Cricut, Inc.

Previous wording

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 nearly 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 everything from personalized birthday cards, mugs and T-shirts, to large-scale interior decorations.

Current wording

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 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 March 31, 2025):

Previous wording

•Cricut Joy family for personalization, organization, and customization, $149.00 - $199.00 MSRP

Current wording

•Cricut Joy family $149.00 - $199.00 MSRP

Previous wording

•Cricut Explore family for cutting, writing and scoring, $249.00 - $319.00 MSRP

Current wording

•Cricut Explore family $249.00 - $319.00 MSRP

Previous wording

•Cricut Maker family for cutting, writing, scoring and adding decorative effects to a wider range of materials, $399.00 - $429.00 MSRP

Current wording

•Cricut Maker family $399.00 - $429.00 MSRP

Previous wording

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.

Current wording

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:

Previous wording

As of September 30, 2024, we had over 2.8 million Paid Subscribers to Cricut Access and Cricut Access Premium.

Current wording

As of March 31, 2025, we had nearly 3.0 million Paid Subscribers to Cricut Access and Cricut Access Premium.

Previous wording

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, Jo-Ann, Michaels, Target, Walmart and many others. We also sell our products and subscriptions to Cricut Access and Cricut Access Premium on cricut.com.

Current wording

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.

Previous wording

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 2021, 2022 and 2023, our fourth quarter represented 30%, 32% and 30% 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 2023 was 42%, compared to gross margin of 45% for all of 2023. Additionally, sales of accessories and materials typically rise and fall with seasonal holiday crafting periods. The yearly seasonality patterns experienced in 2021, 2022, and 2023 are not representative of our typical historical patterns due to the unique aspects of the pandemic and condition of the global economy. For example, we experienced unusually high demand in the first and second quarters of 2021, which is inconsistent with normal seasonality patterns. In 2022, we experienced a deceleration of sales post-Q1 due to the global economic slowdown which drove a deviation from our typically expected seasonality. As the impact of the pandemic and global economic challenges on behaviors abate, we expect to return to a more normal seasonality pattern. 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.

Current wording

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.

Previous wording

We generate Products revenue from sales of connected machines and ancillary products, net of sales discounts, incentives 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 and Maker 3; Cricut Explore, which includes Explore Air 2 and Explore 3; Cricut Joy, which includes Joy and Joy Xtra; and Cricut Venture. Our ancillary products include Cricut EasyPress, Cricut MugPress, hand tools, machine replacement tools and blades, and project materials such as vinyl and iron-on. Products revenue is recognized at the point in time when control is transferred, which is either upon shipment or delivery to the customer in accordance with the terms of each customer contract.

Current wording

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.

Previous wording

Cost of revenue related to Platform consists primarily of hosting fees, digital content costs, amortization of capitalized software development costs and software maintenance costs. 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.

Current wording

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.

Previous wording

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 decrease over the long term as we drive greater scale and efficiency in our business.

Current wording

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.

Previous wording

Research and development expenses consist primarily of costs associated with the development of our platform and products, 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 fluctuate in the near term as we refine our product roadmaps. We expect to produce gross savings of approximately $3.2 million during 2024 as a result of the Q1 2024 restructuring plan.

Current wording

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.

Previous wording

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 sales incentives, 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. We expect to produce gross savings of approximately $2.5 million during 2024 as a result of the Q1 2024 restructuring plan.

Current wording

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.

Previous wording

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. We expect to produce gross savings of approximately $0.6 million during 2024 as a result of the Q1 2024 restructuring plan.

Current wording

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.

Previous wording

Other income, net consists primarily of interest income from our investments in marketable securities, offset by interest expense associated with our debt financing arrangements and amortization of debt issuance costs.

Current wording

Other income (expense), net consists primarily of interest income from our investments in marketable securities, offset by interest expense associated with our debt financing arrangements and amortization of debt issuance costs.

Previous wording

Comparison of the Three and Nine Months Ended September 30, 2024 and 2023

Current wording

Comparison of the Three Months Ended March 31, 2025 and 2024

Previous wording

Platform revenue increased by $0.2 million, or 0%, to $77.7 million for the three months ended September 30, 2024 from $77.5 million for the three months ended September 30, 2023. The increase was driven by an increase in the number of paid subscribers which increased from 2.7 million as of September 30, 2023 to 2.8 million as of September 30, 2024.

Current wording

Platform revenue increased by $1.7 million, or 2%, to $80.0 million for the three months ended March 31, 2025, from $78.3 million for the three months ended March 31, 2024. The increase was driven by an increase in paid subscribers from nearly 2.8 million as of March 31, 2024 to nearly 3.0 million as of March 31, 2025.

Previous wording

Products revenue decreased by $33.2 million, or 11%, to $269.6 million for the nine months ended September 30, 2024 from $302.8 million for the nine months ended September 30, 2023. The decrease was primarily driven by fewer units of Accessories & Materials sold and increased promotional activity during the period.

Current wording

Products revenue decreased by $6.5 million, or 7%, to $82.6 million for the three months ended March 31, 2025 from $89.1 million for the three months ended March 31, 2024. The decrease was primarily driven by fewer units of accessories and materials sold and increased promotional activity compared to the prior year.

Previous wording

Gross margin for Platform was 87% for thethree months ended September 30, 2024 and 89% for the three months ended September 30, 2023. The decrease was primarily driven by increases in hosting fees, external digital content costs, and software development expenses.

Current wording

Gross margin for Platform was 89% for the three months ended March 31, 2025, and 89% for the three months ended March 31, 2024. Equivalent platform margin compared to prior year is driven by lower amortization of capitalized software development costs partially offset by increased platform hosting fees.

