UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________
FORM 8-K
_________________________________
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)
___________________________________
| (State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification Number) | ||||||
(Address of principal executive offices, including zip code)
(385 ) 351-0633
(Registrant’s telephone number, including area code)
Not Applicable
(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:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
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 May 13, 2021, Cricut Inc. (the “Company”) issued a press release and will hold a conference call announcing its financial results for its first quarter ended March 31, 2021. A copy of the press release is furnished herewith as Exhibit 99.1 and incorporated herein by reference.
The information contained herein and in the accompanying exhibit are “furnished” and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference in such filing.
Item 7.01 Regulation FD Disclosure.
The Company announces material information to the public through filings with the Securities and Exchange Commission, or the SEC, the investor relations page on the Company’s website, press releases, public conference calls, webcasts, the Company’s news site at cricut.com/press and blog posts on the Company’s corporate website.
The information disclosed by the foregoing channels could be deemed to be material information. As such, the Company encourages investors, the media and others to follow the channels listed above and to review the information disclosed through such channels.
Any updates to the list of disclosure channels through which the Company announces information will be posted on the investor relations page on the Company’s website.
Item 9.01 Financial Statements and Exhibits.
(d)Exhibits
| Exhibit Number | Exhibit Description | ||||
99.1 | |||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Cricut, Inc. | ||||||||
| Date: | May 13, 2021 | /s/ Martin F. Petersen | ||||||
| Martin F. Petersen | ||||||||
| Chief Financial Officer | ||||||||
Cricut, Inc. Reports First Quarter 2021 Financial Results
Revenue grew 125.3% over Q1 2020
Total users climb to 4.9 million and paid subscribers more than doubled over Q1 2020 to 1.6 million
Delivered 9th consecutive quarter of profitability with net income of $49.4M; Delivered $68.6M of EBITDA
SOUTH JORDAN, Utah, May 13, 2021 (GLOBE NEWSWIRE)-- Cricut, Inc. (“Cricut”) (NASDAQ: CRCT), the creative technology company that has brought a connected platform for making to millions of users worldwide, today announced financial results for its first quarter ended March 31, 2021.
“Cricut saw continued strong demand as we added over 600,000 users in the last three months and delivered year-over-year revenue growth of approximately 125%,” said Ashish Arora, CEO of Cricut. “The creative passion from our community of users serves as a strong foundation for engagement on our platform, creating a viral word-of-mouth marketing engine that drives efficient customer acquisition. To support our users around the world, we continue to improve the Cricut platform by bringing new software, tools, and content that appeals to the diverse breadth of our community.”
First Quarter 2021 Financial Results
•Revenue was $323.8 million, up 125.3% over Q1 2020
•Connected machine revenue was $141.3 million, up 148.4% over Q1 2020
•Subscriptions revenue was $46.1 million, up 140.6% over Q1 2020
•Accessories and materials revenue was $136.4 million, up 101.6% over Q1 2020
•Gross margin was 37.1%, up from 31.1% over Q1 2020
•Net income was $49.4 million, up 279.0% over Q1 2020, and was 15.3% of revenue, compared to $13.0 million, or 9.1% of revenue in Q1 2020
•Diluted earnings per share was $0.24
•EBITDA, was $68.6 million, or 21.2% of revenue, compared to $20.7 million, or 14.4% of revenue in Q1 2020, and includes $3.5 million of recurring stock-based compensation expense and $8.2 million of one-time expenses related to the corporate reorganization associated with the IPO
•International revenue grew 253.4% over Q1 2020 and was 10.3% of total revenue, up from 6.6% of total revenue in Q1 2020
EBITDA and EBITDA margin are non-GAAP measures and are reconciled to the corresponding GAAP measures at the end of this release.
“Sales from connected machines grew 148% over first quarter last year and were limited somewhat by inventory shortages,” said Marty Petersen, CFO of Cricut. “Importantly, our connected machines are only the start of our users’ journey with Cricut. Connected machine sales led to strong demand for our higher margin subscription offering and accessories and materials products, which contributed to gross margins of 37% and EBITDA of $69 million.”
