Cricut at Citi’s 2025 Conference: Subscription Growth Shines

On Thursday, 04 September 2025, Cricut (NASDAQ:CRCT) participated in Citi’s 2025 Global Technology, Media and Telecommunications Conference. The company highlighted its robust subscription growth amidst mixed performance in physical product sales. While Cricut reported a slight decline in machine sales, it emphasized its strategic focus on organic growth, innovation, and shareholder value.

Key Takeaways

• Cricut reported a 2% year-over-year increase in total sales, with subscriptions driving growth.
• The subscription business saw a 7% rise in paid subscribers, contributing 80% of the company’s profit.
• International revenue rose by 8%, though physical product sales declined by 10% in these markets.
• The company is focusing on deepening its presence in existing markets rather than expanding geographically.
• Cricut remains debt-free, prioritizing organic growth and shareholder returns through dividends and buybacks.

Financial Results

Cricut’s recent financial performance reflected a mixed bag of results. The company experienced a 2% year-over-year increase in total sales, driven by its thriving subscription platform, which saw a 4% increase in sales. The subscription model proved highly profitable, with gross margins in the 80% range. However, machine sales faced a slight downturn. Internationally, Cricut’s revenue grew by 8%, though this was partially offset by a 10% decline in physical product sales.

Operational Updates

The launch of Cricut Maker® 4 and Cricut Explore® 4 in February brought new features like faster cutting speeds, contributing to positive consumer engagement. The company is also enhancing its marketing efforts, increasing spend by $20 million to boost enthusiasm, particularly among older consumers. Cricut continues to refine its supply chain to mitigate tariff impacts, focusing on maintaining affordability for consumers.

Future Outlook

Looking ahead, Cricut is committed to enhancing its platform for a broader market by 2025. The company plans to introduce simplified use cases to boost user engagement. Despite international challenges, Cricut aims to deepen its market penetration in existing regions. It is also accelerating investments in hardware innovation, although specific new products have yet to be announced.

Q&A Highlights

During the Q&A, Cricut addressed concerns about a pull forward in accessories and materials due to retail partner anxieties over product availability. The company noted positive sell-out trends in North America, despite some weaknesses in European markets. Cricut also discussed its capital allocation priorities, emphasizing organic growth and potential M&A opportunities to accelerate growth, while maintaining focus on shareholder returns.

For a more detailed account, readers are encouraged to refer to the full transcript provided below.

Full transcript - Citi’s 2025 Global Technology, Media and Telecommunications Conference:

Asya Merchant, Analyst, Citi: Welcome, everyone. My name is Asya Merchant, day two of Citi’s Global TMT Conference. My name is Asya Merchant. I cover Citi’s technology, hardware, and tech supply chain. Really happy to have Cricut’s management here. We have Kimball here. He’s the Chief Financial Officer of Cricut, and we have Jim Suva, who’s the SVP of Finance, Treasury, and Investor Relations. Before I kick it off, I just have a quick safe harbor here to read. Please see Cricut’s investor relations website and recently filed SEC forms for associated risks, uncertainties, and safe harbor statements. With that, I have a few prepared questions here. Kimball, I’m going to kick it off. If somebody from the audience would like to ask a question, please do raise your hand, and we’ll make sure we get the mic to you. Kimball, you just recently reported results not too long ago.

They were better than expected, and they did show positive year-on-year sales growth. After post-COVID, I know a lot of your peers as well that were in the consumer stocks did experience a downturn. I guess the biggest investor questions are, was there a pull forward? Is this demand sustainable? What gives you confidence that we have now kind of turned the corner and are starting to see year-on-year positive sales growth?

