Good day, and thank you for standing by. Welcome to Cricut's First Quarter 2025 Earnings 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'll need to press star one one on your telephone. You'll then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Jim Suva, Senior Vice President of Finance. Thank you, Operator, and good afternoon, everyone. Thank you for joining us on Cricut's F irst Quarter 2025 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.cricut.com. Joining me on the call today are Ashish Arora, Chief Executive Officer, and Kimball Shill, Chief Financial Officer. Today's prepared remarks have been recorded, after which Ashish and Kimball will host 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 factors section of Cricut's 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 6, 2025. Cricut 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, Jim. Let me begin with a few words about tariffs. We acknowledge that tariffs have introduced uncertainty into our markets and into our financial plans. That said, we have spent the last several years moving the majority of our finished goods spend outside of China across all of our product categories. While we have exposure to Southeast Asia tariffs in general, we feel we have a competitive advantage in our current supply chain configuration relative to competition. We will discuss the potential impact of tariffs later on this call. Total sales in Q1 decreased 3% year-on-year. We are pleased with the increase in Paid Subscribers in Q1, up over 6% year-on-year, the continuation of positive international sales growth, which increased 8% year-on-year, and strong profitability with operating income up 16% year-on-year. Given the confidence in the sustainability of our profitable operations and right-sizing our balance sheet post-COVID, the Board of Directors approved three capital allocation items: a special dividend of $0.75 per share, approval of our recurring semiannual dividend of $0.10 per share payable in July, and replenishing our stock repurchase program up to $50 million. Kimball will provide more details on these three capital allocation items in a few minutes. In Q1, platform revenue increased 2% on paid subscriber growth. Products revenue declined 7% as connected machines revenue growth of 4% was more than offset by the 15% decline in accessories and materials. We are pleased with the progress in connected machines as our higher investment in marketing and promotions over the past few quarters appears to be making a difference. Both selling units to retailers and sell-out units to end consumers were up for the quarter. We are dissatisfied with our results in accessories and materials, which would have declined further, but for the benefit of one-time items. While paid subscriber growth is indeed a win, we would benefit from stronger acquisition and engagement. We ended the quarter with just over 5.9 million active users who cut in the past year, down less than 1% from a year ago, while our 90-day engaged users declined 4%. As I mentioned last quarter, in 2025, we are relentlessly focused on increasing our speed of execution and are accelerating investments that will help drive future revenue growth. We are continuing to lean into these investments as we navigate the uncertainty introduced by tariffs. These accelerated investments are in hardware product development, materials, and engagement. In Q1, we launched two new cutting machines and also more Cricut Value materials, and we are pleased with the new launches. We need to reignite our top line to satisfy the expectations of our team and our shareholders. We have conviction in what we need to do to return to growth. We need to attract more new users to buy our connected machines as we focus on addressing affordability, ease of use, and increasing marketing and awareness. We need to reverse weakening engagement trends and reinject enthusiasm among our users by enhancing and simplifying the making process. We need to take back our share in accessories and materials. I will now talk about four priorities: new user acquisition, user engagement, subscriptions, and accessories and materials. We continue to focus on new user acquisition and engagement growth on our platform, which ultimately drives our monetization flywheel. I'm excited about the recent launch of the next generation of our most popular cutting machines, Cricut Explore 4 and Cricut Maker 4. These new machines became available at the end of February in the U.S. and Canada and other locations in March. While these machines were just launched in late Q1, we are pleased with the initial feedback, which is positive from both retailers and users. Furthermore, we are seeing an increased uptake with our bundles, where we add increased value to users and make the out-of-box experience easier. In Q1, we focused heavily on tailoring our paid social content across Meta, Pinterest, and TikTok to drive users further down the funnel. This platform-specific approach helped strengthen mid-funnel efforts across platforms. At the same time, we continue to see strong results from our streaming TV ads and have expanded our strategy to incorporate sales messaging, further supporting our full-funnel marketing approach. Recall, last quarter, we mentioned that we expected to continue marketing spend for 2025 at a similar level to 2024, as we re-accelerate consumer excitement for the brand and category. Given the uncertainty created by tariffs and the potential ripple impacts on household discretionary spending, we will be data-driven in our future marketing investments. We continue to experience expected engagement erosion from our large user cohorts from 2020 and 2021 and from subsequent years, who age on their engagement curve and are not being replenished with as many new users. Also, our more recent new users tend to create fewer projects and