What changed in this filing

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Item 1A. Risk Factors

2026-03-04 compared with 2025-03-05 · 185 added, 175 removed, 1073 unchanged (25% of the section changed)

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• supply chain, manufacturing, distribution and fulfillment risks, including our being dependent on three contract manufacturers to produce connected machines, and on limited sources of supply for components, accessories and materials, as well as our ability to forecast demand and manage our inventory;

• international risks, including regulation, tariffs that historically materially increased our costs and the potential for further trade barriers;

• international risks, including regulation, tariffs that have materially increased, and may continue to increase, our costs and the potential for further trade barriers;

• sales and marketing risks, including our dependence on sales to brick-and-mortar and online retail partners and our need to continue to grow online sales;

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• our failure to capitalize on growth opportunities;

• our inability to meet the challenges resulting from fast-paced changes in technology;

• our inability to meet the challenges resulting from fast-paced changes in technology, including the use of artificial intelligence and machine learning;

• the failure of our connected machines to communicate or sync properly with Cricut-authorized design apps, including our Design Space apps, or other third-party applications such as Android, iOS and Windows;

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As a result of these factors, our rate of adding new users is declining in comparison to recent years and, in the short term, the number of Paid Subscribers could remain flat or decline, and we cannot be sure that we will be successful in attracting and engaging with users, or increasing sales to our users, at levels that will be adequate to maintain or grow our business.

If user engagement declines, then Platform ARPU and Products revenue,

specifically as it relates to accessories and materials, may also decline.

If user engagement declines, then Platform ARPU and Products revenue, specifically as it relates to accessories and materials, may also decline.

However, Platform ARPU has increased in recent periods.

Our revenue growth rate and financial performance have fluctuated in recent periods and may not be indicative of our future performance, and we expect our revenue growth rate to decline compared to prior years.

Our revenue growth rate and financial performance have fluctuated in recent periods and may not be indicative of our future performance, and we expect our revenue growth rate to be lower than growth rates we experienced in prior years.

We experienced rapid revenue growth through 2021 and experienced a reduction in revenue since then, with revenue of $765.1 million, $712.5 million, and $708.8 million for the years ended December 31, 2023, 2024 and 2025, respectively.

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For example, we saw significant growth in sales during the COVID-19 pandemic in 2020 and 2021 but saw a reduction in sales in 2022, 2023, 2024 and 2025.

There can be no assurance that sales will return to 2020 and 2021 levels in the future or that we will be able to continue to significantly grow our revenue in a post-COVID-19 environment.

Our rate of adding new users has declined over the last three years in comparison to 2020 and 2021, and the number of Paid Subscribers could remain flat or decline.

There can be no assurance that sales will return to 2020 and 2021 levels in the future or that we will be able to continue to significantly grow our revenue.

Our rate of adding new users has declined over the last four years in comparison to 2020 and 2021, and the number of Paid Subscribers could remain flat or decline.

If we are unable to anticipate user preferences and successfully develop and introduce new, innovative and updated products in a timely manner, our business may be adversely affected.

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If we are not able to make our connected machines easier to use or improve user education and experience, it may have an adverse effect on our business.

Alternatively, our more experienced users potentially may not appreciate our efforts to simplify or streamline the user experience they may be accustomed to.

In addition, failure to anticipate and respond in a timely manner to changing user preferences could lead to, among other things, reduced word-of-mouth referrals, lower sales, lower subscription rates, pricing pressure, lower gross margins, discounting of our existing products and excess inventory levels.

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As we introduce new or enhanced products, we may face additional challenges related to managing a more complex supply chain and manufacturing process, including the time and cost associated with onboarding and overseeing additional suppliers, contract manufacturers and third-party logistics partners.

As we develop, acquire, and introduce new technologies, including those that may incorporate artificial intelligence and machine learning, we may be subject to new or heightened legal, ethical, and other challenges, including the ability to innovate as quickly as our competitors as well as increased research and development expenses.

We may also face challenges managing the inventory of new or existing products, which could lead to excess inventory and discounting of such products.

Users may negatively react to changes we

introduce to products and product offerings.

Users may negatively

react to changes we introduce to products and product offerings.

In addition, new or enhanced products may have varying selling prices and costs compared to legacy products, which could negatively impact our gross margins and results of operations.

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We derive a significant portion of our revenue from sales of products, particularly our connected machines.

Our connected machine revenue decreased by $5.9 million, or 3.0%, to $192.4 million for the year ended December 31, 2024 from $198.3 million for the year ended December 31, 2023.

Any factors adversely affecting sales of our connected machines, including introduction by competitors of comparable machines at lower price points, a maturing product lifecycle, shortages in our supply or inventory of connected machines, a decline in consumer spending, an increase in second-hand machines, or other factors discussed elsewhere in this Risk Factors section, could result in a continued decline in sales of our connected machines, which would adversely affect our future revenue and results of operations.

Our connected machine revenue remained flat at $192.4 million for the year ended December 31, 2025 and $192.4 million for the year ended December 31, 2024.

Any factors adversely affecting sales of our connected machines, including introduction by competitors of comparable machines at lower price points, a maturing product lifecycle, shortages in our supply or inventory of connected machines, a decline in consumer spending, an increase in second-hand machines, or other factors discussed elsewhere in this Risk Factors section, could result in a decline in sales of our connected machines, which would adversely affect our future revenue and results of operations.