Kimball, Chief Financial Officer, Cricut: Asya, thanks for the question. As we mentioned in our last call, we did see some acceleration of demand from some of our retail customers. I think we think partially related to uncertainty around tariffs that resulted in us returning to growth sooner in the year than we expected. It was primarily for our physical products and primarily consumables and accessories as opposed to machines. If you look at our overall results, you know we grew 2% total company, but 4% of that was our platform, and the rest was those total physical products. Machines were down a little bit. As to the sustainability of that overall, it’s too early to tell. We are monitoring the sells out of how our products are performing in market. Given the uncertainty that we still see around tariffs, it’s a pretty dynamic situation.

Understanding how consumers respond as things manifest in an inflationary environment, we’re still trying to, I should say, we’re monitoring that very closely.

Asya Merchant, Analyst, Citi: OK. Paid subscribers, which is pretty impressive, and you know, speaks to the strength of your platform. You continue to see growth in paid subscribers. I know you’ve put a lot of effort into that, into trying to get, I know Ashish Arora talks about making sure they remain engaged. Can you just talk about what are some of the efforts that you’re doing that are enabling paid subscribers to continue to grow?

Kimball, Chief Financial Officer, Cricut: Yeah, subscription is really a bright spot in our business, and we’re very pleased with our efforts. Even as we’ve seen physical products be challenged over the last few quarters and then finally turn positive, we’ve continued to grow subscribers and subscription revenue. I think that speaks to the investment we continue to put into it and driving the value proposition. We’re very pleased that we continue to grow there. I know Jim has some examples that he brought. If you want to kind of show off your show and tell, why don’t you?

Jim Suva, SVP of Finance, Treasury, and Investor Relations, Cricut: Sure. Asya, as you correctly mentioned, it really is a bright spot for us. It was mathematically up 7% paid subscribers year over year. Very, very pleased with that. When you unwrap that growth, there’s kind of three main areas I’d focus on. One is we’ve really increased the value proposition behind paid subscriptions, things such as wrap text. This is a hat here that my teenager made for me, and they took this text and they curved it. They did it very easily, and that’s with that paid subscription. Automatic background remover. If you have some background that you don’t want in it, you can remove it automatically in tools to help users more easily make. The second thing I would talk about also is we’re doing more with bundles.

When a user wants to buy a machine and enter our ecosystem, we’re doing a very attractive promotion of a bundle of subscriptions plus the product with it. Finally, my last thing I’d mention is you do start with a free 30-day trial. If they have a good out-of-box experience, it really increases their chances to sign up for a paid subscription. Asya, you’d mentioned sales in totality to Kimball at the very beginning. We do say one very big bright spot is paid subscriptions, paid subscribers up 7% year over year. We’re very, very pleased with that.

Asya Merchant, Analyst, Citi: Yeah, especially because they come at higher margins.

Jim Suva, SVP of Finance, Treasury, and Investor Relations, Cricut: They are.

Asya Merchant, Analyst, Citi: Yes, we did touch a little bit on it. I’ve heard from some of your peers there’s been a little bit of pull forward. I think even Apple commented on that. Just help us understand, you know, as it relates to you, what kind of pull forward did you experience? Were you able to quantify that? Was it tariff-driven? How does it affect, kind of as you think about the second half of the year?

Kimball, Chief Financial Officer, Cricut: We did see pull forward in our accessories materials side of the business. That was really related to some retail partners that weren’t sure if they were going to be able to have enough of their other products on shelves, and they were looking to Cricut for how could they help mitigate some of those risks. That did present an opportunity for us to gain share. That’s an area where we’ve talked for a number of quarters now, where we are focused on how do we gain share in that piece of the market. We did benefit from that. We continue to watch sell-out data very closely to understand what those trends are with consumers, to understand the impact on the back half of the year. There’s some of it that we know turns into incremental demand.

There’s some of it that’s pull forward, and exactly where that line falls, we still are watching very closely.

Asya Merchant, Analyst, Citi: If you can, you know, anything that you can share, even anecdotally on the back-to-school season, how’s that trended for you guys?

Kimball, Chief Financial Officer, Cricut: We continue to see sell-out be positive on a year-to-date basis. We’re up year to date at the end of Q2, especially in North America. We saw a little more weakness in our larger European markets, but North America continues to be up and up strongly. Since the end of the quarter, we have continued to see that trend continue to strengthen.

