[10-Q] Cricut, Inc. Quarterly Earnings Report
Filing Impact
Filing Sentiment
Form Type
10-Q
Cricut, Inc. reported higher profitability in Q3 2025 as gross margin and net income improved despite flat revenue. Total revenue was $170.4 million (up 2% year over year), with Platform revenue at $82.8 million (up 7%) and Products revenue at $87.7 million (down 3%).
Gross profit rose to $94.1 million from $77.4 million, driven by a sharp improvement in Products gross margin to 23% from 11%, while Platform margin remained strong at 89%. Net income increased to $20.5 million from $11.5 million, and diluted EPS was $0.10 versus $0.05. For the nine months, revenue was $505.2 million and net income was $68.9 million.
Cricut ended the quarter with cash and marketable securities of $207.1 million and no borrowings on its $300 million revolving credit facility. Deferred revenue was $51.7 million. During 2025 year‑to‑date, the company repurchased 3.5 million shares for $19.0 million and paid cash dividends, including a special dividend declared in May. On October 31, 2025, the Board approved a recurring semi‑annual dividend of $0.10 per share.
Positive
- None.
Negative
- None.
Insights
Margin gains drive earnings growth while cash returns stay high.
Cricut delivered stronger Q3 profitability: gross profit reached
Liquidity remains solid with cash and marketable securities of
The Board approved a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended September 30, 2025
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from ____ to _____
Commission File Number: 001-40257
(Exact name of Registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | |||||||
(385 ) 351-0633
(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
☐ | Large accelerated filer | ☒ | ||||||||||||
☐ | Non-accelerated filer | Smaller reporting company | ||||||||||||
| Emerging growth company | ||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of October 31, 2025, the registrant had 53,255,194 shares of Class A Common Stock, and 158,489,920 shares of Class B Common Stock, outstanding.
TABLE OF CONTENTS
| PAGE | ||||||||
NOTE REGARDING FORWARD-LOOKING STATEMENTS | 2 | |||||||
PART I. | FINANCIAL INFORMATION | 4 | ||||||
Item 1. | Financial Statements (unaudited) | 4 | ||||||
Condensed Consolidated Balance Sheets (unaudited) | 4 | |||||||
Condensed Consolidated Statements of Operations and Comprehensive Income (unaudited) | 5 | |||||||
Condensed Consolidated Statements of Changes in Stockholders’ Equity (unaudited) | 6 | |||||||
Condensed Consolidated Statements of Cash Flows (unaudited) | 8 | |||||||
Notes to Condensed Consolidated Financial Statements | 9 | |||||||
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 21 | ||||||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 31 | ||||||
Item 4. | Controls and Procedures | 31 | ||||||
PART II. | OTHER INFORMATION | 33 | ||||||
Item 1. | Legal Proceedings | 33 | ||||||
Item 1A. | Risk Factors | 33 | ||||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 33 | ||||||
Item 3. | Default Upon Senior Securities | 33 | ||||||
Item 4. | Mine Safety Disclosures | 34 | ||||||
Item 5. | Other Information | 34 | ||||||
Item 6. | Exhibits | 35 | ||||||
Signatures | 36 | |||||||
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which statements involve substantial risk and uncertainties. These forward-looking statements, which are subject to a number of risks, uncertainties and assumptions about us, generally relate to future events or our future financial or operating performance. In some cases, you can identify these statements by forward-looking words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “design,” “intend,” “expect,” “could,” “plan,” “potential,” “predict,” “seek,” “should,” “would,” “target,” “project” or “contemplate” or the negative version of these words and other comparable terminology that concern our expectations, strategy, plans, intentions or projections. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:
•our ability to attract and engage users and attract and expand our relationships with brick-and-mortar and online retail partners and distributors;
•our future results of operations, including trends in revenue, costs, operating expenses and key metrics;
•our ability to compete successfully in competitive markets;
•our expectations and management of future growth;
•our ability to manage our supply chain, manufacturing, distribution and fulfillment, including the ability to forecast demand and manage our inventory;
•our ability to enter new markets and manage our expansion efforts, including internationally;
•our ability to attract and retain management, key employees and qualified personnel;
•our ability to effectively and efficiently protect our brand;
•our ability to maintain, protect and enhance our intellectual property and not infringe upon others’ intellectual property;
•our continued use of open source software;
•our estimated Serviceable Addressable Market, or SAM, and Total Addressable Market, or TAM;
•our ability to prevent serious errors, defects or vulnerabilities in our products and software;
•the adequacy of our capital resources to fund operations and growth;
•our ability to remain in compliance with laws and regulations that currently apply or become applicable to our business both domestically and internationally;
•Petrus’ significant influence over us and our status as a “controlled company” under the rules of the Nasdaq Global Select Market, or the Exchange;
•expectations regarding the financial condition of our brick-and-mortar and online retail partners, online and e-commerce channels and users;
•risks related to general socio-economic and political conditions, consumer confidence, as well as current macro-economic factors, including post-COVID-19 factors and the impact of heightened, new, or proposed tariffs; and
•the other factors identified under, or incorporated by reference in, the section titled “Risk Factors” appearing elsewhere in this Quarterly Report on Form 10-Q.
We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q.
You should not rely upon forward-looking statements as predictions of future events. These statements are only predictions based primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations and prospects. There are important factors that could cause our actual results, events or circumstances to differ materially from the results, events or circumstances expressed or implied by the forward-looking statements, including those factors discussed, or incorporated by reference, in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. You should specifically consider the numerous risks outlined, or incorporated by reference, in the section titled “Risk
2
Factors.” Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained, or incorporated by reference, in this Quarterly Report on Form 10-Q.
Neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. Moreover, the forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any of these forward-looking statements after the date of this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.
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PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Cricut, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share)
| As of September 30, 2025 | As of December 31, 2024 | ||||||||||
| (unaudited) | |||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Marketable securities | |||||||||||
| Accounts receivable, net | |||||||||||
| Inventories | |||||||||||
| Prepaid expenses and other current assets | |||||||||||
| Total current assets | |||||||||||
| Property and equipment, net | |||||||||||
| Operating lease right-of-use asset | |||||||||||
| Deferred tax assets | |||||||||||
| Other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| Liabilities and Stockholders’ Equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | $ | |||||||||
| Accrued expenses and other current liabilities | |||||||||||
| Deferred revenue, current portion | |||||||||||
| Operating lease liabilities, current portion | |||||||||||
| Dividends payable, current portion | |||||||||||
| Total current liabilities | |||||||||||
| Operating lease liabilities, net of current portion | |||||||||||
| Deferred revenue, net of current portion | |||||||||||
| Other non-current liabilities | |||||||||||
| Total liabilities | |||||||||||
Commitments and contingencies (Note 11) | |||||||||||
| Stockholders’ equity: | |||||||||||
Preferred stock, par value $ | |||||||||||
Common stock, par value $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Retained earnings | |||||||||||
| Accumulated other comprehensive income (loss) | ( | ||||||||||
| Total stockholders’ equity | |||||||||||
| Total liabilities and stockholders’ equity | $ | $ | |||||||||
See accompanying notes to these unaudited condensed consolidated financial statements.
4
Cricut, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Income
(unaudited)
(in thousands, except share and per share amounts)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||
| Platform | $ | $ | $ | $ | |||||||||||||||||||
| Products | |||||||||||||||||||||||
| Total revenue | |||||||||||||||||||||||
| Cost of revenue: | |||||||||||||||||||||||
| Platform | |||||||||||||||||||||||
| Products | |||||||||||||||||||||||
| Total cost of revenue | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Research and development | |||||||||||||||||||||||
| Sales and marketing | |||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||
| Total operating expenses | |||||||||||||||||||||||
| Income from operations | |||||||||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||
| Interest income | |||||||||||||||||||||||
| Interest expense | ( | ( | ( | ( | |||||||||||||||||||
| Other income | |||||||||||||||||||||||
| Total other income, net | |||||||||||||||||||||||
| Income before provision for income taxes | |||||||||||||||||||||||
| Provision for income taxes | |||||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
| Other comprehensive income (loss): | |||||||||||||||||||||||
| Change in net unrealized gains (losses) on marketable securities, net of tax | $ | ( | $ | $ | ( | $ | |||||||||||||||||
| Change in foreign currency translation adjustment, net of tax | ( | ||||||||||||||||||||||
| Comprehensive income | $ | $ | $ | $ | |||||||||||||||||||
| Earnings per share, basic | $ | $ | $ | $ | |||||||||||||||||||
| Earnings per share, diluted | $ | $ | $ | $ | |||||||||||||||||||
| Weighted-average common shares outstanding, basic | |||||||||||||||||||||||
| Weighted-average common shares outstanding, diluted | |||||||||||||||||||||||
See accompanying notes to these unaudited condensed consolidated financial statements.
