Good day, and thank you for standing by. Welcome to the Cricut Q2 2021 earnings conference call. I would like to hand the call to Stacie Clements, Investor Relations, The Blueshirt Group. Please go ahead. Thank you, operator, and good afternoon, everyone. Thank you for joining us on Cricut's second quarter 2021 earnings call. Please note that today's call is being webcast 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, prepared remarks and accompanying slides used on today's call will also be posted to the investor relations section of the website, investor.cricut.com. Joining me on the call today are Ashish Arora, Chief Executive Officer, and Marty Petersen, Chief Financial Officer. Before we begin, I 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. 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 Cricut's most recently filed Form 10-Q. Actual events or results may differ materially. All non-GAAP numbers referenced in today's call are reconciled in the press release or on the slide presentation on our investor relations website. This call also contains time-sensitive information that is accurate only as of the date of this broadcast, August 12th, 2021. Cricut assumes no obligation to update any forward-looking projection that may be made in today's press release or call. I will now turn the call over to Ashish to begin. Thank you, Stacie, and welcome everyone. We had a solid second quarter with revenues increasing across all three categories, connected machines, subscriptions, and accessories and materials. Total revenue for the second quarter was $334.5 million, an increase of 42% over an exceptionally strong Q2 last year. Strong revenues, coupled with our profitable business model, led to a $68.5 million in EBITDA, a 39% increase over the second quarter last year. We continued to see growth in our user base and healthy engagement and monetization. We added over 430,000 users in the quarter, bringing our total user count to nearly 5.4 million. We saw continued healthy engagement levels at 59% in the second quarter, down modestly from the stay-at-home engagement levels of the prior four quarters. As a result of healthy user growth and engagement, 3.2 million users were engaged on our platform in Q2. This is 1.1 million more users engaged in Q2 compared to Q2 of the previous year. The large influx of users from 2020 and the first half of 2021 provide a powerful flywheel effect to our business with ongoing monetization opportunities as well as fuel momentum through word-of-mouth referrals. I continue to be amazed by all the projects and creativity from our users. As expected, we are seeing many projects centered around events such as weddings, parties, family reunions, and vacations, just to name a few. As users create, they inspire other users to create, and the more they create, the more Cricut benefits from network effects that ultimately drive new user acquisition and inspire additional engagement. One of the many ways we are able to monetize engagement is through our subscription service, Cricut Access. We ended the quarter with nearly 1.8 million subscribers to Cricut Access, up from 1.6 million at the end of Q1. We continue to focus heavily on increasing the value proposition of our subscription. We now have over 175,000 images in Cricut Access, an increase of over 40% from Q2 2020. In the coming quarters, we will continue to aggressively add content as well as additional software features that will be available exclusively to Cricut Access members. Another important pillar of our growth strategy is international expansion. Revenue from international markets grew 179% year-over-year in the second quarter and continues to grow into a greater proportion of total revenue. Our top markets include Australia, France, Germany, and the U.K. The international markets are especially promising given our observations that the motivations and behaviors that are driving growth internationally are very similar to those that have grown domestically since 2014. We recently introduced our new direct-to-consumer e-commerce site in the U.K., giving our users a complete Cricut-branded shopping experience. We anticipate that more direct-to-consumer sites will be launched in additional geographies in the coming quarters as we see significant synergies with our omni-channel strategy. We also welcomed our first sales team members in Italy and Mexico in Q2 and continued to expand our retailer footprint in markets such as Germany, France, Spain, South Africa, and Southeast Asia. As we think about future investments in international markets, you will see us continue to increase our sales and marketing efforts, including adding key influencer relationships across the globe to help raise awareness and drive conversion. We will also continue to diversify our content offerings, invest heavily in language and currency localization, as well as foster and support international markets with Cricut team members in those geographies. We plan to grow international markets using the proven Cricut playbook, invest in delivering great experiences to users that