Cricut
Cricut makes the home cutting machines crafters use to turn a design on a phone into vinyl decals, cards and iron-on shirts, and sells them an app subscription.
The scores
Growth1/4 →
Revenue fell every year from $1.31B in 2021 to $709M in 2025, and 9% again in Q2 2026; only the subscription grows, about 5%.
Business quality2/4 →
Owners' projects tie them to the app and subscribers grow, but hardware faces cheaper rivals and store brands, and 2021 capped pricing.
Financial position4/4 →
No debt, $286M of cash and securities, an undrawn $300M line and $180M of operating cash flow over twelve months.
Execution record2/4 →
Revenue has fallen five years running and 2025's machine and materials targets were missed, though profit beat its target and cash stayed strong.
Per share capture4/4 ↑
Buybacks exceed stock pay, diluted shares fell 1.6% in a year, and cash returns as regular and special dividends.
Potential2/4 →
5.87M users in a market nobody measures; growth rests on new machines winning back crafters, with no committed demand.
Risk profile3/4 →
No debt, but tariffs on machines made in Asia, seven retailers taking 31% of sales, and a trust holding 73% of the votes.
Valuation3/4 ↓
About 12.7 times operating income without one-offs and 27 times 2027 earnings: fair if the decline stops, dear if it does not.
Evidence quality3/4 →
Results, one-offs and subscribers are filed; machine units and the outlook are management's word, and nobody measures the crafting market.
If it works 1.2× · if it fails you keep about 77%.
The Verdict
We rate Cricut Neutral. The business is mixed: about 3.1 million owners pay for its design app and that number still grows, but machine and materials sales keep shrinking and are being discounted. The price is fair: about 13 times profit once a one-off tariff refund and a legal reserve release are taken out, which assumes the decline stops and pays nothing for a recovery. As a bet it is priced for success: getting back to 2025's profit pays little more than today's price, while failure would cost about a quarter. The view hinges on whether the new Maker 5 and StickerPix machines turn product sales up this Christmas.
The long caseIf new machines bring crafters back, more owners pay for the app each year, and that subscription income keeps growing inside a business that stays profitable.
The evidence under this - 7 claims
Some 2025 product margin came from releasing inventory reserves, so the year-ago margin is flattered; management called Q2's product margin, one-offs removed, about flat on Q1.
About half of the quarter's operating income was one-offs (C05), so the margins overstate the run rate.
On reported profit the multiple is under 10 with a buyback and dividend, which reads cheap; and 2025's own profit included inventory reserve releases, so the underlying base may be lower still.
The company
Cricut makes small cutting machines for the home. You pick a design in its Design Space app, load vinyl, card, iron-on or fabric, and the machine cuts it with a fine blade. People use them for gifts, home decor, party supplies and things to sell.
It sells four families of machines, from the compact Joy to the Maker, plus blades, mats and materials, through Amazon, Michaels, Target, Walmart and others. In September 2026 it added the Maker 5, from $349, and StickerPix, a sticker printer and cutter from $299.
The evidence under this - 4 claims
How it makes money
A dollar arrives in two ways. Products, the machines and materials, brought in $146.0M in the first half of 2026 and keeps about 23 cents of each dollar after making it, once one-offs are removed. Platform, mostly the Access subscription at $95.88 a year, brought in $169.8M and keeps about 89 cents.
So the machine is how an owner arrives, and the subscription is where the profit is made.
The evidence under this - 4 claims
Some 2025 product margin came from releasing inventory reserves, so the year-ago margin is flattered; management called Q2's product margin, one-offs removed, about flat on Q1.
Where the money comes from, stream by stream
| Stream | Share of sales (FY 2025) | How it earns it |
|---|---|---|
| Platform (subscriptions and Design Space) | 46.2% | Access and Access Premium subscriptions, sold monthly or yearly, and other Design Space revenue. |
| Connected machines | 27.1% | Joy, Explore, Maker and Venture cutting machines and heat presses, sold mostly in bundles through retailers and Cricut.com. |
| Accessories and materials | 26.7% | Blades, mats, tools, vinyl, iron-on, card and other materials cut on the machines. |
Who runs it
Ashish Arora has run Cricut since 2012. A trust controls 72.9% of the votes through ten-vote shares, and Arora holds 15.3%, so outside shareholders have no say.
His 2025 bonus paid for beating the profit target even though machine and materials sales missed theirs. Since August he has sold 60,000 shares a day under a plan set in advance; one director bought about 10,000 shares in May.