5
Cricut, Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(unaudited)
(in thousands, except share amounts)
| Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2024 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||
| Issuance of common stock upon vesting or exercise of stock-based awards, net of withholding tax | ( | — | — | ( | |||||||||||||||||||||||||||||||
| Repurchase of common stock | ( | ( | ( | — | — | ( | |||||||||||||||||||||||||||||
| Dividends and dividend equivalents issued | — | — | — | ||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | |||||||||||||||||||||||||||||||
| Balance as of March 31, 2025 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||
| Issuance of common stock upon vesting or exercise of stock-based awards, net of withholding tax | ( | — | — | ( | |||||||||||||||||||||||||||||||
| Repurchase of common stock | ( | ( | ( | — | — | ( | |||||||||||||||||||||||||||||
| Dividends declared | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | |||||||||||||||||||||||||||||||
| Balance as of June 30, 2025 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||
| Issuance of common stock upon vesting or exercise of stock-based awards, net of withholding tax | — | ( | — | — | ( | ||||||||||||||||||||||||||||||
| Repurchase of common stock | ( | ( | — | — | ( | ||||||||||||||||||||||||||||||
| Dividends and dividend equivalents issued | — | — | — | — | |||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
| Balance as of September 30, 2025 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
6
| Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2023 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||
| Issuance of common stock upon vesting or exercise of stock-based awards, net of withholding tax | ( | — | — | ( | |||||||||||||||||||||||||||||||
| Forfeiture of unvested common stock and dividend equivalents | ( | — | — | — | |||||||||||||||||||||||||||||||
| Repurchase of common stock | ( | ( | ( | — | — | ( | |||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
| Balance as of March 31, 2024 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||
| Issuance of common stock upon vesting or exercise of stock-based awards, net of withholding tax | ( | — | — | ( | |||||||||||||||||||||||||||||||
| Forfeiture of unvested common stock and dividend equivalents | ( | — | — | — | |||||||||||||||||||||||||||||||
| Repurchase of common stock | ( | ( | ( | — | — | ( | |||||||||||||||||||||||||||||
| Dividends declared | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | |||||||||||||||||||||||||||||||
| Balance as of June 30, 2024 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||
| Issuance of common stock upon vesting or exercise of stock-based awards, net of withholding tax | — | ( | — | — | ( | ||||||||||||||||||||||||||||||
| Forfeiture of unvested common stock and dividend equivalents | ( | — | — | — | |||||||||||||||||||||||||||||||
| Repurchase of common stock | ( | ( | ( | — | — | ( | |||||||||||||||||||||||||||||
| Dividend equivalents issued | |||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | |||||||||||||||||||||||||||||||
| Balance as of September 30, 2024 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
See accompanying notes to these unaudited condensed consolidated financial statements.
7
Cricut, Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)
(in thousands)
| Nine Months Ended September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities: | |||||||||||
Depreciation and amortization (including amortization of debt issuance costs) | |||||||||||
| Bad debt expense (benefit) | ( | ( | |||||||||
| Stock-based compensation | |||||||||||
| Deferred income tax | ( | ( | |||||||||
| Non-cash lease expense | |||||||||||
| Unrealized foreign currency (gain) loss | ( | ||||||||||
| Provision for inventory obsolescence, net | ( | ||||||||||
| Other | ( | ( | |||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable | |||||||||||
| Inventories | |||||||||||
| Prepaid expenses and other current assets | ( | ||||||||||
| Other assets | ( | ( | |||||||||
| Accounts payable | ( | ||||||||||
Accrued expenses, other current liabilities and other non-current liabilities | ( | ||||||||||
| Operating lease liabilities | ( | ( | |||||||||
| Deferred revenue | |||||||||||
Net cash and cash equivalents provided by operating activities | |||||||||||
| Cash flows from investing activities: | |||||||||||
| Purchases of marketable securities | ( | ||||||||||
| Proceeds from maturities of marketable securities | |||||||||||
Purchases of property and equipment, including capitalized software development costs | ( | ( | |||||||||
| Net cash and cash equivalents provided by (used in) investing activities | ( | ||||||||||
| Cash flows from financing activities: | |||||||||||
| Repurchases of common stock | ( | ( | |||||||||
| Employee tax withholding payments on stock-based awards | ( | ( | |||||||||
| Cash dividend | ( | ( | |||||||||
| Net cash and cash equivalents used in financing activities | ( | ( | |||||||||
| Effect of exchange rate on changes in cash and cash equivalents | |||||||||||
| Net increase in cash and cash equivalents | ( | ||||||||||
| Cash and cash equivalents at beginning of period | |||||||||||
| Cash and cash equivalents at end of period | $ | $ | |||||||||
| Supplemental disclosures of cash flow information: | |||||||||||
| Cash paid during the period for income taxes | $ | $ | |||||||||
| Supplemental disclosures of non-cash investing and financing activities: | |||||||||||
| Right-of-use assets obtained in exchange for new operating lease liabilities | $ | $ | |||||||||
Property and equipment included in accounts payable, accrued expenses and other current liabilities | $ | $ | |||||||||
| Tax withholdings on stock-based awards included in accrued expenses and other current liabilities | $ | $ | |||||||||
| Stock-based compensation capitalized for software development costs | $ | $ | |||||||||
| Dividends declared but unpaid | $ | $ | |||||||||
See accompanying notes to these unaudited condensed consolidated financial statements.
8
Cricut, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
1.Description of Business and Basis of Presentation
Nature of Business
Cricut, Inc. (“Cricut” or the “Company”) is a designer and marketer of a creativity platform that enables users to turn ideas into professional-looking handmade goods. Using the Company’s platform, versatile connected machines, and accessories and materials, users create everything from personalized birthday cards, mugs and T-shirts to large-scale interior decorations. The Company’s subscription services, connected machines and related accessories and materials are primarily marketed under the Cricut brand in the United States, as well as Europe and other countries around the world. Headquartered in South Jordan, Utah, the Company is an innovator in its industry, focused on bringing innovative technology (automation and consumerization of industrial tools) to the craft, DIY, and home décor categories. The Company’s condensed consolidated financial statements include the operations of its wholly owned subsidiaries, which are located throughout Europe and in the Asia-Pacific region.
The Company designs, markets, and distributes the Cricut family of products, including the platform, connected machines, and accessories and materials. In addition, Cricut sells a broad line of images, fonts, and projects for purchase à la carte.
The Company organizes its business into the following two reportable segments: Platform and Products. See Note 15, Segment Information, for further discussion of the Company’s segment reporting structure.
Basis of Presentation and Consolidation
The condensed consolidated financial statements include the accounts of Cricut, Inc. and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
The condensed consolidated balance sheet as of December 31, 2024 was derived from the audited consolidated financial statements as of that date but does not include all disclosures including certain notes required by GAAP on an annual reporting basis.
In the opinion of management, the accompanying interim condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, cash flows and the changes in equity for the interim periods. The results for the three and nine months ended September 30, 2025 are not necessarily indicative of the results to be expected for any subsequent quarter, the fiscal year ending December 31, 2025, or any other period.
Recently Issued Accounting Pronouncements
In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses,” which requires entities to disaggregate operating expenses into specific categories such as employee compensation, depreciation, and intangible asset amortization, by relevant expense caption on the statement of operations. The standard is effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted on either a prospective or retrospective basis. The Company is currently evaluating the impact of this standard on the consolidated financial statements and related disclosures.
9
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU establishes new income tax disclosure requirements in addition to modifying and eliminating certain existing requirements. Under the new guidance, entities must consistently categorize and provide greater disaggregation of information in the rate reconciliation. They must also further disaggregate income taxes paid. Public business entities must apply the ASU’s guidance to annual periods beginning after December 15, 2024. The Company is currently evaluating the impact of this standard on the consolidated financial statements.
2.Summary of Significant Accounting Policies
Use of Estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. For revenue recognition, examples of estimates and judgments include: determining the nature and timing of satisfaction of performance obligations, determining the standalone selling price of performance obligations, and estimating variable consideration such as customer rebates and product returns. Other estimates include the warranty reserve, allowance for credit losses, inventory reserve, intangible assets and other long-lived assets valuation, legal contingencies, stock-based compensation, income taxes, deferred tax assets valuation and developed software, among others. These estimates and assumptions are based on the Company’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including any effects of the economic environment, which management believes to be reasonable under the circumstances. Management adjusts such estimates and assumptions when facts and circumstances dictate. Actual results could differ from these estimates.
Fair Value Measurement
The Company measures at fair value certain of its financial and non-financial assets and liabilities by using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.
Earnings Per Share
Earnings per share is computed using the two-class method required for multiple classes of common stock and participating securities. The rights, including the liquidation and dividend rights and sharing of losses, of the Class A common stock and Class B common stock are identical, other than voting rights. As the liquidation and dividend rights and sharing of profits are identical, the undistributed earnings are allocated on a proportionate basis and the resulting net income per share will, therefore, be the same for both Class A and Class B common stock on an individual or combined basis.
Basic earnings per share is computed using the weighted-average number of outstanding shares of common stock during the period. Diluted earnings per share is computed using the weighted-average number of outstanding shares of common stock and, when dilutive, potential shares of common stock outstanding during the period. Stock-based awards subject to conditions other than service conditions are considered contingently issuable shares and are included in basic EPS based on the number of awards that would be issuable if the reporting date were the end of the contingency period.
Accounts Receivable
Accounts receivable are recorded at original invoice amounts less estimates for credit losses. Management determines the allowance for credit losses by specifically identifying troubled accounts and by using historical write off experience, adjusted for current market conditions and reasonable supportable forecasts of future economic conditions, applied to an aging of all other accounts receivable. Accounts receivable are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded when received.