First Quarter 2021 Business Highlights
•Demand for our products and services, as well as engagement on our platform, remained strong with year-over-year growth across all three revenue segments and an increase in the percentage of users creating in the last 90 days.
• International markets remain a key strategic focus area. Added team members to lead sales in the Middle East, Africa, and Asia. Also, opened new markets in Spain, the Nordics, and Mexico, and expanded our retail footprint in the UK, Australia, France, and Germany.
• Strengthened the extensible Cricut platform with deeper integration between our software, materials, add-on accessories, and digital content. In the first quarter, we launched the new Cricut Mug Press machine accessory and its family of software upgrades, content, and add-on accessories and materials. Cricut users can now easily create professional-looking, personalized mugs for personal use, gifting, or selling.
• Added greater functionality and improved user experiences in our software to help maintain and drive engagement including new design content, enhanced search functionality, built-in educational tutorials, project collections to help users organize their creative work, and the highly requested Offset feature which allows users to add decorative outlines and shadowing to shapes, text, or groups of images.
• Completed initial public offering and listing on the Nasdaq Global Select Market.
• Ninth consecutive quarter of net income profitability; EBITDA profitable every year since 2014.
Key Performance Metrics and Non-GAAP Financial Measures
| As of March 31, | |||||||||||
| 2021 | 2020 | ||||||||||
| Users (in thousands) | 4,939 | 2,803 | |||||||||
| Percentage of Users Creating in Trailing 90 Days | 62 | % | 60 | % | |||||||
| Paid Subscribers (in thousands) | 1,614 | 740 | |||||||||
| For the Three Months Ended March 31, | |||||||||||
| 2021 | 2020 | ||||||||||
| Subscription ARPU | $ | 9.96 | $ | 7.20 | |||||||
| Accessories and Materials ARPU | $ | 29.45 | $ | 25.40 | |||||||
| EBITDA (in millions) | $ | 68.6 | $ | 20.7 | |||||||
EBITDA includes stock-based compensation expense.
Webcast and Conference Call Information
Cricut management will host a conference call and webcast to discuss the results today, Thursday, May 13, 2021 at 3:00 p.m. Mountain Time (5:00 p.m. Eastern Time).
Information about Cricut’s financial results, including a link to the live and archived webcast of the conference call, will be made available on Cricut’s investor relations website at https://investor.cricut.com. The live call may also be accessed via telephone at (833) 398-1017 toll-free domestically and at (914) 987-7715 internationally. Please reference conference ID: 5590544. A transcript of the opening commentary will also be available following the conference call.
About Cricut, Inc.
Cricut, Inc. is a creative technology platform company dedicated to encouraging new ways for people to experience making at home. Cricut’s mission is to unleash the creative potential of its users with innovations that bring ideas to life in the form of professional-looking, personalized handmade projects. Cricut’s industry-leading products include its flagship line of smart cutting machines—Cricut Maker®, the Cricut Explore® family, and Cricut Joy®— accompanied by other
unique tools like Cricut EasyPress®, the Infusible Ink™ system, and a diverse collection of materials. In addition to Cricut’s core offerings, the brand also fosters a thriving community of millions of dedicated users worldwide.
Cricut has used, and intends to continue using, its investor relations website and the Cricut News Blog (https://inspiration.cricut.com/news/) to disclose material non-public information and to comply with its disclosure obligations under Regulation FD. Accordingly, you should monitor our investor relations website and the Cricut News Blog in addition to following our press releases, SEC filings and public conference calls and webcasts.
Media Contact:
Alexandra Kenway
pr@cricut.com
Investor Contact:
Stacie Clements
investors@cricut.com
Stacie Clements
investors@cricut.com
Source: Cricut, Inc.
