CRCT

Image source: The Motley Fool. Tuesday, Aug. 4, 2026 at 2:00 a.m. ET Director of Investor Relations - Chris Belfiore Chief Executive Officer - Ashish Arora Chief Financial Officer - Kimball Shill Operator: Good day and thank you for standing by. Welcome to the Cricut Q2 2026 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand it over to your first speaker today, Chris Belfiore, Director of Investor Relations. Please go ahead. Chris Belfiore: Thank you, Operator, and good afternoon, everyone. Thank you for joining us on Cricut's second quarter 2026 earnings call. Please note that today's call is being webcast and recorded on the Investor Relations section of the company's website. A replay of the webcast will also be available following today's call. For your reference, accompanying slides used on today's call, along with a supplemental data sheet, have been posted to the Investor Relations section of the company's website, investor.cricut.com. Joining me on the call today are Ashish Arora, Chief Executive Officer, and Kimball Shill, Chief Financial Officer. Today's prepared remarks have been recorded, after which Ashish and Kimball will host a live Q&A. Before we begin, we would like to remind everyone that our prepared remarks contain forward-looking statements and management may make additional forward-looking statements, including statements regarding our strategies, business, expenses, tariffs, capital allocation, and results of operations in response to your questions. These statements do not guarantee future performance and therefore undue reliance should not be placed upon them. These statements are based on current expectations of the company's management and involve inherent risk and uncertainties, including those identified in the risk factor section of Cricut's most recently filed Form 10-K or Form 10-Q that we have filed with the Securities and Exchange Commission. Actual events or results could differ materially. This call also contains time-sensitive information that is accurate only as of the date of this broadcast, August 4, 2026. Cricut assumes no obligation to update any forward-looking projection that may be made in today's release or call. I will now turn the call over to Ashish. Ashish Arora: Thank you, Chris. In Q2, we continue to see benefits from our platform-first strategy, aimed at creating a simpler, more compelling user experience. As highlighted last quarter, broadening awareness and relevance among new consumers is a critical driver of new user acquisition. This is the foundation of our new brand anthem, Think It. Make It. Cricut. We saw double-digit cutting machine sell-out growth in the quarter. Positive trends in user engagement and subscriptions were just over 3.1 million. During Q2, we continued to see strong profitability driven by continued strength in our platform business and some unique items like IEEPA tariff refunds. Platform revenue grew just over 5% in the quarter to $85 million. Overall, company sales declined approximately 9% in the quarter. Recall, it was against a difficult year-over-year comp, where we benefited from the pull-forward in Q2 2025 related to potential tariff impacts. The foundational work to create a more compelling mass market experience is in place. And we are focused on translating that investment into stronger execution. We remain committed to increasing the pace of innovation by accelerating our development cycles, expanding awareness of our platform, and strengthening our competitive position. As we execute these priorities, we expect to deliver a more compelling experience for our customers while positioning the business for stronger long-term growth. We are increasingly positioned to deliver the right message to the right consumer about the right product at the right price. Today, I will share the progress we've made to strengthen the business, encouraging signs from the first half of 2026, and how this reinforces our confidence in building on this momentum through the second half. Kimball will then cover the financial details and our outlook for the remainder of 2026. We remain focused on acquiring new users and increasing engagement across our platform, which together drive a monetization flywheel of subscriptions and accessories and materials. We believe the investments we are making today position Cricut for a return to sustainable, profitable growth. Let me talk about our priorities. In Q2, we launched our global marketing campaign, Think It. Make It. Cricut. The message is simple. Cricut is for anyone who wants to create. The campaign highlights how our platform, powered by Design Space, helps people easily turn ideas into meaningful, personalized projects. Our aim is to expand our base beyond identified crafters. Early results show a meaningful increase in traffic to cricut.com compared with prior campaigns, as more consumers engage with the brand and learn about our platform. The campaign will continue rolling out globally and is being integrated across key marketing touchpoints, including our website, user-generated content, and influencer partnerships. Connected machine unit sales were strong in the first half, boosted by the success of the new Joy 2 and Explore 5 bundles, with year-to-date connected machine sales in units up double digits. Connected machine sell-out performance is also strong, up double digits, benefiting from an earlier Prime Day. Sell-out is a key measure of consumer demand and our marketing success. Joy 2 and Explore 5 bundles were key drivers of this growth, giving us confidence that our bundle-only strategy is appealing for consumers. We also made important progress and innovation in the first half. Since launch in Q1, our next-generation cutting machines, Cricut Joy 2 and Cricut Explore 5 have performed well. Our Direct-to-Film or DTF service is still in its infancy, but reinforces the opportunity to expand Cricut beyond hardware into value-added services, deepening engagement with our most loyal users. Given that most orders come from existing subscribers, we believe the service is enhancing the value of our ecosystem. While still in early stages, we are excited about the long-term opportunity and will continue experimenting and investing to expand the platform's capabilities and support the growth of a services business. We continue to make meaningful progress in stabilizing engagement across our platform. Active users grew 1% year-over-year and remained flat sequentially, marking the first time this KPI has stabilized in a second quarter since 2022. Recall, we have a seasonal business and engagement tends to be softer in summer months. 90-day engaged users were also stable year-over-year. Another important milestone that reflects the progress we are making. We believe these results are driven in part by the cumulative impact of our efforts to simplify the user experience, improve onboarding, and strengthen new user acquisition. Improving onboarding remains one of our highest priorities. We know the earliest experiences on our platform have an outsized impact on long-term engagement. We're also making Design Space faster, simpler, and more intuitive for our returning users, reducing friction throughout the creative process so users can spend more time making and less time navigating the platform. AI continues to be an important differentiator for Cricut. During the quarter, we introduced new agentic AI features, purpose-built for creating with Cricut. By understanding our machines, materials, and project workflows, our AI helps users create designs that are more likely to translate successfully into physical projects. As we enter the second half of 2026, we are encouraged by the stabilization and improving trajectory across our engagement metrics. While there is still work to do, we believe our continued investments in simplifying the user experience, strengthening onboarding, and embedding AI throughout our platform are building a stronger foundation for sustainable engagement and long-term growth. Our platform business continued to perform well in the second quarter. Paid subscribers increased by 93,000 or more than 3% year-over-year to just over 3.1 million, contributing to just over 5% growth in platform revenue to $85 million. Sequentially, we added 25,000 paid subscribers during the quarter. As we continue to enhance the value of our subscriptions offering through new AI-powered capabilities, clearer communication of subscriber benefits and targeted promotional offers. We also made meaningful progress expanding our premium subscriptions tier. Following successful initial testing, we saw strong adoption of our premium plan, which starts from $14.99 per month among new subscribers. The offering is now available across both our desktop and mobile applications, and we will continue expanding availability across our purchase channels throughout the year. We also continue to test new plan formats and pricing tiers on an ongoing basis. Enhancing the value of Cricut subscriptions remains a strategic priority. During the quarter, we introduced several AI-powered Cricut Creative Labs experiences that enable subscribers to transform personal photos into personalized projects, including coloring pages and photo art. Early engagement with these new experiences is encouraging and reinforces the opportunity to deliver value across a wide