What changed in this filing

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Item 1. Business

2024-03-06 compared with 2023-03-13 · 103 added, 110 removed, 343 unchanged (38% of the section changed)

At Cricut, our mission is to help people lead creative lives.

Our creativity platform enables our engaged and loyal community of nearly 7.9 million users, as of December 31, 2022, to turn ideas into professional-looking handmade goods.

Using our design software together with our highly versatile ecosystem of connected machines, accessories, and materials, users can create everything from personalized birthday cards and party décor to custom apparel and home goods to large-scale interior decorations and more.

This ecosystem was designed and built for scalability and seamless integration, allowing us to both introduce new products as well as continuously update the functionality and features of existing physical and digital products.

This makes our platform broadly extensible and empowers our users to unlock ever-expanding creative potential.

The Cricut platform centers around cloud-based software, which means that users can access and work on their projects anywhere, at any time, across desktop and mobile devices.

Our creativity platform enables our engaged and loyal community of over 8.9 million users, as of December 31, 2023, to turn ideas into “I Did It’s” — DIY goods from custom greeting cards, and apparel to on-demand gifts and large-scale decor.

We designed and built our ecosystem of connected cutting machines, accessories, and materials for scalability and seamless integration, allowing us to both introduce new products as well as continuously update the functionality and features of existing physical and digital products.

This makes Cricut broadly extensible and empowers our users to unlock ever-expanding creative potential.

The Cricut platform centers around our cloud-based app, Cricut Design Space, giving users access to create and work on their projects anywhere, at any time, across desktop and mobile devices.

This software aggregates billions of data points of our users’ contributions, giving us valuable insights into their preferences and behaviors that enable us to continuously improve our products and drive further engagement.

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We extend the inspiring and intuitive nature of our platform to our hardware with connected machines that are both beautiful and easy to use.

Our portfolio of connected machines cut, write, score, and create decorative effects for a wide range of use cases on an array of materials including paper, vinyl, and leather.

Our portfolio of connected machines cuts, writes, scores, and creates decorative effects for a wide range of use cases on an array of materials including paper, vinyl, wood, and leather.

These machines are available at a variety of price points:

• Cricut Joy for personalization, organization, and customization, $179.00 MSRP

• Cricut Joy family for personalization, organization, and customization, $149.00-$199.00 MSRP

• Cricut Explore family for cutting, writing and scoring, $249.00 - $319.00 MSRP

• Cricut Maker family for cutting, writing, scoring and adding decorative effects to a wider range of materials, $399.00 - $429.00 MSRP

Cricut often becomes a huge part of our users’ creative lives, serving as the foundation for their journey of creativity.

These journeys typically begin with the purchase of a machine and expand across our family of products as users harness the power of our platform.

• Cricut Venture for cutting, writing, and scoring large-format projects at professional speeds, $999.00 MRSP

Cricut often becomes a huge part of users’ creative lives, serving as the foundation for their journey of creativity.

These journeys typically begin with an idea of something to make, leading to the purchase of a machine and expands across our family of products as users harness the power of our platform.

Our users demonstrate continued engagement with our platform over time, which results in purchases of subscriptions, accessories, and materials long after they first purchase a connected machine.

As of December 31, 2022, 51% of our users created on their connected machines in the last 90 days and 74% created in the last 365 days.

In our design apps, users can find inspiration, purchase or upload content like fonts and images, and design a project from scratch or find a vast array of ready-to-make projects on both mobile and desktop devices.

All users can take advantage of a select number of free images, fonts, and projects from our design apps or upload an unlimited number of their own designs.

In addition, we offer a wider selection of images, fonts, and projects for purchase à la carte, including licensed content from our partners, such as well-known characters, designs, and other trademarks from a variety of brands.

We also provide a standard and premium version of our subscription service, Cricut Access.

Cricut Access is a subscription for special design features and capabilities as well as a growing library of more than 300,000 images, thousands of ready-to-make projects, and hundreds of fonts.

As of December 31, 2023, 44% of our users cut on their connected machine in the last 90 days and 66% created in the last 365 days.

In Cricut Design Space, users find inspiration, purchase or upload content like fonts and images, and design a project from scratch or customize a vast array of ready-to-make projects.

Users can take advantage of a select number of free images, fonts, and projects, design within the app, or upload pre-made designs.

In addition, we offer a wider selection of images, fonts, and projects for purchase à la carte, including licensed content such as well-known characters, designs, and other trademarks from a variety of partner brands.

