CRCT - Earnings call transcript Q4 2024

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Operator

Good day, and thank you for standing by. Welcome to Cricut Fourth Quarter 2024 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Jim Suva. Please go ahead.

Jim Suva

Thank you, operator, and good afternoon, everyone. us Fourth joining Call. XXXX for you on Quarter Cricut's Earnings Thank note being section Investor website. is today's of and company's Please call the webcast that recorded on the Relations today's will be webcast the of replay available A following call. also

For your today's with section to supplemental a of posted used the sheet, been investor.cricut.com. Investor call, have along data the accompanying reference, slides on Relations company's website,

recorded, Kimball prepared today Joining Ashish Arora, been and the remarks Officer; Today's Officer. call Q&A. are: which Kimball Shill, on and Financial me Executive Chief live Ashish will after have Chief host

now forward-looking will date that call. I may Factors broadcast, of filed section and assumes accurate in the March any the recently of release everyone begin, and our This this involve materially. and to we Commission. or Form we reliance to forward-looking expectations contains could to our information future Before would uncertainties, make call of Ashish. or results risks update like not are expenses only statements may Exchange should placed remarks results projection events statements, as These and guarantee statements, differ current with including response based to Actual identified no or your remind upon of forward-looking the Securities be we on that also questions. These Cricut's Form do management business, inherent statements not the in XX-Q XX, is therefore, call XX-K XXXX. regarding obligation Cricut company's time-sensitive undue strategies, that Risk them. contain statements today's over including in and those most additional made the have filed that turn performance, of be prepared management and operations

Ashish Arora

you, Jim. Thank

We have our market in conviction and potential. category a overall the strong

sizable, capitalize is shorter term, opportunity the it. even to and on are execute disappointed our with in inability our we While

priorities to and with and drive point could for are XXXX mass we experience, our this development we growth. or income look will eighth in go well diluted in While to market through what to we $XX.X we EPS achieve as and for our back went translates urgency a We look the competing would are operating generated XXXX. inflection details net growth tremendous the XXXX. XXXX and year our our driving what for like $X.X income, and can and to year. we on focus accelerating compared quarterly do better of income, increase of working million XXXX pleased Kimball with I at to net positive much million increased full $X.XX was consecutive by on an better. potential XX% which of a cycles how

our in subscribers profitability We are increase pleased and XXXX. X% in increase with in paid a

engagement. engagement growth. investments in X% are execution on relentlessly development, total of future materials are show drive that that decline with revenue help are continue accelerating product However, we and sales disappointed and are focused and hardware In investments increasing speed will softness. These to metrics the with company in XXXX, accelerated we our

additional initiated to our appropriately intellectual litigation recently also protect We property.

that and are we we promotional continuing increased XXXX. spending marketing in Finally, initiated

top year-on-year details. We Some need a will and of the of as operating reignite expectations result, And line our we our investments we and will Kimball satisfy only to future income into these benefit are team go to the hardware making engagement decline expect XXXX, shareholders. years. to in our and

reverse user new need We is simplifying among Connected to accessories need as we in to defend acquisition, priorities: buy We marketing need materials. we attract focus need growth. our to Machines subscriptions our awareness. share and more to This user have enthusiasm weakening engagement users our increasing plan new on addressing engagement, to conviction return and to to do accessories users what and affordability We and and making materials. in into We reinject the by trends process. and X woven

flywheel. I'm focus launched ultimately machines, next available most to last on monetization which previous continue week, These models. Explore that on Cricut Maker acquisition new to are faster We our excited the and user up our generation Xx and started of X Sage $XXX engagement we in Cricut we've They respectively. X. X popular each our and new and value drives machines tools than $XXX, growth cutting are X to help fresh and by up makers Seashell, of and machine and materials box machine Maker X to including make with the Cricut XX to are The MSRPs enough Cricut greater get modern Explore added right to out and materials colors, projects. platform,

the For the materials Essential to and to that users bundle XXX enough $XX, additional value more only make upgrade to projects. can up adds an

we spend just marketing week, these While in last from to positive million. drive marketing started increase retailers carefully machines both the $XX full users. After augmenting were are is several pleased with which in spend, initial funnel launched by years we our of to reductions end feedback, excitement, XXXX marketing spend and

