All right, perfect. So let's get started here. Good morning, everyone. My name is Erik Woodring. I lead the hardware research here at Morgan Stanley. Before I introduce everyone on stage, I just want to read off the Morgan Stanley disclosure. "For important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative." So delighted to be joined this morning by Ashish Arora, CEO of Cricut; Kimball Shill, CFO of Cricut, and obviously my good friend, Jim Suva, over here. Why don't I stop? Do you have something to read? And then we'll get going. We just wanna remind investors that this is being webcast and also recorded on the Cricut Investor Relations website. We also want to point you to our safe harbor statements, as well as our recent filing of our 10-K and 10-Qs for risks and uncertainties that may be associated with this. Perfect. So, Ashish, Kimball, Jim, thank you very much for joining us this morning. I think maybe the most helpful way to start is I think most people in the audience know what Cricut does, but maybe start with a bit of a postmortem. You just reported Q4 earnings yesterday. Can you touch on some of the most important points from the report, and how we think about kind of 2024 versus 2023? What's the kind of the message you're going into 2024 with? Sure. Thanks, Erik, for having us. So I think, you know, we highlighted a couple of key things in our earnings call yesterday. One is our operating income, which is kind of was our main focus for last year. Our operating income in Q4 grew about 40%, you know, pretty significantly, about, I think, about over 45%-49%. 49% And then, you know, that was despite some significant impairment charges. I'll talk a little bit about impairment charges in a second. The second was, you know, we continued to wrap up marketing and, you know, drove promotions. We got a lift in Q4. But, not as significant as we wanted. So we're going to into 2024 with a, you know, much deeper promotions plan and a more frequent promotions plan to address some of the key affordability concerns that the consumers have. I think those are some of the things. You know, obviously, we are disappointed in our sales, which were down year-over-year, but we feel good about going into 2024. We've seen some early good results of combined, you know, wrapped up marketing and affordability. We're excited about that. Good. So we'll get into all of that, obviously. So maybe if we first start very big picture and think about the macro environment and its impact on kind of consumer demand and purchasing intentions, as well as retailer behavior. What is structural? What is cyclical? What are some of your kind of KPIs and signals? What are they telling you right now? Yeah. So I think, you know, some of the things that we keep looking at and we focus a lot on is just the overall size of our funnel. Our data tells us that our funnel is full. We also hear from the consumer that they're concerned about affordability, ongoing use of the machine, and how much they're gonna use the machine, and if it's gonna be easy enough for them to use. So that's something that we are very focused on, is to make sure that we understand and address the affordability issues. The consumer is hesitant. You know, we think that there's an opportunity to overcome that hesitancy by focusing on showing them the value of the machine addressing affordability. Now, one thing that, you know, we felt what we missed out on some demand that was not fulfilled was, there was a level of conservatism from retailers, that obviously, you know, consumers walked into the store, couldn't find the product, and some of them shifted online, some of them just bought something else, right? So we're working with our retail partners to address some of that conservatism. Okay. We shared a little bit of feedback from our, you know, Valentine's promotions that we did. It is the first time as we continued to wrap our marketing and our promotions, we were very pleased with the left copy year-over-year. And, you know, we are hoping to kind of continue to build confidence in the retailers as we go into Easter, Mother's Day, back- to- school, et cetera. Right. Okay, perfect. Erik, if I can just add. Please. One of the surprises for us in 2023 was that continued conservatism from retailers. So we were expecting, frankly, that they would be restocking more to historical norms. They didn't. We even highlighted in our Q3 comments that we thought some retailers were at risk of suboptimizing holiday demand that we saw the potential for. And as that played out, that indeed happened because they were stocked on shelves in certain instances, as Ashish talked about. And so, yeah, we're working with retailers so they understand the opportunity we see, and hopefully we get on the same page, and they restock to historical norms. Perfect. Before we get into a lot of the specifics, I wanna talk about the long-term drivers of the model, because we've talked about this a lot, but the world has obviously changed across the board for everything and everyone in the last handful of years. And so, you know, I imagine a lot of the long-term drivers that you guys have talked about have remained the same, but what are the most important ones as you sit here today? And has there been any change in that, and you know, kind of impacted things such as such as kind of competition in the industry? Sure. Just help us think about that. So, I think, you know, some of the things... Let me kind of start