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, 2021.
“This was an exciting year for us. We grew the business to $1.3
billion in revenue, up 36% over 2020. This is a remarkable
milestone for the company as we continue to extend our platform,
launch new products, broaden our user base and enter new markets
around the world,” said Ashish Arora, Chief Executive Officer of
Cricut. "Underlying key trends, like personalization and
digitization of tools, drove nearly 2.1 million new users to the
platform. As we head into 2022, our strong focus on profitable
growth prioritizes user engagement and monetization in the short
term, while investing in expanding the platform for longer term
growth."
Fourth Quarter 2021 Financial Results
- Revenue was $387.8 million, up approximately 5% over Q4 2020
and up 123% on a two-year basis.
- Connected machine revenue was $158.1 million, down 7% over Q4
2020 and up nearly 98% on a two-year basis.
- Subscriptions revenue was $55.7 million, up 51% over Q4 2020
and up nearly 257% on a two-year basis.
- Accessories and materials revenue was $174.0 million, up nearly
7% over Q4 2020 and up 123% on a two-year basis.
- Gross margin was 27.0%, down from 33.6% in Q4 2020 and up from
23.1% in Q4 2019. Q4 2021 gross margin was impacted by a higher
level of promotions, pricing reserves, and inflation cost pressures
compared to prior years.
- Operating income was $25.8 million, or 6.7% of total revenue,
compared to $79.6 million, or 21.5% of revenue in Q4
2020. On a two-year basis, operating income was up
124%, compared to $11.5 million, or 6.6% of revenue in Q4
2019.
- Net income was $11.9 million, down approximately 81% over Q4
2020, and was 3.1% of revenue, compared to $61.4 million, or 16.6%
of revenue in Q4 2020. On a two-year basis, net income
was up approximately 53%, compared to $7.8 million, or 4.5% of
revenue in Q4 2019.
- Diluted earnings per share was $0.05.
- EBITDA, was $31.8 million, or 8.2% of revenue, and included
$10.1 million of stock-based compensation expense. Q4 2020 EBITDA
was $83.5 million, or 22.5% of revenue, and included $4.5 million
of stock-based compensation expense. On a two-year
basis, EBITDA was up 122%, compared to $14.3 million, or 8.2% of
revenue in Q4 2019.
- International revenue grew approximately 53% over Q4 2020 and
was 14% of total revenue, up from 10% of total revenue in Q4 2020
and 4% of total revenue in Q4 2019.
Full Year 2021 Financial Results
- Revenue was $1.3 billion, up 36% over FY 2020 and up 168% on a
two-year basis.
- Connected machine revenue was $548.2 million, up nearly 32%
over FY 2020 and up nearly 177% on a two-year basis.
- Subscriptions revenue was $205.9 million, up 85% over FY 2020
and up 282% on a two-year basis.
- Accessories and materials revenue was $552.2 million, up 28%
over FY 2020 and up 135% on a two-year basis.
- Gross margin was 35.0%, relatively flat with 34.7% in FY 2020
and up from 29.3% in FY 2019.
- Operating income was $192.4 million, or 14.7% of total revenue,
compared to $200.5 million, or 20.9% of revenue in FY
2020. On a two-year basis, operating income was up
259%, compared to $53.6 million, or 11.0% of revenue in FY
2019.
- Net income was $140.5 million, down 9% over FY 2020, and was
10.8% of revenue, compared to $154.6 million, or 16.1% of revenue
in FY 2020. On a two-year basis, net income was up
258%, compared to $39.2 million, or 8.1% of revenue in FY
2019.
- Diluted earnings per share was $0.64.
- EBITDA, was $211.6 million, or 16.2% of revenue, and included
$38.1 million of stock-based compensation expense. FY 2020 EBITDA
was $214.4 million, or 22.4% of revenue, and included $9.5 million
of stock-based compensation expense. On a two-year
basis, EBITDA was up nearly 238%, compared to $62.7 million, or
12.9% of revenue in FY 2019.
- International revenue grew approximately 110% over FY 2020 and
was 11% of total revenue, up from 7% of total revenue in FY 2020
and about 4% of total revenue in FY 2019.
EBITDA and EBITDA margin are non-GAAP measures and are
reconciled to the corresponding GAAP measures at the end of this
release.
