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.
Platform-first strategy, new machines, and first service launch
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.
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.
User engagement trends and subscription updates
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.
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.”
Financial results: Platform growth offset by product decline and margin pressure
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.
Tariffs, refunds, and capital return
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.
Outlook: Challenging first half, confidence in second half
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.
About Cricut NASDAQ: CRCT
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.
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