Cricut(CRCT) - 2025 Q2 - Quarterly Report

Note Regarding Forward-Looking Statements This section contains forward-looking statements, subject to substantial risks and uncertainties, cautioning against future predictions - This section contains forward-looking statements subject to substantial risks and uncertainties, primarily related to future events or financial/operating performance[8][10][12] - Investors are cautioned not to rely on these as predictions of future events, as actual results may differ materially due to various factors including those discussed in 'Risk Factors'[8][10][12] Part I. Financial Information Item 1. Financial Statements (unaudited) This section presents Cricut, Inc.'s unaudited condensed consolidated financial statements, covering balance sheets, operations, and cash flows Condensed Consolidated Balance Sheets (unaudited) Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | As of June 30, 2025 | As of December 31, 2024 | Change (vs. Dec 31, 2024) | | :--------------------------------- | :------------------- | :---------------------- | :------------------------ | | Cash and cash equivalents | $298,057 | $232,140 | +$65,917 | | Marketable securities | $78,884 | $104,774 | -$25,890 | | Accounts receivable, net | $81,990 | $101,980 | -$19,990 | | Inventories | $124,796 | $115,255 | +$9,541 | | Total current assets | $599,186 | $580,214 | +$18,972 | | Total assets | $721,511 | $693,035 | +$28,476 | | Accounts payable | $71,977 | $53,373 | +$18,604 | | Accrued expenses and other current liabilities | $61,657 | $76,274 | -$14,617 | | Deferred revenue, current portion | $51,047 | $45,427 | +$5,620 | | Dividends payable, current portion | $204,814 | $24,401 | +$180,413 | | Total current liabilities | $393,104 | $203,374 | +$189,730 | | Total liabilities | $412,574 | $226,274 | +$186,300 | | Total stockholders' equity | $308,937 | $466,761 | -$157,824 | Condensed Consolidated Statements of Operations and Comprehensive Income (unaudited) Condensed Consolidated Statements of Operations and Comprehensive Income Highlights (in thousands, except per share) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change (3M) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change (6M) | | :--------------------------------- | :--------------------------- | :--------------------------- | :---------------- | :--------------------------- | :--------------------------- | :---------------- | | Total revenue | $172,112 | $167,947 | +2.5% | $334,746 | $335,339 | -0.2% | | Total cost of revenue | $70,573 | $78,107 | -9.7% | $134,859 | $153,905 | -12.4% | | Gross profit | $101,539 | $89,840 | +13.0% | $199,887 | $181,434 | +10.2% | | Total operating expenses | $71,434 | $63,408 | +12.7% | $140,441 | $129,797 | +8.2% | | Income from operations | $30,105 | $26,432 | +13.9% | $59,446 | $51,637 | +15.1% | | Net income | $24,488 | $19,769 | +23.9% | $48,402 | $39,416 | +22.8% | | Earnings per share, basic | $0.12 | $0.09 | +33.3% | $0.23 | $0.18 | +27.8% | | Earnings per share, diluted | $0.11 | $0.09 | +22.2% | $0.23 | $0.18 | +27.8% | Condensed Consolidated Statements of Changes in Stockholders' Equity (unaudited) - Total stockholders' equity decreased from $466,761 thousand as of December 31, 2024, to $308,937 thousand as of June 30, 2025[18][22][24] - This was primarily due to significant dividends declared ($204,782 thousand) and common stock repurchases ($16,741 thousand) for the six months ended June 30, 2025[18][22][24] - The decrease was partially offset by net income ($48,402 thousand) and stock-based compensation ($21,351 thousand) for the six months ended June 30, 2025[18][22][24] Condensed Consolidated Statements of Cash Flows (unaudited) Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | YoY Change | | :--------------------------------------- | :--------------------------- | :--------------------------- | :--------- | | Net cash provided by operating activities | $97,323 | $91,648 | +$5,675 | | Net cash provided by (used in) investing activities | $15,520 | ($9,965) | +$25,485 | | Net cash used in financing activities | ($47,549) | ($28,191) | -$19,358 | | Net increase in cash and cash equivalents | $65,917 | $53,365 | +$12,552 | | Cash and cash equivalents at end of period | $298,057 | $195,552 | +$102,505 | Notes to Condensed Consolidated