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What changed in Cricut, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Cricut, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+378 added−361 removedSource: 10-K (2026-03-04) vs 10-K (2025-03-05)

Top changes in Cricut, Inc.'s 2025 10-K

378 paragraphs added · 361 removed · 319 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

85 edited+19 added−13 removed96 unchanged
Biggest changeThese developments create the potential for a patchwork of overlapping but different laws, and increase our risk and compliance costs. 15 Further, some countries also are considering or have passed legislation requiring local storage and processing of data, or similar requirements, which could increase the cost and complexity of operating our products and services and other aspects of our business.
Biggest changeFurther, some countries also are considering or have passed legislation requiring local storage and processing of data, or similar requirements, which could increase the cost and complexity of operating our products and services and other aspects of our business. 15 Additionally, we are subject to laws, rules, and regulations regarding cross-border transfers of personal data, including laws relating to the transfer of personal data outside the European Economic Area, or EEA, and the United Kingdom.
Creating projects drives repeat purchases of accessories and materials for years after a user first buys a connected machine, demonstrating a growing customer lifetime value through ongoing engagement with our platform. 4 Many of our users share a love of our brand, products, and mission, fostering a loyal community of users who are deeply engaged with Cricut and each other.
Creating projects drives repeat purchases of accessories and materials for years after a user first buys a connected machine, demonstrating a growing customer lifetime value through ongoing engagement with our platform. Many of our users share a love of our brand, products, and mission, fostering a loyal community of users who are deeply engaged with Cricut and each other.
Our software and apps are built and continually maintained using the industry’s latest technology like Swift for iOS, Kotlin for Android, and Electron Framework for Mac and Windows. We benefit from and leverage the AWS security frameworks to help secure our users’ information, creative projects, and account. • Cut Smart Technology, Adaptive Tool System and QuickSwap Housings.
Our software and apps are built and continually maintained using the industry’s latest technology like 9 Swift for iOS, Kotlin for Android, and Electron Framework for Mac and Windows. We benefit from and leverage the AWS security frameworks to help secure our users’ information, creative projects, and account. • Cut Smart Technology, Adaptive Tool System and QuickSwap Housings.
The 9 ability to control the amount of machine pressure used by Cricut Maker was an industry first in such a compact form factor, and it allows our users to not only cut thicker materials like matboard, leather and basswood but also to deboss heavy chipboard or engrave metal.
The ability to control the amount of machine pressure used by Cricut Maker was an industry first in such a compact form factor, and it allows our users to not only cut thicker materials like matboard, leather and basswood but also to deboss heavy chipboard or engrave metal.
Many of these companies have substantial market share, diversified product lines, well-established supply and distribution systems, strong brand recognition and significant financial, marketing, research and development and other resources. These channel partners often have their own brands of products that we compete against, particularly in accessories and materials.
Many of these 11 companies have substantial market share, diversified product lines, well-established supply and distribution systems, strong brand recognition and significant financial, marketing, research and development and other resources. These channel partners often have their own brands of products that we compete against, particularly in accessories and materials.
Significant time and resources also go towards training our Cricut community management and Member Care teams to address issues relating to our products and services to reduce negative impacts on our users’ experience. 14 Research and Development Our research and development efforts focus on enabling our users to express their creativity.
Significant time and resources also go towards training our Cricut community management and Member Care teams to address issues relating to our products and services to reduce negative impacts on our users’ experience. Research and Development Our research and development efforts focus on enabling our users to express their creativity.
Users often share projects they created, inspiring other users to create. Design Space provides users 6 with the ability to share direct links to projects and designs, so that others may view and create their own items from the same design.
Users often share projects they created, inspiring other users to create. Design Space provides users with the ability to share direct links to projects and designs, so that others may view and create their own items from the same design.
Our sales and channels team located in the United States support both the onboarding of 13 new brick-and-mortar and online retail partners as well as account management of existing brick-and-mortar and online retail partners.
Our sales and channels team located in the United States support both the onboarding of new brick-and-mortar and online retail partners as well as account management of existing brick-and-mortar and online retail partners.
Item 1. Business Overview At Cricut, our mission is to help people lead creative lives. Our creativity platform enables our engaged and loyal community of nearly 5.9 million Active Users, as of December 31, 2024, to turn ideas into DIY goods from custom greeting cards and apparel to on-demand gifts and large-scale decor.
Item 1. Business Overview At Cricut, our mission is to help people lead creative lives. Our creativity platform enables our engaged and loyal community of nearly 5.9 million Active Users, as of December 31, 2025, to turn ideas into DIY goods from custom greeting cards and apparel to on-demand gifts and large-scale decor.
Our connected machines also use different combinations of tools, attachments, and accessories for deeper capabilities. For example, Cricut Joy can work with over 50 different materials – from the most popular craft materials like cardstock, vinyl and iron-on to specialty materials like polished foils.
Our connected machines also use different combinations of tools, attachments, and accessories for deeper capabilities. For example, Cricut Joy Xtra can work with over 50 different materials – from the most popular craft materials like cardstock, adhesive vinyl and iron-on vinyl to specialty materials like polished foils.
For example, with the introduction of our Smart Materials line (including Smart Vinyl, Smart Iron-On, Smart Paper, and Smart Label), our users can load these materials into their connected machines without the need for a separate cutting mat, allowing users to create more efficiently and design larger projects.
For example, with our Smart Materials line (including Smart Vinyl, Smart Iron-On, Smart Paper, and Smart Label), our users can load these materials into their connected machines without the need for a separate cutting mat, allowing users to create more efficiently and design larger projects.
By enhancing our subscription offerings, we also believe we can grow our subscription base over time. Continuously Improve Ease of Use and User Experience. We plan to continue to broaden our demographic appeal by making our products even easier to use and educating users on our products and their capabilities.
By enhancing our subscription offerings, we also believe we can grow our subscription base over time. Continuously Improve Ease of Use and User Experience. We plan to continue to broaden our demographic appeal by making our products even easier to use and educating users on our products and their capabilities. Expand Internationally.
Approximately 27% of our users make projects to sell. Our Opportunity We believe that anyone can be creative, and thus anyone can be a part of the Cricut community of users. This presents us with a large untapped market opportunity in addition to our current user base.
Approximately 23% of our users make projects to sell. Our Opportunity We believe that anyone can be creative, and thus anyone can be a part of the Cricut community of users. This presents us with a large untapped market opportunity in addition to our current user base.
We sell to a network of smaller, independent retailers in targeted locations or in specialty markets. As of December 31, 2023 and December 31, 2024 we did not have any customers that represented 10% or more of our consolidated revenue.
We sell to a network of smaller, independent retailers in targeted locations or in specialty markets. As of December 31, 2024 and December 31, 2025, we did not have any customers that represented 10% or more of our consolidated revenue.
The output of this content lifecycle results in authentic, on-trend and high-quality images and projects we offer our users for à la carte purchase or as a part of our Cricut Access subscriptions.
The output of this content lifecycle results in authentic, on-trend and high-quality images, fonts, templates and projects we offer our users for à la carte purchase or as a part of our Cricut Access subscriptions.
Employee incentives and benefits include medical, life, disability, vision, and dental insurance coverage, 401(k) retirement plans with company matching contributions, and paid time off. We emphasize “acting like an owner” and in support of the mantra have awarded equity to much of the team.
U.S.-based employee incentives and benefits include medical, life, disability, vision, and dental insurance coverage, 401(k) retirement plans with company matching contributions, and paid time off. We emphasize “acting like an owner” and in support of the mantra have awarded equity to much of the team.
Whether through the creation, acquisition or licensing of varied creative assets, our content teams then use a proprietary process to convert these images and 10 projects into content specifically optimized to integrate with our connected machines and Cricut-branded accessories and materials seamlessly.
Whether through the creation, acquisition or licensing of varied creative assets, our content teams then use a proprietary process to convert these images, fonts, templates and projects into content specifically optimized to integrate with our connected machines and Cricut-branded accessories and materials seamlessly.
This software aggregates billions of data points of our users’ contributions, giving us valuable insights into their preferences and behaviors that enable us to continuously improve our products and drive further engagement. As a result, our business model is characterized by strong user engagement and diversified sales across product categories.
This software aggregates billions of data points of our users’ interactions, giving us valuable insights into their preferences and behaviors that enable us to continuously optimize our products and drive further engagement. As a result, our business model is characterized by strong user engagement and diversified sales across product categories.
In our design app, users can browse and search among a wide range of images, fonts, and projects published by Cricut, by artists enrolled in our Contributing Artists Program, or made and shared by other users on our platform.
In our design app, users can browse and search among a wide range of images, fonts, templates, guided flows, and projects published by Cricut, by artists enrolled in our Contributing Artists Program, or made and shared by other users on our platform.
We also had 46 pending patent applications in the United States and 121 pending patent applications in non-U.S. jurisdictions. These issued patents and pending patent applications are intended to protect our proprietary inventions that are relevant to our business. We continually review our development efforts to assess the existence and patentability of new intellectual property.
We also had 49 pending patent applications in the United States and 108 pending patent applications in non-U.S. jurisdictions. These issued patents and pending patent applications are intended to protect our proprietary inventions that are relevant to our business. We continually review our development efforts to assess the existence and patentability of new intellectual property.
Later, with the release of Cricut Maker, we further innovated by introducing our Adaptive Tool System, which deepens and enhances our connected machine movements by adding additional control from the drive housing itself.
Later, in 2017, with the release of Cricut Maker, we further innovated by introducing our Adaptive Tool System, which deepens and enhances our connected machine movements by adding additional control from the tool housing itself.
We also sell to a network of distributors in over 50 countries who resell our products primarily to international brick-and-mortar and online retail partners and on a limited basis to U.S. brick-and-mortar and online retail partners. In 2023, 62%, and in 2024, 65% of our revenue was generated through online channels, respectively.
We also sell to a network of distributors in over 50 countries who resell our products primarily to international brick-and-mortar and online retail partners and on a limited basis to U.S. brick-and-mortar and online retail partners. In 2024, 65%, and in 2025, 69% of our revenue was generated through online channels, respectively.
With 87% of our users, as of December 31, 2024, creating projects for their friends and family, word-of-mouth marketing continues to be paramount to our operational success. Crafting inspires feelings of accomplishment in our users, which promotes repeat use of our products and re-engagement in our platform and community.
With 89% of our users, as of December 31, 2025, creating projects for their friends and family, word-of-mouth marketing continues to be paramount to our operational success. Crafting inspires feelings of accomplishment in our users, which promotes repeat use of our products and re-engagement in our platform and community.
Increase Monetization from Current Users. We keep our users engaged by applying what we learn on our platform to launch new software and products. We believe that by finding new ways to inspire our users to make with their existing connected machines, we can sell more content and accessories and materials.
We keep our users engaged by applying what we learn on our platform to launch new software and products. We believe that by finding new ways to inspire our users to make with their existing connected machines, we can sell more content and accessories and materials.
We continue to grow our revenues within our international markets and in 2023 20%, and in 2024 22% of our overall revenue came from our international business. Many of our products are sold through traditional brick-and-mortar retail partners, varying in size, including on their websites, as follows: • Specialized Craft Retailers.
We continue to grow our revenues within our international markets and in 2024, 22%, and in 2025, 24% of our overall revenue came from our international business. 13 Many of our products are sold through traditional brick-and-mortar retail partners, varying in size, including on their websites, as follows: • Specialized Craft Retailers.
We invest substantial resources in research and development to enhance our platform, develop new products and features, and improve our user experience. Our hardware innovation harnesses the power of technologies typically found only in professional robotics, computer numerical control machinery, and other automated commercial devices.
We invest substantial resources in research and development to enhance our platform, develop new products and features, and improve our user experience. Our hardware innovation harnesses the power of technologies typically found only in professional robotics, computer numerical control machinery, and other automated commercial devices. Examples of our cutting-edge innovation include: 1.
In addition, we offer a wider selection of images, fonts, and projects through our subscription service, Cricut Access, or for purchase à la carte.
We offer a select number of free images, fonts, and projects. In addition, we offer a wider selection of images, fonts, and projects through our subscription service, Cricut Access, or for purchase à la carte.
Through the interlocking of gears with the machine carriage, our Adaptive Tool System (currently available only on Cricut Maker family) can additionally lift and turn the blade during operation.
Through the interlocking of gears with the machine carriage, our Adaptive Tool System (currently available only on Cricut Maker family) can actively turn the blade during operation.
Our platform is primarily built and maintained in-house by a team of professionals across design, product management and engineering disciplines. As of December 31, 2024, we had over 250 employees in our research and development organization.
Our platform is primarily 14 built and maintained in-house by a team of professionals across design, product management and engineering disciplines. As of December 31, 2025, we had over 291 employees in our research and development organization.
As of December 31, 2024, nearly 5.9 million of our users cut on their connected machines in the last 365 days and 3.8 million cut on their connected machines in the last 90 days.
As of December 31, 2025, nearly 5.9 million of our users cut on their connected machines in the last 365 days and nearly 3.7 million cut on their connected machines in the last 90 days.
For additional information, see the section titled “Risk factors—Risks Related to our Intellectual Property.” Manufacturing, Supply Chain and Fulfillment We currently outsource the manufacturing of our connected machines, accessories and materials to third-party contract manufacturers located primarily in Malaysia, China, Thailand and South Korea. We believe outsourcing our manufacturing function promotes more flexibility and scalability in our operations.
For additional information, see the section titled “Risk factors—Risks Related to our Intellectual Property.” Manufacturing, Supply Chain and Fulfillment We currently outsource the manufacturing of our connected machines, accessories and materials to third-party contract manufacturers located primarily in Malaysia, China, Thailand and South Korea.
For the years ended December 31, 2022, 2023 and 2024, we generated: • Total revenue of $886.3 million, $765.1 million and $712.5 million, respectively, representing (32)%, (14)% and (7)% year-over-year growth, respectively • Net income of $60.7 million, $53.6 million and $62.8 million, respectively, representing (57)%, (12)% and 17% year-over-year growth, respectively Our Industry We both influence and benefit from powerful secular tailwinds: • Personalization is a Global Mega Trend.
For the years ended December 31, 2023, 2024 and 2025, we generated: • Total revenue of $765.1 million, $712.5 million and $708.8 million, respectively, representing (14)%, (7)% and (1)% year-over-year growth, respectively • Net income of $53.6 million, $62.8 million and $76.7 million, respectively, representing (12)%, 17% and 22% year-over-year growth, respectively Our Industry We both influence and benefit from powerful secular tailwinds: • Personalization is a Global Mega Trend.
As of December 31, 2024, we had a total of 18 registered trademarks in the 12 United States and 86 registered trademarks in non-U.S. jurisdictions. We also have registered domain names for websites that we use in our business, such as cricut.com and other variations.
As of December 31, 2025, we had a total of 20 registered trademarks in the United States and 80 registered trademarks in non-U.S. jurisdictions. We also have registered domain names for websites that we use in our business, such as Cricut.com and other variations.
Years ago, we transformed the household electronic cutting machine market with the introduction of our Cut Smart technology on Cricut Explore.
In 2014, we transformed the household electronic cutting machine market with the introduction of our Cut Smart technology on Cricut Explore.
These laws and regulations include laws governing, among other areas, privacy, data protection, information security, content regulation, intellectual property, competition, consumer protection, e-commerce, product liability, marketing, advertising, trade (e.g., sanctions, export controls and tariffs), and taxation. These laws and regulations are often complex, sometimes contradict other laws, and are frequently evolving.
These laws and regulations include laws governing, among other areas, privacy, data protection, information security, content regulation, intellectual property, competition, consumer protection, e-commerce, product liability, marketing, advertising, trade (e.g., sanctions, export controls and tariffs), telecommunications, national security, government contracts, anti-corruption, and taxation. These laws and regulations are often complex, sometimes conflict with or contradict other laws, and are frequently evolving.
The Cricut Explore family pioneered calligraphy pens and sticker making, while the Cricut Maker family cuts softwood and engraves metal. Bluetooth and USB options enable connectivity to Cricut Design Space, our proprietary cloud-based design software available for free on Android, iOS, Mac OS, and PC devices.
The Cricut Explore family pioneered calligraphy pens and sticker making, while the Cricut Maker family cuts softwood and engraves metal. Bluetooth and USB options enable connectivity to Cricut Design Space, our proprietary cloud-based design software available for free on Android, iOS, Mac OS, and PC devices. 6 A comparison of our current connected machines is below.
According to in-house research conducted in 2024: • 38% of new users bought their Cricut machine specifically to make a variety of things • 55% of users bought their machine to make personalized gifts • 27% of users make projects to sell • 84% of users say crafting with Cricut inspires feelings of accomplishment • 87% of users made projects for other people rather than themselves A user’s journey evolves after their first purchase.
According to in-house research conducted in 2025: • 37% of new users bought their Cricut machine specifically to make a variety of things • 53% of users bought their machine to make personalized gifts • 23% of users make projects to sell • 87% of users say crafting with Cricut inspires feelings of accomplishment • 89% of users made projects for other people rather than themselves A user’s journey evolves after their first purchase.
Every project is an opportunity to start a conversation and we often see our users inspire, teach, and create together. Users are passionate about sharing Cricut tips, tricks, and personal stories and this engagement carries over into social media and into everyday life. Globally, there are millions of Cricut followers and hundreds of independently run Cricut groups across social media.
Every project is an opportunity to start a conversation, and we often see our users inspire, teach, and create together. Users are passionate about sharing Cricut tips, tricks, and personal stories and this engagement carries over into social media and into everyday life.
We intend to continue to invest resources to build our brand and community, including employing digital advertising, brand partnerships, and content marketing. Our marketing efforts prioritize the customer journey to ensure that when consumers interact with the Cricut brand, we’re creating positive experiences that people will remember.
