Slide 1: Financial Results Q2 2022
NASDAQ : CRCT Financial Results Q2 2022 August 9, 2022 Q2 2022 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 2022 Financial Results 3
Slide 4: Q2 tested resilience of business model
Q2 tested resilience of business model Revenue $183.8M Sustainable subscriptions revenue Profitability 14th consecutive quarter Users / User Adds 7.2M existing users Q2 2022 Financial Results 4
Slide 5: Sharpened focus on key initiatives
Sharpened focus on key initiatives Connected Accessories Machines Subscriptions & Materials 1 Drive onboarding & engagement 2 Increased monetization Cricut Access / Accessories and Materials 3 Expand internationally Software 4 Innovate and expand platform Q2 2022 Financial Results 5
Slide 6: Investing to drive user engagement
Investing to drive user engagement o Community driven features, notifications and project sharing o Expanding design tools, content and engagement touch points o Learning kits and an onboarding flow Q2 2022 Financial Results 6
Slide 7: Expanding value proposition of Cricut Access
Expanding value proposition of Cricut Access 2.4M Paid Subscribers 600K from Q2 2021 o Had more trial subscribers at the end of Q2 2022 vs Q2 2021, even on slower connected machine sales o More effective merchandising and marketing in Design Space o Continued innovation in premium design tools Q2 20
Slide 8: Creativity across the globe
Creativity across the globe Did you know? We recently launched in Thailand TH and Turkey 🇹🇷 (India 🇮🇳, Japan 🇯🇵, South Korea 🇰🇷 and Taiwan 🇹🇼 coming soon!) Q2 2022 Financial Results 8
Slide 9: Increasing our value proposition
Increasing our value proposition Contributing Artist Program o Enabling wide range of diverse content o Building followers within Design Space o Continued investment in this program Editable Images o Endless design choices with each image o Reduces complexity in designing o Will be available for fre
Slide 10: Long-term trends will continue to drive growth
Personalization Digitization of tools Long-term trends will continue Technology enabling a new generation of entrepreneurs to drive growth Proliferation of social media Q2 2022 Financial Results 10
Slide 11: Financial Results
Financial Results Q2 2022 Financial Results 11
Slide 12: Q2 2022 financial highlights
FY 2021 highlights Q2 2022 financial highlights Revenue Operating Income Net Income $183.8M $20.0M $13.8M (45.1%) 10.9% 7.5% YoY Decrease Operating Margin Net Income Margin Q2 2022 Financial Results 12
Slide 13: Revenue breakdown
Revenue breakdown 94% 3 yr. basis o Subscription revenue $400 in Q2 grew over 33% YoY and $350 $334.5M up ~181% from Q2 2020 despite lower machine sales $300 o Accessories & Materials revenue $250 $235.3M $ in millions in Q2 declined ~(41%) YoY $200 $183.8M o Connected Machine revenue in Q2 declined
Slide 14: Growing user base
Growing user base Users Engaged Users1 Paid Subscribers2 3.7M 2.4M 7.2M 3.1M 1.8M 5.4M 2.1M 3.3M 1.0M 63% 59% 51% 30% 33% 33% Q2 2020 Q2 2021 Q2 2022 Q2 2020 Q2 2021 Q2 2022 Q2 2020 Q2 2021 Q2 2022 1. Number and percentage of users creating on their connected machines in the trailing 90 days as of e
Slide 15: User monetization
User monetization Subscriptions ARPU 1 Accessories & Materials ARPU 1 $32.23 $9.83 $9.59 $26.67 $7.91 $11.45 Q2 2020 Q2 2021 Q2 2022 Q2 2020 Q2 2021 Q2 2022 1. ARPU = Average Revenue Per User Q2 2022 Financial Results 15
Slide 16: Gross margin
Gross margin 31.1% 39.0% 46.5% 100% o Q2 2022 benefited from mix, with higher proportion 90% of revenue driven by subscriptions 80% o Connected machine margins and accessories and 70% materials margins continue to be impacted by supply GROSS MARGIN % chain and inflationary pressures 60% o Accessorie
Slide 17: Operating Expense
Operating Expense Operating Expense (in millions) $27.5 $66.1 $65.4 12% 20% 36% o Total Opex as % of revenue impacted by lower revenue $12.5 $13.8 o Investments funded by strong balance sheet and cash generation o Reprioritized investments toward projects launching $33.0 $31.5 over the next 24 month
Slide 18: Profitability
Profitability Operating Income Net Income 64% 56% 3 yr. basis 3 yr. basis $64.2M $49.1M $45.8M $34.9M $20.0M $13.8M $12.2M $8.8M Q2 2019 Q2 2020 Q2 2021 Q2 2022 Q2 2019 Q2 2020 Q2 2021 Q2 2022 Operating Net Income Margins 12.9% 19.4% 19.2% 10.9% Margins 9.3% 14.8% 14.7% 7.5% Q2 2022 Financial Result
Slide 19: Balance Sheet and Cash Flow highlights
Balance Sheet and Cash Flow highlights Cash, equivalents as of Cash Flow generated from Board-Approved Share Repurchase 6/30/22 Operations 6/30/22 YTD Program Up to $231.3M $13.0M $50.0M Cash, cash equivalents, marketable securities $300.0M New credit line, remains untapped Q2 2022 Financial Results
Slide 20: Forward looking commentary
Near term headwinds with seasonality trends and slower consumer demand to impact the second half of the year Expect retail inventory positions to right-size toward Forward looking end of Q3 with most holiday orders beginning to fulfill in early Q4 commentary Committed to long-term annual operating m
Slide 21: Let's make.
Let’s make. Q2 2022 Financial Results 21
Slide 22: Let's make.
Let’s make. Q2 2022 Financial Results 22
Slide 23: Appendix
Appendix Q2 2022 Financial Results 23
Slide 24: Long-term target model
Long-term target model Long-Term As % of Revenue FY19 FY20 FY21 Targets Gross Margin 29% 35% 35% 37 - 38% R&D Expense 5% 4% 6% 7 - 8% S&M Expense 8% 7% 10% 8 - 10% G&A Expense 5% 3% 4% 3 - 4% Operating Margin 11% 21% 15% 15 - 19% Q2 2022 Financial Results 24