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): August 8, 2024
___________________________________
(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)
(Zip Code)
(440 ) 439-7700
(Registrant's telephone number, including area code)
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 | 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 or Rule 12b-2 of the Exchange Act of 1934.
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 August 8, 2024, Arhaus, Inc. (the “Company”) issued a press release announcing its financial results for the second quarter ended June 30, 2024. A copy of the release is attached as Exhibit 99.1.
Item 7.01 Regulation FD Disclosure
The information furnished pursuant to Item 2.02 and Exhibit 99.1 of this Current Report on Form 8-K shall not be deemed to be “filed” for the 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. The information in this Current Report shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date of this Current Report, regardless of any general incorporation language in the filing.
Item 9.01 Financial Statements and Exhibits
(d) The following exhibits are being filed herewith:
| Exhibit No. | Description | |||||||
Press release dated August 8, 2024 announcing the release of second quarter 2024 results. | ||||||||
| 104 | Cover Page with Interactive Data File (embedded within the Inline XBRL document). | |||||||
SIGNATURE
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 on this 8th day of August, 2024.
| ARHAUS, INC. | |||||
By: | /s/ Dawn Phillipson | ||||
Name: | Dawn Phillipson | ||||
Title: | Chief Financial Officer | ||||
ARHAUS ANNOUNCES SECOND QUARTER 2024 FINANCIAL RESULTS
Net Revenue of $310 million, Net Income of $22 million and Adjusted EBITDA of $40 million
Opened Five New Showrooms in the Second Quarter
Lowering Full Year 2024 Outlook
BOSTON HEIGHTS, Ohio—August 8, 2024—Arhaus, Inc. (NASDAQ: ARHS; “Arhaus” or the “Company”), a rapidly growing lifestyle brand and omni-channel retailer of premium artisan-crafted home furnishings, reported financial results for the second quarter ended June 30, 2024.
Second Quarter 2024 Highlights
•Net revenue of $310 million
•Comparable growth(1) of (7.1)%
•Net and comprehensive income of $22 million
•Adjusted EBITDA of $40 million
Year-to-Date 2024 Highlights, through June 30
•Net revenue of $605 million
•Comparable growth of (8.3)%
•Net and comprehensive income of $37 million
•Adjusted EBITDA of $69 million
2024 Outlook Updated
•Net revenue of $1.25 billion to $1.29 billion
•Comparable growth of (11.0)% to (8.0)%
•Net and comprehensive income of $55 million to $75 million
•Adjusted EBITDA(8) of $125 million to $145 million
CEO Comments
John Reed, Co-Founder and Chief Executive Officer, commented,
“Our team delivered another quarter of solid operational execution, with several new showroom openings, successful new product development and important strategic investments to support our long term growth.
“We have opened 8 new Showrooms in 6 states so far this year and are on pace to meet our goal of opening nine to eleven new Showrooms in 2024. We recently celebrated an important milestone, opening our 100th Showroom. I want to thank our teams across Arhaus for their efforts in this achievement. We have many years of growth ahead as we work toward our long term goal of 165 Traditional Showrooms and up to 100 Design Studios, allowing us to capitalize on our tremendous brand awareness opportunity.
“Total demand(2) in the second quarter increased mid-single-digits. We continue to be very pleased with the performance of our new showrooms and our new showroom economics.
“In the second quarter we saw demand comparable growth(3) soften to (3%). We have experienced tremendous growth over the past several years with second quarter demand comparable growth increases
of 8.6% on a two-year stacked(4) basis and 31.1% on a three-year stacked(5) basis. I am so proud of the team’s execution while growing exponentially over the last several years and look forward to continuing to build on this solid base with our long term growth strategy.
“Given the consumer and demand comparable growth trends we have seen for the past three months, we are adjusting our expectations for the second half of the year and lowering our full year outlook. We remain confident in our long term growth strategy to expand our showroom footprint, increase brand awareness and invest to drive operational efficiency. Our strong, debt-free balance sheet allows us to continue to invest in our industry-leading growth while navigating the current consumer environment.”
