Slide 1: Financial Results Q3 2021
NASDAQ : CRCT Financial Results Q3 2021 November 10, 2021 Q3 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! Q3 2021 Financial Results 3
Slide 4: Q3 2021 highlights
Q3 2021 highlights Revenue Net Income EBITDA1 $260.1M $30.0M $42.7M 24.4% 11.5% 16.4% YoY Increase Net Income Margin EBITDA Margin • Increased investment in software, subscriptions, new product development, and international expansion to drive future growth. 1. Net income adjusted to exclude: intere
Slide 5: Strong user acquisition
Strong user acquisition Total Engaged Ending Paid Users Drive Users Users Subscribers Marketing 5.7M+ 3.2M+ 1.8M+ 55.7% 37.4% 55.8% YoY Growth YoY Growth YoY Growth Did you know? Our covid cohort of users is engaging very similarly to our pre-covid cohort of users. Q3 2021 Financial Results 5
Slide 6: Expanding our reach
Expanding our reach Total SAM 129M International 44M Let’s get started. 85M US + Canada 5.7M+ Users 4%+ Penetration SAM: Active Users (number of people) Q3 2021 Financial Results 6
Slide 7: Enhancing Cricut Access
Enhancing Cricut Access Strategic Software Updates o 25,000 new images (200K total images, and growing) o New Automatic Background Remover tool exclusive to Cricut Access subscribers Did you know? User feedback and requests are a primary driver of how we determine new features and functions. Q3 2021
Slide 8: Passion sparks creativity
Passion sparks creativity Q3 2021 Financial Results 8
Slide 9: Our powerful social community
Our powerful social community 5.3M Social Media Followers 2.8B Views of #Cricut on TikTok Did you know? Over 40% of new customers come from word of mouth…and most of our social views are organic. Q3 2021 Financial Results 9
Slide 10: Improving the user experience
Improving the user experience 1 Tutorial Videos 2 “How-To” Guides 3 Inspirational Ideas 4 Live Classes 5 Launched Cricut Learn Program learn.cricut.com Q3 2021 Financial Results 10
Slide 11: Creativity is universal
Creativity is universal International New Revenue Markets 109.7% Middle East Hong Kong Growth in Q3 2021 YoY D2C Expanded Retailer Markets Footprint UK Germany Mexico Ireland Nordics South Africa France Benelux Singapore Germany Spain Did you know? In Q3 2021, 12.0% of total revenue was generated in
Slide 12: Extending our product ecosystem and platform
Extending our product ecosystem and platform User Experience Updates • Restore Brush feature, allowing users can correct mistakes without starting over • Improved content discovery through new UX enhancements including updated ribbon to highlight our best content and image bookmarking Mobile • Bridg
Slide 13: Let's make.
Let’s make. Q3 2021 Financial Results 13
Slide 14: Financial Results
Financial Results Q3 2021 Financial Results 14
Slide 15: Revenue breakdown
Revenue breakdown 131% 2 yr. stacked o Connected Machine revenue grew 35.7% YoY and 135.6% from Q3 2019 $300 $260.1M o Subscription revenue $250 grew 70.8% YoY and 284.8% from Q3 $53.3 $209.0M 2019 $200 $31.2 o Accessories & Materials revenue $ in millions $150 $104.3 grew 2.0% YoY and 89.3% from Q3
Slide 16: Growing user base
Growing user base Users 90-day Engagement 1 Paid Subscribers 158% 140% 238% 2 yr. stacked 2 yr. stacked 2 yr. stacked 5.7M 1.8M 3.2M 3.7M 2.3M 1.2M 2.2M 1.3M 0.5M 60% 63% 56% Q3 2019 Q3 2020 Q3 2021 Q3 2019 Q3 2020 Q3 2021 Q3 2019 Q3 2020 Q3 2021 1Number and percentage of users creating on their con
Slide 17: User monetization
User monetization Subscriptions ARPU 1 Accessories & Materials ARPU 1 $9.60 $29.41 $8.97 $25.76 $6.47 $18.79 Q3 2019 Q3 2020 Q3 2021 Q3 2019 Q3 2020 Q3 2021 1. ARPU = Average Revenue Per User Q3 2021 Financial Results 17
Slide 18: Gross margin
Gross margin 100% 28.0% 42.8% 39.2% Contributing Factors 90% Q3 2019 80% o Impacted by increased tariff levels 70% 60% Gross Margin % Q3 2020 50% o Abnormally high due to limited promotions because of 40% depleted inventory levels, plus tariff relief 30% Q3 2021 20% o Returned to a more normal promo
Slide 19: Increased investments to drive growth
Increased investments to drive growth Operating Expense Efficient Sales & Marketing spend $21.9M $31.8M $64.3M o New users acquired through word-of-mouth and other low-cost channels 24.7% Catching up deferred pandemic spend 5.2% Investments for future growth in o International Expansion 15.2% 11.6%
Slide 20: Net income and EBITDA
Net income and EBITDA Net Income EBITDA 1 302% 256% 2 yr. stacked 2 yr. stacked $45.2M $61.0M $30.0M $42.7M $7.5M $12.0M Q3 2019 Q3 2020 Q3 2021 Q3 2019 Q3 2020 Q3 2021 Net Income EBITDA 6.6% 21.6% 11.5% Margins 10.7% 29.2% 16.4% Margins 1. Net income adjusted to exclude: interest expense, net; inco
Slide 21: Balance Sheet and Cash Flow highlights
Balance Sheet and Cash Flow highlights Cash & Cash Equivalents as of Cash Flow Used in Ops 9/30/21 during YTD 9/30/21 Strong balance sheet positions us well to mitigate supply chain risk and continue to invest in future growth $224M $132M Cash & cash equivalents Building inventory to mitigate supply
Slide 22: Large market opportunity
Large market opportunity Expand internationally Launch new products in new categories Increase monetization from current users Reach and acquire more users Continuously improve ease of use and user experience Q3 2021 Financial Results 22
Slide 23: Questions?
Questions? Q3 2021 Financial Results 23
Slide 24: Thanks!
NASDAQ : CRCT Thanks! Q3 2021 Financial Results 24
Slide 25: Appendix
Appendix Q3 2021 Financial Results 25
Slide 26: 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 27: Preliminary reconciliation of Net Income to EBITDA
Preliminary reconciliation of Net Income to EBITDA THREE MONTHS ENDED THREE MONTHS ENDED THREE MONTHS ENDED 9/30/19 9/30/20 9/30/21 (in thousands) Net Income $7,473 $45,211 $30,005 Net Income Margin 6.6% 21.6% 11.5% Adjusted to exclude the following: Depreciation and Amortization Expense $2,418 $3,4
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