
$ |
61,682 |
|
Corsair Gaming, Inc.
GAAP to Non-GAAP Reconciliations
Non-GAAP Operating Income Reconciliations
(Unaudited, in thousands, except percentages)
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating Loss - GAAP |
|
$ |
(758 |
) |
|
$ |
(10,988 |
) |
|
$ |
(2,435 |
) |
|
$ |
(68,433 |
) |
Amortization |
|
|
9,507 |
|
|
|
10,352 |
|
|
|
29,005 |
|
|
|
33,924 |
|
Stock-based compensation |
|
|
7,825 |
|
|
|
5,643 |
|
|
|
23,245 |
|
|
|
16,877 |
|
Inventory reserve in excess of normal run rate to address overhang in the channel |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
19,489 |
|
Restructuring costs |
|
|
709 |
|
|
|
81 |
|
|
|
709 |
|
|
|
1,569 |
|
Acquisition accounting impact related to recognizing acquired inventory at fair value |
|
|
960 |
|
|
|
— |
|
|
|
960 |
|
|
|
282 |
|
Acquisition-related and integration-related costs |
|
|
1,386 |
|
|
|
326 |
|
|
|
2,160 |
|
|
|
796 |
|
Other |
|
|
— |
|
|
|
493 |
|
|
|
— |
|
|
|
520 |
|
Adjusted Operating Income - Non-GAAP |
|
$ |
19,629 |
|
|
$ |
5,907 |
|
|
$ |
53,644 |
|
|
$ |
5,024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
As a % of net revenue - GAAP |
|
|
-0.2 |
% |
|
|
-3.5 |
% |
|
|
-0.2 |
% |
|
|
-7.0 |
% |
As a % of net revenue - Non-GAAP |
|
|
5.4 |
% |
|
|
1.9 |
% |
|
|
5.1 |
% |
|
|
0.5 |
% |
Corsair Gaming, Inc.
GAAP to Non-GAAP Reconciliations
Non-GAAP Net Income (Loss) and Net Income (Loss) Per Share Reconciliations
(Unaudited, in thousands, except per share amounts)
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Net loss attributable to common stockholders of Corsair Gaming, Inc. (1) |
|
$ |
(3,079 |
) |
|
$ |
(8,901 |
) |
|
$ |
(3,036 |
) |
|
$ |
(73,427 |
) |
Less: Change in redemption value of redeemable noncontrolling interest |
|
|
— |
|
|
|
(2,690 |
) |
|
|
6,535 |
|
|
|
(12,330 |
) |
Net loss attributable to Corsair Gaming, Inc. |
|
|
(3,079 |
) |
|
|
(6,211 |
) |
|
|
(9,571 |
) |
|
|
(61,097 |
) |
Add: Net income attributable to noncontrolling interest |
|
|
193 |
|
|
|
266 |
|
|
|
958 |
|
|
|
33 |
|
Net Loss - GAAP |
|
|
(2,886 |
) |
|
|
(5,945 |
) |
|
|
(8,613 |
) |
|
|
(61,064 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization |
|
|
9,507 |
|
|
|
10,352 |
|
|
|
29,005 |
|
|
|
33,924 |
|
Stock-based compensation |
|
|
7,825 |
|
|
|
5,643 |
|
|
|
23,245 |
|
|
|
16,877 |
|
Inventory reserve in excess of normal run rate to address overhang in the channel |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
19,489 |
|
Restructuring costs |
|
|
709 |
|
|
|
81 |
|
|
|
709 |
|
|
|
1,569 |
|
Acquisition accounting impact related to recognizing acquired inventory at fair value |
|
|
960 |
|
|
|
— |
|
|
|
960 |
|
|
|
282 |
|
Acquisition-related and integration-related costs |
|
|
1,386 |
|
|
|
326 |
|
|
|
2,160 |
|
|
|
796 |
|
Other |
|
|
— |
|
|
|
493 |
|
|
|
— |
|
|
|
520 |
|
Non-GAAP income tax adjustment |
|
|
(4,137 |
) |
|
|
(3,343 |
) |
|
|
(12,352 |
) |
|
|
(14,615 |
) |
Adjusted Net Income (Loss) - Non-GAAP |
|
$ |
13,364 |
|
|
$ |
7,607 |
|
|
$ |
35,114 |
|
|
$ |
(2,222 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Diluted net income (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
GAAP |
|
$ |
(0.03 |
) |
|
$ |
(0.09 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.77 |
) |
Adjusted, Non-GAAP |
|
$ |
0.13 |
|
|
$ |
0.08 |
|
|
$ |
0.33 |
|
|
$ |
(0.02 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average common shares outstanding - Diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
GAAP |
|
|
102,863 |
|
|
|
95,858 |
|
|
|
102,288 |
|
|
|
95,537 |
|
Adjusted, Non-GAAP |
|
|
106,532 |
|
|
|
99,769 |
|
|
|
106,293 |
|
|
|
95,537 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
(1) Numerator for calculating net loss per share-GAAP |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corsair Gaming, Inc.
