•

Net revenue was $556.3 million, an increase of 70.4% year-over-year. Gamer and creator peripherals segment net revenue was $191.8 million, an increase of 104.0% year-over-year. Gaming components and systems segment net revenue was $364.5 million, an increase of 56.8% year-over-year.

•

Gross profit was $153.8 million, an increase of 118.3% year-over-year, with gross margin of 27.6%, an improvement of 600 basis points year-over-year. Gamer and creator peripherals segment gross profit was $68.9 million, an increase of 197.7% year-over-year. Gaming components and systems segment gross profit was $84.9 million, an increase of 79.5% year-over-year.

•

Operating income was $58.9 million, an increase of 314.2% year-over-year.

•

Adjusted operating income was $71.0 million, an increase of 166.9% year-over-year.

•

Net income was $43.0 million, or $0.43 per diluted share, compared to net income of $6.0 million in the same period a year ago, or $0.08 per diluted share.

•

Adjusted net income was $53.0 million, or $0.53 per diluted share, an increase of 214.8% year-over-year compared to adjusted net income of $16.8 million in the same period a year ago, or $0.21 per diluted share.

•

Adjusted EBITDA was $72.5 million, an increase of 154.7% year-over-year, with adjusted EBITDA margin of 13.0%, an improvement of 430 basis points year-over-year.

•

As of December 31, 2020, we had cash and restricted cash of $133.6 million, $48.1 million capacity under our revolving credit facility and total long-term debt of $321.4 million.

•

Cash flows from operations was $68.6 million, which increased from $36.0 million in the same period a year ago, bringing the full year 2020 cash flow from operations to $169.0 million.

•

Net revenue was $1.7 billion, an increase of 55.2% year-over-year. Gamer and creator peripherals segment net revenue was $539.4 million, an increase of 83.4% year-over-year. Gaming components and systems segment net revenue was $1,163.0 million, an increase of 44.8% year-over-year.

•

Gross profit was $465.4 million, an increase of 107.5% year-over-year, with gross margin of 27.3%, an improvement of 690 basis points year-over-year. Gamer and creator peripherals segment gross profit was $189.7 million, an increase of 133.2% year-over-year. Gaming components and systems segment gross profit was $275.7 million, an increase of 92.9% year-over-year.

•

Operating income was $158.4 million, an increase of 568.0% year-over-year.

•

Adjusted operating income was $204.8 million, an increase of 211.4% year-over-year.

•

Net income was $103.2 million, or $1.14 per diluted share, compared to net loss of $8.4 million in the same period a year ago, or $(0.11) per diluted share.

•

Adjusted net income was $145.0 million, or $1.60 per diluted share, an increase of 427.0% year-over-year compared to adjusted net income of $27.5 million, or $0.35 per diluted share.

•

Adjusted EBITDA was $213.0 million, an increase of 197.5% year-over-year, with adjusted EBITDA margin of 12.5%, an improvement of 600 basis points year-over-year.

•

Net revenue to be in the range of $1.8 billion to $1.95 billion.

•

Adjusted operating income to be in the range of $205 million to $220 million.

•

Adjusted EBITDA to be in the range of $215 million to $230 million.

•

On February 1, 2021, in the patent infringement case, Ironburg Inventions Ltd. v. Valve Corp, the jury unanimously found that Valve Corp infringed Ironburg’s controller patent and awarded Corsair’s subsidiary Ironburg (a subsidiary of SCUF) over $4 million.  In addition, the jury unanimously found willful infringement by Valve Crop.  The jury verdict of willful infringement is the first step to a potential award of enhanced damages up to the statutory limit of treble damages.

•

On January 26, 2021, Corsair closed its follow-on public offering by selling stockholders of 8,625,000 shares of its common stock at a price of $35.00 per share.  The total gross proceeds from the offering, before deducting underwriting discounts and commissions and other offering expenses were approximately $301,875,000.  The selling stockholders received all of the net proceeds from the offering.

•

On January 12, 2021 Corsair announced the promotion of Thi La to President and COO, as well as other senior leadership promotions.

•

On January 28, 2021 Corsair launched three new Corsair Gen 4 PCIe x4 NVMe M.2 Solid State Drives – the MP600 CORE, MP600 PRO and MP600 PRO Hydro X Edition.  All MP600 SSDs store massive amounts of data with lightning-fast transfer speeds, leveraging PCIe technology for incredible sustained performance.