Second Quarter 2024 Results
Net revenue in the second quarter was $310 million, compared to $313 million in the second quarter of 2023. The decrease was the result of the non-recurrence of prior year abnormal backlog deliveries and the implementation of our warehouse management system in our Ohio distribution center.
Comparable growth(1) was (7.1)% and demand comparable growth(3) was (3.0)% in the second quarter of 2024.
Gross margin decreased to $124 million, compared to $140 million in the second quarter of 2023, driven primarily by higher Showroom costs as we continue to expand our footprint, lower product margin related to promotional activity and lower net revenue, and increased delivery and transportation costs.
Selling, general and administrative expenses increased 10.3% to $95 million, compared to $86 million in the second quarter of 2023, primarily driven by higher selling expense mostly related to new Showrooms, higher corporate expense as we continue to invest in our strategic initiatives to support and drive the growth of the business, and increased warehouse expense.
Net and comprehensive income was $22 million compared to $40 million in the second quarter of 2023.
Adjusted EBITDA was $40 million compared to $64 million in the second quarter of 2023. Adjusted EBITDA as a percent of net revenue was 12.9% in the second quarter of 2024, compared to 20.4% in the second quarter of 2023.
Balance Sheet and Cash Flow Highlights, as of June 30, 2024
Cash and cash equivalents totaled $174 million, and the Company had no long-term debt at June 30, 2024. Net merchandise inventory increased $20 million to $274 million, compared to $254 million as of December 31, 2023. Client deposits increased $36 million to $210 million, compared to $174 million as of December 31, 2023.
For the six months ended June 30, 2024, net cash provided by operating activities was $84 million, compared to $64 million for the six months ended June 30, 2023.
For the six months ended June 30, 2024, net cash used in investing activities was approximately $62 million. Company-funded capital expenditures(6) were approximately $40 million, and landlord contributions were approximately $22 million. For the six months ended June 30, 2023, net cash used in investing activities was approximately $35 million. Company-funded capital expenditures were approximately $24 million, and landlord contributions were approximately $11 million.
For the six months ended June 30, 2024, net cash used in financing activities was $71.1 million primarily due to the payment of the special dividend on our Class A and Class B common stock. For the six months ended June 30, 2023, net cash used in financing activities was $0.5 million primarily due to the repurchase of shares for payment of withholding taxes for equity based compensation.
The Company ended the second quarter with 97 total Showrooms across 29 states.
Outlook
The table below presents our updated expectations for selected full year 2024 financial operating results and sets out our expectations for selected third quarter 2024 operating results.
Full Year | Current Guidance | Previous Guidance | Q3 Guidance | ||||||||
| Net revenue | $1.25 billion to $1.29 billion | $1.33 billion to $1.37 billion | $325 million to $345 million | ||||||||
Comparable growth(1) | (11)% to (8)% | (4)% to (2)% | (9)% to (4)% | ||||||||
Net income (7) | $55 million to $75 million | $95 million to $105 million | $10 million to $15 million | ||||||||
Adjusted EBITDA(8) | $125 million to $145 million | $185 million to $200 million | $25 million to $35 million | ||||||||
| Other estimates: | |||||||||||
Company-funded capital expenditures(6) | Unchanged | $80 million to $100 million | |||||||||
| Depreciation & amortization | $40 million to $45 million | $45 million to $50 million | |||||||||
| Fully diluted shares | Unchanged | ~ 141 million | |||||||||
| Effective tax rate | Unchanged | ~ 26% | |||||||||
In 2024, the Company plans to open nine to eleven new Showrooms, as well as renovate, relocate and expand several locations.
(1) Comparable growth is a key performance indicator and is defined as the year-over-year percentage change of the dollar value of orders delivered (based on purchase price), net of the dollar value of returns (based on amount credited to client), from our comparable Showrooms and eCommerce, including through our catalogs and other mailings.
