Cricut's Q4 2024: Engagement Strategies and International Growth Face Key Contradictions

These are the key contradictions discussed in Cricut's latest 2024 Q4 earnings call, specifically including: Engagement Improvement Strategies, and International Market Growth:



Sales and Engagement Challenges:
- Cricut reported a 7% decline in total company sales and a 7% decline in total active users in 2024 compared to 2023.
- The decline in engagement metrics was attributed to fewer new users being attracted and lower engagement levels among recent users compared to the COVID cohorts of 2020 and 2021.

Marketing and Product Strategy:
- Cricut increased marketing spend by $20 million in 2024 and plans to maintain similar spending in 2025.
- The company launched the Cricut Explore 4 and Cricut Maker 4 machines, which are up to 2x faster than their predecessors, to boost engagement and attract new users.

Subscription Growth and Platform Performance:
- Cricut's paid subscribers increased by 7% to 2.96 million in 2024, with a sequential increase of 121,000 in Q4.
- The growth in paid subscriptions was driven by effective onboarding strategies and promotional offers that reduced cancellation rates.

Accessories and Materials Market Pressure:
- Revenue from accessories and materials declined by 20% in 2024, contributing to a 12% overall decrease in product revenue.
- This decline was due to increased competition from private label brands in retail and reduced engagement among users.