A standard and premium version of our subscription service, Cricut Access, enables use of special design features and expanded app capabilities as well as a growing library of more than 750 thousand images, thousands of ready-to-make projects, and hundreds of fonts.

Cricut Access also includes other member benefits, such as discounts and priority support.

Cricut Access Premium includes all of the benefits of the standard version of Cricut Access, as well as additional discounts and preferred shipp ing services.

As of December 31, 2022, we had 2.6 million paid subscribers, representing approximately 33% of our total users.

The broad range of accessories and materials in the Cricut ecosystem also help bring designs to life, from companion products like heat presses to handheld tools, paper, and vinyl.

The premium version includes all of the benefits of the basic Cricut Access subscription, as well as additional discounts and preferred shipping services.

As of December 31, 2023, we had nearly 2.8 million paid subscribers, representing approximately 31% of our total users.

The broad range of accessories and materials in the Cricut ecosystem also help bring designs to life, from heat presses and handheld crafting tools to materials like paper and vinyl.

These products work seamlessly and easily with our connected machines, which helps build brand loyalty among our userbase.

Creating projects often drives repeat purchases of accessories and materials for years after a user first buys a connected machine, demonstrating a growing customer lifetime value through ongoing engagement with our platform.

Many of our users share a love of our brand, products, and mission, which fosters a loyal community of users who are deeply engaged with Cricut and each other.

Creating projects drives repeat purchases of accessories and materials for years after a user first buys a connected machine, demonstrating a growing customer lifetime value through ongoing engagement with our platform.

Many of our users share a love of our brand, products, and mission, fostering a loyal community of users who are deeply engaged with Cricut and each other.

Every project is an opportunity to start a conversation and we often see our users inspire, teach, and create together.

Users are passionate about sharing Cricut tips, tricks, and personal stories and this engagement carries over into social media and into everyday life.

There are more than six million Cricut followers and hundreds of independently run Cricut groups across social media.

Users are passionate about sharing Cricut tips, tricks, and

personal stories and this engagement carries over into social media and into everyday life.

Globally, there are more than 6.9 million Cricut followers and hundreds of independently run Cricut groups across social media.

Users often self-organize, host independent events, and meet up in person across the globe.

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This design of our product ecosystem and marketing helped scale our community of users significantly over time.

The revenue generated from the sales of our connected machines, subscriptions, accessories, and materials comes from a robust mix of brick-and-mortar and online retail, including direct-to-consumer on cricut.com, and partners like Amazon, Michaels, Jo-Ann, Target, and Walmart.

We are a profitable business.

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Approximately 24% of our users make projects to sell.

• Social Media is Enabling a New Wave of Creativity.

The ubiquity of social media is a key driver of global consumer engagement with new creative endeavors.

Through social media, people can be inspired by new ideas or projects anywhere and anytime.

We help our users turn virtual inspiration into beautiful, physical things.

We have over six million followers across social media, and our users have shared thousands of projects on our platform.

Our Opportunity

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This presents us with a large untapped market opportunity in addition to our current user base.

We quantify our market opportunity in terms of SAM, which includes active Makers who we address with our current products and price points, and TAM, which includes potential creatives who we believe we can reach over the long term with products that address new use cases, greater accessibility, and a broader set of price points.

We quantify our market opportunity in terms of target audience profile, which includes active Makers with relevant behavioral attributes who we address with our current products and price points, and our SAM and TAM, which includes potential creatives who we believe we can reach over the long term with products that address new use cases, greater accessibility, and a broader set of price points.

We commissioned a study from YouGov America in September 2020 across multiple countries.

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To calculate our SAM and TAM, we extrapolate these survey results across the general population ages 18 and older in each region.

Our SAM consists of the portion of individuals surveyed who said they have made at least one creative project in categories addressed by our current products in the last 12 months, whom we call “active creatives.” Our TAM includes the individuals in our SAM as well as the portion of individuals surveyed who said they like, buy, used to make or are interested in creating personalized, handmade or custom items, whom we call “potential creatives” but who have not made at least one creative project in categories addressed by our current products in the last 12 months.

Our SAM consists of the portion of individuals surveyed who said they have made at least one creative project in categories addressed by our current products each month in the last 12 months, whom we call “active creatives.” Our TAM includes the individuals in our SAM as well as the portion of individuals surveyed who said they like, buy, used to make or are interested in creating personalized, handmade or custom items, whom we call “potential creatives” but who have not made at least one creative project in categories addressed by our current products in the last 12 months.