these positive a uplift seeing from efforts. are We

the that investment impact In expect to we and we sales. marketing a Our XXXX, reaccelerate level continue as category. similar spending analysis top-of-funnel shows machine market in on consumer excitement our mix brand at positive had for a

plan users we We ended active to users, engaged million in XXXX promotions, during uplift quarter, from in XX-day X.X% which down X.XX even QX XXXX, who year-on-year. XXXX. We had our be cut X.XX with more the million promotional Given positive X.X% we down the started deeper year-on-year.

recently combined are fewer pressure projects fewer of engagement our pandemic. X that last dynamics these the attracting 'XX, users users Both cohorts and we more the new metrics. users Over new during years, the cut than new the to XXXX of than added tend COVID we and

engagement to remains the maximize Our our user focus of base.

platform our are the time, they a the with to particular a onboarders engage As more to likely more engaged base. user we our expect over a are they early, reminder, focus because interact to platform with which more lead

our continue XXX,XXX from members in for simplify Design them progress experience positive big XXXX, by the sequentially be efforts to focusing million. Design on and year-on-year triggers. In SMS XXXX, our efforts coupled organically we creation. In Design the media. their and to inspiration to Despite In customer when activate Space, through will back to experience. them XXXX, based design our personalized Space where use our paid are we and project XXX,XXX through Paid will of Space. their a assembly X% perspective. will our initiatives majority streamlining with and design using by are increased will to and by make channels, those our Space that on continued with in we and across subscribers cases focus, proactive on our assisting engagement our streamlining XXXX, to each new intent. QX retention increased scale In metrics XXXX, drive platform on efforts guide our continue QX, Design us entire we marketing launched out-of-box relevant to XXXX, to other users campaigns experience e-mail, customer for marketing campaigns the from simplify platform. QX. first use bring QX, we a application to this span and increased In pressure to social be members on users this and both a journey continue notifications, major cases, users they reaching meet sending confident inspiration in platform vast of were subscribers specific X.XX PUSH the engagement In focused users life our During came outside cycle new our engagement

more job a doing initial are We onboarders. effective from getting at subscription rates higher

backs efforts where in and driving half of We seeing are offers. are increased are reducing prior cancellations win also voluntary the subscribers. our promotional focused an on In the we promotional incremental trends from on promotional our drop seeing based cancellation on our sign-ups rate year, our positive offers second

increase continually rich strategies million over have suite road subscribers, images of content quality tools, proposition the design for including We above. along high X a with a described the value map and makeable premium to

a incredibly up make content Our goal to and to compelling to leverage sign is software our it as tools. subscriber

a see fruit, and bear our As further the declined subscriptions. Accessories boost plays to sales role materials. XX% expect to Affordability we key efforts for full year. engagement Materials in

and significant and because being of Online. more to lower Retail competitive brands, pressure additional share engagement. now is have in are There focused in cost retail on We private label lost we

continue with along We business, appropriate the in the having this our of relentless driving product on costs out right in configurations focus channels.

a when launched launched of additional So XXXX, second want in Cricut materials to of we materials value number the SKUs. we line users limited make. Recall obvious saw, are the half. And success half choice with the first the in Cricut given SKUs we

portfolio. it's only in still product optimistic that now a we portion We of small our more market, are even the this and early but have some history about

continue cost comments, innovation, for in will on additional a coming with ahead. consumers Consistent have winning competitive We focus products the price our promotional and in category share. this reductions prior with cadence quarters to remain we

accessories, fruit, profitability bears see time. margin some competitive. we focused increase on should but hardware create strategy near being recently over For some This pressure price may our more as we accelerated an in term,

As litigation to I Accessories mentioned our protect and previously, we recently intellectual initiated Materials. property over

with experience, easier appealing We reasons of motivated things and things ecosystem. It's make the to that are affordably, are to materials shelf and both great will a belief make a it people use and that overall help the fundamental give to see we and more focused when those our lift are experience we make on them, consumption. inspiration create for to work us our actual we customer to we that intensely on retailers

contribution future Kimball. We discipline. the as decision Annual XXXX, the a wish in has call to innovate made XX current over that, our We Blackwell to not him thank stand reelection for to past exhibiting endeavors. With Directors focus for are continue his of Shareholder serving both to the the the best at member After Len his upcoming Len and years and long-term driven of I'll while since Board Meeting. during turn

