Financial Performance - Net income for FY 2024 was $62.8 million, representing an 8.8% margin, a 17% increase from FY 2023[1] - Revenue for FY 2024 was $712.5 million, a 7% decline compared to FY 2023[1] - Operating income for FY 2024 was $76.1 million, or 10.7% of revenue, compared to $70.0 million, or 9.1% of revenue in FY 2023[5] - Gross profit for the year ended December 31, 2024, was $352.8 million, an increase of 2.2% from $343.3 million in 2023[26] - Net income for the year ended December 31, 2024, reached $62.8 million, up 17.2% from $53.6 million in 2023[26] - Total revenue for Q4 2024 was $209.3 million, a decrease of 9.5% compared to $231.2 million in Q4 2023[26] - Q4 2024 revenue decreased 9% to $209.3 million compared to Q4 2023[5] Subscriber and Revenue Metrics - Paid subscribers increased to 2.96 million, up 7% from FY 2023[1] - Platform revenue for FY 2024 increased 1% to $313.0 million, up from $309.0 million in FY 2023[5] - International revenue for FY 2024 was $157.5 million, or 22% of total revenue, a 1% increase from FY 2023[8] Cash Flow and Assets - The company generated $265 million in cash from operations in FY 2024[6] - Cash and cash equivalents at the end of 2024 were $232.1 million, up from $142.2 million at the end of 2023[29] - Total assets decreased to $693.0 million in 2024 from $750.1 million in 2023, primarily due to a reduction in inventories[29] Expenses and Investments - Research and development expenses increased to $60.4 million in 2024, compared to $65.0 million in 2023, reflecting a focus on innovation[26] - Operating expenses for the year were $276.7 million, slightly up from $273.3 million in 2023[26] Shareholder Returns - Cricut repurchased $38.5 million of common stock in 2024, compared to $20.3 million in 2023, indicating a commitment to returning value to shareholders[31] - The company declared dividends totaling $110.0 million in 2024, a decrease from $294.1 million in 2023, reflecting a strategic shift in capital allocation[31] Product Development - New product launches included Cricut Explore 4 and Cricut Maker 4, with positive initial feedback[2] Interest Income - The company reported a significant increase in interest income to $11.0 million in 2024, compared to $8.0 million in 2023[26] Gross Margin - Gross margin for FY 2024 improved to 49.5%, up from 44.9% in FY 2023[5]

Core Insights - Cricut, Inc. reported a net income of $62.8 million for FY 2024, representing an 8.8% margin and a 17% increase from the previous year [1][6] - The company generated $265 million in cash from operations in 2024 and ended the year with cash and cash equivalents of $337 million, remaining debt-free [1][5] - FY 2024 revenue was $712.5 million, reflecting a 7% decline compared to FY 2023 [1][6] Financial Performance - Fourth quarter revenue decreased by 9% to $209.3 million compared to $231.2 million in Q4 2023 [6] - Platform revenue increased by 2% to $79.4 million in Q4 2024, while products revenue decreased by 15% to $129.9 million [6] - Gross margin improved to 44.9% in Q4 2024, up from 42.0% in Q4 2023 [6] Subscriber and User Metrics - Paid subscribers grew to 2.96 million, a 7% increase over FY 2023 [1][12] - Active users at the end of 2024 were nearly 5.9 million, while 90-day engaged users decreased by 3% to over 3.8 million [12][9] - The platform's average revenue per user (ARPU) increased to $53.12, up 2% from the previous year [12][14] Management Commentary - The CEO expressed confidence in the market potential but acknowledged challenges in execution and the need for improved competition [2] - New product launches, including the Cricut Explore 4 and Cricut Maker 4, received positive initial feedback [2] Cash Flow and Investments - The company plans to remain active with its $50 million stock repurchase program, with $22.9 million remaining [5] - Cricut continues to generate healthy cash flow to fund inventory needs and long-term growth investments [5]