GAAP to Non-GAAP Reconciliations
Adjusted EBITDA Reconciliations
(Unaudited, in thousands, except percentages)
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Net loss - GAAP |
|
$ |
(2,886 |
) |
|
$ |
(5,945 |
) |
|
$ |
(8,613 |
) |
|
$ |
(61,064 |
) |
Amortization |
|
|
9,507 |
|
|
|
10,352 |
|
|
|
29,005 |
|
|
|
33,924 |
|
Stock-based compensation |
|
|
7,825 |
|
|
|
5,643 |
|
|
|
23,245 |
|
|
|
16,877 |
|
Depreciation |
|
|
3,083 |
|
|
|
2,546 |
|
|
|
9,016 |
|
|
|
7,695 |
|
Interest expense, net |
|
|
2,529 |
|
|
|
2,734 |
|
|
|
7,875 |
|
|
|
5,689 |
|
Inventory reserve in excess of normal run rate to address overhang in the channel |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
19,489 |
|
Restructuring costs |
|
|
709 |
|
|
|
81 |
|
|
|
709 |
|
|
|
1,569 |
|
Acquisition accounting impact related to recognizing acquired inventory at fair value |
|
|
960 |
|
|
|
— |
|
|
|
960 |
|
|
|
282 |
|
Acquisition-related and integration-related costs |
|
|
1,386 |
|
|
|
326 |
|
|
|
2,160 |
|
|
|
796 |
|
Other |
|
|
— |
|
|
|
493 |
|
|
|
— |
|
|
|
520 |
|
Income tax benefit |
|
|
(97 |
) |
|
|
(6,115 |
) |
|
|
(3,023 |
) |
|
|
(11,262 |
) |
Adjusted EBITDA - Non-GAAP |
|
$ |
23,016 |
|
|
$ |
10,115 |
|
|
$ |
61,334 |
|
|
$ |
14,515 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Adjusted EBITDA margin - Non-GAAP |
|
|
6.3 |
% |
|
|
3.2 |
% |
|
|
5.9 |
% |
|
|
1.5 |
% |
Q3 2023 FINANCIAL RESULTS November 7, 2023 Exhibit 99.2
DISCLAIMER Forward Looking Statements This presentation contains forward looking statements that involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, the Company's results may differ materially from those expressed or implied by such forward-looking statements. All statements other than statements of historical fact could be deemed forward-looking statements, including, but not limited to: information or predictions concerning the Company's future financial performance, business plans and objectives, potential growth opportunities, potential pricing of products, potential market leadership, financing plans, competitive position, technological, industry or market trends and potential market opportunities. These statements are based on estimates and information available to the Company at the time of this presentation and are not guarantees of future performance. Actual results could differ materially from the Company's current expectations as a result of many factors, including, but not limited to: current macroeconomic conditions, including but not limited to the impacts of high inflation and the risk of a recession on demand for our products, consumer confidence and financial markets generally; the lingering impacts and future outbreaks of the COVID-19 pandemic and its impacts on its operations and the operations of its manufacturers, retailers and other partners, as well as its lingering impacts on the economy overall, including capital markets; the Company’s ability to build and maintain the strength of its brand among gaming and streaming enthusiasts and its ability to continuously develop and successfully market new gear and improvements to existing gear; the introduction and success of new third-party high-performance computer hardware, particularly graphics processing units and central processing units, as well as sophisticated new video games; fluctuations in operating results; the risk that the Company is not able to compete with competitors and/or that the gaming industry, including streaming and eSports, does not grow as expected or declines; the loss or inability to attract and retain key management; the impacts of geopolitical unrest and events; delays or disruptions at manufacturing and distribution facilities of the Company or third parties; the Company's ability to successfully integrate any companies or assets it has acquired or may acquire; currency exchange rate fluctuations or international