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3.Revenue and Deferred Revenue
Deferred revenue relates to performance obligations for which payments have been received from the customer prior to revenue recognition. Deferred revenue primarily consists of deferred subscription-based services. Deferred revenue also includes amounts allocated from the sale of a connected machine to the unspecified upgrades and enhancements and the Company’s cloud-based services. Contract costs consist of amounts paid to obtain contracts with customers in connection with sales of subscriptions through third-party apps. Contract costs are amortized over the subscription term. As of September 30, 2025 and December 31, 2024 the Company had $1.3 million and $1.2 million recorded for capitalized contract costs, respectively.
The following table summarizes the changes in the deferred revenue balance for the nine months ended September 30, 2025 and 2024:
| Nine Months Ended September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in thousands) | |||||||||||
| Deferred revenue, beginning of period | $ | $ | |||||||||
Recognition of revenue included in beginning of period deferred revenue | ( | ( | |||||||||
Revenue deferred, net of revenue recognized on contracts in the respective period | |||||||||||
| Deferred revenue, end of period | $ | $ | |||||||||
As of September 30, 2025, the aggregate amount of the transaction price allocated to remaining performance obligations was equal to the deferred revenue balance.
The Company expects the following recognition of deferred revenue as of September 30, 2025:
| Year Ended December 31, | |||||||||||||||||||||||||||||
| 2025 (remainder of year) | 2026 | 2027 | 2028 | Total | |||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||||
| Revenue expected to be recognized | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
The Company’s revenue from contracts with customers disaggregated by major product lines, excluding sales-based taxes, are included in Note 15, Segment Information.
Revenue recognized during the three and nine months ended September 30, 2025 related to performance obligations satisfied or partially satisfied was $1.0 million and $7.4 million, respectively.
The following table presents the total revenue by geography based on the ship-to address for the periods indicated:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| North America* | $ | $ | $ | $ | |||||||||||||||||||
| International | |||||||||||||||||||||||
| Total revenue | $ | $ | $ | $ | |||||||||||||||||||
*North America revenue consists of revenues from the United States and Canada. | |||||||||||||||||||||||
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The following table presents the total revenue by source for the periods indicated:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
Platform | $ | $ | $ | $ | |||||||||||||||||||
Connected machines | |||||||||||||||||||||||
Accessories and materials | |||||||||||||||||||||||
| Total revenue | $ | $ | $ | $ | |||||||||||||||||||
4.Cash, Cash Equivalents, and Financial Instruments
The following table shows the Company’s cash, cash equivalents, and marketable securities by significant investment category as of September 30, 2025 and December 31, 2024:
As of September 30, 2025 | ||||||||||||||||||||||||||||||||||||||||||||
| Adjusted Cost | Total Unrealized Gains | Fair Value | Cash and Cash Equivalents | Marketable Securities | ||||||||||||||||||||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||||||||||||||||||||||
| Cash | $ | $ | — | $ | $ | $ | — | |||||||||||||||||||||||||||||||||||||
| Level 1: | ||||||||||||||||||||||||||||||||||||||||||||
| Money market funds | ||||||||||||||||||||||||||||||||||||||||||||
| Level 2: | ||||||||||||||||||||||||||||||||||||||||||||
| U.S. treasury securities | ||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| As of December 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||
| Adjusted Cost | Total Unrealized Gains | Fair Value | Cash and Cash Equivalents | Marketable Securities | ||||||||||||||||||||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||||||||||||||||||||||
| Cash | $ | $ | — | $ | $ | $ | — | |||||||||||||||||||||||||||||||||||||
| Level 1: | ||||||||||||||||||||||||||||||||||||||||||||
| Money market funds | ||||||||||||||||||||||||||||||||||||||||||||
| Level 2: | ||||||||||||||||||||||||||||||||||||||||||||
| U.S. treasury securities | ||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Marketable securities held as of September 30, 2025 generally mature over the next 24 months. As of September 30, 2025 and December 31, 2024 all securities were in an unrealized gain position. The Company determined that an allowance for credit losses was unnecessary for the periods presented.
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5.Inventories
Inventories are comprised of the following:
As of September 30, 2025 | As of December 31, 2024 | ||||||||||
| (in thousands) | |||||||||||
| Raw materials | $ | $ | |||||||||
| Finished goods | |||||||||||
| Total inventories | |||||||||||
| Less: reserves | ( | ( | |||||||||
| Total inventories, net | $ | $ | |||||||||
| Inventories current | $ | $ | |||||||||
| Inventories non-current (included in Other assets) | $ | $ | |||||||||
The Company’s recorded inventory reserves as of September 30, 2025 consisted of $2.8 million related to excess connected machines inventory, $25.1 million related to excess accessories and materials inventory, and $5.2 million related to raw materials components. Amounts charged to the reserve account are recorded primarily in cost of revenues.
6. Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consist of the following:
As of September 30, 2025 | As of December 31, 2024 | ||||||||||
| (in thousands) | |||||||||||
| Customer rebates | $ | $ | |||||||||
| Other accrued liabilities and other current liabilities | |||||||||||
| Total accrued expenses | $ | $ | |||||||||
7. Revolving Credit Facility
On August 4, 2022, the Company entered into a credit agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A, Citigroup N.A., PNC Bank, N.A., KeyBank, N.A., and other parties. The Credit Agreement provides for a five-year revolving credit facility (the “Credit Facility”) of up to $300.0 million, maturing on August 4, 2027. In addition, during the term of the Credit Agreement, the Company may increase the aggregate amount of the Credit Facility by up to an additional $150.0 million, (for maximum aggregate lender commitments of up to $450.0 million), subject to customary conditions under the Credit Agreement, including obtaining a consent from participating lenders (or another lender, if applicable) to such increase. The Credit Facility may be used to issue letters of credit and for other business purposes, including working capital needs. The current unused fee rate is 0.175 % on per annum basis.
As of September 30, 2025, and December 31, 2024 total unamortized debt issuance costs were $0.6 million and $0.8 million, respectively.
The Credit Agreement is collateralized by substantially all of the Company’s assets and contains affirmative and negative covenants, representations and warranties, events of default and other terms customary for loans of this nature. In particular, the Credit Agreement will not permit the leverage ratio to be greater than 3.0 to 1.0, measured on the last day of any fiscal quarter. In addition, the Credit Agreement will not permit the interest coverage ratio to be less than 3.0 to 1.0, for any period of four consecutive quarters, measured on the last day of any fiscal quarter. Management has determined that the Company was in compliance with all financial and non-financial debt covenants as of September 30, 2025. As of September 30, 2025 and December 31, 2024, no 300.0 million.
Generally, borrowings under the Credit Agreement bear interest at a rate based on an alternative base rate (“ABR”), plus, in each case, an applicable margin. The applicable margin will range from (a) borrowings bearing
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8.Income Taxes
The Company computes interim period income taxes by applying an estimated annual effective tax rate to our year-to-date income from operations before income taxes, except for significant unusual or infrequently occurring items. The estimated effective tax rate is adjusted each quarter.
The estimated effective tax rate was 20.0 % and 25.2 % for the three and nine months ended September 30, 2025, respectively, and 18.9 % and 29.5 % for the three and nine months ended September 30, 2024, respectively. The Company’s provision for income taxes was $5.1 million and $23.2 million for the three and nine months ended September 30, 2025, respectively, and $2.7 million and $21.3 million for the three and nine months ended September 30, 2024, respectively. The provision for income taxes varied from the tax computed at the U.S. federal statutory income tax rate for the three and nine months ended September 30, 2025, primarily due to a decrease in stock-based compensation difference attributable to the decrease in stock price upon vesting versus the stock price at the grant date.
The Company reviews its deferred tax assets for realization based upon historical taxable income, prudent and feasible tax planning strategies, the expected timing of the reversals of existing temporary differences and expected future taxable income. The Company has concluded that it is more likely than not that the net deferred tax assets will be realized. Accordingly, the Company has not recorded a valuation allowance against net deferred tax assets for any of the periods presented.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into law. Among other provisions, this act includes permanently extending and modifying certain expiring provisions of the 2017 Tax Cuts and Jobs Act and immediate expensing of domestic research and development expenses. The Company is evaluating the impacts of these provisions and does not expect OBBBA to have a material impact on our consolidated financial statements or annual effective tax rate for 2025.
9.Capital Structure
As of September 30, 2025, the Company had authorized 100,000,000 0.001 1,250,000,000 shares of common stock, par value $0.001 1,000,000,000 shares of Class A common stock and 250,000,000 shares of Class B common stock authorized and 53,704,873 158,489,920 one vote per share. Each share of Class B common stock is entitled to five votes per share and is convertible at any time into one share of Class A common stock. During the nine months ended September 30, 2025 and 2024, 2,360,303 and 5,332,089 shares of Class B common stock were converted to Class A common stock, respectively.
Stock Repurchase Program
On July 19, 2022, the Company’s Board of Directors approved a common stock repurchase program to purchase shares of its outstanding Class A common stock up to an aggregate transactional value of $50 million. On May 2, 2025 the Board approved replenishing the repurchase program up to an aggregate transactional value of $50 million to purchase shares of its outstanding Class A common stock depending on the Company’s continuing analysis of market, financial, and other factors. The common stock repurchase program may be suspended or discontinued at any time and does not have a predetermined expiration date.
