Cricut Inc (CRCT) 2024 Q3 法說會逐字稿

Good day and thank you for standing by. Welcome to Cricut Third Quarter 2024 Earnings Conference Call.

您好，感謝您的支持。歡迎參加 Cricut 2024 年第三季財報電話會議。

(Operator Instruction)

（操作員指令）

Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Jim Suva. Please go ahead.

請注意，今天的會議正在錄音。現在我想將會議交給今天的發言人吉姆·蘇瓦。請繼續。

Thank you operator and good afternoon everyone. Thank you for joining us on Cricut's Third Quarter 2024 Earnings Call. 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.cricket.com.

謝謝接線員，大家下午好。感謝您參加 Cricut 2024 年第三季財報電話會議。請注意，今天的電話會議正在透過網路直播，並記錄在公司網站的投資者關係部分。今天的電話會議結束後還將提供網路直播的重播。供您參考，今天電話會議中使用的幻燈片以及補充資料表已發佈至公司網站 investor.cricket.com 的投資者關係部分。

Joining me on the call today are Ashish Aurora, 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.

今天與我一起參加電話會議的還有執行長 Ashish Aurora 和財務長 Kimball Shill。今天的準備好的演講已經錄製完畢，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.

在開始之前，我們想提醒大家，我們準備好的評論包含前瞻性陳述，管理層可能會在回答您的問題時做出額外的前瞻性陳述，包括有關我們的策略、業務、費用和經營成果的陳述。

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 crickets most recently filed Form 10-K or Form 10-Q that we have filed with the Securities and Exchange Commission.

這些聲明並不能保證未來的表現，因此不應過度依賴它們。這些聲明是基於公司管理層目前的預期，涉及固有風險和不確定性，包括我們向美國證券交易委員會提交的最新 10-K 表或 10-Q 表的風險因素部分中確定的風險和不確定性。

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, November 5, 2024. Cricut assumes no obligation to update any forward-looking projection that may be made in today's release or call. I will now turn the call over to Ashish.

實際事件或結果可能有重大差異。本次通話也包含時間敏感訊息，且僅截至本次廣播之日（2024 年 11 月 5 日）準確。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。現在我將電話轉給 Ashish。

Thank you Jim and welcome everyone.

謝謝吉姆，歡迎大家。

Total sales in Q3 decrease 4% year-on-year. We are pleased with the increase in paid subscribers in Q3 of 5% year-on-year which exceeded our expectations. International sales grew 2% year-on-year with some benefit from foreign exchange rates.

第三季總銷售額較去年同期下降4%。我們很高興看到第三季付費用戶數量年增 5%，這超出了我們的預期。受外匯匯率影響，國際銷售額年增 2%。

In Q3, platform revenue increased slightly on paid subscriber growth. Products Revenue declined 7% as connected machines revenue declined 11% on higher promotions planned for the Q4 holiday season, accessories and materials declined 3% on more favorable crops.

第三季度，由於付費用戶的成長，平台收入略有增加。產品收入下降 7%，其中，由於第四季度假日季計畫的促銷活動增加，連網機器收入下降 11%，而由於農作物收成較好，配件和材料收入下降 3%。

While paid subscriber growth is indeed a win, we would benefit from a stronger acquisition and engagement. We ended the quarter with just under 5.9 million active users who cut in the past year down less than 1% from a year ago and our 90 day engage users declined 3%.

雖然付費用戶的成長確實是一個勝利，但更強勁的收購和參與將使我們受益匪淺。截至本季度，我們的活躍用戶數略低於 590 萬，與去年相比，下降幅度不到 1%，90 天參與用戶數下降了 3%。

We continue to experience engagement erosion from a large 2020 and 2021 pandemic cohorts and from prior years who age on the engagement curve and are not offset with as many new users in recent quarters.

我們繼續經歷來自 2020 年和 2021 年疫情期間大量用戶的參與度下滑，而前幾年用戶的參與度曲線也在老化，而且最近幾個季度的新用戶數量並沒有抵消這一下滑。

While we want to improve engagement for all our users, our focus remains to maximize engagement of our most impactful users from a modernization perspective, which are new users onboarding onto the platform or on boarders and access subscribers. During Q3, we continued to make solid progress on our initiatives to drive engagement with our new members.

雖然我們希望提高所有用戶的參與度，但我們的重點仍然是從現代化的角度最大限度地提高最有影響力的用戶的參與度，這些用戶是加入平台的新用戶或登錄者和訪問訂閱者。在第三季度，我們繼續在推動與新成員互動的舉措上取得堅實進展。

We introduced several improvements to make it easier for new members to connect their new machines and successfully design and make their first projects. As evidence of this success, we have seen almost a 50% increase compared to a year ago in new users who successfully connect the machine within the first five minutes of the connection process.

我們引入了多項改進，使新成員能夠更輕鬆地連接他們的新機器並成功設計和完成他們的第一個專案。作為這一成功的證據，我們看到在連接過程的前五分鐘內成功連接機器的新用戶數量與一年前相比增加了近 50%。

As a reminder, all borders are a particular focus because the more they interact with our platform early the more likely they are to interact with our platform over time. We have further integrated education and health resources directly within the onboarding flow and redesigned the homepage for new members to further tailor it with inspiration most appropriate for beginners.

提醒一下，所有邊界都是需要特別關注的，因為它們早期與我們的平台互動的次數越多，隨著時間的推移，它們與我們的平台互動的可能性就越大。我們進一步在入職流程中直接整合了教育和健康資源，並重新設計了新會員的主頁，以進一步為初學者提供最適合的靈感。

We've also automated steps that we know are common pitfalls for new members. At the end of Q3, we also introduced in beta, an AI driven health assistant to a portion of our members. We are pleased with the initial response from beta users and plan to roll it out specifically with onboarders during Q4.