Kimball Shill

the XXXX million up XXXX. generated prior X.X% decline QX. revenue Thank net XXth the income of fourth or and revenue total year was consecutive X% $XX.X ended up million, Ashish, year-on-year $XX.X In a million, quarter consecutive sales QX marks XXX,XXX our of welcome, down of XXX,XXX total year. with the million platform X% income. Breaking year is $XXX.X quarter, to in Full year was X.X% compared year-on-year. you, and revenue the $XXX.X decline This year. paid of which net in from or our million, X.XX XXXX everyone. we delivered We up or eighth subscribers, X% and X% or and positive revenue over $XX.X further, We sales QX from a X% million for

and subscriptions slightly platform we year shifted all a mix promotional, of For $XX.XX revenue full decreased toward combined promotional from $XX.XX international, annual to QX versus and over XX% activity. year, targeted more efforts. monthly units mix ago X% was Accessories up more increased and geographic X% the more as was Materials decreased ARPU were Machines shifted from $XXX.X XX%. driven primarily products down by XX%, million, year-on-year. Connected revenue sold which are revenue more fewer with

by revenue mostly and revenue in X%. as For driven products the only the XX%, full XX% decreased from decrease Machines year, decreased Connected Accessories Materials

In QX compared to $XX.X terms of breakdown, for quarter increase geographic million, the was X% revenue XXXX. an international of

As revenue, a total was XXXX of international compared of QX with in XXXX. XX% in revenue total QX XX% percentage

XX% For to the in full XX% of international represents and sales X% compared revenues total XXXX company XXXX. year, increased

year and international Latin full QX. year less saw We than X% improvement for America both QX Foreign MESA U.K. the in and sales strength XXXX. exchange in the throughout in by France, and benefited

following We softness of we the more in Australia, are U.S. in trend the experiencing see continued

a user be want and the machine X, flat continues to this the brand acquisition a in in subscriber quarter to pattern make in acquisition. so rates in X% expect gaining we Ashish may paid quarter in from seasonal member declining new subscribers, Recall, calls, we X and which paid to a sales up continue this awareness international to I growth attrition, growth ended there X increase increasing area. are This quarter quarter in for We could sequentially. have mention, strong as of and discussed to challenging quarter result us, earlier positive is in subscriber with quarter-on-quarter million progress detailed quarter-on-quarter efforts of subscriber natural up do our X.XX impact But until growth XXXX. We pace QX on spot bright some that in but and XXXX and be traction X. markets, subscriber

XX% Moving to gross margin. Total QX QX from gross XX.X%, was in in XXXX. increase margin an

of of XX.X% For year total higher also further, revenue a amount the full Breaking from XXXX. total was subscription gross year in to XXXX, a reflects platform XX.X% XX.X% compared product compared an to margin margin The QX gross improvement XX.X%, was as gross margin and revenue percentage ago. margins. for increase down gross higher a

which to decline which For we fees a the the for of hosting and compared gross to was from quarter products expect margin margin year platform decreased from ago. XXXX, primarily in in to gross from in year compared full continue. Gross QX margin platform and XX.X% costs was XX.X%, was year higher the software full development XXXX. The higher ago, XX.X% a to XX.X% year related

Total For the included in million offset expenses was was inventory, $XX.X the million compensation. million the partially higher gross previously margin a expenses margin promotional year, less in for from stock-based primarily decreased gross by QX XX.X% XXXX. reduction X% which than due in and in selling both $XX.X the and increased activity. Total to full quarter XX.X% The operating in operating XXXX, products for were increase quarter full in impairments $XX.X XXXX. reserved and from inventory year

For operating $XXX.X in the XXXX full of increased X% year, XXXX. just million expenses from total over