During the nine months ended September 30, 2025, the Company repurchased and retired 3,485,051 shares of its Class A common stock for $19.0 million.
Dividends
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. 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
14
equivalent of $0.85 per unit in the form of additional RSUs or PRSUs subject to the same vesting conditions as the original awards. The aggregate dividend of $204.8 million was to be satisfied in cash of $180.6 million payable to holders of Class A and Class B common stock with the remaining $24.2 million satisfied on the payment date in the form of dividend equivalents to RSU or PRSU holders prior to any subsequent forfeitures.
On November 1, 2024, the Company 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. As part of the dividends, and pursuant to the underlying award agreements, holders of RSUs or PRSUs received a dividend equivalent of $0.10 per unit in the form of additional RSUs or PRSUs subject to the same vesting conditions as the original awards. The aggregate dividend of $24.2 million was to be satisfied in cash of $21.3 million payable to holders of Class A and Class B common stock with the remaining $2.9 million satisfied on the payment date in the form of dividend equivalents to RSU or PRSU holders prior to any subsequent forfeitures.
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. As part of the dividends, and pursuant to the underlying award agreements, holders of RSUs and PRSUs received a dividend equivalent of $0.50 per unit in the form of additional RSUs or PRSUs subject to the same vesting conditions as the original awards. The aggregate dividend of $121.7 million was to be satisfied in cash of $108.2 million payable to holders of Class A and Class B common stock with the remaining $13.5 million satisfied on the payment date in the form of dividend equivalents to RSU or PRSU holders prior to any subsequent forfeitures.
During the three and nine months ended September 30, 2025, an aggregate of $180.6 million and $202.1 million, respectively, was paid in cash and $23.4 million and $26.3 million, respectively was satisfied in the form of dividend equivalents to RSU or PRSU holders. During the three and nine months ended September 30, 2024, $108.2 million and $109.8 million, respectively, was paid in cash and $13.5 million and $13.5 million, respectively, was satisfied in the form of dividend equivalents to RSU or PRSU holders.
10.Stock-Based Compensation
Stock-Based Compensation Cost
The following table shows the stock-based compensation cost by award type for the periods indicated:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Equity classified awards | |||||||||||||||||||||||
| Restricted stock units | $ | $ | $ | $ | |||||||||||||||||||
| Stock options | |||||||||||||||||||||||
| Class B common stock | |||||||||||||||||||||||
| Liability-classified awards | |||||||||||||||||||||||
| Total stock-based compensation | $ | $ | $ | $ | |||||||||||||||||||
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The following table sets forth the total stock-based compensation cost included in the Company’s condensed consolidated statements of operations and comprehensive income or capitalized to assets for the periods indicated:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Cost of revenue | |||||||||||||||||||||||
| Platform | $ | $ | $ | $ | |||||||||||||||||||
| Products | |||||||||||||||||||||||
| Total cost of revenue | |||||||||||||||||||||||
| Research and development | |||||||||||||||||||||||
| Sales and marketing | |||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||
| Total stock-based compensation expense | $ | $ | $ | $ | |||||||||||||||||||
| Capitalized for software development costs | |||||||||||||||||||||||
| Capitalized to inventories | |||||||||||||||||||||||
| Total stock-based compensation | $ | $ | $ | $ | |||||||||||||||||||
As of September 30, 2025, there was $57.7 million of unrecognized stock-based compensation cost related to service-based awards, which is expected to be recognized over a weighted-average period of 2.6 years. The total unrecognized compensation expense related to unvested PRSUs that are not probable of vesting was $184.3 million as of September 30, 2025.
2021 Equity Incentive Plan
In March 2021, the Company’s 2021 Equity Incentive Plan became effective. The 2021 Equity Incentive Plan provides for the grant of incentive stock options to employees and for the grant of non-statutory stock options, restricted stock, restricted stock units, stock appreciation rights, performance units and performance shares to our employees, directors and consultants and our parent and subsidiary corporations’ employees and consultants. As of September 30, 2025, 48,150,061 shares of Class A common stock were reserved for issuance under this plan including shares reserved for previously granted awards discussed below as well as shares reserved for issuance of future awards under the plan.
A summary of the Company’s service-based RSU activity under the 2021 Equity Incentive Plan is as follows:
Number of RSUs | Weighted- Average Grant Date Fair Value (per share) | ||||||||||
| Outstanding at December 31, 2024 | $ | ||||||||||
| Granted | $ | ||||||||||
| Dividend equivalent grants | |||||||||||
| Vested | ( | $ | |||||||||
| Forfeited / cancelled | ( | $ | |||||||||
| Outstanding at September 30, 2025 | $ | ||||||||||
The Company has granted PRSUs under the 2021 Equity Incentive Plan to certain employees of the Company that represent shares potentially issuable in the future. In July 2024, the Company granted PRSUs by which the first tranche of 30 % and the second tranche of 70 % will vest upon the Company achieving certain adjusted operating income targets during any four consecutive quarters of the respective performance periods, subject to employees remaining with the Company through the vesting date. The performance periods for the first and second tranches is 4 and 5 years, respectively. Adjusted operating income means GAAP operating income adjusted to exclude stock-based compensation expense and payroll expense specifically related to these PRSU awards.
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In 2022, the Company granted PRSUs that vest in two equal tranches subject to the Company achieving certain cumulative adjusted earnings per share over eight quarters at any point during the 5-year performance period, subject to employees remaining with the Company through the vesting date. Adjusted earnings per share means GAAP net income adjusted to exclude income tax expenses, as well as stock-based compensation expense and payroll tax expense specifically related to these PRSU awards.
A summary of the Company’s PRSU activity under the 2021 Equity Incentive Plan is as follows:
Number of PRSUs (a) | Weighted- Average Grant Date Fair Value (per share) | ||||||||||
| Outstanding at December 31, 2024 | $ | ||||||||||
| Granted | $ | ||||||||||
| Dividend equivalent grants | $ | ||||||||||
| Forfeited / cancelled | ( | $ | |||||||||
| Outstanding at September 30, 2025 | $ | ||||||||||
a.Represents the maximum number of PRSUs assuming all performance targets are achieved.
The expense recognized each period for the PRSUs is primarily dependent upon the Company’s estimate of the probability of achieving the performance targets during the performance period. At September 30, 2025, the Company determined it was not probable any performance conditions would be achieved so no stock-based compensation was recorded for these PRSUs during the nine months ended September 30, 2025.
Options under the 2021 Equity Incentive Plan have a contractual term of 10 years. The exercise price of an incentive stock option and non-qualified stock option shall not be less than 100 % of the fair market value of the shares on the date of grant.
A summary of the Company’s stock option activity under the 2021 Equity Incentive Plan is as follows:
Number of Options | Weighted- Average Exercise Price | Weighted- Average Remaining Term (Years) | Aggregate Intrinsic Value | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Outstanding at December 31, 2024 | $ | $ | |||||||||||||||||||||
| Forfeited / cancelled | ( | $ | |||||||||||||||||||||
Outstanding and expected to vest at September 30, 2025 | $ | $ | |||||||||||||||||||||
| Vested and exercisable at September 30, 2025 | $ | $ | |||||||||||||||||||||
During the nine months ended September 30, 2025 and 2024, no options were granted.
Certain employees received restricted stock unit equivalents (“RSU equivalents”) which upon vesting are settled for a cash payment equal to the difference between the Company’s stock price on the vesting date less the base price specified at the time of the grant. Due to the cash settlement feature, these awards are liability classified awards and require initial and subsequent measurement at fair value. As of September 30, 2025 and December 31, 2024, the total recognized liability for the unvested awards was not material and the number of awards was not material.
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Unvested Class B Common Stock
The Company’s unvested Class B common stock resulted from the corporate reorganization in March 2021 and is not part of the 2021 Equity Incentive Plan. Dividends declared on unvested Class B common stock are subject to vesting and forfeited if the underlying stock does not vest. Activity related to Class B common stock subject to future vesting for the nine months ended September 30, 2025 is as follows:
Number of Unvested Shares | Weighted- Average Grant Date Fair Value (per share) | ||||||||||
| Outstanding at December 31, 2024 | $ | ||||||||||
| Vested | ( | $ | |||||||||
| Outstanding at September 30, 2025 | $ | ||||||||||
Options to Purchase Class B Common Stock
The Company’s options to purchase Class B common stock resulted from the corporate reorganization in March 2021 and are not part of the 2021 Equity Incentive Plan. A summary of the Company stock option activity for the options to purchase shares of Class B common stock is as follows:
Number of Options | Weighted- Average Exercise Price | Weighted- Average Remaining Term (Years) | Aggregate Intrinsic Value | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Outstanding at December 31, 2024 | $ | $ | |||||||||||||||||||||
| Forfeited / cancelled | ( | $ | |||||||||||||||||||||
| Outstanding at September 30, 2025 | $ | $ | |||||||||||||||||||||
| Vested and exercisable at September 30, 2025 | $ | $ | |||||||||||||||||||||
2021 Employee Stock Purchase Plan
In March 2021, the Company’s 2021 Employee Stock Purchase Plan (“2021 ESPP”) became effective. Subject to any limitations contained therein, the 2021 ESPP allows eligible employees to contribute, through payroll deductions, up to 15 % of their eligible compensation to purchase the Company’s Class A common stock at a discounted price per share. As of September 30, 2025, 10,602,602 shares of our Class A common stock were available for sale under the 2021 ESPP.