Moreover, because we derive a significant portion of our platform and accessories and materials revenue as an extension of the sales and use of our connected machines, any material decline in the sales and use of our connected machines would also have a pronounced impact on platform and accessories and materials revenue, which would adversely affect our future revenue and results of operations.

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Our ability to accurately forecast demand could be affected by many factors, including changes in consumer demand for our products, changes in demand for the products of our competitors, unanticipated changes in general market or economic conditions or changes in consumer confidence in future economic conditions.

This risk may be exacerbated by the fact that we do not have the manufacturing capacity or supply-chain flexibility to satisfy short-term demand increases.

For example, during the COVID-19 pandemic and stay-at-home orders, we saw significant growth in sales in 2020, which strained our inventory levels and caused shortages that likely resulted in lost sales.

Although our in-channel and on-hand inventory as of December 31, 2024 were generally sufficient, if we fail to accurately forecast consumer demand, we may experience insufficient or excess inventory levels or a shortage or surplus of products available for sale.

This risk may be exacerbated by the fact that we may not have the manufacturing capacity or supply-chain flexibility to satisfy short-term demand increases.

If we fail to accurately forecast consumer demand, we may experience insufficient or excess inventory levels or a shortage or surplus of products available for sale.

If we underestimate demand or are otherwise unable to meet consumer demand, we could experience loss of revenue, reputational harm and damaged relationships, including through social media or other communications from our community, and adversely affect our business, financial condition and results of operations.

If we forecast inventory levels in excess of consumer demand, this may result in inventory write-downs or write-offs and the sale of excess inventory at discounted prices, which would cause our gross margins to suffer and could impair the strength and premium nature of our brand image.

While supply chain conditions have improved during 2023 and 2024, if our supply chain faces challenges again, it could continue to put pressure on margins.

While supply chain conditions improved during 2023, 2024 and 2025, if our supply chain faces challenges again, it could put pressure on margins.

We depend on sales to brick-and-mortar and online retail partners, including a limited number of sophisticated key brick-and-mortar and online retail partners.

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For the year ended December 31, 2024, our top seven brick-and-mortar and online retail partners accounted for 30% of total revenue.

For the twelve months ended

December 31, 2024, our top seven brick-and-mortar and online retail partners accounted for 30% of total revenue.

For the twelve months ended December 31, 2025, our top seven brick-and-mortar and online retail partners accounted for 31% of total revenue.

We anticipate that a similar level of concentration will continue for the foreseeable future.

We are dependent on our brick-and-mortar and online retail partners to manage the sales of our products in their stores and on their websites.

For example, we depend on brick-and-mortar retail partners to provide adequate and attractive space for our products and point of purchase displays in their stores, to maintain appropriate inventory for our product in their stores and to employ, educate and motivate their sales personnel to sell our products.

For example, we depend on brick-and-mortar retail partners to provide adequate

and attractive space for our products and point of purchase displays in their stores, to maintain appropriate inventory for our product in their stores and to employ, educate and motivate their sales personnel to sell our products.

We also depend on our brick-and-mortar and online retail partners to adequately market our products on their websites and provide a positive online shopping and shipping experience for their customers.

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announced it had filed for Chapter 11 bankruptcy and in February 2025 announced that it would liquidate and discontinue business.

While we do not currently expect JOANN, Inc.’s bankruptcy to have a material adverse effect on our business, results of operations or financial condition, there can be no assurance that the bankruptcy, financial distress, or restructuring of one of our brick-and-mortar or online partners would not have such an effect.

All of JOANN, Inc.’s brick-and-mortar locations closed by the end of May 2025.

While JOANN, Inc.’s bankruptcy has not had a material adverse effect on our business, results of operations or financial condition, there can be no assurance that the bankruptcy, financial distress, or restructuring of one of our brick-and-mortar or online partners would not have such an effect.

In addition, current deteriorating general economic conditions, inflationary pressures affecting the pricing of our products or otherwise, and changes in consumer spending preferences or buying trends could have an effect on sales through our brick-and-mortar and online retail partners.

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If we do not effectively grow our online channels while reducing our reliance on our other sales channels, our business, financial condition, results of operations and profitability could be harmed.

Our ability to continue our revenue growth and increase our profitability depends in part upon our ability to successfully implement certain strategic go-to-market initiatives, including expanding our online sales presence while continuing to work with key brick-and-mortar and online retail partners.

Our ability to grow revenue and increase our profitability depends in part upon our ability to successfully implement certain strategic go-to-market initiatives, including expanding our online sales presence while continuing to work with key brick-and-mortar and online retail partners.

Our online sales include online sales through the websites of our brick-and-mortar and online retail partners as well as through our own website Cricut.com.

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We face competition in every aspect of our business, but particularly as it relates to the accessories and materials offerings within our Products segment.

Many accessories and

materials produced by our competitors, including the private label products of some of our retail partners, are compatible with our connected machines and are often available for purchase through our retail partners.

Many accessories and materials produced by our competitors, including the private label products of some of our retail partners, are compatible with our connected machines and are often available for purchase through our retail partners.

