Slide 1: Financial Results Q2 2023
NASDAQ : CRCT Financial Results Q2 2023 August 8, 2023 1
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… Summer Apparel & Cards Décor Projects Accessories Back to From idea Flowers School to I did it. Stickers Mugs & Parties Gifts & Labels Drinkware 3
Slide 4: Cricut Venture
Cricut Venture Empowering entrepreneurs & serious crafters alike o Large-format cutting, writing, foiling, and scoring o Commercial speed (up to 25” per second) o Compatible with current Smart materials o Enhanced software features in Design Space with a focus on UX o Available as of July 25th 4
Slide 5: Do Crew Arch / Tumblers project examples
| Do Crew Arch AOowm A O10 Q WATALIA | Do Crew Tumblers AQ« Q
Slide 6: Cricut Venture social media announcement
10:25 € cricut Cricut © - Follow Jul18-@ ‘The secret is OUT! @: Introducing Cricut Venture", the largest and fastest cutting machine on the Cricut platform. This has been years in the making, and we are so excited to finally share this with you. With #CricutVenture, you can now cut in 13" and 25" wi
Slide 7: 2023 priorities
2023 priorities 1 New User Acquisition 2 User Engagement 3 Subscriptions 4 Accessories & Materials 7
Slide 8: Focus on new users
Select machines to compare. Focus on new users o Over 200 thousand users added in Q2 o Marketing funnel is healthy o Consumer focus on affordability and machine capabilities o Comprehensive marketing plan and promotional strategy will drive conversion in the second half 8
Slide 9: Discover Make Share
Discover Make Share Engagement is more than just cutting o Mobile plays an important role in engagement Design Space Cricut Platform o Over half of all interactions on Design Space home page came from mobile devices 2023 YTD o Improvements to Design Space navigation, Community Project search and
Slide 10: Significant value-add through subscriptions
Significant value-add through subscriptions 2.7M Paid subscribers 15% YoY Flat QoQ o Subscribers are our most valuable users o New Content + Features add value o Current Access features leverage AI and Machine Learning with more to come 10.6K 10
Slide 11: Prioritizing AI & Machine Learning
Prioritizing AI & Machine Learning Concept only Design & Make o Automatic Background Remover Search & Discovery o Similar Images o Semantic Search o Personalized in-app content/ engagement marketing Eye toward Generative AI Regenerate o Optimized for cutting machines as a differentiator o Ensuring w
Slide 12: Accessories and Materials
Accessories and Materials Positive trends from innovation and investments o Will continue promotional cadence o Optimizing products for lower costs that work seamlessly with our machines o Intense focus on overall customer experience 12
Slide 13: Focused on continued long-term growth
Focused on continued long-term growth 13
Slide 14: Financial Results
Financial Results Q2 2023 Financial Results
Slide 15: Q2 2023 financial highlights
Q2 2023 financial highlights Revenue Operating Income1 Net Income $177.8M $19.3M $16.0M -3.0% 10.8% 9.0% YoY Decrease of Total Revenue of Total Revenue Did you know? Q2 was our 18th consecutive quarter of GAAP profitability 15
Slide 16: Revenue breakdown
Revenue breakdown $183.8M $177.8M $200 $180 o Connected Machine revenue $160 in Q2 grew 5% YoY $140 o Accessories & Materials revenue $120 in Q2 declined 20% YoY $100 o Subscription revenue in Q2 $80 grew 13% YoY $60 o Int'l revenue in Q2 grew 34% YoY $40 to $32.6M $20 $0 Q2 2022 Q2 2023 Subscriptio
Slide 17: Growing user base
Growing user base Users Engaged Users Paid Subscribers1 8.4M 2.7M 7.2M 3.7M 3.7M 2.4M 33% 32% Q2 2022 Q2 2023 Q2 2022 Q2 2023 Q2 2022 Q2 2023 1. Paid subscriber attach rate = percentage of total users that were paid subscribers to Cricut Access or Cricut Access Premium as of quarter end. 17
Slide 18: Gross margin
Gross margin 46.5% 49.3% 100% Contributing Factors 90% Connected Machine Margins 80% o Positive mix shift towards newer Connected 70% Machine models and fewer entitlements 60% o Impacted by higher fixed costs as a percentage of revenue in warehousing 50% and operations expense 40% Accessories & Mate
Slide 19: Operating expense
Operating expense $65.4M $68.4M 36% 38% 8% 13% 17% 17% 11% 9% Q2 2022 Q2 2023 R&D S&M G&A % = % of total revenue 19
Slide 20: Operating income and net income
Operating income and net income Operating Income Net Income $20.0M $19.3M $16.0M $13.8M Q2 2022 Q2 2023 Q2 2022 Q2 2023 Operating Net Income 10.9% Margins 10.8% 7.5% Margins 9.0% 20
Slide 21: Balance Sheet and Cash Flow highlights
Balance Sheet and Cash Flow highlights Cash, equivalents Cash Flow generated from Share Repurchase as of 6/30/23 Operations 6/30/23 YTD Program & Dividend $361.5M $159.6M $1.0M Cash, cash equivalents, vs $13.0M PY YTD Used to purchase 104K marketable securities shares in Q2 $300.0M $234.6M 1 Untappe
Slide 22: Forward looking commentary
Forward looking commentary Continue conservative approach to planning. Expect FY23 operating margins to be slightly down YoY given first half performance. Expect slightly softer seasonality in the second half. Paid Subscribers may be flat for the year, or down if current New User trends worsen. Anti
Slide 23: Let's make.
Let’s make. oe eveut TU a iy
Slide 24: 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% 24