As during of or million $XX.X revenue XXXX to X.X% $XX in compared of Ashish we quarter $XX.X Operating efforts or marketing income year. the mentioned, QX million for million. last was X.X% by our revenue increased

income For the increased up in million XXXX. $XX.X XXXX, to operating $XX full year X% compared million, to

year X.X% was XX.X% XXXX As full compared a of to income operating in percentage sales, in XXXX.

the rate XX.X%, was tax in in year XX.X%, XXXX line Our our to rate expectations. tax QX with bringing full

million $X.XX or diluted to share per share QX net income per diluted compared or in For the million quarter, $XX.X XXXX. $XX.X was $X.XX

For in $XX.X the million share up earnings and per from $XX.X share we income income of XXXX. net diluted year, generated net and $X.XX full in $X.XX, earnings of million per diluted

and Turning now flow. to cash sheet balance

We we million. Accordingly, generate We line $XXX work inventory norms. XXXX. long-term funds the remain we cash generated of by higher in cash million year. to investments an to a and more XXXX, on million in and equivalents from to generated as $XXX debt-free. million $XXX from XXXX compared growth. end inventory healthy year million to In of pre-pandemic needs $XXX continue cash at cash for cash annual We of flow ended ago we operations the basis, with bring in inventory levels decreased Recall, with $XXX which

stock. During of cash used of million QX, we repurchase to shares $X X.X million our

share $XX the we $XX QX, repurchase million $XX.X program. declared remains in million per XX, result, XXXX. million the semiannual our for January a As approved of stock dividend After close paid on approximately $X.XX

Now detailed outlook on Recall, to XXXX. annual our to for want our on do or but quarterly we give some outlook we do guidance, color offer XXXX. not for

As Ashish category. our bringing excitement are focused to we mentioned, on

for been deeper updated in have in We we on focus our a markets products excited our which this but week, few R&D, doing are new they continuing launched to about, affordability. We investing available our accelerating increased drive are Machines our only core launches, last through investments and of on marketing by very strategy X promotions product Connected days.

to the year-on-year XXXX half half to to continued Accessories first in the sales Materials. company and total pressure of of XXXX expect first compared in We due decline

However, rates of the rate posted decline should we the of be less we XXXX. the the in sales first half expect than

We be reach that an of point during have to optimistic will reason the the inflection year. second we half

sales increase expect paid to subscriber We year-on-year growth. platform on

a in paid and subscriber could declining X rates to will However, but user QX QX. growth X, put pressure rates. in quarter seasonal result in quarter-on-quarter rates and our This growth growth subscriber subscriber quarter-on-quarter of flat lower on growth new pattern quarter

promotions. XXXX to we efforts Given continuing marketing the that, and began increase we are in

and We from see XXXX benefits expect to in beyond. this

growth. sustainable to investment that will and are accelerate in In addition, we enhancements long-term incremental new products future R&D benefit platform adding

as We impact operating operating expect This points XXXX prosecuting in in are that IP we XXXX. we G&A Therefore, XXXX actions lower also this approximately margin be will operating X income year. margins dollars in percentage operating protection X increase to lower to and will by expenses. aggressively income to result percentage compared

in We incremental improvement subsequent in operating years. expect margins

profitable and to quarter during flow be generate positive expect each XXXX. significant We cash

million which to $XX.X repurchase $XX has We be our stock to million authorized also program, expect remaining. continue with active

remains financial unchanged long-term operating to Our model margin of XX%. targets XX% with

we drive questions. which turn $X that, billion has operator to over achievable. With that operate model scale, call margins I'll above define when top proven are Our for as we and growth, line at the the demonstrated these revenue

Operator

And first coming [Operator Instructions] will our the Stanley. question be Morgan of for Woodring day from Erik

Unknown Analyst

It's actually [ Erik ] for Dylan Woodring.

did like lower? many So challenged on past quarters, getting which and focus you in color we my you is, going question for spoken declining, been lots But it the be actually us but engagement your continues on on about in and it engagement details and the prepared worse. And have to although focusing can data this give been more remarks. the some has efforts, as of looks it keeps you have

concern, a a have not trends focused and for been I is have the this been So on this improving. while and

us why follow-up. will I you could show So have efforts help your will start to And improvements? please a engagement understand