trade disputes resulting in the Company’s gear becoming relatively more expensive to its overseas customers or resulting in an increase in the Company’s manufacturing costs; and the other factors described under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2022 filed with the Securities and Exchange Commission ("SEC") and its subsequent filings with the SEC. The Company assumes no obligation, and does not intend, to update these forward-looking statements, except as required by law. Investors are urged to review in detail the risks and uncertainties outlined in Corsair’s SEC filings. You may get these SEC documents for free by visiting EDGAR on the SEC website at http://www.sec.gov. Non-GAAP Financial Measures Included in this presentation are certain non-GAAP financial measures, including Adjusted Operating Income (Loss), Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income (Loss) and Adjusted Net Income (Loss) Per Share, which are not recognized under the generally accepted accounting principles (“GAAP”) in the United States and designed to complement the financial information presented in accordance with GAAP in the United States because management believes such measures are useful to investors. The non-GAAP measures have limitations as analytical tools and you should not consider them in isolation of, or as an alternative to, measures prepared in accordance with U.S. GAAP. The non-GAAP measures used by the Company may differ from the non-GAAP measures used by other companies. The Company urges you to review the reconciliation of its non-GAAP financial measures to the most directly comparable U.S. GAAP financial measures set forth in the Appendix to this presentation, and not to rely on any single financial measure to evaluate the Company's business. Market & Industry Data This presentation also contains estimates and other statistical data made by independent parties and by the Company relating to the Company’s industry, the Company’s business and the market for the Company’s products and its future growth. This data involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. In addition, projections, assumptions, and estimates of the Company’s future performance and the future performance of the market for its products are necessarily subject to a high degree of uncertainty and risk.
16.5% YoY REVENUE GROWTH, 127.5% YoY Adj. EBITDA GROWTH +16.5% Corsair YoY Revenue Growth +127.5% Corsair YoY Adj. EBITDA Growth Q3’22 Q3’23 Q3’22 Q3’23 See appendix for reconciliation of non-GAAP metrics to most comparable GAAP metrics.
GAMING HARDWARE MARKET (TAM), WHILE APPROXIMATELY FLAT IN 2023, IS STILL AT SIGNIFICANTLY HIGHER LEVELS COMPARED TO 2019 PRE-PANDEMIC… Management estimates based on leading 3rd party analysis – Gaming Peripherals – Keyboards, Mice, Headsets in US and EU5 countries Management estimates based on leading 3rd party analysis – Gaming Components – Cooling, PSU, Case in the US and EU5 countries +56% +67% Q3’23 Market Growth vs. Q3’22 US and EU Peripherals and Components (1)(2) Q3’23 Market Growth vs. Q3’19 Gaming Peripherals (1) Q3’23 Market Growth vs. Q3’19 Components (2) -3%
...AND RECENT SURVEY DATA SUGGEST STRONG GROWTH OVER THE NEXT FEW YEARS Data from this slide is from research by DFC Insights – October 2023 84% OF ENTHUSIASTS WHO BUILT OR BOUGHT GAMING PCS IN 2020 REPORT THEY PLAN TO UPGRADE OR BUY AGAIN WITHIN THE NEXT 2 YEARS
RECENT KEY PRODUCT LAUNCHES
PERIPHERAL PRODUCT LAUNCHES – KEY NEW PRODUCTS IN ALL CATEGORIES K70 MAX Features adjustable CORSAIR MGX magnetic-mechanical switches. VIRTUOSO PRO 50mm graphene drivers and open-back design create more natural sounding audio. HS80 MAX Multi-platform gaming headset. 65-hour battery life with Bluetooth® and 2.4GHz wireless support. K70 CORE Mainstream keyboard with CORSAIR MLX Red mechanical switches. M75 AIR Our first ultralight competitive FPS gaming mouse.