with, you know, as we've continued to research the market, even for ourselves, right? What is the size of the market? We've hit the data a number of different ways. We've commissioned more studies. We continue to believe that we are in a mass-market product opportunity. So we believe in the serviceable addressable market and the size of the opportunity we have. We've also looked at our funnel, our marketing funnel, and it continues to tell us that it's healthy, and we're gonna continue to add to that. The key drivers are, you know, again, I talked about affordability and ease of use being the two main barriers to purchase, so we have to address those. But the overall drivers, which are, again, the trends, you know, more or less have stayed the same. I mean, these are macro-level secular trends, right? The people's need for personalization, people wanting to make gifts for other people, people using it for therapy, all of those things remain the same. The actual financial model is clearly the journey of the machine, the journey of the platform starts with the purchase of a machine. Mm-hmm. Our job is to make sure that we do a great job onboarding that user, getting them engaged on the platform, and that ultimately drives monetization and network effects.. So I think, again, yeah, the model is built around: get the user to purchase a connected machine, get them onboarded and engaged, and help monetize with accessories and materials and subscriptions, and we are highly, highly focused on that. Okay. And unfortunately, if you can't... There, there's no video, but obviously, we can see the personalization firsthand here next to each one of you guys. We should bring you a Cricut Mug next time. So let's talk about, as we dive into some of the details and specifics, maybe first, just customer engagement metrics, percentage of users creating in the last 90 days, kind of ARPU, both expanded through the pandemic. We've seen those return the other way, over the last few years. The question is: What is Cricut doing to kind of stabilize engagement? And, you know, when do you expect these actions to begin to pay off, and why do you expect them to pay off? Yeah. Yeah. So I think engagement is one of the top priorities. You know, if you ask me to prioritize the four things that I mentioned in terms of priorities, acquisition of new consumers and engagement are the two biggest initiatives in the company. Kimball will talk about materials at some point. So that's what we are focused on. Now, some of the headwinds and tailwinds that I talked about yesterday. Now, we acquired a lot of users in 2020 and 2021. Like any, you know, product, there's a graduation curve where engagement kind of declines and then stabilizes over time. We are seeing - you know, we acquired close to, like, 4 million users in that time frame. Those users are coming down, and the curve is yet to fully stabilize. But it will. We see nothing atypical about those curves. That creates a massive headwind. Right? Because as those graduation curves come down. Now, on a tailwind side, you know, a lot of similar subscriptions, a lot of the new users, when they come on board, and as we, you know, make the platform better and better, they are highly engaged, and that creates a positive or a tailwind. We saw that not enough to offset the decline from the graduating 2020 and 2021 cohorts. Yep. So we think that that will continue for the next few quarters. Now, having said that, you know, what can we do to improve the overall engagement? What can we do to improve onboarding? Now, you know, I've shared this stat before, I'll share it again. When we poll users who have not been on the platform for the last three to six months, 80% of them will tell us that basically, they love you. The intrinsic drivers of why they bought a Cricut still remain. Got it. They want to use the platform, they want to come more often, but they cite a couple of reasons. One is lack of time. Mm-hmm. And the other is, I couldn't, I didn't think of a reason, or I couldn't find a project. Right? Or I couldn't find something to make. And our job, so that we can impact engagement across the board, is to address those issues, which is, you know, how do we make the platform easier to use so that instead of taking 25 minutes to make something, it takes 5? How do we give them inspiration that's relevant to them and, you know, create triggers to bring them back to the platform, right? Yeah. I always give the example of if you have a reservations app for restaurants, it's one thing to have a great database of restaurants and reviews, but reminding the user, saying: "Hey, you like Italian food. Here are two restaurants that opened up. Right. We have to bring people back to the platform. We have to serve them the right inspiration base that's personalized to them. So the areas that we are focusing on are clearly onboarding, making the product easier to use, you know, creating tons and tons of inspiration leveraging a lot of personalization, visual and semantic search to help surface the right ideas for people. And then make us more relevant and top of mind. So we think that, you know, we have the right team working on it. As I said, we are gonna continue to have some headwinds for the next few quarters because of the 2020 and 2021 cohorts, but I think there's an opportunity to lift all boats as we improve our engagement efforts. Okay. Okay. So I guess I maybe should have asked these questions the