SOUTH JORDAN, Utah - Cricut, Inc. (NASDAQ:CRCT), a creative technology company, disclosed its financial outcomes for the fourth quarter ended December 31, 2023, revealing a revenue of $231.2 million. This figure falls short of the analyst consensus estimate of $252.67 million and represents an 18% decrease from the $280.8 million reported in the same quarter the previous year. Adjusted earnings per share (EPS) for the quarter were $0.05, which was also below the analyst estimate of $0.06.
Despite the revenue shortfall, the company saw an improvement in gross margin, which increased to 42.0% from 29.8% in Q4 of the prior year. Operating income rose to $16.5 million, or 7.1% of total revenue, up from $11.1 million, or 4.0% of revenue in Q4 2022. Additionally, net income saw a slight increase to $11.3 million or 4.9% of revenue, compared to $10.9 million or 3.9% of revenue in the same quarter last year.
Cricut's CEO, Ashish Arora, acknowledged the disappointing sales figures but expressed encouragement from the operating income growth and the company's seventh consecutive year of profitability. Arora attributed the lower-than-expected sales in part to reduced retailer inventory and less aggressive marketing, stating plans to enhance marketing efforts and spending in 2024.
For the full year 2023, Cricut reported a revenue of $765.1 million, a 14% decline from the previous year's $886.3 million. Despite this, the company generated a strong cash flow from operations, amounting to $288.1 million in 2023, a significant increase from $118 million in 2022.
The company ended the year with a total user base of over 8.9 million, marking a 13% growth over 2022, and paid subscribers increased to 2.77 million, up 6% over the previous year. Cricut's CFO, Kimball Shill, highlighted the company's strong cash flow and the completion of a $50 million stock repurchase program.
Cricut did not provide specific guidance for the upcoming quarter or fiscal year in the press release, nor was there any mention of stock movement following the earnings release, as the up or down % and driver of the move variables were not available.
The company's focus for the future includes a shift in reporting segments to Platform and Products and updating public key performance indicators (KPIs) to better reflect its operations.
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