they will then show and tell to others. We had some very exciting new product launches during the second quarter. From the onset, we have focused on building an innovative and expandable platform for our community of users to drive long-term growth. In June, we launched the new Cricut Explore 3 and Cricut Maker 3 machines. Significant undertakings which included new physical hardware as well as new software features, content, and a line of innovative materials. I'm very pleased with the new products and the improved user experience that they provide. Designed to cut up to 2x as fast, users can also cut longer runs of materials. Now, this is especially useful when creating things like wall decor, large signs or banners, or multiple copies of the same project. In connection with these machine launches, we also launched a line of Smart Materials designed to increase creative use cases and improve ease of use. Smart Materials are especially engineered to keep materials perfectly aligned and on track from start to finish, without the need for a cutting mat and for cuts up to 12 ft in length. These Smart Materials create a frictionless experience for our users, whether they are cutting a small single image or very long or repeated cuts. We will continue to innovate in this area, where quality and seamless integration helps build a moat across our accessories and materials business. Now coming on to software. Our cloud-based software enables us to update features and functionality of existing physical and digital products. This kind of platform extensibility is a clear differentiator in the market, while also enabling us to rapidly innovate and add features to improve the user experience. For example, during Q2, we added the long-requested kerning feature in Design Space, a feature that enhances font usage and encourages engagement by saving time and effort. Additionally, users can now like projects inside Design Space and more easily organize their personal library with our newly redesigned bookmark feature. We also continued our ongoing search optimization, among many other things. We take great pride in listening to feedback from our community, constantly enhancing the platform and the overall user experience, and you will see us continue to invest heavily in these areas. As noted earlier, I love the passion of our users. Many of our users share a love of our brand, products, and mission. In other words, they are the heart and soul of Cricut. Approximately 43% of new customers first hear about Cricut through word of mouth, providing a powerful, viral, and cost-effective marketing engine for new user acquisition. We now have over 5.2 million social media followers and 2.4 billion views on #Cricut on TikTok, which are almost entirely organic. We will continue to foster these communities, amplify their voices, and share their amazing work. Overall, I'm really pleased with the quarter and our progress to date. The products we've launched and the lives we impact create a tremendous opportunity for us to continue scaling our user base. We estimate our serviceable addressable market in the U.S. and Canada is roughly 85 million individuals. Including our SAM internationally, we believe our opportunity is roughly 130 million individuals when adding just Australia, France, Germany, and the U.K. markets. With a user base of nearly 5.4 million, we have penetrated just over 4% of our SAM. As we continue to expand our offerings, drive continued user engagement, and fuel our viral marketing engine, we believe there is an even greater opportunity for creatives everywhere to join the Cricut platform. I will now turn the call over to Marty for more details on the financials. Thank you, Ashish, and good afternoon. Our second quarter's performance was fueled by strong fundamentals in the business and our powerful community of engaged users. Additionally, Q2 benefited from the new product launches that Ashish mentioned earlier. For those of you who are newer to our story, let me quickly touch on the financial drivers of our model. Dating back to 2014, Cricut has a proven track record of strong revenue growth and profitability. Our sales are diversified across categories and give us revenue streams that are largely predictable. The user journey generally starts with the purchase of a connected machine. The gross profit from that purchase mostly covers our customer acquisition cost. The purchase then triggers a flywheel of engagement, which in turn drives ongoing revenue from subscriptions and accessories and materials. With that as a backdrop, I'll now walk through the financial highlights. We continued to see organic adoption. Word of mouth marketing drove strong connected machine sales and increased user acquisition. Our new and existing users continued to be highly engaged, which drove ongoing monetization through subscriptions and accessories and materials. Revenue in the quarter was $334.5 million, an increase of 42% over Q2 last year, representing strong growth relative to a tough comp of 149% year-over-year growth in Q2 2020 at the onset of the pandemic. Strength