The evidence under this - 4 claims
Why it wins, and who could beat it
Why customers come back
Owners stay because their work lives in Cricut's app. Designs, uploads, fonts and machine settings sit in Design Space, which only runs Cricut machines, so leaving means buying a new machine and starting again. That shows in the numbers: from 2023 to 2025 paying subscribers rose from 2.77 million to 3.09 million while active users and sales fell.
The lock has a limit. In 2021 Cricut tried to charge owners for uploading more than 20 designs a month, and backed down within a week after users revolted.
The evidence under this - 6 claims
Cricut backed down in 2021 when it tried to charge for uploads (C18), so the lock holds owners but limits what it can charge; churn is not disclosed.
The threat
Cricut's own annual report names the attackers. Brother, Silhouette America, Loklik and others sell cheaper cutting machines. Store brands and marketplace sellers on Amazon sell vinyl and blanks that fit Cricut machines. And owners can buy single design files on Etsy or Creative Fabrica and upload them free, instead of paying for Access.
The evidence under this - 3 claims
The rivals: BRTHY, AMZN, ETSY, and 4 more that are private, in-house or listed abroad.
Who else does this, rival by rival
| Ticker | Rival | Where it competes | How far along | Priced against it |
|---|---|---|---|---|
| Private | Silhouette America (Cameo)Priced against it: Private | Products | On sale | Private |
| BRTHY | Brother (ScanNCut)Priced against it: One segment only | Products | On sale | One segment only |
| Private | Low-cost machines such as Loklik and xToolPriced against it: Private | Products | On sale | Private |
| Private | Retailers' own-brand materials (Michaels, Hobby Lobby)Priced against it: Private | Products | On sale | Private |
| AMZN | Marketplace sellers on AmazonPriced against it: Different product | Products | On sale | Different product |
| Private | Canva and Creative FabricaPriced against it: Private | Platform | On sale | Private |
| ETSY | Etsy sellers of cut filesPriced against it: One segment only | Platform | On sale | One segment only |
How big it could get
How big this could get
There were 134.79 million US households in 2025. Nobody publishes how many of them craft with a cutting machine, so the market cannot be sized from outside; Cricut's own 5.87 million active users are the floor.
Each of those users brought in $55.77 of app revenue in 2025, so every million more users is worth about $56M a year. About 23% of users make things to sell.
The evidence under this - 3 claims
The results
The numbers
Sales fell 3.1% over the twelve months to Jun 2026, about the same pace as the −0.5% in the year to Dec 2025.
Operating margin is 15%, up from 9.1% in the year to Dec 2023.
Running costs take 42¢ of each sales dollar, up from 20¢ in the year to Dec 2021.
Each dollar put into the business earns 24% a year after tax, down from 31% in the year to Dec 2021.
The business brought in $180M of cash from operations, 26% of sales, before capital spending, which the filer does not tag.
Yearly sales growth has ranged from −32% to +36% over the last 5 years, with sales falling in 4 of them.
The share count fell 4.0% in 4.5 years, and pay in shares costs 3.9% of sales.
All the numbers
Filed figures from the company's 10-K and 10-Q, read 2026-10-07. Fiscal years end in December.
| Dec 2021 | Dec 2022 | Dec 2023 | Dec 2024 | Dec 2025 | 12 mo to Jun 2026 | |
|---|---|---|---|---|---|---|
| Size and growth | ||||||
| Sales | $1.31B | $886M | $765M | $713M | $709M | $690M |
| Sales growth | +36% | −32% | −14% | −6.9% | −0.5% | −3.1% |
| Profit | ||||||
| Gross margin | 35% | 39% | 45% | 50% | 55% | 58% |
| Operating margin | 15% | 9.0% | 9.1% | 11% | 14% | 15% |
| Net margin | 11% | 6.8% | 7.0% | 8.8% | 11% | 13% |
| What growth costs, per sales dollar | ||||||
| Research and development | 6.1% | 8.7% | 8.5% | 8.5% | 9.4% | 9.8% |
| Sales and marketing | 10% | 15% | 16% | 20% | 22% | 23% |
| General and admin | 3.9% | 7.1% | 11% | 10% | 9.7% | 9.3% |
| Pay in shares | 2.9% | 4.6% | 6.2% | 6.3% | 4.9% | 3.9% |
| Cash | ||||||
| Cash from operations | −$105M | $118M | $288M | $265M | $200M | $180M |
| Balance sheet | ||||||
| Cash and short-term investments | $242M | $299M | $245M | $337M | $276M | $286M |
| Returns and shares | ||||||
| Return on capital | 31% | 8.8% | 7.8% | 11% | 17% | 24% |
| Shares (diluted) | 220M | 221M | 220M | 216M | 217M | 211M |
What growth costs
Shrinking has cost Cricut leverage. As sales fell 46% from 2021 to 2025, sales and marketing rose from 10% of sales to 22%, and overheads from 4% to 10%. The operating margin held near 14% only because each sale kept more after making it, and in Q2 2026, without one-offs, it fell again.