EXPANDING CUSTOMIZATION Exclusive drops and custom collaborations. ELGATO x STARFIELD Collaboration with Bethesda Game Studios produced a limited edition Starfield Stream Deck and Wave:3 microphone. SCUF x A7X BUNDLE Exclusive limited-edition Reflex (PS5) and Instinct (Xbox) SCUF controllers created in partnership with Avenged Sevenfold. DROP CSTM80 Redefining highly customizable mechanical keyboards. The new CSTM80 features a magnetic top case that can be paired with matching cables and keycaps allowing a unique look.
SCUF ENVISION FAMILY – WIRED AND WIRELESS PC CONTROLLERS SCUF Envision was designed to deliver the best experience for controller PC gamers. Combining PC performance and SCUF Patented Paddle technology to give best of both worlds. Equipped with 11 additional remappable inputs, ultra-fast wired connectivity, and advanced configuration software Bridges the gap between standard controllers and Keyboard / Mouse SCUF ENVISION CONTROLLER SOLD OUT IN THE FIRST WEEK.
ELGATO PROMPTER The Elgato Prompter – delivers the ability for anyone in the creator community to be able to have a broadcast-level teleprompter at an affordable price. Present video scripts, read Twitch chat, or Zoom conference with natural eye contact. It's powered by your computer and mirrors scripts, stream chat, or any window you drag and drop onto its built-in screen. With unmatched compatibility and Stream Deck support, Prompter makes pro video production accessible to a wider audience. ELGATO PROMPTER SOLD OUT WITHIN THE FIRST 24 HOURS OF LAUNCH.
ELGATO MARKETPLACE A digital creator marketplace for everyone; Streamers, Video Creators, Podcasters and Work professionals. It allows 3rd parties, and our own Makers to make and sell digital products (Plugins, Icons, Overlays and more) to our installed base of almost 2M Stream Deck users. Launched with 1200+ digital products, 320 plugins for Stream Deck from over 240 3rd party Makers. We believe that this marketplace will dramatically increase interest and usage of Stream Deck and drive up the installed base.
iCUE LINK iCUE LINK, launched in July 2023, is a technology that allows components to be assembled inside a gaming computer and reduces the wiring complexity as well as digitally connecting all these components. iCUE LINK market acceptance continues to gain momentum. Potentially expanding the DIY TAM by making PC building even easier. We have extended our range of iCUE LINK enabled products with the introduction of our HydroX enabled CPU and GPU blocks and reservoirs.
FINANCIAL RESULTS
GROSS MARGIN IMPROVEMENTS IN BOTH SEGMENTS Gaming Components and Systems Q3'23 and YTD Results ($ in millions except percentages) Q3'22 Q3'23 Y/Y Q/Q YTD'22 YTD'23 Y/Y Net Revenue $214.9 $272.8 26.9% 10.6% $656.4 $784.5 19.5% % of Total Net Revenue 68.9% 75.1% 620 bps -70 bps 67.2% 75.2% 800 bps Gross Profit $39.8 $59.4 49.4% 3.7% $113.4 $175.5 54.8% Gross Margin 18.5% 21.8% 330 bps -140 bps 17.3% 22.4% 510 bps Gamer and Creator Peripherals Q3'23 and YTD Results ($ in millions except percentages) Q3'22 Q3'23 Y/Y Q/Q YTD'22 YTD'23 Y/Y Net Revenue $96.8 $90.4 -6.7% 14.7% $320.0 $258.1 -19.4% % of Total Net Revenue 31.1% 24.9% -620 bps 70 bps 32.8% 24.8% -800 bps Gross Profit $31.8 $29.9 -5.9% 17.3% $85.4 $82.1 -3.9% Gross Margin 32.8% 33.1% 30 bps 70 bps 26.7% 31.8% 510 bps
Q3 2023 AND YTD RESULTS - SOLID GROWTH (1) Q3'23 revenue growth of 16.5% YoY. Adj. EBITDA growth of 127.5% YoY. Q3'23 gross margin improved by 160 bps. ($ in millions except EPS and percentages) Q3'22 Q3'23 Y/Y Q/Q YTD'22 YTD'23 Y/Y Net Revenue $311.8 $363.2 16.5% 11.6% $976.4 $1,042.6 6.8% Gross Profit $71.6 $89.4 24.9% 7.9% $198.8 $257.6 29.6% Gross Margin 23.0% 24.6% 160 bps -90 bps 20.4% 24.7% 430 bps Operating Income (Loss) ($11.0) ($0.8) -93.1% -72.1% ($68.4) ($2.4) -96.4% Adjusted Operating Income (Loss) $5.9 $19.6 232.3% 23.8% $5.0 $53.6 967.8% Net Income (Loss) Attributable to Common Stockholders ($8.9) ($3.1) -65.4% -380.7% ($73.4) ($3.0) -95.9% Earnings (Loss) per Share (Diluted) $ (0.09) $ (0.03) -66.7% -400.0% $ (0.77) $ (0.03) -96.1% Adjusted Net Income (Loss) $7.6 $13.4 75.7% 36.1% ($2.2) $35.1 -1680.3% Adjusted Earnings (Loss) per Share (Diluted) $ 0.08 $ 0.13 62.5% 44.4% $ (0.02) $ 0.33 -1750.0% Adjusted EBITDA $10.1 $23.0 127.5% 29.6% $14.5 $61.3 322.6% See appendix for reconciliation of non-GAAP metrics to most comparable GAAP metrics.