opposite, but... Well, now let's talk about new customer acquisition. So you added just over 1 million net new users in 2023. You did talk about this metric being a bit more challenged in 2024. Can you just maybe talk about the customer acquisition model and how it's changed, and really, maybe beyond that, is just, you know, when the macro does improve and we're not in such a challenged, kind of, discretionary spending environment, what that longer-term kind of new user opportunity really can be as we look down the line? Sure. So, you know, I'll go back to... You know, we think it's a, you know, it's a broad demographic of people that use our products. Mm-hmm. Right? It's a very simple need, right? People want to be able to cut some things. They want to be able to make all kinds of different things with it. Mm-hmm. We think that the need is very generic. So in 2023, you know, we maintained our marketing to some degree. We had some promotions, although, you know, somewhat exaggerated in Q4. But for the most of the year, our general approach was, let's not scream into an empty room. So let's focus on maximizing operating income. Let's focus on continuing to build the funnel to some degree. Now, as we went into Q4 and ramped our marketing efforts, we have actually continued to wrap those efforts. We are being much, much more defined about our target audience, and we are focusing on people's life stages to get to them. I give the example of, you know, we have a partnership coming out with Pinterest to talk about- You know, the whole when she gets married, from 25 to 44, and there are 5 or 6 events that happen leading up to the marriage. There's a lot of money that's spent on weddings. There are other life stages, like having a baby, buying a new home, and we are basically being much more targeted and using those life stages to trigger the event. The other thing we are doing is, you know, we did a lot of performance advertising in 2023, and really kind of, you know, when you look at our marketing expenses overall, the discretionary part of marketing, we had actually pulled back far too much. Okay. That doesn't reflect in our overall sales and marketing number- Okay. Because it includes subscription revenue, you know, it includes the expenses related to subscriptions and stuff. So as we look at that discretionary spend, our focus is to make sure that we continue to invest in vehicles such as influencer marketing, PR, social media, and I think you'll see some of the best marketing Cricut's ever done. Okay. We saw some early good results too early to call it a win. Okay. But we think that as we go through the next few quarters, our acquisition will improve. Okay, perfect. Let's maybe shift gears. And you know, today, kind of $4 of every $5 that come in this business come from the U.S. That's down because obviously you've had success expanding internationally. That's been a focus, a growth focus for you guys. In your last quarter, international revenue was down 5%, so year-over-year. So can you just maybe better help us understand the level of saturation of international markets? Are there unique growth challenges in international markets that maybe we hadn't considered? Or is this kind of just like a, let's call it a blip on the radar, and you can return to expansion? And underlying that kind of bigger picture, it's just like, where are we in that inning of international expansion? Let's actually get into the numbers, right? Why don't you start- Yeah, yeah. And then I'll give context. Okay. No, I appreciate it. So, I mean, Erik, we were down 5% Q4 year-over-year. And there are a couple of things going on there, but I wanna call out, we did grow 9% for the full year- And we think the opportunity still is massive. We're in over 50 countries at various stages of development, but we're not close to saturation in any of those markets. Okay. In some markets where we are a little bit bigger, like the U.K., we've seen the same kind of consumer headwinds that we've seen in the U.S., and that did weigh on the quarter. We also had other factors in, like Australia and our META region, which for us is Middle East, Turkey, and Africa. Mm-hmm. Where in, in Q4 of 2022, there were some large sell-in, channel fill orders as we expanded distribution in those markets that didn't have comparable, you know, sales in, in Q4 this year. And so, and so it, it was some pressure consumer in larger markets, plus some of those, tough comps and, and some of the more nascent markets that didn't overcome the kinda headwinds that we saw in those, in those markets. Yeah. And let me just add color to that. You know, I'll go back to, you know, we strongly believe the need is very universal, and I think across the board, all our international markets are relatively immature. Mm-hmm. They're very, in the very early stages. Having said that, there's fewer markets that are less immature, you know, you know, like, for example, the U.K., Australia, would be two examples, right? And I think what we saw there was something similar to the U.S., where affordability challenges were more exaggerated. I think our pull back on marketing started to, you know, showed an impact. Mm-hmm. So our goal is to really kind of do what we've been doing in the U.S, or what we plan to do in the U.S., is to address some of those affordability challenges that are even more exaggerated in those countries. You know, build on our awareness and marketing plans. But, you know, I'm actually heading to