Ashish Arora

Thanks, is Dylan. Ashish. This

you're of think about So been right, number right? it's talked for under We've pressure. and a I engagement quarters,

So are is the I'll where the about about coming from. what differently in repeat the some script. then talk first doing comments to talk pressure let we made I'll it. address me And we just of

And a engagement. pressure a lot users a that of on curve, things are go engagement engagement they So as putting the in acquired typical they we creating on -- puts is -- that lot and lot the X through of base of graduation 'XX. pressure that's XXXX

new is, some additional users, less, pressure. as cut puts they we which acquiring second are The to tend

things. right pointed for We talked that you believe actually a the while. on the are strategy out, as working about Now we we've

cetera, things lots signals test, in those that are et working. of have We A/B our

execute need to to we faster. is what However, do

are noted development, effort we've while. we sure finish further a actually can so work now So make that executing comments that on we accelerating that are of to we Kimball's about we get can you software putting the some if for been

the We on? should is more execution. What are need the in have time. we is a right. things we few that over that improve better, basically onboarders, where days. first they think I they strategy engagement onboarders engage to One focusing So engage If are accelerate our and journey the think better

-- use end The within on workflows to are cases these that basically commitment our And just marketing it is Space. to have trying starting is -- which finally, before and basically platform we the user and ramp we get of the we've us implement second a personalized we our execute to to up, deliver that gives are to year. our And to these platform. we information is triggers implemented of Design users back effectively the many ability send ability

thinking get though their So they about taken past engage. and come generate making our may not project, on to platform is to the based behavior, ideas them goal based to of even they actually the back on some to be actions a have

you're absolutely the [ is ] So point right, taken. well

on focused have this. We

We We our significantly just we're our this have efforts believe streamline quarters. talked things. cycles. accelerate the on many We working execution for and to focus, need past right about the

So that's what we're working on.

Unknown Analyst

of that? Got a half. -- a gives point the that in what or And the or that you're year you it. because by And quarter? inflection did a you quarter decline? Or second for the full did Is mention in X now an you also confidence what mean in year

Kimball Shill

our we're not all our as calling growth, year is the mentioned. things rooted we're the but execution for And really full that working question. in on, and thanks Ashish for Dylan, optimism

let me of our the And take different of business. aspects so through you kind

quarter-to-date. XXXX. a launched our and year-on-year, of that for machines That's we're but were that X% And that revenue We in our grow and we're business, the on subscription that, sellout received. generate data with spend. of just seeing First, we machines. marketing. spend down business. that to continuing then in we've the impact, that, tells part updated enthusiasm well healthiest the The we spending X us intermediate We're our machines, year, In pleased are money been that platform. lot we're trends and being that tracking did We're full we having continues believe in expect platform grow an for to is we confident

have bunch that we the in our momentum new So of down Accessories we're XX% in where year, that that, gaining game, we're and machines space. Materials, believe our launching finally, products we that's and up to really know for in we was pick while a business. And

We and SKUs related the saw new of pleased in many help from our and that that that have accessories, some and we more promotional hardware we're with on that, line started coming And especially materials. over value of our those that. continuing first in build XXX will very of QX, part we're half business, we then uplift being the the to

that will revenue So we that think help in build us segment.

of confidence really we'll some that the all half the point year. of these second growth to so inflect our And at things in combined underpin

Operator

Merchant next our Citi. And from line of the coming be Asiya will question of

Asiya Merchant

side, tell that international did positive a what's just something was is you can the On expect. that up. Maybe on you I few there, this highlighted if know going you us well. countries about

total to be in an down you second we international with thinking the trajectory? about how should the If next half, again expect be revenues inflection year

Kimball Shill

Asiya. Thanks,

even excited different forward able more the grown countries, quarter deliver that we're are of And a growth. business. to in in dynamic we row our of XX and in penetration over to is look are markets. Part there in a third those when We levels international for we've we're

U.S. markets what of the in longest some experienced been similar we've And we've the to in headwinds the are experiencing