MARGIN RECOVERY AND COST CONTROL HAS DRIVEN EBITDA (1) GROWTH FOR 2023 See appendix for reconciliation of non-GAAP metrics to most comparable GAAP metrics.
STRONG ACTIVITY IN SELF-BUILT GAMING PCs DRIVING OVERALL YOY GROWTH Gaming Components and Systems Gamer and Creator Peripherals REVENUE BY SEGMENT 16.5% YoY Overall Growth
Given the number of risk factors, uncertainties and assumptions, many of which are discussed in slide 2, actual results may differ materially. We do not intend to update our financial outlook until our next quarterly results announcement. Estimates should not be viewed as a substitute for our full annual financial statement and are not necessarily indicative of the results to be expected for any future period. Certain non-GAAP measures included in our financial outlook were not reconciled to the comparable GAAP financial measures because the GAAP measures are not accessible on a forward-looking basis. We are unable to reconcile these forward-looking into non-GAAP measures to the most directly comparable GAAP measures without unreasonable effort because we are currently unable to predict with a reasonable degree of certainty the type and extent of certain items that would be expected to impact GAAP measures for this period but would not impact the non-GAAP measures. Such items may include stock-based compensation charges, public offering related charges, amortization, and other items. The unavailable information could have a significant impact on our GAAP financial results. Financial Metrics Updated 2023 Guidance Net Revenues $1.40-1.50 billion Adjusted Operating Income $80-90 million Adjusted EBITDA $95-105 million UPDATED FINANCIAL GUIDANCE FY 2023(1)
($ in millions) September 30, 2023 Cash (Excluding restricted cash) $144.9 Term Loan (face value) $223.8 Total Debt $223.8 Net Debt $78.9 DEBT SUMMARY
APPENDIX
USE OF NON-GAAP FINANCIAL MEASURES To supplement the financial results presented in accordance with GAAP, this presentation includes certain non-GAAP financial information, including Adjusted Operating Income (Loss), Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income (Loss) and Adjusted Net Income (Loss) Per Share. These are important financial performance measures for us but are not financial measures as defined by GAAP. The presentation of this non-GAAP financial information is not intended to be considered in isolation of or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. We use these non-GAAP financial measures to evaluate our operating performance and trends and make planning decisions. We believe that these non-GAAP financial measures help identify underlying trends in our business that could otherwise be masked by the effect of the expenses and other items that we exclude in such non-GAAP financial measures. Accordingly, we believe that these non-GAAP financial provide useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects, and allowing for greater transparency with respect to the key financial metrics used by our management in our financial and operational decision-making. We also present these non-GAAP financial measures because we believe investors, analysts and rating agencies consider them useful in measuring our ability to meet our debt service obligations. Our use of these terms may vary from that of others in our industry. These non-GAAP financial measures should not be considered as an alternative to revenues, operating income, net income, cash provided by operating activities or any other measures derived in accordance with GAAP as measures of operating performance or liquidity. Reconciliations of these measures to the most directly comparable GAAP financial measures are presented in the appendix. We encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure and to view these non-GAAP financial measures in conjunction with the related GAAP financial measures.
