Cricut Inc (CRCT) 2022 Q4 法說會逐字稿

Good day. Thank you for standing by. Welcome to the Cricut Q4 Full Year 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. (Operator Instructions) Please be advised that today's conference is being recorded.

再會。謝謝你的支持。歡迎來到 Cricut 2022 年第四季度全年收益電話會議。此時，所有參與者都處於只聽模式。演講者的演講結束後，將進行問答環節。 （操作員說明）請注意，今天的會議正在錄製中。

I would like to turn the conference over now to Stacie Clements from Blueshirt Group. Please go ahead.

我想現在將會議轉交給 Blueshirt Group 的 Stacie Clements。請繼續。

Thank you, operator, and good afternoon, everyone. Thank you for joining us on Cricut's fourth quarter and year ended 2022 earnings call.

謝謝接線員，大家下午好。感謝您加入我們參加 Cricut 的第四季度和截至 2022 年的財報電話會議。

Please note that today's call is being webcast and recorded on the Investor Relations section of the company's website. A replay of the webcast will also be available following today's call. For your reference, accompanying slides used on today's call, along with a supplemental data sheet, have been posted to the Investor Relations section of the company's website, investor.cricut.com.

請注意，今天的電話會議將在公司網站的投資者關係部分進行網絡直播和錄音。在今天的電話會議之後，還將提供網絡廣播的重播。供您參考，今天電話會議中使用的隨附幻燈片以及補充數據表已發佈到公司網站 investor.cricut.com 的投資者關係部分。

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

今天和我一起參加電話會議的有首席執行官 Ashish Arora 和首席財務官 Kimball Shill。今天準備好的發言已經錄製完畢，之後 Ashish 和 Kimball 將主持現場問答。

Before we begin, we would like to remind everyone that our prepared remarks contain forward-looking statements and management may make additional forward-looking statements, including statements regarding our strategies, business, expenses, and results of operations, in response to your questions. These statements do not guarantee future performance, and therefore, undue reliance should not be placed upon them. These statements are based on current expectations of the company's management and involve inherent risks and uncertainties, including those identified in the Risk Factors section of Cricut's most recently filed Form 10-Q. Actual events or results could differ materially. This call also contains time-sensitive information that is accurate only as of the date of this broadcast, March 7, 2023. Cricut assumes no obligation to update any forward-looking projection that may be made in today's release or call.

在我們開始之前，我們想提醒大家，我們準備好的評論包含前瞻性陳述，管理層可能會做出額外的前瞻性陳述，包括關於我們的戰略、業務、費用和運營結果的陳述，以回答您的問題。這些陳述不保證未來的表現，因此，不應過分依賴它們。這些聲明基於公司管理層當前的預期，涉及固有的風險和不確定性，包括 Cricut 最近提交的 10-Q 表格的風險因素部分中確定的風險和不確定性。實際事件或結果可能存在重大差異。此電話會議還包含時間敏感信息，這些信息僅在本次廣播之日（2023 年 3 月 7 日）之前是準確的。Cricut 不承擔更新今天發布或電話會議中可能做出的任何前瞻性預測的義務。

And with that, I will now turn the call over to Ashish.

有了這個，我現在將把電話轉給 Ashish。

Thank you Stacie, and welcome everyone. I want to acknowledge up front that we expected 2022 to be a much better year for Cricut than the results we discuss today reflect. Entering the year, we expected to sell more connected machines and accessories and materials. That said, we added 1.5 million new users in 2022, ending the year with nearly 7.9 million total users on the Cricut platform, just shy of our initial expectations at the beginning of the year of 8 million users, boosted in part by strong connected machine sales in Q4 2021 and the first two months of 2022.

謝謝 Stacie，歡迎大家。我想預先承認，我們預計 2022 年對 Cricut 來說比我們今天討論的結果要好得多。進入這一年，我們預計會銷售更多連接的機器、配件和材料。也就是說，我們在 2022 年增加了 150 萬新用戶，到年底，Cricut 平台上的用戶總數接近 790 萬，略低於我們年初 800 萬用戶的初步預期，部分原因是強大的聯網機器2021 年第四季度和 2022 年前兩個月的銷售額。

Subscriptions also continued to grow notwithstanding the headwinds for our physical products. Despite my disappointment in our 2022 financial performance, I'm extremely proud and grateful for the team's focus and all we accomplished over the past year. Let me explain why. We significantly grew our subscriptions business. We ended the year with 2.6 million paid subscribers, up 28% over 2021. New features and functionality drove an increase in attach rates over the year, a particularly noteworthy highlight that suggests we are not just converting new users into Cricut Access, but also reclaiming existing users. The number of engaged users who cut on the platform increased sequentially in Q4, as expected with typical holiday seasonality. We also saw a significant increase in user interactions like bookmarks and shared projects across the Cricut platform after rolling out multiple new user touchpoints and enhancements.

儘管我們的實體產品遇到不利因素，但訂閱量也繼續增長。儘管我對我們 2022 年的財務表現感到失望，但我對團隊的專注以及我們在過去一年中取得的成就感到非常自豪和感激。讓我解釋一下為什麼。我們顯著發展了訂閱業務。我們在年底擁有 260 萬付費用戶，比 2021 年增長了 28%。新特性和功能推動了這一年的附加率增加，這是一個特別值得注意的亮點，表明我們不僅將新用戶轉化為 Cricut Access，而且還回收現有用戶。正如預期的典型假期季節性一樣，第四季度在該平台上退出的參與用戶數量連續增加。在推出多個新的用戶接觸點和增強功能後，我們還看到 Cricut 平台上的書籤和共享項目等用戶交互顯著增加。

Earlier in 2022, coming off a high-growth pandemic period, retailers reset inventory targets, which put additional pressure on our Connected Machines and Accessories and Materials revenue. We worked diligently with our retail partners to better adjust those levels to their new targets and managed down channel inventory over the second half of the year. As a result, we started 2023 in a much healthier position. We also moved quickly to re-focus investments towards higher impact initiatives and tightened operating expenses, delivering our sixth consecutive year of net income profitability. We will continue to operate the company in a fiscally disciplined way. The opportunity for growth and international expansion has never been stronger. As we entered 2023, we will intensify our focus around new user acquisition and platform expansion in order to drive engagement, subscriptions and increased monetization. We are also on a focused two-year path to re-accelerate growth in Accessories and Materials.

2022 年初，在經歷了高增長的大流行時期後，零售商重新設定了庫存目標，這給我們的互聯機器、配件和材料收入帶來了額外壓力。我們與我們的零售合作夥伴努力合作，以更好地將這些水平調整到他們的新目標，並在今年下半年管理下游渠道庫存。因此，我們在 2023 年開始時處於更健康的狀態。我們還迅速採取行動，重新將投資重點轉向影響更大的計劃並收緊運營費用，實現了我們連續第六年實現淨利潤盈利。我們將繼續以財政紀律的方式經營公司。增長和國際擴張的機會從未如此強大。隨著我們進入 2023 年，我們將加強對新用戶獲取和平台擴展的關注，以推動參與、訂閱和增加貨幣化。我們還專注於為期兩年的路徑，以重新加速配件和材料的增長。

Let me walk through each of these. We acquire new users when someone buys a connected machine. We believe that we are in the early days of market development and have only penetrated 6% of our serviceable addressable market from our top six markets, including the US, Canada, UK, France, Germany and Australia. This is up from 3% two years ago, as Cricut has become a more widely recognized global brand. In 2022, we launched in five new countries and now partner with a network of distributors in over 50 countries. Our international growth remains a key priority in 2023 as we deploy the same playbook that has grown our business in North America. In addition, the investments we make today in new user acquisition, engagement and monetization can be leveraged across all markets. We believe our focus on industrial design, innovation, and our platform approach, along with our connected integration between design space, content, materials and our connected machines, positions us well in the market.

讓我逐一介紹。當有人購買聯網機器時，我們會獲得新用戶。我們認為，我們正處於市場發展的早期階段，在我們的前六大市場（包括美國、加拿大、英國、法國、德國和澳大利亞）中，我們僅滲透了 6% 的可服務目標市場。這比兩年前的 3% 有所上升，因為 Cricut 已成為更廣泛認可的全球品牌。 2022 年，我們在五個新國家/地區推出產品，現在與 50 多個國家/地區的分銷商網絡合作。我們的國際增長仍然是 2023 年的重中之重，因為我們採用了在北美髮展業務的相同策略。此外，我們今天在新用戶獲取、參與和貨幣化方面所做的投資可以在所有市場中得到利用。我們相信，我們對工業設計、創新和平台方法的關注，以及我們在設計空間、內容、材料和聯網機器之間的互聯整合，使我們在市場上處於有利地位。

Over the past year, we have conducted numerous research studies to understand our consumers and their purchase journey. Our research shows that we have a healthy top-of-funnel today with significant opportunity to drive consumer interest and shorten the path to purchase. There are several strategic initiatives in progress today to help simplify the journey from discovery to research to purchase. Our research also shows that we are reaching a broader and more diverse demographic, with nearly 50% of new users identifying as beginner crafters, almost double the rate of 2019 users. And even as we reach less experienced crafters, these new users are as likely to purchase our high-end machines and ultimately engage similarly to more experienced new users.