Previous wording

Products cost of revenue decreased by $46.8 million, or 18%, to $216.8 million for the nine months ended September 30, 2024 from $263.6 million for the nine months ended September 30, 2023. The decrease was primarily driven by a reduction in inventory impairment charges compared to prior year and fewer units of Accessories & Materials sold during the period.

Current wording

Products cost of revenue decreased by $11.4 million, or 17%, to $55.6 million for the three months ended March 31, 2025, from $67.0 million for the three months ended March 31, 2024. The decrease was primarily driven by a reduction in net inventory impairment charges, fewer units of accessories and materials sold, and lower warehousing and operations costs compared to the prior year.

Previous wording

Gross marginfor Products was 11% for the three months ended September 30, 2024 and 13% for the three months ended September 30, 2023. The decrease was primarily driven by increased promotional activity, partially offset by a reduction in inventory impairment charges compared to prior year.

Current wording

Gross marginfor Products was 33% for the three months ended March 31, 2025 and 25% for the three months ended March 31, 2024. The increase was primarily driven by a reduction in net inventory impairment charges compared to prior year, partially offset by increased promotional activity.

Previous wording

Products cost of revenue decreased by $4.2 million, or 5%, to $80.5 million for the three months ended September 30, 2024 from $84.7 million for the three months ended September 30, 2023. The decrease was primarily driven by a reduction in inventory impairment charges compared to prior year.

Current wording

Research and development expenses increased by $0.8 million, or 5%, to $15.7 million for the three months ended March 31, 2025 from $14.9 million for the three months ended March 31, 2024. The increase was primarily

Previous wording

Research and development expenses decreased by $0.7 million, or 4%, to $15.2 million for the three months ended September 30, 2024 from $15.9 million for the three months ended September 30, 2023. The decrease was primarily due to a $1.1 million decrease in personnel-related expense, partially offset by an increase in professional services expense.

Current wording

expense, partially offset by a decrease in personnel-related expense.

Previous wording

Sales and marketing expenses increased by $6.9 million, or 24%, to $35.3 million for the three months ended September 30, 2024 from $28.4 million for the three months ended September 30, 2023. The increase was primarily due to a $5.7 million increase in advertising and other marketing costs and a $1.7 million increase in personnel-related expense, partially offset by a decrease in software and website subscriptions expense.

Current wording

Sales and marketing expenses increased by $3.7 million, or 11%, to $36.7 million for the three months ended March 31, 2025 from $33.0 million for the three months ended March 31, 2024. The increase was primarily driven by a $4.3 million increase in advertising and other marketing costs, partially offset by a decrease in personnel-related expense.

Previous wording

General and administrative expenses increased by $2.3 million, or 16%, to $16.2 million for the three months ended September 30, 2024 from $14.0 million for the three months ended September 30, 2023. The increase was primarily driven by a $4.5 million net reversal of bad debt expense in Q3 2023. This was partially offset by a loss on foreign currency translation and decreases in impairment of unused equipment, software, and inventory.

Current wording

General and administrative expenses decreased by $1.8 million, or 10%, to $16.7 million for the three months ended March 31, 2025 from $18.5 million for the three months ended March 31, 2024. The decrease was primarily driven by a $2.9 million net reversal of bad debt expense and a $0.7 million gain on foreign currency translation. This was partially offset by increases in professional services expense.

Previous wording

Other income, net increased by $1.7 million or 95% to $3.6 million for the three months ended September 30, 2024 from $1.8 million for the three months ended September 30, 2023. The increase was primarily driven by an increase in interest income due to an increase in maturities of marketable securities in 2024.

Current wording

Other income (expense), net increased by $0.2 million or 6% to $3.3 million for the three months ended March 31, 2025 from $3.1 million for the three months ended March 31, 2024. The increase was primarily driven by an increase in interest income.

Previous wording

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 $142.4 million and $104.6 million, respectively, as of September 30, 2024, along with forecasted cash expected to be generated by ongoing operations and $300.0 million in available borrowings and the option to increase the aggregate amount of our credit facility by up to an additional $150.0 million (see Note 7) will be sufficient to satisfy our cash requirements over the next 12 months and beyond. Except for the dividends announced in May and November 2024 and the share repurchase program announced in May 2024, our cash requirements have not changed materially since our Annual Report.

Current wording

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 $252.1 million and $104.5 million, respectively, as of March 31, 2025, along with forecasted cash expected to be generated by ongoing operations and $300.0 million in available borrowings and the option to increase the aggregate amount of our credit facility by up to an additional $150.0 million (see Note 7) will be sufficient to satisfy our cash requirements over the next 12 months and beyond. Except for the recently announced special and semi-annual dividends and the new share repurchase program, our cash requirements have not changed materially since our Annual Report.

Previous wording

During the nine months ended September 30, 2024 and 2023, we paid a dividend of $109.8 million and $293.8 million to holders of Class A and Class B common stock, respectively.

Current wording

During the three months ended March 31, 2025, we paid a dividend of $21.5 million to holders of Class A and Class B common stock.

Previous wording

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. 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.

Current wording

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.

Previous wording

The change in net cash flows from investing activities for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 was due to an increase in proceeds from the maturities of marketable securities in 2024.

Current wording

The change in net cash flows from investing activities for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was due to a decrease in purchases of property and equipment, including capitalized software and development costs.

Previous wording

The change in net cash flows from financing activities for the nine months ended September 30, 2024 compared to nine months ended September 30, 2023 was primarily due to dividend payments of$293.8 million in 2023 compared to the dividend payment in 2024 of $109.8 million, offset by an increase in the repurchase of common stock in 2024.

Current wording

The change in net cash flows from financing activities for the three months ended March 31, 2025 compared to three months ended March 31, 2024 was primarily due to dividend payments of $1.4 million in 2024 compared to the dividend payment in 2025 of $21.5 million.