我們也自動化了我們知道新成員常犯的錯誤的步驟。在第三季末，我們也向部分會員推出了測試版人工智慧健康助理。我們對測試版用戶的初步反應感到滿意，並計劃在第四季度專門向新用戶推出該測試版。

Evidence that these efforts are having a positive impact is that this is the second consecutive quarter of a year-on-year increase in the share of members who complete a project during the first day and who complete multiple projects in their first week. To benefit all members, we continued during the quarter to make improvements to our software platform specifically in helping them search and find inspiring content on our platform and removing friction in designing the projects in design space.

這些努力正在產生正面影響的證據是，這是連續第二個季度，第一天完成一個專案和第一周完成多個專案的會員比例同比增長。為了使所有會員受益，我們在本季度繼續對我們的軟體平台進行改進，特別是幫助他們在我們的平台上搜尋和找到鼓舞人心的內容，並消除在設計空間中設計項目的摩擦。

Based on our AB testing, our filtering and machine learning algorithms have rolled out several improvements to our search capabilities. We have also made content flow simpler by placing images on panels directly adjacent to the canvas, making images a single click away. Measured in terms of time to find and place an image onto the canvas, we have seen an over 20% improvement year-to-date.

根據我們的 AB 測試，我們的過濾和機器學習演算法對我們的搜尋功能進行了多項改進。我們還透過將圖像放置在緊鄰畫布的面板上，使內容流變得更簡單，只需單擊即可獲得圖像。以查找圖像並將其放置到畫布上的時間進行衡量，我們今年迄今已看到超過 20% 的進步。

A major focus in Q3 has also been our text and font editing capabilities and we now have a much broader support of characters among our most popular fonts. Recently, our marketing team has made great progress, bringing members back to design space after their last visit via email, push text notifications and paid social campaigns in a much more personalized, relevant and automated manner.

第三季的一個主要關注點也是我們的文字和字體編輯功能，現在我們對最受歡迎的字體中的字元提供了更廣泛的支援。最近，我們的行銷團隊取得了巨大進展，透過電子郵件、推播文字通知和付費社交活動以更個人化、相關和自動化的方式將會員帶回設計空間。

Our first engagement marketing campaign utilizing this platform went live at the very end of Q3. We plan to scale this effort during Q4 and Q1. While our overall engaged user metrics have not stabilized as of Q3, we are confident in our efforts to deliver a simplified and more personalized experience using our design space platform and our ability to leverage a much more scalable engagement marketing infrastructure.

我們利用該平台進行的首次參與行銷活動於第三季末上線。我們計劃在第四季和第一季擴大這項努力。雖然截至第三季我們的整體參與用戶指標尚未穩定，但我們有信心利用我們的設計空間平台和利用更具可擴展性的參與行銷基礎設施的能力，提供簡化和更個人化的體驗。

During Q3, we conducted a market mix analysis for machine sales in the US and Canada. The results show that our investment in top and middle of funnel marketing had a positive impact on machine sales in the first half of 2024. In addition, the analysis shows that the overall spin on these channels has an attractive ROI. Given these results, we are continuing the higher level of marketing span.

第三季度，我們對美國和加拿大的機器銷售進行了市場組合分析。結果表明，我們在漏斗行銷的頂部和中部的投資對 2024 年上半年的機器銷售產生了積極影響。此外，分析顯示，這些通路的整體旋轉具有很有吸引力的投資回報率。鑑於這些成果，我們將繼續擴大更高水準的行銷範圍。

Our deeper promotional strategy during key selling times of the year that we started in late 2023 is working. For example, we are pleased with the results from the fall Amazon prime day. During 2024, we have worked with the retailers to get to more healthy inventory levels. We are pleased with this progress and believe the channel inventory is healthier this year compared to prior years as we head into the important holiday season. Notwithstanding, there remain pockets in the channel where we would like to see more onhand inventory for holiday. Accessories and materials declined 3% year on year on more favorable carbs and compares to declines of 27% and 26% in Q2 and Q1 respectively.

我們在 2023 年底開始實施的針對一年中關鍵銷售時段的更深入的促銷策略正在發揮作用。例如，我們對秋季亞馬遜 Prime 會員日的業績感到滿意。2024 年，我們與零售商合作，以實現更健康的庫存水準。我們對這一進展感到滿意，並相信隨著我們即將進入重要的假期季節，今年的渠道庫存比往年更加健康。儘管如此，我們仍希望在渠道中看到更多假期庫存。由於碳水化合物更有利，配件和材料年減 3%，而第二季和第一季分別下降 27% 和 26%。

Our materials are engineered to work seamlessly with our machines to create the best user experience. Recall in late Q1, we launched the Cricut value line of materials which we designed to compete in online marketplaces. I'm excited to say that the Cricut value line has been well received and we launched additional skews in Q3 following the initial launch of a limited number of skews in late Q1. We are even more optimistic about this product now that we have a bit of history in the market but it's still early and a small portion of our portfolio.

我們的材料經過精心設計，可以與我們的機器無縫協作，以創造最佳的用戶體驗。回想一下，在第一季末，我們推出了 Cricut 價值系列材料，旨在參與線上市場的競爭。我很高興地說，Cricut 價值線受到了熱烈歡迎，繼第一季末首次推出有限數量的傾斜產品後，我們又在第三季推出了更多傾斜產品。由於我們在市場上擁有一些歷史，因此我們現在對該產品更加樂觀，但它仍處於早期階段，並且只占我們產品組合的一小部分。

We have additional innovation products and cost reductions coming in the quarters ahead. We are focused on attracting more new users to buy our connected machines, reversing weakening engagement trends, reinjecting enthusiasm among our users and being more effective competitors in accessories and materials.

未來幾季我們將推出更多創新產品並降低成本。我們專注於吸引更多新用戶購買我們的連網機器，扭轉參與度減弱的趨勢，重新激發用戶的熱情，並成為配件和材料方面更有效的競爭對手。

We are intensely focused on the overall customer experience and we are motivated to work with those retailers that help us create a great experience both on shelf and for actual use of our ecosystem.