Our competitors may offer competing accessories and materials at lower price points or with different features than our products.

We are currently seeing intensifying competition as it relates to accessories and materials, and we expect the competition in the accessories and materials DIY market to continue to intensify in the future as new and existing competitors introduce new or enhanced products that may compete with our product lines.

existing competitors introduce new or enhanced products that may compete with our product lines.

Our efforts to increase our sales of accessories and materials may not have the desired effect.

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Our competitors may develop or acquire, or have already developed or acquired, intellectual property rights that significantly limit or prevent our ability to compete effectively in the public marketplace.

In addition, our competitors may have significantly greater resources than we do or may introduce product features, including artificial intelligence and machine learning capabilities, sooner than we do, allowing them to identify and capitalize more efficiently upon opportunities in new markets and consumer preferences and trends, quickly transition and adapt their products, devote greater resources to marketing and advertising or better position themselves to withstand substantial price competition.

If we are not able to compete effectively against our competitors, they may acquire and engage our users or generate revenue at the expense of our efforts, which could adversely affect our business, financial condition and results of operations.

In addition, our competitors may have significantly greater resources than we do or may introduce product features and/or technologies, including artificial intelligence and machine learning capabilities, sooner than we do, allowing them to identify and capitalize more efficiently upon opportunities in new markets and consumer preferences and trends, quickly transition and adapt their products, devote greater resources to marketing and advertising or better position themselves to withstand substantial price competition.

While we continued to focus in 2025 on launching new innovation and consumable products, specifically for e-commerce channels, which has resulted in market share gains, if we are not able to compete effectively against our competitors, they may acquire and engage our users or generate revenue at the expense of our efforts, which could adversely affect our business, financial condition and results of operations.

Sales of copycat products or unauthorized “gray market” products by brick-and-mortar and online retail partners or distributors could adversely affect our authorized distribution channels and harm our reputation, business and results of operations.

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We have taken legal action against certain of the producers of these copycat products and anticipate expending significant financial or other resources in the future to combat these products.

In addition, to the extent that sales of copycat products create confusion or experiences

with our products among consumers, our brand and business could be harmed.

In addition, to the extent that sales of copycat products create confusion or experiences with our products among consumers, our brand and business could be harmed.

For example, in some cases, users purchase copycat products believing them to be Cricut products and then inaccurately attribute defects with those products to Cricut, which would adversely affect our reputation.

In other cases, our users purchase copycat accessories to use with their connected machine, but since the copycat accessories are not calibrated correctly to work with our connected machines, they may have a negative experience and attribute it to the connected machine.

In other cases, our users purchase copycat

accessories to use with their connected machine, but since the copycat accessories are not calibrated correctly to work with our connected machines, they may have a negative experience and attribute it to the connected machine.

Further, some of our products may find their way to unauthorized outlets or distribution channels, and could include used product sold as new, fraudulent, unbundled, or stolen goods.

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Competitive pricing pressures, including with respect to our platform services, products, and shipping, may harm our business and results of operations.

If we are unable to sustain pricing levels for our platform services and products, whether due to competitive pressure or otherwise, our gross margins could be significantly reduced.

Our portfolio of connected machines range from $149.00 to $999.00 MSRP, and subscription offerings range from $9.99 per month to $95.88 per year for Cricut Access or $119.88 per year for Cricut Access Premium, which includes all of the benefits of Cricut Access as well as additional discounts and preferred shipping.

Within our extensions, accessories and materials, our SKUs range in price from $1.99 to $999.00.

If we are unable to sustain pricing levels for our platform services and products, including our bundles, whether due to competitive pressure or otherwise, our gross margins could be significantly reduced.

Our portfolio of connected machines, extensions, accessories and materials and bundles are available at a variety of price points, and subscription offerings range from $9.99 per month to $95.88 per year for Cricut Access or $119.88 per year for Cricut Access Premium, which includes all of the benefits of Cricut Access as well as additional discounts and preferred shipping.

Demand for our products can be sensitive to price, especially in times of slow or uncertain economic growth and consumer economic conservatism.

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This type of sales activity could disrupt our brick-and-mortar retailer partners’ sales efforts.

Many of our accessories and materials, including vinyl, iron-on vinyl, paper, stationery, stickers and other merchandise, are also offered by our competitors at lower prices or with free or accelerated shipping timelines that we either are unable to or choose not to match.

Many of our accessories and materials, including adhesive vinyl, iron-on vinyl, paper, stationery, stickers and other merchandise, are also offered by our competitors at lower prices or with free or accelerated shipping timelines that we either are unable to or choose not to match.

Accordingly, if a user runs out of materials during a project, they may opt to purchase a replacement from a competitor or other online retail partner, such as Amazon, to receive one or two-day shipping, which we may not be able to offer.

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We participate in promotional and rebate programs with our key brick-and-mortar and online retail partners to enhance the sale of our products.

These promotional programs consist of incentives or entitlements to our

customers, such as advertising allowances, volume and growth incentives, business development, product damage allowances and point-of-sale support.

Customer rebates are considered to be variable consideration, which we estimate each quarter using the expected value method or most likely amount, based upon the nature of the incentive.

These promotional programs consist of incentives or entitlements to our customers, such as advertising allowances, volume and growth incentives, business development, product damage allowances and point-of-sale support.