The evidence under this - 2 claims
Research spending fell from $79.8M to $66.5M, and 2021's margin was depressed by freight and component costs, so not every rise is lost leverage.
Q2 2025 was itself lifted by retailers buying ahead of tariffs (C03), so the year-ago base is high.
The last report (4 Aug)
Quarter ended June 2026, filed figures.
On the surface Q2 2026 was a record: operating profit of $47.4M on sales of $156.3M. The problem was what made it. $17.9M was a refund of tariffs the Supreme Court ruled unlawful, and $6.4M was a legal reserve released after a settlement. Without them profit was about $23.1M, against $30.1M a year earlier.
Underneath, the two halves went opposite ways. Platform sales grew 5% to $85.0M and paying subscribers reached 3.1 million. Products sales fell 22% to $71.3M on lower volumes and discounts.
What it did to the thesisIt confirmed the split the thesis rests on: the subscription kept growing while machine and materials sales fell sharply on discounts. The record profit proved nothing, because most of it was a tariff refund and a legal release; underlying profit fell.
The quarter in detail
Sales growth from the previous quarter, filed figures.
Earnings per share $0.19 against $0.06 expected; $0.19 as filed, with no adjustments.
The evidence under this - 5 claims
About half of the quarter's operating income was one-offs (C05), so the margins overstate the run rate.
Q2 2025 was itself lifted by retailers buying ahead of tariffs (C03), so the year-ago base is high.
What management did with the money
Cricut hands its cash back. It pays a regular dividend twice a year, paid special dividends from 2023 to 2025, and in the first half of 2026 bought back 4.5 million shares for $19.7M. There was no special dividend in July 2026.
Insiders in 2026Q3: 9 purchases and 18 sales, from their Form 4 filings.
The evidence under this - 2 claims
The price, and where we disagree
In short. Fair. The price pays for profit holding where it is, and nothing for a recovery in machine sales.
The shares rose 54% in six months while sales per share fell, so the whole move was the market paying more for the same business. Much of it came the day after the Q2 2026 record, which was half one-offs.
The test is close. Maker 5 and StickerPix launched in September, management expects product sales to grow in the second half, and Q3 results arrive on 3 November 2026.
The evidence under this - 7 claims
About half of the quarter's operating income was one-offs (C05), so the margins overstate the run rate.
Management called the first half disappointing; Products fell 22% in Q2, and 2025's machine and materials revenue missed the bonus targets (C14).
Q3 2025 had its own inventory reserve movements, so its margin is not a clean base.
How we read the multiple
A buyer pays for the decline stopping.
1. Cricut's shares are worth about $1.34B; less $286M of cash, with no debt, the business is valued at about $1.05B. 2. Over the past year it earned about $82.6M of operating profit once Q2's one-offs are removed. 3. So the business costs about 13 times that profit, and about 27 times what analysts expect it to earn in 2027.
Fair if sales stop falling. If they keep falling, today's profit shrinks and the price looks dear.
Against its own history. Buyers pay more for each dollar of sales than six months ago while sales per share fell, so the rise came from the price, not the business.
The evidence under this - 4 claims
On reported profit the multiple is under 10 with a buyback and dividend, which reads cheap; and 2025's own profit included inventory reserve releases, so the underlying base may be lower still.
Q2 2025 was itself lifted by retailers buying ahead of tariffs (C03), so the year-ago base is high.
Priced against its rivals
None of the listed rivals above sells the same thing to the same buyers as a large part of what it does. A price comparison needs at least two, so the price is judged against its own history instead.
Private or foreign rivals that cannot be priced: Silhouette America (Cameo), Graphtec, Loklik, Siser, Canva, Creative Fabrica.
The bet: what it pays if it works
The bet is that the new machines stop the fall in product sales while the subscription keeps growing, taking profit back above what it earned in 2025.