(2) Demand is an operating metric that we use to measure the dollar value of orders (based on purchase price) at the time the order is placed, net of the dollar value of cancellations and returns (based on unpaid purchase price and amount credited to client). These orders are recognized as net revenue when a client obtains control of the merchandise. Because demand is measured net of cancellations, all demand will eventually become net revenue, with appropriate reserves, when delivered to the client.
(3) Demand comparable growth is a key performance indicator and is defined as the year-over-year percentage change of demand from our comparable Showrooms and eCommerce, including through our catalogs and other mailings.
(4) Two-year stack is calculated as current quarter demand comparable growth plus demand comparable growth for the same prior year quarter.
(5) Three-year stack is calculated as current quarter demand comparable growth plus the sum of demand comparable growth from the same quarter of the prior two years.
(6) Company-funded capital expenditures is defined as total net cash used in investing activities less landlord contributions.
(7) U.S. GAAP net income (loss).
(8) We have not reconciled guidance for Adjusted EBITDA to the corresponding GAAP financial measure because we do not provide guidance for the various reconciling items. These items include, but are not limited to, future share-based compensation expense, income taxes, interest income, and transaction costs. We are unable to provide guidance for these reconciling items because we cannot determine their probable significance, as certain items are outside of our control and cannot be reasonably predicted due to the fact that these items could vary significantly from period to period. Accordingly, reconciliations to the corresponding GAAP financial measure is not available without unreasonable effort.
Conference Call
You are invited to listen to Arhaus’ conference call to discuss the second quarter 2024 financial results scheduled for today, August 8, 2024, at 8:30 a.m. Eastern Time. The call will be available over the Internet on our website (http://ir.arhaus.com) or by dialing (877) 407-3982 within the U.S., or 1 (201) 493-6780, outside the U.S. The conference ID is: 13741049.
A recorded replay of the conference call will be available within approximately three hours of the conclusion of the call and can be accessed online at http://ir.arhaus.com for approximately twelve months.
About Arhaus
Founded in 1986, Arhaus is a rapidly growing lifestyle brand and omni-channel retailer of premium home furnishings. Through a differentiated proprietary model that directly designs and sources products from leading manufacturers and artisans around the world, Arhaus offers an exclusive assortment of heirloom quality products that are sustainably sourced, lovingly made, and built to last. With 100 showrooms and design center locations across the United States, a team of interior designers providing complimentary in-home design services, and robust online and eCommerce capabilities, Arhaus is known for innovative design, responsible sourcing, and client-first service. For more information, please visit www.arhaus.com.
Investor Contact:
Wendy Watson
SVP, Investor Relations
(440) 439-7700 x3409
invest@arhaus.com
Non-GAAP Financial Measures
In addition to the results provided in accordance with U.S. GAAP, this press release and related tables include adjusted EBITDA and adjusted EBITDA as a percentage of net revenue which present operating results on an adjusted basis.
We use non-GAAP measures to help assess the performance of our business, identify trends affecting our business, formulate business plans and make strategic decisions. In addition to our results determined in accordance with U.S. GAAP, we believe that providing these non-GAAP financial measures is useful to our investors as they present an informative supplemental view of our results from period to period by removing the effect of non-recurring items. However, our inclusion of these adjusted measures should not be construed as an indication that our future results will be unaffected by unusual or infrequent items or that the items for which we have made adjustments are unusual or infrequent or will not recur. These non-U.S. GAAP measures are not a substitute for, or superior to, measures of financial performance prepared in accordance with U.S. GAAP. Because not all companies use identical calculations, the presentations of these measures may not be comparable to other similarly titled measures of other companies and can differ significantly from company to company. These measures should only be read together with the corresponding U.S. GAAP measures. Please refer to the reconciliation of adjusted EBITDA to net income, the most directly comparable financial measure prepared in accordance with U.S. GAAP, below.
Forward-Looking Statements
Certain statements contained herein, including statements under the headings “2024 Outlook Updated” and “Outlook”, are not based on historical fact and are “forward-looking statements” within the meaning of applicable securities laws.