Germany and Netherlands in the next week and a half, and the level of enthusiasm across the board. You know, a few days ago, I think about a week ago, I was on a Zoom call with 25 ambassadors in Japan, and then we are just about to launch, like, we hired a country manager. So again, I think we need to go back to the basics- And just continue to do. You know, would we have wanted to see more growth in Q4? Absolutely. Do we think it's... Is our confidence shaken, or we think structurally differently about international? No. Right. We not. Okay. No, but we do think we have an opportunity. The same awareness, focus that we have on the U.S. applies to our international markets as well, right? Okay. Okay. And are there any specific countries or regions that you're kind of mainly focused on, where you see a lot of opportunity, whether it's the funnel or whether it's... when you do a lot of market research, you know, you say: Wow, this is maybe a greater opportunity than perhaps we thought 3, 6, 9 months ago or a year ago. Anywhere you'd point to? So, you know, we are available in over 50 markets today, right? And obviously, if you have to move the needle on the numbers, and show the kind of growth that we're expecting, you obviously go after the markets like, you know, Germany and Central Europe, for example. Okay. I think there's a huge opportunity. We just launched... You know, we were in India for a while. We just kind of wrapped up our effort there, so I think you'll see some of the Asia Pacific markets to increase. Okay. But I think, you know, across the board, we think there's an opportunity. Clearly, we have different-sized teams. It's a very small team of people that's focusing on international, just where we have such a good distribution model of leveraging ambassadors and influencers and people who are passionate about the Cricut brand. Mm-hmm. I think I would say, you know, the dollar numbers will obviously come from the larger regions, Japan, you know, Australia. We have to get U.K. and Australia back on track. Yep. But then also countries like Germany, we'll be expanding distribution now. Okay. So, you know, kind of to date, we've talked a lot about the consumer opportunity... What is the opportunity outside of just the pure consumer? And what I mean by that is, you know, there might be shifting kind of spending priorities amongst consumers, but designers or Etsy store owners, event planners, these all feel like, and we somewhat alluded to them, but kind of the perfect target user for you, regardless of the market backdrop. And so has the, I don't know, it felt like the value proposition for that professional user, has that changed at all, or how do you think about that cohort of targeted customers? Yeah. Yeah. So I think one other thing that you probably, you know, I could have talked about when you asked me about what are the key highlights to be drawn from the call or going into 2024, and I think the words that I'll use is we're maniacally focused on focus. Yep, yep. I think that applies to, you know, us basically saying there's so much headroom in the current category, that we don't need to expand into other verticals. So some of the impairment charges that you saw basically were related to us saying: You know what? Let's just double down on our platform and our connected machines as they exist today. I think we took a similar approach to, within the cutting machine market, what type of consumer do we want to focus on? Mm-hmm. We think that basically we want to focus on the mass consumer market. Yeah. We've identified, you know, again, our appeal is universal. It goes across a variety of demographics, but the target consumer that we are targeting is 25- to 44-year-old. One of the sites I recommend, if you look at trends.pinterest.com, and you type in the word Cricut, you'll see that demographic spike in terms of people who are searching on Cricut. Mm-hmm. Mm-hmm. That doesn't mean that we want to attract Gen Z and other demographics. You know, as far as professionals are concerned, I would say we probably have lesser focus on prosumers today than we had a year ago. Okay. Just given where we want to go. We want to drive affordability and ease of use. There, within that segment, you know, you will see we see, for example, teachers and schools as a focus area, right? The teachers buy the product for themselves, they also end up using it in schools. So we think there's a good overlap. We see folks like health workers, you know, using it to decorate hospitals and pediatrics wards and things like that. But again, I think those are, you know, on top of what our, our focus is on the consumer market. But I would say the focus on prosumers is less today than it was a year ago. Okay. Well, just to be clear- Please. We do have. We do attract prosumers. Oh, for sure. We've disclosed this before, roughly 24% of our user base ends up making something that they want to sell. Got it, right. Right. Yeah. Okay. Last night at earnings, you talked about terminating certain machine projects to focus on products, again, that have more mass appeal than something that might be a bit more specialized. I love, again, focus on focus. It makes total sense. Can you elaborate a bit on what's kind of changing under the hood when it comes to the connected machine kind of product rollout and how you think about new product launches, not just in 2024, but beyond? What is that new focus for you guys there? I think, you know, I'll actually