in the quarter came across our business, including our ability to replenish lower than normal retail inventory levels and the success from our new product launches. Breaking down revenue in the quarter even further, revenue from connected machines grew 29% over Q2 last year, even while comping extremely strong sales in Q2 2020 at the beginning of the pandemic. Connected machine revenue was driven in part by the launch of our new Maker 3 and Explore 3 machines during the quarter. Strong machine sales and new user acquisition, as well as healthy engagement of our growing base of existing users for the past five quarters, helped drive 111% revenue growth in subscriptions in the quarter, and 40% growth in accessories and materials. In terms of geographic breakdown, international revenue continued to outpace growth in North America, increasing 179% in the second quarter over the same quarter in 2020. As a percentage of total revenue, international represented 8.5% in the second quarter, up from 4.3% in Q2 2020 and 7.4% in all of 2020. We anticipate the investments we made in 2020 and ongoing future investments will continue to expand consumer reach and brand awareness internationally. The Cricut community of users drives healthy engagement on our platform and is an important variable in building our long-term business with sustainable growth and compelling margins. In the second quarter, the number of users engaged in our platform for the prior 90 days increased by 1.1 million versus the same quarter last year, further demonstrating consistent, healthy engagement on our platform. As a percentage of total users, this translates to 59% engagement, which is a slight sequential decline on a percentage basis, given that Q2 is typically a seasonally softer quarter. As we move deeper into the summer months, we have also seen pandemic reopenings amplifying some of our normal summer seasonality. As a result, we could see slight pressure on engagement in Q3. We continued to rapidly grow our user base in Q2, ending the quarter with nearly 5.4 million total users or 64% year-over-year growth despite the tough comp from the spike in user growth at the beginning of the pandemic. Ending paid subscribers grew nearly 1.8 million, up 77% over second quarter 2020. 33% of all users were subscribed at the end of Q2, which is equal to Q1 and up from 30% in Q2 2020. We continue to invest heavily in our subscription business, including strengthening and expanding the value proposition and leveraging user data in our targeted marketing efforts. User monetization from subscriptions and accessories and materials remained healthy in Q2. We measure that monetization through ARPU in those segments. We calculate average revenue per user for subscriptions by dividing total subscription revenue by our entire average user base within that period. ARPU for subscriptions in the second quarter was $9.83, up from $7.91 in Q2 2020. We calculate ARPU from accessories and materials by dividing that portion of revenue by our average user base for the period. ARPU from accessories and materials in Q2 was $26.67 compared to $32.23 at the beginning of the pandemic in Q2 2020, when we saw a surge in accessories and materials sales. We anticipate the new Smart Materials launched in the quarter will support accessories and materials monetization over time. Moving into gross margin. Total gross margin in the second quarter was 39%, up from 31% in the second quarter of 2020, as we primarily benefited from lower tariffs associated with moving the bulk of our connected machine production from China to Malaysia, and a slightly more favorable product mix in the quarter. Additionally, starting in Q2, we effected a prospective accounting change where we reclassified approximately $4.8 million of cost of revenue to sales and marketing. In Q2, the impact to gross margin from this change was an increase of approximately 1 percentage point to gross margin with a corresponding increase in operating expense. Looking to the second half of the year, and as we noted last quarter, we may choose to be more promotional in order to optimize user acquisition and product mix as demand and supply normalize, particularly on connected machines. Before I move farther down the P&L, I want to talk for a moment about inventory and supply chain. We, in our retail channels, are now in a healthy inventory position due to our manufacturing strategies put in place over the last few years, and we feel good about where we stand today. We continue to aggressively manage what is within our control. We do, however, see some risks to the supply chain, similar to what many other companies are experiencing. For example, we are subject to chip shortages and have been securing chip inventory well into the future to help mitigate these risks. We have also seen upward pressure on the cost of commodities such as resin and sheet metal and shipping related costs. There could also be possible shipping delays due to local port challenges and shortages of containers and ships. As a precautionary measure, we have a longstanding strategy of