Cricut, Inc. Reports Third Quarter 2023 Financial Results

Total users grew to over 8.6 million, up 16% over Q3 2022

Paid subscribers of approximately 2.7 million, up 11% over Q3 2022

Delivered 19th consecutive quarter of profitability with net income of $17.2 million, up 38% over Q3 2022

Delivered Q3 2023 revenue of $174.9 million, 1% decline compared to Q3 2022

SOUTH JORDAN, Utah, Nov. 07, 2023 (GLOBE NEWSWIRE) -- Cricut, Inc. (“Cricut”) (NASDAQ: CRCT), the creative technology company that has brought a connected platform for making to millions of users worldwide, today announced financial results for its third quarter ended September 30, 2023.

“The third quarter was strong from a profitability perspective, with operating income +36% year over year despite a 1% sales decline. As we mentioned before, in 2023, we are focused on profitability and remain disciplined in our investments to generate value over time. We launched two new products in the quarter: Joy Xtra and Cricut Venture. We are encouraged by our subscriptions revenue which grew 11% year over year. Our international growth was positive, with 36% year over year growth. The Cricut platform now has over 8.6 million total users, up 16% over the third quarter last year. This creates a tremendous opportunity for us to build deeper user engagement on our platform by helping them discover inspiration, design then make their projects and share them on our platform,” said Ashish Arora, Chief Executive Officer of Cricut.

Third Quarter 2023 Financial Results

• Revenue was $174.9 million, down 1% from Q3 2022.
• Connected machine revenue was $49.5 million, down 6% from Q3 2022.
• Subscriptions revenue was $76.3 million, up 11% over Q3 2022.
• Accessories and materials revenue was $49.1 million, down 12% from Q3 2022.
• International revenue increased by 36% over Q3 2022 and was 21% of total revenue, up from 16% of total revenue in Q3 2022.
• Gross margin was 46.8%, up from 46.2% in Q3 2022.
• Operating income was $23.7 million, or 13.5% of total revenue compared to $17.4 million, or 9.8% of revenue in Q3 2022.
• Net income was $17.2 million, or 9.8% of revenue, and up 38% from Q3 2022. Net income in Q3 2022 was $12.4 million, or 7.0% of revenue.
• Diluted earnings per share was $0.08 up from $0.06 per share in Q3 2022.
• Generated $36.4 million in Cash from Operations in Q3 and $196.0 million year to date. Used $0.3 million to repurchase 39 thousand shares of our common stock in Q3 and year to date used $4.6 million to repurchase 490 thousand shares. After the end of Q3 and through October 31 we used $6.9 million of cash to repurchase 821 thousand shares which results in $20 million remaining in the repurchase program as of November 1.

"We delivered our 19th consecutive quarter of positive net income and continue to generate healthy cash flow on an annual basis. Year to date, we have generated $196.0 million in cash from operations and ended the third quarter with $173.6 million in cash and cash equivalents, and we remain debt free. In the second quarter, we announced a $234.6 million special shareholder dividend, of which $232.2 million was distributed in July, with the remainder to be paid upon vesting of restricted shares.” said Kimball Shill, Chief Financial Officer of Cricut. “We remain committed to our long-term operating margin targets of 15-19%. Our proven model has demonstrated that when we operate at scale and drive top line growth, these margins are achievable.”

Recent Business Highlights

• Launched Cricut Venture in July, the largest and fastest connected cutting machine on the Cricut Platform.
• Launched Joy Xtra in September, targeted primarily at new creative users and broadening our market with a printer-friendly compatible format, designed to help makers create the most popular projects, especially full-color stickers, as well as custom cards, t-shirts, and much more, yet compact enough to fit into any space.
• Total user base grew to over 8.6 million, or 16% year over year.
• As of the end of Q3 2023, there were over 3.6 million engaged users cutting on the Cricut platform in the past 90 days, or 42% of our total user base.
• Paid subscribers of approximately 2.7 million by the end of Q3, up 11% year over year.
  
  

Key Performance Metrics  

Webcast and Conference Call Information

Cricut management will host a conference call and webcast to discuss the results today, Tuesday, November 7, 2023 at 3:00 p.m. Mountain Time (5:00 p.m. Eastern Time). Information about Cricut’s financial results, including a link to the live and archived webcast of the conference call, will be made available on Cricut’s investor relations website at https://investor.cricut.com/.

The live call may also be accessed via telephone. Please pre-register using this link: https://register.vevent.com/register/BI75c642d5ec7a4fa7b8558c43b95f41b7. After registering, a confirmation will be sent via email and will include dial-in details and a unique PIN code for entry to the call. To avoid long wait times, we suggest registering at minimum 15 minutes before the start of the call to receive your unique PIN code.

About Cricut, Inc.

Cricut, Inc. is a creative technology company that helps people lead creative lives. Cricut hardware and design software work together as a connected platform for consumers to make beautiful, high-quality DIY projects quickly and easily. These industry-leading products include a flagship line of smart cutting machines — the Cricut Maker^® series, the Cricut Explore^® series, Cricut Joy^™ series, and Cricut Venture^™ — accompanied by other unique tools like Cricut EasyPress^®, the Infusible Ink^™ system, and a diverse collection of materials. In addition to providing tools and materials, Cricut fosters a thriving community of millions of dedicated users worldwide.