range of creative interests. Looking ahead, we see significant opportunity to further differentiate our subscriptions offering by combining AI innovation with our growing library of curated content. Our accessories and materials business remains a challenge. We continue to work our plan to strengthen our product portfolio and improve our competitive position. While the category remains highly competitive, we continue to gain share in some major categories, including printables and Cricut accessories. During the first half of the year, we introduced new SKUs in conjunction with major retailer resets, significantly expanding our assortment with a focus on innovation, value and better meeting the needs of both new and existing Cricut users. We are particularly encouraged by the early consumer response to these new products. Printables are our fastest-growing materials category, as consumers increasingly personalize stickers, labels, photos, and gifts. We also refreshed our hand tools portfolio with new configurations and differentiated designs with additional innovation planned for the second half of the year. These launches and our bundle-only strategy on new machines, where users start with our high-quality tools, accessories, and materials, reinforce our confidence that product innovation remains a key driver of user engagement. In July, we launched the next generation of our large format heat press, AutoPress, engineered to address a large market with a compelling price point. We will continue to innovate in this market. While the performance of our products business disappointed in Q2, I'm encouraged by the broader progress we are making. We are expanding awareness of the Cricut brand, making our platform easier and more intuitive to use, and continuing to build a stronger foundation for long-term growth. While there is still work ahead, the improvements we are seeing in new user acquisition, engagement, subscriptions and underlying consumer demand reinforce our confidence that our strategy is gaining traction. We believe this strategy positions Cricut to deliver sustainable, profitable growth and create long-term value for our shareholders. With that, I will turn the call over to Kimball. Kimball Shill: Thank you, Ashish, and welcome everyone. In the second quarter, we delivered revenue of $156.3 million, down approximately 9% compared to the prior year. Year-on-year comparisons reflect the impact of the prior year pull-forward, which we highlighted a year ago. We generated $39.1 million in net income, or 25% of total sales in Q2. Breaking revenue down further, Q2 2026 revenue from platform was $85 million, up just over 5% year-over-year. ARPU increased 5% to $56.37 from $53.84 a year ago. Platform revenue was up primarily due to the year-over-year increase in paid subscribers and foreign exchange. Q2 revenue from products was $71.3 million, down 22% year-over-year. Product revenue was down primarily due to lower volumes and promotional pricing. Recall that during Q2 2025, we benefited from revenue pull-forward amid tariff-related supply chain uncertainty. As Ashish mentioned, global machine sell-out units grew at double-digit rates, with Joy 2 and Explore 5 bundles as key drivers of this growth, and also benefiting from an earlier Prime Day. As a reminder, we don't have perfect coverage for sell-out data in all channels, so treat this as directional. International sales were $35.9 million, down 1% year-over-year compared to Q2 2025. In Europe, a distribution change in one channel created a temporary sales timing impact as we worked through inventory and represented the headwind in the quarter. That transition is largely complete. International revenue represented 23% of total revenue in Q2 2026, up from 21% in the prior year. Foreign exchange provided a 2.6% benefit to international sales during the quarter. We are beginning to see encouraging results from our focused investments in key emerging markets with significant year-over-year connected machine sell-out growth in Asia, META and LATAM. While these markets remain a relatively small portion of our total business, they are contributing positively across several key operating metrics and continue to represent attractive long-term growth opportunities. Looking ahead, we plan to continue investing in international markets with a focus on increasing brand awareness, expanding our reach, and driving member acquisition throughout 2026. As Ashish mentioned, we ended the quarter with just over 3.1 million paid subscribers. Recall, normal seasonality could still see flat to declining quarter-on-quarter subscriber growth rates. We've remained focused on driving growth for the full year, supported by new product introductions, improved onboarding, ongoing investments and engagement, and promotional support. Moving to gross margin, total gross margin in Q2 was 74.5%, which was up over 14% year-on-year due to some unique items. During the quarter, we settled an outstanding legal claim related to a royalty dispute that allowed us to release accrued reserves of $6.4 million across platform and products. In addition, there was a $17.9 million benefit to gross margin due to IEEPA tariff refunds. Breaking gross margin down further, gross margin from platform in Q2 was 93%, an increase compared to 89.1% a year ago. This increase was driven by the non-recurring royalty settlement. As we've mentioned previously, we are excited about our AI investments, and there may be some gross margin pressure as we continue to ramp AI features. Gross margin from products was 52.4% compared to 32.4% in Q2 a year ago. The increasing gross margins for Q2 was primarily driven by non-recurring IEEPA tariff refunds and the royalty settlement. Total operating expenses for the quarter were $69 million and included $5.5 million in stock-based compensation. Total operating expenses decreased by about 3% from $71.4 million in Q2 2025. As Ashish mentioned, we are focused on increasing our speed of execution and our accelerating investments across our business that will help drive future revenue growth. Operating income for the quarter was $47.4 million, or 30.3% of revenue, compared to $30.1 million or 17.5% of revenue in Q2 last year. This increase reflects the non-recurring items we just talked about. The effective tax rate was 22.4% for Q2 2026 compared to 27.6% in 2025. The tax rate declined this year primarily due to higher R&D tax credits from increased investments and an increase to foreign-derived deduction eligible income. For the quarter, net income was $39.1 million, or $0.19 per diluted share, compared to $24.5 million, or $0.11 per diluted share, in Q2 2025. Turning now to balance sheet and cash flow. We continue to generate healthy cash flow on an annual basis, which funds our inventory needs and investments for long-term growth. In Q2 2026, we generated $50.4 million in cash from operations compared to $36.2 million in Q2 2025. We ended Q2 2026 with cash and cash equivalents of $286 million. We remained debt-free. Inventory decreased by $19 million year-over-year to $106 million, reflecting improved inventory management and normalization as we exited end-of-life machines. During Q2, we used $7.5 million of cash to repurchase 1.7 million shares of our stock. As a result, $21.6 million remain in our approved $50 million stock repurchase program. After the quarter, we paid a recurring semiannual dividend of $0.10 per share on July 21, 2026 to shareholders of record as of July 7th. Recall, we do not give detailed quarterly or annual guidance, but we do want to offer some color on our outlook for the remainder of 2026. We are focused on bringing excitement to our category. We are doing this by accelerating our investments in R&D, new product launches and marketing, including international markets, and continuing our promotional strategies to drive affordability. Through our new brand anthem, Think It. Make It. Cricut., we are investing to broaden awareness and relevance among new consumers and new user acquisition. We remain optimistic about the year overall, despite a disappointing first half, with improving engagement metrics reinforcing our optimism. We expect platform revenue to grow each quarter, while subscriber trends follow their typical seasonal pattern with softness in Q3. With a strong roadmap ahead, we project growth in the second half on products and platform. We have received IEEPA tariff refunds. However, existing tariffs remain a headwind and given ongoing uncertainty, we are not providing any guidance on margin impact. We expect to be profitable each quarter and generate cash flow from operations for full year 2026. Subject to stock price, we also expect to be active with our authorized $50 million stock repurchase program. While tariff uncertainty remains a reality, we are also navigating broader cost pressures, including input costs, supply chain dynamics, and a more cautious consumer environment in certain markets. Our team continues to operate proactively and with discipline, adjusting where needed, while maintaining our focus on strategic investments to position the company for growth. With that, I'll turn the call over to the operator for questions. Operator: [Operator Instructions] Our first question comes from the line of Erik Woodring of Morgan Stanley. Maya Neuman: This is Maya on for Erik. It's good