GAAP TO NON-GAAP RECONCILIATIONS Non-GAAP Operating Income Reconciliations (Unaudited, in thousands, except percentages) Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Operating Loss - GAAP $ (758 ) $ (10,988 ) $ (2,435 ) $ (68,433 ) Amortization 9,507 10,352 29,005 33,924 Stock-based compensation 7,825 5,643 23,245 16,877 Inventory reserve in excess of normal run rate to address overhang in the channel — — — 19,489 Restructuring costs 709 81 709 1,569 Acquisition accounting impact related to recognizing acquired inventory at fair value 960 — 960 282 Acquisition-related and integration-related costs 1,386 326 2,160 796 Other — 493 — 520 Adjusted Operating Income - Non-GAAP $ 19,629 $ 5,907 $ 53,644 $ 5,024 As a % of net revenue - GAAP -0.2 % -3.5 % -0.2 % -7.0 % As a % of net revenue - Non-GAAP 5.4 % 1.9 % 5.1 % 0.5 %
GAAP TO NON-GAAP RECONCILIATIONS Non-GAAP Net Income (Loss) and Net Income (Loss) Per Share Reconciliations (Unaudited, in thousands, except per share amounts) Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net loss attributable to common stockholders of Corsair Gaming, Inc. (1) $ (3,079 ) $ (8,901 ) $ (3,036 ) $ (73,427 ) Less: Change in redemption value of redeemable noncontrolling interest — (2,690 ) 6,535 (12,330 ) Net loss attributable to Corsair Gaming, Inc. (3,079 ) (6,211 ) (9,571 ) (61,097 ) Add: Net income attributable to noncontrolling interest 193 266 958 33 Net Loss - GAAP (2,886 ) (5,945 ) (8,613 ) (61,064 ) Adjustments: Amortization 9,507 10,352 29,005 33,924 Stock-based compensation 7,825 5,643 23,245 16,877 Inventory reserve in excess of normal run rate to address overhang in the channel — — — 19,489 Restructuring costs 709 81 709 1,569 Acquisition accounting impact related to recognizing acquired inventory at fair value 960 — 960 282 Acquisition-related and integration-related costs 1,386 326 2,160 796 Other — 493 — 520 Non-GAAP income tax adjustment (4,137 ) (3,343 ) (12,352 ) (14,615 ) Adjusted Net Income (Loss) - Non-GAAP $ 13,364 $ 7,607 $ 35,114 $ (2,222 ) Diluted net income (loss) per share: GAAP $ (0.03 ) $ (0.09 ) $ (0.03 ) $ (0.77 ) Adjusted, Non-GAAP $ 0.13 $ 0.08 $ 0.33 $ (0.02 ) Weighted-average common shares outstanding - Diluted: GAAP 102,863 95,858 102,288 95,537 Adjusted, Non-GAAP 106,532 99,769 106,293 95,537 (1) Numerator for calculating net loss per share-GAAP
GAAP TO NON-GAAP RECONCILIATIONS Adjusted EBITDA Reconciliations (Unaudited, in thousands, except percentages) Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net loss - GAAP $ (2,886 ) $ (5,945 ) $ (8,613 ) $ (61,064 ) Amortization 9,507 10,352 29,005 33,924 Stock-based compensation 7,825 5,643 23,245 16,877 Depreciation 3,083 2,546 9,016 7,695 Interest expense, net 2,529 2,734 7,875 5,689 Inventory reserve in excess of normal run rate to address overhang in the channel — — — 19,489 Restructuring costs 709 81 709 1,569 Acquisition accounting impact related to recognizing acquired inventory at fair value 960 — 960 282 Acquisition-related and integration-related costs 1,386 326 2,160 796 Other — 493 — 520 Income tax benefit (97 ) (6,115 ) (3,023 ) (11,262 ) Adjusted EBITDA - Non-GAAP $ 23,016 $ 10,115 $ 61,334 $ 14,515 Adjusted EBITDA margin - Non-GAAP 6.3 % 3.2 % 5.9 % 1.5 %