We assess our SAM and TAM in the United States and Canada and internationally.

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Accordingly, we estimate our total SAM is over 129 million individuals.

As of December 31, 2022, we had nearly 7.9 million users, implying approximately 6% penetration of our SAM in all markets.

As of December 31, 2023, we had over 8.9 million users, implying approximately 7% penetration of our SAM in all markets.

We estimate that there are over 163 million potential creatives in the United States and Canada and over 109 million potential creatives in our primary international target markets.

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This opens up a broad array of markets for our users that go beyond the traditional craft market.

The goods that users produce or customize using our platform fall into multiple large market categories, some of which may overlap, including, but not limited to, cards, stationery, seasonal decor, wedding-related services, organization, and custom gifts.

The goods that users produce or customize using our platform fall into multiple large market categories, some of which may overlap, including, but not limited to, cards, seasonal décor, pop culture, wedding-related services, organization, and custom gifts.

The Cricut User Journey

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• 38% of new users bought their Cricut machine specifically to make a broad range of projects

• 25% of users make projects to sell

• 33% of new users make projects to sell

• 82% of users say crafting with Cricut inspires feelings of accomplishment

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For example, a user may buy a connected machine and begin by making cards but later branch out to T-shirts, wall decals, and more.

launch new software and products, and as our community continues to grow and share on our platform and elsewhere online, can continually refresh this relationship and expand the versatility of our platform.

Our large and loyal community of users engage with Cricut and each other both in Design Space, our design software, and through social media.

As we launch new software and products, and as our community continues to grow and share on our platform and elsewhere online, can continually refresh this relationship and expand the versatility of our platform.

Our large and loyal community of users engage with Cricut and each other both in Design Space and through social media.

Users often share projects they created, inspiring other users to create.

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Many users have even taken passion for Cricut to the next level, creating their own tutorials, inspirational posts, and other influential content to share with others.

This adds a larger, broader audience to Cricut’s own social audience of more than six million followers.

adds a larger, broader audience to Cricut’s own social audience of more than 6.9 million followers.

The social conversation that this audience generates includes millions of posts tagging Cricut and related hashtags, billions of video views, and many third-party, independently run Cricut-related groups across social platforms.

These teaching and inspiration moments enhance our monetization opportunities, as they lead to the creation of projects, which often lead users to purchase images, fonts, accessories, and materials.

Our cloud-based software integrates our connected machines and design apps, allowing our users to create and share seamlessly from anywhere, at any time, across desktops or mobile devices.

Our cloud-based software integrates with our connected machines, allowing our users to create and share seamlessly from anywhere, at any time, across desktops or mobile devices.

Our software aggregates billions of data points of our users’ contributions, giving us valuable insights into our users’ preferences and behaviors.

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Having direct access to this data allows us to monitor how users engage with product features, giving us the insights we need to efficiently improve and expand if needed or sunset products when no longer useful.

The integrated structure of our hardware and software products allows us to continue releasing new connected products with uses that seamlessly integrate with our existing ecosystem, allowing us to grow the lifetime value of our consumer base.

The integrated structure of our hardware and software allows us to continue releasing new connected products with uses that seamlessly integrate with our existing ecosystem, allowing us to grow the lifetime value of our consumer base.

Connected Machines

Our connected machine portfolio currently includes Cricut Joy, the Cricut Explore family, and the Cricut Maker family.

Our connected machine portfolio currently includes the Cricut Joy family, the Cricut Explore family, and the Cricut Maker family, and Cricut Venture.

These machines cut, write, score, and create decorative effects using a wide variety of tools and materials including paper, vinyl, leather, and more.

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Bluetooth and USB options enable connectivity to Cricut Design Space, our proprietary cloud-based design software available for free on Android, iOS, Mac OS, and PC devices.

Design Apps and Subscriptions

Users leverage our connected machines and design apps to bring their ideas to life.

Design App and Subscriptions

Users leverage our connected machines and design app to bring their ideas to life.

After downloading our app and creating a profile, users access a select number of free images, fonts, and ready-to-make projects, or can upload their own designs to begin making.

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Much of the à la carte content (with exceptions for some partner content) is also included in Cricut Access, our subscription offering.

Available as a monthly or annual subscription, Cricut Access subscribers enjoy a greater and ever-growing selection of more than 300,000 images, hundreds of fonts, and thousands of ready-to-make projects in our design library, as well as other members-only special features, like Monogram Maker.