我們高度關注整體客戶體驗，並積極與那些幫助我們在貨架上和生態系統的實際使用中創造良好體驗的零售商合作。

It is our fundamental belief that when we give people more reasons and inspiration to make things that are appealing to them and ensure the customer has access to affordable and quality materials, we will see an improved user experience which is one of the reasons that we offer bundles with many of our machines in select channels. We are driven to continue to innovate and improve our platform and user experience while exhibiting both longer term focus and current discipline.

我們堅信，當我們為人們提供更多理由和靈感來製作他們喜歡的東西，並確保客戶能夠獲得價格合理且優質的材料時，我們將看到用戶體驗的改善，這也是我們在特定管道提供許多機器捆綁銷售的原因之一。我們致力於持續創新和改進我們的平台和用戶體驗，同時展現長期關注和當前紀律。

I will now turn the call over to Kimball.

現在我將電話轉給金博爾。

Thank you, Ashish.

謝謝你，Ashish。

In the third quarter, we delivered revenue of $167.9 million. A 4% decline compared to the prior year and in line with our expectations. Breaking revenue down further, Q3 2024 revenue from platform was $77.7 million up slightly year-on-year. While paid subscribers increased 5%, platform revenue was up less as the mix shifted more to annual versus monthly subscriptions and geographic mix shifted more international. Both shifts are targeted efforts. Platform ARPU increased 3% to $52.86. Revenue from products was $90.2 million down 7% over Q3 2023. Connected machines decreased 11% driven primarily by more promotional activity planned for Q4. Accessories and materials decreased 3% on favorable comps.

第三季度，我們營收1.679億美元。與上年相比下降了 4%，符合我們的預期。進一步細分收入，2024 年第三季平台收入為 7,770 萬美元，較去年同期小幅成長。雖然付費用戶增加了 5%，但平台收入增幅較小，因為用戶結構更多地轉向年度訂閱而非月度訂閱，地理結構更加國際化。這兩種轉變都是有針對性的努力。平台ARPU成長3%至52.86美元。產品營收為 9,020 萬美元，較 2023 年第三季下降 7%。連網機器數量下降了 11%，主要原因是第四季度計劃增加促銷活動。由於同行業價格上漲，配件及材料價格下降 3%。

In terms of geographic breakdown, international revenue was $38.5 million or up 2% compared to $37.6 million in Q3 2023. Foreign exchange benefited international sales by just under 2%. As a percentage of total revenue. International was 23% in Q3 2024 compared with 21% of total revenue in Q3 2023. Turning to active users and engagement. We ended the quarter with just under 5.9 million active users. A decline of less than 1% from a year ago. We ended the quarter with over 3.5 million 90 day engaged users which was a 3% decline from Q3 last year.

以地理分佈來看，國際營收為 3,850 萬美元，較 2023 年第三季的 3,760 萬美元成長 2%。外匯使國際銷售額受益近2%。佔總收入的百分比。2024 年第三季度，國際營收佔總營收的 23%，而 2023 年第三季則為 21%。轉向活躍用戶和參與。截至本季末，我們的活躍用戶數略低於 590 萬。與去年同期相比下降幅度不到1%。截至本季度，我們的 90 天活躍用戶數超過 350 萬，較去年第三季下降 3%。

As Ashish mentioned, we are encouraged by improvement in leading indicator metrics for on boarders but have more work to do to improve overall engagement. We ended the quarter with over 2.8 million paid subscribers, up 5% from Q3 2023 and up sequentially. As discussed in earlier calls, there is some natural subscriber attrition. So subscriber growth will be challenging until we increase the pace of machine sales and new user acquisition.

正如 Ashish 所提到的，我們對寄宿生領先指標的改善感到鼓舞，但還需要做更多的工作來提高整體參與度。截至本季末，我們擁有超過 280 萬付費訂閱用戶，較 2023 年第三季成長 5%，且季增。正如我們在之前的電話會議中所討論的那樣，有一些自然的用戶流失。因此，除非我們加快機器銷售和新用戶獲取的速度，否則用戶成長將面臨挑戰。

Moving to gross margin, total gross margin in the third quarter was 46.1%. A slight decrease compared to 46.8% in Q3 2023. Breaking gross margin down further gross margins from platform were 87.1% compared to 89.3% a year ago. The decline in platform gross margins was primarily related to higher software development costs and higher hosting fees compared to a year ago, which we expect to continue. Gross margin from products was 10.7% compared to 13.1% in Q3 a year ago. The decrease in growth margins was primarily due to our decision to be more promotional offset partially by less inventory reserves.

談到毛利率，第三季的總毛利率為46.1%。與 2023 年第三季的 46.8% 相比略有下降。進一步細分毛利率，平台毛利率為 87.1%，而一年前為 89.3%。平台毛利率的下降主要與軟體開發成本和託管費用較去年同期上升有關，我們預計這種情況還將持續下去。產品毛利率為 10.7%，去年同期第三季為 13.1%。成長利潤率的下降主要是因為我們決定增加促銷力度，但庫存儲備減少，部分抵銷了這項影響。

Total operating expenses for the quarter were $66.8 million and included $11.4 million in stock-based compensation. Total operating expenses increased 15% from $58.2 million in Q3 2023 driven primarily by increased sales and marketing efforts that we have talked about for the last couple of quarters. Recall Q3 2023 benefited from $4.5 million of net bad debt reversal. Operating income for the quarter decreased 55% to $10.6 million or 6.3% of revenue from $23.7 million or 13.5% of revenue in Q3 last year. We had some discrete items which lowered the effective tax rate for Q3. We expect full year tax rate to be around 29.5%. Net income was $11.5 million or $0.5 per diluted share compared to $17.2 million or $0.8 per diluted share in Q3 2023.

