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1. Company Snapshot

1.a. Company Description

Cricut, Inc.designs and markets a creativity platform that enables users to turn ideas into professional-looking handmade goods.It operates in three segments: Connected Machines, Subscriptions, and Accessories and Materials.


The company offers connected machines, design apps, and accessories and materials for users to create personalized birthday cards, mugs, T-shirts, and large-scale interior decorations.Its connected machines include Cricut Joy, Cricut Explore, and Cricut Maker to cut, write, score, and create decorative effects using various materials, such as paper, vinyl, leather, and others; and design apps comprise Design Space app and Cricut Joy-specific app.The company also provides Cricut Access and Cricut Access Premium subscription offerings, and in-app purchases; and a software that integrates its connected machines and design apps.


In addition, it offers a range of accessories and materials, such as Cricut EasyPress, Cricut Mug Press, various hand tools, machine replacement tools and blades, and project materials.The company offers its products through its third-party brick-and-mortar and online retail partners; and its website cricut.com, as well as through a network of distributors.It operates in the United States, the United Kingdom, Ireland, Australia, New Zealand, and Western Europe, as well as the Middle East, Latin America, South Africa, and Asia.


The company was formerly known as Provo Craft & Novelty, Inc.and changed its name to Cricut, Inc.in March 2018.


The company was incorporated in 1969 and is headquartered in South Jordan, Utah.

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1.b. Last Insights on CRCT

Recent negative drivers behind Cricut's performance include the "coming back to earth" phase, which has spooked investors. Although the company has a high-margin Platform business with potential for strong cash-flow generation, its operational and financial metrics are not as strong as expected. The recent earnings release showed a beat in Q4 earnings, but this may not be sustained due to the company's slowing growth. Additionally, the new product releases, such as Cricut Explore 4 and Cricut Maker 4, may not be enough to drive growth due to increased competition in the market.

1.c. Company Highlights

2. Strong Q3 Earnings with Revenue Growth and Expanding Margins

The company reported revenue of $170.4 million, a 2% increase year-over-year, driven by a 7% growth in platform revenue. Operating income expanded significantly to $22.7 million, or 13.3% of revenue, up from $10.6 million, or 6.3% of revenue, in Q3 last year. Earnings per share (EPS) came in at $0.1, beating estimates of $0.05. The tax rate in Q3 2025 was 20%, slightly higher than the 18.9% in Q3 2024. The company generated $20 million of cash from operations and ended the quarter with cash and cash equivalents of $207 million.

Publication Date: Nov -25

📋 Highlights
  • Strong Q3 Growth in Key Metrics:: Sales up 2%, operating income surged 114%, EPS doubled (100%), and paid subscribers grew 6% year-on-year.
  • Marketing Strategy Adjustments Boost Engagement:: Target expansion and increased ad spend drove over 20% higher marketing engagement year-over-year.
  • Accessories & Materials Revenue Decline:: Revenue dropped 17% YoY, highlighting underperformance despite cost-cutting and new product launches.
  • Operating Margin Expansion:: Operating income margin rose to 13.3% (from 6.3% in Q3 2024), driven by improved efficiency.

Segment Performance and Key Highlights

Platform revenue grew 7% year-over-year, driven by higher paid subscribers and a 4% increase in average revenue per user (ARPU). Paid subscribers ended Q3 at just over 3 million, up 6% year-over-year. However, accessory and materials revenue decreased 17% year-over-year. The company highlighted that sell-out units were up in North America and globally in Q3 and year-to-date, with a significant increase in marketing engagement year-over-year. As Ashish Arora noted, "We are seeing a significantly higher engagement rate with our ads from this new expanded group."

Valuation and Growth Expectations

The company's current valuation metrics indicate a Price-to-Earnings (P/E) Ratio of 12.39, a Price-to-Book (P/B) Ratio of 2.8, and a Price-to-Sales (P/S) Ratio of 1.4. Analysts estimate next year's revenue growth at -0.1%. The company's Return on Equity (ROE) stands at 19.91%, and Return on Invested Capital (ROIC) is 18.74%. The Dividend Yield is 20.13%, indicating a potentially attractive return for income investors.

Tariff Impact and Future Outlook

The company expects to see a negative impact on margins in Q4 and accelerating in 2026 due to tariffs. However, the company is taking steps to mitigate this impact, including cost-cutting and managing price and promotional strategies. The company's enthusiasm from retail partners and early signs of optimism for Q4 are positives. Ashish Arora emphasized that the company is in a good position overall, with a focus on innovation and penetrating its Serviceable Addressable Market (SAM).

Margin Pressure and Cost Management

The company will continue to manage price and promotional strategies, drive cost out of the supply chain, and participate with supply partners to offset tariff impacts. The expected margin pressure due to tariffs will be a key area to monitor in the coming quarters. The company's ability to maintain its current ROE and ROIC levels will depend on its success in managing these challenges.

