Delivered 7th consecutive year of profitability with net income of $53.6 million, or 7.0% margin

Generated $288.1 million in Cash from Operations in 2023

Total users grew to over 8.9 million, up 13% over FY 2022

Paid subscribers increased to 2.77 million, up 6% over FY 2022

Delivered FY 2023 revenue of $765.1 million, 14% decline compared to FY 2022

66% of total users cut on their Connected Machine in 2023

SOUTH JORDAN, Utah, March 05, 2024 (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 fourth quarter and full year ended December 31, 2023.

“We moved through 2023 focused on profitability even as we navigated a dynamic consumer discretionary environment. We are encouraged by our 49% operating income increase in Q4 year over year and the positive uplift from our promotions in Q4. However, we were disappointed that sales fell in the quarter and full year by 18% and 14%, respectively. Our promotions uplift was smaller than we expected and is attributable in part to lower retailer inventory, but in hindsight, we could have conducted more aggressive marketing and promotions,” Cricut’s Chief Executive Officer, Ashish Arora, said. “We intend to boost our marketing efforts and spending in 2024 to generate more interest and demand throughout the funnel. We will continue our deeper promotional strategy while focusing on maintaining great pricing discipline. We will keep concentrating on acquiring new users and enhancing their engagement and revenue generation.”

Fourth Quarter 2023 Financial Results

• Revenue was $231.2 million compared to $280.8 million in Q4 2022.
• Connected machine revenue was $77.4 million compared to $102.3 million in Q4 2022.
• Subscriptions revenue was $76.5 million up from to $71.1 million in Q4 2022.
• Accessories and materials revenue was $77.3 million compared to $107.3 million in Q4 2022.
• Gross margin was 42.0%, compared to 29.8% in Q4 2022.
• Operating income was $16.5 million, or 7.1% of total revenue, compared to $11.1 million, or 4.0% of revenue in Q4 2022.
• Net income was $11.3 million or 4.9% of revenue, compared to $10.9 million or 3.9% of revenue in Q4 2022.
• Diluted earnings per share was flat year over year at $0.05.
• International revenue decreased by 5% over Q4 2022 and was 22% of total revenue, up from 19% of total revenue in Q4 2022.

Full Year 2023 Financial Results

• Revenue was $765.1 million compared to $886.3 million in FY 2022.
• Connected machine revenue was $198.3 million compared to $252.6 million in FY 2022.
• Subscriptions revenue was $304.0 million, up from $272.3 million in FY 2022.
• Accessories and materials revenue was $262.8 million, compared to $361.4 million in FY 2022.
• Gross margin was 44.9%, up from 39.5% in FY 2022.
• Operating income was $70.0 million, or 9.1% of total revenue, compared to $80.0 million, or 9.0% of revenue in FY 2022.
• Net income was $53.6 million, or 7.0% of revenue, compared to $60.7 million, or 6.8% of revenue in FY 2022.
• Diluted earnings per share was $0.24 compared to $0.28 in FY 2022.
• International revenue was $155.2 million, or 20% of total revenue, compared to $142.3 million or 16% of total revenue in FY 2022.
• Generated $288.1 million in cash from operations.

“Although sales were below expectations and the baseline run rate outside of promotional periods continues to be softer than we would have expected, I am encouraged by operating income, which rose 49% in Q4, and we achieved our 20th consecutive quarter of positive net income. We continue to produce strong cash flow on a yearly basis, which supports inventory needs and investments for long-term growth. In 2023, we generated $288 million in cash from operations, compared to $118 million in 2022. We closed 2023 with a cash and cash equivalents balance of $245 million. We have no debt,” said Kimball Shill, Chief Financial Officer. “During Q4, we spent $15.7 million of cash to buy back 2.1 million shares of our stock. After the quarter ended and through March 1, we spent $10.8 million of cash to buy back 1.7 million more shares of our stock, which effectively finishes our $50 million approved stock repurchase program that was authorized in August 2022. After three years of business evolution, we are planning to change some parts of our quarterly information package for 2024. We increasingly see Cricut as a platform business with physical products. Going forward, we are changing how we report our segments to be Platform and Products. We will also update our public KPIs to focus on the most relevant indicators for our current and future operations.”     
  