Available as a monthly or annual subscription, Cricut Access subscribers enjoy a greater and ever-growing selection of more than 750 thousand images, hundreds of fonts, and thousands of ready-to-make projects in our design library, as well as other members-only special features, like Monogram Maker.

Subscribers also receive discounts to cricut.com and priority support.

Cricut Access is $9.99 billed monthly or $95.88 billed annually.

Cricut Access Premium, which includes all of the benefits of Cricut Access, includes additional discounts and

preferred shipping for an annual cost of $119.88.

As of December 31, 2022, we had 2.6 million Cricut Access subscribers, representing approximately 33% of our total users.

Cricut Access Premium, which includes all the benefits of Cricut Access, includes additional discounts and preferred shipping for an annual cost of $119.88.

As of December 31, 2023, we had nearly 2.8 million Cricut Access subscribers, representing approximately 31% of our total users.

Cricut Extensions, Accessories, and Materials

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The Cricut heat press line, including the Cricut EasyPress family, Cricut Mug Press, Cricut Hat Press, and Cricut Autopress, offers carefully calibrated companions for heat transfer vinyl projects such as personalized apparel or sublimated goods.

This line of heat presses replaces traditional irons and heat transfer tools with products that deliver consistent, even, and precise control.

This line of heat presses replaces traditional irons and heat transfer tools

with products that deliver consistent, even, and precise control.

Our line of lighting products, which includes Cricut Bright in table and floor lamp options, and the popular Cricut BrightPad and BrightPad Go, illuminate surfaces and surroundings for easier crafting and creating.

Cricut materials give users peace of mind with a brand they trust for durability, selection, and compliance.

We sell a wide range of project materials including vinyl, iron-on vinyl, deluxe paper, and Infusible Ink (cuttable sublimation).

We sell a wide range of project materials including vinyl, iron-on vinyl, deluxe paper, and Infusible Ink (cuttable sublimation ink).

Machine and hand tools also support multiple forms of creativity, from fine point blades for vinyl and cardstock, to rotary blades for fabric, to knife blades for leather and softwood.

Handheld tools from scissors, to weeding tools, to glue, complete the Cricut ecosystem for a full-brand offering made for the discerning consumer.

We offer over 3,000 total SKUs within our Cricut extensions, accessories, and materials, ranging in price from a $0.99 a la carte image in Design Space to the $999.00 Cricut Autopress.

We offer over 3,000 total SKUs within our Cricut extensions, accessories, and materials, ranging in price from a $0.99 a la carte image in Design Space to the $999.00 for Cricut Autopress.

How We Go to Market

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We also use digital and social media marketing to attract users.

We sell our connected machines, accessories, and materials through our brick-and-mortar and online retail partners, as well as through our website at cricut.com.

Our partners include Amazon, Hobby Lobby, HSN, Jo-Ann, Michaels, Target, Walmart and many others.

We sell our connected machines, accessories, and materials globally through our brick-and-mortar and online retail partners, as well as through our website at cricut.com.

Our partners include major retailers such as Amazon, Best Buy, Costco, Hobby Lobby, HSN, Jo-Ann, Michaels, Target, and Walmart, along with many others.

We also sell our products, including subscriptions to Cricut Access, on cricut.com.

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Our Vertically Integrated Platform Encourages Continual Engagement.

Our platform accompanies a user from an idea to a finished project, with Cricut providing the connected machines, design apps, digital content, accessories, and materials to make this a seamless journey.

Our platform accompanies a user from an idea to a finished project, with Cricut providing the connected machines, design app, digital content, accessories, and materials to make this a seamless journey.

Users’ engagement with our platform typically begins with a project idea.

In our design apps, users can browse and search among a wide range of images, fonts, and projects published by Cricut, by artists enrolled in our Contributing Artists Program, or made and shared by other users on our platform.

In our design app, users can browse and search among a wide range of images, fonts, and projects published by Cricut, by artists enrolled in our Contributing Artists Program, or made and shared by other users on our platform.

Users can use that digital content to immediately design a project, or can like, bookmark, or organize it in collections for later use.

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Our mission is rooted in our passion for design, and this passion comes to life in the beautiful products we build and experiences we create.

We take great pride in marrying design and functionality for each SKU – from our connected machines and design apps to content to accessories and materials.

We take great pride in marrying design and functionality for each SKU – from our connected machines and design app to content to accessories and materials.

