Cricut(US:CRCT)2022-08-10 00:16User Growth - Cricut has nearly 7.2 million users as of June 30, 2022, an increase from 5.37 million users in the same period of 2021, representing a growth of approximately 33.9%[127] - The percentage of users creating in the trailing 90 days decreased to 51% in June 2022 from 59% in June 2021[127] - Cricut had approximately 2.4 million paid subscribers to Cricut Access and Cricut Access Premium as of June 30, 2022, up from 1.77 million in the same period of 2021, indicating a growth of about 34%[127] Revenue Performance - Total revenue decreased by $150.7 million, or 45%, to $183.8 million for the three months ended June 30, 2022, compared to $334.5 million for the same period in 2021[151] - Connected Machines revenue decreased by $110.9 million, or 76%, to $35.4 million for the three months ended June 30, 2022, compared to $146.3 million for the same period in 2021[152] - Subscriptions revenue increased by $16.9 million, or 33%, to $67.6 million for the three months ended June 30, 2022, driven by a 34% increase in Paid Subscribers from 1.8 million to 2.4 million[153] - Accessories and Materials revenue decreased by $56.8 million, or 41%, to $80.7 million for the three months ended June 30, 2022, primarily due to a decline in unit sales of Accessories[154] - Total revenue for the six months ended June 30, 2022, decreased by $229.8 million, or 35%, to $428.5 million compared to $658.3 million for the same period in 2021[151] - Connected Machines revenue decreased by $189.8 million, or 66%, to $97.8 million for the six months ended June 30, 2022, compared to $287.6 million for the same period in 2021[155] - Accessories and Materials revenue decreased by $75.5 million, or 28%, to $198.3 million for the six months ended June 30, 2022, primarily due to a decline in unit sales[157] Profitability Metrics - Gross profit for Connected Machines decreased to $0.6 million for the three months ended June 30, 2022, from $30.1 million in the same period in 2021, reflecting a gross margin decrease to 2%[159][161] - Subscriptions gross profit increased by $16.0 million, or 35%, to $61.4 million for the three months ended June 30, 2022, with a gross margin of 91%[159] - Gross margin for Subscriptions remained stable at 91% for the six months ended June 30, 2022, compared to 90% for the same period in 2021[169] - Gross margin for Accessories and Materials decreased to 31% for the six months ended June 30, 2022 from 41% for the same period in 2021[171] - Gross margin for Connected Machines decreased to 2% for the six months ended June 30, 2022 from 18% for the same period in 2021[167] Expenses Overview - Research and development expenses are expected to increase as a percentage of revenue to support growth from new products and services[141] - Sales and marketing expenses are projected to fluctuate in the near term due to international expansion and new product launches[142] - Research and development expenses increased by $4.3 million, or 12%, to $40.6 million for the six months ended June 30, 2022 from $36.3 million for the same period in 2021[173] - Sales and marketing expenses increased by $3.8 million, or 6%, to $64.3 million for the six months ended June 30, 2022 from $60.5 million for the same period in 2021[177] - General and administrative expenses increased by $3.2 million, or 13%, to $28.1 million for the six months ended June 30, 2022 from $24.9 million for the same period in 2021[179] Cash Flow and Financial Position - Net cash flows provided by operating activities for the six months ended June 30, 2022, were $13,006 thousand, a significant improvement from $(53,995) thousand in the same period of 2021[191] - Net cash flows used in investing activities increased to $(101,569) thousand for the six months ended June 30, 2022, compared to $(16,124) thousand in the prior year[191] - Net cash flows used in financing activities were $(5,031) thousand for the six months ended June 30, 2022, a decrease from $262,013 thousand in the same period of 2021[191] Risk Management - The company has not been exposed to material risks due to changes in interest rates, with a hypothetical 10% change in interest rates having no material impact on financial statements[194] - Foreign currency exchange risks are monitored, with the company not having entered into derivative or hedging transactions due to the immaterial impact of foreign currency exchange rates on operations during 2019-2021[195] Future Outlook - Cricut's revenue is expected to be higher in the second half of the year, historically representing 59% to 60% of total annual revenue[121] - The company anticipates returning to a more normal seasonality pattern as pandemic-related demand stabilizes[121]