holding generous levels of onshore inventory in our accessories and material SKUs. In order to further mitigate supply chain risk, we are in the process of building inventories above our customary levels on accessories and consumables or materials, and particularly on connected machines. We intend to carry higher inventory levels into the future until we are comfortable the supply chain risks have improved. These dynamics, along with any increased level of promotions in the second half, could put some pressure on margins. Moving on to operating expenses, we continue to take a strategic approach to spending in order to gain efficient business growth long into our future. Total operating expenses in the second quarter were $66.1 million, an increase over Q2 2020 of $38.6 million. Of the increase, $8.1 million was related to stock-based compensation expense in the quarter, and $4.8 million, which I previously mentioned, from the reclass of cost of revenue to sales and marketing expense and relates to the accounting treatment for payment processing fees and certain point of purchase displays. Our total operating expenses as a percentage of revenue was 19.8%, higher than the prior year, as we have leaned into investments in sales and marketing and R&D to help build out the platform and drive future growth. We have always focused on building a long-term durable business model that delivers solid profitability while allowing us to grow the top line and invest for our future. Q2 represents the 10th consecutive quarter of positive net income. Net income in the second quarter was $49.1 million, up 41% from the same period last year, and diluted earnings per share was $0.22. Note that Cricut did not have a comparable EPS history prior to the reorganization at the time of the IPO. Turning to EBITDA, which includes $8.1 million of stock-based compensation expense, we delivered EBITDA of $68.5 million or 20.5% EBITDA margin in the second quarter, compared to $49.2 million or 20.9% margin in the second quarter 2020. As a reminder, we have been EBITDA positive since 2014. Turning now to the balance sheet and cash flow. We ended the quarter with $314 million in cash and cash equivalents. Our credit line of $150 million remains untapped. Cash used in operations for the second quarter was $54 million, reflecting payments for replenishing our inventory position and building additional inventory reserves to help mitigate supply chain risk mentioned earlier. Although we are not providing quantitative guidance at this time, I'd like to provide some color. Q2 outperformed our internal expectations, benefiting from two primary factors that I mentioned earlier. The replenishment of retail channel inventories to more healthy levels and the initial channel fill as we launched two new machines and a new portfolio of Smart Materials. As a result, product sell-in during Q2 materially exceeded sell-through. These tailwinds will not continue in the second half. At the same time, we also began moving into our typically softer summer seasonality. As we emerge from the pandemic, this seasonality has been amplified as people spend less time at home, and we believe this dynamic could extend into Q4. Looking at the year-end total, we still expect to add at least 1.8 million new users in full year 2021, equivalent to the number of new users added in full year 2020. We've made tremendous progress with a little over 1 million new users already added in the first half of the year. Nonetheless, in light of the uncertainties, we are not ready to update this target further at this time. This foundation of new users fuels future growth and profitability. Our platform provides for increased user monetization through higher margin subscriptions and accessories and materials revenue. This larger user base will also drive our viral marketing engine, resulting in new user acquisition and engagement. We will continue to run our business for the long term. Our singular priority will always be to deliver superior experience to our users throughout their crafting journey. Due to both uncertainty and logistical difficulties caused by the pandemic in 2020, our spending levels were restrained despite our growth. Therefore, we entered 2021 trying to catch up to our user growth in more operational areas and expect our increased spending levels to reflect these efforts. With the large base of users coming onto the platform, we plan to increase operating investments for the full year and into next year to drive continued growth in new users and healthy engagement as we lean into channel expansion opportunities, product development, and international growth. Nonetheless, we still expect to operate within our long-term EBITDA target range for the full year, as disclosed previously. In conclusion, we have aggressively and consistently grown the business for many years. With only 4% of our SAM penetrated, we have a large runway for growth and extensible platform for continued innovation and a compelling financial model that drives growth and profitability. With that, we'll turn it back to the operator for