“The past year was highlighted by many accomplishments. We saw
continued strong revenue growth, significantly invested in the
business, grew inventory back to strong levels, successfully
navigated some challenging supply chain logistics, and continued to
generate profits,” said Marty Petersen, Chief Financial Officer of
Cricut. "We believe the fundamentals of our business and the
industry trends that drive our platform expansion remain intact.
Our diversified revenue stream and consistent track record of
driving profitability demonstrate our discipline to manage through
macro-economic uncertainty."
Recent Business Highlights
- Grew engagement on the platform:
- Grew total users on the platform by over 2 million during 2021.
As of the end of 2021, total users on the platform were up 48% year
over year to over 6.4 million.
- Number of engaged users significantly increased. As of the end
of Q4 2021, there were 3.8 million engaged users, an increase of
approximately 1.0 million, or 36% compared to Q4 2020.
As a percentage of total users, as of December 31, 2021, 60% of
Cricut users had created with their connected machines in the
trailing 90 days.
- Paid subscribers grew to over 2.0
million by the end of 2021, up 56% year over year.
- Launched new products:
- Released new connected machines, Cricut Explore 3 and Cricut
Maker 3, in 2021 with updated features and functionality.
- Extended the platform with the launch of new tools and
accessories. In early 2021, we entered the gift category with the
introduction of the Cricut Mug Press. Since the end of 2021, we
expanded into the lighting category with the introduction of Cricut
Bright 360, and, most recently, announced a lineup of new heat
presses including EasyPress 3, Cricut Hat Press and Cricut
Autopress which drive engagement and expand use cases.
- Expanded international footprint:
- Revenue from international markets grew approximately 110% year
over year and represent 11% of total revenue in
2021.
- Entered into 16 new markets since the end of 2020, including
Israel, Hong Kong, Italy, Mexico, and several countries within the
Middle East and Nordics. Cricut products are now available in over
45 countries around the world with a growing retail footprint.
- Launched direct to consumer sites
in UK, Ireland, France, and Germany.
- Extended the platform:
- Continued to increase the content and functionality exclusively
available to Cricut Access subscribers, including the introduction
of tools like Automatic Background Remover. Now over 200,000
images, over 700 fonts, and thousands of ready to make projects are
available to Cricut Access subscribers.
- Design Space now features Destination Pages that highlight
specific content, projects, and images curated for holidays,
events, or inspiring new use cases.
- Improved mobile experience with new iOS mobile application for
Cricut Design Space creating closer parity to the desktop
experience and updates to the Cricut Joy app to enable new features
and functionality.
- Launched Cricut Learn in October 2021, a comprehensive resource
featuring short, expert-led video education as well as live,
interactive virtual classes; had over 80,000 participants since
launch.
- Introducing our Contributing Artist
Program, which will enable a new marketplace for artists to upload
artwork to Cricut Design Space and be compensated based on how
their artwork is used by Cricut members for their projects. This
program now actively in beta will provide millions of Cricut users
access to new, authentic, and diverse content.
Key Performance Metrics and Non-GAAP Financial
Measures
|
As of December 31, |
|
2021 |
|
|
2020 |
|
Users (in thousands) |
6,409 |
|
|
4,323 |
|
Percentage of Users Creating
in Trailing 90 Days |
60 |
% |
|
65 |
% |
Paid Subscribers (in
thousands) |
2,037 |
|
|
1,303 |
|
|
For the Three Months EndedDecember 31, |
|
For the Year EndedDecember 31, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Subscription ARPU |
$ |
9.18 |
|
$ |
9.23 |
|
$ |
38.37 |
|
$ |
32.52 |
Accessories and Materials
ARPU |
$ |
28.66 |
|
$ |
40.76 |
|
$ |
102.91 |
|
$ |
125.88 |
EBITDA (in millions) |
$ |
31.8 |
|
$ |
83.5 |
|
$ |
211.6 |
|
$ |
214.4 |
EBITDA includes stock-based compensation
expense.
Webcast and Conference Call Information
Cricut management will host a conference call and webcast to
discuss the results today, Tuesday, March 8, 2021 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 at (833) 398-1017 toll-free domestically and at (914)
987-7715 internationally. Please reference conference ID: 6933049.
A transcript of the prepared remarks will also be available
following the conference call.
About Cricut, Inc.