在過去的一年裡，我們進行了大量的研究，以了解我們的消費者和他們的購買歷程。我們的研究表明，我們今天擁有一個健康的漏斗頂部，有很大的機會來激發消費者的興趣並縮短購買路徑。今天有幾項戰略舉措正在進行中，以幫助簡化從發現到研究再到購買的過程。我們的研究還表明，我們正在覆蓋更廣泛、更多樣化的人群，近 50% 的新用戶被認定為初學者手工藝者，幾乎是 2019 年用戶的兩倍。即使我們接觸到經驗不足的工匠，這些新用戶也有可能購買我們的高端機器，並最終與更有經驗的新用戶進行類似的互動。

We are also broadening our reach as we attract more Gen Z and Millennials. Going forward, we'll plan and design our marketing use cases to appeal to a broader audience, while still providing the right tools and resources for the more advanced user. A majority of new users are introduced and interact with Cricut at multiple touch-points prior to actively researching the brand. Word-of-mouth through friends and family and social channels, YouTube, TikTok, Pinterest, Facebook, and Instagram continue to play a key role as the initial touch-point for nearly 80% of our new users.

隨著我們吸引更多 Z 世代和千禧一代，我們也在擴大我們的影響力。展望未來，我們將規劃和設計我們的營銷用例以吸引更廣泛的受眾，同時仍然為更高級的用戶提供合適的工具和資源。在積極研究品牌之前，大多數新用戶都會被介紹並在多個接觸點與 Cricut 互動。通過朋友、家人和社交渠道的口耳相傳，YouTube、TikTok、Pinterest、Facebook 和 Instagram 繼續發揮著關鍵作用，作為我們近 80% 的新用戶的初始接觸點。

Earlier in the year, we improved our audience targeting, launched new creative assets and refreshed content on Cricut.com. We continue to expand our influencer partnerships with greater focus around micro-influencers that have the ability to increase brand presence and impact social engagement across video platforms like TikTok and YouTube. Beyond the initial touch-point, we are also focused on a simpler more streamlined purchase journey as we continue to roll-out several new creative assets and tools that bring relevant information to consumers more quickly across all channels. Last month we launched improved product comparison charts and are developing a new, simple quiz to help consumers decide which machine is right for them.

今年早些時候，我們改進了受眾定位，在 Cricut.com 上推出了新的創意資產和更新的內容。我們繼續擴大我們的影響者合作夥伴關係，更加關注微型影響者，這些影響者有能力提高品牌知名度並影響 TikTok 和 YouTube 等視頻平台的社交參與度。除了最初的接觸點之外，我們還專注於更簡單、更精簡的購買旅程，因為我們繼續推出一些新的創意資產和工具，通過所有渠道更快地為消費者提供相關信息。上個月，我們推出了改進後的產品比較圖表，並正在開發一個新的、簡單的測驗來幫助消費者決定哪種機器適合他們。

We are making changes to our website and digital marketing execution to pull users through the funnel to conversion. Many of these updates will be rolled out across our retail channels and global markets. We believe this strategy will help bring more users into the funnel as well as shorten the typical purchasing path for consumers. By investing in these initiatives now, we will position the Cricut brand for growth and accelerate the purchase decision for when consumer spend returns.

我們正在對我們的網站和數字營銷執行進行更改，以通過渠道吸引用戶進行轉化。其中許多更新將在我們的零售渠道和全球市場推出。我們相信這一策略將有助於將更多用戶帶入渠道，並縮短消費者的典型購買路徑。通過現在投資這些舉措，我們將為 Cricut 品牌定位增長，並加快消費者支出回報時的購買決策。

We're also focused on increasing user engagement, which starts the moment we acquire a user. Our data shows that the first few weeks of a new user's experience is often indicative of their engagement over-time. In Q4, we introduced a new onboarding process. We have been testing a series of lesson plans for Explore 3 and Maker 3 with a small population of our users, and are pleased with the initial results. We plan to scale our learnings, expand these initiatives over more machines and continue to refine our approach. Once onboarded, our focus turns to frequency of engagement. Over half of our user base cut on our platform in Q4, and 74% of users cut a project in 2022.

我們還專注於提高用戶參與度，這從我們獲得用戶的那一刻開始。我們的數據表明，新用戶體驗的前幾週通常表明他們會隨著時間的推移而參與。在第四季度，我們引入了新的入職流程。我們一直在為一小部分用戶測試 Explore 3 和 Maker 3 的一系列課程計劃，並對初步結果感到滿意。我們計劃擴展我們的學習，將這些計劃擴展到更多機器上，並繼續改進我們的方法。一旦入職，我們的重點就會轉向參與頻率。超過一半的用戶群在第四季度在我們的平台上削減了，74% 的用戶在 2022 年削減了一個項目。

We have embarked on a number of initiatives to help increase user engagement. In line with that, I'm excited to announce that we have appointed one of our senior leaders to a new role entirely dedicated to user engagement. She previously was responsible for our connected machines portfolio and is one of our most seasoned leaders. Two years ago, we took a similar approach to our Subscriptions business, which resulted in revenue growth and higher attach rates. Both of these leaders will work in tandem, with expanded decision rights to drive strategic plans and roadmaps across several cross functional groups and are ultimately responsible for delivering results for engagement and subscriptions.

我們已經開展了多項舉措來幫助提高用戶參與度。為此，我很高興地宣布，我們已任命一位高級領導擔任一個完全致力於用戶參與的新角色。她之前負責我們的聯網機器產品組合，是我們經驗最豐富的領導者之一。兩年前，我們對訂閱業務採取了類似的方法，這導致了收入增長和更高的附加率。這兩位領導者將協同工作，擴大決策權，以推動跨多個跨職能部門的戰略計劃和路線圖，並最終負責交付參與和訂閱的結果。

Inspiration drives engagement. Our research studies show that 16% of users get their project inspiration directly from Design Space and 25% from all other social media. This gives us significant opportunity to increase traffic sooner in the creative process, offering users thousands of ideas to help inspire and accelerate cutting. We believe that our investments in mobile experiences and other platform enhancements will play a crucial role in this strategy. In the fourth quarter, we saw a significant increase in bookmarks over Q3. We ended the year with over 150 million total bookmarks, an increase of nearly 30 million sequentially, making it easier for users to save ideas for later use when they come back.

靈感驅動參與。我們的研究表明，16% 的用戶直接從 Design Space 獲得項目靈感，25% 從所有其他社交媒體獲得靈感。這為我們提供了重要的機會，可以在創作過程中更快地增加流量，為用戶提供數以千計的想法來幫助激發和加速剪輯。我們相信，我們在移動體驗和其他平台增強方面的投資將在這一戰略中發揮關鍵作用。在第四季度，我們看到書籤數量比第三季度有了顯著增加。到年底，我們的書籤總數超過 1.5 億個，環比增加了近 3000 萬個，使用戶更容易保存想法以備日後使用。

Subscribers are the most valuable members in our platform and drive increased engagement activities versus non-subscribers. We ended the year with 2.6 million paid subscribers, a 28% increase year-over-year. This growth is the direct result of investments we've made over the past 12 to 18 months as we better communicate the value proposition to users in more places throughout their Cricut experience. For example, in Q4 we used the onboarding process to optimize messaging around the benefits of Cricut Access. We also added more merchandising touch-points within the engagement journey, giving us the ability to advertise annual subscription plans more effectively. This latter effort is already showing promising improvement to the mix of annual versus monthly plan sign ups, without impacting attach rate.

訂戶是我們平台中最有價值的成員，與非訂戶相比，他們推動了更多的參與活動。截至年底，我們擁有 260 萬付費用戶，同比增長 28%。這種增長是我們在過去 12 到 18 個月中進行投資的直接結果，因為我們在更多地方的用戶在 Cricut 體驗中更好地傳達了價值主張。例如，在第四季度，我們使用入職流程來優化圍繞 Cricut Access 優勢的消息傳遞。我們還在參與過程中添加了更多的營銷接觸點，使我們能夠更有效地宣傳年度訂閱計劃。後者的努力已經顯示出在不影響附加率的情況下，對年度與月度計劃註冊組合的改進有希望。

We also continued to expand new content and exclusive Cricut Access features, including automatic background remover, monogram maker, editable images, expanded collections and more. In many cases, these robust, highly requested features become an important part in converting users to subscribers. We're also seeing increased engagement from our Contributing Artist Program, which has accelerated our efforts to bring new, relevant and diverse content to Cricut Access.

我們還繼續擴展新內容和獨有的 Cricut Access 功能，包括自動背景去除器、會標製作器、可編輯圖像、擴展的收藏等。在許多情況下，這些強大的、要求很高的功能成為將用戶轉化為訂閱者的重要部分。我們還看到我們的特約藝術家計劃的參與度有所提高，這加快了我們為 Cricut Access 帶來新的、相關的和多樣化的內容的努力。

Another increasingly important source of content for subscribers comes from community projects. These are projects users create with Cricut images, which sometimes include instructions, a list of materials to use and suggestions on design layout. These community projects pass-through Cricut's curation process to ensure authenticity of content and make-ability. When subscribers find a community project that inspires them, they can instantly personalize it or make it as is, saving them the design time of starting from scratch. This is an example of our community adding value to the platform that subscribers benefit from. Our goal is to make it even easier for Cricut users to share their projects and hence, increase the number of community projects, and significantly increase the value proposition for subscribers.

