Cricut, Inc. · NASDAQ:CRCT
Cricut — Q2 2021 Earnings Presentation
28 slides from Cricut's earnings presentation, Aug 12, 2021
Slide 1: Financial Results Q2 2021
NASDAQ : CRCT Financial Results Q2 2021 August 12, 2021 Q2 2021 Financial Results 1
Slide 2: Safe Harbor Statement
This presentation contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We intend all forward-looking statements to be covered by the safe harbor provisions of the Private Securities Litigation Re
Slide 3: Welcome!
NASDAQ: CRCT Welcome! Q2 2021 Financial Results 3
Slide 4: Q2 2021 Highlights
Q2 2021 Highlights Net Revenue Net Income EBITDA1 $334.5M $49.1M $68.5M 42% 41% 39% YoY Increase YoY Increase YoY Increase 1 Net income adjusted to exclude: interest expense, net; income taxes; and depreciation and amortization expense. See reconciliation in the Appendix. Q2 2021 EBITDA includes $8.
Slide 5: Strong user acquisition + healthy engagement
Strong user acquisition + healthy engagement Acquisition drives Total Engaged Ending Paid engagement. Users Users Subscribers 5.4M 3.2M 1.8M 64% 53% 77% YoY Growth YoY Growth YoY Growth Did you know? 59% of all users were engaged in Q2 2021, an increase of 1.1 million engaged users vs Q2 2020. Q2 20
Slide 6: Shifting creative trends and behaviors
Shifting creative trends and behaviors Q2 2021 Financial Results 6
Slide 7: Adding value for our customers with Cricut Access
Adding value for our customers with Cricut Access Cricut Access Subscription Ending Paid Subscribers o Access to over 175K images (over 40% more than Q2 2020) 1.8M o 6K+ ready-to-make projects 77% o Hundreds of fonts YoY Growth o Discounts and priority Cricut Member Care 175,000+ Images Did you know
Slide 8: Creativity is universal
Creativity is universal International Top Retail Expanded Global Expanded Sales Revenue Markets Cricut Team Channel Footprint 179% Australia France Italy Mexico Germany France Growth in Germany Spain Q2 2021 YoY UK South Africa Southeast Asia Cricut.com/UK Did you know? YTD 2021, 9.4% of revenue was
Slide 9: Expanding our product ecosystem and platform
Expanding our product ecosystem and platform Cricut Explore 3 + Cricut Maker 3 Launches o Sleek new hardware, enhanced software, content, and new materials o Smarter & faster than ever (up to 2x as fast) Cricut Smart Materials™ Launch o Innovation to increase creative use cases and improve ease of u
Slide 10: Platform extensibility through software innovation
Platform extensibility through software innovation Strategic Software Updates o Long-requested kerning feature o Redesigned bookmark feature to ease ability to “like” and organize in Design Space o Ongoing search optimization Did you know? User feedback and requests are a primary driver of how we de
Slide 11: The power of our social community
The power of our social community 5.2M+ Social Media Followers 2.4B Views of #Cricut on TikTok Did you know? 43% of new customers first hear about Cricut through word of mouth…and most of our social activity is very low cost or organic. Q2 2021 Financial Results 11
Slide 12: We still have millions to reach
We still have millions to reach International 153M International 44M Total SAM 129M Total TAM 248M 85M 402M US + Canada US + Canada 5.4M Users 4%+ Penetration SAM: Active Creatives TAM: Potential Creatives Note: International opportunity includes Australia, France, Germany and the United Kingdom. Us
Slide 13: Financial Results
Financial Results Q2 2021 Financial Results 13
Slide 14: Cricut's Flywheel
Cricut’s Flywheel Connected Machines Subscriptions $146.3M Revenue $50.7M Revenue Cricut Platform Did you know? Accessories & Materials Our gross profit from our connected machines mostly covers our customer acquisition cost. $137.5M Revenue Q2 2021 Financial Results 14
Slide 15: Revenue Breakdown