We intend to continue to invest resources to build our brand and community, including employing digital advertising, such as social media ads, video ads, and influencer posts. Our marketing efforts prioritize the customer journey to ensure that when consumers interact with the Cricut brand, we’re creating positive experiences that people will remember.
We began our international expansion by launching in Australia, Canada, France, Germany and the United Kingdom, and subsequently launched in Latin America, Western Europe, META (Middle East, Turkey, and Africa), and more recently most of Asia (including India, Japan, and South Korea).
We believe there is a significant opportunity for Cricut to grow internationally. We began our international expansion by launching in Australia, Canada, France, Germany and the United Kingdom, and subsequently launched in Latin America, Western Europe, META (Middle East, Turkey, and Africa), and more recently most of Asia (including India, Japan, and South Korea).
We sell our connected machines, accessories, and materials globally through our brick-and-mortar and online retail partners, as well as through our website at cricut.com. Our partners include major retailers such as Amazon, Best Buy, Costco, Hobby Lobby, HSN, Michaels, Target, and Walmart, along with many others. We also sell our products, including subscriptions to Cricut Access, on cricut.com.
We also use digital and social media marketing to attract users. 7 We sell our connected machines, accessories, and materials globally through our brick-and-mortar and online retail partners, as well as through our website at Cricut.com. Our partners include major retailers such as Amazon, Best Buy, Costco, Hobby Lobby, HSN, Michaels, Target, and Walmart, along with many others.
The accessories and materials DIY market is highly competitive with few barriers to entry. We face heightened competition in providing accessories and materials that we sell for use with our connected machines. We compete against well-established, well-known companies, many of which are also our channel partners.
We face heightened competition in providing accessories and materials that we sell for use with our connected machines. We compete against well-established, well-known companies, many of which are also our channel partners.
With 87% of our users creating products for their friends and family, word-of-mouth marketing continues to be one of the most efficient and effective ways we attract new users. In 2024, 39% of new users first heard about Cricut through friends and family. We also use digital and social media marketing to attract users.
With 89% of our users creating products for their friends and family, word-of-mouth marketing continues to be one of the most efficient and effective ways we attract new users. In 2025, 35% of new users first heard about Cricut through friends and family.
In Cricut Design Space, our users find inspiring content for their projects and easy-to-use software tools and instructions to customize or design from scratch their project idea. Users can take advantage of images, fonts and ready-to-make projects available within our platform, or they can upload their own. We offer a select number of free images, fonts, and projects.
In Cricut Design Space, our users can find guided flows for the most commonly made project types, inspiring content for their projects and easy-to-use software tools and instructions to customize or design from scratch their project idea. Users can take advantage of images, fonts, templates and ready-to-make projects available within our platform, or they can upload their own.
Competition We compete in several market segments with our business. 11 We experience competition in connected machines; for example, Brother, Graphtec, Loklik, Silhouette America, and Siser sell cutting machines. We expect significant competition to continue, both from current competitors as well as new entrants into the market, some of which may become significant competitors in the future.
We experience competition in connected machines; for example, Brother, Graphtec, Loklik, Silhouette America, and Siser sell cutting machines. We expect significant competition to continue, both from current competitors as well as new entrants into the market, some of which may become significant competitors in the future. The accessories and materials DIY market is highly competitive with few barriers to entry.
As of December 31, 2024, we had over 640 employees of which 161 lived outside of the United States. As of December 31, 2024, we had employees in 31 states and 25 countries.
As of December 31, 2025, we had over 700 employees of which 185 lived outside of the United States. As of December 31, 2025, we had employees in 29 states and 25 countries.
This design of our product ecosystem and marketing helped scale our community of users significantly over time. The revenue generated from the sales of our connected machines, subscriptions, accessories, and materials comes from a robust mix of brick-and-mortar and online retail, including direct-to-consumer on cricut.com, and partners like Amazon, Best Buy, Costco, Hobby Lobby, HSN, Michaels, Target, and Walmart.
The revenue generated from the sales of our connected machines, subscriptions, accessories, and materials comes from a robust mix of brick-and-mortar and online retail, including direct-to-consumer on Cricut.com, and partners like Amazon, Best Buy, Costco, Hobby Lobby, HSN, Michaels, Target, and Walmart. We are a profitable business.
Available as a monthly or annual subscription, Cricut Access subscribers enjoy a greater and ever-growing selection of more than one million images, hundreds of fonts, and thousands of ready-to-make projects in our design library, as well as other members-only special features, like Background Remover. Subscribers also receive discounts to cricut.com and priority support.
Available as a monthly or annual subscription, Cricut Access subscribers enjoy a greater and ever-growing selection of more than 1.6 million images, over a thousand fonts, thousands of templates, and thousands of ready-to-make projects in our design library, as well as other members-only special features, like Background Remover and AI generation tools.
We have a significant opportunity to bring more users to our platform by enhancing our brand and product awareness in both the United States and Canada and in the other geographies where we currently sell our products. We intend to pursue this opportunity in part through digital advertising, social media and influencer marketing, retail partners, public relations, and word-of-mouth referrals.
We have a significant opportunity to bring more users to our platform by enhancing our brand and product awareness. We intend to 8 pursue this opportunity in part through digital advertising, social media and influencer marketing, retail partners, public relations, and word-of-mouth referrals. Increase Monetization from Current Users.
Utilizing a patented card mat to hold these cards in place during operation, Cricut machines can cut and draw professional-looking handmade cards for any occasion while easily pulling from hundreds of ready-to-make greeting card projects in Design Space.
Utilizing a patented card mat to hold these cards in place during operation, Cricut machines can cut and draw professional-looking handmade cards. In its initial integration, users could make cards from a library of hundreds of ready-to-make projects in Design Space.
Our hardware and software are beautifully designed to be easy-to-use, so that users can be their creative best. • Proprietary Technology. Our platform benefits from our proprietary intellectual property.
Our software integrates our connected machines with the rest of our platform and enables a seamless creative experience for our users. Our hardware and software are beautifully designed to be easy-to-use, so that users can be their creative best. • Proprietary Technology. Our platform benefits from our proprietary intellectual property.
This engagement generates even more shared projects and word-of-mouth that in turn helps to grow our community. We Have a Positive Impact on Our Users, in Good Times and in Bad. When users design with our products, they feel creative and self-accomplished. When they personalize an object or make something for someone as a gift, they feel good about themselves.
The number of projects made and shared physically or digitally continues to grow over time. This engagement generates even more shared projects and word-of-mouth that in turn helps to grow our community. We Have a Positive Impact on Our Users, in Good Times and in Bad. When users design with our products, they feel creative and self-accomplished.
In addition, to the extent that we gain greater visibility and market exposure as a public company, we face a higher risk of being the subject of intellectual property infringement claims from third parties.
We expect that infringement of our intellectual property may increase as the number of products and competitors in our market increases, and effective protection of intellectual property rights is expensive and difficult. 12 In addition, to the extent that we gain greater visibility and market exposure as a public company, we face a higher risk of being the subject of intellectual property infringement claims from third parties.
It is therefore likely that we will need to comply with these local regulations in addition to the GDPR. Local supervisory authorities can impose fines for non-compliance and have the power to carry out audits, require companies to cease or change processing, request information and obtain access to premises.
Local supervisory authorities can impose fines for non-compliance and have the power to carry out audits, require companies to cease or change processing, request information and obtain access to premises.
As of December 31, 2024, we had 78 issued patents in the United States, which are expected to expire at various times between January 4, 2025, and June 16, 2043, as well as 207 issued patents in non-U.S. jurisdictions, which are expected to expire at various times between January 16, 2025, and December 19, 2048.
As of December 31, 2025, we had 97 issued patents in the United States, which are expected to expire at various times between March 24, 2026, and November 14, 2045, as well as 237 issued patents in non-U.S. jurisdictions, which are expected to expire at various times between January 16, 2026, and February 4, 2050.
The goods that users produce or customize using our platform fall into multiple large market categories, some of which may overlap, including, but not limited to, cards, seasonal décor, pop culture, wedding-related services, organization, and custom gifts.
The goods that users produce or customize using our platform fall into multiple large market categories, some of which may overlap, including, but not limited to, t-shirts, cards, seasonal décor, pop culture, wedding-related services, organization, and custom gifts. 5 The Cricut User Journey Creative individuals come to Cricut and become engaged users who can express themselves both individually and as part of a large and passionate community.
The premium version includes all of the benefits of the basic Cricut Access subscription, as well as additional discounts and preferred shipping services. As of December 31, 2024, we had nearly 3.0 million paid subscribers.
Cricut Access also includes other member benefits, such as discounts on Cricut.com and priority member care support. The premium version includes all of the benefits of the basic Cricut Access subscription, as well as additional discounts and preferred shipping services. As of December 31, 2025, we had just over 3.09 million Paid Subscribers.
This generates even more shared projects and word-of-mouth that in turn helps to grow our community. To date, our success has been driven by word-of-mouth referrals as well as effective use of low-cost marketing channels like social media, which we then complement with our targeted sales and marketing efforts.
To date, our success has been driven by word-of-mouth referrals as well as effective use of low-cost organic marketing channels like social media, which we then complement with our targeted sales and paid marketing efforts. This design of our product ecosystem and marketing helped scale our community of users significantly over time.
The standard and premium version of our subscription service, Cricut Access, enables access to a growing library of more than one million images, thousands of ready-to-make projects, and hundreds of fonts, and the use of special design features and expanded app capabilities. Cricut Access also includes other member benefits, such as discounts on cricut.com and priority member care support.
The standard and premium version of our subscription service, Cricut Access, enables access to a growing library of more than 1.6 million images, thousands of templates, thousands of ready-to-make projects, over a thousand fonts, and the use of special design features and expanded app capabilities.
Cricut Access is $9.99 billed monthly or $95.88 billed annually. Cricut Access Premium, which includes all the benefits of Cricut Access, includes additional discounts and preferred shipping for an annual cost of $119.88.
Subscribers also receive discounts to Cricut.com and priority support. Cricut Access is $9.99 billed monthly or $95.88 billed annually. Cricut Access Premium, which includes all the benefits of Cricut Access, includes additional discounts and preferred shipping for an annual cost of $119.88. As of December 31, 2025, we had just over 3.09 million Cricut Access subscribers.
Our products make people feel accomplished and confident – powerful emotions that help create a relationship and love between our brand and our users. Crafting allows people to create their own gifts or to earn income selling handmade goods. Given the positive emotions connected with crafting, our users create to celebrate and as a respite during difficult times.
When they personalize an object or make something for someone as a gift, they feel good about themselves. Our products make people feel accomplished and confident – powerful emotions that help create a relationship and love between our brand and our users. Crafting allows people to create their own gifts or to earn income selling handmade goods.
We put production power into the hands of our users by allowing them to create their own professional-looking homemade goods instead of purchasing manufactured goods from a third-party. This opens up a broad array of markets for our users that go beyond the traditional craft market.
Because our products make creativity accessible to everyone, we believe our opportunity is much larger than the traditional craft market. We put production power into the hands of our users by allowing them to create their own professional-looking homemade goods instead of purchasing manufactured goods from a third-party.
Cricut software also puts community ideas and inspiration front and center and encourages interaction with one another through a number of sharing and social features. As the number of our users grow, so does the number of projects made and shared physically or digitally through the reinforcing network effect.
Through our platform and online footprint, we help users create and inspire others in the Cricut community through shared ideas and projects. Cricut software also puts community ideas and inspiration front and center and encourages interaction with one another through a number of sharing and social features.
Each project becomes an opportunity to create a conversation – our users share, inspire and teach each other. Our community of nearly 5.9 million Active Users as of December 31, 2024, creates a reinforcing network effect. The number of projects made and shared physically or digitally continues 8 to grow over time.
Many of our users become deeply engaged in our creative community and loyal to our brand. Each project becomes an opportunity to create a conversation – our users share, inspire and teach each other. Our community of nearly 5.9 million Active Users as of December 31, 2025, creates a reinforcing network effect.
The majority of Cricut employees operate on a hybrid model, working in-office 3+ days per week and working virtually the remainder of the week. Policies and practices are in place to ensure adherence to occupational safety within each office.
The majority of Cricut employees operate on a hybrid model, working in-office Monday through Thursday and the option to work virtually on Friday. Policies and practices are in place to ensure adherence to occupational safety within each office. Competition We compete in several market segments with our business.
In 2024, 35% of our revenue was generated through brick-and-mortar sales and 65% was generated through online channels. Our Competitive Strengths Our competitive strengths include: Our Vertically Integrated Platform Encourages Continual Engagement.
We also sell our products, including subscriptions to Cricut Access, on Cricut.com. In 2025, 31% of our revenue was generated through brick-and-mortar sales and 69% was generated through online channels. Our Competitive Strengths Our competitive strengths include: Our Vertically Integrated Platform Encourages Continual Engagement.
As of December 31, 2024, we had nearly 3.0 million Cricut Access subscribers. 7 Cricut Extensions, Accessories, and Materials We sell a broad range of extensions, accessories, and materials designed to work seamlessly with our connected machines. Cricut materials give users peace of mind with a brand they trust for durability, selection, and compliance.
Cricut Extensions, Accessories, and Materials We sell a broad range of extensions, accessories, and materials designed to work seamlessly with our connected machines. Cricut materials give users peace of mind with a brand they trust for durability, selection, and compliance. We sell a wide range of project materials including adhesive vinyl, iron-on vinyl, cardstock, and Infusible Ink (cuttable sublimation ink).
Additionally, we are subject to laws, rules, and regulations regarding cross-border transfers of personal data, including laws relating to the transfer of personal data outside the European Economic Area, or EEA, and the United Kingdom. We rely on transfer mechanisms permitted under these laws, including the standard contract clauses, which have been subject to regulatory and judicial scrutiny.
We rely on transfer mechanisms permitted under these laws, including the standard contract clauses, which have been subject to regulatory and judicial scrutiny.
In the European Union, or EU, the General Data Protection Regulation (EU) 2016/679, or GDPR, became effective on May 25, 2018. The GDPR is intended to create a single legal framework that applies across all EU member states. However, there are certain areas where EU member states can deviate from the requirements in their own legislation.
The GDPR is intended to create a single legal framework that applies across all EU member states. However, there are certain areas where EU member states can deviate from the requirements in their own legislation. It is therefore likely that we will need to comply with these local regulations in addition to the GDPR.
Today, more and more people want to be surrounded by personalized items. We empower individuals to personalize. The number one reason why people buy our connected machines is personalization. • Digitization of Tools. Consumers have access to more tools in the digital world than ever before. They are easier to use, more powerful and available on every device.
Today, more and more people want to be surrounded by personalized items. We empower individuals to personalize. The number one reason why people buy our connected machines is personalization. • Digitization and Intelligence of Tools. The landscape of consumer creativity has evolved from simple digital access to advanced, AI-enabled capability.
These machines are available at a variety of price points: • Cricut Joy family $149.00-$199.00 MSRP • Cricut Explore family $249.00 - $319.00 MSRP • Cricut Maker family $399.00 - $429.00 MSRP • Cricut Venture $999.00 MRSP Cricut often becomes a huge part of users’ creative lives, serving as the foundation for their journey of creativity.
These machines are available at a variety of sizes and price points and in a variety of bundles with accessories and materials, or with accessories and materials plus subscription. Cricut often becomes a huge part of users’ creative lives, serving as the foundation for their journey of creativity.
Handheld tools from scissors, to weeding tools, to rulers, complete the Cricut ecosystem for a full-brand offering made for the discerning consumer. We offer thousands of SKUs within our Cricut extensions, accessories, and materials, ranging in price from $1.99 to $999.00. How We Go to Market Many of our users hear about our products through word-of-mouth.
We offer thousands of SKUs within our Cricut extensions, accessories, and materials at a variety of price points. How We Go to Market Many of our users hear about our products through word-of-mouth.
Collaborating with our hardware engineering and machine teams, our materials team launched a colorful array of newly designed pre-scored and pre-cut cardstock greeting cards, complete with decorative inserts and envelopes.
We work hard to build strong synergies across teams to successfully launch products that address new creative categories. One such example is evident with Cricut Insert Cards. Collaborating with our hardware engineering and machine teams, our materials team developed a colorful array of newly designed pre-scored and pre-cut cardstock greeting cards, complete with decorative inserts and envelopes.
We continue to monitor and review the impact of any resulting changes to EU or United Kingdom law that could affect our operations, which could also increase our risk and compliance costs. The California Consumer Privacy Act, or CCPA,became effective in January 2020 and was subsequently amended by the California Privacy Rights Act.
Furthermore, there will be increasing scope for divergence in application, interpretation and enforcement of data protection law between the United Kingdom and the EU. We continue to monitor and review the impact of any resulting changes to EU or United Kingdom law that could affect our operations, which could also increase our risk and compliance costs.
Ready-to-make projects, ranging in complexity from cards to home décor, each come with instructions and recommendations for the ideal materials to use. Users can save projects to their profile and share their designs with others — directly on our platform and through unique web links and social platforms.
Users can access a select number of free images, fonts, templates, and ready-to-make projects, or can upload their own designs to begin making. Ready-to-make projects, ranging in complexity from cards to home décor, each come with instructions and recommendations for the ideal materials to use.
Laws and regulations may be interpreted, applied, created, amended, and enforced in different ways in various locations around the world, posing a significant challenge to our increasingly global business. As we grow and expand our geographical reach and our offerings, we may become subject to additional regulations, in the United States and internationally.
Laws and regulations may be interpreted, applied, created, amended, and enforced in different ways in various locations around the world, posing a significant challenge to our increasingly global business. Compliance with these laws may be costly, and violations of these laws and regulations could result in fines, criminal sanctions, reputational damage, or other penalties.