Financial Statements Note 1. Description of Business and Basis of Presentation - Cricut, Inc. designs and markets a creativity platform, including connected machines, accessories, materials, and subscription services, enabling users to create handmade goods[27][28] - The company operates in two reportable segments: Platform and Products[27][28] - The condensed consolidated financial statements are prepared in conformity with GAAP and SEC rules for interim reporting, consolidating Cricut, Inc. and its wholly-owned subsidiaries[29][30] Note 2. Summary of Significant Accounting Policies - The preparation of financial statements requires management to make estimates and assumptions, particularly for revenue recognition, warranty reserves, credit losses, inventory reserves, and income taxes[34] - Financial instruments are measured at fair value using a hierarchy, with money market funds classified as Level 1 and U.S. Treasury securities as Level 2[35][36] Accounts Receivable and Allowance for Credit Losses (in millions) | Metric | As of June 30, 2025 | As of December 31, 2024 | As of January 1, 2024 | | :----------------------------- | :------------------ | :---------------------- | :-------------------- | | Net accounts receivable | $82.0 | $102.0 | $111.2 | | Allowance for credit losses | $1.6 | $2.6 | N/A | Note 3. Revenue and Deferred Revenue - Deferred revenue primarily consists of deferred subscription-based services and amounts allocated from connected machine sales for future upgrades and cloud services[41] - Capitalized contract costs were $1.5 million as of June 30, 2025, up from $1.2 million as of December 31, 2024[41] Deferred Revenue Changes (in thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------- | :--------------------------- | :--------------------------- | | Deferred revenue, beginning of period | $48,253 | $43,235 | | Recognition of revenue included in beginning of period deferred revenue | ($35,372) | ($31,834) | | Revenue deferred, net of revenue recognized on contracts in the respective period | $40,751 | $35,724 | | Deferred revenue, end of period | $53,632 | $47,125 | Total Revenue by Geography (in thousands) | Geography | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change (3M) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change (6M) | | :---------------- | :--------------------------- | :--------------------------- | :---------------- | :--------------------------- | :--------------------------- | :---------------- | | North America | $135,825 | $134,415 | +1.0% | $263,394 | $269,250 | -2.2% | | International | $36,287 | $33,532 | +8.2% | $71,352 | $66,089 | +7.9% | | Total revenue | $172,112 | $167,947 | +2.5% | $334,746 | $335,339 | -0.2% | Total Revenue by Source (in thousands) | Source | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change (3M) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change (6M) | | :------------------ | :--------------------------- | :--------------------------- | :---------------- | :--------------------------- | :--------------------------- | :---------------- | | Platform | $80,697 | $77,649 | +3.9% | $160,683 | $155,935 | +3.0% | | Connected machines | $39,430 | $43,970 | -10.4% | $77,892 | $80,918 | -3.7% | | Accessories and materials | $51,985 | $46,328 | +12.2% | $96,171 | $98,486 | -2.4% | | Total revenue | $172,112 | $167,947 | +2.5% | $334,746 | $335,339 | -0.2% | Note 4. Cash, Cash Equivalents, and Financial Instruments Cash, Cash Equivalents, and Marketable Securities (in thousands) | Category | As of June 30, 2025 (Fair Value) | As of December 31, 2024 (Fair Value) | | :-------------------- | :------------------------------- | :----------------------------------- | | Cash | $222,258 | $161,248 | | Money market funds | $75,799 | $70,892 | | U.S. treasury securities | $78,884 | $104,774 | | Total | $376,941 | $336,914 | | Cash and cash equivalents | $298,057 | $232,140 | | Marketable securities | $78,884 | $104,774 | - Marketable securities held as of June 30, 2025, generally mature over the next 24 months and were all in an unrealized gain position[46] - No allowance for credit losses was deemed necessary[46] Note 5. Inventories Inventory Composition (in thousands) | Category | As of June 30, 2025 | As of December 31, 2024 | | :------------------------------------ | :------------------ | :---------------------- | | Raw materials | $30,917 | $38,652 | | Finished goods | $147,941 | $144,630 | | Total inventories | $178,858 | $183,282 | | Less: reserves | ($37,934) | ($49,015) | | Total inventories, net | $140,924 | $134,267 | - As of June 30, 2025, inventory reserves included $2.2 million for excess connected machines, $30.5 million for excess accessories and materials, and $5.2 million for raw materials components[47] - Amounts charged to the reserve are primarily recorded in cost of revenues[47] Note 6. Accrued Expenses and Other Current Liabilities Accrued Expenses and Other Current Liabilities (in thousands) | Category | As of June 30, 2025 | As of December 31, 2024 | | :------------------------------------ | :------------------ | :---------------------- | | Customer rebates | $24,208 | $38,756 | | Other accrued liabilities and other current liabilities | $37,449 | $37,518 | | Total accrued expenses | $61,657 | $76,274 | Note 7. Revolving Credit Facility - Cricut has a five-year revolving credit facility of up to $300.0 million, maturing on August 4, 2027, with an option to increase by an additional $150.0 million[49] - The unused fee rate is 0.175% per annum[49] - As of June 30, 2025, and December 31, 2024, no amounts were outstanding under the Credit Agreement, and available borrowings were $300.0 million[51] - The company was in compliance with all financial and non-financial debt covenants[51] Note 8. Income Taxes Estimated Effective Tax Rate and Provision for Income Taxes (in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Estimated effective tax rate | 27.6% | 33.6% | 27.2% | 32.1% | | Provision for income taxes | $9,355 | $10,023 | $18,062 | $18,666 | - The decrease in the effective tax rate and provision for income taxes was 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[54] - The 'One Big Beautiful Bill Act' (OBBBA) was enacted on July 4, 2025, which includes corporate tax provisions like restoration of 100% bonus depreciation and immediate expensing for R&D[56] - The company is evaluating its financial impact[56] Note 9. Capital Structure - As of June 30, 2025, Cricut had 53,976,481 shares of Class A Common Stock and 158,489,920 shares of Class B Common Stock outstanding[57] - Class B shares have five votes per share and are convertible to Class A[57] - The Board approved replenishing the common stock repurchase program by $50 million on May 2, 2025[58] - During the six months ended June 30, 2025, the company repurchased 3,043,806 shares of Class A common stock for $16.7 million[59] - On May 2, 2025, a special dividend of $0.75 per share and a recurring semi-annual dividend of $0.10 per share were declared, totaling $0.85 per share, payable on July 21, 2025[60][61] - The aggregate dividend of $204.8 million is to be satisfied in cash ($180.6 million) and dividend equivalents to RSU/PRSU holders ($24.2 million)[60][61] Note 10. Stock-Based Compensation Stock-Based Compensation Cost by Award Type (in thousands) | Award Type | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Restricted stock units | $10,231 | $10,027 | $21,019 | $19,824 | | Stock options | $0 | $244 | $0 | $680 | | Class B common stock | $58 | $1,034 | $321 | $2,273 | | Liability-classified awards | $9 | $12 | $11 | $20 | | Total stock-based compensation | $10,298 | $11,317 | $21,351 | $22,797 | Total Stock-Based Compensation Cost by Functional Area (in thousands) | Functional Area | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Cost of revenue | $282 | $465 | $555 | $888 | | Research and development | $3,359 | $3,540 | $6,796 | $7,253 | | Sales and marketing | $2,737 | $2,988 | $5,851 | $5,924 | | General and administrative | $3,310 | $3,626 | $6,936 | $7,311 | | Total stock-based compensation expense | $9,688 | $10,619 | $20,138 | $21,376 | | Capitalized for software development costs | $425 | $365 | $848 | $695 | | Capitalized to inventories | $185 | $333 | $365 | $726 | | Total stock-based compensation | $10,298 | $11,317 | $21,351 | $22,797 | - As of June 30, 2025, there was $65.4 million of unrecognized stock-based compensation cost for service-based awards (weighted-average period of 2.6 years)[67][72] - Unrecognized compensation for PRSUs not probable of vesting was $190.8 million[67][72] Note 11. Commitments