Asya Merchant, Analyst, Citi: OK. When you talk about consumer demand, you know, some of your retail partners, how are they feeling about consumer demand, especially in the products that you’re in, which is discretionary printing, but it is a lot of craft-oriented? What are your retail partners telling you just broadly about this category?

Kimball, Chief Financial Officer, Cricut: I think they’re encouraged by what we see in our sell-out trends. We are also concerned about what happens if tariffs end up creating an inflationary environment. We do have discretionary consumer products, and we have seen that affect us in the past. So far, we haven’t seen that softening demand affect us, but it is something that we’re watching for very carefully.

Asya Merchant, Analyst, Citi: OK. How is post the pandemic, obviously there was demand, but there was also some inventory. Where are we with the inventory levels in the channel in retail?

Kimball, Chief Financial Officer, Cricut: I think we’re actually in a very good equilibrium with our inventory channel. As you mentioned, as we came off of COVID and we had a lot of inventory, we saw retailers essentially redefining a new normal for what they wanted to carry in inventory in 2023 and even in 2024. That was really part of our story of working through channel inventory. We think that inventory balances are healthy in channel, and the sell-in and sell-out are much more closely linked at this point.

Asya Merchant, Analyst, Citi: OK. You had one big retail, you know, JOANN, kind of no longer in business. How are you thinking about, I mean, given that you are seeing demand strength in this category, crafts, I would generally say, you know, you have had one of the major retailers exit the market. Were they just not seeing the strength, or was that something which was very specific to that company?

Kimball, Chief Financial Officer, Cricut: We’re talking about Joanne’s bankruptcy, where they filed for Chapter twice in 12 months. I think that had much more to do with their balance sheet structure and leverage. I think after the effects of COVID and how that played out for them, we have seen that demand shift to other channel partners. We haven’t seen our team shrinking because of it; we have just seen the shift in demand to other channels.

Asya Merchant, Analyst, Citi: All right. Kimball, one of the things I’ve noticed is you used to spend very little on marketing. It was a lot of word of mouth that was driving, you know, that was sort of your flywheel. You have made targeted investments in marketing. What are you doing now that’s working, that’s helping you drive that strength that you’re seeing?

Kimball, Chief Financial Officer, Cricut: Thank you for the question. Let me give some context. As we went through the post-COVID years and we saw our top line declining, we were managing OpEx very tightly. Part of that was pulling back on marketing spend. We reached a point at the end of 2023 where we decided we had pulled back too much on marketing, and we were just seeing our demand weaken. Starting at the beginning of last year, we increased our marketing spend by about $20 million to reinject enthusiasm in the category. We continue at that higher level of marketing spend year to date. We started a few quarters later than that in our European and international markets. One of the things that we see from that is I talked about our sell-out trend of machines.

We believe that, and we’re up year to date, we saw that really pick up in early February and it has been fairly consistent throughout the year, especially in North America. In the international markets where we’re a little bit behind on that awareness spend, we have more mixed results. Our primary measure that we look at is, first, last year we talked about traffic that we were bringing to Cricut.com because that’s where people come research our product. We’re a research purchase. This year, it’s all about what we are seeing in the sell-out of our machines to show increased demand, even with all the other uncertainties going on this year with the broader economy.

Asya Merchant, Analyst, Citi: OK. I know in the past you’ve also talked about this funnel. You know, you bring people into this funnel, and then you kind of encourage them. First, you generate awareness, and then you just encourage them. They start to use the machines, and then eventually they become a paid subscriber. The marketing dollars, the influencing dollars that you’re spending helps to move them along the funnel. Can you talk about sort of what you’re seeing, where maybe there’s a large funnel, but then it’s not necessarily translating at the end to kind of the outcome that you desire? What’s going on there, and how has that changed, or what’s some of the trends that you’re observing?