Customer rebates are considered to be variable consideration, which we estimate each quarter using the expected value method or most likely amount, based upon the nature of the

Sales are reduced by the cost of these promotional and rebate programs and we record a related sales incentive liability in our consolidated balance sheets at the date of the transaction.

To the extent that our estimates of variable consideration from customer rebates each quarter are not accurate, it could affect our revenue in future periods.

We have grown rapidly in prior years and have limited operating experience at our current scale of operations.

We have grown rapidly in prior years and face risks associated with the growth of our business.

If we are unable to manage our growth and the complexity of our business effectively, our brand, company culture and financial performance may suffer.

We have grown rapidly in prior years and have limited operating experience at our current size.

We have grown rapidly in prior years and continue to appropriately scale our business as we implement our growth strategy.

For example, our revenue peaked in 2021 at $1.3 billion before reducing to $765.1 million in 2023, $712.5 million in 2024, and $708.8 million in 2025.

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Fur ther, as we grow, our business becomes increasingly complex, particularly for a company of our relative size.

To effectively manage and capitalize on our growth, we must continue to forecast demand and manage our supply chain, expand our sales and marketing, focus on innovative product development, upgrade and secure our management information systems and other processes and obtain more space for our expanding staff.

To effectively manage and capitalize on our growth opportunities, we must continue to forecast demand and manage our supply chain, expand our sales and marketing, focus on innovative product development, upgrade and secure our management information systems and other processes and obtain more space for our expanding staff.

Our continued growth and complexity could strain our existing resources, and we could experience ongoing operating difficulties in managing our business across numerous jurisdictions, including difficulties in hiring, training and managing a diffuse and growing employee base.

Failure to scale with growth could harm our future success, including our ability to effectively focus on and pursue our corporate objectives.

Moreover, the complicated nature of our business, in which we design our own products, develop our own design apps, rely on third-party manufacturers and sell our products through brick-and-mortar and online retail partners, as well as through our website, exposes us to risk and disruption at many points that are critical to successfully operating our business and may make it more difficult for us to scale our business.

Failure to appropriately scale with growth, improve ease of use and user experience, launch new products in new categories, and strategically expand internationally, could harm our future success, including our ability to effectively focus on and pursue our corporate objectives.

If we do not adapt to meet these evolving challenges, including hiring and maintaining the right number of employees for each aspect of our business, or if our management team does not effectively scale with our growth, we may experience erosion to our brand, the quality of our products may suffer and our company culture may be harmed.

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Successful implementation of our growth strategy will require significan t expenditures before any substantial associated revenue is ge nerated, and we cannot guarantee that these increased investments will result in corresponding and offsetting revenue growth.

Because we have a limited history of operating our business at its current scale, it is difficult to evaluate our current business and future prospects, including our ability to plan for and model future growth and anticipate the risks that may affect our business.

This limited operating experience, combined with the complexity of our business and rapidly evolving nature of the market in which we sell our products, raises substantial uncertainty concerning how these markets and other economic factors beyond our control may develop and reduces our ability to accurately forecast quarterly or annual revenue.

Failure to manage our future growth effectively could adversely affect our business, financial condition and results of operations.

The complexity of our business and rapidly evolving nature of the market in which we sell our products, raises substantial uncertainty concerning how these markets and other economic factors beyond our control may develop and reduces our ability to accurately forecast quarterly or annual revenue.

Failure to manage our future growth effectively could adversely affect our business, brand, financial condition and results of operations.

Our business is affected by seasonality.

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Seasonality in our business can also be skewed by macroeconomic factors, such as inflation and reduction in consumer demand.

In addition, seasonality can be affected by introductions of new or enhanced products, including the costs

associated with such introductions.

In addition, seasonality can be affected by introductions of new or enhanced products, including the costs associated with such introductions.

Furthermore, our rapid growth in prior years may obscure the extent to which seasonality trends have affected our business and may continue to affect our business.

For example, we experienced unusually high demand in the first and second quarters of 2021, which is inconsistent with normal seasonality patterns.

For example, we experienced significant growth in sales in 2020 and 2021 but have seen a reduction in sales in 2022, 2023, 2024,

Accordingly, yearly or quarterly comparisons of our results of operations may not be useful and our results in any particular period will not necessarily be indicative of the results to be expected for any future period.

Moreover, we experienced a significant increase in sales after the outbreak of the COVID-19 pandemic, and the rollout of COVID-19 vaccines, lifting of restrictions on movement and/or normalized full-time return to work trends have negatively impacted demand for our products and platform services, as have current deteriorating general economic conditions, inflationary pressures affecting the pricing of our products, and changes in consumer spending preferences and buying trends, and our sales activity may continue to diminish as a result.

Moreover, we experienced a significant increase in sales after the outbreak of the COVID-19 pandemic, but normalized full-time return to work trends have negatively impacted demand for our products and platform services, as have current deteriorating general economic conditions, inflationary pressures affecting the pricing of our products, and changes in consumer spending preferences and buying trends, and our sales activity may continue to diminish as a result.

As a result of these factors, our rate of adding new users is declining in comparison to recent years and, in the short term, the number of Paid Subscribers could remain flat or decline.