2023 Business Highlights

• Total user base grew to over 8.9 million, or 13% over 2022. Growth in our top 6 markets indicate 7% market penetration of our serviceable addressable market, up from 5% two years ago.
• Paid subscribers grew to 2.77 million, up 6% over 2022. Attach rates decreased to 31% compared to 33% in 2022.
• Ended 2023 with 3.9 million Engaged Users, down 3% over 2022. In Q4 2023, 44% of total users cut on the Cricut platform over the past 90 days. 66% of total users cut on their connected machines in 2023.
• Launched two new machines: Cricut Joy Xtra and Cricut Venture.

Key Performance Metrics  

	As of December 31,
	2023			2022
Users (in thousands)	8,944			7,893
Percentage of Users Creating in Trailing 90 Days	44	%		51	%
Number of Users Creating in Trailing 90 Days	3,932			4,050
Paid Subscribers (in thousands)	2,770			2,609

	Three Months Ended December 31,						Twelve Months Ended December 31,
		2023			2022			2023			2022
Subscription ARPU	$	8.70		$	9.26		$	36.11		$	38.09
Accessories and Materials ARPU	$	8.80		$	13.99		$	31.22		$	50.54

Webcast and Conference Call Information

Cricut management will host a conference call and webcast to discuss the results today, Tuesday, March 5, 2024 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: Cricut Q4 2023 Earnings Pre-Registration. 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, and Cricut Joy^® series, and Cricit Venture^® series — 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:
Nadia Romero
[email protected]

Investor Contact:
Jim Suva
[email protected]

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”).

Cricut, Inc. Condensed Consolidated Statements of Operations and Comprehensive Income (in thousands, except share and per share amounts)
		Three Months Ended December 31,								Year Ended December 31,
			2023				2022				2023				2022
Revenue:
Connected machines		$	77,402			$	102,314			$	198,312			$	252,563
Subscriptions			76,512				71,097				303,989				272,344
Accessories and materials			77,332				107,349				262,846				361,389
Total revenue			231,246				280,760				765,147				886,296
Cost of revenue:
Connected machines			64,127				99,425				172,571				244,260
Subscriptions			8,651				7,442				32,346				26,375
Accessories and materials			61,430				90,282				216,937				265,768
Total cost of revenue			134,208				197,149				421,854				536,403
Gross profit			97,038				83,611				343,293				349,893
Operating expenses:
Research and development			14,991				17,582				65,048				76,914
Sales and marketing			35,771				36,909				123,169				130,379
General and administrative			29,757				18,024				85,091				62,647
Total operating expenses			80,519				72,515				273,308				269,940
Income from operations			16,519				11,096				69,985				79,953
Other income (expense):
Interest income			1,756				933				7,976				1,809
Interest expense			(82	)			(81	)			(323	)			(289	)
Other income			290				658				2,145				508
Total other income, net			1,964				1,510				9,798				2,028
Income before provision for income taxes			18,483				12,606				79,783				81,981
Provision for income taxes			7,195				1,715				26,147				21,315
Net income		$	11,288			$	10,891			$	53,636			$	60,666
Other comprehensive income (loss):
Change in net unrealized gains (losses) on marketable securities, net of tax			765				(228	)			711				(300	)
Change in foreign currency translation adjustment, net of tax			129				122				41				(120	)
Comprehensive income		$	12,182			$	10,785			$	54,388			$	60,246
Earnings per share, basic		$	0.05			$	0.05			$	0.25			$	0.28
Earnings per share, diluted		$	0.05			$	0.05			$	0.24			$	0.28
Weighted-average common shares outstanding, basic			217,252,985				215,658,921				216,892,525				214,458,284
Weighted-average common shares outstanding, diluted			218,671,797				219,710,235				219,722,063				220,588,789

   