Australia highlighted in our U.K. for where challenged, to France and other last of we MESA extremely so the really continue year. example, And number quarters and turn region, challenged. was saw markets particular, well in last corner year like be U.K. for a performed really us the But we QX.

but markets. we're some seeing see that of fully the enough overcome growth, to we of so of other the shoots in some not And headwinds

continuing be our international spend more is and are of in focused marketing how the higher of at our building we're of getting in this working job year we markets. that key awareness about things international awareness on that will we of do level some on continued spend better One Cricut a

Asiya Merchant

Okay. the And rate decline Ashish for the a Connected And generating bit I seems if Machines. ROI It I of from deeper may, Machines. like positive accelerating is on did Connected little promotions. talk about here think

Like right turn bridge you So the Is and me machines positive will is positive gap. that What's generating these confidence? -- gives driving just ROI? what that in around that -- help it generate these ROI? the selling confidence

Kimball Shill

year, ground launches our is this turn with were Thanks. Again, important we full promotions, and of to on And revenue when as we that year are our yes, which the expected that's continue marketing we year. we for that that played build the marketing is but X% we gaining us just confidence we confidence what it's we But And to combined it pull to and tide business the much also new efforts the show XX%, really machine an we down continue out in the awareness to the spend. our with people not 'XX. for in was be expect and goes consumers. That, And that's that we talk our about continuing where, models strategy marketing down the are us the part QX the -- gives spend, in as where addressing to through how affordability deeper momentum. able business funnel.

Operator

coming be will question next our Adrienne the line of Yih from Barclays. of And

Angus Kelleher-Ferguson

of impact Curious and kind A bankruptcy. partner recently retail longer-winded in QX for if category within specialty you in Angus your a is Adrienne if that from of is follow-up. for and Kelleher quick filed wholesale Yih. have on included This could the then that yours quantify a guidance? question the I

Kimball Shill

actively and yes, bankruptcy the risk in mean, our last I not months. to XX So over been managing to the financials. our reflected numbers, you're that QX material is referring we've it's

Angus Kelleher-Ferguson

guess, Got you it. are bridge of of IP an impact curious can expense just What it that? guidance, will I if recovery. timing decline? the guidance bigger question on a drivers X anything to similar op your points second of the sales could those is, a headwinds? to calling X for you How protection much the you'll And actions? hear. whereby have Nice the of My margin shaping to of is share see kind And help us XH

Kimball Shill

Thanks, Angus.

would level things highlight this to year. spend continuing OpEx X I we we're is marketing than One terms there's really, year. at in a So our higher spend of initiated last higher

that's an investment. of part important so And our

our heavily that also that Secondly, as comments, in by those cases of products Ashish to -- we year, accelerate platform have consumers. products are to in some the use experience mentioned we're consumers R&D fiscal of to that things for simpler investing expect in compelling We're key more to our in the bring meaningfully R&D sooner. our so his accelerating a for end

both an And are is protection this so earlier program, highlighted. both court action little we And those year, and action to of which actions, enforce why bit IP rather, because we're spending district ITC IP with those or the year, ongoing more the protection primary a initiated highlighted of spend. We our intellectual property. -- areas a while we last we an have we

end of like software Some bear the of year, the fruit this to investments these will begin platform the by year.

next and benefit year future will years. Some

to for why ultimately, of ] there. operating impact on so X X [ percentage margin an calling And points that's we're

Ashish Arora

that. things, years Let tough market. of few but years the early few couple early of know our of the at last we've Kimball in we're in very had last Part believe the a of just in -- part stages -- also day, we're we end reinforce said a But and me I tough very the of years. couple conviction. already rooted days. it has We in is the our believe

We market have tremendous potential.

internally we as work Board. a So team and with our

investment continued So is the areas marketing. of

product on innovate launches, as and accelerate et machines, well. us cetera, see will our accessories, You materials

investing of and main some about basically takes this mass the of what innovation cycles. And basically, it's are affordability it get finally, market as we to the a to if board, So of the across development cycle and in some you think life the experience, life OpEx objections ease to accelerating use.