kind of do a multi-pronged answer. About 12 months ago is maybe roughly around then, we basically said: Hey, we're going to be focusing less. We're going to focus on connected machines- Mm-hmm. Rather than, you know, we'll continue to have accessories as in, you know, hand tools and other things, but we're going to focus on connected machines. We've since then, basically, you know, given the impairment charges, we've said: There's so much headroom in the markets we are in today, we don't... You know, the vision of the platform hasn't changed, but we don't need to launch it to other verticals that are beyond, you know, what we have today. Mm-hmm. Within that cutting machine market, we are basically focusing on driving more affordable price points. Our innovation is going to be on simplifying, you know, making it mass market- Mm-hmm. getting to more consumers. And if you think about, you know, other products in history, like, you know, just take the iPod Shuffle. Mm-hmm. What Shuffle did was basically bring in massive amount of consumers into the market and then subsequently upgrade it to the iPod. Yep. We have a bit similar strategy and focus, so a lot of our innovation is going to be around creating excitement for the brand with, you know, introducing new price points, you know, simplifying our product road maps, et cetera. A big part of that, even though I know you talked about machine and new launches, a big, part of that is really our focus on the platform. Okay. Just obsessing about the initial one-day journey, the seven-day journey. How do we get people to make, you know, a number of projects in the first few days so that, you know, they can then basically? The engagement curve actually starts at a much higher level. Okay. So I know we just talked about connected machines a fair amount. A lot of value, though, for Cricut, does accrue in the form of aftermarket sales. You know, that's either subscriptions or that's accessories and materials. Over the past few years, A&M, ARPU, has declined double digits. You do expect a decline further in 2024. Maybe can you unpackage the kind of headwinds that this business faces, and then what you're doing to stabilize accessories and materials? And are there any examples of actions that you've taken, even if it's for a short period of time, where you've maybe found some success that you could then roll those initiatives out further and for a longer period of time? Yeah, a couple of things. First of all, you talked about subscriptions and A&M. I just want to call out, we grew subscribers for the full year. Mm-hmm. I know in Q3 we had an inflection point where we dipped below, but I want to just make sure everyone understands that we grew subscribers and subscription revenue for the year. Mm-hmm. A&M is more challenged, right? There are a number of dynamics going on there. One is consumers are engaging less. They're cutting less. You know, we have the vast majority of cutting machines, so we see what people are cutting, and it's not just Cricut materials that are suffering. It's overall engagement there. Ashish touched on this earlier in his comments on affordability, right? Consumers are concerned about: How much is this going to cost me if I'm going to make a T-shirt? And can I make a T-shirt for $5, or is it going to cost me $20, and what materials do I need? We're focused on addressing affordability for consumers. We're doing that in the short term with frequent promotions, right? We've had that cadence of promotionality in the accessories and materials space, going for a while. Our team has done a great job of driving cost out of that business. There's much more to come on that side of it, and some of that goodness was masked by all the E&O that we had in the year. Mm-hmm. But we're focused on how do we give consumers a great experience, but addressing affordability? And so you'll see, you know, enhancements to our portfolio in the second half, and as we move through 2025, that will even help us move further down that path. Okay. But we think it's about cost to serve and cost for consumers to engage as they make. Yeah, let me just add to that. You know, I think Kimball hinted at it, that we've actually been on a pretty rapid path to driving costs out. Mm-hmm. They just kind of get lost in all the other things that are going on. We've seen massive amounts of improvement in product cost as the inventory flows through. Mm-hmm. The second, as we talked about yesterday, is the SKU rationalization. Yes. We had a lot of ongoing E&O materials because of what the decisions we made back in 2020, 2021, 2022. And as we've rationalized the portfolio to almost a third of what we used to have, we think that, that E&O, while, you know, some of it will continue, will be less exaggerated. Mm-hmm. But I think our focus on creating value, and, you know, we talked about it yesterday, but it's a little bit of a virtuous cycle, right? Engagement drops, people use less. Mm-hmm. But people are also using less because materials are not as affordable as they'd like. So if the materials are expensive, they don't want to make as much. Mm-hmm. So if we can drive both those things, there's a symbiotic effect- Right on both those things, so. You don't have to worry about the chicken or the egg. You get them together. Yeah. Right. Exactly. I know this is something that you love to talk about, and you talked about the focus on the platform. So this is... What I want to talk about is software, right? Your