questions. Thank you, presenters. At this time, for the participants to ask a question, please press star one on your telephone keypad. We will pause for just a moment to compile the Q&A roster. We have our first question from Rod Hall from Goldman Sachs. Hi, guys. Thanks for the question. I guess what I wanted to dig into a little bit was the engagement number, and you juxtapose a little bit lower engagement maybe than we anticipated, maybe than you did too, I'm not sure, against really good numbers here. What I'm curious about is whether you think you've learned anything incremental about user behavior that informs you on how this might play out in the second half of the year? I know some of the commentary sounded pretty cautious there, but I'm just curious what you guys feel like you've learned, or have you really learned anything? Are we still kind of waiting to see how consumers behave as we move into the fall? Then I have a follow-up. Okay. Well, Rod, let me take that question. This is Ashish. Just to provide context, let me remind people how we calculate engagement. Engagement is calculated by the number of people that cut in the last 90 days divided by the entire user base. We never churn users out. Right? In Q2, we had, as Marty Petersen said, 3.2 million users that were engaged in the last 90 days. That is about 1.1 million more users that were engaged this year than they were last year. Right? The user growth in terms of engagement was pretty significant. However, as you rightly pointed out, the engagement percentage number, 59%, was down from Q1. The reason was, again, the most important learning was that, clearly with the extended and amplified seasonality, we saw people taking vacations and getting out of their homes. That did influence the types of projects they were making. We saw people making projects for weddings and parties and getting out for trips. At the same time, the overall engagement, probably because of lesser home improvement and stay-at-home projects, the net impact of that was a decline. I think the biggest learning was clearly user behavior is changing. We have tried to offset that with ramping up a lot of our engagement activities by segmenting our users, giving them more inspiration. We've launched education programs. While we will see a continued trend in that decline, at least past the summer months, we think we'll be able to offset some of that because of the additional insights and learnings we have. Just to give one more comment. We had a tremendous program lined up for back to school, and just in the last week and a half, we've seen a significant uptick in engagement because of that back-to-school activities. I think it's a lot going on in the world out there, and we are keeping pretty vigilant in terms of understanding user behaviors, trends, and trying to offset some of that as we go into Q3. Okay. That's great. Thanks, Ashish. Great color there. Marty, you talked about some expected margin pressure in the second half due to supplies and freight and so on. Could you maybe do anything there to quantify for us, like what scale of pressure we're talking about, just so that we can all kind of level set what we should be anticipating for margins in the second part of the year? Yeah. I think that mainly what I was referring to at that time was leaning into more spending on operations investments that we had foregone, or should I say, didn't keep up with in the early part of 2020. We came into 2021 working to catch up with those investments. I think that if you look at the year as a whole, we continue to expect that our EBITDA margin will remain in our long-term target model range of 17%-20%, but the quarters can obviously fluctuate. Okay. What we should be thinking is kind of gross margins holding maybe roughly steady in the second half. Then, as you say, some of those OPEX investments coming back in. That's the way the model roughly moves in the second half of the year. Yeah, I think that's a fair comment. It will be more on the OPEX side. Okay. All right. Thanks a lot. Appreciate it. We have our next question from Katy Huberty from Morgan Stanley. Yes. Thank you. Good afternoon. Marty, you mentioned the strategic decision to hold more inventory. Can you just clarify, is that on Cricut's balance sheet, or is it also in the channel, or a combination of both of those? Can you help us size the contribution to 2Q revenue from rebuilding retail channel inventory and selling in the new products, just so that we can understand what was more one time versus reflecting real sell-through? Yeah. As far as inventory goes, my comment was primarily focused on our balance sheet. We don't really have control over, obviously, the channel inventories. As I mentioned earlier, we have had a strategy of keeping little higher balances of our accessories and materials, but we're extending that to machines, especially right now, just because of the supply chain challenges that exist today. That being said, we do feel good about the progress that we made in building channel inventories or refilling, let me say, channel inventories from