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.
“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 and subscriptions rise
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.
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.
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.
Machine demand offsets weaker product revenue
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 timing issue weighs on reported sales
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.
Profitability boosted by one-time items
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.
Second-half outlook
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.
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.
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 contact@marketbeat.com.
Continue following MarketBeat
Add MarketBeat as your preferred source on Google to see our latest stories in your feed.
Before you consider Cricut, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Cricut wasn't on the list.
While Cricut currently has a Strong Sell rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
MarketBeat just released its list of the 7 hottest IPOs expected to hit Wall Street in 2026. See which companies are preparing to go public and why investors are watching closely.
Get This Free Report