use fewer material types in these projects than crafters in past years. Our initiatives to improve our experience for new users joining our platform or onboarders remain a key focus. We are also increasing our investments to enhance the overall user journey by helping them go smoothly from a project idea to a physical project in their hands. Our growing content library of images and fonts, along with our continued improvements in AI and machine learning search algorithms, continue to be strong value drivers on our platform, especially for our Cricut Access subscribers. Users seek a broad and diverse selection of high-quality makeable content, which often falls short when using external sources. We continue to see a favorable trend in the share of projects cut using our library versus external content. This trend helps retention of our Cricut Access subscribers. We continue to simplify the out-of-box experience and guide first-time users step by step through the most popular project types. This includes new personalized first-cut experiences, visualization of digital designs as a physical product preview, adding guided touch points, and leveraging AI assistance all the way through successfully making their creations. In 2025, we will continue to enhance and simplify Design Space, focusing on specific use cases and streamlining the entire customer journey for each of those use cases, both from a design and assembly perspective. Q1 was also the first full quarter of offering our new engagement marketing platform with personalized push notifications in the U.S. and Canada. Our goal is to bring more users back to the platform to drive inspiration and reasons to make. We are pleased with the increase in returning traffic we are generating. A portion of users came back for the first time in the quarter thanks to these efforts. We are continuing to expand the capabilities of our platform to enable more omnichannel campaigns. At the end of Q1, we also started deploying our new engagement marketing campaigns to countries outside the U.S. Despite the continued pressure on our engagement metrics, we are confident in our efforts to simplify the design experience, continue to grow the number of images, fonts, and editable designs, and improve our capabilities to bring users back to our platform to make a project. Cricut is a platform company, and Design Space is our core platform. Nothing is more important to us than providing our users with a deeply rewarding creative experience every time they come to Design Space. We are not there today, but we believe that the focus and resources we are bringing to bear will result in significant improvements over the next 12 months. In Q1, our Paid Subscribers increased over 6% to just over 2.97 million. Paid Subscribers continue to be a big positive for us and increased 177,000 year-on-year and increased 15,000 sequentially in Q1. We are doing a more effective job of capturing a higher percentage of onboarders as subscribers. We are also seeing positive trends on win-backs, where our promotional offers are driving increased sign-ups from prior subscribers. Recall, in the second half of 2024, we focused promotional efforts on reducing cancellations, and we are seeing improvements in our ability to mitigate cancellations with these promo offers and improved explanation of subscriber benefits. These efforts continued in Q1. We have a rich roadmap to continually increase the value proposition for subscribers, including over 1 million high-quality makeable images and a suite of premium design tools along with the content strategies described above. Our goal is to make it incredibly compelling to sign up as a subscriber to leverage our content and software tools. As our engagement efforts bear fruit, we expect to see a further boost to our subscriptions. Accessories and material sales declined 15% in Q1, which includes about 5 percentage points of help from one-time items. In our efforts to return Cricut to growth, we know we have to return accessories and materials to growth. We also continue in our relentless focus to drive costs out of this business, including diversifying our finished goods supply base, largely outside of China over the past several years. We are also focused on having the right product configurations in the appropriate channels, so Cricut materials are the obvious choice when users want to make. Over the last several years, we have lost ground to competition in material types, where there are low barriers to entry. This is manifested in white-label brands and retailers, as well as new entrants in online marketplaces. We have embraced the challenge to provide refreshed and cost-competitive materials and accessory offerings. As these offerings continue to roll out over the coming 12 months, we intend to reclaim market share and, by doing so, enhance the making experience of our users. Recall, in the first half of 2024, we launched the Cricut Value line of materials with over 30 SKUs, staged throughout the year as a test. Given the success we saw, we are accelerating this business as we launched over 100 SKUs in late March and early April this year. We have expanded the Cricut Value line beyond the initial assortment of iron-on, vinyl, and cardstock to include glitter iron-on, and there is more to come. Consumers love the value proposition of Cricut Value line of materials with its quality and ease of use. We continue to be optimistic about this product now that we have some history in the market, but it is still a small portion of our portfolio. We have additional innovation products and cost reductions coming in the quarters ahead. We also launched e-commerce-specific configurations of our main line of materials, which are performing well. Consistent with prior comments, we will continue our promotional cadence in this category to remain price-competitive for