Core Insights - Cricut, Inc. is scheduled to present at the Morgan Stanley's Technology, Media and Telecom Conference on March 5, 2025, in San Francisco, California [1] - The presentation will be available via live webcast on Cricut's investor relations website, with a replay accessible afterward [1] Company Overview - Cricut, Inc. is a creative technology company that provides a connected platform for consumers to create high-quality DIY projects easily [3] - The company offers a range of products, including the Cricut Maker® series, Cricut Explore® series, Cricut Joy™, and Cricut Venture™, along with tools like Cricut EasyPress® and the Infusible Ink™ system [3] - Cricut has built a community of millions of dedicated users worldwide, enhancing its brand presence and customer engagement [3] Investor Relations - Cricut utilizes its investor relations website and the Cricut News Blog to disclose material non-public information and comply with Regulation FD [4] - Stakeholders are encouraged to monitor these platforms, along with press releases, SEC filings, and public conference calls for updates [4]

Core Viewpoint - Cricut, Inc. will report its financial results for the fourth quarter ended December 31, 2024, on March 4, 2025, after U.S. markets close [1] Group 1: Financial Reporting - The earnings call will take place on March 4, 2025, at 3:00 p.m. Mountain Time (5:00 p.m. Eastern Time) [1] - A live webcast of the earnings call will be available on Cricut's investor relations website [2] - Pre-registration is required to access the audio call, and participants are advised to register at least one day in advance [3] Group 2: Company Overview - Cricut, Inc. is a creative technology company that provides a connected platform for DIY projects, including smart cutting machines and design software [4] - The company offers a range of products, including the Cricut Maker series, Cricut Explore series, Cricut Joy™, and Cricut Venture™, along with unique tools and materials [4] - Cricut fosters a community of millions of dedicated users worldwide [4] Group 3: Disclosure Practices - Cricut uses its investor relations website and the Cricut News Blog to disclose material non-public information and comply with disclosure obligations [5]

Core Insights - The investment philosophy emphasizes avoiding errors of commission in favor of errors of omission, as the latter are less costly [1] - The focus is on identifying clear and obvious investment opportunities that warrant a concentrated position, typically 5-10% of the portfolio [1] - The approach suggests that smaller investments may not justify the effort, advocating for index fund investments instead [1] Investment Strategy - The strategy involves prioritizing significant investment opportunities that stand out as obvious choices [1] - The intention is to issue fewer buy theses, making those that are suggested more meaningful [1] - The company seeks to learn from the investment community when mistakes are made, indicating a collaborative approach to investment education [1]

Financial Data and Key Metrics Changes - Total sales in Q3 decreased by 4% year-on-year, with revenue of $167.9 million [26] - Platform revenue was $77.7 million, up slightly year-on-year, while product revenue was $90.2 million, down 7% [26] - Gross margin decreased to 46.1% from 46.8% in Q3 2023, with platform gross margin at 87.1% compared to 89.3% a year ago [30][31] - Net income was $11.5 million or $0.05 per diluted share, down from $17.2 million or $0.08 per diluted share in Q3 2023 [34] Business Line Data and Key Metrics Changes - Revenue from connected machines decreased by 11%, driven by higher promotional activity planned for Q4 [27] - Accessories and materials revenue declined by 3% on favorable comparisons [27] - Paid subscribers increased by 5% year-on-year, totaling over 2.8 million [29] Market Data and Key Metrics Changes - International sales grew by 2% year-on-year, with international revenue at $38.5 million [27] - International sales benefited from foreign exchange rates, contributing just under 2% to the growth [28] Company Strategy and Development Direction - The company is focused on improving user engagement, particularly among new users, to counteract declining engagement from older cohorts [11][23] - A deeper promotional strategy during key selling times is being implemented, with positive results observed from recent promotional events [20] - The company plans to continue increasing marketing spend to drive user acquisition and engagement [19][75] Management's Comments on Operating Environment and Future Outlook - Management expects continued sales pressure on the product segment, with total company revenue likely down year-on-year in Q4 [39] - There is confidence in the ability to improve engagement metrics and subscriber growth despite current challenges [51] - The long-term financial model remains unchanged, with operating margin targets of 15% to 19% [40] Other Important Information - The company generated $70 million in cash from operations, ending Q3 with a cash balance of $247 million [35] - A special one-time dividend of $0.40 per share was paid, along with a recurring semi-annual dividend of $0.10 per share [37] - The company remains debt-free and does not anticipate the need for debt in the near term [38] Q&A Session Summary Question: Active users are declining while paid subscribers are growing - Management explained that engagement pressure is coming from older user cohorts, but they are seeing healthy signs in new user onboarding and engagement metrics [44][51] Question: Long-term margin levels in the platform segment - Management indicated that while there are pressures on platform margins due to increased costs, they expect to maintain a focus on investments that will support long-term growth [58] Question: Trends in accessory revenues and connected machines - Management noted that accessory revenue decline is due to easier comparisons, while connected machines' decline is driven by promotional strategies for Q4 [65][66] Question: Promotional intensity in the crafting category - Management acknowledged increased competition on price points and emphasized their promotional strategy to drive demand during the holiday season [67][68] Question: Key learnings from higher marketing intensity - Management highlighted improvements in traffic to their website and ongoing adjustments to marketing strategies based on performance metrics [73][74]