software makes it easy for users to create anywhere, any device, based in the cloud. What opportunities do you see to expand kind of features and functionality of the software? Again, you talked about ease of use. How does software play into that? I mean, it's huge, right? I always tell, at the end of the day, we make incredible physical products, but the soul of the company is software, content, and the platform. Mm-hmm. Right? And our opportunity to monetize that platform and subscriptions continues. I think there's a number of things we are focusing on, which is, you know, first, let me start with onboarding, right? Mm-hmm. We want to make sure that, you know, when the users come in, they're able to really set up the product with an incredible amount of ease, and then we can launch them the right way. Mm-hmm. So just giving them the right experience. So we are leveraging technologies like personalization, search, ease... You know, how do we make the design process a lot easier? Yep. The second is, you know, because everything is in the cloud, you know, there's a massive amount of inspiration that we provide. But on top of that, you know, the inspiration is as much driven by the projects and the recipes that other people make. Mm-hmm. So we have, you know, designers who actually work with us, who are publishing those recipes. So if you wanted to come in, and you said, "Hey, I want to make a birthday card for my daughter or my niece"- Mm-hmm Basically, instead of having you go through the design process, you can access the work that I may have done very quickly so that, you know, I can effectively save you 30 or 60 minutes of time. Yep. So expanding the amount of inspiration, whether it's in terms of ingredients, like images, or recipes, like projects, how do we then, you know, take that vast majority? You know, this is talking, I'm talking millions and millions of things get done. Yes. How do we kind of find the right things, and when you come onto the platform, leverage things like personalization to give you the few things that you would be interested in? Right. Right? So I think there's a lot of innovation around, you know, expanding inspiration, onboarding, you know, bringing users back to the platform. Mm-hmm. So, you know, make sure, making sure that we can send notifications, we can provide the right, relevant inspiration to bring people back to the platform. Once they come to the platform, there was a massive amount of inspiration. That inspiration is matched to the skill set of the user, and ultimately, they're able to quickly design and make something. Right. So, you know, I would say we've made a lot of progress in the next 1 year, but I'll be sitting here 10 years from now, and I'll still say, "Oh, my God, there's so much work to be done." Right? So I think that's the soul and the backbone of the company, and we're going to continue investing in it. Right. I was going to add on, Erik, also, because this is a technology conference. You think about artificial intelligence and machine learning. They're complementary to our software. Things. You, you've already started to see these publicly when you start to be on the subscriber base, things like automatic background remover. Mm-hmm. Taking text and being able to warp it and curve it and do some really good features and things like that. You know, we can now create stickers really easily. Do you want a background? Do you want additional layers and things? But artificial intelligence and machine learning to- is actually complementary- Right to our platform. Okay. Oh, that's helpful. Let's quickly touch on margins. I want to make sure we have a handful of minutes. I want to touch on a handful of topics here. So touch on margins. You did mid-40% gross margins in 2023, record for the company. Given your comments on accessories and materials and connected machines and kind of the strategy around using promotions to spur demand, how do we think about margins over the next 12 months in the longer term? I know you've set some targets, but help us understand kind of the moving pieces behind all of that. Yes, thanks, thanks for the question. So, so first, let's, let's talk about the impact that subscriptions have on gross margins. Mm-hmm. Because as we've matured over the last several years, subscriptions revenue and contribution profit is a much bigger piece of the pie, and so that helps us with our gross margins, and we see that continuing. You saw a little bit of decline in that gross margin in the year, from 90%, I think, to 89%, and that's really around amortization of software development costs that as we invest more in the platform, you can expect a little bit more amortization to hit that. Yep. Essentially, that will be the same year- over- year as you go forward. On the A&M side, you know, E&O was such a big part of the story in 2023, where it would be less exaggerated. There's some goodness that we've seen in getting cost out, and so even though we intend to be promotional in that category, we do expect incremental improvement in A&M gross margins in 2024. On machines, you know, we had very high gross margins for us in Q4, it was approaching 18%. And, you know, don't consider that structural, don't project that forward. Because as we succeed in our promotion strategy and drive the volumes we expect to drive, I'd be looking closer to kind of mid-single digit for gross margins on machines. Okay. Okay. And again, to kind of layer into this topic