Cricut, Inc. is a creative technology platform
company dedicated to encouraging new ways for people to experience
making at home. Cricut’s mission is to unleash the creative
potential of its users with innovations that bring ideas to life in
the form of professional-looking, personalized handmade projects.
Cricut’s industry-leading products include its flagship line of
smart cutting machines— the Cricut Maker® family, the Cricut
Explore® family, and Cricut Joy®— accompanied by other unique tools
like Cricut EasyPress®, the Infusible Ink™ system, and a diverse
collection of materials. In addition to Cricut’s core offerings,
the brand also 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.
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, such as the ongoing COVID-19 pandemic and any
resulting economic slowdown, governmental action, stay-at-home
order 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) |
|
|
Years Ended December 31, |
|
2021 |
|
2020 |
|
2019 |
Revenue: |
|
|
|
|
|
Connected machines |
$ |
548,205 |
|
|
$ |
416,714 |
|
|
$ |
198,144 |
|
Subscriptions |
|
205,858 |
|
|
|
111,337 |
|
|
|
53,829 |
|
Accessories and materials |
|
552,164 |
|
|
|
430,979 |
|
|
|
234,581 |
|
Total revenue |
|
1,306,227 |
|
|
|
959,030 |
|
|
|
486,554 |
|
Cost of revenue: |
|
|
|
|
|
Connected machines |
|
484,025 |
|
|
|
351,898 |
|
|
|
176,894 |
|
Subscriptions |
|
21,961 |
|
|
|
13,125 |
|
|
|
8,827 |
|
Accessories and materials |
|
342,791 |
|
|
|
261,633 |
|
|
|
158,483 |
|
Total cost of revenue |
|
848,777 |
|
|
|
626,656 |
|
|
|
344,204 |
|
Gross profit |
|
457,450 |
|
|
|
332,374 |
|
|
|
142,350 |
|
Operating expenses: |
|
|
|
|
|
Research and development |
|
79,814 |
|
|
|
38,930 |
|
|
|
26,674 |
|
Sales and marketing |
|
133,963 |
|
|
|
63,329 |
|
|
|
40,110 |
|
General and administrative |
|
51,268 |
|
|
|
29,602 |
|
|
|
22,005 |
|
Total operating expenses |
|
265,045 |
|
|
|
131,861 |
|
|
|
88,789 |
|
Income from operations |
|
192,405 |
|
|
|
200,513 |
|
|
|
53,561 |
|
Total other expense, net |
|
(32 |
) |
|
|
(1,320 |
) |
|
|
(3,293 |
) |
Income before provision for
income taxes |
|
192,373 |
|
|
|
199,193 |
|
|
|
50,268 |
|
Provision for income taxes |
|
51,900 |
|
|
|
44,615 |
|
|
|
11,057 |
|
Net income |
$ |
140,473 |
|
|
$ |
154,578 |
|
|
$ |
39,211 |
|
Other comprehensive income
(loss): |
|
|
|
|
|
Change in foreign currency translation adjustment, net of tax |
|
(64 |
) |
|
|
37 |
|
|
|
(28 |
) |
Comprehensive income |
|
140,409 |
|
|
|
154,615 |
|
|
|
39,183 |
|
Earnings per share, basic |
$ |
0.67 |
|
|
$ |
0.74 |
|
|
$ |
0.19 |
|
Earnings per share, diluted |
$ |
0.64 |
|
|
$ |
0.74 |
|
|
$ |
0.19 |
|
Weighted-average common shares
outstanding, basic |
|
208,833,827 |
|
|
|
208,116,104 |
|
|
|
208,116,104 |
|
Weighted-average common shares
outstanding, diluted |
|
219,776,069 |
|
|
|
208,116,104 |
|
|
|
208,116,104 |
|
|
Cricut, Inc.Condensed Consolidated Balance
Sheets(in thousands, except share and per share
amounts) |
|
|
As of December 31,2021 |
|
As of December 31,2020 |
|
|
|
|
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
241,597 |
|
|
$ |
122,215 |
|
Accounts receivable, net |
|
199,508 |
|
|
|
162,931 |
|
Inventories |
|
454,174 |
|
|
|
248,745 |
|
Prepaid expenses and other current assets |