Cricut, Inc. Condensed Consolidated Balance Sheets (in thousands, except share and per share amounts)
	As of December 31,
		2023			2022
Assets
Current assets:
Cash and cash equivalents	$	142,187		$	224,943
Marketable securities		102,952			74,256
Accounts receivable, net		111,247			136,539
Inventories		244,469			351,682
Prepaid expenses and other current assets		19,114			23,842
Total current assets		619,969			811,262
Property and equipment, net		47,614			63,407
Operating lease right-of-use assets		12,353			17,078
Intangible assets, net		—			760
Deferred tax assets		34,823			23,819
Other assets		35,363			33,301
Total assets	$	750,122		$	949,627
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	76,860		$	63,195
Accrued expenses and other current liabilities		71,933			69,775
Deferred revenue, current portion		40,304			34,869
Operating lease liabilities, current portion		5,230			5,436
Dividends payable, current portion		2,137			80,781
Total current liabilities		196,464			254,056
Operating lease liabilities, net of current portion Operating lease liabilities, net of current portion		8,938			13,935
Deferred revenue, net of current portion		2,931			3,789
Other non-current liabilities		6,916			5,112
Total liabilities		215,249			276,892
Commitments and contingencies
Stockholders’ equity:
Preferred stock, par value $0.001 per share, 100,000,000 shares authorized, and no shares issued and outstanding as of December 31, 2023 and December 31, 2022.		—			—
Common stock, par value $0.001 per share, 1,250,000,000 shares authorized as of December 31, 2023, 217,915,713 and 219,656,587 shares issued and outstanding as of December 31, 2023 and 2022, respectively.		218			220
Additional paid-in capital		505,864			672,990
Retained earnings		28,514			—
Accumulated other comprehensive income (loss)		277			(475	)
Total stockholders’ equity		534,873			672,735
Total liabilities and stockholders’ equity	$	750,122		$	949,627

Cricut, Inc. Condensed Consolidated Statements of Cash Flows (in thousands)
	Year Ended December 31,
		2023				2022
Cash flows from operating activities:
Net income	$	53,636			$	60,666
Adjustments to reconcile net income to net cash and cash equivalents provided by (used in) operating activities:
Depreciation and amortization (including amortization of debt issuance costs)		30,039				26,957
Bad debt expense		1,720				(64	)
Impairments		9,953				2,922
Stock-based compensation		47,326				41,121
Deferred income tax		(11,238	)			(20,461	)
Non-cash lease expense		4,987				4,845
Provision for inventory obsolescence		26,330				11,466
Unrealized foreign currency (gain) loss		88				(1,040	)
Other		(2,143	)			(440	)
Changes in operating assets and liabilities:
Accounts receivable		23,500				63,696
Inventories		78,376				63,085
Prepaid expenses and other current assets		4,204				8,807
Other assets		869				(51	)
Accounts payable		13,535				(139,845	)
Accrued expenses and other current liabilities and other non-current liabilities		7,761				(2,137	)
Operating lease liabilities		(5,423	)			(5,096	)
Deferred revenue		4,577				3,252
Net cash and cash equivalents provided by operating activities		288,097				117,683
Cash flows from investing activities:
Purchase of marketable securities		(63,451	)			(180,112	)
Proceeds from maturities of marketable securities		38,390				21,393
Proceeds from sales of marketable securities		—				84,621
Purchases of property and equipment, including capitalized software development costs		(23,717	)			(33,771	)
Net cash and cash equivalents used in investing activities		(48,778	)			(107,869	)
Cash flows from financing activities:
Repurchases of common stock		(20,332	)			(18,580	)
Proceeds from exercise of stock options		383				31
Employee tax withholding payments on stock-based awards		(8,106	)			(6,384	)
Payments for debt issuance costs		—				(1,300	)
Cash dividend		(294,130	)			—
Other financing activities, net		—				(14	)
Net cash and cash equivalents used in financing activities		(322,185	)			(26,247	)
Effect of exchange rate on changes on cash and cash equivalents		110				(221	)
Net decrease in cash and cash equivalents		(82,756	)			(16,654	)
Cash and cash equivalents at beginning of period		224,943				241,597
Cash and cash equivalents at end of period	$	142,187			$	224,943
Supplemental disclosures of cash flow information:
Cash paid during the period for interest	$	—			$	—
Cash paid during the period for income taxes	$	24,072			$	28,916

Cricut, Inc. Condensed Consolidated Statements of Cash Flows (continued) (in thousands)
	Year Ended December 31,
		2023			2022
Supplemental disclosures of non-cash investing and financing activities:
Right-of-use assets obtained in exchange for new operating lease liabilities	$	280		$	4,285
Property and equipment included in accounts payable and accrued expenses and other current liabilities	$	2,824		$	4,410
Tax withholdings on stock-based awards included in accrued expenses and other current liabilities	$	451		$	1,324
Stock-based compensation capitalized for software development costs	$	1,960		$	2,321
Leasehold improvements acquired through tenant allowances	$	—		$	859
Dividends declared but unpaid	$	2,342		$	81,420

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