where they were earlier. You'll recall that over the past year, we've been light on inventory in terms of being able to meet demand for the channel. We have caught up on that, and we did that in Q2. We feel pretty good about our position on inventories today, but we continue to build that and will continue to build it into the future. As far as Q2 and the impact of the channel fill from the product launches and the inventory replan, it's obviously a little challenging to determine exactly what those numbers are, because with the channel inventory fill, you've got phase in and phase outs that are implemented by some of the retailers, and it's a little bit challenging to define it exactly. But our estimate is about 8%-10% attributable to the channel fill for the launch and about 5%-8% for inventory replan. Are those numbers on total revenue or just for device revenue? On total revenue. Total revenue. Okay. The refill was both for accessories and materials and devices, or mostly just on the machine side? More on machines. We were in a better inventory position earlier on accessories and materials. In Q2, it was really mostly machines. Katy, I just want to add to Marty's color, which is, part of the reason it's really hard to estimate is that especially going into the quarter, we still had retailers that were out of product. We had to kind of net out the sales loss because we didn't have enough inventory in the channel. It's really hard to, both from a phase in, phase out perspective, because there's a slowdown in the existing products, while new people are waiting after the announcement for the new product. Again, we just have to take that with a grain of salt. Okay, that's really helpful. Just a follow-up on the discussion around engagement. You mentioned that quarter to date, you're seeing a bit of a downtick. Should we expect that that looks similar to the downtick from March to June, which was about 3 points? Any view yet on whether you would expect to see the normal sequential uptick in the December quarter, the holiday season? Yeah. I think there are two numbers, right? One is what other companies would define as active user growth. We talk about it as engagement numbers. The absolute numbers will increase quarter-over-quarter, year-on-year, right? Because we have a much larger install base this year, and that's what we saw in Q2. Now in Q3, as summer came and even as we've gone in the last few weeks and months, we've clearly seen some headwinds for engagement. What's interesting is that we haven't seen similar headwinds, at least to date, on subscription, which we can kind of look at those 2 data points in tandem. One of the comments that I was making specifically about our efforts on back to school is that it's kind of shown that people are there. They're just kind of either coming back from vacation. We've seen an uptick, I would say, in the last week on those engagement numbers. I think when you look at overall Q3, yes, there will be some pressure. When you look at the engagement percentage number, the number will increase year on year. As we go into the holidays, similar to back to school, as we see people staying more at home, getting into the holiday mode, Halloween and Christmas and everything else that goes with it, we'll see more uptick in some of those numbers. That's perfect. Thank you, Ashish and Marty. We have our next question from Mark Altschwager from Baird. Your line is open. Good afternoon. Thanks for taking my question. I guess, first I wanted to ask about the Maker and Explore 3. Just any further learnings you can provide from the upgrade there, I guess I'm curious to what extent you're seeing existing Maker and Explore owners upgrade their machines versus just kind of continuing to add features to attract new users to the ecosystem. Mark, just to recap, and again, probably one of my favorite questions. I'm a product guy, I can talk a lot about products. Overall, I think those two products have been receiving very well by the market. We're not breaking out right now in terms of what percent. We just don't want to read too much into the initial cycle, because it can be very misleading. We've seen a healthy mix of people upgrading, but also, a healthy percentage of new users coming into the market, right? When our goal of launching these products, in addition to giving more speeds and feeds, was to add versatility and new use cases, right? With long cutting, people can actually do more types of projects in wall decor and home improvement, and even using the stencils for painting. That also has a parallel impact in how we are approaching channels and new user segments. We are actually pleased with all of that. We've seen people expanding the way, how they use our products. We've seen new user types. One of the things that I found very interesting when our creative teams initially launched Maker 3 is the first time there's a fair good representation of men and women doing different projects. You had this gentleman doing a big sign and other outdoor projects. I think, it definitely accomplished a strategic objective of