•

On January 21, 2021 Corsair launched its Vengeance RGB PRO SL high-performance DDR4 memory kits.  Initially available in a wide range of frequencies up to 3,600MHz and kits up to 128GB (4x32GB) in both black and white, VENGEANCE RGB PRO SL boasts dynamic ten-zone RGB lighting in a form-factor just 44mm tall, offering wide compatibility with nearly any PC build. Each module is tightly screened and optimized for peak performance and overclocking potential, for memory that matches its mesmerizing visuals with equally impressive performance.  

•

On January 14, 2021 Corsair launched a new series of mid-tower ATX cases to suit nearly any build: the Corsair 5000D, 5000D AIRFLOW and the iCUE 5000X RGB. Every 5000 Series case offers simple and tidy cable management thanks to the Corsair RapidRoute cable management system, terrific cooling from included fans featuring Corsair AirGuide technology and a spacious interior that fits multiple radiators, including two 360mm simultaneously. Between the understated styling of the 5000D, the optimized airflow of the 5000D AIRFLOW, and the eye-catching RGB lighting behind four beautiful tempered glass panels of the 5000X RGB, the 5000 Series has a case to meet any builder’s priorities.

•

On December 9, 2020 Corsair under its SCUF brand unveiled the new SCUF H1 customizable wired gaming headset. Based on the design and technology of the award-winning CORSAIR VIRTUOSO headset, the H1 is customizable and tailored for competitive gamers who prefer the zero-latency provided by a wired headset.  The SCUF H1’s lightweight design is fully configurable and built for comfort, with immersive sound and a high-resolution interchangeable microphone to make crucial callouts that can be the difference between a victory or a loss. Every rustle of footsteps in

a grassy field and every far-off missile strike is delivered with clear fidelity, almost doubling the audio frequency of most gaming headsets.

•

Adjusted operating income, non-GAAP, is determined by adding back to GAAP operating income the acquisition accounting impacts related to recognizing acquired deferred revenue and inventory at fair value, change in fair value of contingent consideration for business acquisition, stock-based compensation, intangible asset amortization, certain acquisition-related and integration-related expenses, executive transition costs, non-deferred costs associated with the IPO and the secondary offering, and debt modification costs.

•

Adjusted net income, non-GAAP, is determined by adding back to GAAP net income (loss) the acquisition accounting impacts related to recognizing acquired deferred revenue and inventory at fair value, change in fair value of contingent consideration for business acquisition, stock-based compensation, intangible asset amortization, certain acquisition-related and integration-related

expenses, executive transition costs, non-deferred costs associated with the IPO and the secondary offering, debt modification costs, loss on extinguishment of debt, and the related tax effects of each of these adjustments.

•

Adjusted net income per diluted share, non-GAAP, is determined by dividing adjusted net income, non-GAAP by the respective weighted average shares outstanding, inclusive of the impact of other dilutive securities.

•

Adjusted EBITDA is determined by adding back to GAAP net income (loss) the acquisition accounting impacts related to recognizing acquired deferred revenue and inventory at fair value, change in fair value of contingent consideration for business acquisition, stock-based compensation, certain acquisition-related and integration-related expenses, executive transition costs, non-deferred costs associated with the IPO and the secondary offering, debt modification costs, intangible asset amortization, depreciation and amortization, interest expense (including loss on extinguishment of debt) and tax expense (benefit).

•

Adjusted EBITDA margin is determined by dividing adjusted EBITDA by net revenue for the respective periods.  

Three Months Ended

December 31,

Year Ended

December 31,

2020

2019

2020

2019

Net revenue

$

556,339

$

326,555

$

1,702,367

$

1,097,174

Cost of revenue

402,540

256,102

1,236,938

872,887

Gross profit

153,799

70,453

465,429

224,287

Operating expenses:

Sales, general and administrative

81,127

47,041

257,004

163,033

Product development

13,779

9,194

50,064

37,547

Total operating expenses

94,906

56,235

307,068

200,580

Operating income

58,893

14,218

158,361

23,707

Other (expense) income:

Interest expense

(6,021

)

(8,485

)

(35,137

)

(35,548

)

Other expense, net

(1,153

)

(81

)

(1,182

)

(1,558

)

Total other expense, net

(7,174

)

(8,566

)

(36,319

)

(37,106

)

Income (loss) before income taxes

51,719

5,652

122,042

(13,399

)

Income tax (expense) benefit

(8,676

)

360

(18,825

)

5,005

Net income (loss)

$

43,043

$

6,012

$

103,217

$

(8,394

)

Net income (loss) per share:

