What happened
Shares of Cricut (CRCT 2.69%) have plummeted today, down by 24% as of 10:50 a.m. EDT, after the company reported second-quarter earnings. The results beat expectations, but management's cautious commentary regarding Cricut's outlook may have rattled investors.
So what
Revenue in the second quarter increased 42% to $334.5 million, ahead of the consensus estimate of $317.4 million in sales. That figure included $146.3 million in connected machine revenue and $50.7 million in subscriptions revenue. Another $137.5 million in sales was attribute to accessories and materials. The creative technology company, which makes crafting machines, reported net income of $49.1 million, or $0.22 per share, which beat the $0.21 per share in profits that Wall Street analysts were looking for.
Image source: Cricut.
"Our second quarter performance delivered strong results across the business, driven by new users and continued healthy engagement levels," CEO Ashish Arora said in a release. "We successfully launched two new connected machines, a new line of Smart Materials, added new features and functionality to our software platform, and saw strong growth from our top international markets."
Now what
Cricut did not offer quantitative guidance, but CFO Marty Peterson instead provided some other commentary. On the conference call with analysts, Peterson noted that second-quarter results benefited from channel fill as the company filled retail inventories with the new products.
"As a result, product sell-in during Q2 materially exceeded sell-through," the finance chief said. "These tailwinds will not continue in the second half."
Peterson also suggested that people are spending less time at home as parts of the country show progress in controlling the pandemic. Cricut expects to add 1.8 million new users in 2021.