consumers with a focus on winning share. We continue to explore opportunities to increase Cricut's market share within our omnichannel retail partners. Also, we believe our more diversified manufacturing footprint gives us an advantage relative to competitors as tariffs are rolled out, giving us an opportunity to potentially capture more open-to-buy dollars from our retail partners. For some accessories, we recently focused on being more price-competitive. This may create some near-term margin pressure for these products, but as our accelerated hardware strategy bears fruit, we should see an increase in their profitability over time. We are intensely focused on the overall customer experience, and we are motivated to work with those retailers that help us create a great experience both on the shelf and for actual use of our ecosystem. It is our fundamental belief that when we give people more reasons and inspiration to make things easily and affordably, we will see a lift to materials consumption. We are driven to continue to innovate while exhibiting both long-term focus and current discipline. With that, I'll turn the call over to Kimball. Thank you, Ashish, and welcome, everyone. In the first quarter, we delivered revenue of $162.6 million, a 3% decline compared to the prior year. We generated $23.9 million in net income, or 14.7% of total sales in Q1. Breaking revenue down further, Q1 2025 revenue from platform was $80 million, up 2% year-on-year. We ended Q1 with just over 2.97 million Paid Subscribers, which is up 177,000, or 6% year-on-year, and up 15,000, or 1% from Q4. Platform revenues were up less than Paid Subscribers due to more promotions, mix shift more toward annual versus monthly subscriptions, and geographic mix shift more international, all of which are targeted efforts. ARPU increased 2% to $53.10 from $52.26 a year ago. Q1 revenue from products was $82.6 million, down 7% year-on-year. Connected machines revenue increased 4%, driven primarily by more units sold combined with fewer legacy machine sales. Selling units to retailers and sell-out units to end consumers were both up for the quarter. Accessories and materials decreased 15% and included about 5 percentage points of help from one-time items. In terms of geographic breakdown, international revenue for the quarter was $35.1 million, an increase of 8% compared to Q1 2024, and included about 2% of foreign exchange headwind. As a percentage of total revenue, international was 22% in Q1 2025, compared with 19% of total revenue in Q1 2024. We saw strength in our U.K., Germany, Meta, and Latin America markets. We are experiencing continued softness in Australia. We are increasing sales and marketing resources to further fuel momentum in international markets. We ended the quarter with just over 2.97 million Paid Subscribers, up over 6% from Q1 2024 and up sequentially. This continues to be a bright spot for us, and Ashish detailed our efforts that are gaining traction in this area. I do want to mention, 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. Recall, this could result in a seasonal pattern of quarter-on-quarter paid subscriber growth in Q1 and Q4, but flat to declining quarter-on-quarter subscriber counts in Q2 and Q3. Moving to gross margin. Total gross margin in Q1 was 60.5%, an increase from 54.7% in Q1 2024. The improvement reflects a higher amount of subscription revenue as a percentage of total revenue and higher product gross margins. Breaking gross margin down further, gross margin from platform in Q1 was 89.2% compared to 88.8% a year ago. The increase in platform gross margin for the quarter was primarily related to lower amortization of software development costs. Gross margin from products was 32.7% compared to 24.8% in Q1 a year ago. The increase in gross margin for the quarter was primarily due to selling previously reserved inventory and a more favorable product mix as we launched new products. The uplift from these items more than offset our increased promotional activities. Total operating expenses for the quarter were $69 million and included $10.2 million in stock-based compensation. Total operating expenses increased 4% from $66.4 million in Q1 2024. Recall, we increased our marketing efforts during 2024 by $20 million and continued at a similar rate through Q1. As Ashish mentioned, we will be data-driven in our future marketing spend as we navigate the uncertainty from tariffs and potential impact on consumer spending. We will continue to lean into our physical products and platform investments to drive future growth as we continue to manage our business through a long-term lens. Operating income for the quarter was $29.3 million, or 18% of revenue, compared to $25.2 million, or 15.1% of revenue in Q1 last year, and was benefited from the one-time items by almost 4 percentage points. The tax rate in Q1 2025 of 26.7% was lower than the 30.6% in Q1 2024, primarily due to fully vested RSAs in 2024, which increased the prior-year tax rate, combined with higher R&D credits in 2025. For the quarter, net income was $23.9 million, or $0.11 per diluted share, compared to $19.6 million, or $0.09 per diluted share in Q1 2024. Turning now to balance sheet and cash flow. We continue to generate healthy cash flow on an annual basis, which funds inventory needs and investments for long-term growth. In Q1, we generated $61.2 million in cash from operations, compared to $56.7 million a year ago. We ended Q1 with cash and cash equivalents of $357 million. We remained debt-free. During Q1, we paid approximately $21 million for the declared $0.10 per share semi-annual dividend on January 21st, 2025. We used $12 million in cash to repurchase 2.1 million shares of our stock. As a result, $10.9 million remained in our previously approved $50 million stock repurchase program as of the end of March. As Ashish mentioned, given the