3. NewsRoom

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Financial Contrast: Cricut (NASDAQ:CRCT) and Hitek Global (NASDAQ:HKIT)

Dec -02

Source: defenseworld.net

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Dividends Up To 20% Wall Street Says You Should Sell

Nov -22

Source: forbes.com

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Cricut, Inc. (CRCT) Q3 2025 Earnings Call Transcript

Nov -05

Source: seekingalpha.com

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Cricut, Inc. (CRCT) Surpasses Q3 Earnings and Revenue Estimates

Nov -05

Source: zacks.com

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Cricut, Inc. Reports Third Quarter 2025 Financial Results

Nov -04

Source: globenewswire.com

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Cricut to Announce Third Quarter 2025 Financial Results on November 4, 2025

Oct -14

Source: globenewswire.com

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Cricut to Announce Third Quarter 2025 Financial Results on November 4, 2025

Oct -14

Source: globenewswire.com

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Cricut, Inc. (CRCT) Presents At Goldman Sachs Communacopia + Technology Conference 2025 Transcript

Sep -11

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.14%)

6. Segments

Subscriptions

Expected Growth: 1.2%

Cricut's subscription growth is driven by increasing adoption of its cutting machines and expanding content offerings, including digital images, fonts, and sewing patterns. Strong marketing efforts, strategic partnerships, and a loyal customer base also contribute to the growth. Additionally, the rise of DIY and crafting activities, particularly among millennials and Gen Z, fuels demand for Cricut's subscription-based services.

Accessories and Materials

Expected Growth: 0.8%

Cricut's Accessories and Materials segment growth is driven by increasing adoption of DIY crafts and personalized gifts, expansion into new markets, and strategic partnerships. The company's innovative products, such as cutting machines and tools, also contribute to growth. Additionally, the rise of e-commerce and online marketplaces provides an opportunity for Cricut to reach a broader customer base, further fueling growth.

Connected Machines

Expected Growth: 1.5%

Cricut's Connected Machines segment growth of 1.5 is driven by increasing adoption of DIY and crafting activities, expansion into new markets, and strategic partnerships. Additionally, the rise of e-commerce and social media platforms has fueled demand for personalized and customized products, further boosting sales of Cricut's cutting machines and accessories.

7. Detailed Products

Cricut Machines

A series of cutting machines designed for crafters, makers, and DIY enthusiasts to cut various materials such as paper, vinyl, iron-on, and fabric.

Cricut Tools

A range of tools and accessories designed to work with Cricut machines, including blades, mats, and pens.

Cricut Materials

A variety of materials and supplies designed to work with Cricut machines, including paper, vinyl, iron-on, and fabric.

Cricut Design Space

A cloud-based design software that allows users to create and customize designs for cutting with Cricut machines.

Cricut Access

A subscription-based service that provides access to a library of images, fonts, and projects, as well as exclusive content and discounts.

Cricut Education

A range of online tutorials, classes, and workshops designed to teach users new skills and techniques with Cricut machines and software.

8. Cricut, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Cricut's products are unique and specialized, but there are some substitutes available in the market. However, the company's strong brand reputation and customer loyalty reduce the threat of substitutes.

Bargaining Power Of Customers

Cricut's customers are mostly hobbyists and crafters who are loyal to the brand. The company's products are specialized, and customers have limited bargaining power.

Bargaining Power Of Suppliers

Cricut has a diversified supplier base, and the company is not heavily dependent on a single supplier. This reduces the bargaining power of suppliers.

Threat Of New Entrants

The craft cutting machine market has high barriers to entry, including significant research and development costs and the need for specialized manufacturing capabilities. This reduces the threat of new entrants.

Intensity Of Rivalry

The craft cutting machine market is moderately competitive, with a few established players. However, Cricut's strong brand reputation and customer loyalty help the company to maintain its market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 2.58%
Debt Cost 3.95%
Equity Weight 97.42%
Equity Cost 3.70%
WACC 3.71%
Leverage 2.65%

11. Quality Control: Cricut, Inc. passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Cricut

A-Score: 6.0/10

Value: 6.2

Growth: 6.3

Quality: 7.6

Yield: 10.0

Momentum: 3.0

Volatility: 2.7

1-Year Total Return ->

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Rigetti Computing

A-Score: 4.3/10

Value: 6.0

Growth: 4.9

Quality: 4.4

Yield: 0.0

Momentum: 10.0

Volatility: 0.3

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Fathom Digital

A-Score: 3.9/10

Value: 8.1

Growth: 4.9

Quality: 4.8

Yield: 0.0

Momentum: 5.0

Volatility: 0.7

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Red Cat Holdings

A-Score: 3.7/10

Value: 6.0

Growth: 2.8

Quality: 3.3

Yield: 0.0

Momentum: 10.0

Volatility: 0.3

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AstroNova

A-Score: 3.4/10

Value: 7.5

Growth: 3.9

Quality: 3.9

Yield: 0.0

Momentum: 1.0

Volatility: 4.0

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Key Tronic

A-Score: 3.2/10

Value: 8.0

Growth: 3.9

Quality: 2.1

Yield: 0.0

Momentum: 1.0

Volatility: 4.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

5.06$

Current Price

5.06$

Potential

-0.00%

Expected Cash-Flows