Forward-looking statements can generally be identified by the use of forward-looking terminology, including, but not limited to, “may,” “could,” “seek,” “guidance,” “predict,” “potential,” “likely,” “believe,” “will,” “expect,” “anticipate,” “estimate,” “plan,” “intend,” “forecast,” or variations of these terms and similar expressions, or the negative of these terms or similar expressions. Past performance is not a guarantee of future results or returns and no representation or warranty is made regarding future performance. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond our control that could cause our actual results, performance or achievements to be materially different from the expected results, performance or achievements expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to: our ability to manage and maintain the growth rate of our business; our ability to obtain quality merchandise in sufficient quantities; disruption in our receiving and distribution system, including delays in the integration of our distribution centers and the possibility that we may not realize the anticipated benefits of multiple distribution centers; the possibility of cyberattacks and our ability to maintain adequate cybersecurity systems and procedures; loss, corruption and misappropriation of data and information relating to clients and employees; changes in and compliance with applicable data privacy rules and regulations; risks as a result of constraints in our supply chain; a failure of our vendors to meet our quality standards; declines in general economic conditions that affect consumer confidence and consumer spending that could adversely affect our revenue; our ability to anticipate changes in consumer preferences; risks related to maintaining and increasing showroom traffic and sales; our ability to compete in our market; our ability to adequately protect our intellectual property; compliance with applicable governmental regulations; effectively managing our eCommerce business and digital marketing efforts; our reliance on third-party transportation carriers and risks associated with increased freight and transportation costs; and compliance with SEC rules and regulations as a public reporting company. These factors should not be construed as exhaustive. Further information on potential factors that could affect the financial results of the Company and its forward-looking statements is included in the Company’s filings with the Securities and Exchange Commission. The Company assumes no obligation to update any forward-looking statement, except as may be required by law. These forward-looking statements speak only as of the date of this release. All forward-looking statements are qualified in their entirety by this cautionary statement.
Arhaus, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited, amounts in thousands, except share and per share data) | ||||||||
| June 30, 2024 | December 31, 2023 | ||||||||||
| Assets | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | 174,186 | $ | 223,098 | |||||||
| Restricted cash | 3,213 | 3,207 | |||||||||
| Accounts receivable, net | 1,544 | 2,394 | |||||||||
| Merchandise inventory, net | 273,557 | 254,292 | |||||||||
| Prepaid and other current assets | 38,010 | 26,304 | |||||||||
| Total current assets | 490,510 | 509,295 | |||||||||
| Operating right-of-use assets | 352,472 | 302,157 | |||||||||
| Financing right-of-use assets | 37,764 | 38,835 | |||||||||
Property, furniture and equipment, net | 268,339 | 220,248 | |||||||||
| Deferred tax assets | 14,258 | 19,127 | |||||||||
| Goodwill | 10,961 | 10,961 | |||||||||
| Other noncurrent assets | 2,997 | 4,525 | |||||||||
| Total assets | $ | 1,177,301 | $ | 1,105,148 | |||||||
| Liabilities and Stockholders’ Equity | |||||||||||
| Current liabilities | |||||||||||