Every touchpoint is an opportunity to engage the customer and exceed expectations.

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We Designed our Platform to Constantly Evolve so We Can Find New Ways to Delight Users.

We constantly innovate and offer new products and functionality to provide users with new capabilities for their existing connected machines.New products are integrated seamlessly into existing connected machines with updates to our software, infrastructure, and content.

We constantly innovate and offer new products and functionality to provide users with new capabilities for their existing connected machines.

New products are integrated seamlessly into existing connected machines with updates to our software, infrastructure, and content.

We continuously improve our software to address the unique needs our users have when crafting.

For example, in 2022, we launched Monogram Maker, which is integrated into our Design

Space platform and provides an easy-to-use tool for creating well-designed monograms.

We also developed a more empowering font picker and we extended our platform to support Editable Images, which give our users the ability to easily personalize content from our image library.

In addition, we enabled the infrastructure to support content contributions from new and diverse artists as part of our Contributing Artists Program.

For example, in 2023, we launched Multi-Warp and Create Sticker, two ways of making the design and cutting process more efficient for our users.

In addition, we expanded the Contributing Artists Program, which launched in 2022, to more than 700 artists with over 580,000 contributed images in this short time.

We Have a Strong and Loyal Community of Users.

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Each project becomes an opportunity to create a conversation – our users share, inspire and teach each other.

Our community of nearly 7.9 million users as of December 31, 2022, creates a reinforcing network effect.

Our community of over 8.9 million users as of December 31, 2023, creates a reinforcing network effect.

As the number of our users grow, so does the number of projects made and shared physically or digitally.

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These are key elements of our growth strategy:

Expand Internationally.

We believe there is a significant opportunity for Cricut to grow internationally.

We began our international expansion by launching in Australia, Canada, France, Germany and the United Kingdom, and subsequently launched in Latin America, Western Europe, and more recently most of Asia (including India, Japan, and South Korea).

We have also localized our design apps in each of the most commonly spoken languages in the countries we have entered.

We offer country-specific content and continue to add local content for markets where we are in various stages of launch.

We will continue to pursue disciplined international expansion by targeting countries with large populations of active creatives where we believe the Cricut value proposition will resonate.

We expect to leverage a combination of brick-and-mortar and online retail partners to go to market internationally.

Reach More Users.

As of December 31, 2022, we had nearly 7.9 million users, representing approximately 6% of the 129 million addressable active creatives in our SAM.

As of December 31, 2023, we had over 8.9 million users, representing approximately 7% of the 129 million addressable active creatives in our SAM.

We have a significant opportunity to bring more users to our platform by enhancing our brand and product awareness in both the United States and Canada and in the other geographies where we currently sell our products.

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We believe that reducing the barriers to entry for both active and potential creatives can help us both further penetrate our SAM and continue to expand and penetrate a portion of our TAM.

Launch New Products in New Categories.

New products help us extend our impact with new and existing users.

Our deeply engaged base of users gives us unique insights into what new products are going to be most successful.

Our strategy for keeping current users engaged is focused on launching new products and services that attach seamlessly to our existing platform.

We plan on expanding our offerings to serve a larger portion of our SAM, including new connected machine offerings with new uses to capture additional customer segments.

Our ability to launch new services and new products will allow us to diversify our channels and bring on new brick-and-mortar and online retail partners.

Expand Internationally.

We believe there is a significant opportunity for Cricut to grow internationally.

We have also localized our design app in each of the most commonly spoken languages in the countries we have entered.

We offer country-specific content and continue to add local content for markets where we are in various stages of launch.

We will continue to pursue disciplined international expansion by targeting countries with large populations of active creatives where we believe the Cricut value proposition will resonate.

We expect to leverage a combination of brick-and-mortar and online retail partners to go to market internationally.

Technology and Content

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Our hardware innovation harnesses the power of technologies typically found only in professional robotics, computer numerical control machinery, and other automated commercial devices.

One example of our cutting-edge innovation is Cricut Joy, a connected machine that is both powerful and portable.

Examples of our cutting-edge innovation include Cricut Joy Xtra and Cricut Venture, both launched in 2023, both addressing key needs our consumers asked for relating to maximization of cutting materials, portability, and batch making.

Our software integrates our connected machines with the rest of our platform and enables a seamless creative experience for our users.

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The ability to control the amount of machine pressure used by Cricut Maker was an industry first in such a compact form factor, and it allows our users to not only cut thicker materials like matboard, leather and basswood but also to deboss heavy chipboard or engrave metal.