|
32,820 |
|
|
|
4,916 |
|
Total current assets |
|
928,099 |
|
|
|
538,807 |
|
Property and equipment, net |
|
53,261 |
|
|
|
33,441 |
|
Operating lease right-of-use assets |
|
17,653 |
|
|
|
— |
|
Intangible assets, net |
|
1,520 |
|
|
|
2,280 |
|
Deferred tax assets |
|
3,255 |
|
|
|
3,119 |
|
Other assets |
|
2,462 |
|
|
|
3,753 |
|
Total assets |
$ |
1,006,250 |
|
|
$ |
581,400 |
|
Liabilities and
Stockholders’ Equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
204,714 |
|
|
$ |
251,658 |
|
Accrued expenses and other current liabilities |
|
69,351 |
|
|
|
71,324 |
|
Deferred revenue, current portion |
|
30,547 |
|
|
|
23,518 |
|
Operating lease liabilities, current portion |
|
3,755 |
|
|
|
— |
|
Total current liabilities |
|
308,367 |
|
|
|
346,500 |
|
Operating lease liabilities, net of current portion |
|
15,780 |
|
|
|
— |
|
Deferred revenue, net of current portion |
|
4,858 |
|
|
|
2,758 |
|
Other non-current liabilities |
|
3,269 |
|
|
|
3,217 |
|
Total liabilities |
|
332,274 |
|
|
|
352,475 |
|
Commitments and contingencies
(Note 12) |
|
|
|
Stockholders’ equity: |
|
|
|
Preferred stock, par value $0.001 per share, 100,000,000 shares
authorized, 0 shares issued and outstanding as of December 31,
2021. 0 shares issued, authorized or outstanding as of
December 31, 2020. |
|
— |
|
|
|
— |
|
Common stock, par value $0.001 per share, 1,250,000,000
shares authorized as of December 31, 2021,
221,913,559 shares issued and outstanding as of
December 31, 2021; 257,058,262 shares authorized as of
December 31, 2020, 208,116,104 shares issued and
outstanding as of December 31, 2020 |
|
222 |
|
|
|
208 |
|
Additional paid-in capital |
|
717,369 |
|
|
|
412,741 |
|
Accumulated deficit |
|
(43,560 |
) |
|
|
(184,033 |
) |
Accumulated other comprehensive income (loss) |
|
(55 |
) |
|
|
9 |
|
Total stockholders’ equity |
|
673,976 |
|
|
|
228,925 |
|
Total liabilities and stockholders’ equity |
$ |
1,006,250 |
|
|
$ |
581,400 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cricut, Inc.Condensed Consolidated
Statements of Cash Flows(in
thousands) |
|
|
Years Ended December 31, |
|
|
2021 |
|
|
|
2020 |
|
|
|
2019 |
|
Cash flows from
operating activities: |
|
|
|
|
|
Net income |
$ |
140,473 |
|
|
$ |
154,578 |
|
|
$ |
39,211 |
|
Adjustments to reconcile net income to net cash and cash
equivalents (used in) provided by operating activities: |
|
|
|
|
|
Depreciation and amortization (including amortization of debt
issuance costs) |
|
19,388 |
|
|
|
14,116 |
|
|
|
9,178 |
|
Impairment of trade name |
|
— |
|
|
|
— |
|
|
|
747 |
|
Stock-based compensation |
|
38,074 |
|
|
|
9,484 |
|
|
|
1,845 |
|
Deferred income tax |
|
(135 |
) |
|
|
(2,463 |
) |
|
|
(1,257 |
) |
Non-cash lease expense |
|
4,186 |
|
|
|
— |
|
|
|
— |
|
(Gain) loss on disposal of property and equipment |
|
(2 |
) |
|
|
— |
|
|
|
16 |
|
Provision for inventory obsolescence |
|
5,070 |
|
|
|
2,802 |
|
|
|
5,193 |
|
Provision for doubtful accounts |
|
1,096 |
|
|
|
128 |
|
|
|
699 |
|
Loss on extinguishment of debt |
|
— |
|
|
|
162 |
|
|
|
— |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
Accounts receivable |
|
(37,673 |
) |
|
|
(97,625 |
) |
|
|
(4,876 |
) |
Inventories |
|
(207,978 |
) |
|
|
(37,979 |
) |
|
|
(73,233 |
) |
Prepaid expenses and other current assets |