對訂閱者而言，另一個日益重要的內容來源來自社區項目。這些是用戶使用 Cricut 圖像創建的項目，其中有時包括說明、要使用的材料列表和設計佈局建議。這些社區項目通過 Cricut 的策劃過程，以確保內容的真實性和可製作性。當訂閱者找到激發他們靈感的社區項目時，他們可以立即對其進行個性化設置或按原樣製作，從而節省他們從頭開始的設計時間。這是我們的社區為訂戶從中受益的平台增加價值的一個例子。我們的目標是讓 Cricut 用戶更容易分享他們的項目，從而增加社區項目的數量，並顯著增加訂閱者的價值主張。

And finally, we are increasing our focus on accessories and materials where we believe we have the right to play and to win. We are uniquely positioned to build innovative, high-quality, connected products that integrate with our hardware and our software. Our smart materials are a great example of this. This segment has experienced headwinds since exiting the pandemic as a result of a few consumer dynamics converging at once, including increasing price sensitivity, slower machine sales and less frequent engagement. First, we have seen increased price sensitivity from users, particularly as the current economic situation continues. As consumers become more price sensitive, shopping habits for materials are increasingly shifting from bricks-and-mortar retail to online, third-party marketplaces, where we have seen an emergence of lower cost, lower quality materials. In response, we have started to work with our retail partners to develop differentiated product configurations and promotional strategies by channel to meet the needs of their customers, whether in-store or online. Our goal is to simplify SKUs, to re-engineer and repackage materials, and drive greater supply-chain efficiencies to regain healthier margins, while competing and driving share gain across all channels. Some of this will take time to execute while we move through existing inventory. In the meantime, we will focus on being cost competitive for consumers and take a more deliberate and analytical approach to promotional strategies to maximize margins while capturing our share of the market.

最後，我們正在加大對配件和材料的關注，我們相信我們有權參與其中並取得勝利。我們具有獨特的優勢，可以構建與我們的硬件和軟件集成的創新、高質量、互聯的產品。我們的智能材料就是一個很好的例子。由於一些消費者動態同時融合，包括價格敏感度提高、機器銷售放緩和參與頻率降低，這一細分市場自疫情結束以來經歷了逆風。首先，我們看到用戶對價格的敏感度越來越高，尤其是在當前經濟形勢持續的情況下。隨著消費者對價格變得更加敏感，材料的購物習慣越來越多地從實體零售轉向在線第三方市場，我們已經看到低成本、低質量材料的出現。作為回應，我們已開始與我們的零售合作夥伴合作，按渠道開發差異化的產品配置和促銷策略，以滿足他們客戶的需求，無論是在店內還是在網上。我們的目標是簡化 SKU，重新設計和重新包裝材料，提高供應鏈效率以重新獲得更健康的利潤，同時在所有渠道競爭和推動份額增長。當我們移動現有庫存時，其中一些將需要時間來執行。與此同時，我們將專注於為消費者提供成本競爭力，並採取更加審慎和分析性的促銷策略，以最大限度地提高利潤率，同時佔領我們的市場份額。

Second, the pressure we've experienced in new machines sales has also affected our Accessories and Materials segment. A portion of our Materials business is generated through the sale of machine bundles, which is an effective way to deliver to new users the materials they need to quickly start their journey with Cricut.

其次，我們在新機器銷售方面遇到的壓力也影響了我們的配件和材料部門。我們材料業務的一部分是通過機器捆綁銷售產生的，這是向新用戶提供他們快速開始 Cricut 之旅所需材料的有效方式。

Third, our Accessories and Materials segment is influenced by how much our users cut. The intensity of engagement has been lighter since exiting the pandemic. The strategies we are building to drive engagement and subscriptions should work in parallel with our efforts to build a more robust online channel with our retail partners and together, will reignite growth in Accessories and Materials. We believe all of these things together increase user engagement, combined with new product bundles, pricing and cost structures will be a two-year journey to re-accelerate this segment of the business.

第三，我們的配件和材料部門受到用戶削減量的影響。自大流行結束以來，參與的強度有所減輕。我們為推動參與和訂閱而製定的戰略應與我們與零售合作夥伴建立更強大的在線渠道的努力同時進行，並共同重振配件和材料的增長。我們相信，所有這些因素共同提高了用戶參與度，再加上新的產品組合、定價和成本結構，將需要兩年的時間來重新加速這一業務領域的發展。

In summary, we are creating greater alignment within the organization to drive our key priorities; acquiring new users globally, driving increased engagement and subscriptions, and structuring our Accessories and Materials business for long-term success. We have in-depth knowledge of our user base and have identified multiple opportunities to grow and increase monetization over the long-term. Our focus on strengthening every facet of the platform will help enable long-term sustainable growth and further enhance our defensible moat, with recurring monetization opportunities that are more characteristic of a platform business. Although the current macro environment will impact overall growth in the short term, the initiatives we are deploying now will position us well for when consumer spend returns.

總而言之，我們正在組織內部建立更大的一致性，以推動我們的關鍵優先事項；在全球範圍內獲取新用戶，提高參與度和訂閱量，並構建我們的配件和材料業務以取得長期成功。我們對我們的用戶群有深入的了解，並發現了多種長期增長和增加貨幣化的機會。我們專注於加強平台的各個方面，這將有助於實現長期可持續增長，並進一步增強我們的防禦護城河，並提供更多平台業務特徵的經常性貨幣化機會。儘管當前的宏觀環境會在短期內影響整體增長，但我們現在正在部署的舉措將使我們在消費者支出回報時處於有利地位。

I'll now turn the call over to Kimball for the financials.

我現在將電話轉給 Kimball 以獲取財務信息。

Thank you, Ashish, and welcome everyone. Although consumer spend continues to be soft, Q4 delivered typical seasonal strength in connected machine revenue, new user growth, subscriptions revenue and user engagement.

謝謝你，Ashish，歡迎大家。儘管消費者支出繼續疲軟，但第四季度在聯網機器收入、新用戶增長、訂閱收入和用戶參與度方面表現出典型的季節性強勢。

In the fourth quarter, we generated revenue of $280.8 million, a 28% decline compared to prior year Q4 and generated $10.9 million in net income as we continued to invest in our key priorities. Full year revenue was $886.3 million, a 32% decline over 2021. Keep in mind, most of 2021 reflected unusually high growth due to the pandemic.

第四季度，我們的收入為 2.808 億美元，與去年第四季度相比下降 28%，並且由於我們繼續投資於我們的主要優先事項，因此產生了 1090 萬美元的淨收入。全年收入為 8.863 億美元，比 2021 年下降 32%。請記住，2021 年的大部分時間都反映出由於大流行導致的異常高增長。

Breaking revenue down further, revenue from connected machines for the year was $252.6 million, down 54% over 2021, reflecting softer consumer spend and excess channel inventory levels throughout most of the year. In mid-2022, retailers began initiating lower inventory target levels in preparation for a weaker economy, as such, Connected Machine revenue doesn't necessarily align with the increase in new user growth over the year. In working with our retail partners, we prioritized channel inventory and entered 2023 with healthier alignment between sell-in and sell-out.

進一步細分收入，全年聯網機器的收入為 2.526 億美元，比 2021 年下降 54%，反映出全年大部分時間消費者支出疲軟和渠道庫存水平過高。 2022 年年中，零售商開始降低庫存目標水平，為疲軟的經濟做準備，因此，Connected Machine 收入不一定與全年新用戶增長的增長保持一致。在與我們的零售合作夥伴合作時，我們優先考慮渠道庫存並進入 2023 年，在進銷存之間實現更健康的協調。

Revenue from Accessories and Materials for the year was $361.4 million, down 35% over 2021. Similar to connected machines, we entered 2022 with heavy channel inventory, making a tough year-over-year comparison. We continue to see pressure in Accessories and Materials from the dynamics Ashish mentioned earlier, which contributed to the decline in revenue and ARPU. Our strategy for reacceleration in this segment is focused on cost reductions over-time, sound promotional strategies for increased market share, more machine and materials bundles across more diverse channels, and driving an overall increase in user engagement.

全年配件和材料的收入為 3.614 億美元，比 2021 年下降 35%。與聯網機器類似，我們進入 2022 年時渠道庫存量很大，因此很難進行同比比較。我們繼續看到前面提到的動態 Ashish 在配件和材料方面的壓力，這導致了收入和 ARPU 的下降。我們在該細分市場的再加速戰略側重於隨著時間的推移降低成本、提高市場份額的合理促銷策略、跨更多樣化渠道的更多機器和材料捆綁，以及推動用戶參與度的整體增長。

Subscriptions revenue for the year was $272.3 million, a 32% increase over 2021 and benefited from targeted investments in Cricut Access and the expansive improvements made over the last several quarters. In terms of geographic breakdown, international revenue was $142.3 million, compared to $148.5 million in 2021. As a percentage of total revenue, international was 16%, compared to 11% of total revenue in 2021.