So ecosystems, what working towards. we that's on are machines and

the are significantly we ultimately to platform working benefit use, make will engagement. it to use, on our On which of easier also ease

areas: a addictive X the make faster, platform. our make marketing; finally, sustained and are those think innovation easier, more then products to engaging affordable; I very better, So to drive

we experience. believe for continue mass that's where opportunity market a to So build company towards this the the right is to

Operator

our be And Sachs. coming line Goldman Eric will question next Sheridan from of the of

Eric Sheridan

in think alternative exploring could. ago, the to talked that and alternative creating things to intensity of virality hands from two, amount in a it. creator away partnering That we do or one. And How what of marketing if the on an platforms about be dynamics with sheet couple has economy. and of around marketing beyond products now players the different balance possibly Two, like standpoint put ways commerce A from promotion market, your I of increasing some terms you're number in planning just cash number you landscape dynamics? paid the would about commerce pathways quarters broader

this where turnaround guys and the XXXX, high return deeper priorities allocation You capital your shareholders, think you period? about to in while stays this is into for time how do marketing we're do period the capital intensity during

Ashish Arora

Eric. Thanks, Yes.

manifestation, our significant of right? that opportunity is and So guided there et make is cases, about right? we expand take and right? see the our me first a of use we content, to current the question. of different different simpler couple of its to the One we experience, platform have and as of talk cetera. I'll to let Kimball believe lot as believe we data continue product I'll enhance a But probably in a part continue a answer angles, broadening appeal second a more have experience as that demographics, demographics, first, So let we the we it to kind So different

word the a in and that of product marketing has this project. the in know made of a about talked mouth past get the about we've comes people a friend part to our huge Now because

get was crafty." I the didn't the story example, of an saying, we but as as friend Cricut, her, of the platform, telling that I an engaged the right, as are was that demographics not gym So right? the you in she the our more for a that about a believe with talked day, a broadening I to who opportunity that to there's we out me platform, we've and her I know, virality made about. Last addition asked least, building on people know of the project to we economy. -- "Hey, me", How of you we are get about And monetize there went other Just and call is CPA, thinking in -- have the platform? and telling forms how works ways right product, the are who other other to other "Hey, you fulfillment, current do one what the what works creator forms this always create ladies were to

things. and products view only business investment the a create solutions range again, it's demographics, in helping our with is current our So market a our make models ways also wide current of platform of people to new to not to and new

leave it about question and at So second that now, structure. for capital I'll let the just I'll answer Kimball

Kimball Shill

years over has I'd inventory. inventory so the out last of as $XXX levels been we've we call lot that several -- from levels excess of million bringing a we've the Eric, brought ended that $XXX down been down ] million generating inventory And pandemic year been highs. and by [ with cash the

level run inventory keep cash enough and dry the term to investing our And expect framework our we a have wouldn't historically us of are us. and business we've in year. That there's we were we that an where is our how that But in at to make we forward active shareholders. as off from time dividends case to the kicking for discretion. to able to Board's going second that are: paid that have this dividend medium special strategic acquisition really I said, January we beyond that, have the allocation program; same -- So return long produce offer capital dividend; some we we recurring the and buyback sure be makes we on to used then installment we're do a sense time about semiannual efficiently for tools capital we we do powder just our

Operator

call to back Thank Q&A to closing for over go Jim ahead. Suva you. This go our like I for ahead Please does turn the session conclude would remarks. today. and And

Jim Suva

afternoon. Lisa, everyone, you, joining and us Thank thank for you, this

large and user increase drive to provide also a but value over term platform to opportunity our new Cricut long to only not have engagement. users. increased We the strengthen, continues growth The

for for manage healthy profitable continue us. sustainable, and the to ahead cash generate growth business will opportunities excited We I'm about flows. the

meeting to Wednesday, Francisco, be there. in Technology, investors will with March and Morgan we We XXXX, Telecom the San X, California, hope Conference see Stanley at Media tomorrow, and you

call, please this additional now have earnings This you questions, If you. jsuva@cricut.com. concludes at disconnect. Thank e-mail me may now and you

Operator

Thank you all for participating in today's conference call.

You evening. may good a now Have disconnect.

Cricut (CRCT) 4 Mar 252024 Q4 Earnings call transcript