Our Growth Strategy These are key elements of our growth strategy: Reach More Users. As of December 31, 2024, we had nearly 5.9 million Active Users, representing approximately 5% of the 129 million addressable active creatives in our SAM.
Given the positive emotions connected with crafting, our users create to celebrate and as a respite during difficult times. Our Growth Strategy These are key elements of our growth strategy: Reach More Users. As of December 31, 2025, we had nearly 5.9 million Active Users.
The United Kingdom has also adopted a version of the GDPR (combining the GDPR and the Data Protection Act 2018), each of which potentially authorizes similar fines and other potentially divergent enforcement actions. Furthermore, there will be increasing scope for divergence in application, interpretation and enforcement of data protection law between the United Kingdom and the EU.
The United Kingdom has also adopted a data protection regime generally tracking the GDPR (combining the GDPR and the Data Protection Act 2018), which potentially authorizes fines similar to those under the GDPR and the Data Protection Act 2018 and other potentially divergent enforcement actions. The United Kingdom made targeted amendments to this data protection regime in 2025.
Users often self-organize, host independent events, and meet up in person across the globe. Our internal consumer research shows us that our members crave community over competition. Through our platform and online footprint, we help users create and inspire others in the Cricut community through shared ideas and projects.
Globally, there are 4 millions of Cricut followers and hundreds of independently run Cricut groups across social media. Users also self-organize, host independent events, and meet up in person across the globe. Our internal consumer research shows us that our members crave community.
The Cricut User Journey Creative individuals come to Cricut and become engaged users who can express themselves both individually and as part of a large and passionate community. As of December 31, 2024, 94% of our users identify as women. Many users also earn income through products they create on Cricut.
As of December 31, 2025, 94% of our users identify as women. Many users also earn income through products they create on Cricut.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur failure to successfully manage these risks could harm our international operations and adversely affect our business, financial condition and results of operations. 48 Table of Contents In addition, changes related to Brexit could subject us to heightened risks in that region, including disruptions to trade and free movement of goods, services and people to and from the United Kingdom, disruptions to the workforce of our business partners, increased foreign exchange volatility with respect to the British pound and additional legal, political and economic uncertainty.
Biggest changeOur failure to successfully 48 Table of Contents manage these risks could harm our international operations and adversely affect our business, financial condition and results of operations.
We may also face challenges managing the inventory of new or existing products, which could lead to excess inventory and discounting of such products. Users may negatively react to changes we 18 Table of Contents introduce to products and product offerings.
We may also face challenges managing the inventory of new or existing products, which could lead to excess inventory and discounting of such products. Users may negatively 18 Table of Contents react to changes we introduce to products and product offerings.
These promotional programs consist of incentives or entitlements to our 23 Table of Contents customers, such as advertising allowances, volume and growth incentives, business development, product damage allowances and point-of-sale support. Customer rebates are considered to be variable consideration, which we estimate each quarter using the expected value method or most likely amount, based upon the nature of the incentive.
These promotional programs consist of incentives or entitlements to our customers, such as advertising allowances, volume and growth incentives, business development, product damage allowances and point-of-sale support. Customer rebates are considered to be variable consideration, which we estimate each quarter using the expected value method or most likely amount, based upon the nature of the 23 Table of Contents incentive.
A cyberattack, security breach or incident or other event that causes the loss or public disclosure of, or unauthorized access by third parties to, sensitive information stored by us or our brick-and-mortar and online retail partners, or the perception that any of these have occurred, could have serious negative consequences for our business, including loss of information, indemnity obligations, claims, regulatory investigations, fines, penalties and damages, reduced demand for our products and services, an unwillingness of our users to use our products or services, harm to our reputation and brand, and time consuming and expensive litigation, any of which could adversely affect our 46 Table of Contents financial results.
A 46 Table of Contents cyberattack, security breach or incident or other event that causes the loss or public disclosure of, or unauthorized access by third parties to, sensitive information stored by us or our brick-and-mortar and online retail partners, or the perception that any of these have occurred, could have serious negative consequences for our business, including loss of information, indemnity obligations, claims, regulatory investigations, fines, penalties and damages, reduced demand for our products and services, an unwillingness of our users to use our products or services, harm to our reputation and brand, and time consuming and expensive litigation, any of which could adversely affect our financial results.
Our charter documents also contain other provisions that could have an anti-takeover effect, such as: • subject to the rights of the holders of preferred stock, permitting the board of directors to establish the number of directors and fill any vacancies and newly created directorships; • prohibiting cumulative voting for directors; • requiring super-majority voting to amend some provisions in our certificate of incorporation and bylaws; • authorizing the issuance of undesignated preferred stock that our board of directors could use to implement a stockholder rights plan; • eliminating the ability of stockholders to call special meetings of stockholders; • prohibiting stockholder action by written consent prior to the Final Conversion Date unless the action is first recommended or approved by the board, and prohibiting stockholder action by written consent from and after the Final Conversion Date, which requires stockholder actions to be taken at a meeting of our stockholders; • certain litigation against us can only be brought in Delaware; and • our dual class common stock structure as described above.
Our charter documents also contain other provisions that could have an anti-takeover effect, such as: • subject to the rights of the holders of preferred stock, permitting the board of directors to establish the number of directors and fill any vacancies and newly created directorships; • prohibiting cumulative voting for directors; • requiring super-majority voting to amend some provisions in our certificate of incorporation and bylaws; • authorizing the issuance of undesignated preferred stock that our board of directors could use to implement a stockholder rights plan; • eliminating the ability of stockholders to call special meetings of stockholders; • prohibiting stockholder action by written consent prior to the Final Conversion Date unless the action is first recommended or approved by the board of directors, and prohibiting stockholder action by written consent from and after the Final Conversion Date, which requires stockholder actions to be taken at a meeting of our stockholders; • certain litigation against us can only be brought in Delaware; and • our dual class common stock structure as described above.
Bribery Act, by us, our employees and our business partners; • complexity and other risks associated with current and future legal requirements in other countries, including legal requirements related to consumer protection, consumer product safety and privacy frameworks, such as the GDPR, including data transfer or localization restrictions, or LGPD; • varying levels of Internet technology adoption and infrastructure, and increased or varying network and hosting service provider costs; • tariffs and other non-tariff barriers, such as quotas and local content rules, as well as tax consequences; • fluctuations in currency exchange rates and the requirements of currency control regulations, which might restrict or prohibit conversion of other currencies into U.S. dollars; and • political or social unrest or economic instability in a specific country or region in which we operate, including, for example, recent social and political unrest in China, which could have an adverse impact on our operations in that location.
Bribery Act, by us, our employees and our business partners; • complexity and other risks associated with current and future legal requirements in other countries, including legal requirements related to consumer protection, consumer product safety and privacy frameworks, such as the GDPR, including data transfer or localization restrictions, or LGPD; • varying levels of Internet technology adoption and infrastructure, and increased or varying network and hosting service provider costs; • tariffs and other non-tariff trade barriers, such as quotas and local content rules, as well as tax consequences; • fluctuations in currency exchange rates and the requirements of currency control regulations, which might restrict or prohibit conversion of other currencies into U.S. dollars; and • political or social unrest or economic instability in a specific country or region in which we operate, including, for example, recent social and political unrest in China, which could have an adverse impact on our operations in that location.
Our financial condition, results of operations and operating metrics in any given quarter can be influenced by numerous factors, many of which we are unable to predict or are outside of our control, including those discussed in this Risk Factors section and: • the continued market acceptance, and the growth, of the personal craft market; • our ability to attract and engage our users, leading to increased sales to them; • our development and improvement of the quality of our user experience, including enhancement of existing products, creation of new products, technology and features and licensing of new content; • the continued development and upgrading of our proprietary software; • the timing and success of new products, features and content introductions by us or our competitors or any other change in the competitive landscape of the markets in which we operate; • pricing pressure as a result of inflationary pressures, competition or otherwise; • the impact of price increases on our retail partners or consumers generally; • cost increases, delays or disruptions in our supply chain; • errors in our forecasting of the demand for our products, which could lead to lower revenue, increased costs or both; • increases in marketing, sales and other operating expenses; • seasonal fluctuations in platform revenue, engagement by users and purchases of accessories and materials; • the mix of our products sales from period to period; • our ability to maintain gross margins and operating margins, including as a result of higher fixed costs, warehousing or operations expense, or price competitiveness, in one or more product categories, which we are experiencing and may experience again in the future; • system failures or breaches of security or privacy; • adverse litigation judgments, settlements or other litigation-related costs; • changes in the legislative or regulatory environment, including with respect to privacy, data protection and security, consumer product safety and advertising or enforcement by government regulators, including fines, orders or consent decrees; • fluctuations in currency exchange rates and changes in the proportion of our revenue and expenses denominated in foreign currencies; • changes in our effective tax rate; 25 Table of Contents • changes in accounting standards, policies, guidance, interpretations or principles; and • changes in business or macroeconomic conditions, including the impact of the COVID-19 pandemic, lower consumer confidence, recessionary conditions, inflationary pressures, increased unemployment rates or stagnant or declining wages.
Our financial condition, results of operations and operating metrics in any given quarter can be influenced by numerous factors, many of which we are unable to predict or are outside of our control, including those discussed in this Risk Factors section and: • the continued market acceptance, and the growth, of the personal craft market; • our ability to attract and engage our users, leading to increased sales to them; • our development and improvement of the quality of our user experience, including enhancement of existing products, creation of new products, technology and features and licensing of new content; • the continued development and upgrading of our proprietary software; • the timing and success of new products, features and content introductions by us or our competitors or any other change in the competitive landscape of the markets in which we operate; • pricing pressure as a result of inflationary pressures, competition or otherwise; • the impact of price increases on our retail partners or consumers generally; • cost increases, delays or disruptions in our supply chain; • errors in our forecasting of the demand for our products, which could lead to lower revenue, increased costs or both; • increases in marketing, sales and other operating expenses; • seasonal fluctuations in platform revenue, engagement by users and purchases of accessories and materials; • the mix of our products sales from period to period; • our ability to maintain gross margins and operating margins, including as a result of higher fixed costs, warehousing or operations expense, or price competitiveness, in one or more product categories, which we are experiencing and may experience again in the future; • system failures or breaches of security or privacy; • adverse litigation judgments, settlements or other litigation-related costs; • changes in the legislative or regulatory environment, including with respect to privacy, data protection and security, consumer product safety and advertising or enforcement by government regulators, including fines, orders or consent decrees; • fluctuations in currency exchange rates and changes in the proportion of our revenue and expenses denominated in foreign currencies; • changes in our effective tax rate; • changes in accounting standards, policies, guidance, interpretations or principles; and 25 Table of Contents • changes in business or macroeconomic conditions, lower consumer confidence, recessionary conditions, inflationary pressures, increased unemployment rates or stagnant or declining wages.
In addition, our competitors may have significantly greater resources than we do or may introduce product features, including artificial intelligence and machine learning capabilities, sooner than we do, allowing them to identify and capitalize more efficiently upon opportunities in new markets and consumer preferences and trends, quickly transition and adapt their products, devote greater resources to marketing and advertising or better position themselves to withstand substantial price competition.
In addition, our competitors may have significantly greater resources than we do or may introduce product features and/or technologies, including artificial intelligence and machine learning capabilities, sooner than we do, allowing them to identify and capitalize more efficiently upon opportunities in new markets and consumer preferences and trends, quickly transition and adapt their products, devote greater resources to marketing and advertising or better position themselves to withstand substantial price competition.
There are a number of factors that could impact our number of users and our ability to increase sales to users, including: • a decline in the public’s interest in or discretionary time and money available for do-it-yourself, or DIY, crafting activities; • pricing, perceived value and ease of use of our platform and products; • our ability to satisfy demand for and deliver quality products and value for subscriptions; • sales of competitive products; • our failure to broaden our demographic appeal; • our ability to continue to improve the user experience in each aspect of our business and successfully educate our users about our products; • our failure to capitalize on growth opportunities; • our inability to meet the challenges resulting from fast-paced changes in technology; • the failure of our connected machines to communicate or sync properly with Cricut-authorized design apps, including our Design Space apps, or other third-party applications such as Android, iOS and Windows; • unsatisfactory experiences with our products, including with respect to the use, purchasing or delivery of our products or with Cricut Member Care, including public disclosure of those experiences through social media or other communications from our community; • changes to our product offerings; • our failure to increase our international presence, including the failure to translate and localize our digital content and subscriptions, or the failure to further expand internationally; • decreased word-of-mouth referrals from our community or failed marketing efforts; • increase in users joining our platform through a second-hand machine, who tend to exhibit lower engagement intensity compared to users joining through a newly purchased machine; and • deteriorating general economic conditions, inflationary pressures affecting the pricing of our products or otherwise, or changes in consumer spending preferences or buying trends, each of which we currently are experiencing.
There are a number of factors that could impact our number of users and our ability to increase sales to users, including: • a decline in the public’s interest in or discretionary time and money available for do-it-yourself, or DIY, crafting activities; • pricing, perceived value and ease of use of our platform and products; • our ability to satisfy demand for and deliver quality products and value for subscriptions; • sales of competitive products; • our failure to broaden our demographic appeal; • our ability to continue to improve the user experience in each aspect of our business and successfully educate our users about our products; • our failure to capitalize on growth opportunities; • our inability to meet the challenges resulting from fast-paced changes in technology, including the use of artificial intelligence and machine learning; • the failure of our connected machines to communicate or sync properly with Cricut-authorized design apps, including our Design Space apps, or other third-party applications such as Android, iOS and Windows; • unsatisfactory experiences with our products, including with respect to the use, purchasing or delivery of our products or with Cricut Member Care, including public disclosure of those experiences through social media or other communications from our community; • changes to our product offerings; • our failure to increase our international presence, including the failure to translate and localize our digital content and subscriptions, or the failure to further expand internationally; • decreased word-of-mouth referrals from our community or failed marketing efforts; • increase in users joining our platform through a second-hand machine, who tend to exhibit lower engagement intensity compared to users joining through a newly purchased machine; and • deteriorating general economic conditions, inflationary pressures affecting the pricing of our products or otherwise, or changes in consumer spending preferences or buying trends, each of which we currently are experiencing.
Any factors adversely affecting sales of our connected machines, including introduction by competitors of comparable machines at lower price points, a maturing product lifecycle, shortages in our supply or inventory of connected machines, a decline in consumer spending, an increase in second-hand machines, or other factors discussed elsewhere in this Risk Factors section, could result in a continued decline in sales of our connected machines, which would adversely affect our future revenue and results of operations.
Any factors adversely affecting sales of our connected machines, including introduction by competitors of comparable machines at lower price points, a maturing product lifecycle, shortages in our supply or inventory of connected machines, a decline in consumer spending, an increase in second-hand machines, or other factors discussed elsewhere in this Risk Factors section, could result in a decline in sales of our connected machines, which would adversely affect our future revenue and results of operations.
This type of sales activity could disrupt our brick-and-mortar retailer partners’ sales efforts. Many of our accessories and materials, including vinyl, iron-on vinyl, paper, stationery, stickers and other merchandise, are also offered by our competitors at lower prices or with free or accelerated shipping timelines that we either are unable to or choose not to match.
This type of sales activity could disrupt our brick-and-mortar retailer partners’ sales efforts. Many of our accessories and materials, including adhesive vinyl, iron-on vinyl, paper, stationery, stickers and other merchandise, are also offered by our competitors at lower prices or with free or accelerated shipping timelines that we either are unable to or choose not to match.
Maintaining, protecting and enhancing our brand depends largely on the success of our marketing efforts, our ability to provide consistent, high-quality products, services, features, content and support and our ability to successfully secure, maintain and defend our rights to use the Cricut, Cricut Access, Cricut EasyPress, Cricut Explore, Cricut Maker and Design Space marks and other trademarks important to our brand or that we develop in the future.
Maintaining, protecting and enhancing our brand depends largely on the success of our marketing efforts, our ability to provide consistent, high-quality products, services, features, content and support and our ability to successfully secure, maintain and defend our rights to use the Cricut, Cricut Access, Cricut EasyPress, Cricut Explore, Cricut Maker, Design Space, and Cricut MugPress marks and other trademarks important to our brand or that we develop in the future.
Failure to comply with anti-corruption and anti-money laundering laws, including the FCPA and similar laws associated with our activities outside of the United States, could subject us to penalties and other adverse consequences. We operate a global business and may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities.
Failure to comply with anti-corruption, anti-bribery, and anti-money laundering laws, including the FCPA and similar laws associated with our activities outside of the United States, could subject us to penalties and other adverse consequences. We operate a global business and may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities.
Failure to manage our future growth effectively could adversely affect our business, financial condition and results of operations. Our business is affected by seasonality. Our business has historically been influenced by seasonal trends. We generate a disproportionate amount of sales activity related to our products during the fourth quarter, due in large part to seasonal holiday demand.
Failure to manage our future growth effectively could adversely affect our business, brand, financial condition and results of operations. Our business is affected by seasonality. Our business has historically been influenced by seasonal trends. We generate a disproportionate amount of sales activity related to our products during the fourth quarter, due in large part to seasonal holiday demand.
We have limited control over our contract manufacturers, component suppliers and third-party logistics partners, which subjects us to additional risks, including, but not limited to: • inability to satisfy demand for our products; • reduced control over delivery timing and product reliability; • reduced ability to monitor the manufacturing process and components used in our products; • limited ability to develop comprehensive manufacturing specifications that take into account any materials shortages or substitutions; • variance in the manufacturing capability of our third-party manufacturers; • price increases; • difficulties in establishing additional supplier, manufacturer or third-party logistics partner relationships if we experience difficulties with our existing suppliers, manufacturers or third-party logistics partners, or such partners go out of business; • shortages of materials or components; • infringement or misappropriation of our intellectual property or cyberattacks; • exposure to natural catastrophes, political unrest, terrorism, labor strikes or disputes, pandemics and economic instability resulting in the disruption of trade from foreign countries in which our products are manufactured or the components thereof are sourced; • changes in local economic conditions in the jurisdictions where our manufacturers, suppliers and third-party logistics partners are located; • the imposition of new laws and regulations, including those relating to labor conditions, quality and safety standards, imports, duties, tariffs, taxes and other charges on imports, as well as trade restrictions and restrictions on currency exchange or the transfer of funds; and • insufficient warranties and indemnities on components supplied to our manufacturers or performance by our partners.