全年訂閱收入為 2.723 億美元，比 2021 年增長 32%，這得益於對 Cricut Access 的有針對性的投資以及過去幾個季度所做的廣泛改進。就地域細分而言，國際收入為 1.423 億美元，而 2021 年為 1.485 億美元。國際收入佔總收入的百分比為 16%，而 2021 年為 11%。

Turning to users and engagement. I'm pleased to share we ended the year with nearly 7.9 million total users, or 23% growth over 2021. Despite softer consumer spend throughout the year, this was just shy of our 8 million total user expectation at the beginning of 2022. We ended the year with over 4 million users who cut a project on a machine within the last 90 days. This is up 6% from 2021. To put this in perspective, in 2022, 74% of total users cut a project in the last 12 months. Through the initiatives Ashish outlined, we have a significant opportunity to reach these users, which is three quarters of our total user base. We ended the year with over 2.6 million paid subscribers, up 28% from end of 2021. Attach rates were strong at 33%, up from 32% last year.

轉向用戶和參與。我很高興地與大家分享，我們在年底的總用戶數接近 790 萬，比 2021 年增長了 23%。儘管全年消費者支出疲軟，但這僅略低於我們在 2022 年初的 800 萬總用戶預期。我們到年底，超過 400 萬用戶在過去 90 天內在機器上完成了項目。這比 2021 年增長了 6%。從這個角度來看，到 2022 年，74% 的用戶總數在過去 12 個月內削減了一個項目。通過 Ashish 概述的舉措，我們有很大的機會接觸到這些用戶，這些用戶占我們總用戶群的四分之三。截至今年年底，我們擁有超過 260 萬付費用戶，比 2021 年底增長了 28%。訂閱率高達 33%，高於去年的 32%。

ARPU for Subscriptions for the year was $38.09, slightly down from $38.37 in 2021. For context, three factors generally explain variability in subscription ARPU from one period to the next, when subscribers are growing and attach rates remain high, timing of signups, mix of new versus renewals subscriptions, and the increasing mix of international subscriptions. Accessories and Materials ARPU was $50.54 for the year, compared to $102.91 in 2021. We believe with renewed focus, we can re-accelerate accessories and materials revenue over-time.

全年訂閱的 ARPU 為 38.09 美元，略低於 2021 年的 38.37 美元。就上下文而言，三個因素通常可以解釋訂閱 ARPU 從一個時期到下一個時期的變化，當訂閱者在增長並且附加率仍然很高時，註冊時間，混合新訂閱與續訂訂閱，以及越來越多的國際訂閱組合。配件和材料 ARPU 全年為 50.54 美元，而 2021 年為 102.91 美元。我們相信，通過重新關注，我們可以重新加速配件和材料收入的增長。

Moving to gross margin. Total gross margin in the fourth quarter was 30%, an improvement compared to 27% in Q4 2021. As a reminder, Q4 has seasonal pressure due to increased revenue contribution from connected machines. Breaking gross margin down further. Gross margin from connected machines was 2.8%. This compares to a negative 1.5% in Q4 of last year, when we elected to take price protection on Air 2 and Maker units in channel. For the full year, Connected Machine margin was 3.3%, down from 11.7% in 2021, and was primarily impacted by higher fixed costs as a percentage of revenue in warehousing and operations expense, along with increased warranty expense and promotional activity.

轉向毛利率。第四季度的總毛利率為 30%，與 2021 年第四季度的 27% 相比有所改善。提醒一下，由於聯網機器的收入貢獻增加，第四季度存在季節性壓力。毛利率進一步下滑。聯網機器的毛利率為 2.8%。相比之下，去年第四季度為負 1.5%，當時我們選擇對渠道中的 Air 2 和 Maker 設備採取價格保護措施。全年，Connected Machine 的利潤率為 3.3%，低於 2021 年的 11.7%，這主要受到固定成本佔倉儲和運營費用收入百分比上升以及保修費用和促銷活動增加的影響。

Looking at 2023, decreasing inventory levels along with fixed costs on warehousing and operations expense will continue to put pressure on margins. Partially offsetting this, we expect end-of-life machines to become a smaller part of machine mix, with small incremental improvements to machine margins. Subscriptions gross margin for the full year was 90.3%, up slightly compared to 2021 of 89.3%. Gross margin from Accessories and Materials was impacted by increased promotions, as well as fixed operating costs amortized over lower volumes both for the quarter and the full year. Full year gross margin for Accessories and Materials was 26.5%, compared to 37.9% in 2021. Going forward, we'll continue to be competitive on price.

展望 2023 年，庫存水平下降以及倉儲和運營費用的固定成本將繼續對利潤率構成壓力。部分抵消這一點，我們預計報廢機器將成為機器組合的較小部分，機器利潤率將有小幅增量改善。全年訂閱毛利率為 90.3%，與 2021 年的 89.3% 相比略有上升。配件和材料的毛利率受到促銷活動增加以及本季度和全年銷量下降的固定運營成本的影響。配件和材料的全年毛利率為 26.5%，而 2021 年為 37.9%。展望未來，我們將繼續在價格上具有競爭力。

Turning to operating expenses. We continue to operate the business with discipline and flexibility to navigate current trends. In March, we began to see consumer spend softening and started to reprioritize investments. As a result, we eliminated $50 million of planned spend and investments throughout 2022 and held operating expenses relatively flat year-over-year. Total operating expenses for the year were $269.9 million and included $40.2 million in stock-based compensation expense. This was up less than 2% from $265 million in 2021.

轉向運營費用。我們繼續以紀律和靈活性經營業務，以應對當前趨勢。 3 月，我們開始看到消費者支出疲軟，並開始重新確定投資的優先順序。因此，我們在整個 2022 年取消了 5000 萬美元的計劃支出和投資，並使運營費用同比持平。全年總運營費用為 2.699 億美元，其中包括 4020 萬美元的股票薪酬費用。這比 2021 年的 2.65 億美元增長不到 2%。

Operating income for the year was $80 million, or 9% of revenue, reflecting lower revenues compared to 2021 of $192.4 million, or 14.7% of revenue. Despite the challenges we faced in 2022, we continued to prioritize net income and cash. 2022 was our sixth consecutive year of positive net income. Net income for the year was $60.7 million or $0.28 per diluted share, compared to $140.5 million, or $0.64 per diluted share in 2021.

全年營業收入為 8000 萬美元，佔收入的 9%，與 2021 年的 1.924 億美元（佔收入的 14.7%）相比，收入有所下降。儘管我們在 2022 年面臨挑戰，但我們繼續優先考慮淨收入和現金。 2022 年是我們連續第六年實現正淨收入。全年淨收入為 6070 萬美元或每股攤薄收益 0.28 美元，而 2021 年為 1.405 億美元或每股攤薄收益 0.64 美元。

Turning now to the balance sheet and cash flow. We continue to generate healthy cash flow on an annual basis, which funds annual inventory needs and investments for long-term growth. For the year, we generated $117.7 million in cash from operations, ending with a balance of $299.2 million. This strength allows for a flexible, yet purposeful approach to capital allocation, including returning capital to shareholders. During the year, we repurchased 2.35 million shares of our stock at a cost of $18.5 million. We have $31.5 million remaining in the repurchase program. In addition, on February 15 we used $77 million to pay a special shareholder dividend.

現在轉向資產負債表和現金流量。我們每年繼續產生健康的現金流，為年度庫存需求和長期增長投資提供資金。這一年，我們從運營中產生了 1.177 億美元的現金，期末餘額為 2.992 億美元。這種優勢允許採用靈活而有目的的資本分配方法，包括向股東返還資本。年內，我們以 1850 萬美元的成本回購了 235 萬股股票。我們在回購計劃中還有 3150 萬美元。此外，2 月 15 日，我們使用 7700 萬美元支付了特別股東股息。

As we look ahead to 2023, we continue to see softer consumer spend patterns and are thus taking a conservative approach in our planning. We will continue to take a prudent and prioritized approach to investments, while managing for small, incremental operating margin improvements and healthy cash generation in 2023.

展望 2023 年，我們繼續看到消費者支出模式趨於疲軟，因此在我們的規劃中採取了保守的方法。我們將繼續採取審慎和優先的投資方式，同時在 2023 年實現小幅增量營業利潤率改善和健康的現金產生。

In terms of new user growth, we expect to add fewer new users in 2023 than we did last year. For comparative purposes, user growth in Q1 of 2022 benefited from strong machines sales in Q4 of 2021 and early 2022. Conversely, Q1 2023 will see pressure from softer Q4 holidays sales. In addition, we started 2023 with softer-than-expected Connected Machine sales in January and February. While we have a positive outlook on Subscriptions, lower new users will put pressure on our subscriber growth rate and attach rate.