confidence in the sustainability of our profitable operations and right-sizing our balance sheet post-COVID, the Board of Directors approved three capital allocation items. First, a special dividend of $0.75 per share, which is primarily driven by the inventory reductions, which we do not expect to continue. Second, approval of our recurring semi-annual dividend of $0.10 per share, which is primarily driven by our profitable operations. Both the special dividend and the recurring semi-annual dividend will be payable on July 21, 2025, to shareholders of record on July 7, 2025. Third, the replenishing of our stock repurchase program up to $50 million, which incorporates the unused portion from the prior approvals. Now onto our outlook. Recall, we do not give detailed quarterly or annual guidance, but we do want to offer some color on our outlook. We are focused on controlling what we can control, and we are managing our business through a long-term lens. As Ashish mentioned, we are keenly aware of the uncertainty created by changing tariffs, and we are proactively assessing and adjusting as needed. We are focused on bringing excitement to our category and are continuing to increase our platform and hardware investments to drive future growth. We may take a more measured approach for marketing investment based on potential consumer spending changes in reaction to tariff policies and will be data-driven in our decisions to rebalance both investments and consumer pricing. We continue to expect total company sales to decline year-on-year in the first half of 2025, compared to the first half of 2024 due to continued pressure in accessories and materials. We also continue to expect the rate of sales decline should be less than the rates we posted in the first half of 2024. While we are working with tremendous urgency to get to an inflection point this year, we are aware that the dynamics surrounding tariffs and associated consumer discretionary income impact may put that at risk. We continue to expect platform sales to increase year-on-year on Paid Subscriber growth. However, lower new user growth rates will put pressure on our subscriber growth rates. This could result in a seasonal pattern of quarter-on-quarter paid subscriber growth in Q1 and Q4, but flat to declining quarter-on-quarter subscriber counts in Q2 and Q3. Given the uncertainty surrounding tariffs, our prior guidance for operating margins can no longer be relied upon, and we are no longer providing any color on our operating margin expectations for the year. We expect to be profitable each quarter and generate significant positive cash flow during 2025. While tariffs are the reality of today's world, our teams continue to be proactive and nimble with how we execute our strategy as we continue our investments to position the company for growth. With that, I'll turn the call over to the operator for questions. Thank you. At this time, we will conduct the question-and-answer session. As a reminder, to ask a question, you'll need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question today comes from Tarra Wilson with Morgan Stanley. Your line is open. Hi, this is Maya. I'm for Tarra wilson. Two questions for me. Maybe the first, you just talked about tariffs. So what are some of the levers that you have to mitigate any tariff-related headwinds? I understand you diversified your supply chain footprint a lot over the past few years, which is great. Are you raising prices to offset tariff costs? Are you absorbing some of them? Have you seen any pull forward ahead of price increases? Maya, thanks for the question. On tariffs, let me break it down into three parts. First, our supply chain configuration, as you called out, because we actually do think it is a help to us at this point relative to some of the competition. I will talk about potential margin impact to the business and impacts to customer pricing. Over the last several years, we've been moving our finished goods spend outside of China. We think that positions us well in the current environment. For example, all of our hardware products, our cutting machines, our heat presses, and other extensions, and those types of accessories are all manufactured in Malaysia. Many of our consumables are produced in South Korea, Thailand, and some still come out of China. Overall, the vast majority of our finished goods spend comes from countries other than China. Especially for some of our partners that have more China exposure, we think that represents an opportunity for us. From a margin impact, it's a dynamic situation and still a little too early to call. That's one of the reasons why we have removed any color or outlook on operating margins for the year. That said, I want to emphasize that we expect to be profitable each quarter and to generate significant cash flow. When it comes to consumer pricing, we're still evaluating exactly how that plays out, but we do expect the average consumer price to go up. We'll achieve that through a combination of less deep promotions and some targeted price increases, but we'll be very deliberate on how we exercise pricing strategy. Again, recapping, supply chain we think is a help. Margin, too soon to tell. We're removing guidance, but expect to be profitable each quarter and produce significant cash flow. We do expect some impact on consumers. On the second part of your question on are we seeing any pull forward of orders. In Q1, we didn't see any, but recall, Liberation Day came after the end of the quarter. Since the quarter closed, we've had multiple conversations with some of our U.S. channel partners that have slowed or discontinued receipts from China. Where we have an opportunity to help stock shelves and support revenues of our partners, and we have an opportunity to gain share in a profitable way, we have agreed to incremental inventory shipments. We're