Cricut, Inc.

Good day, and thank you for standing by. Welcome to the Cricket First Quarter 2026 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand over the conference to your first speaker today, Michael Hode, Vice President of Finance. Please go ahead.

Thank you, Operator, and good afternoon, everyone. Thank you for joining us on Cricket's first quarter 2026 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. Joining me on the call today are Ashish Arora, Chief Executive Officer, and Kimball Schill, Chief Financial Officer. Today's prepared remarks have been recorded, after which Ashish and Kimball will host a live Q&A. 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, tariffs, capital allocation, 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 factor section of crickets most recently filed Form 10-K or Form 10-Q that we have filed with the Securities and Exchange Commission. 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, May 5th, 2026. Cricket 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.

Thank you, Michael. In Q1, we began to see the early benefits of our platform-first strategy with guided onboarding, bundles, guided flows in design space, and services working together for a simpler, more compelling user experience. We successfully introduced our newest machines and launched Cricket's first service offering. Both reflect the strength of our platform in delivering a guided experience that helps users make what they want more easily. We are also encouraged by the positive response to the added value in our new machine bundles, which reinforces our strategy. We are pleased to see growth in active users year on year. Simplifying the user experience remains a key focus to drive engagement. We are pleased with profitability, growth in platform revenue, and growth in global machine sellout units. However, those gains did not yet translate into total company sales growth, which declined less than 2% year over year in Q1. We are moving with urgency to create a more compelling mass market experience, accelerate our development cycles, and compete more effectively. Today I will discuss what went well in Q1 2026, where we can improve, and our priorities for the year. Himmel will then cover the financial details and our outlook for 2026. We delivered solid Q1 profitability despite early headwinds. Platform revenue increased nearly 6% and strong machine sellout units gave us a solid start to the year. During the quarter, we launched two new cutting machines, Joy2 and Explore5, offered exclusively in bundle options designed to improve user onboarding while delivering compelling price points and value. We also launched the next generation of our handheld heat presses, EasyPress SE, in the popular 9x9 and 12x10 sizes. To support these launches, we introduced several new materials and accessories, and continue to improve our software platform, including new AI capabilities and easy to use guided project flows. We are encouraged by the initial results and user feedback. We are proud to be the recipient of Michael's Best New Product Launch Award. Michael's is the world's largest craft retailer and an important partner for Cricut. We're also focused on increasing our speed of execution and our accelerating investments in hardware development materials, and engagement to support future growth. You can already see the early results of those investments in our 2026 launches so far. We plan to maintain a marketing and promotional cadence similar to last year, and we are excited about the roadmap ahead. We remain focused on acquiring new users and increasing engagement across our platform, which together drive our monetization flywheel of subscription and accessories and materials. We believe Cricket is a growth business and we are intent on proving it. Let me talk about our priorities. At the top of the funnel, our goal is to broaden awareness and bring new consumers into the brand. Our research tells us that to do that successfully, Cricket has to feel relevant and approachable. Put simply, we need more consumers to believe that Cricket is for someone like me. That is a core objective of our influencer strategy today, and it will also be a central message in the broader marketing campaign we're preparing to launch this summer. As consumers move from awareness into consideration, we see two barriers that matter most. They need to believe that Cricket is easy to use and affordable. Our strategy is designed to address both. We are continuing to invest in onboarding, guided flows, software and platform improvements, and bundle-only offerings. Together, these efforts help simplify the learning curve, improve affordability and perceived value, and make it easier for new users to get started and succeed early in their journey with Cricut. We saw encouraging signs of progress in Q1. We continued to invest in marketing to expand our audience and deepen engagement with the brand. We gained momentum across key channels driven in part by strong results from our influencer activations, along with continued improvement in overall digital marketing performance. These efforts were further supported by the halo effect of our late Q4 campaigns and promotional activity. Altogether, that contributed to strength in connected machine sellout in Q1, with particularly strong consumer demand early in the quarter. While we did not grow products revenue in Q1, we did continue to see global machine sellout increase year over year, and quarter-to-date trends remain positive. At the same time, we are building the experience in a way that supports stronger adoption over the long term. In 2026, we are leading into our bundle-only consumer experience as we launch the next generation of our cutting machines. These new bundles combine the machines tools, and materials with tightly integrated guided software flows to create a more cohesive out-of-box experience and help users succeed from their very first project. In Q1, we began to see early benefits from this approach, which I'll speak to more when I get to engagement. We also made important progress and innovation during the quarter. We introduced two next-generation cutting machines built on all new architectures. Cricut Joy 2 and Cricut Explore 5. We launched our direct-to-film service, Cricut's first service offering, which is another strong example of how we are reducing complexity for consumers. It combines the power of our creative platform with the simplicity of guided flows, enabling users to create vibrant full-color designs that are delivered directly to their doors. We believe this is the beginning of a new era for Cricut. one where we expand the top of the funnel, remove barriers to adoption, and deliver a more seamless end-to-end experience that helps more users create with confidence from day one. We continue to make progress, stabilizing engagement trends, ending the quarter with active users up 1% and 90-day engaged users down 1%, representing improvements year-on-year and sequentially. We are encouraged by the early response to the initiatives we launched in late Q4 and into