Even then it pays little: at what buyers pay today for each dollar of profit, that recovery is worth only a little more than today's price. If it fails and profit drifts down to what analysts expect, holders keep about three quarters of their money, because the cash and the subscription stay.
| Operating profit in two to three years | Paid subscribers needed | At the stated multiple |
|---|---|---|
| $82.60M | about 3.1M at 25% kept | 1.0× |
| $100.00M (the big win) | about 3.7M at 25% kept | 1.2× |
| $130.00M | about 4.8M at 25% kept | 1.6× |
To pay 2× (a Fair bet) it would need about $161.90M of operating profit (about 6.0M paid subscribers at 25% kept); to pay 5× (a Cheap bet), about $404.74M of operating profit (about 15.0M paid subscribers at 25% kept), at the same multiple.
The steps it has to take
- Done Joy 2 and Explore 5 bundles launched
- Done Maker 5 and StickerPix launched
- Not started Products revenue up year on year due 2027-03-31
- Not started Products gross margin above 30%, one-offs removed due 2027-08-31
- In progress Active users growing again due 2027-03-31
The detail behind the label
The evidence under this - 7 claims
Some 2025 product margin came from releasing inventory reserves, so the year-ago margin is flattered; management called Q2's product margin, one-offs removed, about flat on Q1.
On reported profit the multiple is under 10 with a buyback and dividend, which reads cheap; and 2025's own profit included inventory reserve releases, so the underlying base may be lower still.
Where we disagree with the market
A shrinking pandemic gadget maker past its peak, or, since August, a cheap, profitable dividend payer.
The subscription is real and growing, but the hardware half is still shrinking and the record quarter flattered the trend.
Analysts see only the decline, and the market cheered a record quarter. The filings show both are partly right: a subscription that keeps growing and earns most of the profit, under a hardware business that is shrinking and discounted.
Against us on the upside: machine units sold to shoppers rose by double digits in the first half, and new machines are out. Against us on the downside: those units sold at lower prices, and every analyst left rates the shares a sell.
What analysts say, and the evidence
The evidence under this - 7 claims
On reported profit the multiple is under 10 with a buyback and dividend, which reads cheap; and 2025's own profit included inventory reserve releases, so the underlying base may be lower still.
Some 2025 product margin came from releasing inventory reserves, so the year-ago margin is flattered; management called Q2's product margin, one-offs removed, about flat on Q1.
About half of the quarter's operating income was one-offs (C05), so the margins overstate the run rate.
Products revenue fell 16% in the same half (C08), so units rose on lower prices; management says its sell-out data does not cover every channel.
What could go wrong, and how we would know
The risks
- Product sales keep falling Machine and materials sales fell 22% in Q2 2026; if the new machines do not turn that, profit keeps shrinking under the price.
- Cheaper rivals and store brands Rival machines, store-brand materials and free design files compete for every part of the business except the app lock-in.
- Tariffs The machines are made in Asia; the refunds are one-offs, and the tariffs still in force raise what each machine costs.
- A few big retailers Seven retailers took 31% of 2025 sales, and one, JOANN, closed in 2025.
- A trust controls the votes A trust holds 72.9% of the votes, so outside shareholders cannot force a change of course.
- The lock has limits Owners revolted in 2021 when Cricut tried to charge for uploads, so it cannot squeeze subscribers hard.
The evidence under this - 7 claims
About half of the quarter's operating income was one-offs (C05), so the margins overstate the run rate.
What we still do not know
- How many paying subscribers cancel each year, and how many new machine owners sign up; Cricut reports only the net number.
- How many households craft with a cutting machine; nobody outside the company publishes it.
- How much of Q2 2026's fall in product sales was lower prices rather than fewer machines sold.
The evidence under this - 3 claims
About half of the quarter's operating income was one-offs (C05), so the margins overstate the run rate.
What would change our view
- Neutral→AttractiveA cheaper price on unchanged profit
It needs:
- ○The business is valued at 9 times its profit without one-offs, from about 13 today.about ≈$4.52 today, 27% below the last close
- Neutral→AttractiveProduct sales and margins turn
It needs all of:
- ○Machine and materials sales grow from a year earlier in both Q3 and Q4 2026.checked at the next results, due by 3 Nov
- ○Machine and materials keep more than 30 cents of each sales dollar after making them, one-offs removed, in the second half of 2026.checked at the next results, due by 3 Nov
- Neutral→UnattractiveThe subscription starts to shrink
It needs:
- ○Paying subscribers fall from a year earlier in any quarter.checked at the next results, due by 3 Nov
We would also be wrong if
- App sales grow under 3% a year for two quarters running.
- Machine and materials margins, one-offs removed, stay under 25% through 2027.
What is coming
- 3 November 2026 Q3 2026 results: Whether Products revenue grows on the new machines and what profit looks like without one-offs.
Every dated event ahead
- 3 November 2026 Q3 2026 results: Whether Products revenue grows on the new machines and what profit looks like without one-offs.