No offerings have been authorized to date by the administrator under the 2021 ESPP. If the administrator authorizes an offering period under the 2021 ESPP, the administrator will establish the duration of offering periods and purchase periods, including the starting and ending dates of offering periods and purchase periods, provided that no offering period may have a duration exceeding 27 months.
11.Commitments and Contingencies
Litigation
12.Leases
The Company leases office space with lease terms ranging from one to six years . These leases require monthly lease payments that may be subject to annual increases throughout the lease term. Certain of these leases also include renewal options at the election of the Company to renew or extend the lease.
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The Company has determined its leases should be classified as operating leases. Variable lease costs are comprised primarily of the Company’s proportionate share of operating expenses, property taxes, and insurance and are classified as lease cost due to the Company’s election to not separate lease and non-lease components. The Company incurred operating lease costs of $1.0 million and $3.1 million for the three and nine months ended September 30, 2025, respectively, and $1.3 million and $4.0 million for the three and nine months ended September 30, 2024, respectively. The Company also incurred variable lease costs of $0.1 million and $0.3 million for the three and nine months ended September 30, 2025, respectively, and $0.1 million and $0.3 million for the three and nine months ended September 30, 2024, respectively.
Cash paid for amounts included in the measurement of operating lease liabilities was $1.1 million and $3.5 million for the three and nine months ended September 30, 2025, respectively, and $1.5 million and $4.5 million for the three and nine months ended September 30, 2024, respectively. These amounts were included in net cash provided by operating activities in the Company’s consolidated statements of cash flows.
As of September 30, 2025, the maturities of the Company’s operating lease liabilities were as follows:
Operating Leases | |||||
| Year Ended December 31, | (in thousands) | ||||
| 2025 (remainder of the year) | $ | ||||
| 2026 | |||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| Total lease payments | $ | ||||
| Less: imputed interest | $ | ( | |||
| Present value of operating lease liabilities | $ | ||||
| Operating lease liabilities, current | $ | ||||
| Operating lease liabilities, non-current | $ | ||||
The weighted average remaining operating lease term and the weighted average discount rate used to determine the operating lease liability were as follows:
| As of September 30, 2025 | As of December 31, 2024 | ||||||||||||||||||||||
| Weighted-average remaining lease term of operating leases | |||||||||||||||||||||||
| Weighted-average discount rate of operating leases | % | % | |||||||||||||||||||||
13.Employee Benefit Plan
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14.Net Income Per Share
The computation of net income per share is as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| (in thousands, except share and per share amounts) | |||||||||||||||||||||||
| Basic earnings per share: | |||||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
| Shares used in computation: | |||||||||||||||||||||||
| Weighted-average common shares outstanding, basic | |||||||||||||||||||||||
| Earnings per share, basic | $ | $ | $ | $ | |||||||||||||||||||
| Diluted earnings per share: | |||||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
| Shares used in computation: | |||||||||||||||||||||||
| Weighted-average common shares outstanding, basic | |||||||||||||||||||||||
| Weighted-average effect of potentially dilutive securities: | |||||||||||||||||||||||
| Unvested common stock subject to forfeiture | |||||||||||||||||||||||
| Restricted stock units | |||||||||||||||||||||||
| Diluted weighted-average common shares outstanding | |||||||||||||||||||||||
| Diluted earnings per share | $ | $ | $ | $ | |||||||||||||||||||
The following potentially dilutive shares were excluded from the computation of diluted earnings per share for the periods presented because including them would have had an anti-dilutive effect:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Employee stock options | |||||||||||||||||||||||
| Restricted stock units | |||||||||||||||||||||||
| Unvested Class B common stock subject to forfeiture | |||||||||||||||||||||||
15.Segment Information
The Company organizes its business into the following two reportable segments: Platform and Products. The chief operating decision makers (“CODM”) review revenue and gross profit for each of the reportable segments. The CODM consists of the Company’s Chief Executive Officer and Chief Financial Officer. Gross profit is defined as revenue less cost of revenue incurred by the segment. The Company considered the provisions of ASC 280-10-50 as it relates to the information provided to and used by the CODM for evaluating performance and allocating resources to operating segments.
The Platform segment derives revenue primarily from monthly and annual subscription fees, purchases of digital content, and a minimal amount of the revenue allocated to unspecified future upgrades and enhancements related to the essential software and access to the Company’s cloud-based services. For the nine months ended September 30, 2025, upfront digital content revenue comprised 2 % of Platform revenue. The remaining Platform revenue consists of ratably recognized subscription revenue and revenue related to unspecified future upgrades and enhancements related to the essential software and access to the Company’s cloud-based services, which are recognized over the determined service period.
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The Products segment derives revenue primarily from the sale of its connected machine hardware, and sale of craft, DIY, home décor products and extensions. There are no internal revenue transactions between the Company’s segments.
The Company does not allocate assets at the reportable segment level as these are managed on an entity wide group basis. As of September 30, 2025, long-lived assets located outside the United States, primarily located in Malaysia and China, were $5.1 million.
Key financial performance measures of the segments including revenue, cost of revenue and gross profit are as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Platform: | |||||||||||||||||||||||
| Revenue | $ | $ | $ | $ | |||||||||||||||||||
| Cost of revenue | |||||||||||||||||||||||
| Gross profit | $ | $ | $ | $ | |||||||||||||||||||
| Products: | |||||||||||||||||||||||
| Revenue | $ | $ | $ | $ | |||||||||||||||||||
| Cost of revenue | |||||||||||||||||||||||
| Gross profit | $ | $ | $ | $ | |||||||||||||||||||
| Consolidated: | |||||||||||||||||||||||
| Revenue | $ | $ | $ | $ | |||||||||||||||||||
| Cost of revenue | |||||||||||||||||||||||
| Gross profit | $ | $ | $ | $ | |||||||||||||||||||
16.Subsequent Events
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.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read together with our interim condensed consolidated financial statements and related notes and other financial information appearing elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements included in our Annual Report. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results could differ materially from these forward-looking statements as a result of many factors, including those discussed, or incorporated by reference, in the sections titled “Risk Factors” and “Note Regarding Forward-Looking Statements.”
Overview of Our Business and History
At Cricut, our mission is to help people lead creative lives. We have designed and built a creativity platform that enables our engaged and loyal community of 5.9 million Active Users to turn ideas into professional-looking handmade goods. We define “Active User” as a registered user of at least one registered connected machine who has utilized their connected machine to create a project in the last 365 days. With our highly versatile Design Space Platform and our products, including our connected machines and accessories and materials, our users create
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everything from personalized birthday cards, mugs and T-shirts, to large-scale interior decorations. Our users’ journeys typically begin with the purchase of a connected machine. 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. 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 September 30, 2025):
•Cricut Joy family $179.00 - $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 software is cloud-based, meaning that users can access and work on their projects anywhere, at any time, across desktops or mobile devices. We enable our users to be inspired, to create and share projects with the Cricut community and to follow others doing the same. On our platform, users can find inspiration, purchase or upload content like fonts and images, design a project from scratch or find a vast array of ready-to-make projects. Users can leverage the full power of our platform by using our connected machines together with our free design apps, in-app purchases and subscription offerings to design and complete projects. All users can access a select number of free images, fonts and projects from our design apps or upload their own. In addition, we offer a wider selection of images, fonts and projects for purchase à la carte, including licensed content from partners with well-known brands and characters, like major motion picture studios. We also have two subscription offerings:
•Cricut Access: Provides a subscription to images, fonts and projects as well as other member benefits, including exclusive software features and functionality, discounts, and priority Cricut Member Care. Cricut Access is billed monthly for $9.99 per month or annually for $95.88 per year.
•Cricut Access Premium: Includes all of the benefits of Cricut Access as well as additional discounts and preferred shipping and is billed annually for $119.88 per year.
As of September 30, 2025, we had over 3.0 million Paid Subscribers to Cricut Access and Cricut Access Premium.
We sell a broad range of accessories and materials that bring our users’ designs to life, from advanced tools like heat presses to Cricut-branded rulers, scoring tools, pens, paper and iron-on vinyl, all designed to work seamlessly with our connected machines. Designing and completing projects drives repeat purchases of Cricut-branded accessories and materials.
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.
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. We also sell our products and subscriptions to Cricut Access and Cricut Access Premium on cricut.com.
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 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. 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. 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. The current global macroeconomic environment, including regulatory and economic uncertainty, adverse impacts from factors such as trade wars, heightened, scheduled or threatened tariffs, or by retaliatory trade measures taken by China or other countries, may impact our business and international expansion.
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For more information regarding our business model, factors affecting our performance, and seasonality, please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report, which is incorporated herein by reference.