to see the stabilization and engagement this quarter. Maybe just a question on international demand for me. I understand there was some changes with a distributor you mentioned. If we were to exclude the change in distribution and the benefit from foreign exchange, is there any way you can share kind of how demand or revenue trended internationally? Would it have grown year-over-year if we kind of exclude those 2 factors? Just any color you can share there and on your strategy in those markets looking forward. Kimball Shill: Thanks for the question. So there was always a story about a channel shift in Europe with one of the largest retailers and we changed the way that we supply them. So just the timing of inventory and invoicing mechanics meant that we weren't selling in to comp the sell-out, which then created an air bubble for the quarter. We've largely worked through that, and so we don't expect that to be a headwind in the revenue as we move through Q3. I think it is fair to call out that we would have grown in Q2 even without the benefit of foreign exchange, but for that air bubble. And then on our new markets, we continue to see strong performance. So I'm talking META, LATAM and Asia. And it's just, they're small enough that they don't overcome the pressure we saw in the larger market. So it was really a story about that distribution change in Europe. Ashish Arora: And just adding on to that, I think as we kind of commented on in our remarks, sell-through, we are pretty pleased with the sell-through across the board, especially in terms of machines. Kimball Shill: Yes, we were up on sell-out machines, double digits as we said in our prepared remarks, and we actually saw sell-in units up double digits on a global basis. Operator: Our next question comes from the line of Angus Kelleher of Barclays. Angus Kelleher-Ferguson: Hi, this is Angus Kelleher on for Adrienne Yih. I think I'll start things off with one for Ashish. Last quarter you highlighted Direct-to-Film as a new monetization lever beyond machines and subscriptions. Any update on adoption since launch and is DTF or any new monetization lever contributing meaningfully to platform ARPU today? And then just more broadly on that point, how should we think about the opportunity to monetize the platform beyond subscriptions? Ashish Arora: Thanks, Angus, for the question. It's still kind of really early to talk about it because we just launched DTF in North America, and we haven't launched it internationally. We have not fully started marketing it, but we're generally pleased with the launch. We also added more services under the umbrella of Creative Labs where we offer more AI tools that people can use as part of their subscription. We just actually, I think just yesterday -- a couple of days ago, announced Cricut Patterns, which is to go after the varied hobbies of our existing users. So the strategy is to drive engagement, get better value from our subscriptions for people who are subscribing, as well as monetize these services. We would say we are still in the very early days, and we have primarily focused on user experience, but we believe that over time that strategy will pay off. But at this point, it's not meaningful. Kimball Shill: Yes, and I guess I would just add, most of the users we see engaging with Direct-to-Film are existing subscribers, and many of those are repeat purchases. So we see it as adding value to our subscriptions offering today. As we -- it's again early days, so it's not necessarily bringing in new broader users, but it's deepening the engagement of existing users and subscribers. Ashish Arora: I think in the second half of the year, we'll ramp up our marketing. As I said, we wanted to iron out all the kinks and focus on the user experience. And we're pleased with the people that are coming and the satisfaction they're getting from that. So we will continue to invest in all of those areas. Angus Kelleher-Ferguson: Got you. Great. And then I'm going to circle back on something. Yes, sorry in advance, Kimball, since I know you covered it, but there's just a big delta between product revenue and the machine sell-in and sell-out. Can you help us understand or quantify how much of the disconnect versus product revenue is retailer dynamics versus pricing versus A&M pressure versus the one-time items, which are lapping? Just any more color you could provide there would be great. Kimball Shill: Yes, so we were down $20 million year-over-year in the quarter, about 22%. And we didn't expect to grow in the first half, as we called out, and that played out much to our expectations. The majority of that was really comping the tariff pull-forward in the accessories and materials from a year ago that set up that really tough comp. We did continue to see some erosion in the traditional accessories and materials business with decreases in volumes and pricing as we were chasing affordability for consumers in that pressure that continued to see -- sorry, in that segment that continue to see pressure in the market. And then on the machine side of the business, as Ashish mentioned, we're pleased with the sell-out increase we saw and also the sell-in units. But there's a mix of machines that we launched this year versus machines that we launched last year. So, we were comping with this year, we launched Joy 2 and Explore 5, and a year ago we launched Explore 4 and Maker 5. So on average, a higher price per machine a year ago than what we launched this year, and so just the mix created some challenge on the revenue side, and we knew that, we talked about that in Q1. On our continuing products, so on Maker 4 and Joy Xtra, this year, we have more promotionality comping less promotionality from a year ago. So both of those represented headwind to revenue in the first half. As we move to the back half of the year, we have additional launches coming that we think will reverse this trend. Actually, we're confident we'll reverse this trend. And it's also worth pointing out that platform revenue will grow each quarter. So, it's grown each quarter this year. We expect it to grow in Q3 and in Q4. If you want me to take you through the other reduction and the callback, I can talk through the impact of tariff refunds and what that looks like in margin pressure. We received $20.3 million of IEEPA tariff refunds in the quarter, $17.9 million of that benefited gross margin, while the balance was on the balance sheet and will flow through with inventories as we end up selling that inventory out. We also had a favorable legal settlement related to a royalty dispute that we've been litigating over the last few years. And with the favorable outcome, we were able to release a reserve of $6.4 million. Then that benefit was split between platform and products. And so, without those one-time items, gross margin for the quarter would have been about 58.9%, so about flat to last quarter. And similar on physical products, gross margins would have been about flat. Operating margin would have been 14.7% as opposed to the 30% that we reported. And then just flowing it through to operating income, it would have been about $23 million instead of $47 million. So still very profitable and solid performance even in declining revenue, but just wanted to highlight the benefit of those one-time items. Angus Kelleher-Ferguson: That's great, Kimball. Just one quick clarifier. Is that all of the IEEPA refunds you expect to receive, or is there maybe still some outstanding? Kimball Shill: There are still some that we're working, but that is the large majority of it. So again, we received $20.3 million in the quarter. There's still some that are working, and there's about $1.7 million of it is still -- that we received in this quarter that will flow through the P&L as we sell out the inventory that's tied to. Operator: I am showing no further questions at this time. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. 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This article first appeared on GuruFocus. Release Date: August 04, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Cricut Inc (NASDAQ:CRCT) saw double-digit cutting machine sell-out growth in Q2 2026, driven by the success of new Joy 2 and Explore 5 bundles and an earlier Prime Day. Platform revenue grew 5% year-over-year to $85 million, with paid subscribers increasing by 93,000 to over 3.1 million, and ARPU rising 5% to $56.37. Active users grew 1% year-over-year and remained flat sequentially, marking the first time this KPI has stabilized in the second quarter since 2022, with 90-day engaged users also stable. The company generated strong profitability with Q2 net income of $39.1 million (25% of sales) and operating cash flow of $50.4 million, while remaining debt-free with $286 million in cash. Cricut Inc (NASDAQ:CRCT) is seeing encouraging early results from its new 'Think It, Make It, Cricket' marketing campaign, which has driven a meaningful increase in traffic to cricket.com and is expanding brand awareness beyond core crafters. The company is making progress in international markets, with significant year-over-year connected machine sell-out growth in Asia, META, and LATAM, and international revenue now representing 23% of total revenue. Total company sales declined approximately 9% year-over-year in Q2 2026, against a difficult comp due to