Cricut, Inc.

What they do

Cricut designs and sells connected machines that cut, write, and score materials, paired with its cloud-based Design Space software and mobile apps. Users access free and paid content, and can subscribe to Cricut Access Standard or Premium for additional images, fonts, and AI credits. Products are sold through retail partners like Amazon, Michaels, Target, and Walmart, as well as directly via Cricut.com.

Revenue drivers

• Platform revenue — Includes subscriptions (Cricut Access Standard and Premium), digital content sales, and other platform fees. Q2 2026 platform revenue was $85.0 million, up over 5% year-over-year, and represents over half of total revenue.
• Products revenue — Sales of connected machines and accessories (e.g., cutting machines, materials, tools). Q2 2026 products revenue was $71.3 million, down 22% year-over-year, reflecting lower hardware and accessory sales.
• Cricut Access subscriptions — Recurring monthly/annual subscriptions; 3.1 million paid subscribers as of June 30, 2026, up 3% year-over-year. Contributes to platform ARPU of $56.37, up 5%.

Recent performance

Q2 2026 revenue was $156.3 million, down 9% year-over-year, with platform revenue up over 5% and products revenue down 22%. Net income was $39.1 million (25.0% of revenue), up 59% from Q2 2025. Gross margin improved to 74.5% from 59.0%, due to product mix and cost actions. Operating cash flow was $50 million in the quarter. Full-year 2025 revenue was $708.8 million with net income of $76.7 million.

Strategy

Cricut is pursuing a platform-first strategy, emphasizing subscriptions, engagement, and AI-driven design features to increase user value. Management cites improving engagement trends, double-digit global machine sell-out growth, and investments in innovation, international expansion, and marketing. The company returned $7.5 million in share repurchases during Q2 2026 and continues a semi-annual dividend of $0.10 per share.

Risks

• Revenue decline — Total company revenue declined 9% year-over-year in Q2 2026, with products revenue down 22%, signaling continued pressure on hardware sales.
• Tariff and trade exposure — The company faces materially increased costs from tariffs (including IEEPA tariffs, though recently rescinded) and potential further trade barriers that could impact margins and international expansion.
• Seasonality and promotional activity — Q4 is the highest revenue quarter but also has heavy discounting, which depresses gross margin (Q4 2025 gross margin was 47% vs. 55% full-year).
• Dependence on retail partners — Sales rely heavily on third-party retailers (Amazon, Michaels, Target, etc.); any loss or reduced shelf space could hurt revenue.

Outlook

Management expects continued seasonality with Q4 being the strongest quarter. They are investing in international growth and marketing while navigating tariff-related cost pressures. The company projects healthy cash flow and aims to return capital through dividends and repurchases while maintaining a strong balance sheet.