本季總營運費用為 6,680 萬美元，其中包括 1,140 萬美元的股票薪酬。總營運費用較 2023 年第三季的 5,820 萬美元增加了 15%，這主要得益於我們在過去幾季談到的銷售和行銷力度的加大。回想一下，2023 年第三季受惠於 450 萬美元的淨壞帳沖銷。本季營業收入從去年第三季的 2,370 萬美元（佔營收的 13.5%）下降 55% 至 1,060 萬美元（佔營收的 6.3%）。我們有一些單獨的項目降低了第三季的有效稅率。我們預計全年稅率在29.5%左右。淨收入為 1,150 萬美元或每股攤薄收入 0.5 美元，而 2023 年第三季為 1,720 萬美元或每股攤薄收入 0.8 美元。

This marks our 23rd consecutive quarter of positive net income as we continue to invest in our key priorities while running the company in a profitable manner and for long term value creation.

這是我們連續第 23 個季度實現正淨收入，因為我們繼續對我們的關鍵優先事項進行投資，同時以盈利的方式經營公司並創造長期價值。

Turning now to balance sheet and cash flow, we continue to generate healthy cash flow on an annual basis which funds inventory needs and investments for long term growth. In Q3, we generated $70 million in cash from operations compared to $36 million a year ago.

現在談談資產負債表和現金流，我們繼續每年產生健康的現金流，為庫存需求和長期成長的投資提供資金。第三季度，我們的營運活動現金流為 7,000 萬美元，而去年同期為 3,600 萬美元。

We ended Q3 with a cash, cash equivalents, and marketable securities balance of $247 million. We remain debt free. Current inventory decreased by $136 million from a year ago to $168 million at the end of Q3 2024. During Q3, we used $10.3 million of cash to repurchase 1.8 million shares of our stock resulting in $30.8 million remaining on our $50 million authorized stock repurchase program.

截至第三季末，我們的現金、現金等價物及有價證券餘額為 2.47 億美元。我們仍然沒有債務。截至 2024 年第三季末，目前庫存較去年同期減少 1.36 億美元至 1.68 億美元。在第三季度，我們使用 1,030 萬美元現金回購了 180 萬股股票，使得我們 5,000 萬美元的授權股票回購計畫剩餘 3,080 萬美元。

In July, we paid approximately $108 million in dividends for the special one time dividend of $0.40 per share plus our first recurring semi annual dividend of $0.10 per share.

7 月份，我們支付了約 1.08 億美元的股息，包括每股 0.40 美元的一次性特別股息以及每股 0.10 美元的首次定期半年度股息。

The board of directors authorized our second recurring semi annual dividend of $0.10 per share for shareholders of record on January 7, 2025 and payable on January 21, 2025. These capital allocations are possible due to past profitability and our confidence in the sustainability of our future profitable operations. We want Cricut to always have ample liquidity to sustain and grow our business but not hold excess cash. We do not anticipate the need for any debt or utilization of our credit line in the near term.

董事會批准我們向 2025 年 1 月 7 日登記在冊的股東派發第二次定期半年度股息，每股 0.10 美元，並於 2025 年 1 月 21 日支付。這些資本配置是可能的，因為我們過去的獲利能力以及我們對未來獲利營運永續性的信心。我們希望 Cricut 始終擁有充足的流動資金來維持和發展我們的業務，但不會持有過多的現金。我們預計短期內不需要任何債務或使用我們的信用額度。

Now on to our outlook. Recall we do not give detailed quarterly or annual guidance but we do want to offer some updated color on our outlook for the rest of 2024 which remains generally unchanged. Given the first three quarters of the year, we expect sales will decline for the full year. We expect continued sales pressure on our product segment and accordingly total company revenue likely will be down Q4 year-on-year.

現在來談談我們的展望。回想一下，我們沒有提供詳細的季度或年度指導，但我們確實希望對 2024 年剩餘時間的展望提供一些更新的信息，這些展望基本上保持不變。鑑於今年前三個季度的情況，我們預計全年銷售額將下降。我們預計我們的產品部門的銷售壓力將持續存在，因此公司第四季的總收入可能會比去年同期下降。

We expect paid subscribers to grow compared to Q4 2023 and we expect platform revenue to be up slightly. As we stated above, we plan to continue our increased spend on sales and marketing given year-to-date performance. We continue to expect some incremental improvement in operating margins for the full year. Our long term financial model remains unchanged with operating margin targets of 15% to 19%. Our proven model has demonstrated that when we operate at scale which we define as revenue above $1 billion and drive top line growth, these margins are achievable.

我們預計付費用戶數量將與 2023 年第四季相比成長，我們預計平台收入將略有成長。正如我們上面所述，鑑於今年迄今為止的表現，我們計劃繼續增加在銷售和行銷方面的支出。我們仍預計全年營業利潤率將有所提高。我們的長期財務模型維持不變，營業利益率目標為 15% 至 19%。我們經過驗證的模型表明，當我們的規模運作（我們定義為收入超過 10 億美元）並推動營收成長時，這些利潤率是可以實現的。

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

說完這些，我將把電話轉給接線生來回答問題。

Thank you.

謝謝。

(Operator Instruction)

（操作員指令）

Our first question comes from the line of EriK Woodring from Morgan Stanley.

我們的第一個問題來自摩根士丹利的 EriK Woodring。

Super thanks so much for taking my questions. Just two if I may. Ashish first you know, I think this was the second consecutive quarter where active users are declining year-over-year and sequentially, but at the same time, paid subscribers are growing year-over-year and sequentially. So can you maybe just give us a bit more detail on exactly what's happening under the hood because, you know, it seems just looking at those metrics, you're having a tough time kind of maintaining your user base, but you are successful at converting a smaller cohort of users to paid subscribers, which is just a bit interesting. So do you mind double clicking on helping and helping us maybe understand what's going on under the hood? And then I have a follow up, please. Thanks.