在新用戶增長方面，我們預計 2023 年新增用戶將比去年少。相比之下，2022 年第一季度的用戶增長得益於 2021 年第四季度和 2022 年初的強勁機器銷售。相反，2023 年第一季度將面臨第四季度假期銷售疲軟的壓力。此外，我們在 2023 年 1 月和 2 月的聯網機器銷售低於預期。雖然我們對訂閱前景持樂觀態度，但新用戶減少將對我們的訂閱增長率和附加率造成壓力。

From a revenue standpoint, we entered 2023 with healthier channel inventory levels and revenue should be more directly linked to consumer demand. In other words, in 2023, Cricut could sell more Connected Machines than in 2022 and yet add fewer new users. As a reminder, Q1 of 2023 will be a tough year-over-year comp and we expect it to be materially below Q1 of last year. We expect year-over-year comps to improve starting in Q2. Gross margins will continue to be pressured. On physical products, higher fixed costs as a percentage of revenue in warehousing and operating expense will continue to be a factor throughout 2023. Accessories and Materials will also continue at a similar promotional cadence to remain price competitive, and we will likely have reserves for aging inventories as it relates to materials, particularly in Q2. As a result, we expect full year Accessories and Materials margins will be similar to Q4 2022 results. Machine gross margins should improve incrementally as machine mix shifts more to our newer machines in the second half of the year.

從收入的角度來看，我們以更健康的渠道庫存水平進入 2023 年，收入應該更直接地與消費者需求掛鉤。換句話說，到 2023 年，Cricut 可以銷售比 2022 年更多的聯網機器，但增加的新用戶會更少。提醒一下，2023 年第一季度將是一個艱難的同比比較，我們預計它會大大低於去年第一季度。我們預計從第二季度開始，同比收入將有所改善。毛利率將繼續受壓。在實體產品方面，固定成本佔倉儲和運營費用收入的百分比將在整個 2023 年繼續成為一個因素。配件和材料也將繼續以類似的促銷節奏保持價格競爭力，我們可能會有老化儲備與材料相關的庫存，尤其是在第二季度。因此，我們預計全年配件和材料利潤率將與 2022 年第四季度的結果相似。隨著機器組合在今年下半年更多地轉向我們的新機器，機器毛利率應該會逐步提高。

We remain focused on managing our profitability, while investing in areas with the highest impact. For 2023, we anticipate small incremental operating margin improvement on an annual basis, with small upticks in the second half that align with stronger seasonality. Should macro conditions worsen, we will continue to manage with the flexibility to make adjustments as needed, just as we demonstrated in 2022. We expect to continue generating healthy cash flow from operations and remain committed to our long-term operating margin targets of 15% to 19%. Our proven model has demonstrated that when we operate at scale and drive topline growth, these margins are achievable.

我們仍然專注於管理我們的盈利能力，同時投資於影響最大的領域。對於 2023 年，我們預計營業利潤率每年將小幅提高，下半年小幅上升與更強的季節性相一致。如果宏觀環境惡化，我們將繼續靈活管理，根據需要進行調整，正如我們在 2022 年所展示的那樣。我們預計將繼續從運營中產生健康的現金流，並繼續致力於實現 15% 的長期運營利潤率目標到 19%。我們經過驗證的模型表明，當我們大規模運營並推動收入增長時，這些利潤率是可以實現的。

With that, I'll turn the call over to the operator for questions.

有了這個，我會把電話轉給接線員詢問問題。

(Operator Instructions) The first question we have is coming from Mark Altschwager of Baird.

（操作員說明）我們的第一個問題來自 Baird 的 Mark Altschwager。

As we look at the gross margin profile of the Machine segment and the Accessories and Material segment in these recent quarters versus a few years ago, how much of the compression is structural, whether related to cost inflation or efforts to drive better affordability versus some more temporary factors? I guess, as another way, could you sort of rebase the gross margin expectations for those segments medium to longer term after you've moved past some of these kind of temporary factors?

當我們查看最近幾個季度機器部門以及配件和材料部門與幾年前相比的毛利率情況時，有多少壓縮是結構性的，無論是與成本通脹有關還是與提高負擔能力的努力相關，而不是更多臨時因素？我想，換句話說，在你擺脫了這些臨時因素之後，你能否重新調整這些細分市場的中長期毛利率預期？

So I'll talk about Machines and Accessories and Materials separately, all of our physical products are being influenced by kind of the cost of peak inventory and the cost of our physical plant footprint over smaller volumes. And that is I think, pressure that continues with us through the year, going through 2023. In terms of magnitude that and the impact of our promotional strategies and promotion loss we've spent on machines are about equal and we were less promotional on the annual basis of machines than we were last year, but still it's a fairly significant portion of our gross margin. We expect machine gross margins to improve incrementally this year as we have our mix shift more towards our newer machines. On the Accessories and Material side, we called out that we will be more promotional and than we were in Q4 in particular, but we were more promotional than people that were for the full year. And we saw share gains from that in our mass and craft channels where we have data, we don't have perfect data every place, but where we do, we saw that. Margins are going to be pressured for 2023 and probably beyond as we go through a journey in our accessories materials business.

因此，我將分別討論機器、配件和材料，我們所有的實物產品都受到峰值庫存成本和我們的實體工廠佔地面積較小的成本的影響。這就是我認為，壓力將持續到 2023 年，一直持續到 2023 年。就其規模以及我們在機器上花費的促銷策略和促銷損失的影響而言，我們在機器上的促銷活動較少機器的年度基礎比我們去年高，但它仍然是我們毛利率的相當大的一部分。我們預計今年機器毛利率將逐步提高，因為我們的產品組合更多地轉向更新的機器。在配件和材料方面，我們呼籲我們將進行更多的促銷活動，特別是在第四季度，但我們的促銷活動比全年的人都多。在我們擁有數據的大眾和工藝渠道中，我們看到了從中獲得的份額收益，我們並不是每個地方都有完美的數據，但在我們擁有的地方，我們看到了這一點。到 2023 年甚至更久，我們的配件材料業務的利潤率將面臨壓力。

Why don't I stop there and you can follow-up.

為什麼我不就此打住，你可以跟進。

I'll just add to Kimball's point. I just want to go back to the machines and just kind of, build on what Kimball said. One is, clearly a lot of our margins were compressed because of the existing or the legacy machines if you will. As we come into 2023 with a much cleaner portfolio and as our portfolio mix improves, right, I think that'll be positive for our margins. So I feel good about that. The second, which we kind of hinted on in the prepared remark is, our promotional, we've, in the last probably 12 months, even though we've been less promotional in Q4 in general, we focus a lot on the bottom of the funnel and done a lot of POS dollars. I think going into 2023 we will be less promotional and reallocate some of those dollars to top of funnel, in terms of driving awareness. So I think between, at least, especially on machines, between the portfolio mix and our promotional strategy, we'll see some positive improvement in margins for machines.

我將補充 Kimball 的觀點。我只想回到機器上，並以 Kimball 所說的為基礎。一是，如果你願意的話，很明顯我們的很多利潤都因為現有或遺留機器而被壓縮。隨著我們進入 2023 年，投資組合更加清潔，隨著我們的投資組合得到改善，我認為這將對我們的利潤率產生積極影響。所以我對此感覺很好。第二，我們在準備好的評論中暗示的是，我們的促銷活動，在過去大約 12 個月裡，儘管我們在第四季度的促銷活動總體上較少，但我們非常關注底部漏斗又做了很多POS美金。我認為進入 2023 年，我們將減少促銷活動，並將其中一些美元重新分配到漏斗頂部，以提高意識。所以我認為，至少，尤其是在機器上，在產品組合和我們的促銷策略之間，我們將看到機器利潤率的一些積極改善。

And then Ashish, I think you mentioned earlier that, you're really doing a nice job attracting kind of more beginner crafters to the platform, and I think you said your studies suggest that they're as likely to buy the larger machines as well as things like the Joy. I guess I'm a little bit surprised by that. I thought maybe the Joy would over-index to some of those beginner crafters. So just curious if you could expand upon your learnings there and just maybe some of the implications as we think about some of the mix impacts on machine revenue over-time.

然後 Ashish，我想你之前提到過，你確實做得很好，吸引了更多的初學者手工藝者到這個平台，我想你說過你的研究表明他們也有可能購買更大的機器就像喜悅之類的東西。我想我對此有點驚訝。我想也許 Joy 會對一些初學手工藝者過度索引。所以很好奇你是否可以在那裡擴展你的學習，以及我們考慮隨著時間的推移對機器收入的一些混合影響時的一些影響。

And then kind of a related question, but the subscription attachment continues to trend nicely. Is it fair to think that that could continue to edge higher as more of those beginner crafters enter the platform? I would think that, some of the benefits of Cricut access would be, potentially higher for those newer crafters that wouldn't otherwise know how to create some of the designs.