We have limited control over our contract manufacturers, component suppliers and third-party logistics partners, which subjects us to additional risks, including, but not limited to: • inability to satisfy demand for our products; • reduced control over delivery timing and product reliability; • reduced ability to monitor the manufacturing process and components used in our products; • limited ability to develop comprehensive manufacturing specifications that take into account any materials shortages or substitutions; • variance in the manufacturing capability of our third-party manufacturers; • price increases; • difficulties in establishing additional supplier, manufacturer or third-party logistics partner relationships if we experience difficulties with our existing suppliers, manufacturers or third-party logistics partners, or such partners go out of business; • shortages of materials or components; • infringement or misappropriation of our intellectual property or cyberattacks; 39 Table of Contents • exposure to natural catastrophes, political unrest, terrorism, labor strikes or disputes, pandemics and economic instability resulting in the disruption of trade from foreign countries in which our products are manufactured or the components thereof are sourced; • changes in local economic conditions in the jurisdictions where our manufacturers, suppliers and third-party logistics partners are located; • the imposition of new laws and regulations, including those relating to labor conditions, quality and safety standards, imports, duties, tariffs, taxes and other charges on imports, as well as trade restrictions and restrictions on currency exchange or the transfer of funds; and • insufficient warranties and indemnities on components supplied to our manufacturers or performance by our partners.
These risks can make it more expensive to operate our business outside the United States, meaning that our international business may be less profitable than our U.S. business. We have limited experience with international regulatory environments and market practices and may not be able to penetrate or successfully operate in the markets we choose to enter.
These risks can make it more expensive to operate our business outside the United States, meaning that our international business may be less profitable than our U.S. business. We have relatively limited experience with international regulatory environments and market practices and may not be able to penetrate or successfully operate in the markets we choose to enter.
In addition, we will incur additional costs to comply with the potential disclosure requirements, including costs related to conducting diligence procedures to determine the sources of minerals that may be used or necessary to the production of our products and, if applicable, potential changes to products, processes or sources of supply as a consequence of such due diligence activities.
In addition, we may incur additional costs to comply with the potential disclosure requirements, including costs related to conducting diligence procedures to determine the sources of minerals that may be used or necessary to the production of our products and, if applicable, potential changes to products, processes or sources of supply as a consequence of such due diligence activities.
We leverage our third-party payment processors to bill users on cricut.com and Paid Subscriber on our behalf. If these third parties become unwilling or unable to continue processing payments on our behalf, we would have to find alternative methods of collecting payments, which could adversely impact user and Paid Subscriber acquisition and retention.
We leverage our third-party payment processors to bill users on Cricut.com and Paid Subscribers on our behalf. If these third parties become unwilling or unable to continue processing payments on our behalf, we would have to find alternative methods of collecting payments, which could adversely impact user and Paid Subscriber acquisition and retention.
Competitive pricing pressures, including with respect to our platform services, products, and shipping, may harm our business and results of operations. If we are unable to sustain pricing levels for our platform services and products, whether due to competitive pressure or otherwise, our gross margins could be significantly reduced.
Competitive pricing pressures, including with respect to our platform services, products, and shipping, may harm our business and results of operations. If we are unable to sustain pricing levels for our platform services and products, including our bundles, whether due to competitive pressure or otherwise, our gross margins could be significantly reduced.
To effectively manage and capitalize on our growth, we must continue to forecast demand and manage our supply chain, expand our sales and marketing, focus on innovative product development, upgrade and secure our management information systems and other processes and obtain more space for our expanding staff.
To effectively manage and capitalize on our growth opportunities, we must continue to forecast demand and manage our supply chain, expand our sales and marketing, focus on innovative product development, upgrade and secure our management information systems and other processes and obtain more space for our expanding staff.
On October 7, 2022, President Biden signed an Executive Order on Enhancing Safeguards for United States Signals Intelligence Activities, directing the United States to take certain steps to implement the EU-U.S. Data Privacy Framework or the DPF.
On October 7, 2022, then President Biden signed an Executive Order on Enhancing Safeguards for United States Signals Intelligence Activities, directing the United States to take certain steps to implement the EU-U.S. Data Privacy Framework or the DPF.
The principal factors and uncertainties that make investing in our Class A common stock risky include, among others: • risks regarding our ability to attract and engage with our users, including anticipating their product preferences; • competitive risks in both of our segments: Platform and Products; • supply chain, manufacturing, distribution and fulfillment risks, including our being dependent on three contract manufacturers to produce connected machines, and on limited sources of supply for components, accessories and materials, as well as our ability to forecast demand and manage our inventory; • international risks, including regulation, tariffs that historically materially increased our costs and the potential for further trade barriers; • sales and marketing risks, including our dependence on sales to brick-and-mortar and online retail partners and our need to continue to grow online sales; • risks relating to the complexity of our business, which includes connected machines, custom tools, hundreds of materials, design apps, e-commerce software, subscriptions, content, international production, direct sales, and retail distribution, particularly for a company of our relative size; 16 Table of Contents • risks related to product quality, safety and warranty claims and returns; • risks related to protection of our intellectual property, as well as to cybersecurity and potential security breaches and incidents; • risks related to general socio-economic and political conditions as well as consumer confidence; and • risks related to our dependence on our Chief Executive Officer.
The principal factors and uncertainties that make investing in our Class A common stock risky include, among others: • risks regarding our ability to attract and engage with our users, including anticipating their product preferences; • competitive risks in both of our segments: Platform and Products; • supply chain, manufacturing, distribution and fulfillment risks, including our being dependent on three contract manufacturers to produce connected machines, and on limited sources of supply for components, accessories and materials, as well as our ability to forecast demand and manage our inventory; • international risks, including regulation, tariffs that have materially increased, and may continue to increase, our costs and the potential for further trade barriers; • sales and marketing risks, including our dependence on sales to brick-and-mortar and online retail partners and our need to continue to grow online sales; • risks relating to the complexity of our business, which includes connected machines, custom tools, hundreds of materials, design apps, e-commerce software, subscriptions, content, international production, direct sales, and retail distribution, particularly for a company of our relative size; • risks related to product quality, safety and warranty claims and returns; • risks related to protection of our intellectual property, as well as to cybersecurity and potential security breaches and incidents; 16 Table of Contents • risks related to general socio-economic and political conditions as well as consumer confidence; and • risks related to our dependence on our Chief Executive Officer.
We are subject to the FCPA, the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act, the USA PATRIOT Act, the U.K. Bribery Act and possibly other anti-bribery and anti-money laundering laws in countries in which we conduct activities.
We are subject to the FCPA, the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act, the USA PATRIOT Act, the U.K. Bribery Act and possibly other anti-corruption and anti-bribery laws and anti-money laundering laws in countries in which we conduct activities.
Compliance with applicable regulatory requirements regarding the export of our products and services may create delays in the introduction of our products and services in some international target markets, prevent our international users from accessing our products and services, and, in some cases, prevent the export of our products and services to some countries altogether.
Compliance with applicable regulatory requirements regarding the export of our products and services may create delays in the introduction of our products and services in some international target markets, prevent our international users from accessing our products and services, and, in some cases, prevent the export of our products and services to some countries or users altogether.
Our rate of adding new users has declined over the last three years in comparison to 2020 and 2021, and the number of Paid Subscribers could remain flat or decline. If we are unable to anticipate user preferences and successfully develop and introduce new, innovative and updated products in a timely manner, our business may be adversely affected.
Our rate of adding new users has declined over the last four years in comparison to 2020 and 2021, and the number of Paid Subscribers could remain flat or decline. If we are unable to anticipate user preferences and successfully develop and introduce new, innovative and updated products in a timely manner, our business may be adversely affected.
Our business is vulnerable to damage or interruption from earthquakes, fires, pandemics, floods, power losses, telecommunications failures, terrorist attacks, acts of war, including the current conflicts between Russia and Ukraine and in the Middle East, human errors, break-ins, public health crises, such as the impacts of the COVID-19 pandemic and similar events.
Our business is vulnerable to damage or interruption from earthquakes, fires, pandemics, floods, power losses, telecommunications failures, terrorist attacks, acts of war, including the current conflicts between Russia and Ukraine and in the Middle East, human errors, break-ins, public health crises, such as COVID 19, and similar events.
We had in 2022, 2023 and 2024, and may continue to have in the future, low gross margins in the early stages of our relationships with certain brick-and-mortar and online retail partners, particularly international brick-and-mortar and online retail partners that often require significant ramp-up periods, which has and may in the future adversely affect our total revenue.
We had in 2023, 2024 and 2025, and may continue to have in the future, low gross margins in the early stages of our relationships with certain brick-and-mortar and online retail partners, particularly international brick-and-mortar and online retail partners that often require significant ramp-up periods, which has and may in the future adversely affect our total revenue.
Continued deterioration in trade relations or adverse developments in political, social or economic conditions in or affecting China or future unforeseen problems, including health pandemics or regulatory changes, could affect deliveries of our products to our retail partners or users, possibly resulting in business interruptions, substantially delayed or lost sales, loss of inventory or increased expenses that cannot be passed on to brick-and-mortar and online retail partners or users, any of which could ultimately have a material adverse effect on our business and financial results.
Continued deterioration in trade relations or adverse developments in political, social or economic conditions in or affecting China or future unforeseen problems, including health pandemics or regulatory changes, could affect deliveries of our products to our retail partners or users, possibly resulting in business interruptions, substantially delayed or lost sales, loss of inventory or increased 41 Table of Contents expenses that cannot be passed on to brick-and-mortar and online retail partners or users, any of which could ultimately have a material adverse effect on our business and financial results.
In addition to warranties supplied by us, including the extended warranty option we recently introduced, our brick-and-mortar and online retail partners may offer the option for users to purchase third-party extended warranty and services contracts in some markets, which creates an ongoing performance obligation for such third parties beyond our warranty period.
In addition to warranties supplied by us, including the extended warranty option we offer, our brick-and-mortar and online retail partners may offer the option for users to purchase third-party extended warranty and services contracts in some markets, which creates an ongoing performance obligation for such third parties beyond our warranty period.
Additionally, we are vulnerable to service interruptions experienced by Amazon Web Services and other providers, and we expect to experience interruptions, delays or outages in service availability in the future due to a variety of factors, including infrastructure changes, human, hardware or software errors, hosting disruptions and capacity constraints.
Additionally, we have suffered and are vulnerable to service interruptions experienced by Amazon Web Services and other providers, and we expect to experience interruptions, delays or outages in service availability in the future due to a variety of factors, including infrastructure changes, human, hardware or software errors, hosting disruptions and capacity constraints.
Such agreements may be terminated by us for cause, such as (i) failure to deliver products pursuant to the terms of the agreement, (ii) breaches of product warranty, indemnity or insurance; intellectual property; property and representations and covenants contained in the agreements; (iii) breaches of any other representations and warranties that are not cured within five days after notice or (iv) certain events relating to our top vendors’ insolvency or their filing a petition for bankruptcy.
Such agreements may be terminated by us for cause, such as (i) failure to deliver products pursuant to the terms of the agreement, (ii) 35 Table of Contents breaches of product warranty, indemnity or insurance; intellectual property; property and representations and covenants contained in the agreements; (iii) breaches of any other representations and warranties that are not cured within five days after notice or (iv) certain events relating to our top vendors’ insolvency or their filing a petition for bankruptcy.
In addition, the U.S. government may add additional parties to the Entity List, the List of Specialty Designated Nationals, or other restricted party lists, which could harm our business, increase the cost of conducting our operations in China, and/or result in retaliatory actions against U.S. interests.
In addition, the U.S. government may add additional parties to the Entity List, the List of Specialty Designated Nationals, the FCC’s Covered List, or other restricted party lists, which could harm our business or increase the cost of conducting our operations in China, and/or result in retaliatory actions against U.S. interests.
Our directors, executive officers and holders of 5% or more of our common stock hold approximately 92% of the total voting power of our common stock and are able to exert significant control over us, which will limit your ability to influence the outcome of important transactions, including a change of control.
Our directors, executive officers and holders of 5% or more of our common stock hold approximately 93% of the total voting power of our common stock and are able to exert significant control over us, which will limit your ability to influence the outcome of important transactions, including a change of control.
Gross margins from sales to retailers may decline as a result of a number of factors outside our control, including inflationary pricing pressures, tariffs as a result of trade wars and our reliance on three primary contract manufacturers which hold influence over the supply chain.
Gross margins from sales to retailers may decline as a result of a number of factors outside our control, including inflationary pricing pressures, tariffs, and our reliance on three primary contract manufacturers which hold influence over the supply chain.
Our SAM and TAM are representative of a broad demographic. However, historically we have served a largely female demographic representing 94% of our users as of December 31, 2024 We continue to explore additional offerings that address new categories that will appeal to a wider demographic.
Our SAM and TAM are representative of a broad demographic. However, historically we have served a largely female demographic representing 94% of our users as of December 31, 2025. We continue to explore additional offerings that address new categories that will appeal to a wider demographic.
For example, the United States enacted the Inflation Reduction Act in 2022, which imposes a 1% excise tax on certain stock repurchases (including potentially pursuant to our stock repurchase program) and a 15% alternative minimum tax on adjusted financial statement income.
For example, the United States enacted the Inflation Reduction Act of 2022, which imposes a 1% excise tax on certain stock repurchases (including potentially pursuant to our stock repurchase program) and a 15% alternative minimum tax on adjusted financial statement income.
Moreover, the complicated nature of our business, in which we design our own products, develop our own design apps, rely on third-party manufacturers and sell our products through brick-and-mortar and online retail partners, as well as through our website, exposes us to risk and disruption at many points that are critical to successfully operating our business and may make it more difficult for us to scale our business.
Moreover, the complicated nature of our business, in which we design our own products, develop our own design apps, rely on third-party manufacturers and sell our products through brick-and-mortar and online retail partners, as well as through our website, exposes us to risk and disruption at many points that are critical to successfully operating our business and may make it more difficult for us to scale our business at an effective rate.
If we do not allocate and effectively manage the resources necessary to build, sustain and secure necessary information technology infrastructure, we could be subject to transaction errors, processing inefficiencies, the loss of brick-and-mortar and online retail partners or users, business disruptions or the loss of or unauthorized access to personal information or personal data or loss or damage to intellectual property through a cyberattack or other security breach or incident.
If we do not allocate and effectively manage the resources necessary to build, sustain and secure necessary information technology infrastructure, we could be subject to transaction errors, processing inefficiencies, the loss of brick-and-mortar and online retail partners or users, business disruptions or the loss of or unauthorized access to personal information or personal data or loss or damage to 45 Table of Contents intellectual property through a cyberattack or other security breach or incident.
Any such issues may result in delays in shipping times, reduced packing quality or costly litigation, and our reputation and results of operations may be harmed. By using third-party operators for our inventory management, warehousing and fulfillment, we also face additional risks associated with not having complete control over operations at those facilities.
Any such issues may result in delays in shipping times, reduced packing quality or costly litigation, and our reputation and results of operations may be harmed. 38 Table of Contents By using third-party operators for our inventory management, warehousing and fulfillment, we also face additional risks associated with not having complete control over operations at those facilities.
Failure to forecast appropriate demand, lead times, significant price fluctuations or shortages in materials or components, including the costs to transport such materials or components, the uncertainty of currency fluctuations against the U.S. dollar, increases in labor rates, limitations on the availability of labor, trade duties or tariffs and/or the introduction of new and expensive raw materials, some of which we expect in 2025, could adversely affect our contract manufacturers’ ability to manufacture our products in sufficient quantity and within sufficient time to meet our consumer demand, which would adversely affect our business, financial condition and operational results.
Failure to forecast appropriate demand, lead times, significant price fluctuations or shortages in materials or components, including the costs to transport such materials or components, the uncertainty of currency fluctuations against the U.S. dollar, increases in labor rates, limitations on the availability of labor, trade duties or tariffs and/or the introduction of new and expensive raw materials could adversely affect our contract manufacturers’ ability to manufacture our products in sufficient quantity and within sufficient time to meet our consumer demand, which would adversely affect our business, financial condition and operational results.
In addition to the general uncertainty and overall risk from potential changes in U.S. laws and policies, as we make business decisions in the face of such uncertainty, we may incorrectly anticipate the outcomes, miss out on business opportunities or fail to effectively adapt our business strategies and manage the adjustments that are necessary in response to those changes.
In addition to the general uncertainty and overall risk from potential changes in the laws and policies of the U.S. or its trading partners, as we make business decisions in the face of such uncertainty, we may incorrectly anticipate the outcomes, miss out on business opportunities or fail to effectively adapt our business strategies and manage the adjustments that are necessary in response to those changes.
Our failure to adequately prevent fraudulent transactions could damage our reputation, result in litigation or regulatory action and lead to expenses that could substantially impact our results of operations. 35 Table of Contents Risks Related to Manufacturing, Supply Chain and Fulfillment We depend upon three contract manufacturers, and our operations would be disrupted if we encountered problems with our contract manufacturers.
Our failure to adequately prevent fraudulent transactions could damage our reputation, result in litigation or regulatory action and lead to expenses that could substantially impact our results of operations. Risks Related to Manufacturing, Supply Chain and Fulfillment We depend upon three contract manufacturers, and our operations would be disrupted if we encountered problems with our contract manufacturers.