Key Business Metrics
In addition to the measures presented in our interim condensed consolidated financial statements, we use the following key metrics to evaluate our business, measure our performance, identify trends and make strategic decisions.
| As of September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Active Users (in thousands) | 5,874 | 5,894 | |||||||||
| 90-Day Engaged Users (in thousands) | 3,419 | 3,532 | |||||||||
| Paid Subscribers (in thousands) | 3,004 | 2,838 | |||||||||
| As of September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Platform ARPU | $ | 54.96 | $ | 52.86 | |||||||
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. 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. If possession of a connected machine is transferred to a new owner and registered by that new owner, the new owner is added to the total Active Users and the prior owner is removed from the total Active Users if the prior owner does not own any other registered connected machines. Active Users is a key indicator of the health of our business, because changes in the number of Active Users excludes non-users to better represent opportunities for us to drive additional platform and accessories and materials revenue.
90-Day Engaged Users
We define 90-Day Engaged Users as registered users of at least one registered connected machine who have utilized their connected machine to create a project in the last 90 days. 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. If possession of a connected machine is transferred to a new owner and registered by that new owner, the new owner is added to the total 90-Day Engaged Users and the prior owner is removed from the total 90-Day Engaged Users if the prior owner does not own any other registered connected machines. 90-Day Engaged Users excludes non-users to better represent opportunities for us to drive additional platform and accessories and materials revenue.
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 is a key metric to track growth in our Platform revenue and potential leverage in our gross margin.
Platform ARPU
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.
Components of our Results of Operations
We operate and manage our business in two reportable segments: Platform and Products. We identify our reportable segments based on the information used by management to monitor performance and make operating
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decisions. See Note 15 to our unaudited consolidated financial statements included elsewhere in this filing for additional information regarding our reportable segments.
Revenue
Platform
We generate Platform revenue primarily from sales of subscriptions to Cricut Access and Cricut Access Premium, digital content, and a minimal amount of revenue allocated to the unspecified future upgrades and enhancements related to the essential software and access to our cloud-based services. For a monthly or annual subscription fee, Cricut Access includes a subscription to images, fonts and projects as well as other member benefits, including exclusive software features and functionality, discounts, and priority Cricut Member Care. For our annual subscription fee, Cricut Access Premium includes all the benefits of Cricut Access as well as additional discounts and preferred shipping. 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.
Products
We generate Products revenue from sales of connected machines and ancillary products, net of sales discounts, rebates and returns, and includes amounts allocated to the material right for discounts on materials and accessories available only to Paid Subscribers. 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. 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.
Cost of Revenue
Platform
Cost of revenue related to Platform consists primarily of hosting fees, digital content costs, amortization of capitalized software development costs, software maintenance costs, and royalties. We expect our cost of revenue related to Platform as a percentage of revenue to fluctuate in the near term as we expand our content offerings, including localized content for international target markets, and decrease over time as we drive greater scale and efficiency in our business.
Products
Cost of revenue related to Products consists of product costs, including costs of components, cost of contract manufacturers for production, inspecting and packaging, shipping, receiving, handling, warehousing and fulfillment, duties and other applicable importing costs, warranty replacement, excess and obsolete inventory write-downs, tooling and equipment depreciation and royalties. We expect our cost of revenue related to Products as a percentage of revenue to fluctuate in the near term as we continue selling through end of life machines, address global supply chain challenges and continue to invest in the growth of our business and to decrease over the long term as we drive greater scale and efficiency in our business.
Operating Expenses
Research and Development
Research and development expenses consist primarily of costs associated with the development of our connected machines, software and accessories and materials, including personnel-related expenses for engineering, product development and quality assurance, as well as prototype costs, service fees incurred by contracting with vendors and allocated overhead. We expect our research and development expenses to increase in the near term as we refine our product roadmaps.
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Sales and Marketing
Sales and marketing expenses consist primarily of the advertising and marketing of our products, third-party payment processing fees, personnel-related expenses, including salaries and bonuses, benefits and stock-based compensation expense, as well as customer rebates, professional services, promotional items, and allocated overhead costs. We expect our sales and marketing expenses as a percentage of revenue to fluctuate in the near term.
General and Administrative
General and administrative expenses consist of personnel-related expenses for our finance, legal, human resources and administrative personnel, including salaries and bonuses, benefits and stock-based compensation expense, as well as the costs of professional services, any allocated overhead, information technology, impairment charges of unused equipment, and other administrative expenses. 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.
Other Income, Net
Other income, net consists primarily of interest income from our investments in marketable securities and cash and cash equivalents, offset by interest expense associated with our debt financing arrangements and amortization of debt issuance costs.
Provision for Income Taxes
Provision for income taxes consists of income taxes in the United States and certain state and foreign jurisdictions in which we conduct business. We have not recorded a valuation allowance against our deferred tax assets as we have concluded that it is more likely than not that the deferred tax assets will be realized.
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Results of Operations
The following tables set forth the components of our interim condensed consolidated statements of operations for each of the periods presented and as a percentage of our revenue for those periods. The period-to-period comparison of results of operations is not necessarily indicative of results of future periods.
The following table is presented in thousands:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||
| Platform | $ | 82,783 | $ | 77,674 | $ | 243,466 | $ | 233,609 | |||||||||||||||
| Products | 87,654 | 90,216 | 261,717 | 269,620 | |||||||||||||||||||
| Total revenue | 170,437 | 167,890 | 505,183 | 503,229 | |||||||||||||||||||
| Cost of revenue: | |||||||||||||||||||||||
Platform(1) | 8,957 | 10,000 | 26,441 | 27,647 | |||||||||||||||||||
Products(1) | 67,384 | 80,527 | 184,759 | 216,785 | |||||||||||||||||||
| Total cost of revenue | 76,341 | 90,527 | 211,200 | 244,432 | |||||||||||||||||||
| Gross profit | 94,096 | 77,363 | 293,983 | 258,797 | |||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
Research and development(1) | 16,865 | 15,240 | 49,284 | 44,408 | |||||||||||||||||||
Sales and marketing(1) | 37,467 | 35,278 | 110,029 | 101,662 | |||||||||||||||||||
General and administrative(1) | 17,113 | 16,249 | 52,573 | 50,494 | |||||||||||||||||||
| Total operating expenses | 71,445 | 66,767 | 211,886 | 196,564 | |||||||||||||||||||
| Income from operations | 22,651 | 10,596 | 82,097 | 62,233 | |||||||||||||||||||
| Other income, net | 2,980 | 3,566 | 9,998 | 10,011 | |||||||||||||||||||
| Income before provision for income taxes | 25,631 | 14,162 | 92,095 | 72,244 | |||||||||||||||||||
| Provision for income taxes | 5,119 | 2,674 | 23,181 | 21,340 | |||||||||||||||||||
| Net income | $ | 20,512 | $ | 11,488 | $ | 68,914 | $ | 50,904 | |||||||||||||||
(1) Includes stock-based compensation expense as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Cost of revenue | |||||||||||||||||||||||
| Platform | $ | 246 | $ | 341 | $ | 786 | $ | 833 | |||||||||||||||
| Products | 11 | 170 | 26 | 566 | |||||||||||||||||||
| Total cost of revenue | 257 | 511 | 812 | 1,399 | |||||||||||||||||||
| Research and development | 2,636 | 4,266 | 9,432 | 11,519 | |||||||||||||||||||
| Sales and marketing | 2,149 | 3,474 | 8,000 | 9,398 | |||||||||||||||||||
| General and administrative | 2,342 | 3,628 | 9,278 | 10,939 | |||||||||||||||||||
| Total stock-based compensation expense | $ | 7,384 | $ | 11,879 | $ | 27,522 | $ | 33,255 | |||||||||||||||
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Comparison of the Three and Nine Months Ended September 30, 2025 and 2024
Revenue
| Three Months Ended September 30, | Change | Nine Months Ended September 30, | Change | ||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | $ | % | 2025 | 2024 | $ | % | ||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||||||||||||||||||||||||||
| Platform | $ | 82,783 | $ | 77,674 | $ | 5,109 | 7 | % | $ | 243,466 | $ | 233,609 | $ | 9,857 | 4 | % | |||||||||||||||||||||||||||||||
| Products | 87,654 | 90,216 | (2,562) | (3) | % | 261,717 | 269,620 | (7,903) | (3) | % | |||||||||||||||||||||||||||||||||||||
| Total revenue | $ | 170,437 | $ | 167,890 | $ | 2,547 | 2 | % | $ | 505,183 | $ | 503,229 | $ | 1,954 | — | % | |||||||||||||||||||||||||||||||
Three Months Ended September 30, 2025 and 2024
Platform revenue increased by $5.1 million, or 7%, to $82.8 million for the three months ended September 30, 2025, from $77.7 million for the three months ended September 30, 2024. The increase was driven by an increase in paid subscribers from 2.8 million as of September 30, 2024 to 3.0 million as of September 30, 2025.
Products revenue decreased by $2.6 million, or 3%, to $87.7 million for the three months ended September 30, 2025 from $90.2 million for the three months ended September 30, 2024. The decrease was primarily driven by fewer units of accessories and materials sold and at a lower average selling price, partially offset by more units of connected machines sold and at a higher average selling price.
Nine Months Ended September 30, 2025 and 2024
Platform revenue increased by $9.9 million, or 4%, to $243.5 million for the nine months ended September 30, 2025, from $233.6 million for the nine months ended September 30, 2024. The increase was driven by an increase in paid subscribers from 2.8 million as of September 30, 2024 to 3.0 million as of September 30, 2025.