Accordingly, it can be difficult to predict the degree to which customer demand, seasonality, and uneven sales patterns of our customers will affect our business in the future.

Our quarterly results of operations and other operating metrics may fluctuate from quarter to quarter, which makes these metrics difficult to predict.

Our quarterly results of operations and other operating metrics have fluctuated and may continue to fluctuate in the future.

Additionally, our limited operating history at our current scale of operations makes it difficult to forecast our future results.

Our quarterly results of operations and other operating metrics have fluctuated and may continue to fluctuate in the future, which may make it difficult to accurately forecast our future results.

As a result, you should not rely on our past quarterly results of operations as indicators of future performance.

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• changes in accounting standards, policies, guidance, interpretations or principles;

• changes in business or macroeconomic conditions, including the impact of the COVID-19 pandemic, lower consumer confidence, recessionary conditions, inflationary pressures, increased unemployment rates or stagnant or declining wages.

• changes in business or macroeconomic conditions, lower consumer confidence, recessionary conditions, inflationary pressures, increased unemployment rates or stagnant or declining wages.

As a result of these factors, our rate of adding new users is declining in comparison to recent years and, in the short term, the number of Paid Subscribers could remain flat or decline.

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Our future growth depends in part on further penetrating our SAM and TAM and we may not be successful in doing so.

We believe that our growth depends on our ability to reach our market opportunity in terms of our SAM, which includes active creatives who we address with our current products and price points, and our TAM, which includes potential creatives who we believe we can reach over the long term as we make products for new uses and products that are more accessible, even easier to use and available at a broad set of price points.

See the section titled “Business - Our Opportunity.” We assess our SAM and TAM in the United States and Canada, as well as internationally.

We believe that our growth depends on our ability to reach our market opportunity in terms of our serviceable addressable market, or SAM, which includes active creatives who we address with our current products and price points, and our total addressable market, or TAM, which includes potential creatives who we believe we can reach over the long term as we make products for new uses and products that are more accessible, even easier to use and available at a broad set of price points.

We believe that in order to further penetrate our SAM and TAM, we must continually improve ease of use and user experience, launch new products in new categories and expand internationally.

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Our SAM and TAM are representative of a broad demographic.

However, historically we have served a largely female demographic representing 94% of our users as of December 31, 2024 We continue to explore additional offerings that address new categories that will appeal to a wider demographic.

However, historically we have served a largely female demographic representing 94% of our users as of December 31, 2025.

We continue to explore additional offerings that address new categories that will appeal to a wider demographic.

Any new offerings may not appeal to current consumer preferences and may not be accepted by our user community or potential new users.

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Our platform is complex and multifaceted, and operational and performance issues could arise both from the platform itself and from outside factors, such as cybersecurity attacks or other third-party attacks.

Errors, failures, vulnerabilities or bugs have been found in the past, and may in the future be found.

Errors, failures,

vulnerabilities or bugs have been found in the past, and may in the future be found.

Our platform also relies on third-party technology and systems to perform properly, and our platform is often used in connection with computing environments utilizing different operating systems, system management software, equipment and networking configurations, which may cause errors in, or failures of, our platform or such other computing environments.

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Our top seven brick-and-mortar and online retail partners, measured by the revenue we derive from them, accounted for 30% of total revenue for the year ended December 31, 2024 and 31% for the year ended December 31, 2025.

Gross margins from sales to retailers may decline as a result of a number of factors outside our control, including inflationary pricing pressures, tariffs as a result of trade wars and our reliance on three primary contract manufacturers which hold influence over the supply chain.

Gross margins from sales to retailers may decline as a result of a number of factors outside our control, including inflationary pricing pressures, tariffs, and our reliance on three primary contract manufacturers which hold influence over the supply chain.

This may magnify the impact of variations in revenue and operating costs on our results of operations, which in turn could adversely affect our overall margins and profitability.

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We also continue to pursue direct to retailer sales, which may impact our relationships with existing distributors.

In the future, we may choose to temporarily or permanently stop shipping product to distributors who do

not follow the policies and guidelines in our sales agreements, which could adversely affect our revenue and results of operations.

In the future, we may choose to temporarily or permanently stop shipping product to distributors who do not follow the policies and guidelines in our sales agreements, which could adversely affect our revenue and results of operations.

Additionally, many of our international distributors buy from us in U.S.

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Additionally, the loss of any key personnel could make it more difficult to manage our operations and research and development activities, reduce our employee retention and revenue and impair our ability to compete.

In connection with our initial public offering, we entered into employment letters with our key personnel.

In connection with and subsequent to our initial public offering, we entered into employment letters with our key personnel.

These letters have no specific duration and constitute at-will employment.

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We believe that our brand is important to our large and loyal community of users, many of whom become deeply engaged with our brand.

Maintaining, protecting and enhancing our brand depends largely on the success of our marketing efforts, our ability to provide consistent, high-quality products, services, features, content and support and our ability to successfully secure, maintain and defend our rights to use the Cricut, Cricut Access, Cricut EasyPress, Cricut Explore, Cricut Maker and Design Space marks and other trademarks important to our brand or that we develop in the future.