increasing the versatility of our platform, but also going after new audiences and segments as well as upgrading it. That's great. Thank you. Marty, I wanted to follow up on your comment on promotions in Q3. I guess, just help us understand the strategy behind the increased planned promotionality, especially against the backdrop of a channel that's just kind of recently catching up from a supply perspective. Yeah. I talked about leaning into our investments that we had kind of lagged on in the high growth periods here recently. The primary things we're leaning into are going to be channel expansion. I'll just call it platform development or enhancing our platform, namely software, and then international growth. Those are the three primary things. Mark, I'll address the promotions part of your question. As we go into the holidays in general, we see our portfolio mix has more machines, as we go into the holiday season. The product mix clearly changes. In addition to that, we have some phase outs of one of our existing machines that we are planning as well. We are just using this as an opportunity to acquire as many users as possible so we can generate ARPU. The goal is to continue to energize and create excitement, expand into new channels like Marty talked about, as well as expand the international footprint. That makes sense. Thanks for all the detail, and best of luck. We have our next question from Jim Suva from Citigroup. Your line is open. Thank you. Good results to you and your team. I have a question then a follow-up after you answer it, because it might be completely unrelated to it. On the supply of channel inventories, are you happy and pleased where they're at now? Are they in equilibrium, or do your channel inventories need to come higher or lower? I realize during COVID, there was a big rush in back orders and such, but now that we're hopefully coming out of COVID, I'm just wondering about your channel inventories. I've noticed the Mug Press was sold out originally, and now it's more in stock at stores. I'm just kind of wondering about your channel inventory levels, how you feel about them. In conversations with our retailers and in viewing their weekly data, we feel good about where we are right now. Obviously, when I make the comment that we refilled the channel, it doesn't mean it's on every single SKU, but the vast majority of the SKUs, we've replenished to what I would call a healthy level, a good level that we're comfortable with. Gotcha. On the supplies and materials, if I heard correctly. Last year, June quarter was inflated due to a rush on people buying cutters and accessories for mask making and COVID-related things and T-shirts and everyone trying to do an at-home business. Is that the way to think about it, that last year was overly inflated, and then this year, is that kind of a sustainable, the $26 rate you kind of see, or is that still kind of inflated? The reason why I ask is our family, we've switched from mask making to now birthday party T-shirt making and stuff like that with our Cricut. Just kind of wondering about the ARPU then versus now and kind of your outlook for ARPU. I think your perception, Jim, is correct. We feel good about the $26.67 ARPU number. Let me explain why. If you just ignore 2020 for a moment, it was an odd year for a lot of reasons. If you look back to 2018 and 2019, $26.67 is actually $2.50 higher than what it was in 2018. The calculation for ARPU, remember, is accessories and materials revenue divided by our entire user base. We've actually increased that ARPU by $2.50 while quadrupling the user base over that same time period. We feel pretty good about that $26.67. That makes sense. Thank you so much for the details and clarification. It's greatly appreciated. Once again, if you would like to ask a question, please press star one on your telephone keypad. We have our next question from Adrienne Yih from Barclays. Your line is open. Great. Thank you very much, and well done on the quarter. Ashish, I wanted to get your view on what you're seeing happening in sort of the maker market trends. Etsy obviously gave a softer guide for the third quarter, so are those being supplanted by individual uptake? Marty, for you, how far is your chip supply bought forward? It sounds like you have plenty of inventory, so I'm just wondering how far in advance do you buy those chips? Are they all fungible, meaning that you can buy them as forward as you want and there are pretty much no changes there. You mentioned briefly the potential for promotional activity to pick up perhaps kind of later on in the year. I'm just wondering if that was prompted by anything that you're seeing currently or that's just an eventuality in the future. Thank you very much. Yeah. Let me take the first part of the question, and Marty, you can jump in for the second. One thing that we have very long-term focus, and there are some broad macro trends that we think are very well intact and probably will stay intact for the next many years. These are like personalization. There's nothing that has happened pre-pandemic, during pandemic, or