While we have policies, procedures and training to foster compliance with these laws, we cannot assure you that our employees or third-party business partners or intermediaries, contractors, representatives and agents will not take actions in violation of our policies or applicable law for which we may ultimately be held responsible.
While we have policies, procedures and training to foster compliance with these laws, we cannot 49 Table of Contents assure you that our employees or third-party business partners or intermediaries, contractors, representatives and agents will not take actions in violation of our policies or applicable law for which we may ultimately be held responsible.
Further, our system implementations may not result in productivity improvements at a level that outweighs the costs of implementation, or at all. 26 Table of Contents Our platform is complex and multifaceted, and operational and performance issues could arise both from the platform itself and from outside factors, such as cybersecurity attacks or other third-party attacks.
Further, our system implementations may not result in productivity improvements at a level that outweighs the costs of implementation, or at all. Our platform is complex and multifaceted, and operational and performance issues could arise both from the platform itself and from outside factors, such as cybersecurity attacks or other third-party attacks.
We have taken legal action against certain of the producers of these copycat products and anticipate expending significant financial or other resources in the future to combat these products. In addition, to the extent that sales of copycat products create confusion or experiences 22 Table of Contents with our products among consumers, our brand and business could be harmed.
We have taken legal action against certain of the producers of these copycat products and anticipate expending significant financial or other resources in the future to combat these products. In addition, to the extent that sales of copycat products create confusion or experiences with our products among consumers, our brand and business could be harmed.
We are subject to a variety of taxes and tax collection obligations in the United States and in numerous other foreign jurisdictions. We record tax expense, including indirect taxes, based on current tax payments and our estimates of future tax payments, which may include reserves for estimates of probable or likely settlements of tax audits.
We are subject to a variety of taxes and tax collection obligations in the United States and in numerous other foreign jurisdictions. We record tax expense, including indirect taxes, based on current tax payments and our 34 Table of Contents estimates of future tax payments, which may include reserves for estimates of probable or likely settlements of tax audits.
Our third-party manufacturers are largely based in Malaysia, China, Thailand and South Korea, and our connected machines are manufactured in Malaysia. As a result, our manufacturing, and therefore our business, financial condition and results of operations may be adversely affected by social, political, regulatory and economic developments in these countries, particularly in Malaysia and China.
Our third-party manufacturers are largely based in Malaysia, China, Thailand and South Korea, and our connected machines are manufactured in Malaysia. As a result, our manufacturing, and therefore our business, 36 Table of Contents financial condition and results of operations may be adversely affected by social, political, regulatory and economic developments in these countries, particularly in Malaysia and China.
Following a July 10, 2023 adequacy decision issued by the European Commission, the DPF, along with a United Kingdom extension to the DPF that allows the transfer of personal data from the United Kingdom to the U.S., or UK DPF Extension, are available for companies to use to legitimize personal data transfers from the EEA and United Kingdom to the U.S.
Following a July 10, 2023 adequacy decision issued by the European Commission, the DPF, along with a United Kingdom extension to the DPF that allows the transfer of personal data from the United Kingdom to the U.S., or UK DPF Extension, are 43 Table of Contents available for companies to use to legitimize personal data transfers from the EEA and United Kingdom to the U.S.
We believe that our growth depends on our ability to reach our market opportunity in terms of our SAM, which includes active creatives who we address with our current products and price points, and our TAM, which includes potential creatives who we believe we can reach over the long term as we make products for new uses and products that are more accessible, even easier to use and available at a broad set of price points.
We believe that our growth depends on our ability to reach our market opportunity in terms of our serviceable addressable market, or SAM, which includes active creatives who we address with our current products and price points, and our total addressable market, or TAM, which includes potential creatives who we believe we can reach over the long term as we make products for new uses and products that are more accessible, even easier to use and available at a broad set of price points.
We generally provide a one-year limited warranty on our connected machines and customer satisfaction guarantees on certain other products, and we permit returns of certain products for a full refund within 15 days of receipt of order. We also recently introduced an extended warranty program in the United States.
We generally provide a one-year limited warranty on our connected machines and customer satisfaction guarantees on certain other products, and we permit returns of certain products for a full refund within 15 days of receipt of order. We also offer an extended warranty program in the United States.
We have been subject to cyberattacks and security breaches and 45 Table of Contents incidents in the past, and cyberattacks, security breaches and incidents could expose us to a risk of lost, exposed or corrupted information, unauthorized disclosure of information, litigation and possible liability to employees, users, brick-and-mortar and online retail partners and regulatory authorities.
We have been subject to cyberattacks and security breaches and incidents in the past, and cyberattacks, security breaches and incidents could expose us to a risk of lost, exposed or corrupted information, unauthorized disclosure of information, litigation and possible liability to employees, users, brick-and-mortar and online retail partners and regulatory authorities.
In addition, the most commonly used Internet browsers—Chrome, Firefox, Internet 47 Table of Contents Explorer and Safari—allow Internet users to modify their browser settings to prevent cookies from being accepted by their browsers, and a number of other software tools allow users to block or otherwise limit the functionality of cookies.
In addition, the most commonly used Internet browsers—Chrome, Firefox, Internet Explorer and Safari—allow Internet users to modify their browser settings to prevent cookies from being accepted by their browsers, and a number of other software tools allow users to block or otherwise limit the functionality of cookies.
While supply chain conditions have improved during 2023 and 2024, if our supply chain faces challenges again, it could continue to put pressure on margins. We depend on sales to brick-and-mortar and online retail partners, including a limited number of sophisticated key brick-and-mortar and online retail partners.
While supply chain conditions improved during 2023, 2024 and 2025, if our supply chain faces challenges again, it could put pressure on margins. We depend on sales to brick-and-mortar and online retail partners, including a limited number of sophisticated key brick-and-mortar and online retail partners.
There can be no assurance that sales will return to 2020 and 2021 levels in the future or that we will be able to continue to significantly grow our revenue in a post-COVID-19 environment. To date, our business has operated almost exclusively in a relatively strong economic environment.
There can be no assurance that sales will return to 2020 and 2021 levels in the future or that we will be able to continue to significantly grow our revenue. To date, our business has operated almost exclusively in a relatively strong economic environment.
For example, we depend on brick-and-mortar retail partners to provide adequate and attractive space for our products and point of purchase displays in their stores, to maintain appropriate inventory for our product in their stores and to employ, educate and motivate their sales personnel to sell our products.
For example, we depend on brick-and-mortar retail partners to provide adequate 19 Table of Contents and attractive space for our products and point of purchase displays in their stores, to maintain appropriate inventory for our product in their stores and to employ, educate and motivate their sales personnel to sell our products.
Additionally, if third parties we work with, such as vendors or developers, violate applicable laws or regulations or our contracts and policies, such violations may also put our users’ content and personal information at risk and could in turn adversely affect our business.
Additionally, if third parties we work with, such as vendors or developers, violate applicable laws or regulations or our contracts and policies, such violations may also put our users’ content and data at risk and could in turn adversely affect our business.
To comply with the decree, we may be required to further invest in potentially duplicative infrastructure and personnel in 44 Table of Contents Vietnam, establish and maintain a local data protection program, and incur other costs and expenses related to these new requirements. California has also enacted legislation affording consumers expanded privacy protections.
To comply with the decree, we may be required to further invest in potentially duplicative infrastructure and personnel in Vietnam, establish and maintain a local data protection program, and incur other costs and expenses related to these new requirements. California has also enacted legislation affording consumers expanded privacy protections.
Our ability to continue our revenue growth and increase our profitability depends in part upon our ability to successfully implement certain strategic go-to-market initiatives, including expanding our online sales presence while continuing to work with key brick-and-mortar and online retail partners.
Our ability to grow revenue and increase our profitability depends in part upon our ability to successfully implement certain strategic go-to-market initiatives, including expanding our online sales presence while continuing to work with key brick-and-mortar and online retail partners.
For example, in 2022, 2023 and 2024, our fourth quarter represented 32%, 30% and 29% of total revenue for the year, respectively. Our promotional discounting activity is also higher in the fourth quarter, which negatively impacts gross margin during this period.
For example, in 2023, 2024 and 2025, our fourth quarter represented 30%, 29% and 29% of total revenue for the year, respectively. Our promotional discounting activity is also higher in the fourth quarter, which negatively impacts gross margin during this period.
If such obligations were imposed, the additional costs associated with tax collection, remittance and audit requirements could adversely affect our business, financial condition and results of operations. Item 1B. Unresolved Staff Comments None.
If such obligations were imposed, the additional costs associated with tax collection, remittance and audit requirements could adversely affect our business, financial condition and results of operations. 61 Table of Contents Item 1B. Unresolved Staff Comments None.
As a result, we could be subject to higher than anticipated tax liabilities as well as ongoing variability in our quarterly tax rates as audits close and exposures are re-evaluated. We continue to analyze our exposure for taxes and related liabilities and have accrued $3.2 million as of December 31, 2024 for uncertain tax positions.
As a result, we could be subject to higher than anticipated tax liabilities as well as ongoing variability in our quarterly tax rates as audits close and exposures are re-evaluated. We continue to analyze our exposure for taxes and related liabilities and have accrued $2.1 million as of December 31, 2025 for uncertain tax positions.
Seasonality in our business can also be skewed by macroeconomic factors, such as inflation and reduction in consumer demand. In addition, seasonality can be affected by introductions of new or enhanced products, including the costs 24 Table of Contents associated with such introductions.
Seasonality in our business can also be skewed by macroeconomic factors, such as inflation and reduction in consumer demand. In addition, seasonality can be affected by introductions of new or enhanced products, including the costs associated with such introductions.
The Swiss Federal Data Protection and Information 43 Table of Contents Commissioner also has stated that it no longer considers the Swiss-U.S. Privacy Shield adequate for the purposes of personal data transfers from Switzerland to the United States.
The Swiss Federal Data Protection and Information Commissioner also has stated that it no longer considers the Swiss-U.S. Privacy Shield adequate for the purposes of personal data transfers from Switzerland to the United States.
The CCPA, these other state laws and other proposed laws at the state and federal level in the United States are far-reaching and in certain cases are overlapping but different l, resulting in further uncertainty and potentially requiring changes in our business practices and policies and our incurring, require us to incur additional costs and expenses in an effort to comply.
The CCPA, these other state laws and other proposed laws at the state and federal level in the United States are far-reaching and in certain cases are overlapping but different, resulting in further uncertainty and potentially requiring changes in our business practices and policies and our incurring, require us to incur additional costs and expenses in our efforts to comply.
In addition, U.S. public companies are required to maintain records that accurately and fairly represent their transactions and maintain internal controls and compliance procedures designed to prevent violations of anti- 49 Table of Contents corruption laws.
In addition, U.S. public companies are required to maintain records that accurately and fairly represent their transactions and maintain internal controls and compliance procedures designed to prevent violations of anti-corruption laws.
Our directors, executive officers and holders of 5% or more of our outstanding common stock, and their respective affiliates, hold, in the aggregate, approximately 92% of the total voting power of shares of our outstanding common stock based on the number of shares outstanding as of December 31, 2024. Further, Petrus and affiliates, collectively, are currently our largest stockholder.
Our directors, executive officers and holders of 5% or more of our outstanding common stock, and their respective affiliates, hold, in the aggregate, approximately 93% of the total voting power of shares of our outstanding common stock based on the number of shares outstanding as of December 31, 2025. Further, Petrus and affiliates, collectively, are currently our largest stockholder.
With laws and regulations such as the GDPR, LGPD and CCPA imposing new and relatively burdensome obligations, and with substantial uncertainty over the interpretation and application of these and other laws and regulations, there is a risk that the requirements of these or other laws and regulations, or of contractual or other obligations relating to privacy, data protection or information security, are interpreted or applied in a manner that is, or is alleged to be, inconsistent with our management and processing practices, our policies or procedures, or the features of our products and services.
With laws and regulations such as the GDPR, LGPD and CCPA imposing new and relatively burdensome obligations, and with substantial uncertainty over the interpretation and application of these and other laws and regulations, there is a risk that the requirements of these or other laws and regulations, or of contractual or other obligations relating to privacy, data protection, information security, or the storing, sharing, use, processing, transfer, disclosure and protection of data or other content, are interpreted or applied in a manner that is, or is alleged to be, inconsistent with our management and processing practices, our policies or procedures, or the features of our products and services.
Our top seven brick-and-mortar and online retail partners, measured by the revenue we derive from them, accounted for 33% of total revenue for the year ended December 31, 2023 and 30% for the year ended December 31, 2024.
Our top seven brick-and-mortar and online retail partners, measured by the revenue we derive from them, accounted for 30% of total revenue for the year ended December 31, 2024 and 31% for the year ended December 31, 2025.
The adoption of new laws by, or a successful assertion by taxing authorities of such laws, could also require us to incur substantial costs to capture data and 61 Table of Contents collect and remit taxes.
The adoption of new laws by, or a successful assertion by taxing authorities of such laws, could also require us to incur substantial costs to capture data and collect and remit taxes.
We are currently seeing intensifying competition as it relates to accessories and materials, and we expect the competition in the accessories and materials DIY market to continue to intensify in the future as new and existing competitors introduce new or enhanced products that may compete with our product lines.
We are currently seeing intensifying competition as it relates to accessories and materials, and we expect the competition in the accessories and materials DIY market to continue to intensify in the future as new and 21 Table of Contents existing competitors introduce new or enhanced products that may compete with our product lines.
In February 2022, Google announced its Privacy Sandbox initiative, including plans to adopt similar restrictions to restrict tracking activity across Android devices. In July 2024, Google announced its plans to roll out a new user choice mechanism regarding third-party cookies.
In February 2022, Google announced its Privacy Sandbox initiative, including plans to adopt similar restrictions to restrict tracking activity across Android devices. In July 2024, Google announced its plans to roll out a new user choice mechanism 47 Table of Contents regarding third-party cookies.
In other cases, our users purchase copycat accessories to use with their connected machine, but since the copycat accessories are not calibrated correctly to work with our connected machines, they may have a negative experience and attribute it to the connected machine.
In other cases, our users purchase copycat 22 Table of Contents accessories to use with their connected machine, but since the copycat accessories are not calibrated correctly to work with our connected machines, they may have a negative experience and attribute it to the connected machine.
Accordingly, Petrus and affiliates hold approximately 73% of the voting power of our outstanding capital stock in the aggregate.
Accordingly, Petrus and affiliates hold approximately 74% of the voting power of our outstanding capital stock in the aggregate.
It is possible that the U.S. government may take future measures to impose (a) stricter export controls on items destined for China; (b) additional restrictions on the import of certain components, software, and/or systems from China; and (c) additional duties on shipments made from China.
The U.S. government has already imposed, and it is possible that the U.S. government may in the future take additional measures to impose, (a) stricter export controls on items destined for China; (b) additional restrictions on the testing and import of certain components, software, and/or systems from China; and (c) additional duties on shipments made from China.
Our business is subject to the risk of earthquakes, fire, power outages, floods, public health crises, such as post-COVID-19 factors, and other catastrophic events, and to interruption by man-made problems such as war or terrorism.
Our business is subject to the risk of earthquakes, fire, power outages, floods, public health crises, and other catastrophic events, and to interruption by man-made problems such as war or terrorism.
Any failure or perceived failure by us to comply with our privacy policies, our privacy, data protection or information security-related obligations to brick-and-mortar and online retail partners, users or other third parties, or any of our other legal obligations relating to privacy, data protection or information security may result in governmental investigations or enforcement actions, litigation, claims or public statements against us by consumer advocacy groups or others, and could result in significant liability or cause our users to lose trust in us, which could adversely affect our reputation and business.
Any failure or perceived failure by us to comply with our privacy policies, our privacy, data protection, data processing or information security-related obligations to brick-and-mortar and online retail partners, users or other third parties, or any of our other legal obligations relating to privacy, data protection, information security or the storing, sharing, use, processing, transfer, disclosure and protection of data or other content may result in governmental investigations or enforcement actions, litigation, claims or public statements against us by consumer advocacy groups or others, and could result in significant liability or cause our users to lose trust in us, which could adversely affect our reputation and business.
Although the European Commission adopted an adequacy decision for the United Kingdom in June 2021 that allows for the continued flow of personal data from the EU to the United Kingdom, this decision may be revoked or modified and will need to be renewed after four years from the date of adoption.
Although the European Commission adopted an adequacy decision for the United Kingdom in June 2021 that allows for the continued flow of personal data from the EU to the United Kingdom, this decision may be revoked or modified and requires renewal after four years from the date of adoption.
If we 40 Table of Contents cannot successfully defend any large claim, maintain our general liability insurance on acceptable terms or maintain adequate coverage against potential claims, our financial results could be adversely affected.
If we cannot successfully defend any large claim, maintain our general liability insurance on acceptable terms or maintain adequate coverage against potential claims, our financial results could be adversely affected.
Moreover, we experienced a significant increase in sales after the outbreak of the COVID-19 pandemic, and the rollout of COVID-19 vaccines, lifting of restrictions on movement and/or normalized full-time return to work trends have negatively impacted demand for our products and platform services, as have current deteriorating general economic conditions, inflationary pressures affecting the pricing of our products, and changes in consumer spending preferences and buying trends, and our sales activity may continue to diminish as a result.
Moreover, we experienced a significant increase in sales after the outbreak of the COVID-19 pandemic, but normalized full-time return to work trends have negatively impacted demand for our products and platform services, as have current deteriorating general economic conditions, inflationary pressures affecting the pricing of our products, and changes in consumer spending preferences and buying trends, and our sales activity may continue to diminish as a result.
This limited operating experience, combined with the complexity of our business and rapidly evolving nature of the market in which we sell our products, raises substantial uncertainty concerning how these markets and other economic factors beyond our control may develop and reduces our ability to accurately forecast quarterly or annual revenue.
