Cricut, Inc. · NASDAQ:CRCT
Cricut — Q3 2022 Earnings Presentation
25 slides from Cricut's earnings presentation, Nov 8, 2022
Slide 1: Quarterly Results Q3 2022
NASDAQ : CRCT Quarterly Results Q3 2022 November 8, 2022 Q3 2022 Financial Results 1
Slide 2: From idea to I did it.
From idea to I did it. Q3 2022 Financial Results 2
Slide 3: 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 4: Strong brand interest
Strong brand interest User Growth up 30% Subscription Growth Profitability ~7.5M existing users Outpaced user growth for 11th consecutive quarters 15th consecutive quarter “What 120 is Cricut” Search Frequency (U.S.) v Christmas From trends.google.com Dec. 100% 100 2020 Dec. 2021 80% 80 Sept. Sept.
Slide 5: Connected platform is our competitive moat
Connected platform is our competitive moat Habit forming High switching cost experience Design Space Users create Cricut Platform & derive value Q3 2022 Financial Results 5
Slide 6: Expanding value proposition of Cricut Access
Expanding value proposition of Cricut Access o Contributing Artist Program o Editable Images o Premium Tools Q3 2022 Financial Results 6
Slide 7: Multiple advertising touchpoints within Design Space
Multiple advertising touchpoints within Design Space Top 10 Cricut Access sign up locations –Q3 2022 % of signups by location Menu dropdown Machine Registration General merchandising Design space - Canvas upsell 35% Home screen pop up Content Check out Font selections Paid Subscribers growth Content
Slide 8: Easier onboarding drives engagement
Easier onboarding drives engagement New User Virtual Learning Plan o Design Space guided tutorials & step-by-step guides New Learning Kits pilot on Cricut.com o Materials and tools for specific projects to ease a user into the Cricut ecosystem Q3 2022 Financial Results 8
Slide 9: Platform drives rich user interactions
Platform drives rich user interactions Engagement is more than just cutting o ~3.6M users cut on their Cricut machines in the last 90 days — up 11% YOY Design Space Cricut Platform o 120M project & image bookmarks o Nearly 2M bookmarks added per week in Q3 o Mobile apps make it easier to engage even
Slide 10: Creating value in accessories and materials
Creating value in accessories and materials Increase promotional strategy o Continued focus on affordability for users o Help right size channel inventory New use cases o Launched wide range of items for card making, labeling and personalization o Lean in on retail partnerships who showcase compatib
Slide 11: International expansion
Launched localized International versions of Design Space in expansion 9 new languages Did you know? We recently launched in Japan, South Korea, Saudi Arabia Q3 2022 Financial Results 11
Slide 12: Opportunity for continued long-term growth
Strong fundamentals in the business Greater focus on monetization Opportunity for and engagement continued long-term growth Gaining greater market share, less than 10% penetrated in serviceable addressable market (SAM) Q3 2022 Financial Results 12
Slide 13: Financial Results
Financial Results Q3 2022 Financial Results 13
Slide 14: Q3 2022 financial highlights
FY 2021 highlights Q3 2022 financial highlights Revenue Operating Income Net Income $177.0M $17.4M $12.4M (32%) 9.8% 7.0% YoY Decrease Operating Margin Net Income Margin Q3 2022 Financial Results 14
Slide 15: Revenue breakdown
Revenue breakdown 57% 3 yr. basis $300 o Subscription revenue in Q3 grew over 29% YoY $260.1M $250 o Accessories & Materials revenue $209.0M in Q3 declined (47%) YoY $200 $177.0M o Connected Machine revenue $ in millions in Q3 declined (49%) YoY $150 o Connected Machines and Accessories & $112.5 Mat
Slide 16: 48% of users cut projects in Q3
48% of users cut projects in Q3 Users Engaged Users* Paid Subscribers 2.5M 7.5M 3.6M 3.2M 5.7M 1.8M 2.3M 3.7M 1.2M 1.3M 2.2M 0.5M 56% 32% Q3 2019 Q3 2020 Q3 2021 Q3 2022 Q3 2019 Q3 2020 Q3 2021 Q3 2022 Q3 2019 Q3 2020 Q3 2021 Q3 2022 *Number of users cutting on their connected machines in the traili
Slide 17: User monetization
User monetization Subscriptions ARPU* Accessories & Materials ARPU* $29.41 $9.60 $9.40 $8.97 $25.76 $6.47 $18.79 $7.61 Q3 2019 Q3 2020 Q3 2021 Q3 2022 Q3 2019 Q3 2020 Q3 2021 Q3 2022 * ARPU = Average Revenue Per User Q3 2022 Financial Results 17
Slide 18: Gross margin
Gross margin 39.2% 27.0% 40.5% 46.5% 46.2% 100% 90% o Gross margin increase year-over-year reflects 80% the benefit of our diverse revenue stream 70% o Connected machine margins improved GROSS MARGIN % 60% sequentially from Q2 2022 to Q3 2022, benefiting from product mix within the 50% category 40%
Slide 19: Operating expense
Operating expense $90,000 $78.9M $80,000 3% $67.6M $70,000 $64.3M $65.4M $64.4M o Balancing focused investments for long- $60,000 5% 6% 8% $ in 000s 9% term growth with short-term $50,000 profitability 11% $40,000 13% o Investments funded by strong $30,000 12% 17% 16% balance sheet and cash generati
Slide 20: Sustained profitability
Sustained profitability Operating Income Net Income 81% 67% 3 yr. basis 3 yr. basis $57.7M $45.2M $37.7M $30.0M $17.4M $12.4M $9.6M $7.5M Q3 2019 Q3 2020 Q3 2021 Q3 2022 Q3 2019 Q3 2020 Q3 2021 Q3 2022 Operating Net Income Margins 8.5% 27.6% 14.5% 9.8% Margins 6.6% 21.6% 11.5% 7.0% Q3 2022 Financial
Slide 21: Balance Sheet and Cash Flow highlights
Balance Sheet and Cash Flow highlights Cash, equivalents as of Cash Flow generated from Share Repurchase 9/30/22 Operations 9/30/22 YTD Program Used $198.0M $630K $10.0M Cash, cash equivalents, marketable securities vs ($131.8M) cash used PY YTD to purchase 1.38M shares $300.0M Untapped credit line
Slide 22: Forward looking commentary
Anticipate increased demand in Q4 for holiday; headwinds include timing of retail channel fill. Expect to enter 2023 with healthy channel inventory levels; focused on linear relationship between sell in and sell out. Forward looking Committed to long-term annual operating margin targets of commentar
Slide 23: Let's make.
Let’s make. Q3 2022 Financial Results 23
Slide 24: Appendix
Appendix Q3 2022 Financial Results 24
Slide 25: 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% Q3 2022 Financial Results 25