Maintaining, protecting and enhancing our brand depends largely on the success of our marketing efforts, our ability to provide consistent, high-quality products, services, features, content and support and our ability to successfully secure, maintain and defend our rights to use the Cricut, Cricut Access, Cricut EasyPress, Cricut Explore, Cricut Maker, Design Space, and Cricut MugPress marks and other trademarks important to our brand or that we develop in the future.

Our brand value also depends on our ability to maintain a positive user perception of our corporate integrity and culture.

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Any transition of the cloud services currently provided by Amazon Web Services to another cloud provider would be difficult to implement and will cause us to incur significant time and expense.

Additionally, we are vulnerable to service interruptions experienced by Amazon Web Services and other providers, and we expect to experience interruptions, delays or outages in service availability in the future due to a variety of factors, including infrastructure changes, human, hardware or software errors, hosting disruptions and capacity constraints.

Additionally, we have suffered and are vulnerable to service interruptions experienced by Amazon Web Services and other providers, and we expect to experience interruptions, delays or outages in service availability in the future due to a variety of factors, including infrastructure changes, human, hardware or software errors, hosting disruptions and capacity constraints.

Outages and capacity constraints could arise from a number of causes such as technical failures, natural disasters, fraud or security attacks.

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We generally provide a one-year limited warranty on our connected machines and customer satisfaction guarantees on certain other products, and we permit returns of certain products for a full refund within 15 days of receipt of order.

We also recently introduced an extended warranty program in the United States.

We also offer an extended warranty program in the United States.

Additionally, our brick-and-mortar and online retail partners and distributors provide users with their own respective warranty and/or return policies relative to our connected machines, accessories and materials and other Cricut products they sell, which in turn flow down to us as a contractual obligation and/or allowance that we must honor.

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Also, while our warranty is limited to repairs and returns, warranty claims may result in litigation, the occurrence of which could adversely affect our business, financial condition and results of operations.

In addition to warranties supplied by us, including the extended warranty option we recently introduced, our brick-and-mortar and online retail partners may offer the option for users to purchase third-party extended warranty and services contracts in some markets, which creates an ongoing performance obligation for such third parties beyond our warranty period.

In addition to warranties supplied by us, including the extended warranty option we offer, our brick-and-mortar and online retail partners may offer the option for users to purchase third-party extended warranty and services contracts in some markets, which creates an ongoing performance obligation for such third parties beyond our warranty period.

Extended warranties are regulated in the United States on a state level and are treated differently by each state.

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While we saw an increase in demand for our products and platform services during the COVID-19 pandemic in 2020 and 2021, our current revenue growth rates are declining compared to those years.

There can be no assurance that sales will return to 2020 and 2021 levels in the future or that we will be able to continue to significantly grow our revenue in a post-COVID-19 environment.

There can be no assurance that sales will return to 2020 and 2021 levels in the future or that we will be able to continue to significantly grow our revenue.

To date, our business has operated almost exclusively in a relatively strong economic environment.

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Any debt financing secured by us in the future could involve restrictive covenants relating to our capital-raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions.

If we cannot maintain our culture as we grow, we could lose the innovation and teamwork that we believe contribute to our success and our business may be harmed.

We believe that a critical component of our success has been our corporate culture.

As we continue to grow, including by expanding our presence internationally, and develop the infrastructure associated with being a public

company, we will need to maintain our culture among a larger number of employees, dispersed across various geographic regions.

Recent employment trends have required us to make substantial changes to the way that the vast majority of our employee population does their work, and we have faced new and unforeseen challenges arising from the management of remote, geographically-dispersed teams.

Any failure to preserve our culture could adversely affect our future success, including our ability to retain and recruit personnel and to effectively focus on and pursue our corporate objectives.

We may experience fluctuations in our tax obligations and effective tax rate.

We are subject to a variety of taxes and tax collection obligations in the United States and in numerous other foreign jurisdictions.

We record tax expense, including indirect taxes, based on current tax payments and our estimates of future tax payments, which may include reserves for estimates of probable or likely settlements of tax audits.

We record tax expense, including indirect taxes, based on current tax payments and our

estimates of future tax payments, which may include reserves for estimates of probable or likely settlements of tax audits.

Fluctuations in our tax obligations and effective tax rate could adversely affect our business.

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Such agreements may be terminated by the vendors only for cause, such as (i) a breach of our payment obligation for accepted products that is not cured within ten days after notice from the vendor or (ii) certain events relating to our insolvency or filing a petition for bankruptcy.

Such agreements may be terminated by us for cause, such as (i) failure to deliver products pursuant to the terms of the agreement, (ii) breaches of product warranty, indemnity or insurance;

Such agreements may be terminated by us for cause, such as (i) failure to deliver products pursuant to the terms of the agreement, (ii)

breaches of product warranty, indemnity or insurance;

intellectual property;

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Any adverse change in our contract manufacturers’ financial or business conditions could disrupt our ability to supply our products to our brick-and-mortar and online retail partners, distributors and online sales channels, and could negatively impact our ability to meet our forecasted consumer demand and to timely launch new products or features .

In addition, our three contract manufacturers manufacture our connected machines at facilities located in Malaysia, with some manufacturing of certain accessories and materials conducted in the People’s Republic of China, or China.