Products revenue decreased by $7.9 million, or 3%, to $261.7 million for the nine months ended September 30, 2025 from $269.6 million for the nine months ended September 30, 2024. The decrease was primarily driven by fewer units of accessories and materials sold and at a lower average selling price, partially offset by more units of connected machines sold and at a higher average selling price.
Cost of Revenue, Gross Profit and Gross Margin
| Three Months Ended September 30, | Change | Nine Months Ended September 30, | Change | ||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | $ | % | 2025 | 2024 | $ | % | ||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
| Cost of Revenue: | |||||||||||||||||||||||||||||||||||||||||||||||
| Platform | $ | 8,957 | $ | 10,000 | $ | (1,043) | (10) | % | $ | 26,441 | $ | 27,647 | $ | (1,206) | (4) | % | |||||||||||||||||||||||||||||||
| Products | 67,384 | 80,527 | (13,143) | (16) | % | 184,759 | 216,785 | (32,026) | (15) | % | |||||||||||||||||||||||||||||||||||||
| Total cost revenue | $ | 76,341 | $ | 90,527 | $ | (14,186) | (16) | % | $ | 211,200 | $ | 244,432 | $ | (33,232) | (14) | % | |||||||||||||||||||||||||||||||
| Gross Profit: | |||||||||||||||||||||||||||||||||||||||||||||||
| Platform | 73,826 | 67,674 | 6,152 | 9 | % | 217,025 | 205,962 | 11,063 | 5 | % | |||||||||||||||||||||||||||||||||||||
| Products | 20,270 | 9,689 | 10,581 | 109 | % | 76,958 | 52,835 | 24,123 | 46 | % | |||||||||||||||||||||||||||||||||||||
| Total gross profit | $ | 94,096 | $ | 77,363 | $ | 16,733 | 22 | % | $ | 293,983 | $ | 258,797 | $ | 35,186 | 14 | % | |||||||||||||||||||||||||||||||
| Gross Margin | |||||||||||||||||||||||||||||||||||||||||||||||
| Platform | 89 | % | 87 | % | 89 | % | 88 | % | |||||||||||||||||||||||||||||||||||||||
| Products | 23 | % | 11 | % | 29 | % | 20 | % | |||||||||||||||||||||||||||||||||||||||
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Three Months Ended September 30, 2025 and 2024
Platform cost of revenue decreased by $1.0 million, or 10%, to $9.0 million for the three months ended September 30, 2025, from $10.0 million for the three months ended September 30, 2024. The decrease was primarily driven by decreases in external digital content costs and amortization of capitalized software development costs.
Gross margin for Platform was 89% for the three months ended September 30, 2025, and 87% for the three months ended September 30, 2024. The increase was primarily driven by decreases in external digital content costs and amortization of capitalized software development costs.
Products cost of revenue decreased by $13.1 million, or 16%, to $67.4 million for the three months ended September 30, 2025, from $80.5 million for the three months ended September 30, 2024. The decrease was primarily driven by a reduction in net inventory impairment charges and lower inventory procurement costs.
Gross margin for Products was 23% for the three months ended September 30, 2025 and 11% for the three months ended September 30, 2024. The increase was primarily driven by a reduction in net inventory impairment charges and lower inventory procurement costs.
Nine Months Ended September 30, 2025 and 2024
Platform cost of revenue decreased by $1.2 million, or 4%, to $26.4 million for the nine months ended September 30, 2025, from $27.6 million for the nine months ended September 30, 2024. The decrease was primarily driven by lower amortization of capitalized software development costs.
Gross margin for Platform was 89% for the nine months ended September 30, 2025, and 88% for the nine months ended September 30, 2024. The increase was primarily driven by decreases in amortization of capitalized software development costs.
Products cost of revenue decreased by $32.0 million, or 15%, to $184.8 million for the nine months ended September 30, 2025, from $216.8 million for the nine months ended September 30, 2024. The decrease was primarily driven by a reduction in net inventory impairment charges and lower inventory procurement costs.
Gross margin for Products was 29% for the nine months ended September 30, 2025 and 20% for the nine months ended September 30, 2024. The increase was primarily driven by a reduction in net inventory impairment charges and lower inventory procurement costs.
Operating Expenses
Research and Development
| Three Months Ended September 30, | Change | Nine Months Ended September 30, | Change | ||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | $ | % | 2025 | 2024 | $ | % | ||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
| Research and development | $ | 16,865 | $ | 15,240 | $ | 1,625 | 11 | % | $ | 49,284 | $ | 44,408 | $ | 4,876 | 11 | % | |||||||||||||||||||||||||||||||
| As a percentage of total revenue | 10 | % | 9 | % | 10 | % | 9 | % | |||||||||||||||||||||||||||||||||||||||
Research and development expenses increased by $1.6 million, or 11%, to $16.9 million for the three months ended September 30, 2025 from $15.2 million for the three months ended September 30, 2024. The increase was primarily due to a $1.3 million increase in product development expense and a $0.2 million increase in personnel-related expense.
Research and development expenses increased by $4.9 million, or 11%, to $49.3 million for the nine months ended September 30, 2025 from $44.4 million for the nine months ended September 30, 2024. The increase was primarily due to a $3.2 million increase in product development expense and a $1.5 million increase in professional services expense.
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Sales and Marketing
| Three Months Ended September 30, | Change | Nine Months Ended September 30, | Change | ||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | $ | % | 2025 | 2024 | $ | % | ||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
| Sales and marketing | $ | 37,467 | $ | 35,278 | $ | 2,189 | 6 | % | $ | 110,029 | $ | 101,662 | $ | 8,367 | 8 | % | |||||||||||||||||||||||||||||||
| As a percentage of total revenue | 22 | % | 21 | % | 22 | % | 20 | % | |||||||||||||||||||||||||||||||||||||||
Sales and marketing expenses increased by $2.2 million, or 6%, to $37.5 million for the three months ended September 30, 2025 from $35.3 million for the three months ended September 30, 2024. The increase was primarily driven by a $1.1 million increase in advertising and other marketing costs, a $0.7 million increase in software subscriptions, and a $0.4 million increase in payment processing fees.
Sales and marketing expenses increased by $8.4 million, or 8%, to $110.0 million for the nine months ended September 30, 2025 from $101.7 million for the nine months ended September 30, 2024. The increase was primarily driven by a $7.8 million increase in advertising and other marketing costs and a $1.1 million increase in payment processing fees, offset by a $0.8 million decrease in personnel-related expense.
General and Administrative
| Three Months Ended September 30, | Change | Nine Months Ended September 30, | Change | ||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | $ | % | 2025 | 2024 | $ | % | ||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
| General and administrative | $ | 17,113 | $ | 16,249 | $ | 864 | 5 | % | $ | 52,573 | $ | 50,494 | $ | 2,079 | 4 | % | |||||||||||||||||||||||||||||||
| As a percentage of total revenue | 10 | % | 10 | % | 10 | % | 10 | % | |||||||||||||||||||||||||||||||||||||||
General and administrative expenses increased by $0.9 million, or 5%, to $17.1 million for the three months ended September 30, 2025 from $16.2 million for the three months ended September 30, 2024. The increase was primarily driven by a $0.6 million increase in professional services expense and a $0.5 million increase in foreign currency transaction losses.
General and administrative expenses increased by $2.1 million, or 4%, to $52.6 million for the nine months ended September 30, 2025 from $50.5 million for the nine months ended September 30, 2024. The increase was primarily driven by a $3.8 million increase in professional services expense, partially offset by a $1.3 million net reversal of bad debt.
Other Income, Net
| Three Months Ended September 30, | Change | Nine Months Ended September 30, | Change | ||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | $ | % | 2025 | 2024 | $ | % | ||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
| Other income, net | $ | 2,980 | $ | 3,566 | $ | (586) | (16) | % | $ | 9,998 | $ | 10,011 | $ | (13) | 0 | % | |||||||||||||||||||||||||||||||
Other income, net decreased by $0.6 million or 16% to $3.0 million for the three months ended September 30, 2025 from $3.6 million for the three months ended September 30, 2024. The decrease was primarily driven by a decrease in interest income.
Other income, net decreased slightly for the nine months ended September 30, 2025.
29
Provision for Income Taxes
| Three Months Ended September 30, | Change | Nine Months Ended September 30, | Change | ||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | $ | % | 2025 | 2024 | $ | % | ||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
| Provision for income taxes | $ | 5,119 | $ | 2,674 | $ | 2,445 | 91 | % | $ | 23,181 | $ | 21,340 | $ | 1,841 | 9 | % | |||||||||||||||||||||||||||||||
Provision for income taxes increased by $2.4 million, or 91%, to $5.1 million for the three months ended September 30, 2025 from $2.7 million for the three months ended September 30, 2024. The increase was primarily due to an increase to pre-tax book income of $11.5 million.
Provision for income taxes increased by $1.8 million, or 9%, to $23.2 million for the nine months ended September 30, 2025 from $21.3 million for the nine months ended September 30, 2024. The increase was primarily due 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 offset by an increase to pre-tax book income of $19.9 million.
Liquidity and Capital Resources
Our operations during the periods presented have been financed primarily through cash flow from operating activities. We believe our balances of cash and cash equivalents and marketable securities, which totaled $187.9 million and $19.2 million, respectively, as of September 30, 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 7) will be sufficient to satisfy our cash requirements over the next 12 months and beyond. Except for the recently announced semi-annual dividend and our continuing share repurchase program, our cash requirements have not changed materially since our Annual Report.