The complexity of our business and rapidly evolving nature of the market in which we sell our products, raises substantial uncertainty concerning how these markets and other economic factors beyond our control may develop and reduces our ability to accurately forecast quarterly or annual revenue.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThese service providers assist us to design and implement our cybersecurity policies and procedures, as well as to monitor and test our safeguards and to conduct regular vulnerability assessments for our internal assets.
Biggest changeThese service providers assist us to design and implement our cybersecurity policies and procedures, as well as to monitor and test our safeguards and to conduct regular vulnerability assessments for our internal assets. We manage third-party cybersecurity risk through a risk-based due diligence and oversight program led by our CISO.
Our CISO and representatives from our steering committee on information security provide quarterly briefings to the audit committee regarding our company’s cybersecurity risks and activities, including any recent cybersecurity incidents and related responses, cybersecurity systems testing, activities of third parties, and the like.
Our CISO and representatives from our steering committee on information security provide quarterly briefings to the audit committee regarding our company’s cybersecurity risks and activities, including any recent cybersecurity incidents and related responses, cybersecurity systems testing, activities of third parties, and the like. We maintain a comprehensive set of information security metrics to monitor and manage our cybersecurity program.
Because many members of our board of directors regularly attend our audit committee meetings, the full board of directors regularly receives updates on cybersecurity.
Management provides the Audit Committee with updates on key cybersecurity performance indicators on a quarterly basis. Because many members of our board of directors regularly attend our audit committee meetings, the full board of directors regularly receives updates on cybersecurity.
Removed
We require each third-party service provider to give assurance that it has the ability to implement and maintain appropriate security measures, consistent with all applicable laws, to implement and maintain reasonable security measures in connection with their work with us, and to promptly report any suspected breach of its security measures that may affect our company.
Added
Before engagement, we assess providers’ security controls in proportion to the sensitivity of the data and systems involved. Where risks are elevated, we may require remediation, enhanced monitoring, or independent attestations as a condition of onboarding, and we may decline to engage or restrict access if risks cannot be adequately mitigated.
Removed
We review third-party service providers’ policies, data protection procedures, intellectual property protection measures and incident response measures. Our CISO oversees our relationships with these third-party service providers.
Added
Our contracts require applicable service providers to maintain reasonable security measures, comply with relevant laws and standards, and promptly notify us of any actual or suspected security incident affecting our systems or data. For higher-risk vendors, we conduct ongoing monitoring, and our CISO oversees remediation of any identified deficiencies.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties Our corporate headquarters are in South Jordan, Utah under operating leases that expire at various times through 2029. We also lease offices elsewhere in Utah, China and Malaysia. All of our offices are leased and we do not own any real property. We believe that our existing facilities are sufficient for our current needs.
Biggest changeItem 2. Properties Our corporate headquarters are in South Jordan, Utah under operating leases that expire in May 2029. We also lease offices elsewhere in Utah, China and Malaysia. All of our offices are leased and we do not own any real property. We believe that our existing facilities are sufficient for our current needs.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePurchases of Equity Securities by the Issuer and Affiliated Purchasers The following table provides information regarding share repurchases made by Cricut during the three months ended December 31, 2024: Period Total Number of Shares Purchased (1) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Program Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (in thousands) October 1, 2024 through October 31, 2024 610,207 $6.55 610,207 $26,840 November 1, 2024 through November 30, 2024 0 $0.00 0 $26,840 December 1, 2024 through December 31, 2024 681,165 $5.85 681,165 $22,854 Total 1,291,372 $6.18 1,291,372 $22,854 (1) On August 9, 2022, we announced that our Board of Directors had approved a common stock repurchase program under which we may purchase shares of our outstanding Class A common stock up to an aggregate transactional value of $50 million.
Biggest changePurchases of Equity Securities by the Issuer and Affiliated Purchasers The following table provides information regarding share repurchases made by Cricut during the three months ended December 31, 2025: Period Total Number of Shares Purchased (1) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Program Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (in thousands) October 1, 2025 through October 31, 2025 474,853 $5.31 474,853 $44,401 November 1, 2025 through November 30, 2025 0 $0.00 0 $44,401 December 1, 2025 through December 31, 2025 617,989 $5.03 617,989 $41,293 Total 1,092,842 $5.15 1,092,842 $41,293 (1) On May 2, 2025, the board of directors approved a replenishing of the share repurchase program authorizing the Company to purchase up to an aggregate of $50 million of our outstanding Class A common stock depending on our continuing analysis of market, financial, and other factors.
The following graph compares (i) the cumulative total stockholder return on our Class A common stock from March 25, 2021 (the date our Class A common stock commenced trading on the Nasdaq) through December 31, 2024 with (ii) the cumulative total return of the Nasdaq Composite Index and the S&P Mid Cap 400 Index over the same period, assuming the investment of $100 in our Class A common stock and in each index on March 25, 2021 and the reinvestment of dividends.
The following graph compares (i) the cumulative total stockholder return on our Class A common stock from March 25, 2021 (the date our Class A common stock commenced trading on the Nasdaq) through December 31, 2025 with (ii) the cumulative total return of the Nasdaq Composite Index and the S&P Mid Cap 400 Index over the same period, assuming the investment of $100 in our Class A common stock and in each index on March 25, 2021 and the reinvestment of dividends.
Dividend Policy On November 1, 2024, the Board of Directors approved its second recurring semi-annual dividend of $0.10 per share on its Class A and Class B common stock, payable on January 21, 2025 to shareholders of record as of January 7, 2025 and on May 6, 2024, the Company declared a special dividend of $0.40 per share and a recurring semi-annual dividend of $0.10 per share on its Class A and Class B common stock, payable on July 19, 2024 to shareholders of record as of July 2, 2024.
On November 1, 2024, the board of directors approved a semi-annual dividend of $0.10 per share on its Class A and Class B common stock, payable on January 21, 2025 to shareholders of record as of January 7, 2025 and on May 6, 2024, the Company declared a special dividend of $0.40 per share and a recurring semi-annual dividend of $0.10 per share on its Class A and Class B common stock, payable on July 19, 2024 to shareholders of record as of July 2, 2024.
Prior to that date, there was no public trading market for our Class A common stock. There is no public trading market for our Class B common stock. Holders of Record As of February 28, 2025, we had 160 holders of record of our Class A and Class B common stock.
Prior to that date, there was no public trading market for our Class A common stock. There is no public trading market for our Class B common stock. Holders of Record As of February 27, 2026, we had 134 holders of record of our Class A and Class B common stock.
As part of the dividends, and pursuant to the underlying award agreements, holders of restricted stock units and performance-based restricted stock units received a dividend equivalent per unit in the form of additional restricted stock units and performance-based restricted stock units subject to the same vesting conditions as the original awards. However, we have not adopted a dividend policy.
As part of the dividends, and pursuant to the underlying award agreements, holders of restricted stock units and performance-based restricted stock units received a dividend equivalent per unit in the form of additional 64 Table of Contents restricted stock units and performance-based restricted stock units subject to the same vesting conditions as the original awards.
Any future determination to pay dividends on our common stock will be made at the discretion of our board of directors subject to applicable laws, and will depend upon, among other factors, our results of operations, financial condition, contractual restrictions and capital requirements. 64 Table of Contents Our ability to pay cash dividends on our capital stock may also be limited by the terms of our Credit Agreement and the terms of any future debt or preferred securities or future indebtedness.
However, we have not adopted a dividend policy. Any future determination to pay dividends on our common stock will be made at the discretion of our board of directors subject to applicable laws, and will depend upon, among other factors, our results of operations, financial condition, contractual restrictions and capital requirements.
On May 6, 2024, the Board of Directors approved an additional $50 million for the share repurchase program, to purchase shares of our outstanding Class A common stock depending on our continuing analysis of market, financial, and other factors. The share repurchase program may be suspended or discontinued at any time and does not have a predetermined expiration date.
The common stock repurchase program may be suspended or discontinued at any time and does not have a predetermined expiration date.
Added
Dividend Policy On October 31, 2025, the board of directors approved a recurring semi-annual dividend of $0.10 per share on its Class A and Class B common stock, payable on January 20, 2026 to shareholders of record as of January 6, 2026 and on May 2, 2025, the board of directors approved a special dividend of $0.75 per share and a recurring semi-annual dividend of $0.10 per share on its Class A and Class B common stock, payable on July 21, 2025 to shareholders of record as of July 7, 2025.
Added
Our ability to pay cash dividends on our capital stock may also be limited by the terms of our Credit Agreement and the terms of any future debt or preferred securities or future indebtedness.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeOf the jurisdictions where Pillar Two has been adopted, the only jurisdiction where the top-up tax is applicable is Switzerland and the estimated tax is immaterial. 72 Table of Contents Results of Operations The following table is presented in thousands: Year Ended December 31, 2024 2023 2022 (in thousands) Revenue: Platform $ 312,976 $ 309,012 $ 278,646 Products 399,562 456,135 607,650 Total revenue 712,538 765,147 886,296 Cost of revenue: Platform (1) 37,288 32,804 26,676 Products (1) 322,462 389,050 509,727 Total cost of revenue 359,750 421,854 536,403 Gross profit 352,788 343,293 349,893 Operating expenses: Research and development (1) 60,399 65,048 76,914 Sales and marketing (1) 143,294 123,169 130,379 General and administrative (1) 72,985 85,091 62,647 Total operating expenses 276,678 273,308 269,940 Income from operations 76,110 69,985 79,953 Other income (expense): Interest income 11,016 7,976 1,809 Interest expense (326) (323) (289) Other income 2,077 2,145 508 Total other income, net 12,767 9,798 2,028 Income before provision for income taxes 88,877 79,783 81,981 Provision for income taxes 26,047 26,147 21,315 Net income $ 62,830 $ 53,636 $ 60,666 (1) Includes stock-based compensation expense as follows: Year Ended December 31, 2024 2023 2022 (in thousands) Cost of revenue Platform $ 1,192 $ 926 $ 443 Products 712 1,505 487 Total cost of revenue 1,904 2,431 930 Research and development 15,620 18,169 17,713 Sales and marketing 12,825 12,740 12,603 General and administrative 14,718 13,986 9,875 Total stock-based compensation expense $ 45,067 $ 47,326 $ 41,121 73 Table of Contents Comparison of the years ended December 31, 2024 and 2023 Revenue Years Ended December 31, Change Change 2024 $ % 2023 $ % 2022 (in thousands) Revenue: Platform $ 312,976 $ 3,964 1 % $ 309,012 $ 30,366 11 % $ 278,646 Products 399,562 (56,573) (12) % 456,135 (151,515) (25) % 607,650 Total revenue $ 712,538 $ (52,609) (7) % $ 765,147 $ (121,149) (14) % $ 886,296 Platform revenue increased by $4.0 million, or 1%, to $313.0 million for the year ended December 31, 2024 from $309.0 million for the year ended December 31, 2023.
Biggest changeOn an after-tax basis, this election resulted in an approximate $20 million reduction to deferred tax assets, which primarily accounts for the decrease in capitalized research expenditures. 72 Table of Contents Results of Operations The following table is presented in thousands: Year Ended December 31, 2025 2024 2023 (in thousands) Revenue: Platform $ 327,399 $ 312,976 $ 309,012 Products 381,381 399,562 456,135 Total revenue 708,780 712,538 765,147 Cost of revenue: Platform (1) 35,990 37,288 32,804 Products (1) 282,359 322,462 389,050 Total cost of revenue 318,349 359,750 421,854 Gross profit 390,431 352,788 343,293 Operating expenses: Research and development (1) 66,522 60,399 65,048 Sales and marketing (1) 159,412 143,294 123,169 General and administrative (1) 68,464 72,985 85,091 Total operating expenses 294,398 276,678 273,308 Income from operations 96,033 76,110 69,985 Other income (expense): Interest income 11,389 11,016 7,976 Interest expense (567) (326) (323) Other income 1,038 2,077 2,145 Total other income, net 11,860 12,767 9,798 Income before provision for income taxes 107,893 88,877 79,783 Provision for income taxes 31,188 26,047 26,147 Net income $ 76,705 $ 62,830 $ 53,636 (1) Includes stock-based compensation expense as follows: Year Ended December 31, 2025 2024 2023 (in thousands) Cost of revenue Platform $ 1,052 $ 1,192 $ 926 Products 46 712 1,505 Total cost of revenue 1,098 1,904 2,431 Research and development 12,047 15,620 18,169 Sales and marketing 10,065 12,825 12,740 General and administrative 11,581 14,718 13,986 Total stock-based compensation expense $ 34,791 $ 45,067 $ 47,326 73 Table of Contents Comparison of the years ended December 31, 2025 and 2024 Revenue Years Ended December 31, Change Change 2025 $ % 2024 $ % 2023 (in thousands) Revenue: Platform $ 327,399 $ 14,423 5 % $ 312,976 $ 3,964 1 % $ 309,012 Products 381,381 (18,181) (5) % 399,562 (56,573) (12) % 456,135 Total revenue $ 708,780 $ (3,758) (1) % $ 712,538 $ (52,609) (7) % $ 765,147 Platform revenue increased by $14.4 million, or 5%, to $327.4 million for the year ended December 31, 2025 from $313.0 million for the year ended December 31, 2024.
One user may own multiple registered connected machines but is only counted once if that user registers those connected machines by using the same email address.
One user may own multiple registered connected machines but is only counted once if that user registers those connected machines by using the same email address.
Once they have purchased connected machines, users inspire one another to create and use more of our digital content, subscriptions and accessories and materials. In turn, we learn from our users’ creativity, and launch new products to help expand their creative horizons. We measure engagement by the number of Active Users and 90-Day Engaged Users interacting with our Platform.
Once they have purchased connected machines, users inspire one another to create and use more of our digital content, subscriptions and accessories and materials. In turn, we learn from our users’ creativity, and may launch new products to help expand their creative horizons. We measure engagement by the number of Active Users and 90-Day Engaged Users interacting with our Platform.
Our ancillary products include Cricut EasyPress, Cricut MugPress, hand tools, machine replacement tools and blades, and project materials such as vinyl and iron-on. Products revenue is recognized at the point in time when control is transferred, which is either upon shipment or delivery to the customer in accordance with the terms of each customer contract.
Our ancillary products include Cricut EasyPress, Cricut MugPress, hand tools, machine replacement tools and blades, and project materials such as adhesive vinyl and iron-on vinyl. Products revenue is recognized at the point in time when control is transferred, which is either upon shipment or delivery to the customer in accordance with the terms of each customer contract.
Once we acquire a user, we see strong engagement with them over time. We drive engagement through a highly interactive and fulfilling product experience and the strength of our community. We continuously innovate and improve our connected machines, design apps and accessories and materials, giving our users more to create.
Once we acquire a user, we often see strong engagement with them over time. We drive engagement through a highly interactive and fulfilling product experience and the strength of our community. We continuously innovate and improve our connected machines, design apps and accessories and materials, giving our users more to create.
Digital content includes à la carte digital content purchases, including fonts, images and projects. Platform revenue is recognized on a ratable basis over time, during the subscription term for subscriptions, and at the point in time when control is transferred for à la carte digital content.
Digital content includes à la carte digital content purchases, including fonts, images, templates, and projects. Platform revenue is recognized on a ratable basis over time, during the subscription term for subscriptions, and at the point in time when control is transferred for à la carte digital content.
Dividends On November 1, 2024, the Board of Directors declared a recurring semi-annual dividend of $0.10 per share on its Class A and Class B common stock, payable on January 21, 2025 to shareholders of record as of January 7, 2025.
On November 1, 2024, the board of directors declared a recurring semi-annual dividend of $0.10 per share on its Class A and Class B common stock, payable on January 21, 2025 to shareholders of record as of January 7, 2025.
We currently sell a portfolio of connected machines that cut, write, score and create other decorative effects using a wide variety of materials including paper, vinyl, iron-on vinyl, pens, and more.
We currently sell a portfolio of connected machines that cut, write, score and create other decorative effects using a wide variety of materials including paper, adhesive vinyl, iron-on vinyl, pens, and more.
Paid Subscribers We define Paid Subscribers as the number of users with a subscription to Cricut Access or Cricut Access Premium, excluding cancelled, unpaid or free trial subscriptions, as of the end of a period.
Paid Subscribers We define Paid Subscribers as the number of users with a subscription to Cricut Access or Cricut Access Premium, excluding cancelled, unpaid, paused, or free trial subscriptions, as of the end of a period.
As of December 31, 2024, nearly 5.9 million Active Users created on their connected machines in the last 365 days. This durable relationship is motivated by new software and products that we launch to expand the capabilities of existing connected machines as well as through the inspiration derived from our large and passionate community.
As of December 31, 2025, nearly 5.9 million Active Users created on their connected machines in the last 365 days. This durable relationship is motivated by new software and products that we launch to expand the capabilities of existing connected machines as well as through the inspiration derived from our large and passionate community.
Our connected machines portfolio consists of machines in four product families: Cricut Maker, which includes Maker and Maker 3; Cricut Explore, which includes Explore Air 2 and Explore 3; Cricut Joy, which includes Joy and Joy Xtra; and Cricut Venture.
Our connected machines portfolio consists of machines in four product families: Cricut Maker, which includes Maker, Maker 3 and Maker 4; Cricut Explore, which includes Explore Air 2, Explore 3 and Explore 4; Cricut Joy, which includes Joy and Joy Xtra; and Cricut Venture.
We identify our reportable segments based on the information used by management to monitor performance and make operating decisions. See Note 18 to our audited consolidated financial statements included elsewhere in this filing for additional information regarding our reportable segments.
We identify our reportable segments based on the information used by management to monitor performance and make operating decisions. See Note 16 to our audited consolidated financial statements included elsewhere in this filing for additional information regarding our reportable segments.