Key Performance Metrics
In addition to the measures presented in our consolidated financial statements, we use the following key business metrics to help us evaluate our business, identify trends affecting our business, formulate business plans and make strategic decisions. We believe these metrics are useful to investors because they can help in monitoring the long-term health of our business. Our determination and presentation of these metrics may differ from that of other companies. The presentation of these metrics is meant to be considered in addition to, not as a substitute for or in isolation from, our financial measures prepared in accordance with GAAP.
Glossary of Terms
Users: We define a User as a registered user of at least one registered connected machine as of the end of a period. One user may own multiple registered connected machines, but is only counted once if that user registers those connected machines by using the same email address.
Percentage of Users Creating in Trailing 90 Days: We define the Percentage of Users Creating in Trailing 90 Days as the percentage of users who have used a connected machine for any activity, such as cutting, writing or any other activity enabled by our connected machines, in the past 90 days.
Paid Subscribers: We define Paid Subscribers as the number of users with a subscription to Cricut Access or Cricut Access Premium, excluding cancelled, unpaid or free trial subscriptions, as of the end of a period.
Subscription ARPU: We define Subscription ARPU as Subscriptions revenue divided by average users in a period.
Accessories and Materials ARPU: We define Accessories and Materials ARPU as Accessories and Materials revenue divided by average users in a period. Accessories and Materials ARPU fluctuates over time as we introduce new accessories and materials at various price points and as the volume and mix of accessories and materials purchased changes
Paid Subscribers: We define Paid Subscribers as the number of users with a subscription to Cricut Access or Cricut Access Premium, excluding cancelled, unpaid or free trial subscriptions, as of the end of a period.
Subscription ARPU: We define Subscription ARPU as Subscriptions revenue divided by average users in a period.
Accessories and Materials ARPU: We define Accessories and Materials ARPU as Accessories and Materials revenue divided by average users in a period. Accessories and Materials ARPU fluctuates over time as we introduce new accessories and materials at various price points and as the volume and mix of accessories and materials purchased changes
Cautionary Statement Regarding Forward Looking Statements
This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 as amended (the “Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements include, but are not limited to, quotations from management, statements in the paragraphs under
“Business Outlook” above, strategies, market size and growth opportunities. Forward-looking statements generally can be identified by the fact that they do not relate strictly to historical or current facts and by the use of forward-looking words such as “anticipates,” “believes,” “targets,” “potential,” “estimates,” “expects,” “intends,” “plans,” “projects,” “may” or similar terminology. In particular, statements, express or implied, concerning future actions, conditions or events, future results of operations or the ability to generate revenues, income or cash flow are forward-looking statements. These statements are based on and reflect our current expectations, estimates, assumptions and/ or projections and our perception of historical trends and current conditions, as well as other factors that we believe are appropriate and reasonable under the circumstances. Forward-looking statements are neither predictions nor guarantees of future events, circumstances or performance and are inherently subject to known and unknown risks, uncertainties and assumptions, many of which are beyond our control, that could cause our actual results to differ materially from those indicated by those statements. There can be no assurance that our expectations, estimates, assumptions and/or projections will prove to be correct or that any of our expectations, estimates or projections will be achieved. The forward-looking statements included in this press release are only made as of the date indicated on the relevant materials and are based on our estimates and opinions at the time the statements are made. We disclaim any obligation to publicly update any forward-looking statement to reflect subsequent events or circumstances or changes in opinion, except as required by law.