然後是一個相關的問題，但訂閱附件的趨勢繼續良好。隨著越來越多的新手工匠進入平台，認為它會繼續走高是否公平？我認為，對於那些不知道如何創建某些設計的新工匠來說，Cricut 訪問的一些好處可能會更高。

Yeah. So Mark, first of all, as Kim, as we said, we were pretty pleased with the fact that we added 1.5 million users, came up to 7.9 million and that's just like less than 6% or 6% of our SAM. And as you pointed out, a lot of these are beginner users and Gen Zs, and specifically when it comes to beginner users, we kind of studied the data and we were pretty positively surprised that they didn't differ from other cohorts, both in terms of engagement as well as in terms of the kind of machines they bought. So we were also very pleasantly surprised with that. We still do think that affordability is going to continue to be key for our user base. So I think products like Cricut Joy will play a role, but I think it's very hard to draw correlation that is just the bigger are getting bigger our user users just with those, entry level machine price points. I also think that some of the improvements that we've made, user will definitely the starting price point is really important because the user comes into the category and they basically -- to enter the category, it's it has to be a lower price point. But as we do a better job in helping people understand and figuring out their use cases, I think we have an opportunity to continue to improve, users to get the right product, which may or may not be the entry level price point. So we are actually pretty pleased and excited about that, although we still think that driving affordability and lower price machines is beneficial to the whole category.

是的。因此，馬克，首先，正如我們所說，作為金，我們對我們增加了 150 萬用戶，達到 790 萬用戶感到非常高興，這只是我們 SAM 的不到 6% 或 6%。正如你所指出的，其中很多是初學者用戶和 Z 世代，特別是當涉及到初學者用戶時，我們研究了數據，我們非常驚訝地發現他們與其他群體沒有區別，無論是在參與度以及他們購買的機器類型。因此，我們對此也感到非常驚喜。我們仍然認為負擔能力將繼續成為我們用戶群的關鍵。所以我認為像 Cricut Joy 這樣的產品會發揮作用，但我認為很難得出相關性，即我們的用戶越來越多，只是那些入門級機器的價格點。我還認為我們所做的一些改進，用戶肯定會認為起始價格點非常重要，因為用戶進入該類別並且他們基本上 - 要進入該類別，它必須是一個較低的價格點.但隨著我們在幫助人們理解和弄清楚他們的用例方面做得更好，我認為我們有機會繼續改進，用戶可以獲得合適的產品，這可能是也可能不是入門級價格點。所以我們實際上對此感到非常高興和興奮，儘管我們仍然認為推動可負擔性和更低價格的機器對整個類別都是有利的。

One thing I'll just highlight is that we kind of have a little notation in our presentation is that as we are looking at our data, a pretty good percentage of users is actually even beyond our SAM. So these are people that we would not categorize as people that would've qualified to be in our SAM. So we are actually really excited about the breadth of penetration that we are seeing both inside our SAM and outside.

我要強調的一件事是，我們在演示文稿中有點表示，當我們查看我們的數據時，相當大比例的用戶實際上什至超出了我們的 SAM。所以這些人我們不會歸類為有資格加入我們的 SAM 的人。因此，我們實際上對我們在 SAM 內部和外部看到的滲透廣度感到非常興奮。

I will let Kimball talk about the subscriptions.

我會讓 Kimball 談談訂閱。

We're really excited about our subscription business and we think the team has done a great job this year in activating our user base and in growing the subscription of the business. And we're in the very early stages of our roadmap. And we've heard us talk about features like automatic background remover and editable images and we have a long roadmap of features that will continue to add to the value proposition of subscribers. We've talked about our contributing artist program that is adding new and diverse content that's getting a lot of traction. We're doing a better job of merchandising Cricut access throughout the platform and we're seeing results from that as we create more touch-points. An example of that is we're having an uptick in the number of annual subscriptions as we've advertised it, as opposed to monthly subscriptions. And so we think we have a lot of room for improvement as we get better and better there. That said, we called on our prepared remarks that we expect to add fewer new users in 2023 and so that naturally is going to put pressure on our attach rate and on our growth rate because the largest portion of new subscribers come from adding new user to the platform, but as we get traction on some of these acquisition initiatives that Ashish mentioned and also on engagement, we think that that will help us reaccelerate growth in the subscription category.

我們對我們的訂閱業務感到非常興奮，我們認為該團隊今年在激活我們的用戶群和增加業務訂閱方面做得很好。我們正處於路線圖的早期階段。我們已經聽到我們談論自動背景去除器和可編輯圖像等功能，並且我們有一個很長的功能路線圖，這些功能將繼續增加訂閱者的價值主張。我們已經討論了我們的貢獻藝術家計劃，該計劃正在添加新的和多樣化的內容，這些內容受到了很大的關注。我們在整個平台上更好地銷售 Cricut 訪問權限，並且隨著我們創建更多接觸點，我們看到了結果。這方面的一個例子是，正如我們宣傳的那樣，我們的年度訂閱數量有所增加，而不是每月訂閱。因此，我們認為隨著我們在那裡變得越來越好，我們還有很大的改進空間。也就是說，我們呼籲我們準備好的評論，我們預計在 2023 年增加的新用戶會減少，因此這自然會給我們的附加率和增長率帶來壓力，因為新訂戶的最大部分來自於將新用戶添加到該平台，但隨著我們對 Ashish 提到的其中一些收購計劃以及參與度的關注，我們認為這將幫助我們重新加速訂閱類別的增長。

661589828Our next question will be coming from Jim Suva of Citi.

661589828我們的下一個問題將來自花旗銀行的 Jim Suva。

Separately on the machines versus the accessories, it sounds like you mentioned January and February were also facing challenging inventory work down in the channel. When do you kind of expect that to be more normalized? Are we talking another quarter or so or kind of further out and then I'll probably have a follow-up.

分別在機器和配件上，聽起來你提到 1 月和 2 月在渠道中也面臨著具有挑戰性的庫存工作。您預計什麼時候會更加正常化？我們是在討論另一個季度左右還是更遠的時間，然後我可能會進行跟進。

Actually, we entered the year with much healthier channel inventory. And what we were calling out in our prepared remarks is we had our forecast of what we expected for the quarter and we saw softer demand than we expected in the quarter, but that's not related to unhealthy channel inventory levels. We have a target range of forward-looking weeks on hand for our channels and we ended in those ranges. So this was more a consumer demand impact related to I think discretionary spend more than it was channel inventory issues.

實際上，我們以更健康的渠道庫存進入了這一年。我們在準備好的評論中所說的是，我們對本季度的預期進行了預測，我們看到本季度的需求比我們預期的要疲軟，但這與不健康的渠道庫存水平無關。我們為我們的渠道製定了前瞻性週的目標範圍，我們在這些範圍內結束。因此，這更多是與我認為可自由支配支出相關的消費者需求影響，而不是渠道庫存問題。

And so just to clarify, it sounds like what your channel, not what you calculate, but what your channel feedback is, that they're also comfortable with the inventory levels in the channel, because the reason why I ask is it seems like the channel is working down inventory to levels of pre-COVID maybe or even lower pre-COVID. But if you could comment on the feedback you're getting there?

所以澄清一下，這聽起來像是你的渠道，而不是你計算的，而是你的渠道反饋，他們也對渠道中的庫存水平感到滿意，因為我問的原因似乎是渠道正在將庫存減少到 COVID 之前的水平，甚至可能低於 COVID 之前的水平。但是，如果您可以對您得到的反饋發表評論？

The channel is continuing to focus on inventory, but we are in continuous dialogue with, on channel inventory plans and we're aligned on those plans with our retailers. I think there's a general level of conservatism, but overall, like as Kimball said, we feel good about inventory coming into 2023. We had a healthy on plan weeks in hand inventory and I think we are just kind of watching the consumer spend very closely in terms of discretionary products, but I think there's generally a good balance at this point overall.

該渠道繼續關注庫存，但我們一直在與渠道庫存計劃進行對話，並且我們與我們的零售商就這些計劃保持一致。我認為存在普遍的保守主義水平，但總的來說，就像 Kimball 所說的那樣，我們對 2023 年的庫存感到滿意。我們有一個健康的計劃週手頭庫存，我認為我們只是在密切關註消費者支出在可自由支配的產品方面，但我認為總體上在這一點上有一個很好的平衡。

Then my last question is focused on research and development that you're doing internally there at Cricut. Are you kind of keeping same levels and same roadmap or given the macro uncertainties, do you need to do some adjustments?

然後我的最後一個問題是關於你在 Cricut 內部進行的研究和開發。你是保持相同的水平和相同的路線圖，還是考慮到宏觀不確定性，你需要做一些調整嗎？

I think a couple of comments. I think about six, maybe two quarters ago we had kind of shared, two or three quarters ago we had shared that we are going to really lean in and double down on connected machines, right. So focus less, at least in the shorter term on accessories, but really kind of build-out our connected machines portfolio. So I think we take a very long view on that and we continue to innovate. We continue to do exciting things in that category. So I think you'll see some great innovations from us over-time. The thing that I would say that we have really kind of focused in on is building out the software and the platform. You see the benefit of that in subscriptions already. I think you'll see a number of initiatives around engagement and even more so I would say, the company is really going to become a -- I mean, we were always a platform company, but you'll see more and more investments in the software platform and we are really excited about that, but we've taken a very balanced approach to our R&D and feel that, we've kind of streamlined our R&D approach to what our strategy is and our priorities are.