Cricut has used, and intends to continue using, its investor relations website and the Cricut News Blog (https://cricut.com/blog/news/) to disclose material non-public information and to comply with its disclosure obligations under Regulation FD. Accordingly, you should monitor our investor relations website and the Cricut News Blog in addition to following our press releases, SEC filings and public conference calls and webcasts.

Media Contact:
Kriselle Laran
pr@cricut.com

Investor Contact:
Jim Suva
investors@cricut.com

Source: Cricut, Inc.

Key Performance Metrics

In addition to the measures presented in our consolidated financial statements, we use the following key business metrics to help us evaluate our business, identify trends affecting our business, formulate business plans and make strategic decisions. We believe these metrics are useful to investors because they can help in monitoring the long-term health of our business. Our determination and presentation of these metrics may differ from that of other companies. The presentation of these metrics is meant to be considered in addition to, not as a substitute for or in isolation from, our financial measures prepared in accordance with GAAP.

Glossary of Terms

Users: We define a User as a registered user of at least one registered connected machine as of the end of a period. One user may own multiple registered connected machines, but is only counted once if that user registers those connected machines by using the same email address.

Engaged Users: We define the Engaged Users as users who have used a connected machine for any activity, such as cutting, writing or any other activity enabled by our connected machines, in the past 90 days.

Percentage of Users Creating in Trailing 90 Days: We define the Percentage of Users Creating in Trailing 90 Days (Engaged Users) as the percentage of users who have used a connected machine for any activity, such as cutting, writing or any other activity enabled by our connected machines, in the past 90 days. We calculate the percentage by dividing the number of Engaged Users in the period by the total user base.

Paid Subscribers: We define Paid Subscribers as the number of users with a subscription to Cricut Access or Cricut Access Premium, excluding cancelled, unpaid or free trial subscriptions, as of the end of a period.

Subscription ARPU: We define Subscription ARPU as Subscriptions revenue divided by average users in a period.

Accessories and Materials ARPU: We define Accessories and Materials ARPU as Accessories and Materials revenue divided by average users in a period. Accessories and Materials ARPU fluctuates over time as we introduce new accessories and materials at various price points and as the volume and mix of accessories and materials purchased changes.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 as amended (the “Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements include, but are not limited to, quotations from management, business outlook, strategies, market size and growth opportunities. Forward-looking statements generally can be identified by the fact that they do not relate strictly to historical or current facts and by the use of forward-looking words such as “anticipates,” “believes,” “targets,” “potential,” “estimates,” “expects,” “intends,” “plans,” “projects,” “may” or similar terminology. In particular, statements, express or implied, concerning future actions, conditions or events, future results of operations or the ability to generate revenues, income or cash flow are forward-looking statements. These statements are based on and reflect our current expectations, estimates, assumptions and/ or projections and our perception of historical trends and current conditions, as well as other factors that we believe are appropriate and reasonable under the circumstances. Forward-looking statements are neither predictions nor guarantees of future events, circumstances or performance and are inherently subject to known and unknown risks, uncertainties and assumptions, many of which are beyond our control, that could cause our actual results to differ materially from those indicated by those statements. There can be no assurance that our expectations, estimates, assumptions and/or projections will prove to be correct or that any of our expectations, estimates or projections will be achieved. The forward-looking statements included in this press release are only made as of the date indicated on the relevant materials and are based on our estimates and opinions at the time the statements are made. We disclaim any obligation to publicly update any forward-looking statement to reflect subsequent events or circumstances or changes in opinion, except as required by law.

Numerous factors could cause our actual results and events to differ materially from those expressed or implied by forward-looking statements including, but not limited to, risks and uncertainties associated with: our ability to attract and engage with our users; competitive risks; supply chain, manufacturing, distribution and fulfillment risks; international risks, including regulation and tariffs that have materially increased our costs and the potential for further trade barriers or disruptions; sales and marketing risks, including our dependence on sales to brick-and-mortar and online retail partners and our need to continue to grow online sales; risks relating to the complexity of our business, which includes connected machines, custom tools, hundreds of materials, design apps, e-commerce software, subscriptions, content, international production, direct sales and retail distribution; risks related to product quality, safety and warranty claims and returns; risks related to the fluctuation of our quarterly results of operations and other operating metrics; risks related to intellectual property, cybersecurity and potential data breaches; risks related to our dependence on our Chief Executive Officer; risks related to our status as a “controlled company”; and the impact of economic and geopolitical events, natural disasters and actual or threatened public health emergencies, current recessionary pressures and any resulting economic slowdown from any of these events, or other resulting interruption to our operations. These risks and uncertainties are described in greater detail under the heading “Risk Factors” in the most recent form 10-Q that we have filed with the Securities and Exchange Commission (“SEC”).