Numerous factors could cause our actual results and events to differ materially from those expressed or implied by forward-looking statements including, but not limited to, risks and uncertainties associated with: our ability to attract and engage with our users; competitive risks; supply chain, manufacturing, distribution and fulfillment risks; international risks, including regulation and tariffs that have materially increased our costs and the potential for further trade barriers or disruptions; sales and marketing risks, including our dependence on sales to brick-and-mortar and online retail partners and our need to continue to grow online sales; risks relating to the complexity of our business, which includes connected machines, custom tools, hundreds of materials, design apps, e-commerce software, subscriptions, content, international production, direct sales and retail distribution; risks related to product quality, safety and warranty claims and returns; risks related to the fluctuation of our quarterly results of operations and other operating metrics; risks related to intellectual property, cybersecurity and potential data breaches; risks related to our dependence on our Chief Executive Officer; risks related to our status as a “controlled company”; and the impact of economic and geopolitical events, natural disasters and actual or threatened public health emergencies, such as the ongoing COVID-19 pandemic and any resulting economic slowdown, governmental action, stay-at-home order or other resulting interruption to our operations. These risks and uncertainties are described in greater detail under the heading “Risk Factors” in the final prospectus that we have filed with the Securities and Exchange Commission (“SEC”).
Cricut, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share amounts)
| As of March 31, 2021 | As of December 31, 2020 | ||||||||||
| (unaudited) | |||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 337,472 | $ | 122,215 | |||||||
| Accounts receivable, net | 154,356 | 162,931 | |||||||||
| Inventories | 301,776 | 248,745 | |||||||||
| Prepaid expenses and other current assets | 2,225 | 4,916 | |||||||||
| Total current assets | 795,829 | 538,807 | |||||||||
| Property and equipment, net | 37,377 | 33,441 | |||||||||
| Intangible assets, net | 2,090 | 2,280 | |||||||||
| Deferred tax assets | 3,119 | 3,119 | |||||||||
| Other assets | 1,772 | 3,753 | |||||||||
| Total assets | $ | 840,187 | $ | 581,400 | |||||||
| Liabilities and Stockholders’ Equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 203,828 | $ | 251,658 | |||||||
| Accrued expenses and other current liabilities | 66,409 | 71,324 | |||||||||
| Deferred revenue, current portion | 24,551 | 23,518 | |||||||||
| Total current liabilities | 294,788 | 346,500 | |||||||||
| Deferred revenue, net of current portion | 3,454 | 2,758 | |||||||||
| Other non-current liabilities | 3,498 | 3,217 | |||||||||
| Total liabilities | 301,740 | 352,475 | |||||||||
| Commitments and contingencies (Note 9) | |||||||||||
| Stockholders’ equity: | |||||||||||
Preferred stock, par value $0.001 per share, 100,000,000 shares authorized, no shares issued and outstanding as of March 31, 2021. No shares issued, authorized or outstanding as of December 31, 2020. | — | — | |||||||||
Common stock, par value $0.001 per share, 1,250,000,000 shares authorized as of March 31, 2021, 221,365,580 shares issued and outstanding as of March 31, 2021; 257,058,262 shares authorized as of December 31, 2020, 208,116,104 shares issued and outstanding as of December 31, 2020 | 221 | 208 | |||||||||
| Additional paid-in capital | 672,845 | 412,741 | |||||||||
| Accumulated deficit | (134,615) | (184,033) | |||||||||
| Accumulated other comprehensive income (loss) | (4) | 9 | |||||||||
| Total stockholders’ equity | 538,447 | 228,925 | |||||||||
| Total liabilities and stockholders’ equity | $ | 840,187 | $ | 581,400 | |||||||
Cricut, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Income
(unaudited)
(in thousands, except share and per share amounts)
| Three Months Ended March 31, | |||||||||||
| 2021 | 2020 | ||||||||||
| Revenue: | |||||||||||
| Connected machines | $ | 141,320 | $ | 56,888 | |||||||
| Subscriptions | 46,139 | 19,180 | |||||||||
| Accessories and materials | 136,363 | 67,655 | |||||||||
| Total revenue | 323,822 | 143,723 | |||||||||
| Cost of revenue: | |||||||||||
| Connected machines | 119,692 | 51,577 | |||||||||
| Subscriptions | 4,298 | 2,841 | |||||||||
| Accessories and materials | 79,562 | 44,537 | |||||||||
| Total cost of revenue | 203,552 | 98,955 | |||||||||