我想有幾點意見。我想大約六個，也許兩個季度前我們有點分享，兩個或三個季度前我們分享了我們將真正依靠並加倍投入連接的機器，對吧。因此，至少在短期內減少對配件的關注，但實際上是在構建我們的互聯機器產品組合。所以我認為我們對此有很長遠的看法，我們會繼續創新。我們繼續在該類別中做令人興奮的事情。所以我認為隨著時間的推移，你會看到我們的一些偉大的創新。我要說的是，我們真正關注的是構建軟件和平台。您已經在訂閱中看到了這樣做的好處。我想你會看到很多關於參與的舉措，甚至更多所以我想說，公司真的會成為——我的意思是，我們一直是一家平台公司，但你會看到越來越多的投資軟件平台，我們對此感到非常興奮，但我們對研發採取了一種非常平衡的方法，並認為我們已經根據我們的戰略和優先事項簡化了我們的研發方法。

(Operator Instructions) The next question is coming from Adrienne Yih of Barclays.

（操作員說明）下一個問題來自巴克萊銀行的 Adrienne Yih。

Ashish, I wanted to get some more details on kind of your target, your customer. Do you have good data on sort of the target household income? It sounds like the new users are more beginners or more Gen Z. Does that mean that maybe your more seasoned users are kind of coming out of the kind of active user base and then of the 74% that cut this year, can you tell what proportion of them are heavy users versus sort of one-time users? And for the one-time users, is there an active method of reaching out to them and being more personalized to engage them more?

Ashish，我想了解更多有關您的目標（您的客戶）的詳細信息。您是否有關於目標家庭收入排序的可靠數據？聽起來新用戶更多是初學者或更多 Z 世代。這是否意味著您的老用戶可能正在從活躍用戶群中脫穎而出，然後在今年減少的 74% 中，您能說出什麼嗎他們中重度用戶與一次性用戶的比例？對於一次性用戶，是否有一種積極的方法來接觸他們並更加個性化以更多地吸引他們？

There's a number of questions there and if I don't get to all of them, please feel free to follow-up or we can follow-up in our call. So I think one of the things I feel really good about, we are so early on in the cycle, right? And even though we added 1.5 million users and we have 7.9 million in total, at the end of the day, it's close to 6% of our SAM. And like I said, we've even broadened outside our SAM. I don't think our market is shifting. I think our market is expanding, right? And what I mean by that is we are definitely continuing to attract the advanced crafters and the engaged crafters, but we are also broadening. So the way to think about it is we are kind of flattening the bell curve, if you will, right? So the long tails are getting fatter. So we think that as we expand the market, which is what our strategy is, as our products become easier to use, more affordable and there's still a long ways to do that. We are keeping the current engaged customer base. We are getting to the crafter, but also we are getting to a user base that we've always wanted to. And like I said, the good news about attracting big crafter is that at least at this point, we don't see that cohort doing anything different from our more engaged cohorts. So that's kind of my overall remark on the acquisition piece.

這裡有很多問題，如果我沒有回答所有問題，請隨時跟進，或者我們可以在電話中跟進。所以我認為我感覺非常好的一件事是，我們處於週期的早期，對吧？即使我們增加了 150 萬用戶並且我們總共有 790 萬用戶，但在一天結束時，它接近我們 SAM 的 6%。就像我說的，我們甚至擴大了 SAM 之外的範圍。我不認為我們的市場正在發生變化。我認為我們的市場正在擴大，對嗎？我的意思是，我們肯定會繼續吸引先進的工匠和敬業的工匠，但我們也在擴大。所以考慮它的方式是我們正在使鐘形曲線變平，如果你願意的話，對吧？所以長尾越來越胖。所以我們認為，隨著我們擴大市場，這就是我們的戰略，因為我們的產品變得更容易使用，更實惠，而且還有很長的路要做到這一點。我們正在保持當前參與的客戶群。我們正在接觸工匠，但我們也正在接觸我們一直想要的用戶群。就像我說的，吸引大手工藝者的好消息是，至少在這一點上，我們沒有看到這個群體與我們更投入的群體有什麼不同。這就是我對收購部分的總體評論。

I think from an engagement perspective, we have gotten better and better at understanding the various cohorts. So we haven't kind of -- the data's not mature enough to share outside. But the way we look at engagement is we are able to differentiate between subscribers and non-subscribers. We're able to classify people who are monthly users and quarterly users, occasional and semi-annual. And the one good thing that when we ask our customer base, even the people like who've not engaged with us for 12 months, right, as to what's their experience being at Cricut and what drives them to Cricut, we see a very high percentage. We've shared this number in the past, like over close to 80% of people really say, wow, these are people that have actually not used the platform in nine to 12 months. And they will say, I love using the platform. And I think that's when we get into the question and saying, well, why didn't you, right? And typically what we hear is, well, I just ran out of time or life got in the way. And what they're probably saying is that, we have an opportunity to make the experience even simpler, better and as we build in mobile strategies, et cetera, we have an opportunity to bring back that user.

我認為從參與度的角度來看，我們在理解不同群體方面做得越來越好。所以我們還沒有——數據還不夠成熟，無法在外面分享。但是我們看待參與度的方式是我們能夠區分訂閱者和非訂閱者。我們能夠將用戶分為每月用戶和季度用戶、偶爾用戶和半年用戶。一件好事是，當我們詢問我們的客戶群時，即使是那些已經 12 個月沒有與我們接觸的人，對，關於他們在 Cricut 的經歷是什麼以及是什麼驅使他們來到 Cricut，我們看到一個非常高的百分比。我們過去分享過這個數字，超過 80% 的人真的說，哇，這些人實際上已經有 9 到 12 個月沒有使用過這個平台了。他們會說，我喜歡使用這個平台。而且我認為那是我們進入問題並說，好吧，你為什麼不這樣做，對吧？通常我們聽到的是，好吧，我只是沒時間了，或者生活受阻了。他們可能在說，我們有機會讓體驗變得更簡單、更好，並且隨著我們構建移動策略等，我們有機會帶回該用戶。

Having said that, and I'll end it there. We clearly want to go after. If you think about the folks that are engaged and specifically subscribers, our number one focus is on engaged subscribers, right, which is these are the people that we want to keep engaged, we want to keep subscribed. Having said that, we do have an opportunity to go after the folks that are not as engaged or not subscribed and we have a number of strategies in place to go after them. But I would say in terms of the pecking order, our number one focus is let's keep our engaged users engaged and let's keep our engaged subscribers engaged and subscribed.

話雖如此，我會在那裡結束它。我們顯然想要追求。如果你考慮那些參與的人，特別是訂閱者，我們的首要關注點是參與的訂閱者，對的，這些是我們想要保持參與的人，我們想要繼續訂閱。話雖如此，我們確實有機會關注那些不那麼投入或不訂閱的人，我們有很多策略來關注他們。但我要說的是，就啄食順序而言，我們的首要重點是讓我們保持活躍的用戶參與，讓我們保持活躍的訂閱者參與和訂閱。

Just a couple of follow-ups. I guess, the community aspect of it that was kind of front and center. I think the machine sales have sort of co-opted that in terms of the story discussion. And I'm just wondering, content creation, you did talk about it. But can you talk about kind of the community development in that aspect of it? I mean, it's seemingly kind of taken a backseat in the mind of the user. Is that not the case?

只是一些後續行動。我想，它的社區方面是一種前沿和中心。我認為機器銷售在故事討論方面有點合作。我只是想知道，內容創作，你確實談到過它。但是你能談談這方面的社區發展嗎？我的意思是，它似乎在用戶心目中退居二線。不是這樣嗎？

And for Kimball, you talked about a two-year horizon and I wanted to make sure that I understand this of pressure on sales. And if that's correct, how are you thinking about managing the cost side of the P&L under that circumstance?

對於 Kimball，你談到了兩年的期限，我想確保我理解銷售壓力。如果那是正確的，那麼在這種情況下，您如何考慮管理損益的成本方面？

So Adrienne, let me take the first half of the question and then I'll let Kimball answer the second half. No, I think what drove the category in terms of the network effects, in terms of the community, they're as strong as they have ever been, right? We continue to have very high percentage of users coming from friends and family. Over 80% of users come to know about Cricut through some kind of social media or friends and family or some kind of demos that somebody did for them. So that aspect, even outside the platform, and then I'll talk about the platform continues to be very healthy and very robust, right? So nothing has changed from that standpoint.

所以 Adrienne，讓我回答問題的前半部分，然後讓 Kimball 回答後半部分。不，我認為是什麼在網絡效應方面推動了這一類別，在社區方面，它們和以往一樣強大，對吧？我們仍然有很高比例的用戶來自朋友和家人。超過 80% 的用戶是通過某種社交媒體或朋友和家人或某人為他們做的某種演示來了解 Cricut 的。所以那個方面，甚至在平台之外，然後我會談論這個平台仍然非常健康和強大，對吧？所以從那個角度來看沒有任何改變。

As far as the focus on community itself, I would say, and I made this comment to when Mark asked the question, actually when I think Jim asked the question about R&D. We are building the community right inside the platform, right and the community is creating projects that subscribers are able to benefit from and that helps them save over-time, right? We've created other high value actions where people are able to follow each other, people are able to bookmark. So all of that we think that takes an expanded view of our lengthen engagement.