|
(27,942 |
) |
|
|
(2,991 |
) |
|
|
4,550 |
|
Other assets |
|
(934 |
) |
|
|
(450 |
) |
|
|
(79 |
) |
Accounts payable |
|
(46,667 |
) |
|
|
157,023 |
|
|
|
10,340 |
|
Accrued expenses and other current liabilities and other
non-current liabilities |
|
3,639 |
|
|
|
39,732 |
|
|
|
7,454 |
|
Operating lease liabilities |
|
(4,672 |
) |
|
|
— |
|
|
|
— |
|
Deferred revenue |
|
9,128 |
|
|
|
11,710 |
|
|
|
4,073 |
|
Net cash and cash equivalents (used in) provided by operating
activities |
|
(104,949 |
) |
|
|
248,227 |
|
|
|
3,861 |
|
Cash flows from
investing activities: |
|
|
|
|
|
Acquisitions of property and equipment, including capitalized
software development costs |
|
(35,786 |
) |
|
|
(21,842 |
) |
|
|
(14,095 |
) |
Net cash and cash equivalents (used in) provided by investing
activities |
|
(35,786 |
) |
|
|
(21,842 |
) |
|
|
(14,095 |
) |
Cash flows from
financing activities: |
|
|
|
|
|
Proceeds from capital contributions |
|
200 |
|
|
|
1,088 |
|
|
|
1,296 |
|
Proceeds from issuance of common stock upon initial public
offering, net of offering costs |
|
262,007 |
|
|
|
— |
|
|
|
— |
|
Repurchase of compensatory units |
|
(170 |
) |
|
|
(3,038 |
) |
|
|
(728 |
) |
Proceeds from exercise of stock options |
|
272 |
|
|
|
— |
|
|
|
— |
|
Employee tax withholding payments on stock-based awards |
|
(2,017 |
) |
|
|
— |
|
|
|
— |
|
Payments on term loan |
|
— |
|
|
|
(22,917 |
) |
|
|
(4,417 |
) |
Drawdowns on revolving loan |
|
— |
|
|
|
228,269 |
|
|
|
502,730 |
|
Payments on revolving loan |
|
— |
|
|
|
(260,862 |
) |
|
|
(487,755 |
) |
Payments on capital leases |
|
— |
|
|
|
(81 |
) |
|
|
(127 |
) |
Payments for debt issuance costs |
|
— |
|
|
|
(854 |
) |
|
|
(103 |
) |
Cash dividend |
|
— |
|
|
|
(51,202 |
) |
|
|
— |
|
Other financing activities, net |
|
(48 |
) |
|
|
(1,318 |
) |
|
|
— |
|
Net cash and cash equivalents (used in) provided by financing
activities |
|
260,244 |
|
|
|
(110,915 |
) |
|
|
10,896 |
|
Effect of exchange rate on
changes on cash and cash equivalents |
|
(127 |
) |
|
|
92 |
|
|
|
(25 |
) |
Net increase in cash and cash
equivalents |
|
119,382 |
|
|
|
115,562 |
|
|
|
637 |
|
Cash and cash equivalents at
beginning of period |
|
122,215 |
|
|
|
6,653 |
|
|
|
6,016 |
|
Cash and cash equivalents at
end of period |
$ |
241,597 |
|
|
$ |
122,215 |
|
|
$ |
6,653 |
|
Supplemental
disclosures of cash flow information: |
|
|
|
|
|
Cash paid during the period
for interest |
|
14 |
|
|
|
1,306 |
|
|
|
3,301 |
|
Cash paid during the period
for income taxes |
|
81,132 |
|
|
|
42,315 |
|
|
|
6,652 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Revenue: |
|
|
|
|
|
|
|
Connected machines |
$ |
158,105 |
|
|
$ |
170,915 |
|
|
$ |
548,205 |
|
|
$ |
416,714 |
|
Subscriptions |
|
55,743 |
|
|
|
36,923 |
|
|
|
205,858 |
|
|
|
111,337 |
|
Accessories and materials |
|
173,978 |
|
|
|
163,128 |
|
|
|
552,164 |
|
|
|
430,979 |
|
Total revenue |
|
387,826 |
|
|
|
370,966 |
|
|
|
1,306,227 |
|
|
|
959,030 |
|
Cost of revenue: |
|
|
|
|
|
|
|
Connected machines |
|
160,467 |
|
|
|
146,253 |
|
|
|
484,025 |
|
|
|
351,898 |
|
Subscriptions |
|
6,444 |
|
|
|
4,164 |
|
|
|
21,961 |
|
|
|
13,125 |
|
Accessories and materials |
|
116,093 |
|
|
|
95,800 |
|
|
|
342,791 |
|
|
|
261,633 |
|
Total cost of revenue |