Basic

$

0.47

$

0.08

$

1.20

$

(0.11

)

Diluted

$

0.43

$

0.08

$

1.14

$

(0.11

)

Weighted-average shares used to compute net income

  (loss) per share

Basic

91,923

77,293

86,256

76,223

Diluted

99,771

79,514

90,577

76,223

Three Months Ended

December 31,

Year Ended

December 31,

2020

2019

2020

2019

Net revenue:

Gamer and Creator Peripherals

$

191,835

$

94,057

$

539,366

$

294,141

Gaming Components and Systems

364,504

232,498

1,163,001

803,033

    Total Net Revenue

$

556,339

$

326,555

$

1,702,367

$

1,097,174

Gross Margin:

Gamer and Creator Peripherals

35.9

%

24.6

%

35.2

%

27.7

%

Gaming Components and Systems

23.3

%

20.4

%

23.7

%

17.8

%

    Total Gross Margin

27.6

%

21.6

%

27.3

%

20.4

%

December 31,

2020

December 31,

2019

Assets

Current assets:

Cash and restricted cash

$

133,338

$

51,717

Accounts receivable, net

293,629

202,334

Inventories

226,007

151,063

Prepaid expenses and other current assets

37,997

24,696

Total current assets

690,971

429,810

Property and equipment, net

16,475

15,365

Goodwill

312,760

312,750

Intangible assets, net

259,317

291,027

Restricted cash, noncurrent

230

230

Other assets

34,362

10,536

TOTAL ASSETS

$

1,314,115

$

1,059,718

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable

$

299,636

$

182,025

Current portion of debt, net

—

2,364

Other liabilities and accrued expenses

205,745

115,541

Total current liabilities

505,381

299,930

Debt, net

321,393

503,448

Deferred tax liabilities

29,752

33,820

Other liabilities, noncurrent

20,199

5,745

TOTAL LIABILITIES

876,725

842,943

Stockholders’ Equity:

Common stock and additional paid-in capital

438,676

324,976

Accumulated deficit

(2,813

)

(106,030

)

Accumulated other comprehensive income (loss)

1,527

(2,171

)

Total Stockholders’ Equity

437,390

216,775

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$

1,314,115

$

1,059,718

Three Months Ended

December 31,

Year Ended

December 31,

2020

2019

2020

2019

Cash flows from operating activities:

Net income (loss)

$

43,043

$

6,012

$

103,217

$

(8,394

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

   Stock-based compensation

1,510

1,035

5,796

3,848

   Depreciation

2,613

1,936

9,318

7,384

   Amortization of intangible assets

8,572

6,572

33,916

30,123

   Debt issuance costs amortization

560

708

2,550

2,989

   Loss on debt extinguishment

858

—

4,114

—

   Deferred income taxes

(584

)

(4,278

)

(7,476

)

(11,535

)

   Other

1,524

(945

)

2,594

(347

)

   Changes in operating assets and liabilities:

      Accounts receivable

(33,425

)

(37,460

)

(91,492

)

(48,033

)

      Inventories

(19,200

)

28,732

(80,086

)

15,711

      Prepaid expenses and other assets

12,478

1,693

(7,953

)

(1,619

)

      Accounts payable

23,750

14,138

116,522

16,203

      Other liabilities and accrued expenses

26,930

17,826

77,933

30,773

         Net cash provided by operating activities

68,629

35,969

168,953

37,103

Cash flows from investing activities:

   Acquisition of business, net of cash acquired

(455

)

(121,258

)

(1,291

)

(126,104

)

   Payment of deferred consideration

—

—

—

(10,300

)

   Purchase of property and equipment

(3,917

)

(1,845

)

(8,989

)

(8,848

)

   Purchase of intangible asset

—

(175

)

—

(175

)

         Net cash used in investing activities

(4,372

)

(123,278

)

(10,280

)

(145,427

)

Cash flows from financing activities:

   Proceeds from issuance of debt, net

—

113,885

—

113,885

   Repayment of debt

(50,000

)

(1,194

)

(190,394

)

(3,969

)

   Payment of debt issuance costs

—

(2,300

)

(194

)

(2,450

)

   Repayment of line of credit, net

—

(35,700

)

—

(27,000

)

Proceeds from initial public offering, net of underwriting

   discounts and commissions

—

—

118,575

—

   Payment of other offering costs

(2,873

)

(137

)

(8,455

)

(245

)

Proceeds from issuance of common stock to

   common stockholders

—

53,500

—

53,500

   Repurchase of common stock

—

(962

)