and Contingencies - Cricut is subject to various claims and litigation in the ordinary course of business[79] - Management does not believe any current contingencies will have a material effect on its financial position, results of operations, or liquidity[79] Note 12. Leases - The company leases office space under operating leases with terms ranging from one to six years[80][81] - Operating lease costs were $1.1 million for Q2 2025 and $2.2 million for H1 2025[80][81] Operating Lease Liabilities Maturities (in thousands) | Year Ended December 31, | Operating Leases | | :---------------------- | :--------------- | | 2025 (remainder of year) | $2,106 | | 2026 | $4,128 | | 2027 | $2,869 | | 2028 | $4,023 | | 2029 | $1,693 | | Total lease payments | $14,819 | | Present value of operating lease liabilities | $13,393 | - As of June 30, 2025, the weighted-average remaining operating lease term was 3.8 years, and the weighted-average discount rate was 5.4%[82] Note 13. Employee Benefit Plan - Cricut sponsors a 401(k) plan, matching 50% of the first 12% of an employee's salary[83] - Contributions were $0.7 million for Q2 2025 and $1.5 million for H1 2025[83] Note 14. Net Income Per Share Net Income Per Share (except share and per share amounts) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income | $24,488 | $19,769 | $48,402 | $39,416 | | Basic EPS | $0.12 | $0.09 | $0.23 | $0.18 | | Diluted EPS | $0.11 | $0.09 | $0.23 | $0.18 | | Weighted-average common shares outstanding, basic | 211,865,363 | 216,422,513 | 212,514,662 | 215,986,713 | | Diluted weighted-average common shares outstanding | 214,529,726 | 217,501,646 | 214,649,931 | 217,390,891 | - Potentially dilutive shares excluded from diluted EPS computation due to anti-dilutive effect for the three months ended June 30, 2025, included 3,126,575 employee stock options and 16,408 unvested Class B common stock[84] Note 15. Segment Information - Cricut operates in two reportable segments: Platform and Products[85][86][87] - The Platform segment generates revenue from subscriptions and digital content, while the Products segment derives revenue from connected machine hardware and craft/DIY products[85][86][87] Segment Financial Performance (in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change (3M) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change (6M) | | :-------------------- | :--------------------------- | :--------------------------- | :---------------- | :--------------------------- | :--------------------------- | :---------------- | | Platform Revenue | $80,697 | $77,649 | +3.9% | $160,683 | $155,935 | +3.0% | | Platform Cost of Revenue | $8,816 | $8,888 | -0.8% | $17,484 | $17,647 | -0.9% | | Platform Gross Profit | $71,881 | $68,761 | +4.5% | $143,199 | $138,288 | +3.5% | | Platform Gross Margin | 89% | 89% | 0 pp | 89% | 89% | 0 pp | | Products Revenue | $91,415 | $90,298 | +1.2% | $174,063 | $179,404 | -3.0% | | Products Cost of Revenue | $61,757 | $69,219 | -10.8% | $117,375 | $136,258 | -13.8% | | Products Gross Profit | $29,658 | $21,079 | +40.7% | $56,688 | $43,146 | +31.4% | | Products Gross Margin | 32% | 23% | +9 pp | 33% | 24% | +9 pp | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on Cricut's financial condition and results of operations, covering business overview, key metrics, and cash flows Overview of Our Business and History - Cricut's mission is to help people lead creative lives through its creativity platform, which includes Design Space, connected machines (Cricut Joy, Explore, Maker, Venture families), and accessories/materials[90][92] - The platform offers two subscription services: Cricut Access (images, fonts, projects, software features, discounts) and Cricut Access Premium (additional discounts, preferred shipping)[91][98] - Products are sold through brick-and-mortar/online retail partners (e.g., Amazon, Michaels, Walmart) and cricut.com[94][95] - The company historically experiences highest revenue in the fourth quarter due to holiday shopping[94][95] Key Business Metrics Key Business Metrics (in thousands, except ARPU) | Metric | As of June 30, 2025 | As of June 30, 2024 | YoY Change | | :------------------------ | :------------------ | :------------------ | :--------- | | Active Users | 5,901 | 5,918 | -0.3% | | 90-Day Engaged Users | 3,482 | 