Manufacturing in these countries, particularly Malaysia, may be subject to political, economic, widespread health outbreaks, labor constraints, border closures, social and legal uncertainties that may harm our relationships with these parties.

In addition, our three contract manufacturers manufacture our connected machines at facilities located in Malaysia, with manufacturing of certain sub-assemblies and materials conducted in the People’s Republic of China, or China.

Our other contract manufacturers are located in Malaysia, China, Thailand and South Korea.

Manufacturing in these countries may be subject to political, economic, widespread health outbreaks, labor constraints, border closures, social and legal uncertainties that may harm our relationships with these parties, and may, in-turn increase supply risk, including the risk of supply interruptions.

In particular, changes in Malaysia’s employment regulations, including increases to the national minimum wage and restrictions on migrant labor, could significantly harm our contract manufacturers’ ability to meet our expected manufacturing yields and costs.

Our other contract manufacturers are also located in Malaysia, China, Thailand and South Korea, which may increase supply risk, including the risk of supply interruptions.

Our contracts with our three 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.

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Our third-party manufacturers are largely based in Malaysia, China, Thailand and South Korea, and our connected machines are manufactured in Malaysia.

As a result, our manufacturing, and therefore our business, financial condition and results of operations may be adversely affected by social, political, regulatory and economic developments in these countries, particularly in Malaysia and China.

As a result, our manufacturing, and therefore our business,

financial condition and results of operations may be adversely affected by social, political, regulatory and economic developments in these countries, particularly in Malaysia and China.

In particular, a variety of recent events have caused, and will likely continue to cause, interruptions in the development, manufacturing (including the procurement of key components) and shipment of our connected machines, which could adversely impact our revenue, gross margins and results of operations.

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Furthermore, most of our contract manufacturers’ primary facilities are located in Malaysia, China, Thailand and South Korea, which exposes us to certain additional risks in addition to the above that could adversely affect our business, financial condition and results of operations.

For example, we have

experienced issues with the import of goods and services from certain ports.

For example, we have experienced issues with the import of goods and services from certain ports.

Credit in Asia has in the past and may in the future be difficult to access, which could have an impact on the terms upon which we and our contract manufacturers are able to obtain access to components or accessories and materials from particular suppliers.

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Failure to forecast appropriate demand, lead times, significant price fluctuations or shortages in materials or components, including the costs to transport such materials or components, the uncertainty of currency fluctuations against the U.S.

dollar, increases in labor rates, limitations on the availability of labor, trade duties or tariffs and/or the introduction of new and expensive raw materials, some of which we expect in 2025, could adversely affect our contract manufacturers’ ability to manufacture our products in sufficient quantity and within sufficient time to meet our consumer demand, which would adversely affect our business, financial condition and operational results.

dollar, increases in labor rates, limitations on the availability of labor, trade duties or tariffs and/or the introduction of new and expensive raw materials could adversely affect our contract manufacturers’ ability to manufacture our products in sufficient quantity and within sufficient time to meet our consumer demand, which would adversely affect our business, financial condition and operational results.

If we overestimate our production requirements, we or our contract manufacturers may purchase excess components and build excess inventory.

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If we underestimate our product requirements, our contract manufacturers may have inadequate component inventory, which could interrupt the manufacturing of our products and result in delays or cancellation of orders from brick-and-mortar and online retail partners, distributors and online sales channels.

We may be required to incur higher costs to secure the necessary production capacity and components to meet unanticipated demand, which could result in

lower margins.

While supply chain conditions have improved during 2024, if our supply chain faces challenges again, it could put pressure on margins.

We may be required to incur higher costs to secure the necessary production capacity and components to meet unanticipated demand, which could result in lower margins.

While supply chain conditions improved during 2023, 2024 and 2025, if our supply chain faces challenges again, it could put pressure on margins.

The failure of our third-party logistics partners to adequately and effectively staff could adversely affect our brick-and-mortar and online retail partner and user experience and results of operations.

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As a result, we could experience delays, increased shipping costs and lost sales as a result of missed delivery deadlines and product demand cycles.

For example, at times during the COVID-19 pandemic, shipping of our products was delayed, which inconvenienced our users and brick-and-mortar and online retail partners.

We could experience shipping delays in the future as a result of shortages of containers and ships, local port challenges or for other reasons.

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In addition, we may be exposed to recalls, product replacements or modifications, write-offs of inventory or intangible assets and significant warranty and other expenses, such as litigation costs and regulatory fines.

cannot successfully defend any large claim, maintain our general liability insurance on acceptable terms or maintain adequate coverage against potential claims, our financial results could be adversely affected.

If we cannot successfully defend any large claim, maintain our general liability insurance on acceptable terms or maintain adequate coverage against potential claims, our financial results could be adversely affected.

In the event that we receive shipments of products that have defects or otherwise fail to comply with our technical specifications or that fail to conform to our quality control standards, and we are not able to obtain replacement products in a timely manner, we risk revenue losses from the inability to sell those products, increased administrative and shipping costs and lower profitability.

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Regulations related to conflict minerals may cause us to incur additional expenses and could limit the supply and increase the costs of certain metals used in the manufacturing of our products.

We are subject to requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which will require us to conduct due diligence on and disclose whether or not our products contain conflict minerals.