the prior year's tariff-related pull-forward. Product revenue fell 22% year-over-year to $71.3 million, impacted by lower volumes, promotional pricing, and a mix shift toward lower-priced new machines. The accessories and materials business remains a challenge, with continued erosion in volumes and pricing due to a highly competitive market and consumer price sensitivity. The company faces ongoing tariff headwinds and broader cost pressures, including input costs and supply chain dynamics, with no guidance provided on margin impact due to uncertainty. International sales were down 1% year-over-year, impacted by a temporary sales timing issue from a distribution change in Europe, which created a headwind in the quarter. Excluding one-time items (IEEPA tariff refunds and a legal settlement), gross margin would have been approximately 58.9%, flat to last quarter, and operating margin would have been 14.7% instead of the reported 30.3%. Warning! GuruFocus has detected 4 Warning Signs with CRCT. Is CRCT fairly valued? Test your thesis with our free DCF calculator. Q: Can you help us understand or quantify how much of the disconnect between product revenue and machine sell-in/sell-out is due to retailer dynamics, pricing, accessories and materials pressure, or one-time items you are lapping? A: Kimball Schill, CFO, explained that product revenue was down 22% year-over-year, primarily due to comping against the tariff pull-forward from Q2 2025. The company also saw continued erosion in the traditional accessories and materials business due to volume declines and pricing pressure as they chased affordability. On the machine side, the mix of new, lower-priced launches (Joy 2 and Explore 5) versus higher-priced launches a year ago (Explore 4 and Maker 5) created a revenue headwind, along with increased promotionality on continuing products. Excluding one-time items, gross margin would have been approximately 58.9%, flat to last quarter, and operating margin would have been 14.7% instead of the reported 30.3%. Q: Is there any way you can share how demand or revenue trended internationally, excluding the distribution change and foreign exchange benefit? Would it have grown year-over-year? A: Kimball Schill, CFO, stated that the company would have grown in Q2 even without the benefit of foreign exchange, but for the "air bubble" created by a channel shift in Europe with one of the largest retailers. The change in supply mechanics created a temporary sales timing impact, which has largely been worked through and is not expected to be a headwind in Q3. Ashish Arora, CEO, added that sell-through was strong across the board, particularly for machines, with double-digit sell-out growth globally. Q: Any update on adoption of direct-to-film (DTF) since launch, and is it contributing meaningfully to platform ARPU? How should we think about monetizing the platform beyond subscriptions? A: Ashish Arora, CEO, noted it is still very early days for DTF, which has only launched in North America and has not been fully marketed. The company is pleased with the launch and is focused on user experience. Kimball Schill, CFO, added that most DTF users are existing subscribers and repeat purchasers, so it is deepening engagement rather than bringing in new users. The company plans to ramp up marketing in the second half of the year, but currently, these services are not meaningful to ARPU. Q: Is that all of the IEEPA tariff refunds you expect to receive, or is there still some outstanding? A: Kimball Schill, CFO, confirmed that the $20.3 million received in the quarter represents the large majority of the refunds, but there are still some working through the process. Of the amount received, $17.9 million benefited gross margin, while the remaining $1.7 million will flow through the P&L as the associated inventory is sold. Q: Can you provide more color on the stabilization of engagement metrics and what is driving the improvement? A: Ashish Arora, CEO, attributed the stabilization to the cumulative impact of efforts to simplify the user experience, improve onboarding, and strengthen new user acquisition. Active users grew 1% year-over-year and remained flat sequentially, marking the first time this KPI has stabilized in the second quarter since 2022. 90-day engaged users were also stable year-over-year. The company is also embedding AI throughout the platform, introducing new agentic AI features designed to help users create designs that translate successfully into physical projects. Q: Can you elaborate on the performance of the new premium subscription tier and its adoption? A: Ashish Arora, CEO, stated that following successful initial testing, the company saw strong adoption of its premium plan, which starts at $14.99 per month among new subscribers. The offering is now available across both desktop and mobile applications, and the company will continue expanding availability across purchase channels throughout the year. They are also testing new plan formats and pricing tiers on an ongoing basis. Q: What is the outlook for the second half of 2026, particularly regarding revenue growth and profitability? A: Kimball Schill, CFO, stated that the company expects platform revenue to grow each quarter, while subscriber trends follow typical seasonal patterns with softness in Q3. With a strong roadmap ahead, they project growth in the second half on both products and platform. The company expects to be profitable each quarter and generate cash flow from operations for the full year 2026. They also expect to be active with the authorized $50 million stock repurchase program, subject to stock price. Q: Can you provide more detail on the gross margin breakdown and the impact of one-time items? A: Kimball Schill, CFO, detailed that total gross margin was 74.5%, up over 14% year-on-year due to unique items. This included a $6.4 million release of accrued reserves from a favorable legal settlement related to a royalty dispute, and a $17.9 million benefit from IEEPA tariff refunds. Platform gross margin was 93%, up from 89.1% a year ago, while product gross margin was 52.4% compared to 32.4% in Q2 2025. Without these one-time items, gross margin would have been about 58.9%, flat to last quarter. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management attributed the 9% overall revenue decline to a difficult year-over-year comparison involving a 2025 tariff-related pull-forward. User engagement reached a significant milestone with active users growing 1% year-over-year, marking the first second-quarter stabilization since 2022. The 'Think It. Make It. Cricut.' global marketing campaign is successfully driving increased web traffic and aims to expand the brand's reach beyond traditional crafters. A bundle-only strategy for new machines like Joy 2 and Explore 5 is driving double-digit unit sell-out growth by ensuring users start with high-quality tools and materials. The platform business remains the primary growth engine, with paid subscribers surpassing 3.1 million and revenue growing 5% due to improved onboarding and subscriber benefits. Management is integrating agentic AI features into Design Space to reduce creative friction and ensure digital designs translate successfully into physical projects. Management projects revenue growth in both products and platform segments for the second half of 2026, supported by a strong product roadmap. Platform revenue is expected to grow sequentially each quarter, though subscriber additions may follow typical seasonal softness in Q3. The company plans to continue aggressive investments in R&D and marketing to accelerate development cycles and broaden consumer awareness. Strategic focus remains on expanding the premium subscription tier and testing new plan formats to enhance ecosystem monetization. Management expects to remain profitable and generate positive cash flow from operations for the full year 2026. Gross margins were significantly bolstered by $17.9 million in IEEPA tariff refunds and a $6.4 million release of reserves following a favorable royalty dispute settlement. Excluding one-time items, operating margin would have been 14.7% rather than the reported 30.3%. The accessories and materials business continues to face volume and pricing pressure due to a highly competitive market and a cautious consumer environment. International revenue faced a temporary headwind in Europe due to a distribution channel transition that is now largely complete. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management confirmed that international revenue would have grown year-over-year if not for a specific 'air bubble' caused by a distribution change in Europe. Emerging markets in Asia, META, and LATAM are showing strong performance but remain a small portion of the total business. DTF is in its infancy and currently serves primarily to deepen engagement with existing subscribers rather than attracting new users. While not yet a meaningful revenue contributor, management believes these value-added services will differentiate the subscription offering over time. The revenue decline despite unit growth was driven by a shift in product mix toward lower-priced machines compared to the prior year's launches. Increased promotional activity on legacy machines like Maker 4 and Joy Xtra created additional revenue headwinds in the first half of the year.