|
283,004 |
|
|
|
246,217 |
|
|
|
848,777 |
|
|
|
626,656 |
|
Gross profit |
|
104,822 |
|
|
|
124,749 |
|
|
|
457,450 |
|
|
|
332,374 |
|
Operating expenses: |
|
|
|
|
|
|
|
Research and development |
|
22,979 |
|
|
|
11,146 |
|
|
|
79,814 |
|
|
|
38,930 |
|
Sales and marketing |
|
43,151 |
|
|
|
23,785 |
|
|
|
133,963 |
|
|
|
63,329 |
|
General and administrative |
|
12,851 |
|
|
|
10,234 |
|
|
|
51,268 |
|
|
|
29,602 |
|
Total operating expenses |
|
78,981 |
|
|
|
45,165 |
|
|
|
265,045 |
|
|
|
131,861 |
|
Income from operations |
|
25,841 |
|
|
|
79,584 |
|
|
|
192,405 |
|
|
|
200,513 |
|
Total other expense, net |
|
(41 |
) |
|
|
(76 |
) |
|
|
(32 |
) |
|
|
(1,320 |
) |
Income before provision for
income taxes |
|
25,800 |
|
|
|
79,508 |
|
|
|
192,373 |
|
|
|
199,193 |
|
Provision for income
taxes |
|
13,876 |
|
|
|
18,060 |
|
|
|
51,900 |
|
|
|
44,615 |
|
Net income |
$ |
11,924 |
|
|
$ |
61,448 |
|
|
$ |
140,473 |
|
|
$ |
154,578 |
|
Other comprehensive income
(loss): |
|
|
|
|
|
|
|
Change in foreign currency translation adjustment, net of tax |
|
(39 |
) |
|
|
84 |
|
|
|
(64 |
) |
|
|
37 |
|
Comprehensive income |
|
11,885 |
|
|
|
61,532 |
|
|
|
140,409 |
|
|
|
154,615 |
|
Earnings per share, basic |
$ |
0.06 |
|
|
$ |
0.30 |
|
|
$ |
0.67 |
|
|
$ |
0.74 |
|
Earnings per share,
diluted |
$ |
0.05 |
|
|
$ |
0.30 |
|
|
$ |
0.64 |
|
|
$ |
0.74 |
|
Weighted-average common shares
outstanding, basic |
|
210,776,177 |
|
|
|
208,116,104 |
|
|
|
208,833,827 |
|
|
|
208,116,104 |
|
Weighted-average common shares
outstanding, diluted |
|
222,897,188 |
|
|
|
208,116,104 |
|
|
|
219,776,069 |
|
|
|
208,116,104 |
|
|
|
|
|
|
|
|
|
Use of Non-GAAP Financial Measures
EBITDA and EBITDA Margin
We calculate EBITDA as net income adjusted to exclude: interest
expense, net; income taxes; and depreciation and amortization
expense. Stock-based compensation is included in our EBITDA
calculation. EBITDA Margin is calculated by dividing EBITDA by
total revenue.
We use EBITDA and EBITDA Margin as a measure of operating
performance in our business. We believe this non-GAAP financial
measure is useful to investors for period-to-period comparisons of
our business and in understanding and evaluating our results of
operations for the following reasons:
- EBITDA and EBITDA
Margin are widely used by investors and securities analysts to
measure a company’s operating performance without regard to items
such as depreciation and amortization expense, interest expense and
income taxes that can vary substantially from company to company
depending upon their financing and the method by which assets were
acquired;
- Our management uses
EBITDA and EBITDA Margin in conjunction with financial measures
prepared in accordance with GAAP for planning purposes, including
the preparation of our annual operating budget, as a measure of our
core results of operations and the effectiveness of our business
strategy and in evaluating our financial performance; and
- EBITDA and EBITDA
Margin provide consistency and comparability with our past
financial performance, facilitate period-to-period comparisons of
our core results of operations and also facilitate comparisons with
other peer companies, many of which use similar non-GAAP financial
measures to supplement their GAAP results.