| Gross profit | 120,270 | 44,768 | |||||||||
| Operating expenses: | |||||||||||
| Research and development | 15,698 | 9,171 | |||||||||
| Sales and marketing | 27,489 | 12,447 | |||||||||
| General and administrative | 12,419 | 5,700 | |||||||||
| Total operating expenses | 55,606 | 27,318 | |||||||||
| Income from operations | 64,664 | 17,450 | |||||||||
| Other expense, net | (29) | (574) | |||||||||
| Income before provision for income taxes | 64,635 | 16,876 | |||||||||
| Provision for income taxes | 15,217 | 3,836 | |||||||||
| Net income | $ | 49,418 | $ | 13,040 | |||||||
| Other comprehensive income (loss): | |||||||||||
| Foreign currency translation adjustment | (13) | 98 | |||||||||
| Comprehensive income | 49,405 | 13,138 | |||||||||
| Net income | $ | 49,418 | $ | 13,040 | |||||||
| Earnings per share, basic | $ | 0.24 | $ | 0.06 | |||||||
| Earnings per share, diluted | $ | 0.24 | $ | 0.06 | |||||||
| Weighted-average common shares outstanding, basic | 207,309,946 | 208,116,104 | |||||||||
| Weighted-average common shares outstanding, diluted | 208,458,352 | 208,116,104 | |||||||||
Cricut, Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)
(in thousands)
| Three Months Ended March 31, | |||||||||||
| 2021 | 2020 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $ | 49,418 | $ | 13,040 | |||||||
Adjustments to reconcile net income to net cash and cash equivalents provided by (used in) operating activities: | |||||||||||
Depreciation and amortization (including amortization of debt issuance costs) | 3,956 | 3,246 | |||||||||
| Stock-based compensation | 11,685 | 1,446 | |||||||||
| Provision for inventory obsolescence | 605 | 2,580 | |||||||||
| Provision for doubtful accounts | (109) | 467 | |||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable | 8,684 | (12,707) | |||||||||
| Inventories | (52,939) | 31,968 | |||||||||
| Prepaid expenses and other current assets | 2,680 | 448 | |||||||||
| Other assets | (30) | 38 | |||||||||
| Accounts payable | (48,317) | (43,289) | |||||||||
Accrued expenses and other current liabilities and other non-current liabilities | 675 | 8,273 | |||||||||
| Deferred revenue | 1,729 | 927 | |||||||||
Net cash and cash equivalents (used in) provided by operating activities | (21,963) | 6,437 | |||||||||
| Cash flows from investing activities: | |||||||||||
Acquisitions of property and equipment, including costs capitalized for development of internal use software | (7,839) | (7,753) | |||||||||
| Net cash and cash equivalents used in investing activities | (7,839) | (7,753) | |||||||||
| Cash flows from financing activities: | |||||||||||
| Proceeds from capital contributions | 200 | 1,083 | |||||||||
| Proceeds from issuance of common stock upon initial public offering, net of offering costs | 245,082 | — | |||||||||
| Repurchase of compensatory units | (160) | (732) | |||||||||
Repurchase of common stock upon Corporate Reorganization | (10) | — | |||||||||
| Payments on term loan | — | (1,250) | |||||||||
| Drawdowns on revolving loan | — | 169,426 | |||||||||
| Payments on revolving loan | — | (131,792) | |||||||||
| Payments on capital leases | (14) | (25) | |||||||||
| Net cash provided by financing activities | 245,098 | 36,710 | |||||||||
| Effect of exchange rate on changes on cash and cash equivalents | (39) | 83 | |||||||||
| Net increase in cash and cash equivalents | 215,257 | 35,477 | |||||||||
| Cash and cash equivalents at beginning of period | 122,215 | 6,653 | |||||||||
| Cash and cash equivalents at end of period | $ | 337,472 | $ | 42,130 | |||||||
| Supplemental disclosures of cash flow information: | |||||||||||
| Cash paid during the period for interest | $ | 9 | $ | 591 | |||||||
| Cash paid during the period for income taxes | $ | 789 | $ | — | |||||||
Supplemental disclosures of non-cash investing and financing activities: | |||||||||||
Property and equipment included in accounts payable and accrued expenses and other current liabilities | $ | 2,085 | $ | 1,061 | |||||||
| Stock-based compensation capitalized for software development costs | $ | 294 | $ | 77 | |||||||
Deferred offering costs in accounts payable and accrued expenses and other current liabilities | $ | 1,096 | $ | — | |||||||
| Reclassification of liability awards to equity upon modification | $ | 10,784 | $ | — | |||||||
Use of Non-GAAP Financial Measures
EBITDA and EBITDA Margin
We calculate EBITDA as net income adjusted to exclude: interest expense, net; income taxes; and depreciation and amortization expense. Stock-based compensation is included in our EBITDA calculation. EBITDA Margin is calculated by dividing EBITDA by total revenue.