User Metrics - As of September 30, 2024, Cricut reported 5.9 million Active Users, a slight decrease from 5.93 million in the previous year[120]. - The number of Paid Subscribers increased to 2.84 million, up from 2.70 million year-over-year, representing a growth of approximately 5.2%[120]. - Cricut's digital platform enhancements have led to a 115% increase in Paid Subscribers from 1.3 million in 2020 to nearly 2.8 million in 2023[116]. Revenue and Financial Performance - Total revenue for the three months ended September 30, 2024, was $167.9 million, a decrease of $7.0 million or 4% compared to $174.9 million for the same period in 2023[142]. - Platform revenue accounted for 40% of total revenue in 2023, up from 12% in 2020, indicating a significant shift towards digital offerings[116]. - Platform revenue increased by $0.2 million, or 0%, to $77.7 million for the three months ended September 30, 2024, driven by an increase in paid subscribers from 2.7 million to 2.8 million[143]. - Products revenue decreased by $7.2 million, or 7%, to $90.2 million for the three months ended September 30, 2024, primarily due to increased promotional activity[144]. - Gross profit for the three months ended September 30, 2024, was $77.4 million, a decrease of $4.6 million or 6% compared to $81.9 million for the same period in 2023[147]. - Net income for the three months ended September 30, 2024, was $11.5 million, a decrease of $5.7 million or 33% compared to $17.2 million for the same period in 2023[142]. Cost and Expenses - Gross margin for the fourth quarter of 2023 was 42%, down from 45% for the entire year, attributed to increased promotional discounting during the holiday season[114]. - Total cost of revenue for the three months ended September 30, 2024, was $90.5 million, a decrease of $2.4 million or 3% compared to $92.9 million for the same period in 2023[147]. - Research and development expenses decreased by $0.7 million, or 4%, to $15.2 million for the three months ended September 30, 2024[156]. - Total operating expenses for the three months ended September 30, 2024, were $66.8 million, an increase of $8.5 million or 15% compared to $58.2 million for the same period in 2023[147]. - Sales and marketing expenses increased by $6.9 million, or 24%, to $35.3 million for the three months ended September 30, 2024, compared to $28.4 million for the same period in 2023[159]. - General and administrative expenses increased by $2.3 million, or 16%, to $16.2 million for the three months ended September 30, 2024, compared to $14.0 million for the same period in 2023[161]. Cash Flow and Dividends - Net cash flows provided by operating activities were $161.9 million for the nine months ended September 30, 2024, compared to $196.0 million for the same period in 2023[172]. - The company paid dividends of $109.8 million in 2024, a significant decrease from $293.8 million in 2023[169]. - Cash and cash equivalents and marketable securities totaled $142.4 million and $104.6 million, respectively, as of September 30, 2024[168]. - The company experienced a decrease in net cash flows used in investing activities, primarily due to an increase in proceeds from the maturities of marketable securities in 2024[175]. Strategic Initiatives - Cricut expects to achieve gross savings of approximately $3.2 million in 2024 due to a restructuring plan initiated in Q1 2024[132]. - The company has reduced its reportable segments from three to two, combining Subscriptions and digital content into one Platform segment, reflecting a strategic focus on digital growth[116]. - The company anticipates returning to a more normal seasonality pattern as the impact of the pandemic and global economic challenges abate[114]. - Future capital requirements may vary materially based on revenue growth, R&D spending, and market conditions, with potential needs for additional financing[170].