Kimball, Chief Financial Officer, Cricut: We are always looking at how we spend our money and are balancing the different areas of spend. Last year, it was primarily focused on broad awareness and filling that funnel. This year, we’ve talked about refocusing some of that spend on moving people through that funnel. One of the insights that we have learned as we move through the year is that older consumers tend to be, the message is resonating with them, and we’re seeing demand there. We think that is the hypothesis. Part of it is discretionary money to spend in those households as opposed to some of our younger customers that we’ve had historically. We are focusing on the middle of the funnel and educating people on the product so that we can do a better job of converting those end consumers.

Asya Merchant, Analyst, Citi: OK. Jim, you’ve recently, maybe if I can direct some to you, you’ve recently launched some new products. Just help us explain kind of what these new products are, and how are you thinking just broadly about the TAM?

Jim Suva, SVP of Finance, Treasury, and Investor Relations, Cricut: Sure. In late February, we launched two new products. They are called the Cricut Maker® 4 and the Cricut Explore® 4. The last time those came out, which were the Cricut Maker® 3 and the Cricut Explore® 3, was around the year 2021. It had been a long time for a refresh there. What’s new about them? First of all, we don’t have a cadence like every year, like in September, like some companies have a new product come out every single year. We don’t have that cadence. The new products that came out have some great new features with them. For example, the Cricut Maker® 4 cuts up to twice as fast.

If my wife or I are making t-shirts for our kids, or more importantly, for the kids’ swim team or soccer team, and we’re going to cut multiple products, cutting twice as fast really saves a lot of time. That’s just one example. There are also new colors, and we do know that color does sell, whether it be in fashion, in phones, or in back-to-school things, colors do sell. We had some new colors that came out with that also. We did mention that these new machines are selling well, and we’ve also been selling more bundles. Let me explain to you a little bit about what that means. With that bundle, we’re also putting on some very value-attractive kits, like essentials or everything kits that allow you to take it out of the box and immediately make.

Some of the kits are 10 projects, and some can be a lot more projects depending upon which bundle you do. That way, when you open it up and take it out of the box, you’re not wondering, do I need a mat? Do I need a scraper? Do I need vinyl? You’re actually able to open it up out of the box. Asya, we talked about it on our earnings call. We were very impressed to see an uptake in those bundles, which we hope translates into a more user, easier, positive experience out of the box. Kimball mentioned the increase in marketing spend. One thing that I would add into that also is we are accelerating our investments in hardware. We wouldn’t be doing that if there are not more things yet to come.

We’re not here to announce our new products, but suffice it to say, we would not be spending an acceleration on our hardware and platform investments, in addition to marketing, if there weren’t things still in the pipeline coming. The cadence from previously was not as fast as we’d like to see, and we’re back into investing and invigorating and coming out with new innovations. So far, the Cricut Maker® 4 and the Cricut Explore® 4, we’re very pleased with how they’re doing.

Asya Merchant, Analyst, Citi: OK. Accessories and supplies, I know we’ve talked about third-party competition there, but it looks like you’re starting to gain some share, or you’re working on gaining some share there. Just help us understand what’s going on in that landscape, both from a competitive standpoint and what you’re doing to kind of gain share in the consumables and accessories.

Kimball, Chief Financial Officer, Cricut: Let me break it down into two pieces. There’s what’s happening in online marketplaces because it’s a different dynamic than in retail. In retail, over the last several years, we’ve seen all of our main retail partners come up with their own white label brands, so we have competition on shelf. One of the effects of tariffs in April was we have a more competitive supply chain than many of our retailers do because we’ve spent much of the last five years disintermediating China from our supply chain. That set us up to do well, and that’s one of the reasons that we saw some of that accelerated demand in Q2. In our online marketplaces, it’s a different value proposition. A few years ago, we were selling the same products in a Walmart and a Michaels and a Target as we were selling on Amazon.