also seeing an incremental consideration for in-store placement and marketing from our retail partners. That largely relates to our consumables business and accessories and materials. On machines, where we have a more constrained supply chain with long lead times, we'll continue to support normal run rates to keep channels in balance. Yep. Maya, this is Ashish. Let me just jump in. Just to reinforce a couple of things that Kimball said in the first part of the question about tariffs. On the pricing and promotions front, we're going to be very deliberate on very measured pricing actions if and when we think it's necessary. Also, I think we'll be very disciplined on our promotional cadence to the extent that we will probably not go as deep and as broad. Overall, we think that, again, even for Malaysia and some of the other countries, the tariff situation may change. At this point, given the information we have, we think we are relatively well-positioned in this environment. Great. Thank you. One last one from me. It was good to see connected machines revenue return to growth in Q1 and the strong performance in platform as well. Can you maybe give us some more details and color on engagement trends? It looked like engaged users declined year- over- year and sequentially. Active users moved slightly lower year- over- year. I know you've spoken extensively about the initiatives and efforts in place to drive engagement higher. Can you help us understand why and when we should start to see these engagement efforts bear fruit? Thank you. That's it for me. Thanks, Maya, for the question. First of all, I want to acknowledge, right? We've been talking about this for several quarters now, and engagement continues to be a challenge. I won't go into too much detail on the reasons why it continues to be a challenge, but let me just kind of quickly recap. The two main reasons are the large cohorts that we acquired in 2020 and 2021, which, as their engagement curve graduates over time, that puts a lot of pressure, especially while our acquisition is improving, we are still not acquiring enough to offset that. The second is, as we position the platform and the category for mainstream users as we get to a broader audience, in many cases, it's an advantage, but those new users are cutting less. Let me focus on what are we doing to fix this. Number one is we are really building the platform for onboarders and improving the onboarding experience. As and when they come onto the platform, they fall in love with the platform, they're able to use it very easily, and the learning curve is very low so that they come back more often from the get-go, right? To me, that is probably the single most important thing that we should be focusing on. The second, as we commented on in our remarks, right? We have implemented a marketing platform, and we're seeing really good results from it, which is how do we bring users? Not only do we have to improve the making experience, the designing experience, how do we give people more reasons to come back? We are doing that through personalized notifications and sending them information or inspiration that encourages them to come back and make a project. We've seen some really good results for that, so we're going to scale that. We've so far implemented that in the U.S. and Canada, and we're going to scale that internationally as well as amplify those marketing efforts. That is the second thing we are doing. The third, which is probably the most important one, we've embarked on a pretty major platform re-architect from a user experience standpoint. Our goal is to create some transformational experiences in the design space. The way we are doing that is through these very specific use cases. In addition to making changes to the platform, our goal is that when a user comes in, how do we uncover their intent? They're here to make a T-shirt. They're here to make a vinyl decal or a card or another project. How do we make it easy for them to make that in three or four easy steps? I think we will continue, we'll actually be delivering those use cases throughout the year. We think that it'll not only improve the experience for onboarders, but it'll also give us a reason to bring back many of the past users that are not coming onto the platform as often. We are pretty—I know it's been—we've been talking about this for a while, but we have a tremendous amount of conviction and confidence that we are working on the right things. As some of these things converge, we expect to see those engagement numbers go up. Thank you for the question. Our next question is from Mike Cadiz from Citigroup. Your line is open. Hi there. Good afternoon. Thanks for the message. This is Mike Cadiz for Asya Merchant at Citi. I have a couple of questions myself. The first is, it's good to see that you continue to mention an inflection point or aspire to an inflection point this year. My question is, what gives you the confidence that such an inflection point can be reached this year? That's number one. The second is profitability was much stronger than expected. How should we think about that going forward? That's it for me. Thank you, folks. Hey, Mike. Thanks for the question. First, on the inflection point, as we called on the prepared remarks, given the uncertainty of tariffs, that may put that at risk. Let me share some of the breadcrumbs that we see in our business. First of all, our machine business is improving. We were up selling revenue on machines. We were up selling units for the quarter, and we were up sell-out units for the quarter. That's only the second time that's happened since 2021. We think it's signs that our marketing efforts are starting to bear fruit, and we're reaccelerating with consumers. Our platform business continues to grow. Paid subscriptions is up. While accessories and materials is still challenged and