非常感謝您回答我的問題。如果可以的話，就兩個。首先，Ashish，我認為這是連續第二個季度活躍用戶數量同比和環比下降，但與此同時，付費用戶數量同比和環比增長。所以，您能否向我們詳細介紹一下幕後發生的情況，因為從這些指標來看，您在維護用戶群方面遇到了困難，但您成功地將一小部分用戶轉化為付費用戶，這有點有趣。那麼，您介意雙擊“幫助”並幫助我們了解幕後發生的事情嗎？然後我還有一個後續問題。謝謝。

Thanks Eric for the question. So let me talk about engagement first and I'll kind of break it down for you and then I'll talk a little bit about the second part of your question, which is the subscribers. So, you know, engagement continues. You know, we've talked about this for several quarters. Now it continues to be a focus for the company. And what we see is we see some pressure from the cohorts of 2020 2021 but we also see some very healthy signs. So I'm going to spend some time on that, the core that we acquired in 2020 and 2021 and we acquired a lot of users as these users graduate over time over the engagement curve, that's putting some pressure on the overall engagement numbers. Now, you know, typically we offset that with as we acquire new members and since we haven't, we aren't acquiring as many new members as we'd like, that's not helping. So the net result of that is what you see in the overall engagement numbers.

感謝 Eric 提出這個問題。所以讓我先談談參與度，我會為你詳細分析一下，然後我再談談你問題的第二部分，也就是訂閱者。所以，你知道，參與仍在繼續。你知道，我們已經討論了這個問題好幾個季度了。現在它仍然是公司的關注重點。我們看到，2020 年和 2021 年的群體面臨一些壓力，但我們也看到一些非常健康的跡象。因此，我將花一些時間在這上面，我們在 2020 年和 2021 年獲得的核心用戶以及隨著這些用戶的參與度曲線隨著時間的推移而畢業而獲得了大量用戶，這給整體參與度數字帶來了一些壓力。現在，您知道，通常我們透過獲取新成員來抵消這一點，但由於我們沒有獲得我們希望的那麼多新成員，這沒有幫助。因此，最終結果就是您在整體參與度數字中看到的結果。

Now from a focus standpoint, you know, we have kind of two populations, right? And maybe another one called the engaged subscribers. But basically we are focusing on boarders and then the entire install base of active users, right? From an on board perspective, you know, and these are good leading indicators. You know, we really kind of we want to make it easy for them to come on to the platform in a way that their lifetime engagement is better than the cohorts that we acquired in 2020 and 2021. And some of the metrics we talked about is that, you know, we saw nearly a 50% improvement in the number of people being able to connect with their machine in the first five minutes. And why that's important is that those users then create more projects because they spend less time connecting.

現在從焦點的角度來看，您知道，我們有兩種人群，對嗎？也許還有另一個叫做參與訂閱者的名稱。但基本上我們關注的是邊界用戶，然後是整個活躍用戶安裝群，對嗎？從船上角度來看，這些都是很好的領先指標。你知道，我們真的想讓他們輕鬆進入這個平台，以便他們的終身參與度比我們在 2020 年和 2021 年獲得的群體更好。我們討論的一些指標是，我們發現在前五分鐘內能夠連接機器的人數提高了近 50%。這很重要，因為這些用戶隨後會創建更多的項目，因為他們花費的連接時間更少了。

You know, it was also the second quarter in a row that, you know, onboards created more projects in the first few days and from our data from prior history, we know that when that happens, that tends to lead to better engagement over the lifetime of that customer. You know, without going into all the details, we also talked a little bit about what we are doing for existing for the entire install base. So, you know, we've seen some pretty significant improvement in the amount of time it's taking for people to search for content. And we've actually implemented a new platform that would allow us going into Q4 to bring those users back to design space.

您知道，這也是連續第二個季度，入職後在頭幾天創造了更多的項目，並且從我們之前的歷史數據來看，我們知道，當這種情況發生時，往往會在客戶的整個生命週期內帶來更好的參與度。你知道，我們不必談論所有的細節，我們也討論了一下我們為整個安裝基礎所做的工作。所以，你知道，我們看到人們搜尋內容所花費的時間有了相當顯著的改善。實際上，我們已經實施了一個新平台，可以讓我們進入第四季度，將這些用戶帶回設計空間。

So those are some of the things that you know, are helping with increasing engagement and you know, specifically from an engaged subscriber standpoint, we are being because people are able to find content, they are able to get personalized information. We are seeing a better success rate in acquiring those customers back or retaining those customers. So I think the net result of that is, you know, we see that improvement in engaged subscribers. And, you know, we're pretty convinced that the things that we are working on, especially given the leading indicators that I talked about, you know, are things that will impact our overall engagement curves over time. So we're going to stay focused on executing on that path.

所以這些都是有助於提高參與度的事情，特別是從參與訂閱者的角度來看，我們之所以這樣做是因為人們能夠找到內容，他們能夠獲得個人化的信息。我們看到重新贏得這些客戶或留住這些客戶的成功率更高。因此我認為最終的結果是，我們看到訂閱用戶的參與度有所提高。而且，你知道，我們非常確信，我們正在做的事情，特別是考慮到我談到的領先指標，這些事情將隨著時間的推移影響我們的整體參與度曲線。因此，我們將繼續專注於執行這條道路。

So work on subscriptions. You know, we're actually very excited about our subscription business. We think it's evidence of we continue to focus on adding value, making sure that our customers view that as a compelling value. You know, you may recall last quarter, we talked about, we thought we might even be marginally down as subscribers to the quarter. So we were quite pleased to grow subscribers by 5%. But I think that also talks to our ability to reach into our user base even as we're not adding as many new users as we would like currently.

因此，請努力訂閱。你知道，我們實際上對我們的訂閱業務感到非常興奮。我們認為這是我們繼續專注於增加價值的證據，確保我們的客戶認為這是具有吸引力的價值。你知道，你可能還記得上個季度我們討論過，我們認為本季的訂閱用戶數量甚至可能會略有下降。因此，我們很高興看到訂閱用戶數量增加了 5%。但我認為這也說明了我們有能力接觸我們的用戶群，儘管我們目前增加的新用戶數量不如我們所希望的那麼多。

Okay. That's really helpful. Thank you for all that color guys. Maybe my second question on my follow up is for you, Kimball. You included in your prepared remarks, comments around incremental operating margin improvement a year this year, I think through the first three quarters of the year, you're at roughly over just over 12% operating margins. And I believe it was last quarter you referenced maybe a point of operating margin improvement this year relative to 2023. Is that still how we should be thinking about the operating margin improvement that you're referencing or has anything changed in the background? Thanks so much.