- 3 March 2027 Q4 2026 results and the 2027 outlook: The holiday quarter for Maker 5 and StickerPix, and whether a special dividend returns.
- 4 August 2027 Credit line matures: Whether Cricut renews the undrawn $300M line on similar terms.
Since we wrote this
- 28 OctBet moveBet re-struck: Priced for success to Safe, little upsideRe-priced at the 27 October close.
- 27 OctBet moveBet re-struck: Safe, little upside to Priced for successRe-priced at the 26 October close.
- 26 OctBet moveBet re-struck: Priced for success to Safe, little upsideRe-priced at the 23 October close.
- 7 OctThesis writtenNeutral, medium convictionWritten a month before Q3 results, after the shares rose 54% in six months on a record quarter that was half one-offs.
Sources 17
Sources - 17
Every claim above cites one of these, or states the reasoning that derived it. The quote is frozen at the date it was read: a link can rot, and an agent fetch returns a reading of a page rather than the page. Backs counts the whole claim ledger, so it can name a claim this page does not surface.
- S01primarycompany filing2026-03-04what Cricut sells, Access prices, the named competitors, retail concentration, suppliers, user metrics for 2023 to 2025, staff and the FY2025 statementsbacksC01C02C07C12C16C17C19C22C26
- S02primarycompany filing2026-08-05the two new segments, segment gross profit, the tariff refunds and the royalty settlement, the June balance sheet, buybacks, dividends and the revolverbacksC01C03C05C06C08C09C10C11C12C33
- S03primarycompany release2026-08-04Q2 2026 revenue by segment, margins, operating income, and users, subscribers and ARPUbacksC03C04
- S04primarytranscript2026-08-04Cricut Q2 2026 earnings call transcript (FMP), held 4 August 2026the margin without one-offs, machine sell-out units, the outlook for each quarter, and the AI and marketing plans
without those one-time items, gross margin for the quarter would have been about 58.9%, so about flat to last quarter
backsC05C09C29C30 - S05primarycompany filing2026-04-21voting control, the leaders and their tenure, 2025 pay and the bonus metrics against targetsbacksC13C14C35
- S06primarycompany filing2026-10-05open-market sales and purchases, plan flags, and the chief executive's daily salesbacksC15
- S07primarycompany release2026-09-03the Maker 5 launch date, bundle price from $349 and the two weeks sold only at Cricut.com and Michaels
its most versatile smart cutting machine yet, designed to help people confidently turn their ideas into meaningful, personalized items.
backsC27 - S08primarycompany release2026-09-24the StickerPix prices of $299 and $169, and that the full library and Cricut AI need a paid Access subscription
Cricut StickerPix Print prints and laminates on pre-cut sticker sheets to create personalized photo prints, stickers, and labels.
backsC28 - S09primaryvendor data2026-10-06Research pack for CRCT (FMP market tier, FINRA short interest), fetched 7 October 2026the 6 October close, returns and the price move split, the 52-week range, analyst ratings and estimates, short interest and the insider base ratebacksC15C31C32C33C34
- S10secondarynews2021-03-18the 2021 plan to cap free uploads, the users' revolt, and Cricut's reversal
Over the past week the community has been quite vocal in their disapproval of a plan by Cricut to limit usage of existing machines, requiring a monthly fee in order to cut more than 20 designs per month.
backsC18 - S11primarycompany filing2026-02-19craft supplies among Etsy's six largest categories, $8.9B of sales between thembacksC21
- S12primarycompany filing2026-08-06Etsy's active buyers and spend per buyer over the year to June 2026backsC23
- S13secondarygovernment data2025-12-31134,790 thousand US households in 2025
Graph and download economic data for Total Households (TTLHH) from 1940 to 2025 about households, household survey, and USA.
backsC24 - S14secondarygovernment data2026-09-16$8,752M of sales in August 2026 against $7,987M a year earlier
Graph and download economic data for Advance Retail Sales: Sporting Goods, Hobby, Musical Instrument, and Book Stores (RSSGHBMS) from Jan 1992 to Aug 2026 about musical, hobby, book, sport, retail trade, sales, retail, goods, and USA.
backsC25 - S15primarycompany release2026-03-032025 revenue by line, operating income and the Q4 2025 quarterbacksC02
- S16primarycompany filing2026-08-05five years of revenue, gross margin, operating costs, stock pay, cash flow and capital spendingbacksC06C07C31C33C36C37
- S17primarycompany filing2026-02-06that Amazon runs a marketplace for third-party sellers beside its own retailbacksC38