The economics of those channels are very different. Beginning last year, we launched our value line of materials. They were engineered and configured specifically to compete well in online marketplaces, so that continues to do well for us. Just by having the right product at the right price point in a configuration that also works for our platform partners is allowing us to gain share in those marketplaces. The competitive nature of our supply chain relative to some of the competition is also helping us this year in our retail channels.

Asya Merchant, Analyst, Citi: OK. Just on international, I think that’s still a growth market for you guys on the international side as well. That’s where you guys are growing. Just help us understand where you guys are, what are some of the new markets that you want to get into, and some of the trends that you’re seeing internationally that may be different than what you’re observing domestically.

Kimball, Chief Financial Officer, Cricut: Yeah. We’re excited about international, and we grew again this last quarter. We think we have room for improvement there. We were up 8% this last quarter, but four points of that came from foreign exchange help. The rest was from our platform growth. Our physical products were actually down about 10%. That has more to do with some of the specific markets where we’re larger on an international basis continuing to struggle. We’ve talked about Australia for a couple of quarters now. That kind of brought down some of the physical products. Overall, international is up 8% for the quarter. At this point, we’re in 50 countries around the world. We won’t be expanding to new geographies this year, but we are looking at getting deeper into the geographies where we already have a presence. Feel free to add anything, Jim.

Jim Suva, SVP of Finance, Treasury, and Investor Relations, Cricut: I was going to say, when we think about the 50 countries, a lot of them are still in the infancies and not quite as mature as, say, where the U.S. market is. We’re continuing to build content there, fonts, languages, uniqueness to the website for specific regional holidays and festivities and things there. Again, up 8% year over year, that was strong, but we believe we can do better. Again, FX did help us this past quarter by about half of that.

Asya Merchant, Analyst, Citi: Is there some, does it change the way you kind of think about the rest of your income statement as you’re expanding internationally? Is there a little bit more on margins? Are they different? OpEx, is it, you know, OpEx ratios? Is it different as you’re going internationally?

Kimball, Chief Financial Officer, Cricut: Yeah, so we haven’t really split that out. I mean, international is about 21% of the business overall from the last quarter. We don’t have the same profitability goals for new markets as we do for established markets. In many of our more established markets like the UK, France, Germany, Australia, and New Zealand, where we’ve been for a while, some of those markets have experienced the same kind of consumer pressure and inflationary pressure. Last year, that was really a story around the UK, and they kind of turned the corner in Q4. Australia seems to be two or three quarters behind the UK in kind of the same cycle. We are investing heavily in those markets. We know we have an opportunity. We talked about the marketing spend. We know awareness in some of those European markets is about half of what we have in North America.

We do have an opportunity as we lean into our marketing spend to build that awareness, and we think that will pay dividends over time. Just as we turned off marketing back in 2022 and 2023 and didn’t see an immediate drop, as we’ve turned spend back on, we don’t see an immediate uptick. There’s building momentum that we’re doing at this point.

Jim Suva, SVP of Finance, Treasury, and Investor Relations, Cricut: I would add, in some of these developing countries, there is a higher propensity to make and then resell out of somebody’s home as opposed to North America. What I’m getting at is maybe a parent is making t-shirts to resell them for the soccer team or school functions or things like that. Maybe in North America, they may make for their child or give away. There is a higher % of people who we call kind of prosumers who will then make and resell their product internationally. That is where, when Kimball mentioned the Cricut value line, a lot of the people who will make and resell want to buy and are very focused on cost-value proposition.

You might want to buy a longer roll of vinyl, where Cricut value vinyl is a better price per foot than going into a retailer where it’s a shorter SKU just for making one or two projects. Internationally, it does have a little bit higher mix of make to then resell for a profit.

Asya Merchant, Analyst, Citi: Which is good, again, good for margins.

Jim Suva, SVP of Finance, Treasury, and Investor Relations, Cricut: Yes.