During the nine months ended September 30, 2025, we paid dividends of $202.1 million to holders of Class A and Class B common stock.
Our future capital requirements may vary materially from those currently planned and will depend on many factors, including our rate of revenue growth, the timing and extent of spending on research and development efforts and other growth initiatives, the expansion of sales and marketing activities, the timing of new product introductions, market acceptance of our products and overall economic conditions, including the impact of regulatory and economic uncertainty, as well as heightened, new, or proposed tariffs. To the extent that current and anticipated future sources of liquidity are insufficient to fund our future business activities and requirements, we may be required to seek additional equity or debt financing. The sale of additional equity would result in additional dilution to our stockholders. The incurrence of debt financing would result in debt service obligations, and the instruments governing such debt could provide for operating and financing covenants that would restrict our operations. There can be no assurances that we will be able to raise additional capital. The inability to raise capital would adversely affect our ability to achieve our business objectives.
Cash Flows
| Nine Months Ended September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in thousands) | |||||||||||
Net cash flows provided by operating activities | $ | 117,798 | $ | 161,885 | |||||||
| Net cash flows provided by (used in) investing activities | 67,891 | (14,436) | |||||||||
Net cash flows used in financing activities | (230,483) | (147,402) | |||||||||
Operating Activities
The change in net cash flows from operating activities for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 is due to a net decrease in operating assets and liabilities of $34.2 million in 2025 compared to $65.5 million in 2024, in addition to a reduction in non-cash adjustments of $14.7 million in 2025 compared to $45.5 million in 2024 due primarily to a reduction of the provision for inventory
30
obsolescence, a decrease in stock-based compensation and a decrease in depreciation and amortization. These were partially offset by an increase in net income.
Investing Activities
The change in net cash flows from investing activities for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 was due primarily to proceeds from maturities of marketable securities in 2025 not used to purchase new securities.
Financing Activities
The change in net cash flows from financing activities for the nine months ended September 30, 2025 compared to nine months ended September 30, 2024 was primarily due to dividend payments of $202.1 million in 2025 compared to $109.8 million in 2024.
Critical Accounting Estimates
Our management’s discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with United States generally accepted accounting principles (“GAAP”). The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenues and expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. The critical accounting policies that reflect our more significant judgments and estimates used in the preparation of our condensed consolidated financial statements include those described in Note 2 of the notes to our condensed consolidated financial statements in the section titled “Summary of Significant Accounting Policies” in Part I, Item 1 of this Quarterly Report on Form 10-Q and in our Annual Report.
ITEM 3. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK
For a discussion of the Company’s market risk, please refer to Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report. There have been no material changes to the Company’s market risk during the three and nine months ended September 30, 2025.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
As required by Rule 13a-15(b) under the Exchange Act, our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this Quarterly Report on Form 10-Q, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and to provide reasonable assurance that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on Effectiveness of Controls
Our management, including our Chief Executive Officer and Chief Financial Officer, do not expect that our disclosure controls or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are
31
resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been or would be detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are not presently a party to any material pending legal proceedings. We are, from time to time, subject to legal proceedings and claims, as well as regulatory disputes, audits, government inquiries and other proceedings arising from the normal course of business activities, and an unfavorable resolution of any of these matters could materially affect our business, results of operations, financial condition or cash flows.
Litigation may be necessary, among other things, to defend ourselves or our users by determining the scope, enforceability and validity of third-party proprietary rights, to establish our proprietary rights, or to address royalty payments we make. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.
ITEM 1A. RISK FACTORS
In addition to the other information set forth in this report, you should carefully consider the risk factors discussed in “Part I. Item 1A — Risk Factors” in our Annual Report on Form 10-K for the period ended December 31, 2024, filed on March 5, 2025, and in “Part II. Item 1A — Risk Factors” in our Quarterly Report on Form 10-Q for the period ended March 31, 2025, filed on May 7, 2025, both of which are hereby incorporated by reference. The risks and uncertainties described in such risk factors and elsewhere in this report have the potential to materially affect our business, financial condition, results of operations, cash flows, projected results and future prospects. We do not believe that there have been any material changes to the risk factors previously disclosed in our recent SEC filings, including our previously filed Form 10-K and 10-Q, as referenced above.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Sales of Unregistered Securities
None.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
The following table provides information regarding common stock repurchases made by Cricut during the three months ended September 30, 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) | ||||||||||||||||||||||||||
| July 1, 2025 through July 31, 2025 | 422,386 | $5.30 | 422,386 | $47,032 | ||||||||||||||||||||||
| August 1 through August 31, 2025 | — | $— | — | $47,032 | ||||||||||||||||||||||
| September 1, 2025 through September 30, 2025 | 18,859 | $5.70 | 18,859 | $46,925 | ||||||||||||||||||||||
| Total | 441,245 | $5.32 | 441,245 | $46,925 | ||||||||||||||||||||||
(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 common stock repurchase program may be suspended or discontinued at any time and does not have a predetermined expiration date.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
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ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
Securities Trading Plans of Directors and Executive Officers
During our last fiscal quarter, the following director and officer, as defined in Rule 16a-1(f), adopted a “Rule 10b5-1 trading arrangement,” as defined in Regulation S-K Item 408, as follows:
On August 20, 2025 , Ashish Arora , our Chief Executive Officer and a member of our Board of Directors , adopted a Rule 10b5-1 trading arrangement providing for the sale from time to time of an aggregate of up to 2,797,223 shares of our Class A common stock, which will be reduced by approximately 448,000 shares of Class A common stock to be withheld to satisfy tax obligations upon the vesting of certain outstanding equity awards. Accordingly, up to an aggregate of 2,349,223 shares of Class A common stock may be sold from time to time pursuant to the trading arrangement. The trading arrangement is intended to satisfy the affirmative defense in Rule 10b5-1(c). The duration of the trading arrangement is until October 23, 2026 , or earlier if all transactions under the trading arrangement are completed.
No other officers or directors, as defined in Rule 16a-1(f), adopted and/or terminated
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ITEM 6. EXHIBITS
The documents listed below are incorporated by reference or are filed with this Quarterly Report on Form 10-Q, in each case as indicated therein (numbered in accordance with Item 601 of Regulation S-K).
EXHIBIT INDEX
Exhibit Number | Description | |||||||
| 10.1*+ | Amended and Restated Outside Director Compensation Policy. | |||||||
| 31.1* | Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||
| 31.2* | Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||
32.1*† | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002. | |||||||
32.2*† | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002. | |||||||
| 101.INS | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document. | |||||||
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |||||||
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |||||||
| 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document. | |||||||
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |||||||
| 104* | Cover Page Interactive Data File - the cover page interactive data is embedded within the Inline XBRL document or included within the Exhibit 101 attachments | |||||||
* Filed herewith
+ Indicates management contract or compensatory plan.
† The certifications furnished in Exhibits 32.1 and 32.2 hereto are deemed to accompany this Quarterly Report on Form 10-Q and will not be deemed "filed" for purposes of Section 18 or the Securities Exchange Act of 1934, as amended, except to the extent that the registrant specifically incorporates it by reference.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Date: | November 4, 2025 | By: | /s/ Ashish Arora | |||||||||||
| Name: | Ashish Arora | |||||||||||||
| Title: | Chief Executive Officer | |||||||||||||
(Principal Executive Officer) | ||||||||||||||
| Date: | November 4, 2025 | By: | /s/ Kimball Shill | |||||||||||
| Name: | Kimball Shill | |||||||||||||
| Title: | Chief Financial Officer | |||||||||||||
(Principal Financial Officer) | ||||||||||||||
| Date: | November 4, 2025 | By: | /s/ Ryan Harmer | |||||||||||
| Name: | Ryan Harmer | |||||||||||||
| Title: | SVP of Accounting, Corporate Controller | |||||||||||||
| (Principal Accounting Officer) | ||||||||||||||
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FAQ
How did Cricut (CRCT) perform in Q3 2025?
Revenue was $170.4 million (up 2% year over year). Net income was $20.5 million, and diluted EPS was $0.10.
What drove Cricut’s margin improvement in Q3 2025?
Products gross margin improved to 23% from 11%, and Platform margin was 89%, lifting gross profit to $94.1 million.
How did Cricut’s segments perform in Q3 2025?
Platform revenue was $82.8 million (up 7%). Products revenue was $87.7 million (down 3%).
What is Cricut’s liquidity position?
Cash and marketable securities totaled $207.1 million, with $300 million available under an undrawn revolving credit facility.
What were Cricut’s cash returns to shareholders in 2025 year‑to‑date?
Repurchased 3.5 million shares for $19.0 million and paid cash dividends, including a special dividend declared in May.
Did Cricut declare any dividends after quarter‑end?
Yes. On October 31, 2025, the Board approved a recurring semi‑annual dividend of $0.10 per share.
What is Cricut’s deferred revenue balance?
Deferred revenue was $51.7 million as of September 30, 2025.
Cricut, Inc.
NASDAQ:CRCT
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CRCT Stock Data
1.14B
207.08M
9.25%
43.23%
2.58%
Computer Hardware
Special Industry Machinery, Nec
United States
SOUTH JORDAN