Core Viewpoint - Cricut, Inc. reported quarterly earnings of $0.05 per share, missing the Zacks Consensus Estimate of $0.07 per share, representing an earnings surprise of -28.57% [1] - The company posted revenues of $167.89 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 1.54%, but down from $174.91 million year-over-year [2] Financial Performance - Cricut's earnings of $0.05 per share for the recent quarter is a decrease from $0.08 per share a year ago [1] - The company has surpassed consensus EPS estimates two times over the last four quarters [2] - Cricut shares have lost approximately 3.3% since the beginning of the year, contrasting with the S&P 500's gain of 19.8% [3] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.04 on revenues of $228.97 million, and for the current fiscal year, it is $0.29 on revenues of $729.66 million [7] - The estimate revisions trend for Cricut is mixed, leading to a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Technology Services industry, to which Cricut belongs, is currently in the top 32% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8]

Subscriber and User Metrics - Paid subscribers increased to over 2.8 million, up 5% year over year[1] - Active users decreased slightly to nearly 5.9 million, while 90-day engaged users decreased 3% to over 3.5 million[6] Financial Performance - Q3 2024 revenue was $167.9 million, down 4% compared to Q3 2023[3] - Total revenue for Q3 2024 was $167.89 million, a decrease of 4.8% compared to $174.91 million in Q3 2023[21] - Gross profit for Q3 2024 was $77.36 million, down from $81.93 million in Q3 2023, reflecting a gross margin of 46.1%[21] - Net income was $11.5 million, or 6.8% of revenue, down 33% from Q3 2023[4] - Net income for the nine months ended September 30, 2024, was $50.90 million, an increase of 20.0% from $42.35 million in the same period of 2023[23] - Cricut's diluted earnings per share for Q3 2024 was $0.05, down from $0.08 in Q3 2023[21] Revenue Breakdown - Platform revenue was $77.7 million, slightly up over Q3 2023, while products revenue was $90.2 million, down 7% from Q3 2023[3] - International revenue increased by 2% over Q3 2023, accounting for 23% of total revenue, up from 21% in Q3 2023[3] Operating Metrics - Gross margin was 46.1%, down from 46.8% in Q3 2023[3] - Operating income was $10.6 million, or 6.3% of total revenue, compared to $23.7 million, or 13.5% of revenue in Q3 2023[4] - Operating expenses increased to $66.77 million in Q3 2024, compared to $58.25 million in Q3 2023, primarily due to higher sales and marketing expenses[21] Cash and Assets - Generated $70 million in cash from operations in Q3 2024, ending the quarter with $247 million in cash and cash equivalents[5] - Cash and cash equivalents at the end of Q3 2024 were $142.38 million, slightly up from $142.19 million at the end of Q3 2023[22] - Accounts receivable decreased to $93.30 million in Q3 2024 from $111.25 million in Q3 2023, indicating improved collection efforts[22] - Inventories decreased significantly to $167.50 million in Q3 2024 from $244.47 million in Q3 2023, suggesting better inventory management[22] - The company reported a total of $161.89 million in net cash provided by operating activities for the nine months ended September 30, 2024[23] Liabilities - Total liabilities decreased to $187.93 million as of September 30, 2024, from $215.25 million in the previous year[22]

Paid subscribers over 2.8 million, up 5% over Q3 2023 Q3 2024 revenue of $167.9 million, down 4% compared to Q3 2023 Delivered 23rd consecutive quarter of profitability with net income of $11.5 million SOUTH JORDAN, Utah, Nov. 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 third quarter ended September 30, 2024. "We are pleased with ...