Asya Merchant, Analyst, Citi: OK. All right. Tariffs, I know you already said you’ve mitigated a lot of the logistics from where these are manufactured to outside of China. Just given all the tariffs and the reciprocal tariffs that are going on, just help us understand how you think about tariffs. Just given the holiday season, what does that imply for margins?

Kimball, Chief Financial Officer, Cricut: It is still a pretty dynamic environment. As we went into Liberation Day in April, we thought we were actually in a pretty good step because, as I mentioned, we’d spent a lot of energy moving our supply chain largely outside of China. There are some things that are very hard to disintermediate. For example, ceramics—this example of a mug that Jim’s 11-year-old daughter at the time made for me from our products. It is hard to get economic ceramics outside of China. Most of our other spend, we have been able to move to other countries, but we still had exposure to Southeast Asia. When we saw tariffs come in basically across the globe, it created a dynamic environment.

As we watch tariff levels bounce around, we are also moving production around to make sure that we are saving as much money as we can when it comes to pricing and the impacts of that. We know, and I mentioned this before, we have a discretionary consumer spend product. We know that affordability is the main concern of our consumers, especially when you look at cutting machines. It is not just the cost of a machine that can be anywhere from $100 to $400. It is what is the cost of taking on this hobby, because I am going to have to buy iron-on or vinyl or specialized paper to make these projects. How much is that going to cost me? We are very focused on, as we navigate this, what we can do to make sure that we are keeping it as affordable for our consumers as possible.

If I look at the speed of inventory turns, we’ve got 2,500 SKUs, and not everything has the same velocity. Even though we’ve seen tariffs come up starting in April and then reset again in August, most of the impact for us starts to show up in Q4. The margin impact for us is going to be a 2026 story, not a 2025 story.

Jim Suva, SVP of Finance, Treasury, and Investor Relations, Cricut: Asya, there have been some companies in the news who have talked about slowing down their production to try to time the tariffs and impact on their income statement. We’re not slowing down our shipping. We want to go into the holidays with strength to make sure our retailers have the product on shelf to have a successful holiday season. We’re not gaming it or trying to slow down tariffs based upon certain cutoffs. I know other companies are. We’re continuing to produce and ship, and we’ll have to absorb the increased costs as they come.

Asya Merchant, Analyst, Citi: OK. I’m going to just see if anybody in the audience has any questions here. OK. Otherwise, Jim, I’m going to ask a little bit, or Kimball as well. I’m going to ask about shareholder returns. Your cash flow generation is very impressive, and you’ve shown that you always give it back to the shareholders. You’ve done special dividends, you have a regular dividend, you have share buybacks. How do you balance from the free cash flow that you generate? How do you balance that between growth, capital returns? Is acquisition something that you guys think about? Just walk us through that.

Kimball, Chief Financial Officer, Cricut: Jim, you want to take that one?

Jim Suva, SVP of Finance, Treasury, and Investor Relations, Cricut: Yeah, Asya, great question. We are very fortunate to be a very profitable company and generate significant cash, and we have zero debt. We’re not against debt if an opportunity comes along. Let me walk you through the structure, how we think about capital allocation, because it’s very premeditated and with purpose and intent. It’s something we work with our CFO, CEO, and board of directors. There should be no surprises here. First of all, priority number one is to fund organic growth. That organic growth is to drive sales. It’s the increased marketing that Kimball talked about, the increased R&D that we’re doing in hardware and in software and in platform. We are spending now for the sustainable long term. That’s how we look at it. Organic growth is number one. Second would be M&A. We do look at M&A from time to time.

We haven’t announced any large acquisitions. We look at them. We would have to find something that accelerates our growth. We’re not like a bolt-on company where one should expect it. M&A is in our list as number two. Third is to return excess cash. You correctly mentioned special dividends as well as recurring dividends. Let me separate those into two buckets. The special dividend, which in July we paid a $0.75 dividend plus a $0.10 recurring dividend, the $0.75 dividend is the special dividend. That was funded by our workdown of inventory. Kimball mentioned during COVID days, we ordered a lot of products, whether it be semiconductor chips, plastics, metals. They have to be assembled in Malaysia, then shipped to the United States. In our distribution center, they’ll be warehoused, and then eventually go to our retailers. We’ll eventually get paid from that.