| Accounts payable | $ | 67,949 | $ | 63,699 | |||||||
| Accrued taxes | 7,093 | 9,638 | |||||||||
| Accrued wages | 10,791 | 15,185 | |||||||||
| Accrued other expenses | 45,584 | 46,062 | |||||||||
| Client deposits | 210,268 | 173,808 | |||||||||
| Current portion of operating lease liabilities | 49,463 | 33,051 | |||||||||
| Current portion of financing lease liabilities | 975 | 904 | |||||||||
| Total current liabilities | 392,123 | 342,347 | |||||||||
| Operating lease liabilities, long-term | 417,861 | 362,598 | |||||||||
| Financing lease liabilities, long-term | 53,636 | 53,870 | |||||||||
| Deferred rent and lease incentives | — | 1,952 | |||||||||
| Other long-term liabilities | 4,371 | 4,143 | |||||||||
| Total liabilities | $ | 867,991 | $ | 764,910 | |||||||
Commitments and contingencies | |||||||||||
| Stockholders’ equity | |||||||||||
Class A shares, par value $0.001 per share (600,000,000 shares authorized, 53,466,265 shares issued and 53,345,001 outstanding as of June 30, 2024; 53,254,088 shares issued and 53,169,711 outstanding as of December 31, 2023) | 53 | 52 | |||||||||
Class B shares, par value $0.001 per share (100,000,000 shares authorized, 87,115,600 shares issued and outstanding as of June 30, 2024; 87,115,600 shares issued and outstanding as of December 31, 2023) | 87 | 87 | |||||||||
| Retained earnings | 111,544 | 145,292 | |||||||||
| Additional paid-in capital | 197,626 | 194,807 | |||||||||
| Total stockholders’ equity | 309,310 | 340,238 | |||||||||
| Total liabilities and stockholders’ equity | $ | 1,177,301 | $ | 1,105,148 | |||||||
Arhaus, Inc. and Subsidiaries Condensed Consolidated Statements of Comprehensive Income (Unaudited, amounts in thousands, except share and per share data) | ||
| Six months ended | Three months ended | ||||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| Net revenue | $ | 604,963 | $ | 617,467 | $ | 309,801 | $ | 312,899 | |||||||||||||||
| Cost of goods sold | 365,537 | 349,109 | 185,429 | 172,779 | |||||||||||||||||||
| Gross margin | 239,426 | 268,358 | 124,372 | 140,120 | |||||||||||||||||||
| Selling, general and administrative expenses | 191,684 | 168,913 | 94,991 | 86,131 | |||||||||||||||||||
| Income from operations | $ | 47,742 | $ | 99,445 | $ | 29,381 | $ | 53,989 | |||||||||||||||
| Interest income, net | (2,038) | (651) | (606) | (478) | |||||||||||||||||||
| Other income | (197) | (660) | (75) | (88) | |||||||||||||||||||
| Income before taxes | 49,977 | 100,756 | 30,062 | 54,555 | |||||||||||||||||||
| Income tax expense | 12,644 | 26,474 | 7,828 | 14,372 | |||||||||||||||||||
| Net and comprehensive income | $ | 37,333 | $ | 74,282 | $ | 22,234 | $ | 40,183 | |||||||||||||||
| Net and comprehensive income per share, basic | |||||||||||||||||||||||
| Weighted-average number of common shares outstanding, basic | 139,901,319 | 139,232,238 | 139,985,846 | 139,389,967 | |||||||||||||||||||
| Net and comprehensive income per share, basic | $ | 0.27 | $ | 0.53 | $ | 0.16 | $ | 0.29 | |||||||||||||||
| Net and comprehensive income per share, diluted | |||||||||||||||||||||||
| Weighted-average number of common shares outstanding, diluted | 140,736,096 | 139,959,943 | 140,916,161 | 139,979,928 | |||||||||||||||||||
| Net and comprehensive income per share, diluted | $ | 0.27 | $ | 0.53 | $ | 0.16 | $ | 0.29 | |||||||||||||||
Arhaus, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited, amounts in thousands) | ||
| Six months ended | |||||||||||
| June 30, | |||||||||||
| 2024 | 2023 | ||||||||||
| Cash flows from operating activities | |||||||||||
| Net income | $ | 37,333 | $ | 74,282 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities | |||||||||||
| Depreciation and amortization | 17,709 | 14,140 | |||||||||
| Amortization of operating lease right-of-use asset | 17,942 | 16,080 | |||||||||