Our actual results could differ materially from these forward-looking statements as a result of many factors, including those discussed in the sections titled “Risk Factors” and “Note Regarding Forward-Looking Statements.” A discussion regarding our financial condition and results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022 can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our annual report on Form 10-K filed on March 6, 2024, which is hereby incorporated by reference herein.
Our actual results could differ materially from these forward-looking statements as a result of many factors, including those discussed in the sections titled “Risk Factors” and “Note Regarding Forward-Looking Statements.” A discussion regarding our financial condition and results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023 can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our annual report on Form 10-K filed on March 5, 2025, which is hereby incorporated by reference herein.
The promotional programs include advertising allowances, volume and growth incentives, business development, product damage allowances and point-of-sale support. Customer rebates are considered to be variable consideration, which we estimate using the expected value method or most likely amount, based upon the nature of the incentive.
The promotional programs include advertising allowances, volume and growth incentives, business development, product damage allowances and point-of-sale support. Customer rebates are considered to be variable consideration, which we 78 Table of Contents estimate using the expected value method or most likely amount, based upon the nature of the incentive.
Certain customer rebate programs are estimates at period end due to the nature of the incentives or expected and yet-to-be announced incentive programs that apply to current period revenue transactions. These estimates are based on our incentive program experience, historical 78 Table of Contents and projected sales data and current contractual terms.
Certain customer rebate programs are estimates at period end due to the nature of the incentives or expected and yet-to-be announced incentive programs that apply to current period revenue transactions. These estimates are based on our incentive program experience, historical and projected sales data and current contractual terms.
Much of our supply chain originates in Malaysia and China. We expect to pursue additional geographic diversification in our supply chain to mitigate tariffs and other supply chain challenges. We must continue to build relationships with strong third-party suppliers, contract manufacturers and third-party logistics companies and continue to diversify our supply chain to improve operational results.
Much of our supply chain originates in Malaysia and China. We expect to pursue additional geographic diversification in our supply chain to mitigate tariffs and other supply chain challenges. We must 68 Table of Contents continue to build relationships with strong third-party suppliers, contract manufacturers and third-party logistics companies and continue to diversify our supply chain to improve operational results.
Any future determination to pay dividends on our common stock will be made at the discretion of our board of directors subject to applicable laws, and will depend upon, among other factors, our results of operations, financial condition, contractual restrictions and capital requirements.
Any future determination to pay dividends on our common stock will be made at the discretion of our board of directors subject to applicable laws, and will depend upon, 77 Table of Contents among other factors, our results of operations, financial condition, contractual restrictions and capital requirements.
If our users engage with their connected machines less over time, the overall growth in our business may slow. 68 Table of Contents Scaling our Hardware and Software Product Offerings We have historically enjoyed strong demand for our products, both physical and digital, driving methodical growth.
If our users engage with their connected machines less over time, the overall growth in our business may slow. Scaling our Hardware and Software Product Offerings We have historically enjoyed strong demand for our products, both physical and digital, driving methodical growth.
We believe our balances of cash and cash equivalents, which totaled $232.1 million as of December 31, 2024, along with forecasted cash expected to be generated by ongoing operations and $300.0 million in available borrowings and the option to increase the aggregate amount of our credit facility by up to an additional $150.0 million (see Note 8 ) will be sufficient to satisfy our cash requirements over the next 12 months and beyond.
We believe our balances of cash and cash equivalents, which totaled $256.2 million as of December 31, 2025, along with forecasted cash expected to be generated by ongoing operations and $300.0 million in available borrowings and the option to increase the aggregate amount of our credit facility by up to an additional $150.0 million (see Note 8 ) will be sufficient to satisfy our cash requirements over the next 12 months and beyond.
Inventory and Supply Chain We utilize third-party contract manufacturers to source components and finished goods and third-party logistics companies to warehouse and distribute our products . As of December 31, 2024, we had component purchase obligations of $6.4 million , with $2.0 million payable within 12 months in addition to ongoing inventory purchases of finished goods from our contract manufacturers.
Inventory and Supply Chain We utilize third-party contract manufacturers to source components and finished goods and third-party logistics companies to warehouse and distribute our products . As of December 31, 2025, we had component purchase obligations of $4.9 million , with $2.4 million payable within 12 months in addition to ongoing inventory purchases of finished goods from our contract manufacturers.
To date, word-of-mouth referrals, as well as effective use of low-cost marketing channels like social media, have driven our success. In 2024, 39% of new users first heard about Cricut through friends and family. Sales and marketing expenses represented 15%, 16% and 20% of revenue in 2022, 2023 and 2024, respectively.
To date, word-of-mouth referrals, as well as effective use of low-cost marketing channels like social media, have driven our success. In 2025, 35% of new users first heard about Cricut through friends and family. Sales and marketing expenses represented 16%, 20% and 22% of revenue in 2023, 2024 and 2025, respectively.
By subscribing to our offerings, users have access to a curated and growing design library of over one million images, thousands of ready-to-make projects and hundreds of fonts. We believe that the number of Paid Subscribers is an indicator of the depth of our users’ engagement.
By subscribing to our offerings, users have access to a curated and growing design library of over 1.6 million images, thousands of templates, thousands of ready-to-make projects and over a thousand fonts. We believe that the number of Paid Subscribers is an indicator of the depth of our users’ engagement.
The share repurchase program may be suspended or discontinued at any time and does not have a predetermined expiration date. During the twelve months ended December 31, 2024, we repurchased and retired 6,247,175 shares of our Class A common stock for $38.4 million under this program.
The share repurchase program may be suspended or discontinued at any time and does not have a predetermined expiration date. During the twelve months ended December 31, 2025, we repurchased and retired 4,577,893 shares of our Class A common stock for $24.6 million under this program.
As of December 31, 2022, 2023 and 2024, we had 5.8 million, 5.9 million and 5.9 million Active Users, respectively, representing 12%, 2% and (1)% year-over-year growth, respectively. See the section titled “Key Business Metrics” for the definition of Active Users.
As of December 31, 2023, 2024 and 2025, we had nearly 5.9 million, 5.9 million and nearly 5.9 million Active Users, respectively, representing 2%, (1)% and 0% year-over-year growth, respectively. See the section titled “Key Business Metrics” for the definition of Active Users.
Year Ended December 31, 2024 2023 2022 Active Users (in thousands) 5,892 5,935 5,834 90-Day Engaged Users (in thousands) 3,812 3,932 4,050 Paid Subscribers (in thousands) 2,959 2,770 2,609 Year Ended December 31, 2024 2023 2022 Platform ARPU $53.12 $52.07 $47.76 Active Users We define Active Users as registered users of at least one registered connected machine who have utilized their connected machine to create a project in the last 365 days.
As of December 31, 2025 2024 2023 Active Users (in thousands) 5,871 5,892 5,935 90-Day Engaged Users (in thousands) 3,695 3,812 3,932 Paid Subscribers (in thousands) 3,091 2,959 2,770 Year Ended December 31, 2025 2024 2023 Platform ARPU $55.77 $53.12 $52.07 Active Users We define Active Users as registered users of at least one registered connected machine who have utilized their connected machine to create a project in the last 365 days.
See the section titled “Key Business Metrics” for the definition of Platform ARPU and for information regarding that metric over the last three years. 2022 2023 2024 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Paid Subscribers (in thousands) 2,311 2,367 2,438 2,609 2,715 2,722 2,699 2,770 2,797 2,813 2,838 2,959 Platform ARPU $42.31 $44.58 $46.58 $47.76 $48.51 $50.13 $51.20 $52.07 $52.26 $52.61 $52.86 $53.12 Factors Affecting Our Performance Our financial condition and results of operations have been, and will continue to be, affected by a number of factors, including the following: Attracting New Users and Driving Connected Machine Sales Our growth depends in part on our ability to drive continued growth in users and connected machine sales.
See the section titled “Key Business Metrics” for the definition of Platform ARPU and for information regarding that metric over the last three years. 2023 2024 2025 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Paid Subscribers (in thousands) 2,715 2,722 2,699 2,770 2,797 2,813 2,838 2,959 2,974 3,010 3,004 3,091 Platform ARPU $48.51 $50.13 $51.20 $52.07 $52.26 $52.61 $52.86 $53.12 $53.10 $53.84 $54.96 $55.77 Factors Affecting Our Performance Our financial condition and results of operations have been, and will continue to be, affected by a number of factors, including the following: Attracting New Users and Driving Connected Machine Sales Our growth depends in part on our ability to drive continued growth in users and connected machine sales.
Leases As of December 31, 2024, we had fixed lease payment obligations of $17.0 million, with $4.6 million payable within 12 months primarily for corporate and other office space.
Leases As of December 31, 2025, we had fixed lease payment obligations of $12.7 million, with $4.1 million payable within 12 months primarily for corporate and other office space.
Gross margin for Products increased to 19% for the year ended December 31, 2024 from 15% for the year ended December 31, 2023.
Gross margin for Products increased to 26% for the year ended December 31, 2025 from 19% for the year ended December 31, 2024.
During the twelve months ended December 31, 2024, an aggregate of $110.0 million was paid in cash, and $13.5 million was satisfied in the form of dividend equivalents to RSU or PRSU holders. However, we have not adopted a dividend policy.
During the twelve months ended December 31, 2025, an aggregate of $202.1 million was paid in cash, and $26.3 million was satisfied in the form of dividend equivalents to RSU or PRSU holders. However, we have not adopted a dividend policy.
As part of the dividend, and pursuant to the underlying award agreements, holders of RSUs and PRSUs received a dividend equivalent of $0.35 per unit in the form of additional RSUs or PRSUs subject to the same vesting conditions as the original awards.
As part of the dividends, and pursuant to the underlying award agreements, holders of restricted stock units (“RSUs”) and performance-based restricted stock units (“PRSUs”) received a dividend equivalent of $0.85 per unit in the form of additional RSUs or PRSUs subject to the same vesting conditions as the original awards.
General and Administrative Years Ended December 31, Change Change 2024 $ % 2023 $ % 2022 (dollars in thousands) General and administrative $ 72,985 $ (12,106) (14) % $ 85,091 $ 22,444 36 % $ 62,647 As a percentage of total revenue 10 % 11 % 7% General and administrative expenses decreased by $12.1 million, or 14%, to $73.0 million for the year ended December 31, 2024 from $85.1 million for the year ended December 31, 2023.
General and Administrative Years Ended December 31, Change Change 2025 $ % 2024 $ % 2023 (dollars in thousands) General and administrative $ 68,464 $ (4,521) (6) % $ 72,985 $ (12,106) (14) % $ 85,091 As a percentage of total revenue 10 % 10 % 11% General and administrative expenses decreased by $4.5 million, or 6%, to $68.5 million for the year ended December 31, 2025 from $73.0 million for the year ended December 31, 2024.
Sales and Marketing Years Ended December 31, Change Change 2024 $ % 2023 $ % 2022 (dollars in thousands) Sales and marketing $ 143,294 $ 20,125 16 % $ 123,169 $ (7,210) (6) % $ 130,379 As a percentage of total revenue 20 % 16 % 15% Sales and marketing expenses increased by $20.1 million, or 16%, to $143.3 million for the year ended December 31, 2024 from $123.2 million for the year ended December 31, 2023.
Sales and Marketing Years Ended December 31, Change Change 2025 $ % 2024 $ % 2023 (dollars in thousands) Sales and marketing $ 159,412 $ 16,118 11 % $ 143,294 $ 20,125 16 % $ 123,169 As a percentage of total revenue 22 % 20 % 16% Sales and marketing expenses increased by $16.1 million, or 11%, to $159.4 million for the year ended December 31, 2025 from $143.3 million for the year ended December 31, 2024.
Other Income Years Ended December 31, Change Change 2024 $ % 2023 $ % 2022 (dollars in thousands) Other income, net $ 12,767 $ 2,969 30 % $ 9,798 $ 7,770 383 % $ 2,028 Other income, net increased by $3.0 million, or 30%, to a net income of $12.8 million for the year ended December 31, 2024 from a net income of $9.8 million for the year ended December 31, 2023.
Other Income Years Ended December 31, Change Change 2025 $ % 2024 $ % 2023 (dollars in thousands) Other income, net $ 11,860 $ (907) (7) % $ 12,767 $ 2,969 30 % $ 9,798 Other income, net decreased by $0.9 million, or 7%, to $11.9 million for the year ended December 31, 2025 from $12.8 million for the year ended December 31, 2024.
See the section titled “Key Business Metrics” for the definitions of Active Users and 90-Day Engaged Users and for information regarding those metrics over the last three years. 67 Table of Contents The table below shows the number of Active Users and 90-Day Engaged Users for the periods indicated. 2022 2023 2024 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Active Users (in Thousands) 5,498 5,593 5,673 5,834 5,943 5,912 5,929 5,935 5,952 5,918 5,894 5,892 90-Day Engaged Users (in Thousands) 3,703 3,670 3,564 4,050 3,710 3,652 3,641 3,932 3,527 3,541 3,532 3,812 Growing With Users Over Time Many of our users choose to pay for our subscription offerings which include a subscription to images, fonts and projects as well as other member benefits, including exclusive software features and functionality, discounts, priority Cricut Member Care, and, in the case of Cricut Access Premium, preferred shipping.
The table below shows the number of Active Users and 90-Day Engaged Users for the periods indicated. 2023 2024 2025 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Active Users (in Thousands) 5,943 5,912 5,929 5,935 5,952 5,918 5,894 5,892 5,926 5,901 5,874 5,871 90-Day Engaged Users (in Thousands) 3,710 3,652 3,641 3,932 3,527 3,541 3,532 3,812 3,372 3,482 3,419 3,695 Growing With Users Over Time Many of our users choose to pay for our subscription offerings which include a subscription to images, fonts and projects as well as other member benefits, including exclusive software features and functionality, discounts, priority Cricut Member Care, and, in the case of Cricut Access Premium, preferred shipping.
We expect our general and administrative expenses as a percentage of revenue to increase in the near term as we expand our operations, invest in systems enhancements, and incur expenses required of a public company. We produced gross savings in general and administrative of approximately $0.6 million during 2024 as a result of the January 2024 restructuring plan.
We expect our general and administrative expenses as a percentage of revenue to increase in the near term as we expand our operations, invest in systems enhancements, and incur expenses required of a public company.
The aggregate dividend of $81.4 million was to be satisfied in cash of $76.9 million payable to holders of Class A and Class B common stock with the remaining $4.5 million satisfied on the payment date in the form of dividend equivalents to RSU or PRSU holders.
The aggregate dividend of $24.3 million was to be satisfied in cash of $21.1 million payable to holders of Class A and Class B common stock with the remaining $3.2 million satisfied on the payment date in the form of dividend equivalents to RSU or PRSU holders prior to any subsequent forfeitures.
The increase was primarily driven by a reduction in inventory impairment charges compared to prior year, partially offset by increased promotional activity . 74 Table of Contents Operating Expenses Research and Development Years Ended December 31, Change Change 2024 $ % 2023 $ % 2022 (dollars in thousands) Research and development $ 60,399 $ (4,649) (7) % $ 65,048 $ (11,866) (15) % $ 76,914 As a percentage of total revenue 8 % 9 % 9 % Research and development expenses decreased by $4.6 million, or 7%, to $60.4 million for the year ended December 31, 2024 from $65.0 million for the year ended December 31, 2023.
The increase was primarily driven by a reduction in net inventory impairment charges and lower inventory procurement costs. 74 Table of Contents Operating Expenses Research and Development Years Ended December 31, Change Change 2025 $ % 2024 $ % 2023 (dollars in thousands) Research and development $ 66,522 $ 6,123 10 % $ 60,399 $ (4,649) (7) % $ 65,048 As a percentage of total revenue 9 % 8 % 9 % Research and development expenses increased by $6.1 million, or 10%, to $66.5 million for the year ended December 31, 2025 from $60.4 million for the year ended December 31, 2024.
See the section titled “Key Business Metrics” for the definition of Paid Subscribers and for information regarding that metric over the last three years. As of December 31, 2024, we had nearly 3.0 million Paid Subscribers, representing 7% year-over-year growth. We aim to increase the number of our users that are Paid Subscribers over time.
See the section titled “Key Business Metrics” for the definition of Paid Subscribers and for information regarding that metric over the last three years. As of December 31, 2025, we had just over 3.09 million Paid Subscribers, representing 4% year-over-year growth.
The change was primarily related to interest from marketable securities due to more favorable rates and higher cash balances in 2024. 75 Table of Contents Provision for Income Taxes Years Ended December 31, Change Change 2024 $ % 2023 $ % 2022 (dollars in thousands) Provision for income taxes $ 26,047 $ (100) — % $ 26,147 $ 4,832 23 % $ 21,315 Provision for income taxes decreased by $0.1 million, or 0%, to $26.0 million for the year ended December 31, 2024 from $26.1 million for the year ended December 31, 2023.
The change was primarily related to a decrease in interest from marketable securities due to less favorable rates and lower marketable security balances in 2025. 75 Table of Contents Provision for Income Taxes Years Ended December 31, Change Change 2025 $ % 2024 $ % 2023 (dollars in thousands) Provision for income taxes $ 31,188 $ 5,141 20 % $ 26,047 $ (100) — % $ 26,147 Provision for income taxes increased by $5.1 million, or 20%, to $31.2 million for the year ended December 31, 2025 from $26.0 million for the year ended December 31, 2024.
The increase was primarily driven by increases in software development costs and hosting fees. Gross margin for Platform decreased to 88% for the year ended December 31, 2024 from 89% for the year ended December 31, 2023. The decrease was primarily driven by increases in software development costs and hosting fees.
The decrease was primarily driven by lower amortization of capitalized software development costs. Gross margin for Platform increased to 89% for the year ended December 31, 2025 from 88% for the year ended December 31, 2024. The increase was primarily driven by decreases in amortization of capitalized software development costs.