好的。這真的很有幫助。感謝各位色彩朋友。也許我後續的第二個問題是問你的，金博爾。您在準備好的評論中提到了今年營業利潤率逐年遞增的評論，我認為今年前三個季度，您的營業利潤率大約略高於 12％。我相信上個季度您曾提到今年的營業利潤率相對於 2023 年可能會有所提高。我們是否仍應該這樣考慮您所提到的營業利潤率提高，或者背後是否發生了任何變化？非常感謝。

Thanks there. Nothing's changed as I highlighted in the prepared market. So General Alec remains unchanged. We're still expecting about a point improvement in year-over-year operating margin for full year. Remember as we go into the holiday, we tend to have lower growth margins on our physical products. Given the promotionality and, and the higher volumes of physical products we sell during the holiday. So that will pressure margins for the quarter. But so we still expect about a point improvement on year-over-year.

謝謝。正如我在準備好的市場中所強調的那樣，什麼都沒有改變。因此亞歷克將軍保持不變。我們仍然預計全年營業利潤率將年增約一個點。請記住，隨著假期的到來，我們的實體產品的成長利潤率往往會降低。考慮到促銷活動以及假期期間我們銷售的實體產品數量較多。因此這將給本季的利潤率帶來壓力。但我們仍然預期同比會有所提高。

For the year. Super. Thank you so much guys. I'll get back in the queue.

今年。極好的。非常感謝你們。我會回到隊列中。

Our next question comes from the line of Adrienne Yih from Barclays.

我們的下一個問題來自巴克萊銀行的 Adrienne Yih。

Hi, this is [Angus] on for Adrienne and thanks for taking my question. How do you think about long term margin levels in the platform segment? Is there a path back to 90% in the near term? And then on that, what are the fundamental drivers of platform growth margin performance? And how did those behave this quarter? Because it sounds like the software issue kind of clouded the fundamental performance. And then I have a follow up. Thanks.

大家好，我是 Adrienne 的 [Angus]，感謝您回答我的問題。您如何看待平台部分的長期利潤水準？短期內有沒有可能回到 90% 呢？那麼，平台成長利潤率表現的根本驅動因素是什麼？本季的表現如何？因為這聽起來像是軟體問題影響了根本的效能。然後我會進行後續跟進。謝謝。

So, you know, we continue to invest in the platform and those are our costs to be capitalized and those get amortized over three years. [Angus] also, we've seen our hosting fees for subscribers for our platform go up both of those. Both of which put pressure on platform margins for the quarter. We do expect that that trend to continue. I mean, we wrote it about a point in margins as we continue to lean into those investments. And I think that trend you can expect to continue going forward.

所以，你知道，我們繼續投資該平台，這些都是我們要資本化的成本，這些成本將在三年內攤提。 [安格斯] 此外，我們也看到我們平台訂閱者的託管費用均有所上漲。這兩方面都給本季的平台利潤率帶來壓力。我們確實預計這一趨勢將會持續下去。我的意思是，隨著我們繼續依賴這些投資，我們在利潤率上寫下了一個點。我認為這種趨勢將會持續下去。

Yeah, you know, you also talked about a little bit of the mix of annual versus monthly with annual being, you know, at a lower revenue, but that put some pressure as well. But ultimately, that's the intended result.

是的，您知道，您也談到了年度和月度收入的混合，年度收入較低，但這也帶來了一些壓力。但最終，這就是預期的結果。

Yes. Well, so she is highlighting, you know, we were up 5% on number of subscribers but only up marginally on revenue. And that really is two factors that are intentional on our part. One, we are trying to increase the mix of annual subscribers over monthly that comes at a discount and then also as the mix continues to shift more international, that also puts pressure on subscription revenue and then, and obviously slightly lower revenue with the increased cost puts pressure on overall margin for that.

是的。她強調說，我們的訂閱用戶數量增加了 5%，但收入僅略有增長。這其實是我們有意為之的兩個因素。首先，我們試圖增加年度訂閱用戶的數量，而非按月訂閱，因為這樣會打折，而且隨著訂閱用戶數量不斷向國際化轉變，這也給訂閱收入帶來了壓力，而且顯然，隨著成本增加，收入會略有下降，從而給整體利潤帶來壓力。

Got it. Thanks, very helpful. And then my second question is I think in your remarks, you spoke about retailer inventory levels, but anything you could share on whether you see a potential restocking environment in the future or if it seems like retailers are making, you know, more permanent shifts in the levels of crafting products that they carry.

知道了。謝謝，非常有幫助。我的第二個問題是，我認為在您的演講中，您談到了零售商的庫存水平，但您是否可以分享一下未來是否會出現潛在的補貨環境，或者零售商是否似乎正在對其所持有產品的製作水平進行更持久的轉變。

Yeah, so this is the second quarter where we talked about, we've seen partial restocking of the channel and as we go into holiday, you know, I think channel is in generally a healthy position. There are pockets where we would like to see more inventory. But, overall, I think it's better than it was a year ago as we go into this holiday season, we have our you know, deeper Q4 promotions lined up and we're just at the doorway of holiday season. So at this point, we're anxious to see how consumers show up for holiday

是的，這是我們談論的第二季度，我們已經看到管道的部分補貨，而且隨著假期的到來，我認為管道總體處於健康狀態。我們希望看到更多庫存。但總體而言，我認為情況比一年前要好，因為我們進入了這個假期季節，我們已經準備好了更深入的第四季度促銷活動，而且我們正處於假期季節的門口。因此，我們目前急切地想知道消費者如何度過假期

Let me add on to that. So, you know, our traffic to our site is based on all the marketing we've been doing. And, you know, our expectation going into Q4, given all the promotional activity is that that conversion will start to manifest itself. So while the retailer inventory is better and we are happy and excited about that, there's still some pos Kimball said, you know, there will be some, hopefully nobody leaves money on the table in terms of when that consumer comes in to shop, but you know, definitely an improvement year-on-year.