We use EBITDA and EBITDA Margin as a measure of operating in our business. We believe this non-GAAP financial measure is useful to investors for period-to-period comparisons of our business and in understanding and evaluating our results of operations for the following reasons:
•EBITDA and EBITDA Margin are widely used by investors and securities analysts to measure a company’s operating performance without regard to items such as depreciation and amortization expense, interest expense and income taxes that can vary substantially from company to company depending upon their financing and the method by which assets were acquired;
•Our management uses EBITDA and EBITDA Margin in conjunction with financial measures prepared in accordance with GAAP for planning purposes, including the preparation of our annual operating budget, as a measure of our core results of operations and the effectiveness of our business strategy and in evaluating our financial performance; and
•EBITDA and EBITDA Margin provide consistency and comparability with our past financial performance, facilitate period-to-period comparisons of our core results of operations and also facilitate comparisons with other peer companies, many of which use similar non-GAAP financial measures to supplement their GAAP results.
Our use of EBITDA and EBITDA Margin has limitations as an analytical tool, and you should not consider these measures in isolation or as substitutes for analysis of our financial results as reported under GAAP. Some of these limitations are, or may in the future be, as follows:
•Although depreciation and amortization expense are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and EBITDA and EBITDA Margin do not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
•EBITDA and EBITDA Margin do not reflect the portion of software development costs that we capitalize under GAAP, which has recently been, and will continue to be for the foreseeable future, a significant recurring expense for our business and an important part of our investment in new products;
•EBITDA and EBITDA Margin do not reflect: (i) changes in, or cash requirements for, our working capital needs, (ii) interest expense, or the cash requirements necessary to service interest or principal payments on our debt, which reduces cash available to us or (iii) tax payments that may represent a reduction in cash available to us.
Because of these limitations, we believe EBITDA and EBITDA Margin should be considered along with other operating and financial performance measures presented in accordance with GAAP.
The following table presents a reconciliation of EBITDA to net income and EBITDA Margin to net income margin, the most directly comparable financial measures prepared in accordance with GAAP, for each of the periods indicated:
| Three Months Ended March 31, | |||||||||||
| 2021 | 2020 | ||||||||||
| ($ in thousands) | |||||||||||
| Net income | $ | 49,418 | $ | 13,040 | |||||||
| Net income margin | 15.3 | % | 9.1 | % | |||||||
| Adjusted to exclude the following: | |||||||||||
| Depreciation and amortization expense | $ | 3,886 | $ | 3,236 | |||||||
| Interest expense, net | $ | 79 | $ | 574 | |||||||
| Corporate income tax expense | $ | 15,217 | $ | 3,836 | |||||||
| EBITDA | $ | 68,600 | $ | 20,686 | |||||||
| EBITDA margin | 21.2 | % | 14.4 | % | |||||||
Note: Q1 2021 EBITDA includes $3.5 million of recurring stock-based compensation expense and $8.2 million of one-time expenses related to the corporate reorganization associated with the IPO. Q1 2020 EBITDA includes $1.5 million of recurring stock-based compensation expense.