In 2022, 2023 and 2024, 41%, 38%, and 35% of our revenue was generated through brick-and-mortar sales, respectively. In 2022, 2023 and 2024, 59%, 62%, and 65% of our revenue was generated through online channels, respectively.
In 2023, 2024 and 2025, 38%, 35%, and 31% of our revenue was generated through brick-and-mortar sales, respectively.
Our business model is characterized by strong engagement and diversified sales across product categories. This engagement has led to rapid growth and strong profitability. Attracting and Engaging New Users through Connected Machine Sales Since launching our first connected machine in 2014, we have built a loyal and growing community of users that has reached substantial scale.
Attracting and Engaging New Users through Connected Machine Sales Since launching our first connected machine in 2014, we have built a loyal and growing community of users that has reached substantial scale.
We review Platform ARPU as an indicator of the monetization of our Active Users. We define Platform ARPU as Platform revenue in a 12-month period divided by Active Users. Platform ARPU allows us to forecast Platform revenue over time and is an indicator of our ability to expand with users and of user engagement with our subscription offerings.
Platform ARPU allows us to forecast Platform revenue over time and is an indicator of our ability to expand with users and of user engagement with our subscription offerings.
Our international expansion has resulted in, and will continue to result in, increased costs and is subject to a variety of risks, including content localization, multilingual customer support, potentially complex delivery logistics and compliance with foreign laws and regulations. 69 Table of Contents Seasonality Historically, we have experienced the highest revenue levels in the fourth quarter of the year, coinciding with the holiday shopping season in the United States.
Our international expansion has resulted in, and will continue to result in, increased costs and is subject to a variety of risks, including content localization, multilingual customer support, potentially complex delivery logistics and compliance with foreign laws and regulations.
The increase was primarily due to a $16.0 million increase in advertising and other marketing expense and a $4.8 million increase in personnel-related expense, partially offset by a decrease in software subscriptions expense.
The increase was primarily due to a $16.0 million increase in advertising and other marketing expense.
As we continue to grow internationally, we expect we may experience seasonality in additional markets, which may differ from the seasonality experienced in the United States. Key Business Metrics In addition to the measures presented in our consolidated financial statements, we use the following key metrics to evaluate our business, measure our performance, identify trends and make strategic decisions.
Key Business Metrics In addition to the measures presented in our consolidated financial statements, we use the following key metrics to evaluate our business, measure our performance, identify trends and make strategic decisions.
On May 6, 2024 the Company’s Board of Directors approved an additional $50 million for the share repurchase program to purchase shares of its outstanding Class A common stock depending on the Company’s continuing analysis of market, financial, and other factors.
See Note 13 of the notes to our consolidated financial statements for additional information. 76 Table of Contents Stock Repurchase Program On May 2, 2025, the board of directors approved a replenishing of the share repurchase program authorizing the Company to purchase up to an aggregate of $50 million of its outstanding Class A common stock depending on the Company’s continuing analysis of market, financial, and other factors.
Investing Activities The change in net cash flows from investing activities for the year ended December 31, 2024 compared to year ended December 31, 2023 was primarily due to a decrease in net purchases and maturities of marketable securities during 2024 compared to 2023, in addition to a decrease in acquisitions of property and equipment.
Investing Activities The change in net cash flows from investing activities for the year ended December 31, 2025 compared to year ended December 31, 2024 was primarily due to proceeds from maturities of marketable securities in 2025 not used to purchase new securities.
We expect our sales and marketing expenses as a percentage of revenue to fluctuate in the near term. We produced gross savings in sales and marketing of approximately $2.5 million during 2024 as a result of the January 2024 restructuring plan.
We expect our sales and marketing expenses as a percentage of revenue to fluctuate in the near term.
Cost of Revenue, Gross Profit and Gross Margin Years Ended December 31, Change Change 2024 $ % 2023 $ % 2022 (dollars in thousands) Cost of Revenue: Platform $ 37,288 $ 4,484 14 % $ 32,804 $ 6,128 23 % $ 26,676 Products 322,462 (66,588) (17) % 389,050 (120,677) (24) % 509,727 Total cost revenue $ 359,750 $ (62,104) (15) % $ 421,854 $ (114,549) (21) % $ 536,403 Gross Profit: Platform $ 275,688 $ (520) — % $ 276,208 $ 24,238 10 % $ 251,970 Products 77,100 10,015 15 % 67,085 (30,838) (31) % 97,923 Total gross profit $ 352,788 $ 9,495 3 % $ 343,293 $ (6,600) (2) % $ 349,893 Gross Margin Platform 88 % 89 % 90 % Products 19 % 15 % 16 % Platform cost of revenue increased by $4.5 million, or 14%, to $37.3 million for the year ended December 31, 2024 from $32.8 million for the year ended December 31, 2023.
Cost of Revenue, Gross Profit and Gross Margin Years Ended December 31, Change Change 2025 $ % 2024 $ % 2023 (dollars in thousands) Cost of Revenue: Platform $ 35,990 $ (1,298) (3) % $ 37,288 $ 4,484 14 % $ 32,804 Products 282,359 (40,103) (12) % 322,462 (66,588) (17) % 389,050 Total cost revenue $ 318,349 $ (41,401) (12) % $ 359,750 $ (62,104) (15) % $ 421,854 Gross Profit: Platform $ 291,409 $ 15,721 6 % $ 275,688 $ (520) — % $ 276,208 Products 99,022 21,922 28 % 77,100 10,015 15 % 67,085 Total gross profit $ 390,431 $ 37,643 11 % $ 352,788 $ 9,495 3 % $ 343,293 Gross Margin Platform 89 % 88 % 89 % Products 26 % 19 % 15 % Platform cost of revenue decreased by $1.3 million, or 3%, to $36.0 million for the year ended December 31, 2025 from $37.3 million for the year ended December 31, 2024.
On December 21, 2022, the Company declared a special dividend of $0.35 per share on its Class A and Class B common stock, payable on February 15, 2023 to shareholders of record as of February 1, 2023.
On May 2, 2025, the Company declared a special dividend of $0.75 per share and a recurring semi-annual dividend of $0.10 per share on its Class A and Class B common stock, payable on July 21, 2025 to shareholders of record as of July 7, 2025.
We also sell our products and subscriptions to Cricut Access and Cricut Access Premium on cricut.com. 66 Table of Contents We design and develop our software and hardware products, and we work with third-party contract manufacturers to source components and finished goods and with third-party logistics companies to warehouse and distribute our products.
As of December 31, 2025, we had just over 3.09 million Paid Subscribers to Cricut Access and Cricut Access Premium. We design and develop our software and hardware products, and we work with third-party contract manufacturers to source components and finished goods and with third-party logistics companies to warehouse and distribute our products.
Products cost of revenue decreased by $66.6 million, or 17%, to $322.5 million for the year ended December 31, 2024 from $389.1 million for the year ended December 31, 2023. The decrease was primarily driven by a reduction in inventory impairment charges compared to prior year and fewer units of Accessories & Materials sold during the period.
Products cost of revenue decreased by $40.1 million, or 12%, to $282.4 million for the year ended December 31, 2025 from $322.5 million for the year ended December 31, 2024. The decrease was primarily driven by a reduction in net inventory impairment charges and lower inventory procurement costs.
For example, gross margin in the fourth quarter of 2024 was 45%, compared to gross margin of 50% for all of 2024. Additionally, sales of accessories and materials typically rise and fall with seasonal holiday crafting periods.
Our promotional discounting activity is higher in the fourth quarter as well, which negatively impacts gross margin during this period. For example, gross margin in the fourth quarter of 2025 was 47%, compared to gross margin of 55% for all of 2025. Additionally, sales of accessories and materials typically rise and fall with seasonal holiday crafting periods.
Products revenue decreased by $56.6 million, or 12%, to $399.6 million for the year ended December 31, 2024 from $456.1 million for the year ended December 31, 2023. The decrease was primarily driven by fewer units of Accessories & Materials sold and increased promotional activity during the period.
Products revenue decreased by $18.2 million, or 5%, to $381.4 million for the year ended December 31, 2025 from $399.6 million for the year ended December 31, 2024. The decrease was primarily driven by fewer units of accessories and materials sold and at a lower average selling price.
Our Business Model Our business model thrives because our products unlock creativity, which then in turn drives the engagement of our users. Our nearly 5.9 million Active Users’ journeys typically begin with the purchase of a connected machine and expand across our family of products as users harness the power of our platform.
Our nearly 5.9 million Active Users’ journeys typically begin with the purchase of a connected machine and expand across our family of products as users harness the power of our platform. Our business model is characterized by strong engagement and diversified sales across product categories. This engagement has led to rapid growth and strong profitability.
We expect our research and development expenses to increase in the near term as we refine our product roadmaps. We produced gross savings in research and development of approximately $3.2 million during 2024 as a result of the January 2024 restructuring plan.
We expect our research and development expenses to increase in the near term as we refine our product roadmaps.
The decrease was primarily due to a $4.7 million decrease in personnel-related expense.
The decrease was primarily due to a $4.7 million net reversal of bad debt.
Financing Activities The change in net cash flows from financing activities for the year ended December 31, 2024 compared to year ended December 31, 2023 was primarily due to a decrease in dividends paid in 2024 compared to 2023, partially offset by an increase in repurchases of common stock .
Financing Activities The change in net cash flows from financing activities for the year ended December 31, 2025 compared to year ended December 31, 2024 was primarily due to dividend payments of $202.1 million in 2025 compared to $110.0 million paid in 2024.
The increase was primarily driven by growth of 7% in the number of Paid Subscribers from 2.8 million as of December 31, 2023 to nearly 3.0 million as of December 31, 2024. The increase was offset partially by increased promotional activity, increased mix shift to annual subscriptions, and increased mix shift to international subscriptions.
The increase was primarily driven by growth of 4% in the number of Paid Subscribers from 3.0 million as of December 31, 2024 to just over 3.09 million as of December 31, 2025.
Our connected machines are designed for a wide range of uses and are available at a variety of price points (MSRP by machine family as of December 31, 2024): • Cricut Joy family $149.00 - $199.00 MSRP • Cricut Explore family $249.00 - $319.00 MSRP • Cricut Maker family $399.00 - $429.00 MSRP • Cricut Venture $999.00 MSRP Our platform integrates our design apps and connected machines, allowing our users to create and share seamlessly.
Our connected machines are designed in a variety of sizes for a wide range of uses and are available at a variety of price points and in a variety of bundles with accessories and materials, or with accessories and materials plus subscription. Our platform integrates our design apps and connected machines, allowing our users to create and share seamlessly.
This represents an effective tax rate of 29.3% and 32.8% for the years ended December 31, 2024 and 2023, respectively. The decrease in the tax rate is due mainly to a decrease in uncertain tax positions related to the release of reserves due to statute lapses and a decrease in return to provision adjustments.
This represents an effective tax rate of 28.9% and 29.3% for the years ended December 31, 2025 and 2024, respectively. The decrease in the tax rate is due mainly to a decrease in stock based compensation differences attributable to the decrease in stock price upon vesting versus the stock price at the grant date.
Our ability to pay cash dividends on our capital stock may also be limited by the terms of our Credit Agreement and the terms of any future debt or preferred securities or future indebtedness. 77 Table of Contents Cash Flows Year Ended December 31, 2024 2023 2022 (in thousands) Net cash flows provided by (used in) operating activities $ 264,968 $ 288,097 $ 117,683 Net cash flows used in investing activities (18,328) (48,778) (107,869) Net cash flows (used in) provided by financing activities (156,435) (322,185) (26,247) Operating Activities The change in net cash flows from operating activities for the year ended December 31, 2024 compared to year ended December 31, 2023 is primarily due to a decrease in payable balances , and a reduction in cash received from accounts receivable in 2024 compared to 2023.
Cash Flows Year Ended December 31, 2025 2024 2023 (in thousands) Net cash flows provided by (used in) operating activities $ 200,230 $ 264,968 $ 288,097 Net cash flows used in investing activities 60,657 (18,328) (48,778) Net cash flows (used in) provided by financing activities (237,445) (156,435) (322,185) Operating Activities The change in net cash flows from operating activities for the year ended December 31, 2025 compared to year ended December 31, 2024 is due to a net decrease in operating assets and liabilities of $57.3 million in 2025 compared to $130.0 million in 2024, due primarily to a reduction in inventory due to lower inventory purchases in 2025.
For the years ended December 31, 2022, 2023 and 2024, we generated: • Total revenue of $886.3 million, $765.1 million and $712.5 million, respectively, representing (32)%, (14)% and (7)% year-over-year growth, respectively • Net income of $60.7 million, $53.6 million and $62.8 million, respectively, representing (57)%, (12)% and 17% year-over-year growth, respectively On March 29, 2021, we completed an initial public offering (“IPO”), in which we sold 13,250,000 shares of Class A common stock, and the selling stockholders sold an additional 2,064,903 shares of Class A common stock at a price to the public of $20.00 per share.
In 2023, 2024 and 2025, 62%, 65%, and 69% of our revenue was generated through online channels, respectively. 66 Table of Contents For the years ended December 31, 2023, 2024 and 2025, we generated: • Total revenue of $765.1 million, $712.5 million and $708.8 million, respectively, representing (14)%, (7)% and (1)% year-over-year growth, respectively • Net income of $53.6 million, $62.8 million and $76.7 million, respectively, representing (12)%, 17% and 22% year-over-year growth, respectively Our Business Model Our business model thrives because our products unlock creativity, which then in turn drives the engagement of our users.
For example, in 2022, 2023 and 2024, our fourth quarter represented 32%, 30% and 29% of total revenue for the year, respectively. Our promotional discounting activity is higher in the fourth quarter as well, which negatively impacts gross margin during this period.
Seasonality Historically, we have experienced the highest revenue levels in the fourth quarter of the year, coinciding with the holiday shopping season in the United States. For example, in 2023, 2024 and 2025, our fourth quarter represented 30%, 29% and 29% of total revenue for the year, respectively.
Removed
As of December 31, 2024, we had nearly 3.0 million Paid Subscribers to Cricut Access and Cricut Access Premium. We sell our connected machines and accessories and materials through our brick-and-mortar and online retail partners, as well as through our website at cricut.com. Our partners include Amazon, Hobby Lobby, HSN, Michaels, Target, Walmart and many others.
Added
See the section titled “Key Business Metrics” for the definitions of Active Users and 90-Day Engaged Users and for information regarding those metrics over the last three years.
Removed
We received aggregate net proceeds of $242.7 million after deducting offering costs, underwriting discounts and commissions of $22.3 million.
Added
We aim to increase the number of our users that are Paid Subscribers over time. 67 Table of Contents We review Platform ARPU as an indicator of the monetization of our Active Users. We define Platform ARPU as Platform revenue in a 12-month period divided by Active Users.
Removed
On April 28, 2021, we sold an additional 968,815 shares of Class A common stock and the selling stockholders sold an additional 150,984 shares of Class A common stock pursuant to the partial exercise of the underwriters’ option to purchase additional shares which generated net proceeds of $18.0 million after deducting for underwriting discounts and commissions of $1.4 million.
Added
As we continue to grow internationally, we expect we may experience seasonality in additional markets, which may differ from the seasonality experienced in the United States. Business Environment Beginning in 2025, the U.S. government implemented a series of tariffs affecting a broad range of products manufactured outside the United States.
Removed
The decrease was primarily due to a $13.3 million decrease in impairment of unused equipment, software, and inventory (see Note 2) and a $1.9 million decrease in professional services expense, partially offset by increases in personnel-related expense and bad debt expense.
Added
Since that time, tariff measures have continued to evolve, including the imposition of additional tariffs, temporary pauses, modifications, and product or country-specific exclusions. The U.S. government has also indicated that it is engaged in, or may engage in, bilateral or multilateral negotiations that could result in further changes to applicable tariff rates, scope, or enforcement.
Removed
See Note 13 of the notes to our consolidated financial statements for additional information. 76 Table of Contents Stock Repurchase Program On July 19, 2022 , our Board of Directors authorized a share repurchase program to repurchase up to $50 million of its outstanding Class A common stock which was completed during the six months ended June 30, 2024.
Added
Approximately one-half of Cricut’s revenue is derived from platform, which is not subject to these tariffs. In addition, of the physical products manufactured outside the United States, approximately 20% are sold outside the United States, and therefore are 69 Table of Contents not subject to U.S. import tariffs.
Removed
These decreases were partially offset by lower in ventory purchases during 2023 due to higher beginning inventory balances combined with softening of consumer demand.
Added
Notwithstanding these mitigating factors, tariffs may continue to have a significant impact on our cost structure and results of operations due to our global manufacturing footprint across multiple Asian countries.
Added
While the majority of our manufacturing currently occurs in Malaysia, we also source products from South Korea, Thailand, China, and other Asian jurisdictions, each of which may be subject to different tariff regimes, changes in trade policy, or future restrictions.
Added
We continue to actively monitor developments in the trade, regulatory, and consumer environment and may adjust our sourcing, pricing, promotional, and operational strategies as appropriate.
Added
The combined impact of existing and potential future tariffs, shifts in sourcing strategies, pricing or promotional actions, changes in consumer demand or behavior, and other related factors could materially adversely affect our sales, margins, cash flows, and results of operations in future periods.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAs the impact of foreign currency exchange rates was not material to results of operations during 2022, 2023 and 2024, we have not entered into derivative or hedging transactions, but we may do so in the future if our exposure to foreign currency becomes more significant.
Biggest changeAs the impact of foreign currency exchange rates was not material to results of operations during 2023, 2024 and 2025, we have not entered into derivative or hedging transactions, but we may do so in the future if our exposure to foreign currency becomes more significant. 79 Table of Contents

Other CRCT 10-K year-over-year comparisons