of promotions, you did talk about last night some positive read-throughs from promotional activity you took around Valentine's Day. Maybe just elaborate that. Again, Ashish, you talked earlier about some of the holidays coming up and how that can help kind of spur engagement and demand. You know, do you intend to utilize some of these read-throughs and knowledge that you've gained from Valentine's Day, to take those actions as we move forward? Yeah. So actually, let me, let me kind of go back to a higher level and talk about. I'll talk about integrated marketing and promotions together, right? Mm-hmm. If, when we look at our discretionary marketing- Mm-hmm From 2021 to 2023, we feel that, and it kind of hides a lot of things, but, you know, there's a lot of things going on in that number. But if you look at discretionary marketing, we think we pulled back far too much, right? We are ramping that back up. Mm-hmm. And the way we are looking at our media mix is really focused on what I call perpetual marketing content, right? Which is, the good thing about performance advertising, is it ramps up very quickly, but the moment you stop, you're done. Whereas, you know, if you deploy vehicles, like what particularly work well for us, like influencer marketing, social media, right? Driving network effects, PR, you know, all of these organic vehicles, which don't ramp it very quickly, they take some time, but they're very perpetual. Once you have content out there, our partnership with Pinterest, right? Mm-hmm. So all of those things are really helpful for the brand. What we saw in Valentine is everything just come together, right? Mm-hmm. We had excellent marketing, which is still ramping up. Our promotions plan was very effective, and we think the funnel that we have always talked about converted and converted well. Mm-hmm. We lost out some pretty significant sales because retailers were caught off guard. You know, again, some of them, some of that went to online, but we think that we believe we lost a lot of sales opportunity. I personally, myself, went to four stores- Right Looking for one of our models for a teacher friend of mine. Couldn't find it, right? Mm-hmm. I'm just putting myself in the consumer's shoes. What had happened. yeah. Our cadence is gonna be deeper and more frequent throughout the year. Mm-hmm. We have something coming up for National Craft Month. We have Easter, we have. We already talked about. We were in a meeting earlier this morning on Mother's Day. Mm-hmm. Back to school. So I think, you know, I'm just, I'm just super excited about and optimistic about our marketing. Mm-hmm. Again, still wouldn't call it a win, but we think the combination of all this because, again, we believe in the market, we believe in the funnel, we think we'll start to see the corner at some point. Okay, perfect. Kimball, I'll shift you very quickly, before I give you the last word, Ashish, which is: you paid two special dividends in 2023. You repurchased about 20 million of stock. I believe that authorization has now wrapped, and so how should we all be thinking about Cricut's capital allocation priorities going forward? So it's kind of a four-part allocation strategy. One we want to make sure we have enough inventory to run our business. Two, we're focused on making sure we're doing the right investments to drive medium and long-term growth, both from a hardware product roadmap, as well as on our platform. And as Ashish mentioned, we're in the very early stages still there. Then we're open to acquisition, especially as it accelerates key strategic priorities. Mm-hmm. But beyond that, it's how do we return capital to shareholders efficiently? And as you've seen active in the last 12 months, we've had both buyback programs and special dividends. Both of those are tools in our tool shed, but ultimately, we make our recommendations to the board, and those are board decisions. Okay. You know, we've talked a lot about the different underlying factors of this business, of the evolution of this story. I want to end on a positive note by pointing out, obviously, despite the challenges that Cricut has faced, this is a consistently profitable business that generates cash. Obviously, both very important in this industry that we all work in. What is the kind of message that you want to leave everyone with today before we wrap? Yeah. So I think, you know, again, internally, inside the company, we don't talk about the economy. Mm-hmm. We don't talk about consumer spending. We basically believe that everything that we are doing is at our control. Mm-hmm. The way we are approaching it is with, again, we go back to the strong conviction in our market. We're going back to the basics, simplifying our thinking, you know, being very, very clear on what we need to accomplish and being incredibly execution focused. Mm-hmm. Right? So we talk about 30-day impact, 60-day impact, 90-day impact, you know, and I think, again, like I said, we don't need to reinvent something. We don't need to go find additional markets. We don't need to do something exotic. We just need to go do the basics and do them really, really, really well and have a team that prioritizes execution. And, you know, one of the things I always say is, "Keep your vision fuzzy and keep your execution crystal clear. So we are focused on executing. Okay, that's perfect. We just ended. So Ashish, Kimball, Jim, thank you very much for joining us this morning. Thank you. Thank you.