Interested in Cricut, Inc.? Here are five stocks we like better. Q2 revenue fell 9% to $156.3 million, pressured by a difficult comparison and a 22% decline in product sales, while platform revenue rose just over 5% to $85 million. Paid subscribers increased by 93,000 year over year to more than 3.1 million, and connected-machine sell-out grew at a double-digit rate, signaling continued engagement with Cricut’s platform strategy. Reported profitability benefited from $17.9 million in tariff refunds and a $6.4 million royalty-reserve release; excluding these items, gross margin was approximately 58.9%. Management expects platform and product revenue growth in the second half while maintaining profitability and generating full-year operating cash flow. Can Cricut Stock Jump Higher In 2023? Cricut (NASDAQ:CRCT) reported second-quarter revenue of $156.3 million, down approximately 9% from a year earlier, as product sales faced a difficult comparison with a prior-year period that benefited from tariff-related purchase pull-forwards. The company said platform revenue continued to grow, while connected-machine sell-out rose at a double-digit rate. Net income was $39.1 million, or $0.19 per diluted share, compared with $24.5 million, or $0.11 per diluted share, in the year-earlier quarter. Results included $17.9 million of gross-margin benefit from IEEPA tariff refunds and a $6.4 million release of accrued reserves following the settlement of a royalty dispute. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control Cricut Fails To Impress The Market And Shares Go On Sale “In Q2, we continued to see benefits from our platform-first strategy aimed at creating a simpler, more compelling user experience,” President and CEO Ashish Arora said. He cited rising machine demand, stable engagement metrics and subscription growth as signs that the company’s strategy is gaining traction. Platform revenue increased just over 5% year over year to $85 million. Paid subscribers rose by 93,000, or more than 3%, from a year earlier to just over 3.1 million. Sequentially, Cricut added 25,000 paid subscribers during the quarter. → Financials Hit Record Highs as the AI Trade Unravels—Can They Keep Leading? Cricut Crafted Another Great Quarter Average revenue per user increased 5% to $56.37, from $53.84 in the prior-year period. Chief Financial Officer Kimball Shill said platform revenue growth reflected the larger subscriber base and foreign-exchange effects. The company is expanding its premium subscription offering, which starts at $14.99 per month, across desktop and mobile applications after what Arora described as strong adoption during initial testing. Cricut is also testing additional plan formats and pricing tiers. → Why Rare Earth Processing Could Be the Real 2027 Opportunity During the quarter, the company introduced AI-powered Creative Labs features that allow subscribers to transform personal photos into projects such as coloring pages and photo art. Arora said Cricut’s AI tools are designed around the company’s machines, materials and project workflows to help users produce designs that translate into physical projects. Active users increased 1% year over year and were flat sequentially, marking the first time the metric had stabilized in a second quarter since 2022, according to the company. Ninety-day engaged users were also stable year over year. Products revenue fell 22% to $71.3 million, primarily due to lower volumes and promotional pricing. Shill said the decline largely reflected a difficult comparison against the second quarter of 2025, when customers pulled forward purchases amid tariff-related supply-chain uncertainty. Despite the revenue decline, global connected-machine sell-out grew at a double-digit rate. New Cricut Joy 2 and Cricut Explore 5 bundles were key contributors, along with an earlier Prime Day. The company also reported double-digit growth in global machine sell-in units. Shill said machine revenue faced an unfavorable product mix comparison because the company launched Joy 2 and Explore 5 this year, compared with the higher-priced Explore 4 and Maker 4 machines launched a year ago. He also cited more promotional activity for continuing products, including Maker 4 and Joy Xtra. Arora said the company’s bundle-only approach for new machines is intended to introduce users to Cricut tools, accessories and materials at the outset. The company also introduced new accessories and materials stock-keeping units during retailer resets, with particular emphasis on printable products, including items used for stickers, labels, photos and gifts. Cricut launched its next-generation Autopress large-format heat press in July. Arora said the company plans to continue innovating in that market. International revenue was $35.9 million, down 1% year over year, and represented 23% of total revenue, up from 21% a year earlier. Foreign exchange provided a 2.6% benefit to international revenue. Shill said a change in how Cricut supplies one of its largest European retail partners created a temporary timing issue involving inventory and invoicing. The transition is largely complete, he said, and the company does not expect it to remain a revenue headwind in the third quarter. Excluding the foreign-exchange benefit, international revenue would have grown in the quarter absent the European distribution timing issue, Shill said. He added that connected-machine sell-out has grown significantly year over year in Asia, the Middle East and Africa, and Latin America, though those regions remain a relatively small part of the business. Total gross margin rose to 74.5% from the prior-year quarter, aided by the IEEPA tariff refunds and royalty settlement. Platform gross margin was 93%, while products gross margin was 52.4%, compared with 32.4% a year earlier. Shill said that excluding the one-time items, total gross margin would have been about 58.9%, roughly flat with the first quarter. Operating margin would have been 14.7%, compared with the reported 30.3%. Operating expenses declined about 3% to $69 million, including $5.5 million in stock-based compensation. Operating income was $47.4 million, compared with $30.1 million in the prior-year period. Cricut generated $50.4 million in operating cash flow during the quarter and ended the period with $286 million in cash and cash equivalents, with no debt. Inventory declined $19 million year over year to $106 million. During the quarter, the company repurchased 1.7 million shares for $7.5 million. It had $21.6 million remaining under its $50 million repurchase authorization. Cricut also paid a recurring semiannual dividend of $0.10 per share on July 21. Cricut does not provide detailed quarterly or annual guidance, but management said it expects platform revenue to grow in each remaining quarter of 2026. Subscriber trends are expected to follow typical seasonal patterns, including softness in the third quarter. Shill said the company projects second-half growth in both products and platform revenue, supported by new product launches, marketing investments, promotional efforts and improved onboarding. Cricut expects to remain profitable in each quarter and generate operating cash flow for the full year. The company said existing tariffs, input costs, supply-chain conditions and cautious consumers in some markets remain pressures. While Cricut has received most of its anticipated IEEPA tariff refunds, Shill said some refunds are still being processed and the company is not providing margin guidance because of continuing tariff uncertainty. Cricut, Inc (NASDAQ: CRCT) is a U.S.-based technology company specializing in personal and small-business crafting solutions. The company designs and markets a family of cutting machines that leverage computer-aided design to precisely cut a wide range of materials, including paper, vinyl, fabric and leather. Complementing its hardware offerings, Cricut provides proprietary software and mobile applications that enable users to create custom artwork, import graphics and access a vast library of pre-designed projects and fonts through a subscription service. Founded as a division of Provo Craft & Novelty in 2005, Cricut emerged as an independent public company in March 2021. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Cricut Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Over 3.1 million Paid Subscribers, up 3% over Q2 2025 Q2 2026 revenue of $156.3 million, down 9% compared to Q2 2025 Net income of $39.1 million, up 59% compared to Q2 2025 Recurring semi-annual dividend of $0.10 per share paid in July 2026 SOUTH JORDAN, Utah, Aug. 04, 2026 (GLOBE NEWSWIRE) -- Cricut, Inc. (“Cricut”) (NASDAQ: CRCT), the creative technology company that has brought a connected platform for making to millions of users worldwide, today announced financial results for its second quarter ended June 30, 2026. “We were pleased with the progress we made executing against our strategic priorities in the second quarter,” said Ashish Arora, Chief Executive Officer of Cricut. “Although total company revenue declined 9% year over year in Q2, subscriptions exceeded 3.1 million, we saw improving engagement trends, and achieved double-digit global machine sell-out growth. These results reinforce our confidence that our platform-first strategy is making Cricut easier to discover, easier to use, and more valuable for our customers, while positioning the business for growth.” Second Quarter 2026 Financial Results Revenue was $156.3 million, down 9% from Q2 2025. Platform revenue was $85.0 million, up over 5% over Q2 2025. Products revenue was $71.3 million, down 22.0% from Q2 2025. International revenue decreased by 1% from Q2 2025 and was 23% of total revenue, up from 21% of total revenue in Q2 2025. Gross margin was 74.5%, up from 59.0% in Q2 2025. Operating income was $47.4 million, or 30.3% of revenue, and up 58% from Q2 2025. Operating income in Q2 2025 was $30.1 million, or 17.5% of revenue. Net income was $39.1 million, or 25.0% of revenue, and up 59% from Q2 2025. Net income in Q2 2025 was $24.5 million, or 14.2% of revenue. Diluted earnings per share was $0.19, up from $0.11 per share in Q2 2025. Generated $50 million in Cash from Operations in Q2. Used $7.5 million to repurchase 1,742,294 shares of our common stock in Q2 with $21.6 million remaining on our $50 million authorized stock repurchase program, which the board replenished in May 2025. “In the second quarter, we delivered revenue of $156.3 million, down 9% year over year, and net income of $39.1 million, or 25.0% of sales, benefiting from some unique items. Platform revenue grew over 5% to $85.0 million,” said Kimball Shill, Chief Financial Officer. “Our business continues to generate healthy cash flow and maintain a strong balance sheet, providing the flexibility to invest in innovation, international expansion, and marketing, while continuing to return capital to shareholders through dividends and share repurchases. We believe our financial position gives us the ability to execute our strategy and invest for future growth.” Recent Business Highlights Paid Subscribers increased to 3.10 million, up 3% year-over-year. Platform ARPU increased to $56.37, up 5% year-over-year. Active Users grew 1% year-over-year to nearly 6.0 million. 