3,541 | -1.7% | | Paid Subscribers | 3,010 | 2,813 | +7.0% | | Platform ARPU | $53.84 | $52.00 | +3.5% | - Active Users are registered users of at least one connected machine who have created a project in the last 365 days[101][103] - Paid Subscribers are users with a Cricut Access or Premium subscription, excluding cancelled, unpaid, or free trials[101][103] Components of our Results of Operations - Platform revenue is primarily from subscriptions (Cricut Access, Cricut Access Premium) and digital content, recognized ratably over the subscription term or at point of transfer for à la carte content[106] - Products revenue comes from sales of connected machines (Maker, Explore, Joy, Venture families) and ancillary products (heat presses, tools, materials), recognized at the point of control transfer (shipment or delivery)[107] - Cost of revenue for Platform includes hosting fees, digital content, software amortization, and royalties[108][109] - For Products, cost of revenue includes product costs, manufacturing, shipping, warehousing, duties, warranty, and inventory write-downs[108][109] - Operating expenses include Research and Development (product development, personnel), Sales and Marketing (advertising, payment processing, personnel, rebates), and General and Administrative (finance, legal, HR, IT, professional services)[110][111][113] Results of Operations Revenue Revenue Performance (in thousands) | Segment | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change (3M) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change (6M) | | :-------------- | :--------------------------- | :--------------------------- | :---------------- | :--------------------------- | :--------------------------- | :---------------- | | Platform | $80,697 | $77,649 | +3.9% | $160,683 | $155,935 | +3.0% | | Products | $91,415 | $90,298 | +1.2% | $174,063 | $179,404 | -3.0% | | Total revenue | $172,112 | $167,947 | +2.5% | $334,746 | $335,339 | -0.2% | - Platform revenue increased by 4% for the three months and 3% for the six months ended June 30, 2025, driven by an increase in paid subscribers from 2.8 million to 3.0 million[119][121] - Products revenue increased by 1% for the three months due to more accessories/materials sold at higher prices (accelerated by tariff uncertainty)[120][122] - Products revenue decreased by 3% for the six months due to fewer connected machines and accessories/materials sold at lower average prices[120][122] Cost of Revenue, Gross Profit and Gross Margin Cost of Revenue, Gross Profit, and Gross Margin Performance (in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change (3M) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change (6M) | | :-------------------------- | :--------------------------- | :--------------------------- | :---------------- | :--------------------------- | :--------------------------- | :---------------- | | Platform Cost of Revenue | $8,816 | $8,888 | -0.8% | $17,484 | $17,647 | -0.9% | | Platform Gross Profit | $71,881 | $68,761 | +4.5% | $143,199 | $138,288 | +3.5% | | Platform Gross Margin | 89% | 89% | 0 pp | 89% | 89% | 0 pp | | Products Cost of Revenue | $61,757 | $69,219 | -10.8% | $117,375 | $136,258 | -13.8% | | Products Gross Profit | $29,658 | $21,079 | +40.7% | $56,688 | $43,146 | +31.4% | | Products Gross Margin | 32% | 23% | +9 pp | 33% | 24% | +9 pp | | Total Gross Profit | $101,539 | $89,840 | +13.0% | $199,887 | $181,434 | +10.2% | - Platform cost of revenue decreased slightly due to lower software amortization[125][126][128][129] - Products cost of revenue decreased significantly due to fewer connected machines sold, lower procurement costs, and reduced inventory impairment charges[125][126][128][129] - Products gross margin improved by 9 percentage points for both the three and six months ended June 30, 2025, driven by lower inventory procurement costs, reduced impairment charges, and improved product margins[127][130] Operating Expenses Research and Development Research and Development Expenses (in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change (3M) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change (6M) | | :-------------------------- | :--------------------------- | :--------------------------- | :---------------- | :--------------------------- | :--------------------------- | :---------------- | | R&D