While assorted machine tools are required to create these decorative effects, our connected machines also have the capability to automatically detect whether the proper tool is installed to safeguard proper operation and help our users achieve their desired effect.

While assorted machine tools are required to create these decorative effects, our connected machines also have the capability to automatically detect

whether the proper tool is installed to safeguard proper operation and help our users achieve their desired effect.

• Cloud-Based Architecture Which Allows for Simplicity, Scalability and Security.

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Our software and apps are built and continually maintained using the industry’s latest technology like Swift for iOS, Kotlin for Android, and Electron Framework for Mac and Windows.

We benefit from and leverage the AWS security frameworks to provide our users an infrastructure that is consistent with information security best practices so that our users’ information, creative projects, and account are safe and secure.

We benefit from and leverage the AWS security frameworks to help secure our users’ information, creative projects, and account.

• Cut Smart Technology, Adaptive Tool System and QuickSwap Housings.

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The output of this content lifecycle results in authentic, on-trend and high-quality images and projects we offer our users for à la carte purchase or as a part of our Cricut Access subscriptions.

As we diversify our content categories and further expand internationally, we will continue to develop localized and meaningful content shaped to meet the language, needs and preferences of our growing global user base.

As we diversify our content categories and further expand internationally, we will continue to

develop localized and meaningful content shaped to meet the language, needs and preferences of our growing global user base.

As our user base expands, demand for content is higher than ever.

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Artists get compensated when members use their artwork.

We also updated and expanded the library with editable images and Monogram Maker, which empower users to personalize their projects more easily.

We also continue to update and expand the library with editable images and new features that enable a more efficient design process, such as Multi-Warp and Create Sticker.

• Unified Integration Between Hardware, Software and Content.

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Our employees strive to support this mission by providing an innovative creativity platform that includes software, machines, materials, and tools to our users.

Much of our team are makers and crafters and are engaged with our end-users.

Much of our team are makers and crafters themselves and are engaged with our end-users.

We celebrate seeing the creativity and kindness that our end users create with the tools we provide.

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As of December 31, 2023, we had over 690 employees of which 152 lived outside of the United States.

Before the pandemic, we had employees in 11 states and 8 countries.

As of December 31, 2023, we had employees in 33 states and 23 countries.

We believe the diversity of background and thought that this growth has infused into our

company is a great strength and will continue to be as we continue to grow and expand around the world.

We believe the diversity of background and thought that this growth has infused into our company is a great strength and will continue to be as we continue to grow and expand around the world.

We consider our relations with employees to be good.

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While support is primarily provided in the form of product donations, it also includes employees’ time in providing crafted projects.

Employee Safety.

The health and wellness of our employees and members remains a priority.

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The majority of Cricut employees operate on a hybrid model, working in-office 3+ days per week and working virtually the remainder of the week.

Policies and practices are in place to ensure adherence to occupational and COVID-19 safety within each office.

Policies and practices are in place to ensure adherence to occupational safety within each office.

We compete in several market segments with our business.

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We face heightened competition in providing accessories and materials that we sell for use with our connected machines.

We compete against well-established, well-known companies, many of which are also our retail partners, including Hobby Lobby, HSN, Jo-Ann, Michaels, Amazon, and Walmart.

We compete against well-established, well-known companies, many of which are also our channel partners.

Many of these companies have substantial market share, diversified product lines, well-established supply and distribution systems, strong brand recognition and significant financial, marketing, research and development and other resources.

These brick-and-mortar and online retail partners often have their own brands of products that we compete against, particularly in accessories and materials.

These channel partners often have their own brands of products that we compete against, particularly in accessories and materials.

We also compete with well-established content providers, from free resources that enable users to access content that is compatible with our platform, to more specific content marketplaces, like Creative Fabrica and Etsy, where customers can purchase digital files to upload to our platform.

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Although we rely in part upon these legal and contractual protections, we believe that factors such as the skills and ingenuity of our employees and the functionality and frequent enhancements to our platform are larger contributors to our success in the market.

As of December 31, 2022, we had 45 issued patents in the United States, which expire at various times between October 6, 2023 and February 17, 2041, as well as 89 issued patents in non-U.S.

jurisdictions, which expire at various times between July 14, 2026 and August 2, 2046, we also hold 44 pending patents in the United States and 96 pending patents in non-U.S.