90-Day Engaged Users was flat year-over-year at 3.5 million. After Q2 closed, Cricut completed a recurring semi-annual dividend of $0.10 per share paid on July 21, 2026, to shareholders of record on July 7, 2026** ** The approved dividend is to the Company’s Class A and Class B Common Stockholders. In addition, holders of restricted stock units that are unvested on the record date are credited with a dividend equivalent based on the value of the per share dividend pursuant to the terms of the Company’s equity incentive documents. The dividend equivalent entitles such holders to receive additional shares upon vesting of the corresponding restricted stock units. The board of directors views this level of capital allocation, both stock repurchases and dividends, as appropriate given the Company’s operating and financial plans and will continue to evaluate capital allocation on a regular basis. Key Performance Metrics In addition to the measures presented in our condensed consolidated financial statements, we use the following key business metrics to evaluate our business, measure our performance, identify trends affecting our business, and make strategic decisions. We believe these metrics are useful to investors because they can help in monitoring the long-term health of our business. Our determination and presentation of these metrics may differ from that of other companies. The presentation of these metrics is meant to be considered in addition to, not as a substitute for or in isolation from, our financial measures prepared in accordance with GAAP. Glossary of Terms 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 product 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 product 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, paused, 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. Webcast and Conference Call Information Cricut management will host a conference call and webcast to discuss the results today, Tuesday, August 4, 2026 at 3:00 p.m. Mountain Time (5:00 p.m. Eastern Time). Information about Cricut’s financial results, including a link to the live and archived webcast of the conference call, will be made available on Cricut’s investor relations website at https://investor.cricut.com/. The live call may also be accessed via telephone. Please pre-register using this link: https://register-conf.media-server.com/register/BI98ef3f88677d416c98006d778bcd5c08. After registering, a confirmation will be sent via email and will include dial-in details and a unique PIN code for entry to the call. To avoid long wait times, we suggest registering at minimum 15 minutes before the start of the call to receive your unique PIN code. About Cricut, Inc. Cricut, Inc. is a creative platform company that makes it easy for users to create meaningful personal items. Cricut hardware and software work together as a connected platform for consumers to make beautiful, high-quality projects quickly and easily. These industry-leading products include a flagship line of smart cutting machines — the Cricut Maker® family, the Cricut Explore® family, the Cricut Joy® family — accompanied by other unique tools like Cricut EasyPress®, the Infusible Ink™ system, and a diverse collection of materials. In addition to providing tools and materials, Cricut fosters a thriving community of millions of dedicated users worldwide. Cricut has used, and intends to continue using, its investor relations website and the Cricut News Blog (https://cricut.com/blog/news/) to disclose material non-public information and to comply with its disclosure obligations under Regulation FD. Accordingly, you should monitor our investor relations website and the Cricut News Blog in addition to following our press releases, SEC filings and public conference calls and webcasts. Media Contact:Avani [email protected] Investor Relations:[email protected]: Cricut, Inc. Cautionary Statement Regarding Forward-Looking Statements This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 as amended (the “Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements include, but are not limited to, quotations from management, business outlook, strategies, capital allocation plans, the impact of tariffs on our business, the impact of geopolitical conflict or war on our supply chain, market size and growth opportunities. Forward-looking statements generally can be identified by the fact that they do not relate strictly to historical or current facts and by the use of forward-looking words such as “anticipates,” “believes,” “targets,” “potential,” “estimates,” “expects,” “intends,” “plans,” “projects,” “may,” “will” or similar terminology. In particular, statements, express or implied, concerning future actions, conditions or events, future results of operations or the ability to generate revenues, income or cash flow are forward-looking statements. These statements are based on and reflect our current expectations, estimates, assumptions and/ or projections and our perception of historical trends and current conditions, as well as other factors that we believe are appropriate and reasonable under the circumstances. Forward-looking statements are neither predictions nor guarantees of future events, circumstances or performance and are inherently subject to known and unknown risks, uncertainties and assumptions, many of which are beyond our control, that could cause our actual results to differ materially from those indicated by those statements. There can be no assurance that our expectations, estimates, assumptions and/or projections, including with respect to the future earnings and performance of Cricut, Inc., will prove to be correct or that any of our expectations, estimates or projections will be achieved. The forward-looking statements included in this press release are only made as of the date indicated on the relevant materials and are based on our estimates and opinions at the time the statements are made. We disclaim any obligation to publicly update any forward-looking statement to reflect subsequent events or circumstances or changes in opinion, except as required by law. Numerous factors could cause our actual results and events to differ materially from those expressed or implied by forward-looking statements including, but not limited to, risks and uncertainties associated with: our ability to attract and engage with our users; competitive risks; supply chain, manufacturing, distribution and fulfillment risks; international risks, including regulation, trade wars, heightened, scheduled, or threatened tariffs or by retaliatory trade measures that have materially increased our costs and the potential for further trade barriers or disruptions; sales and marketing risks, including our dependence on sales to brick-and-mortar and online retail partners and our need to continue to grow online sales; risks relating to the complexity of our business, which includes connected machines, custom tools, hundreds of materials, design apps, e-commerce software, subscriptions, content, international production, direct sales and retail distribution; risks related to product quality, safety and warranty claims and returns; risks related to the fluctuation of our quarterly results of operations and other operating metrics; risks related to intellectual property, cybersecurity and potential data breaches; risks related to our dependence on our Chief Executive Officer; risks related to our status as a “controlled company”; and the impact of economic and geopolitical events, natural disasters and actual or threatened public health emergencies, current recessionary pressures and any resulting economic slowdown from any of these events, or other resulting interruption to our operations. These risks and uncertainties are described in greater detail, or are incorporated by reference, under the heading “Risk Factors” in the most recent form 10-K or 10-Q that we have filed with the Securities and Exchange Commission (“SEC”). In addition, certain risks and uncertainties not presently known to us or that we currently believe to be immaterial could affect the accuracy of any such forward-looking statements. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty. The forward-looking statements included in these materials are only made as of the date indicated on the relevant materials and we disclaim any obligation to publicly update any forward-looking statement to reflect subsequent events or circumstances, except as required by law.