Expenses | $16,762 | $14,315 | +17.1% | $32,419 | $29,168 | +11.1% | | As a percentage of total revenue | 10% | 9% | +1 pp | 10% | 9% | +1 pp | - The increase in R&D expenses was primarily due to higher product development expense, personnel-related expense, and professional services expense[131][132] Sales and Marketing Sales and Marketing Expenses (in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change (3M) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change (6M) | | :-------------------------- | :--------------------------- | :--------------------------- | :---------------- | :--------------------------- | :--------------------------- | :---------------- | | S&M Expenses | $35,877 | $33,354 | +7.6% | $72,562 | $66,384 | +9.3% | | As a percentage of total revenue | 21% | 20% | +1 pp | 22% | 20% | +2 pp | - The increase in sales and marketing expenses was primarily driven by higher advertising and other marketing costs[133][134] General and Administrative General and Administrative Expenses (in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change (3M) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change (6M) | | :-------------------------- | :--------------------------- | :--------------------------- | :---------------- | :--------------------------- | :--------------------------- | :---------------- | | G&A Expenses | $18,795 | $15,739 | +19.4% | $35,460 | $34,245 | +3.5% | | As a percentage of total revenue | 11% | 9% | +2 pp | 11% | 10% | +1 pp | - The increase in G&A expenses for the three months was due to a $1.7 million net reversal of bad debt expense in Q2 2024 and a $1.5 million increase in professional services[135][136] - For the six months, it was driven by a $3.2 million increase in professional services, offset by foreign currency transaction losses and a bad debt reversal[135][136] Other Income, Net Other Income, Net (in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change (3M) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change (6M) | | :---------------- | :--------------------------- | :--------------------------- | :---------------- | :--------------------------- | :--------------------------- | :---------------- | | Other income, net | $3,738 | $3,360 | +11.2% | $7,018 | $6,445 | +8.9% | - The increase in other income, net, for both periods was primarily driven by an increase in interest income[137][138] Provision for Income Taxes Provision for Income Taxes (in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change (3M) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change (6M) | | :-------------------------- | :--------------------------- | :--------------------------- | :---------------- | :--------------------------- | :--------------------------- | :---------------- | | Provision for income taxes | $9,355 | $10,023 | -6.7% | $18,062 | $18,666 | -3.2% | - The decrease in provision for income taxes was 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[139][140] Liquidity and Capital Resources - Cricut believes its cash and cash equivalents ($298.1 million), marketable securities ($78.9 million) as of June 30, 2025, forecasted operating cash flow, and $300.0 million available credit facility are sufficient to meet cash requirements for the next 12 months and beyond[141] - During the six months ended June 30, 2025, the company paid $21.5 million in dividends[142] - An additional $180.6 million dividend was paid on July 21, 2025[142] Cash Flows Net Cash Flows by Activity (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | YoY Change | | :--------------------------------------- | :--------------------------- | :--------------------------- | :--------- | | Net cash provided by operating activities | $97,323 | $91,648 | +$5,675 | | Net cash provided by (used in) investing activities | $15,520 | ($9,965) | +$25,485 | | Net cash used in financing activities | ($47,549) | ($28,191) | -$19,358 | - Operating cash flows increased due to a net increase in operating assets and liabilities and higher net income, partially offset by reduced non-cash adjustments[145][146][147] - Investing cash flows improved significantly due to a decrease in marketable securities purchases[145][146][147] - Financing cash flows increased outflows primarily due to higher dividend