post-pandemic that would lend itself for us to believe that that's changing. The second is the proliferation of social media. Again, that's going to continue to inspire people, and people are going to be more and more intent driven in terms of what they're trying to do and have the tools necessary, the proliferation of digital tools for people to be able to make things. Then finally, like you pointed out, Etsy seller trends, right? While there may be a tiny variation in some of these things in the shorter term, we believe that those are long-term secular trends that we need to continue to focus on. What we have seen is, clearly, especially during the summer, certain types of projects being done less of, and other types of projects being done a lot more of. One of my favorite examples, especially as we are continue to expand our channels, use cases, and audiences, is people using our products for labeling and organizing, right? I'm part of many Facebook groups for professional organizers, and one of our products that we've talked about in the past is Cricut Joy, which is to go after mass market. A lot of these organizers, and even people at home, are using Cricut Joy to create very beautiful labels and to help organize things, whether it's kids' bedrooms or even as we go into schools and classrooms. I'm very pleased about that. I think one of the other trends that I think if you look at it from a holistic standpoint, rather than from a month by month, is international, right? I get bombarded almost every other day by somebody in some country saying, "When is Cricut coming to XYZ?" I think those are things that a few things that have changed, in the shorter term that I think was really kind of with the opening of economy and the fact that people hadn't gotten out of their homes for a while. As we look at it over the medium to long term, I think everything we feel is intact, and we are going to continue to execute on going after broadening our use cases, adding versatility to our platform and expanding our channels to reach those new types of users. Marty, anything you want to add to that? Very helpful. Thank you. Your question about chips and components. First of all, our supply chain team has done an excellent job in helping us mitigate a lot of this risk. It was about a year ago that we began very aggressively working with the manufacturers of these chips and components to lock in supply further out in the future. Some of those components and chips are as far as 52 weeks out that we have locked in. As we look at our longer-term forecast potential, we feel very good and comfortable with where we are at this moment in the locking in those chips and components. The same comment can be made on shipping and our team's efforts there. We worked very hard to build inventory, especially on machines fast so that we could beat the peak congestion that we're experiencing right now in shipping. We were able to get a fair amount of inventory in before we knew the crunch was coming. From a supply chain standpoint, overall supply chain standpoint, we feel pretty good about our position and where we stand. Marty, on the promos? Sorry, just to remind. Oh, do you mind repeating the question on promotions again? Oh, yeah. You mentioned the potential for more promotional activity potentially pressuring margins later on, and I was wondering if that stemmed from anything that you might be seeing in current day, or it was sort of just a warning for the future. Thank you. No, I wouldn't characterize it as a warning. I don't think, again, the model that we have is going to stay within those parameters. I think what I was pointing out too is that in general, in every Q4, as we head into the holiday season, we have a promotional strategy, and based on the year, we have a different cadence towards that promotional strategy. I think we're going to see this very similar trend as we go from Q2 to Q4. In addition to that, in any other categories that I've been a part of, sometimes when you have a phase in, phase out, it's a wonderful opportunity to create some energy and excitement in the market without damaging the price cadence structurally over the long term. That's what I was commenting on, which is, you're going to see the seasonality that you typically do, and in addition to that, we may opportunistically use some of that to gain new customers and create excitement while keeping the new model comes out, et cetera, full price, and then the old model comes out and you're trying to be aggressive with it. Again, I don't think there's anything out of ordinary. Okay. Makes total sense. Thank you very much. There are no further questions at this time. Okay. Stacie, is there anything else we need to cover? I think that's it. I think that's it. Ashish, thank you everyone for joining us on the call today, and we look forward to speaking with you over the coming quarter. Yeah. Thank you again, everyone, for joining our call, and appreciate your time and focus on us. Ladies and gentlemen, this concludes today's presentation. Thank you for participating. You may now disconnect.