Cricut, Inc. (CRCT) came out with quarterly earnings of $0.19 per share, beating the Zacks Consensus Estimate of $0.04 per share. This compares to earnings of $0.11 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +375.00%. A quarter ago, it was expected that this company would post earnings of $0.05 per share when it actually produced earnings of $0.1, delivering a surprise of +100%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Cricut, which belongs to the Zacks Technology Services industry, posted revenues of $156.29 million for the quarter ended June 2026, missing the Zacks Consensus Estimate by 6.89%. This compares to year-ago revenues of $172.11 million. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Cricut shares have lost about 3.2% since the beginning of the year versus the S&P 500's gain of 11%. While Cricut has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Cricut was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.04 on $170.97 million in revenues for the coming quarter and $0.14 on $706.52 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Technology Services is currently in the bottom 40% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. QXO, Inc. (QXO), another stock in the same industry, has yet to report results for the quarter ended June 2026. This company is expected to post quarterly earnings of $0.10 per share in its upcoming report, which represents a year-over-year change of -9.1%. The consensus EPS estimate for the quarter has been revised 14.1% higher over the last 30 days to the current level. QXO, Inc.'s revenues are expected to be $3.21 billion, up 68.3% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cricut, Inc. (CRCT) : Free Stock Analysis Report QXO, Inc. (QXO) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Cricut, Inc.'s (NASDAQ:CRCT) recent earnings report didn't offer any surprises, with the shares unchanged over the last week. We did some digging, and we think that investors are missing some encouraging factors in the underlying numbers. We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. In high finance, the key ratio used to measure how well a company converts reported profits into free cash flow (FCF) is the accrual ratio (from cashflow). The accrual ratio subtracts the FCF from the profit for a given period, and divides the result by the average operating assets of the company over that time. You could think of the accrual ratio from cashflow as the 'non-FCF profit ratio'. Therefore, it's actually considered a good thing when a company has a negative accrual ratio, but a bad thing if its accrual ratio is positive. That is not intended to imply we should worry about a positive accrual ratio, but it's worth noting where the accrual ratio is rather high. That's because some academic studies have suggested that high accruals ratios tend to lead to lower profit or less profit growth. Over the twelve months to March 2026, Cricut recorded an accrual ratio of -0.55. That implies it has very good cash conversion, and that its earnings in the last year actually significantly understate its free cash flow. To wit, it produced free cash flow of US$137m during the period, dwarfing its reported profit of US$73.1m. Cricut did see its free cash flow drop year on year, which is less than ideal, like a Simpson's episode without Groundskeeper Willie. That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates. Happily for shareholders, Cricut produced plenty of free cash flow to back up its statutory profit numbers. Because of this, we think Cricut's underlying earnings potential is as good as, or possibly even better, than the statutory profit makes it seem! And on top of that, its earnings per share have grown at 58% per year over the last three years. The goal of this article has been to assess how well we can rely on the statutory earnings to reflect the company's potential, but there is plenty more to consider. With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. Our analysis shows 2 warning signs for Cricut (1 is a bit concerning!) and we strongly recommend you look at them before investing. This note has only looked at a single factor that sheds light on the nature of Cricut's profit. But there are plenty of other ways to inform your opinion of a company. Some people consider a high return on equity to be a good sign of a quality business. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks with high insider ownership. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Transitioned to a platform-first strategy, shifting from standalone hardware to bundle-only machine offerings to simplify onboarding and improve perceived value. Global machine sell-out units grew year-over-year, serving as a leading indicator for the monetization flywheel despite a 2% decline in total company sales. The company launched Joy 2 and Explore 5 machines on all-new architectures, with the Joy 2 specifically designed to lower barriers to entry at a U.S. price point between $99 and $129. Introduced 'Cricut Direct-to-Film' as the company's first service offering, demonstrating a new capability to monetize the creative platform beyond physical hardware. Stabilized engagement trends with active users up 1% year-over-year, driven by new AI-assisted project tools and guided software flows for popular use cases. International revenue grew 16% year-over-year, now representing 26% of total sales, supported by targeted marketing and pricing investments in Europe and Australia. Aggressively refreshing the materials portfolio with over 200 new SKUs to combat pressure from private label offerings and online marketplace entrants. Management expects total company revenue to remain flat or decline in Q2 due to a difficult prior-year comparison involving tariff-related inventory pull-forward. Confidence in second-half growth is supported by a robust product roadmap, new brand campaigns, and the full availability of higher-priced machine bundles. Platform revenue is projected to grow sequentially each quarter, while paid subscriber counts may face seasonal pressure and remain flat in Q2 and Q3. The company plans to accelerate R&D and marketing investments throughout 2026 to increase speed of execution and broaden mass-market awareness. Guidance assumes continued profitability and positive cash flow for the full year 2026, despite ongoing macro headwinds and cautious consumer sentiment in Europe. Product gross margins declined to 23.1% due to inventory write-downs from end-of-life programs and lower monetization of previously reserved inventory. Tariff impacts remain a headwind; while IEEPA tariffs were overturned, a new 10% administration tariff has been implemented, which is expected to result in a 10% blended impact across the business once IEEPA-related noise clears. The Board approved a recurring semiannual dividend of $0.10 per share and remains active with a $50 million stock repurchase program. Management flagged potential supply chain disruptions or rising input costs for plastics if global energy price volatility continues. Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. The first-half revenue decline is primarily attributed to lower average selling prices (ASPs) as the company comps against higher-priced machine launches from the prior year. Management is confident in a second-half reversal driven by new product introductions and the 'halo effect' of upcoming international marketing investments. Testing higher pricing on the iOS App Store while offering lower legacy prices via direct payment has successfully shifted users to Cricut's own payment platform. New subscription tiers are being tested using AI credits and shop benefits as differentiators, with early signals showing encouraging adoption of higher-priced tiers. Cricut has applied for material refunds following the overturning of IEEPA tariffs but is not monetizing these receivables due to a strong cash position of $256 million. Refunds will be recorded as a one-time credit to Cost of Goods Sold (COGS) only when the cash is actually received. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here.

