Slide 1: Financial Results Q4 2022 and FY 2022
NASDAQ : CRCT Financial Results Q4 2022 and FY 2022 March 7, 2023 cricut.
Slide 2: Safe Harbor Statement
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 Se
Slide 3: I want to make…
I want to make… Apparel & Everyday Cards Décor Accessories Items Flowers From idea School to I did it. Supplies Mugs & Stickers Gifts Parties 3 Drinkware & Labels
Slide 4: 2022 business highlights
2022 business highlights User Base Growth User Engagement o 7.9M total users o Engaged users up 6% YoY o 1.5M users added in 2022 o Increased user interactions with new touchpoints & enhancements Subscriptions Growth Fiscally Disciplined o 2.6M subscribers, up 28% o $60.7M net income o Revenue up 32
Slide 5: 2023 priorities
2023 priorities 1 New User Acquisition 2 Engagement 3 Subscriptions 4 Accessories & Materials 5
Slide 6: New user acquisition
Total SAM 129M New user acquisition 44M International growth key priority o Launched in 5 new markets in 2022 85M o Available in 50+ countries Reaching a broader U.S. demographic 7.9M o Nearly 50% of new users identify as beginner crafters; yet engage the same as more 6%* experienced users o Acquiri
Slide 7: Strong network effects and streamlined audience targeting
Strong network effects and streamlined audience targeting 6.1M Social media followers 8.5B Views on top 5 Cricut hashtags #cricut #cricutprojects #cricuthacks #cricutmaker #cricutmade 7
Slide 8: Simplifying the purchase journey
Simplifying the purchase journey o Streamlined buy-flow o New homepage o New tools for product comparisons 8
Slide 9: Driving engagement
Driving engagement Engagement is more than just cutting o 50%+ of unique users cut on our Design Space Cricut Platform platform in Q4, number of engaged users up 6% YoY o Promising initial results from onboarding journey o New, dedicated senior leadership o Over 150 million total bookmarks within De
Slide 10: Focus on subscriptions
Focus on subscriptions 2.6M Paid subscribers 28% increase YoY o Benefiting from investments over the last 12-18 months o Additional merchandising touchpoints within the User engagement journey o Improvement in mix of Annual vs. Monthly Paid Subscribers 10
Slide 11: Cricut Access and community features
Cricut Access and community features 11
Slide 12: Reengineering the accessories and materials business over the next 2 years
Reengineering the accessories and materials business over the next 2 years Addressing price sensitivity o Differentiated product configurations o Analytical approach to our promotional strategy o Driving cost reductions and supply chain efficiencies New machine bundle configurations Look—no mat! o R
Slide 13: Opportunity for continued long-term growth
Opportunity for continued long-term growth 1 New User Acquisition 2 Engagement 3 Subscriptions 4 Accessories & Materials 13
Slide 14: Q4 2022 Financial Results
Q4 2022 Financial Results 14
Slide 15: Full year 2022 financial highlights
FY 2021 highlights Full year 2022 financial highlights Revenue Operating Income1 Net Income $886.3M $80.0M $60.7M -32.1% 9.0% 6.8% 15
Slide 16: Revenue breakdown
Revenue breakdown $1,400 $1.3B $1,200 o Connected Machine revenue in Q4 declined 35% YoY and 54% on a full $1,000 year basis $886.3M o Subscription revenue in Q4 $800 grew 28% YoY and 32% on a full year basis $600 o Accessories & Materials revenue in Q4 $400 $387.8M declined 38% YoY and 35% on a ful
Slide 17: Growing user base
Growing user base Users Engaged Users1 Paid Subscribers2 7.9M 4.1M 2.6M 3.8M 6.4M 2.0M 60% 65% 51% 32% 30% 33% Q4 2021 Q4 2022 Q4 2021 Q4 2022 Q4 2021 Q4 2022 17
Slide 18: User monetization
User monetization Subscriptions ARPU1 Accessories & Materials ARPU1 $38.37 $38.09 $102.91 $50.54 $9.18 $9.26 $28.66 $13.99 Q4 21 Q4 22 FY 21 FY 22 Q4 21 Q4 22 FY 21 FY 22 18
Slide 19: Gross margin
Gross margin 27.0% 29.8% 35.0% 39.5% Contributing Factors 100% Q4 2022 80% o Q4 seasonal pressure due to increased revenue contribution from connected machines Connected Machine Margins 60% o Impacted by higher fixed costs as a percentage of revenue in warehousing and operations expense 40% Accessor
Slide 20: Prioritized investments to drive growth
Prioritized investments Operating Expense to drive growth $79.0M $72.5M $265.0M $269.9M 30% Managed with disciplined and flexible approach 20% o In March of 2022, we reprioritized investments as 4% 7% consumer spend started to soften Eliminated $50M in planned spend 10% 15% Investments for future gr
Slide 21: Operating Income and Net Income
Operating Income and Net Income Operating Income Net Income $192.4M $140.5M $80.0M $60.7M $25.8M $11.1M $11.9M $10.9M Q4 21 Q4 22 FY 21 FY 22 Q4 21 Q4 22 FY 21 FY 22 Operating Net Income 6.7% 4.0% Margins 14.7% 9.0% 3.1% 3.9% Margins 10.8% 6.8% 21
Slide 22: Balance Sheet and Cash Flow highlights
Balance Sheet and Cash Flow highlights Cash, equivalents Cash Flow generated Share Repurchase as of 12/31/22 from Operations Program & Dividend 12/31/22 YTD $299.2M $117.7M $18.5M $300.0M $76.9M1 22
Slide 23: Forward looking commentary
Forward looking commentary Anticipate Q1 2023 revenue to decline YoY% but expect comps to improve starting in Q2. Entered 2023 with healthier channel inventory levels and expect revenue to be more directly linked to consumer demand. Committed to long-term annual operating margin targets of 15%-19%,
Slide 24: Let’s make.
Let’s make. 24
Slide 25: Long-term target model
Long-term target model As % of Revenue FY20 FY21 FY22 Long-Term Targets Gross Margin 35% 35% 39% 37 - 38% R&D Expense 4% 6% 9% 7 - 8% S&M Expense 7% 10% 15% 8 - 10% G&A Expense 3% 4% 7% 3 - 4% Operating Margin 21% 15% 9% 15 - 19% 25