As of December 31, 2023, we had 61 issued patents in the United States, which are expected to expire at various times between May 4, 2024, and March 23, 2042, as well as 125 issued patents in non-U.S.

jurisdictions, which are expected to expire at various times between July 8, 2024, and December 19, 2048.

We also had 53 pending patent applications in the United States and 185 pending patent applications in non-U.S.

jurisdictions.

These patents are intended to protect our proprietary inventions that are relevant to our business.

These issued patents and pending patent applications are intended to protect our proprietary inventions that are relevant to our business.

We continually review our development efforts to assess the existence and patentability of new intellectual property.

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Despite our efforts to protect our intellectual property rights, they may not be respected in the future or may be invalidated, circumvented, or challenged.

In addition, as we continue to expand internationally, the laws of certain foreign countries may not protect our intellectual property rights to the same extent as laws in the United States.

In addition, as we continue to expand internationally, the

laws of certain foreign countries may not protect our intellectual property rights to the same extent as laws in the United States.

We expect that infringement of our intellectual property may increase as the number of products and competitors in our market increases, and effective protection of intellectual property rights is expensive and difficult.

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We believe outsourcing our manufacturing function promotes more flexibility and scalability in our operations.

We primarily use one contract manufacturer, Xiamen Intretech, Inc., or Intretech, with operations in Malaysia and China, to produce our connected machines, which are built based on our quality and performance standards and specifications.

We are increasing use of another contract manufacturer, also with operations in Malaysia.

Our agreement with Intretech is on a purchase order basis, and Intretech is not otherwise obligated to supply our connected machines in any specific quantity or at any specific price.

The Intretech agreement has an initial five-year term beginning August 2018 and thereafter automatically renews for one additional year unless earlier terminated by the parties for breach or upon 60 days’ prior written notice.

We primarily use two contract manufacturers, with operations in Malaysia and China, to produce our connected machines, which are built based on our quality and performance standards and specifications.

Our contracts with our two primary contract manufacturers do not obligate them to supply our connected machines in any specific quantity or at any specific price and allow us to enter purchase orders with such manufacturers.

Our contract manufacturers procure from approved third-party suppliers a majority of the components (measured by spend) that are used in the production of our products.

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Certain highly specialized components and raw materials, such as electronic components, microchips and certain alloys that are critical to the performance of our connected machines, are sourced from very limited component suppliers.

These components have unique performance

profiles, and, as a result, it is not commercially practical to support multiple sources for these components for our products.

These components have unique performance profiles, and, as a result, it is not commercially practical to support multiple sources for these components for our products.

To streamline e-commerce logistics, inventory management, warehousing and fulfillment, we engage a small number of third-party logistics partners, including last mile warehousing and delivery partners, located in the United States, China, Europe, and Australia to receive and distribute our products.

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Our sales and channels team located in the United States support both the onboarding of new brick-and-mortar and online retail partners as well as account management of existing brick-and-mortar and online retail partners.

We also have an international sales and marketing force in the United Kingdom, Australia, across Western Europe, South Africa, Middle East, Singapore, Mexico, and Brazil, to drive sales and whose reach spans into many jurisdictions across the globe.

spans into many jurisdictions across the globe.

We continue to grow our revenues within our international markets and in 2022 16.1%, and in 2023 20.3% of our overall revenue came from our international business.

Many of our products are sold through traditional brick-and-mortar retail partners, varying in size, including on their websites, as follows:

• Specialized Craft Retailers.

We sell to specialized arts and crafts supply retailers with large regional or national presence, such as Hobby Lobby, HSN, Jo-Ann, and Michaels.

We sell to specialized arts and crafts supply retailers with large regional or national presence, such as Hobby Lobby, Hobbycraft, Jo-Ann, and Michaels.

• National Retailers.

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We sell to a network of smaller, independent retailers in targeted locations or in specialty markets.

Each of Jo-Ann, Michaels, and Walmart represented 10% or more of our consolidated revenue in the year ended December 31, 2020, and Amazon, Michaels, and Walmart represented 10% or more of our consolidated revenue in the year ended December 31, 2021.

As of December 31, 2022 we did not have any customers that represented 10% or more of our consolidated revenue.

Each of Jo-Ann, Michaels, and Walmart represented 10% or more of our consolidated revenue in the year ended December 31, 2021.

As of December 31, 2022 and December 31, 2023 we did not have any customers that represented 10% or more of our consolidated revenue.

We also currently offer our products through our website at cricut.com, which can be purchased directly by users in the United States, Canada, the United Kingdom, Ireland, France, and Germany.