We saw a very significant workdown in our own inventory from the COVID days to today. That workdown resulted in extra cash that was in excess of need of organic growth and M&A. I mentioned we haven’t done M&A, but we’re not opposed to it. So far, that extra cash, what we’ve done is we’ve given it back to our shareholders. We don’t want to hold cash just to hold cash or be a bank or hold excess cash. We will return it to shareholders. One should think about that special dividend as being primarily fueled by the inventory workdown post-COVID. That’s different than our recurring dividend. Our recurring dividend is paid twice a year in July and in January. Right now, it’s been set at $0.10 every six months. That recurring dividend is being funded by our organic operations, the profitable operations.

When we have excess cash, we’ll also look at stock buybacks. We have a $50 million stock buyback in place. This is our third $50 million stock buyback that we’ve put in place. The previous ones took approximately 18 months for us to work through each of those $50 million. Given the trading volumes and price action that we see, sometimes we are a little bit limited from accelerating that because we will still want to make sure that there’s ample liquidity in the market for investors to be able to enter and exit their stock without creating a disruption. Asya, to reaffirm your statement, we’re very pleased to be a profitable company and very focused on organic growth. When we don’t have it, we will return it to shareholders. We have no intention in the near term of taking on debt.

If the opportunity from M&A or accelerating investments came along, we’re not opposed to debt. Right now, we believe that we can continue our dividend, and we’re in a very strong suit for that for capital deployment.

Asya Merchant, Analyst, Citi: OK. Let me do one last round, see if investors have any questions here. OK. I’m going to ask Jim and Kimball to maybe wrap it up with a few comments on what do you think is underappreciated by the investment community about Cricut’s shares?

Kimball, Chief Financial Officer, Cricut: We are really excited about our subscription business. That’s where 80% of our profit comes from. We have over 3 million subscribers. We invest heavily in the platform and increasing our value proposition over time. We think even as we’ve seen the physical products be challenged over the last couple of years, and finally returning back to growth in Q2, we have continued to consistently grow subscribers. One of the things that we have talked about publicly this year is we are re-architecting our platform to be a much more mass-market experience. At the end of Q2, we were on target with two simplified use cases that are our most common use cases. We have a few more that we will deliver by the end of the year. One of the things that will be transformational for us in 2025 is a much simpler, much mass-oriented user experience.

We think that will help engagement in our platform and in bringing new consumers to our ecosystem.

Jim Suva, SVP of Finance, Treasury, and Investor Relations, Cricut: I would say, in addition to what Kimball said, investors really don’t appreciate the subscription model. They value us as a hardware-only company. I understand that. When you peel back and spend the time to understand our business, the subscription profitability and the stickiness of paid subscribers is very encouraging. When you layer on that we just grew paid subscribers 7% year over year, that’s pretty compelling when you think about the lifetime value of a paid subscriber who’s coming in. Whether they pay us monthly or annually, that’s good profit margins. Recall our gross margins for our platform are high 80%. We’re very pleased with that. It rarely comes up when people first look at our company. The second thing I would focus on is the financial positive leverage of when we become a recurring sustainable growth company. The leverage of profitability from increasing sales is significant.

I would encourage you to take a look at that. While we’re pleased that we hit growth this past quarter in Q2, we’re really looking for sustainable long-term growth. The financial model and profits it puts off in cash flow is tremendous. I think those are the two things, Asya, that investors underappreciate.

Asya Merchant, Analyst, Citi: All right. I’m going to wrap it up here. Thank you both. Thank you, gentlemen, for coming too, and good luck with the rest of your investor meetings.

Kimball, Chief Financial Officer, Cricut: Asya, thank you for hosting us.

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