至於對社區本身的關注，我會說，我是在 Mark 提出問題時發表此評論的，實際上是在我認為 Jim 提出有關研發的問題時。我們正在平台內部建立社區，對吧，社區正在創建訂閱者能夠從中受益並幫助他們節省加班時間的項目，對吧？我們已經創建了其他高價值的操作，人們可以在其中相互關注，人們可以添加書籤。因此，我們認為所有這一切都擴大了我們延長參與的視野。

So I would say, in summary, both outside our platform and inside our platform, community plays a massive role. And I think those network effects will continue to drive that. I think as the consumer spend returns over-time, we think that we will benefit from the funnel that we are building and the network effects that we are driving. But also as I said, community is a front and center part of our platform. And I think we'll see the benefit of that in terms of content that the community will generate and contribute to the platform.

所以我想說，總而言之，無論是在我們的平台之外還是在我們的平台之內，社區都發揮著巨大的作用。我認為這些網絡效應將繼續推動它。我認為隨著時間的推移，消費者支出的回報，我們認為我們將從我們正在構建的渠道和我們正在推動的網絡效應中受益。但也正如我所說，社區是我們平台的前沿和中心部分。而且我認為我們將在社區將生成並為平台做出貢獻的內容方面看到這樣做的好處。

When I talked about two year acceleration, I was really talking about the accessories materials, not machines, right? And so let me talk about what we're seeing and what we're doing as additional context to Ashish's prepared remarks. We're seeing a price sensitive consumer, right? We're also seeing cheaper, inferior materials showing up in the market, especially online, right? And so our strategy there is to be cost competitive. So over the last year and for the next couple years, you'll see us being more promotional, right, in the short-term, because we want to make sure that our products are affordable to consumers. And as I mentioned that when we are closer to price parity, we win our fair share, right? We were more promotional in Q4, and where we have data to measure, we saw that we actually improved our share position. Over the medium term, we're going to be reconfiguring our supply chain to drive cost out to help improve our margins even as we're being more promotional, and price competitive.

我說兩年加速的時候，我說的是配件材料，不是機器，對吧？因此，讓我談談我們所看到的以及我們正在做的事情，作為 Ashish 準備好的發言的補充背景。我們看到的是對價格敏感的消費者，對嗎？我們還看到市場上出現了更便宜、劣質的材料，尤其是在網上，對吧？因此，我們的戰略是具有成本競爭力。所以在過去的一年和接下來的幾年裡，你會看到我們在短期內進行了更多的促銷活動，因為我們想確保我們的產品對消費者來說是負擔得起的。正如我提到的，當我們接近價格平價時，我們就贏得了公平的份額，對嗎？我們在第四季度進行了更多的促銷活動，在我們有數據可以衡量的地方，我們看到我們實際上提高了我們的份額地位。從中期來看，我們將重新配置我們的供應鏈以降低成本，以幫助提高我們的利潤率，即使我們正在加大促銷力度和價格競爭力。

Secondly, we sell a lot of materials through bundles. When we sell a new machine, we bundle it. And when we had fewer new machine sales, that also translates into fewer material sales. And as we work with our retail partners, you'll see us being leaning into bundles with better value propositions both in brick-and-mortar and online.

其次，我們通過捆綁銷售大量材料。當我們出售一台新機器時，我們會將其捆綁銷售。當我們的新機器銷售量減少時，這也意味著材料銷售量減少。當我們與我們的零售合作夥伴合作時，您會看到我們傾向於在實體店和網上提供更好的價值主張。

And then the third factor is lower engagement, right? Even though our engaged users are up 6% year-over-year, we're seeing since the pandemic people cutting fewer projects, right? And so that drives the amount of material usage. And so that's where the engagement initiative machines reference really come into play. And this is a space where our materials work seamlessly with our machines and we believe we have a right to win. And so it's going to take some time. We've got inventory that we have to work through, and so between supply chain reconfiguration and working through inventory, that's why we think it's kind of a two-year journey.

然後第三個因素是較低的參與度，對嗎？儘管我們的參與用戶同比增長 6%，但我們看到自大流行以來人們削減的項目減少了，對吧？因此，這推動了材料使用量。因此，這就是參與計劃機器參考真正發揮作用的地方。這是一個我們的材料與我們的機器無縫工作的空間，我們相信我們有權利獲勝。所以這需要一些時間。我們有我們必須處理的庫存，因此在供應鏈重新配置和處理庫存之間，這就是為什麼我們認為這是一個兩年的旅程。

But I just want to highlight that we're very focused on managing our costs and being responsible, and I think we demonstrated that in last year with how we're responsible we are to how the year played out for us. And we will continue to be flexible based on what we see, but for the overall business, we do expect to improve margins incrementally over the course of the year.

但我只想強調，我們非常專注於管理成本和承擔責任，我認為我們在去年證明了這一點，我們對這一年的表現負責。我們將根據我們所看到的情況繼續保持靈活性，但對於整體業務，我們確實希望在這一年中逐步提高利潤率。

We have a follow-up question coming from Jim Suva of Citi.

我們有一個來自花旗銀行的 Jim Suva 的後續問題。

.I have a couple follow up questions. I believe it was Kimball mentioned some changes to the supply chain. Are you referring more to like those bundles like when Jim Suva bought the premium bundle with the machine the first time? Is that what you mean by reconfiguring the supply chain for those packages or are you talking about reconfiguring the supply chain, like how you make the machines, where you make the machines, where you do your distribution centers, or what did you refer by changes to your distribution or your channel.

.我有幾個跟進問題。我相信是 Kimball 提到了供應鏈的一些變化。您是指 Jim Suva 第一次購買帶有機器的高級捆綁包時的那些捆綁包嗎？這就是你所說的為這些包裹重新配置供應鏈的意思，還是你在談論重新配置供應鏈，比如你如何製造機器，你在哪裡製造機器，你在哪裡建立你的配送中心，或者你指的是什麼變化到您的發行版或頻道。

So again, my comments are most on the reconfiguration, mostly directory towards Accessories and Materials, and it involves everything from looking at how we package, how we differentiate across different channels with configurations of product along with machines, and where some of those activities take place. So we may look at near-shoring different materials over-time, how we can serve the market more effectively, and frankly do it with less inventory.

再說一次，我的評論主要是關於重新配置，主要是附件和材料目錄，它涉及到所有方面，從查看我們的包裝方式，我們如何通過產品和機器的配置來區分不同的渠道，以及其中一些活動發生的地方地方。所以我們可能會考慮近岸外包不同的材料，我們如何才能更有效地服務於市場，坦率地說，用更少的庫存來做到這一點。

And then my second follow-up is on cash flow and what your plans are there? It sounds like you mentioned work down inventory still some more, is that correct? And if so, how should we think about your cash flow and what you're going to use?

然後我的第二個後續行動是關於現金流量的，你的計劃是什麼？聽起來你提到要進一步減少庫存，對嗎？如果是這樣，我們應該如何考慮您的現金流量以及您將使用什麼？

Well, so we do expect to be cash flow accretive for the year. We are starting to work through our inventory positions back to more pre-pandemic levels, but it will take us some time to get there.

好吧，所以我們確實希望今年的現金流量會增加。我們正開始努力將庫存頭寸恢復到大流行前的水平，但這需要一些時間才能實現。

And my last question is seasonality. With COVID it's been tough to earmark what is normal seasonality, but I kind of would assume that second half of the year are stronger than the first half and probably Q4 is the strongest of the quarters. Is that the seasonality we should expect or are all these moving parts something I should be aware to calibrate a little bit more correctly for seasonality?

我的最後一個問題是季節性。有了 COVID，很難確定什麼是正常的季節性，但我有點假設下半年比上半年強，第四季度可能是季度中最強勁的。這是我們應該預期的季節性，還是我應該注意所有這些活動部件以更正確地校準季節性？

We're expecting normal seasonality as we look to 2023. I mean, acknowledging that Q1 is going to be particularly difficult quarter for us. If you recall last year it was in March, so we saw kind of the March shift in consumer behavior. And so I think Q1 will be challenging, but we expect improvement starting in Q2, but we think normal seasonality is how we're looking at the year.

展望 2023 年，我們預計會出現正常的季節性。我的意思是，承認第一季度對我們來說將是特別困難的一個季度。如果你還記得去年是三月份，那麼我們看到了消費者行為在三月份的轉變。因此，我認為第一季度將充滿挑戰，但我們預計從第二季度開始有所改善，但我們認為正常的季節性是我們看待這一年的方式。

Thank you. I will now like to turn the call back over to management for closing remarks.

謝謝。我現在想把電話轉回給管理層作結束語。

Thank you, Operator. And thank you all for joining us this afternoon. We'll actually be at the Morgan Stanley conference tomorrow and looking forward to seeing everyone then. So thank you again.

謝謝你，運營商。感謝大家今天下午加入我們。實際上，我們明天將參加摩根士丹利會議，期待屆時與大家見面。所以再次感謝你。

Thank you all for joining this evening. You all have a great day. You may now disconnect.

感謝大家參加今晚的活動。你們都有美好的一天。您現在可以斷開連接。