Users can also purchase subscriptions to Cricut Access and Cricut Access Premium through our website or through Cricut’s design apps on Android and iOS devices.

Additionally, users can make in-app purchases of images, fonts and projects à la carte on our platform and through our design apps.

Users can also purchase subscriptions to Cricut Access and Cricut Access Premium through our website or through Cricut’s design app on Android and iOS devices.

Additionally, users can make in-app purchases of images, fonts and projects à la carte on our platform and through our design app.

We drive consumers to our website and platform primarily through word-of-mouth marketing channels and the use of low-cost marketing channels like social media.

We believe our omni-channel strategy enables us to target a diverse consumer base.

Cricut marketing efforts keenly focus on building product awareness, driving conversion, and engaging the community to attract new users and retain existing users.

Our loyal community of millions of users — empowered

with a platform designed for sharing — are our best and most effective marketing tools, helping to generate robust word-of-mouth referrals, which have been significant drivers of our growth.

Cricut marketing efforts keenly focus on building brand and product awareness, driving conversion, and engaging the community to attract new users and retain existing users.

Our loyal community of millions of users — empowered with a platform designed for sharing — are our best and most effective marketing tools, helping to generate robust word-of-mouth referrals, which have been significant drivers of our growth.

With 86% of our users, as of December 31, 2023, creating projects for their friends and family, word-of-mouth marketing continues to be paramount to our operational success.

Crafting inspires feelings of accomplishment in our users, which promotes repeat use of our products and reengagement in our platform and community.

Crafting inspires feelings of accomplishment in our users, which promotes repeat use of our products and re-engagement in our platform and community.

Users in our community are deeply engaged and are passionate about sharing inspiration, Cricut tips and tricks, and personal stories online through third-party platforms like blogs and YouTube as well as social media, which promotes discovery and adoption.

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Additionally, our users’ ongoing engagement on our data-driven platform enables us to learn more about their preferences and behaviors, which we harness to continually improve our platform and to predict what new products will be successful, driving a cycle of further community engagement.

We intend to continue to invest resources to build our brand and community, including employing digital advertising and content marketing.

We intend to continue to invest resources to build our brand and community, including employing digital advertising, brand partnerships, and content marketing.

Our marketing efforts prioritize the customer journey to ensure that when consumers interact with the Cricut brand, we’re creating positive experiences that people will remember.

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It is therefore likely that we will need to comply with these local regulations in addition to the GDPR.

Local supervisory authorities can impose fines for non-compliance and have the power to carry out audits,

require companies to cease or change processing, request information and obtain access to premises.

Local supervisory authorities can impose fines for non-compliance and have the power to carry out audits, require companies to cease or change processing, request information and obtain access to premises.

The GDPR created more stringent operational requirements for processors and controllers of personal data, including, for example, requiring enhanced disclosures to data subjects about how personal data is processed (including information about the profiling of individuals and automated individual decision-making), limiting retention periods of personal data, requiring mandatory data breach notification and requiring additional policies and procedures to comply with the accountability principle under the GDPR.

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Additionally, in November 2020, California passed the California Privacy Rights Act, or CPRA, which amended and significantly modified the CCPA, potentially resulting in further uncertainty and requiring us to incur additional costs and expenses in efforts to comply.

Similar legislative developments in other states and at the federal level in the United States have been enacted or proposed, which could create the potential for a patchwork of overlapping but different laws.

Similar legislative developments in other states have been enacted or proposed.

For example, Virginia, Colorado, Utah, and Connecticut have each passed laws similar to but different from the CCPA and CPRA that have taken effect in 2023;

Florida, Montana, Oregon/ and Texas have enacted similar laws that go into effect in 2024;

Tennessee, Delaware, and Iowa have enacted similar laws that go into effect in 2025;

and Indiana has enacted a similar law that will go into effect in 2026.

Federal privacy legislation also has been proposed.

These developments create the potential for a patchwork of overlapping but different laws.

Further, some countries also are considering or have passed legislation requiring local storage and processing of data, or similar requirements, which could increase the cost and complexity of operating our products and services and other aspects of our business.

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Such reports and other information filed by the Company with the SEC are available free of charge at investor.cricut.com/financial-information/sec-filings when such reports are available on the SEC’s website.

In addition, the SEC maintains a website that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov.

Our Company periodically provides certain information for investors on its corporate website, www.cricut.com, and its investor relations website, investor.cricut.com.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business