讓我補充一下。所以，您知道，我們網站的流量是基於我們一直在做的所有行銷。而且，您知道，考慮到所有的促銷活動，我們預計進入第四季後，這種轉變將開始顯現。因此，雖然零售商庫存更好，我們對此感到高興和興奮，但金博爾說，仍然存在一些問題，你知道，會有一些，希望沒有人會在消費者進來購物時浪費錢，但你知道，肯定是同比有所改善。

Got it. Thank you guys and see you next month.

知道了。謝謝你們，下個月見。

Thanks, [Angus].

謝謝，[安格斯]。

Our next question comes from the line of Asiya Merchant from Citi Group.

我們的下一個問題來自花旗集團的 Asiya Merchant。

Great. Thanks for taking my question today. If you can double click a little bit, looks like accessory revenues down, you know, 3% an improvement from what we've seen in the first half of this year? Are we at some kind of an inflection point here you think on your accessories? And on the flip side, you know, connected machines being down 11% on a year-on-year basis, which was a little bit, you know, different than what you've seen in the first half of the year. So if you can just double click on, you know, the trends that you're seeing on both those, that would be great. Thanks.

偉大的。感謝您今天回答我的問題。如果您可以雙擊一下，看起來配件收入下降了 3％，與今年上半年相比有所改善？您認為我們是否正處於配件領域的某種轉捩點？另一方面，連網機器數量較去年同期下降了 11%，這與今年上半年的情況略有不同。因此，如果您可以雙擊所看到的趨勢，那就太好了。謝謝。

Asiyah, thanks for the question. First on the sensor materials, that's really more a story of easier comps if you look at prior year comparisons. And I think it's more instructive if you look at sequentially where we're about flat from Q2 to Q3 and, and then let that inform your assumptions on Q4. But we do expect to see continued pressure and accessories and materials and they're not calling the reflection point at this point. On machines, that's really a story about promotionality as we prepare for deeper Q4 promotions. And so gross sales on machines was actually up marginally for the quarter. But by the time we take into account provisions for Q4 promotions, that's what's really driving the 11% down in machine revenue for the quarter.

Asiyah，謝謝你的提問。首先關於感測器材料，如果你查看前幾年的比較，這實際上更像是一個更容易比較的故事。我認為，如果您按順序查看從第二季度到第三季度的持平情況，然後以此為依據對第四季度進行假設，會更有啟發。但我們確實預計會看到持續的壓力、配件和材料，而它們目前還沒有到達反射點。對於機器來說，這實際上是一個關於促銷的故事，我們正在為更深入的第四季促銷做準備。因此本季機器的總銷售額實際上略有上升。但當我們考慮到第四季度促銷費用時，這才是導致本季機器收入下降 11% 的真正原因。

Okay. That's helpful. And then on just promotional intensity, I understand you guys have, you know, obviously promotions lined up here for the holiday season. Generally speaking though, you know, relative to the competitive environment, how are you looking at the promotional environment given that, you know, zooming consumers seems like you think that that's going to be a positive driver. How is the promotional intensity broadly in the crafting category?

好的。這很有幫助。然後就促銷力度而言，我知道你們已經為假期季節準備了一系列促銷活動。不過一般來說，相對於競爭環境，您如何看待促銷環境，因為您知道，快速成長的消費者似乎會成為積極的驅動力。手工藝品類的促銷力道大致如何？

I think we're seeing promotions fairly broadly in the category. You know, in material segment, for example, throughout the year, we have seen increased you know, competition on price point. And that's partly what informs our promotional strategy on that front. On connected machines, you know, we continue to see positive uplift as we go through each of these promotional periods and that gives us confidence to continue executing on that strategy. I will add that, you know, when we're not on promotion, we've seen weaker baseline demand than we expected. And we've talked about that for a couple of quarters. Now where that's continued throughout the year.

我認為我們在該類別中看到了相當廣泛的促銷活動。你知道，例如在材料領域，全年我們看到價格競爭日益激烈。這在某種程度上決定了我們在這方面的促銷策略。您知道，在連網機器方面，我們在每個促銷期都看到積極的提升，這給了我們繼續執行該策略的信心。我要補充一點，你知道，當我們沒有促銷時，我們看到的基線需求比我們預期的要弱。我們已經討論了這個問題幾個季度了。現在這種情況已經持續了一整年。

And let me just add that, you know, we've kind of been, we've intensified our marketing over the last few quarters and we see the traffic to not just cricut.com but other online properties. And, you know, but at the same time, we still think that despite, you know, when we do, when we are promoting, we see that demand manifest itself. But in normal times, we think that the consumer is still waiting and affordability is still, you know, just given the consumer discretionary spending affordability is still one of the key factors. So I think, you know, our Q4 strategy is very much built around the hypothesis that, you know, there's awareness, there's, you know, interest in the category. And basically our goal is to, you know, help drive some of that conversion in this time frame.

我還要補充一點，您知道，我們在過去幾個季度中已經加強了行銷力度，我們看到不僅是 cricut.com 的流量在增加，其他線上網站的流量也在增加。但同時，我們仍然認為，儘管如此，當我們這樣做時，當我們進行推廣時，我們會看到需求的顯現。但在正常時期，我們認為消費者仍然在等待，而負擔能力仍然是，你知道，考慮到消費者可自由支配的開支，負擔能力仍然是關鍵因素之一。所以我認為，我們的第四季策略主要是圍繞著這樣一個假設建立的，即人們對該類別有認知，有興趣。基本上，我們的目標是在這個時間範圍內幫助推動一些轉變。

Okay. Thank you.