was a headwind of the quarter, we continue to see our value line doing well. Again, small part of the portfolio. Last year, we launched about 30 SKUs over the course of the year as a test. We saw it perform well. In late Q1 and in April, we launched over 100 new SKUs in value line that we think will have an impact on the year as we focus on gaining share materials. The final point is we do believe our supply chain configuration helps us as we lean in with our retail partners and with the opportunity to potentially gain share there in the short term. That really goes to the signs of positivity we see in the business. In terms of the profitability, there were about four percentage points of help in the quarter that we called out, four percentage points of help in the operating margins that we called out. Let me kind of break that down into pieces. There is kind of stuff above the line and then one below the line. Our gross margins for the quarter were 60.5%. In our product segment, we had some new product launches that carry higher gross margins. We had some excess inventory that we were able to monetize during the quarter. If you—I will call out footnote five in the Q. It will show you that we worked through about $5 million of our excess and obsolete balance there. We also had the benefit of some duty drawback as a one-time item that was the help of the quarter. On the other side, our gross margin platform continues to be a significant portion of our revenue, and it carries about 89% gross margins. That really explains kind of the higher gross margins for the quarter. Below the line in G&A, we had some bad debt related to Joann's bankruptcy that we were able to unwind based on a favorable court ruling. Excellent. Thank you. Thank you for your question. As a reminder, if you would like to ask a question, please press star one one on your telephone. Our next question comes from Adrian Yee with Barclays. Your line is open. Hi, this is Angus on for Adrian Yee. Thanks for taking my question. I have two questions on product. My first is, could you talk about the uptake of the new fourth-gen machines, both from a customer feedback and usage standpoint and then also from a retailer standpoint in terms of timeline to get fully ramped and fully in stock with your key partners, given the uncertain ordering backdrop that you cited when answering, Maya? Angus, thanks for the question. We launched in kind of late Q1 the next generation machines, Maker 4, which is our flagship, and Explore 4. I'm not prepared to split out exactly how those machines did, but I will say they've been well-received with retailers and consumers. We are not short on stock of machines, right? What I was talking about really is we will continue to ship machines on a run rate basis according to forecast. That is really driven by sell-out. There is not really an opportunity to do a lot of pull-in of machines, but we also have sufficient to meet the demand that we see and that we expect. Where we do have more flexibility is on our consumables business. In the accessories and materials side of the business, where we have more flexibility and shorter lead times and where we have retail partners that have exposure because of shipments that they have either slowed or paused from China, we do have the ability to step in and do more without putting other retail partners at risk. Got it. That is great. You kind of touched on it a little bit, but my second question is, yeah, also on hard goods segments. How is the value line of materials performing in terms of regaining market share from private label brands? Just taking a step back, anything you could share in terms of how far along that product line is in its journey and where you see it going in terms of% of your partner doors and websites that it will ultimately be sold in? Thank you. Our value line of materials is engineered to compete well in online marketplaces specifically, right? It is the right product configuration so that it is profitable for Cricut and it is profitable for our partners as we compete online. Again, mentioned that last year was only 30 SKUs. This year has been over 100. We have more coming, but it is still a small part of the overall portfolio. We see that growing over time, and we see it as an opportunity where we can gain share, particularly online in the materials business. Yeah. Just to add to that, right? We are going to see an enhanced push for the value line of materials. We have 100 SKUs coming. We have more SKUs in the works in the second half of the year and going into next year. We are basically focusing a lot on configurations that make the product affordable to our consumers. We ultimately think that it'll become a meaningful portion of our portfolio, but it's going to be a journey to get there. Yeah. Angus, I'd also like to emphasize that we're continuing to drive cost out of all of our materials business. While value line is about how do we gain and win online, we're continuing to be more competitive in how we compete across all of our channels with the materials business. Great. Thanks. Good luck. Thank you. Again, if you would like to ask a question, press star one one on your telephone. One moment, please. I'm showing no other questions at this time, so I would like to turn it back to Jim for closing remarks. Thank you, Terese. And thank you for everyone for joining us this afternoon. We have a large opportunity over the long term to drive new user growth and increase engagement. The Cricut platform continues to not only strengthen but also provide increased value to our users. We will continue to manage the business for sustainable, profitable growth and generate healthy cash flows. I'm excited about the opportunities ahead of us. If you have additional questions, please email me at jsuva@cricut.com. This now concludes this earnings call, and you may disconnect.