Q1, including guided flows for full-color stickers and insert cards, expanded vinyl decal use cases, our AI-assisted project designer tool, and improved project preview visualization. We now have six guided flows, which cover our most popular use cases and dramatically simplify the user experience. In addition, we began ruling out AI project designer, which allows users to design and make a project through a conversational interface. Taken together, these launches reflect how our platform is evolving to become simpler, more intuitive, and more compelling for a broader set of consumers. A key leading indicator of future growth is how effectively we engage new users. In Q1, cut-intensity among our 2026 onboarder cohort in their first few weeks reached its highest level for a Q1 in the past two years. Users onboarding with our newly launched Joy to Explore 5 machines are now guided through a broader range of projects that utilize the full set of materials included in their bundles. We also introduced additional improvements late in the quarter to further reduce friction and drive repeat engagement. These include enhanced educational content within guided flows, improved accuracy for AI assistant chatbot, and gamification designed to encourage exploration of machine capabilities and repeat visits. Among returning members, we are seeing early signs of progress as well. Members who joined in recent years and returned to create projects in Q1 demonstrated higher cut intensity compared to prior years. At the same time, as the large 2020 and 2021 cohorts continue to decline as a percentage of our active user base, we are seeing a moderation in overall engagement erosion. Our engagement marketing efforts, which focus on bringing users back into our platform, are also becoming more effective and efficient. For example, using AI to generate and personalize lifecycle campaign messaging has consistently improved click-through rates. The product improvements experienced by returning users in design space are positively impacting perception among both members and independent influencers. Looking ahead, we are excited about our upcoming platform innovations, which we believe will continue to make the creative experience faster, more intuitive, and more delightful. In Q1, paid subscribers increased 104,000, or over 3% year on year, to almost 3.08 million, as we saw platform revenue increase nearly 6% to almost 84.8 million year-on-year. We did see a drop of 13,000 subscribers sequentially from Q4 2025, reflecting lower promotional activity in Q1, as we emphasized revenue growth in the quarter. As discussed in earlier calls, there is some natural subscriber attrition. So subscriber growth may be challenging until we increase the pace of machine sales and new user acquisition. We saw some of this pressure manifest in Q1. That said, we continue to see healthy sign-up rates from our new members and are achieving a higher revenue growth rate. Additionally, at the end of Q1, we started testing new subscription plans and pricing tiers on new sign-ups using AI credits and shop benefits as differentiators. Early conversion signals and higher tier adoption are encouraging, but it is still early. We will continue to test new plans and price points as we add more value and benefits for our subscribers. Earlier, we also rolled out a price increase on new subscribers through the iOS App Store, while simultaneously offering alternative payment options to purchase via Cricut at the lower legacy price. We have been watching this test and have seen positive results in shifting users to the cricket payment options or a higher price purchase via the app store without significant impact to overall expected signups. We have a rich roadmap to continually increase the value proposition for subscribers. Our goal is to make it incredibly compelling to be a subscriber to leverage our content, software tools, and services. This remains a highly competitive category. particularly in material types with low barriers to entry, where we continue to see pressure from private label offerings at retail, as well as new entrants across online marketplaces and store shelves. We are not satisfied with our position in parts of this category, and we are moving aggressively to refresh the portfolio, improve value, and sharpen our channel execution. Those efforts produced mixed results in Q1, But there were encouraging signs. We saw double-digit growth in value materials online, and we made share gains in iron-on, vinyl, and cutting mats. At the same time, share in heat presses was pressured as we moved through product line transitions. Overall, our view is clear. When we bring the right combination of innovation, quality, and affordability to market, we can improve our share position while enhancing the making experience for our users. Innovation remains central to that effort. For example, with the launch of Joy 2 and Explore 5, we introduced OmniPen, our new universal pen system, which has been well-received for its performance and compatibility. Across Q1 and Q2, we are expanding the portfolio with more than 200 new SKUs and executing a meaningful retail refresh with key partners. We're also continuing to invest in core categories, such as Smart Iron-On and Vinyl. with new colors, finishes, and a broader assortment. At the same time, we are advancing our full-color strategy through continued innovation in printables across inkjet and sublimation, along with refreshed tools and accessories. In heat presses, we are broadening our lineup to address more price points and use cases. EasyPress Mini LT, which we launched in Q4, is helping address affordability, and early results suggest much of that demand has been incremental. In Q1, we also launched EasyPress SE in the popular 9x9 and 12x10 sizes, which expands our ability to compete more effectively across markets with a professional quality, easy-to-use heat transfer solution. We also launched Cricut's first service offering with our Direct-to-Film or DTF service, which leverages our creative platform content and new guided flows. Customers create vibrant, full-color designs that we print and deliver to them, which they can then press on to fabric or other substrates. While still a small experiment, this service is an important example of how we can monetize our creative platform beyond cutting machines. Early response has been encouraging. So far, over 80% of orders are coming from subscribers, and around a third of orders have already come from repeat customers. Over time, we believe this can deepen engagement and further increase the value of our subscription offering. Stepping back, We are moving with urgency on both innovation and cost discipline. We have more product innovation ahead. We are equally focused on execution, improving the end-to-end customer experience, and driving greater efficiency across the business. Our conviction remains the same. When we make it easier and more affordable for people to create, we increase engagement, materials usage, and long-term value creation. With that, I will turn the call over to Kimball.