Cricut reported Q1 2026 revenue of $159.5 million, down 2% year‑over‑year, with net income of $20.3 million; platform revenue rose nearly 6% to $84.8 million and paid subscribers climbed to about 3.08 million, but product revenue fell ~9.6%, squeezing gross margin to 58.1%. Management is executing a platform-first, bundle-only strategy—launching Joy 2, Explore 5, EasyPress SE, AI Project Designer and a direct-to-film service pilot—and expects these innovations and higher‑priced bundles to help drive a stronger second half of 2026. Cricut finished the quarter with $256 million cash and no debt, repurchased $12.2 million of stock and declared a $0.10 semiannual dividend, though tariffs remain a material headwind as the company pursues an unspecified refund. Interested in Cricut, Inc.? Here are five stocks we like better. Can Cricut Stock Jump Higher In 2023? Cricut (NASDAQ:CRCT) reported first-quarter 2026 revenue of $159.5 million, down 2% from the prior year, as higher platform revenue and improving user trends were offset by a decline in product revenue tied largely to promotional activity and product mix. The company posted net income of $20.3 million, or $0.10 per diluted share, compared with $23.9 million, or $0.11 per diluted share, a year earlier. Chief Executive Officer Ashish Arora said the company is beginning to see “early benefits” from its platform-first strategy, pointing to guided onboarding, software “guided flows” in Design Space, new bundles, and services working together to simplify the user experience. During the quarter, Cricut launched two new cutting machines—Joy 2 and Explore 5—sold exclusively in bundle options intended to improve onboarding and offer “compelling price points and value.” The company also launched the next generation of its handheld heat presses, EasyPress SE, and introduced new materials, accessories, and AI-related software enhancements. → Roblox Stock Slides to New Low as Safety Changes Weigh on Outlook Cricut Fails To Impress The Market And Shares Go On Sale Arora said Cricut was recognized with Michaels’ Best New Product Launch Award for Joy 2 and Explore 5, noting that Michaels is “an important partner.” He added that Cricut is accelerating investments in hardware development, materials, and engagement to support future growth, while maintaining a marketing and promotional cadence similar to last year and preparing a broader marketing campaign to launch this summer. As part of its efforts to reduce complexity for consumers, Cricut also introduced its first service offering: a direct-to-film (DTF) service that allows users to create full-color designs through guided flows and have the designs printed and delivered. Arora described the initiative as a “small experiment” but said early response has been encouraging, with “over 80% of orders” coming from subscribers and “around a third” of orders from repeat customers. → The Real SpaceX Play: 5 Chip Stocks Powering the IPO Before It Launches Cricut Crafted Another Great Quarter Arora said the company ended the quarter with active users up 1% year-over-year and 90-day engaged users down 1%, which he described as improvements both year-over-year and sequentially. He highlighted progress from guided flows for popular use cases and the rollout of AI Project Designer, a conversational interface intended to help users design and make projects more easily. Paid subscribers increased by 104,000, or more than 3% year-over-year, to nearly 3.08 million, while platform revenue rose nearly 6% to about $84.8 million. However, Cricut reported a sequential decline of 13,000 subscribers from the fourth quarter of 2025, which Arora attributed to lower promotional activity in the first quarter as the company emphasized revenue growth. → 3 Emerging Markets ETFs to Maximize Exposure to High-Potential Countries Arora said Cricut is testing new subscription plans and pricing tiers for new signups, using AI credits and shop benefits as differentiators. He also discussed a separate test involving higher pricing for new subscribers through the iOS App Store while offering alternative payment options to buy directly through Cricut at the legacy price. Arora said results have been positive, shifting “a majority of consumers” to Cricut payment options and some to higher-priced App Store purchases “without significant impact to overall expected signups.” Chief Financial Officer Kimball Shill said platform revenue growth was supported by higher paid subscribers and foreign exchange. Platform ARPU increased 4.8% to $55.65 from $53.10 a year earlier. Product revenue, however, fell 9.6% year-over-year to $74.7 million, primarily due to lower average selling prices from increased promotional activity and product mix as Cricut cleared end-of-life inventory ahead of new product launches. Shill also noted that as the company shifts to a bundle-only strategy for next-generation connected machines bundled with materials, Cricut will no longer provide the supplemental revenue breakdown of connected machines and accessories and materials in SEC filings and its data sheet. It will continue reporting platform and products revenue and costs in its consolidated financial statements. International sales grew more than 16% year-over-year to $40.9 million and represented 26% of total revenue, up from 22% in the prior year. Shill said foreign exchange benefited international sales by 10.3% in the quarter, and the company saw year-over-year growth in Europe and Australia as well as strong momentum in Asia and Latin America. The company’s META region declined year-over-year amid geopolitical pressures, though Shill said exposure there remains limited. Total gross margin was 58.1%, down 2.4 percentage points year-over-year. Platform gross margin was 89%, slightly below 89.2% a year earlier, with Shill noting potential pressure as the company ramps AI features. Products gross margin dropped to 23.1% from 32.7%, driven by inventory write-downs tied to end-of-life programs, lower monetization of previously reserved inventory, tariffs, and increased promotional activity. Operating expenses totaled $69.8 million, up just over 1% from a year earlier, and included $6.3 million in stock-based compensation. Operating income was $22.9 million, or 14.4% of revenue, compared with $29.3 million, or 18% of revenue, in the prior-year quarter. Shill said the tax rate declined to 19% from 26.7% due primarily to higher R&D tax credits from increased investments. Shill said the company generated $26.9 million in operating cash flow in the quarter, down from $61.2 million a year earlier, and ended Q1 with $256 million in cash and no debt. Inventory declined $8 million year-over-year to $106 million as the company exited end-of-life machines. Cricut repurchased 2.8 million shares for $12.2 million during the quarter, leaving $29.1 million remaining on its authorized $50 million repurchase program. The company also paid about $21 million for its declared $0.10 per share semiannual dividend in January, and the board approved a recurring semiannual dividend of $0.10 per share payable July 21, 2026, to shareholders of record as of July 7, 2026. On tariffs, Shill said Cricut is not providing guidance on margin impact given the “recent Supreme Court ruling overturning IEEPA tariffs and associated dynamics.” He added that tariffs remain a headwind, explaining that inventory brought in under IEEPA tariffs continues to flow through cost of goods sold and that the company has applied for tariff refunds. Shill said the refund amount is “material” but Cricut is not sharing a number. He also said Cricut is not monetizing or factoring the receivables, citing its cash position and debt-free balance sheet. Shill said Cricut does not provide detailed quarterly or annual guidance, but offered expectations for 2026 trends. In Q2, the company does not expect total revenue growth year-over-year, citing a difficult comparison to Q2 2025, which benefited from revenue pull-forward amid tariff-related supply chain uncertainty. He said Cricut expects platform revenue to grow each quarter, while subscriber trends are expected to follow typical seasonal softness in Q2 and Q3. During the Q&A, Shill said the first-half product revenue story is largely about lower average selling prices versus last year as Cricut launched less expensive machines this year. He contrasted Joy 2’s $99–$129 U.S. entry price with last year’s Maker 4 entry price of about $399, and said ongoing promotional activity on continuing products has also pressured average selling prices. While acknowledging continued erosion in accessories and materials, Shill said bundle-only next-generation machines include bundled materials that provide some offset. Arora said the company is encouraged by continued machine sell-out as a leading indicator and emphasized international investments, additional innovation and product introductions planned for the second half, and a new brand campaign aimed at making Cricut feel “relevant and approachable.” He also said the availability of higher-priced bundles later in the year could be a positive factor, describing 2026 as “the year of the two halves.” On retailer behavior, Arora said Cricut’s retail partners are “very excited” about the roadmap and innovation, and that retailers have been pleased with the shift to bundles. He said the company has not seen a significant shift in retailer buying behavior tied to consumer sentiment, while Shill added that some consumer caution has been more evident in Europe than in the U.S. Cricut, Inc (NASDAQ: CRCT) is a U.S.-based technology company specializing in personal and small-business crafting solutions. The company designs and markets a family of cutting machines that leverage computer-aided design to precisely cut a wide range of materials, including paper, vinyl, fabric and leather. Complementing its hardware offerings, Cricut provides proprietary software and mobile applications that enable users to create custom artwork, import graphics and access a vast library of pre-designed projects and fonts through a subscription service. Founded as a division of Provo Craft & Novelty in 2005, Cricut emerged as an independent public company in March 2021. The article "Cricut Q1 Earnings Call Highlights" was originally published by MarketBeat.

Cricut, Inc. (CRCT) came out with quarterly earnings of $0.1 per share, beating the Zacks Consensus Estimate of $0.05 per share. This compares to earnings of $0.11 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +100.00%. A quarter ago, it was expected that this company would post earnings of $0.04 per share when it actually produced earnings of $0.04, delivering no surprise. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Cricut, which belongs to the Zacks Technology Services industry, posted revenues of $159.47 million for the quarter ended March 2026, missing the Zacks Consensus Estimate by 2.8%. This compares to year-ago revenues of $162.63 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Cricut shares have lost about 16% since the beginning of the year versus the S&P 500's gain of 5.2%. While Cricut has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Cricut was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.04 on $167.84 million in revenues for the coming quarter and $0.14 on $706.52 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Technology Services is currently in the bottom 30% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, AppLovin (APP), is yet to report results for the quarter ended March 2026. The results are expected to be released on May 6. This mobile app technology company is expected to post quarterly earnings of $3.40 per share in its upcoming report, which represents a year-over-year change of +103.6%. The consensus EPS estimate for the quarter has been revised 0% lower over the last 30 days to the current level. AppLovin's revenues are expected to be $1.77 billion, up 19.5% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cricut, Inc. (CRCT) : Free Stock Analysis Report AppLovin Corporation (APP) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research