| Amortization of deferred financing fees, interest on finance lease in excess of principal paid and interest on operating leases | 13,008 | 9,945 | |||||||||
| Equity based compensation | 3,351 | 3,904 | |||||||||
| Deferred tax assets | 4,870 | 5,333 | |||||||||
| Amortization of cloud computing arrangements | 762 | 142 | |||||||||
| Amortization and write-off of lease incentives | (80) | (160) | |||||||||
| Insurance proceeds | — | 60 | |||||||||
| Changes in operating assets and liabilities | |||||||||||
| Accounts receivable | 850 | (12) | |||||||||
| Merchandise inventory | (19,265) | (8,495) | |||||||||
| Prepaid and other assets | (11,545) | 619 | |||||||||
| Other noncurrent liabilities | 332 | 169 | |||||||||
| Accounts payable | 4,571 | (10,525) | |||||||||
| Accrued expenses | (11,254) | (14,847) | |||||||||
| Operating lease liabilities | (10,740) | (17,253) | |||||||||
| Client deposits | 36,460 | (9,186) | |||||||||
| Net cash provided by operating activities | 84,304 | 64,196 | |||||||||
| Cash flows from investing activities | |||||||||||
| Purchases of property, furniture and equipment | (62,158) | (35,216) | |||||||||
| Insurance proceeds | — | 333 | |||||||||
| Net cash used in investing activities | (62,158) | (34,883) | |||||||||
| Cash flows from financing activities | |||||||||||
| Principal payments under finance leases | (448) | (130) | |||||||||
| Repurchase of shares for payment of withholding taxes for equity based compensation | (548) | (347) | |||||||||
| Cash dividend payments | (70,056) | — | |||||||||
| Net cash used in financing activities | (71,052) | (477) | |||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | (48,906) | 28,836 | |||||||||
| Cash, cash equivalents and restricted cash | |||||||||||
| Beginning of period | 226,305 | 152,527 | |||||||||
| End of period | $ | 177,399 | $ | 181,363 | |||||||
| Supplemental disclosure of cash flow information | |||||||||||
| Interest paid in cash | $ | 2,143 | $ | 2,610 | |||||||
| Interest received in cash | 5,155 | 3,172 | |||||||||
| Income taxes paid in cash | 15,815 | 21,902 | |||||||||
| Noncash investing activities: | |||||||||||
| Purchase of property, furniture and equipment in current liabilities | 12,672 | 8,542 | |||||||||
| Noncash financing activities: | |||||||||||
| Capital contributions | 17 | 30 | |||||||||
Arhaus, Inc. and Subsidiaries Reconciliation of Net Income to Adjusted EBITDA (Unaudited, amounts in thousands) | ||
| Six months ended | Three months ended | ||||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| Net and comprehensive income | $ | 37,333 | $ | 74,282 | $ | 22,234 | $ | 40,183 | |||||||||||||||
| Interest income, net | (2,038) | (651) | (606) | (478) | |||||||||||||||||||
| Income tax expense | 12,644 | 26,474 | 7,828 | 14,372 | |||||||||||||||||||
| Depreciation and amortization | 17,709 | 14,140 | 9,106 | 7,400 | |||||||||||||||||||
| EBITDA | 65,648 | 114,245 | 38,562 | 61,477 | |||||||||||||||||||
| Equity based compensation | 3,351 | 3,904 | 1,327 | 2,274 | |||||||||||||||||||
Other expenses (1) | — | 437 | — | — | |||||||||||||||||||
| Adjusted EBITDA | $ | 68,999 | $ | 118,586 | $ | 39,889 | $ | 63,751 | |||||||||||||||
| Net revenue | $ | 604,963 | $ | 617,467 | $ | 309,801 | $ | 312,899 | |||||||||||||||
| Net and comprehensive income as a % of net revenue | 6.2 | % | 12.0 | % | 7.2 | % | 12.8 | % | |||||||||||||||
| Adjusted EBITDA as a % of net revenue | 11.4 | % | 19.2 | % | 12.9 | % | 20.4 | % | |||||||||||||||
(1) Other expenses represent costs and investments not indicative of ongoing business performance, such as public offering costs, severance, signing bonuses and recruiting costs. For the six months ended June 30, 2023, these expenses consisted largely of $0.3 million of severance, signing bonuses and recruiting costs and $0.1 million of public offering costs.