—

(1,531

)

   Proceeds from exercise of stock options

113

44

1,337

124

         Net cash provided by (used in) financing activities

(52,760

)

127,136

(79,131

)

132,314

Effect of exchange rate changes on cash

1,930

(9

)

2,079

37

Net increase in cash and restricted cash

13,427

39,818

81,621

24,027

Cash and restricted cash at the beginning of the period

120,141

12,129

51,947

27,920

Cash and restricted cash at the end of the period

$

133,568

$

51,947

$

133,568

$

51,947

Three Months Ended

December 31,

Year Ended

December 31,

2020

2019

2020

2019

Operating Income - GAAP

$

58,893

$

14,218

$

158,361

$

23,707

Acquisition accounting impact related to recognizing acquired deferred revenue at fair value

-

1,067

-

1,067

Acquisition accounting impact related to recognizing acquired inventory at fair value

-

1,604

394

1,604

Change in fair value of contingent consideration for business acquisition

954

(635

)

954

(635

)

Stock-based compensation

1,510

1,035

5,796

3,848

Intangible asset amortization

8,572

6,571

33,916

30,123

Acquisition-related and integration-related costs

680

1,250

3,156

3,099

Executive transition costs

-

444

-

984

Non-deferred IPO and secondary offering costs

428

224

1,633

1,135

Debt modification costs

-

836

623

836

Adjusted Operating Income - Non-GAAP

$

71,037

$

26,614

$

204,833

$

65,768

As a % of net revenue - GAAP

10.6

%

4.4

%

9.3

%

2.2

%

As a % of net revenue - Non-GAAP

12.8

%

8.1

%

12.0

%

6.0

%

Three Months Ended

December 31,

Year Ended

December 31,

2020

2019

2020

2019

Net Income (Loss) - GAAP

$

43,043

$

6,012

$

103,217

$

(8,394

)

Acquisition accounting impact related to recognizing acquired deferred revenue at fair value

-

1,067

-

1,067

Acquisition accounting impact related to recognizing acquired inventory at fair value

-

1,604

394

1,604

Change in fair value of contingent consideration for business acquisition

954

(635

)

954

(635

)

Stock-based compensation

1,510

1,035

5,796

3,848

Intangible asset amortization

8,572

6,571

33,916

30,123

Acquisition-related and integration-related costs

680

1,250

3,156

3,099

Executive transition costs

-

444

-

984

Non-deferred IPO and secondary offering costs

428

224

1,633

1,135

Debt modification costs

-

836

623

836

Loss on debt extinguishment

858

-

4,114

-

Non-GAAP income tax adjustment

(3,032

)

(1,567

)

(8,850

)

(6,163

)

Adjusted Net Income - Non-GAAP

$

53,013

$

16,841

$

144,953

$

27,504

Diluted Net income (loss) per share:

  GAAP

$

0.43

$

0.08

$

1.14

$

(0.11

)

  Adjusted, Non-GAAP

$

0.53

$

0.21

$

1.60

$

0.35

Shares used to compute diluted net income (loss) per share:

  GAAP

99,771

79,514

90,577

76,223

  Adjusted, Non-GAAP

99,771

79,514

90,577

78,117

Three Months Ended

December 31,

Year Ended

December 31,

2020

2019

2020

2019

Net Income (Loss) - GAAP

$

43,043

$

6,012

$

103,217

$

(8,394

)

Acquisition accounting impact related to recognizing acquired deferred revenue at fair value

-

1,067

-

1,067

Acquisition accounting impact related to recognizing acquired inventory at fair value

-

1,604

394

1,604

Change in fair value of contingent consideration for business acquisition

954

(635

)

954

(635

)

Stock-based compensation

1,510

1,035

5,796

3,848

Acquisition-related and integration-related costs

680

1,250

3,156

3,099

Executive transition costs

-

444

-

984

Non-deferred IPO and secondary offering costs

428

224

1,633

1,135

Debt modification costs

-

836

623

836

Intangible asset amortization

8,572

6,571

33,916

30,123

Depreciation

2,613

1,936

9,318

7,384

Interest expense (includes loss on debt extinguishment)

6,021

8,485

35,137

35,548

Tax expense (benefit)

8,676

(360

)

18,825

(5,005

)

Adjusted EBITDA - Non-GAAP

$

72,497

$

28,469

$

212,969

$

71,594

Adjusted EBITDA margin - Non-GAAP

13.0

%

8.7

%

12.5

%

6.5

%