Our use of EBITDA and EBITDA Margin has limitations as an
analytical tool, and you should not consider these measures in
isolation or as substitutes for analysis of our financial results
as reported under GAAP. Some of these limitations are, or may in
the future be, as follows:
- Although
depreciation and amortization expense are non-cash charges, the
assets being depreciated and amortized may have to be replaced in
the future, and EBITDA and EBITDA Margin do not reflect cash
capital expenditure requirements for such replacements or for new
capital expenditure requirements;
- EBITDA and EBITDA
Margin do not reflect the portion of software development costs
that we capitalize under GAAP, which has recently been, and will
continue to be for the foreseeable future, a significant recurring
expense for our business and an important part of our investment in
new products;
- EBITDA
and EBITDA Margin do not reflect: (i) changes in, or cash
requirements for, our working capital needs, (ii) interest expense,
or the cash requirements necessary to service interest or principal
payments on our debt, which reduces cash available to us or (iii)
tax payments that may represent a reduction in cash available to
us.
Because of these limitations, we believe EBITDA and EBITDA
Margin should be considered along with other operating and
financial performance measures presented in accordance with
GAAP.
Beginning the first quarter ending March 31, 2022, we will be
able to provide year-over-year earnings per share comparisons post
IPO. Therefore going forward, management will begin focusing on
operating income and earnings per share as the key metrics for
measuring operating performance and managing the long-term
business. Fourth quarter 2021 will be the last time we highlight
EBITDA as a key metric. Note that operating income is closely
aligned with how we have calculated EBITDA.
The following table presents a reconciliation of EBITDA to net
income and EBITDA Margin to net income margin, the most directly
comparable financial measures prepared in accordance with GAAP, for
each of the periods indicated:
|
Three Months EndedDecember
31, |
|
Years EndedDecember 31, |
|
|
2021 |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
2019 |
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
11,924 |
|
|
$ |
61,448 |
|
|
$ |
7,789 |
|
|
$ |
140,473 |
|
|
$ |
154,578 |
|
|
$ |
39,211 |
|
Net income margin |
|
3.1 |
% |
|
|
16.6 |
% |
|
|
4.5 |
% |
|
|
10.8 |
% |
|
|
16.1 |
% |
|
|
8.1 |
% |
Adjusted to exclude the
following: |
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization expense |
$ |
5,956 |
|
|
$ |
3,906 |
|
|
$ |
2,787 |
|
|
$ |
19,109 |
|
|
$ |
14,003 |
|
|
$ |
9,108 |
|
Interest expense, net |
$ |
26 |
|
|
$ |
74 |
|
|
$ |
1,229 |
|
|
$ |
159 |
|
|
$ |
1,155 |
|
|
$ |
3,291 |
|
Corporate income tax expense |
$ |
13,876 |
|
|
$ |
18,060 |
|
|
$ |
2,502 |
|
|
$ |
51,900 |
|
|
$ |
44,615 |
|
|
$ |
11,057 |
|
EBITDA |
$ |
31,782 |
|
|
$ |
83,488 |
|
|
$ |
14,307 |
|
|
$ |
211,641 |
|
|
$ |
214,351 |
|
|
$ |
62,667 |
|
EBITDA margin |
|
8.2 |
% |
|
|
22.5 |
% |
|
|
8.2 |
% |
|
|
16.2 |
% |
|
|
22.4 |
% |
|
|
12.9 |
% |
Note: EBITDA includes stock-based compensation expense of $10.1
million for the three months ended December 31, 2021, $4.5
million for the three months ended December 31, 2020, and $0.6
million for the three months ended December 31, 2019. EBITDA
includes stock-based compensation expense of $38.1 million for the
year ended December 31, 2021, $9.5 million for the year ended
December 31, 2020, and $1.8 million for the year ended December 31,
2019. EBITDA includes $29.9 million in recurring stock-based
compensation expense and $8.2 million in one-time expenses related
to the corporate reorganization associated with the IPO in the year
ended December 31, 2021.
Media Contact:
Kriselle Laran
pr@cricut.com
Investor Contact:
Stacie Clements
investors@cricut.com
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