Revenue Breakdown 42% YoY growth o Connected Machine revenue grew 29% YoY $400 $371.0M $334.5M o Subscription revenue grew $350 $323.8M 111% YoY $300 $ in millions $235.3M o Accessories & Materials $250 $209.0M revenue grew 40% YoY $200 o International revenue grew $150 179% YoY and represented $100
Slide 16: Healthy Engagement
Healthy Engagement Engaged Users over 90 days Users Paid Subscribers 53% 64% 77% YoY growth YoY growth YoY growth 3.2M 5.4M 1.8M 3.1M 1.6M 2.8M 4.9M 2.3M 4.3M 3.7M 1.3M 2.1M 1.2M 3.3M 1.0M 63% 63% 65% 62% 59% Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q2 2020 Q3
Slide 17: Increased User Monetization
Increased User Monetization Subscriptions ARPU 1 Accessories & Materials ARPU 1 $40.76 $9.96 $9.83 $8.97 $9.23 $32.23 $7.91 $29.41 $29.45 $26.67 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 1 ARPU = Average Revenue Per User Q2 2021 Financial Results 17
Slide 18: Significant increase in gross margin
Significant increase in 31.1% 42.8% 33.6% 37.1% 39.0% gross margin 100% 90% Contributing Factors 80% 70% o Shift in Manufacturing 60% Gross Margin % Reduction in tariffs by shifting production of Connected Machines from China to Malaysia 50% o Product Mix 40% Higher % of revenue from Subscriptions a
Slide 19: Efficient business growth
Efficient business growth Operating Expense $27.5M $31.8M $45.2M $55.6M $66.1M $70 o Efficient Sales & Marketing spend to drive new users and healthy $60 4% engagement $50 4% o R&D investment to continue to $ in millions $40 3% build out the platform 10% $30 4% 8% o Leaning into sales channel $20 2%
Slide 20: Strong growth in net income and EBITDA
Strong growth in net income and EBITDA Net Income EBITDA 1 $83.5M $68.6M $68.5M $61.4M $61.0M $49.4M $49.1M $45.2M $49.2M $34.9M Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Net Income Margins EBITDA 14.8% 21.6% 16.6% 15.3% 14.7% Margins 20.9% 29.2% 22.5% 21.2% 20.
Slide 21: Balance Sheet and Cash Flow Highlights
Balance Sheet and Cash Flow Highlights Cash & Cash Equivalents as of Cash Flow Used in Ops 6/30/21 as of 6/30/21 Our strong balance sheet positions us well to mitigate supply chain risk and invest in future growth. $314M $54M Cash & cash equivalents YTD cash flow used in operations $150M credit line
Slide 22: Forward-looking summary
Forward-looking summary o Q2 2021 boosted by new product launches and retail channel inventory FY 2021 User Add catchup Projection o Amplified summer seasonality expected to extend into early Q4 1.8M+ o Leaning into operating investments in user acquisition and monetization At least as many new user
Slide 23: Questions
Questions Q2 2021 Financial Results 23
Slide 24: Thanks!
NASDAQ : CRCT Thanks! Q2 2021 Financial Results 24
Slide 25: Appendix
Appendix Q2 2021 Financial Results 25
Slide 26: Reconciliation of Net Income to EBITDA
Reconciliation of Net Income to EBITDA THREE MONTHS THREE MONTHS THREE MONTHS THREE MONTHS THREE MONTHS ENDED 6/30/20 ENDED 9/30/20 ENDED 12/31/20 ENDED 3/31/21 ENDED 6/30/21 (in thousands) Net Income $34,879 $45,211 $61,448 $49,418 $49,126 Net Income Margin 14.8% 21.6% 16.6% 15.3% 14.7% Adjusted to
Slide 27: Long-term target model
Long-term target model Long-Term As % of Revenue FY18 FY19 FY20 Targets Gross Margin 33% 29% 35% 37 - 38% R&D Expense 7% 5% 4% 7 - 8% S&M Expense 9% 8% 7% 8 - 10% G&A Expense 5% 5% 3% 3 - 4% EBITDA Margin1 14% 13% 22% 17 - 20% 1. Non-GAAP financial measure. See Appendix at the end of this presentati
Slide 28: SAM/TAM – Additional Information
SAM/TAM – Additional Information We believe that everyone is innately creative and thus anyone can be a part of the Cricut community of users. This presents us with a large, untapped market opportunity in addition to our current user base. We quantify our market opportunity in terms of a Serviceable