好的。謝謝。

Our next question comes from the line of Eric Sheridan from Goldman Sachs.

我們的下一個問題來自高盛的埃里克·謝裡丹（Eric Sheridan）。

Thank you so much for taking the question, maybe just a couple of parts in one question. And then I'll go back into the queue. When you go back to earlier this year where you sort of asserted this move towards higher marketing intensity to sort of stimulate growth. If we go backwards before we go forward, what have been the key learnings from that higher level of marketing intensity that you feel are working and that are building scale around the platform and the product array of the company? And the extent to which some of those efforts around marketing have fallen short of your original goals. How much of it is down to either intensity or channels you're investing in on the marketing side versus the overall environment you find yourself in with respect to the consumer and possibly down the receptivity of some of those marketing messages? Thank you.

非常感謝您回答這個問題，也許一個問題中只包含幾個部分。然後我將回到隊列。當您回顧今年早些時候您曾主張提高行銷強度以刺激成長時。如果我們在前進之前先回顧一下過去，您認為從更高水平的營銷強度中獲得的關鍵經驗是什麼？以及在行銷方面所做的一些努力在多大程度上未能達到您最初的目標。這在多大程度上取決於您在行銷方面投入的強度或管道，還是取決於您所處的消費者的整體環境，以及可能取決於某些行銷訊息的接受度？謝謝。

Eric. Thanks for the question. So, if I look at history, right, we haven't grown top line in a couple of years and, as we were managing OpEx, we pulled back in marketing as part of that and got to the point where we feel like we've over indexed on that, but we didn't, as we, as we pulled back on marketing, we didn't initially see dramatic drop offs in demand or consumer enthusiasm. And likewise, as we came into the year and we've talked about we're leaning into marketing. We want to regenerate enthusiasm both with the consumers and our retailers.

埃里克。謝謝你的提問。因此，如果我回顧歷史，對吧，我們有幾年沒有實現營收成長，而且，在我們管理營運支出時，我們撤回了行銷投入，並且到了我們覺得我們對此過度重視的地步，但是，當我們撤回行銷投入時，我們最初並沒有看到需求或消費者熱情的急劇下降。同樣，隨著我們進入新的一年，我們已經討論過我們傾向於行銷。我們希望重新激發消費者和零售商的熱情。

We have been, we've been spending more throughout the year and slowly seeing improvement on key metrics. Now, granted, we haven't seen overall top line improvement, but one of the key things that we measure is traffic to cricut.com as you mentioned a moment ago. We measured that because regardless of what channel a consumer decides to end our ecosystem, by purchasing a connected machine. We know that coming to cricut.com to research our products is an important part of that journey. And we have seen improvement in that both on a quarter, over quarter and a year on year basis for traffic.

我們全年的支出都在增加，關鍵指標也慢慢改善。現在，誠然，我們還沒有看到整體營收的改善，但正如您剛才提到的，我們衡量的關鍵指標之一是 cricut.com 的流量。我們進行測量是因為無論消費者決定透過什麼管道購買連網機器來終結我們的生態系統。我們知道，造訪 cricut.com 研究我們的產品是這趟旅程的重要部分。我們看到，無論是按季度、按季度或按年，流量都有所改善。

We also have a multimedia mix model where we are measuring the impact of spend by channel. And, we're looking at returns based on multiples of our spend and optimizing that model on a frequent basis to optimize the mix and move money around. But you know, we are confident enough in the data that we see that keeps us leading into that spend. So in Q4, marketing spend tends to be higher than Q3. So you can expect that to continue in Q4, but also for us to continue spending at an elevated rate going into 2025 because it also isn't just start marketing and see immediate results we're building for the long term and happy with the results we're seeing so far.

我們還有一個多媒體組合模型，用來衡量各通路支出的影響。並且，我們會根據支出的倍數來尋找回報，並頻繁優化該模型，以優化組合併轉移資金。但你知道，我們對所看到的數據非常有信心，這讓我們在支出方面保持領先。因此，第四季的行銷支出往往高於第三季。因此，您可以預期這種情況將在第四季度繼續下去，而且我們將在 2025 年繼續以較高的速度支出，因為我們不只是開始行銷並看到立竿見影的效果，我們還在為長期發展而建設，並對目前看到的結果感到滿意。

Great. Thank you.

偉大的。謝謝。

Thank you at this time. I would now like to turn the call back over to Jim Suva for closing remarks.

這次謝謝你了。現在我想將電話轉回給吉姆·蘇瓦，請他作最後發言。

Thank you, [Gigi] and thank you for everyone joining us this afternoon. We have a large opportunity over the long term to drive new user growth and increased engagement. The Cricut platform continues to not only strengthen but also provide increased value to our users. We will continue to manage the business for sustainable profitable growth and generate healthy cash flows.

謝謝你，[Gigi]，也謝謝大家今天下午加入我們。從長遠來看，我們有很大的機會推動新用戶的成長和參與度的提升。Cricut 平台不僅不斷增強，而且還為我們的用戶提供更大的價值。我們將繼續管理業務，實現可持續的獲利成長並產生健康的現金流。

I'm excited about the opportunities ahead of us. We will be meeting with investors at the Barclays Investor Conference in New York City on Thursday, December 5 and the Roth MKM Investor Conference in Deer Valley, Utah on Thursday, December 12. We hope to see you there. If you have additional questions, please email me at jsuva@cricut.com. This now concludes this earnings call and you may disconnect.

我對我們面臨的機會感到興奮。我們將於 12 月 5 日星期四在紐約巴克萊投資者大會上與投資者會面，並於 12 月 12 日星期四在猶他州鹿谷舉行的 Roth MKM 投資者大會上與投資者會面。我們希望在那裡見到您。如果您還有其他問題，請發送電子郵件至 jsuva@cricut.com。本次收益電話會議到此結束，您可以斷開連線。

This concludes today's conference call. Thank you for participating. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。