payments[145][146][147] Critical Accounting Estimates - Management's discussion and analysis relies on critical accounting policies and estimates detailed in Note 2 of the financial statements and the Annual Report, which involve significant judgments and assumptions[148] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section states no material changes to the company's market risk disclosures have occurred since its Annual Report - No material changes to the Company's market risk disclosures have occurred during the three and six months ended June 30, 2025, as referenced in the Annual Report[149] Item 4. Controls and Procedures This section details management's evaluation of disclosure controls and internal control over financial reporting, concluding on their effectiveness Evaluation of Disclosure Controls and Procedures - The Chief Executive Officer and Chief Financial Officer concluded that Cricut's disclosure controls and procedures were effective as of June 30, 2025, providing reasonable assurance that required information is recorded, processed, summarized, and reported timely[150][151] Changes in Internal Control over Financial Reporting - No changes in internal control over financial reporting occurred during the period that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[152] Inherent Limitations on Effectiveness of Controls - Management acknowledges that control systems provide only reasonable, not absolute, assurance and have inherent limitations, meaning errors or fraud may occur and not be detected due to resource constraints, faulty judgments, circumvention, or deterioration over time[153] Part II. Other Information Item 1. Legal Proceedings This section confirms Cricut is not involved in material pending legal proceedings, though subject to routine claims - Cricut is not a party to any material pending legal proceedings but is subject to ordinary course claims and litigation, the resolution of which cannot be predicted with certainty[156][157] Item 1A. Risk Factors This section refers to previously disclosed risk factors in the Annual Report and prior Quarterly Report, with no material changes - No material changes to the risk factors previously disclosed in the Annual Report on Form 10-K (December 31, 2024) and Quarterly Report on Form 10-Q (March 31, 2025) have occurred[158] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section reports on equity security transactions, noting no unregistered sales and detailing common stock repurchases Sales of Unregistered Securities - There were no unregistered sales of equity securities during the period[159] Purchases of Equity Securities by the Issuer and Affiliated Purchasers Common Stock Repurchases (Three Months Ended June 30, 2025) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (in thousands) | | :-------------------------------- | :----------------------------- | :--------------------------- | :------------------------------------------------------------------------------------------------ | | April 1, 2025 through April 30, 2025 | 801,296 | $4.97 | $6,912 | | May 1 through May 31, 2025 | — | $— | $50,000 | | June 1, 2025 through June 30, 2025 | 116,046 | $6.30 | $49,269 | | Total | 917,342 | $5.14 | $49,269 | - On May 2, 2025, the Board of Directors approved replenishing the share repurchase program by $50 million for Class A common stock[160] Item 3. Default Upon Senior Securities This item is not applicable to the company for the reporting period - This item is not applicable[161] Item 4. Mine Safety Disclosures This item is not applicable to the company for the reporting period - This item is not applicable[162] Item 5. Other Information This section reports on director and executive officer trading plans, indicating no new or terminated Rule 10b5-1 arrangements - No director or officer adopted or terminated a 'Rule 10b5-1 trading arrangement' or a 'non-Rule 10b5-1 trading arrangement' during the last fiscal quarter[163] Item 6. Exhibits This section lists all documents filed as exhibits to the Quarterly Report on Form 10-Q, including certifications and XBRL documents - The report includes various exhibits, such as certifications of principal executive and financial officers (31.1, 31.2, 32.1, 32.2) and Inline XBRL documents (101.INS, 101.SCH, etc.)[164][166] Signatures