The implementation of these requirements could adversely affect the sourcing, availability and pricing of the materials used in the manufacture of components used in our products.

In addition, we will incur additional costs to comply with the potential disclosure requirements, including costs related to conducting diligence procedures to determine the sources of minerals that may be used or necessary to the production of our products and, if applicable, potential changes to products, processes or sources of supply as a consequence of such due diligence activities.

We are subject to requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which requires us to conduct due diligence on and disclose whether or not our products contain conflict minerals.

These requirements could adversely affect the sourcing, availability and pricing of the materials used in the manufacture of components used in our products.

In addition, we may incur additional costs to comply with the potential disclosure requirements, including costs related to conducting diligence procedures to determine the sources of minerals that may be used or necessary to the production of our products and, if applicable, potential changes to products, processes or sources of supply as a consequence of such due diligence activities.

It is also possible that we may face reputational harm if we determine that certain of our products contain minerals not determined to be conflict free or if we are unable to alter our products, processes or sources of supply to avoid such materials.

Significant increases in inflation, commodity prices or transportation costs may adversely affect the costs of our component suppliers and contract manufacturers, and we may be unable to pass on these higher costs to our brick-and-mortar and online retail partners or users.

We are currently experiencing inflationary pressures affecting the prices of components for our products and transportation resources.

Inflationary pressures impact the prices of components for our products and transportation resources.

Significant increases in commodity prices, such as base metals (e.g.

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Our business therefore could be affected by social, political, regulatory or economic developments in China.

For example, since 2018, the Office of the U.S.

Trade Representative, or the USTR, has imposed additional tariffs of 10% or more on various imports into the U.S.

For example, since 2018, the U.S.

has imposed additional tariffs on many imports into the U.S.

of Chinese-origin goods, including communications equipment products and components manufactured in and imported from China and China has also imposed tariffs on imports into China from the United States.

In addition, due to concerns with the security of products and services from certain telecommunications and video providers based in China, the United States government has enacted bans on the use of certain Chinese- and Russian-origin components, software, and systems either in items sold to the U.S.

(See also our risk factor “ Recent and additional changes in U.S.

taxes, tariffs, trade restrictions, or other trade policies affecting products produced in other countries, or similar recent or additional retaliatory changes by U.S.

trading partners in response to these measures, could adversely affect our business.

”) In addition, due to concerns with the security of products and services from certain telecommunications and video providers based in China, the U.S.

government has enacted bans on the use of certain Chinese- and Russian-origin components, software, and systems either in items sold to the U.S.

government or in the internal networks of government contractors and subcontractors (even if those networks are not used for government-related projects).

It is possible that the U.S.

government may take future measures to impose (a) stricter export controls on items destined for China;

(b) additional restrictions on the import of certain components, software, and/or systems from China;

government has already imposed, and it is possible that the U.S.

government may in the future take additional measures to impose, (a) stricter export controls on items destined for China;

(b) additional restrictions on the testing and import of certain components, software, and/or systems from China;

and (c) additional duties on shipments made from China.

The likelihood of one or more of these actions occurring has materially increased in light of comments by the new U.S.

presidential administration, which has repeatedly communicated an intention to impose additional duties on imports from China (as well as on imports from other countries).

Any of these actions could affect the profitability and/or stability of the manufacturing activities conducted by our key third-party manufacturing partners or introduce other risks to our business, including supply chain interruptions, substantially delayed or lost shipments, or increased expenses.

In addition, the U.S.

government may add additional parties to the Entity List, the List of Specialty Designated Nationals, or other restricted party lists, which could harm our business, increase the cost of conducting our operations in China, and/or result in retaliatory actions against U.S.

government may add additional parties to the Entity List, the List of Specialty Designated Nationals, the FCC’s Covered List, or other restricted party lists, which could harm our business or increase the cost of conducting our operations in China, and/or result in retaliatory actions against U.S.

We also depend on semiconductors made in Taiwan, and a worsening of the geopolitical situation involving China and/or Taiwan could affect our ability to procure these semiconductors.

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government has introduced various regulatory changes to its export controls regime since 2022 that have significantly affected the semiconductor manufacturing and semiconductor manufacturing equipment industries.

Continued deterioration in trade relations or adverse developments in political, social or economic conditions in or affecting China or future unforeseen problems, including health pandemics or regulatory changes, could affect deliveries of our products to our retail partners or users, possibly resulting in business interruptions, substantially delayed or lost sales, loss of inventory or increased expenses that cannot be passed on to brick-and-mortar and online retail partners or users, any of which could ultimately have a material adverse effect on our business and financial results.

expenses that cannot be passed on to brick-and-mortar and online retail partners or users, any of which could ultimately have a material adverse effect on our business and financial results.

In such an eventuality, we could be forced to relocate certain of our manufacturing, either temporarily or permanently, to another potentially costlier location or find alternative potentially costlier methods of shipping our finished products to brick-and-mortar and online retail partners and users.

If any of our China-based suppliers for any of our components are unable to supply the components that our manufacturers need to meet anticipated consumer demand, our business would be materially and adversely affected.

Changes in U.S.

tax, tariff or other trade policy regarding products produced in other countries could adversely affect our business.

Recent additional changes in U.S.

taxes, tariffs, trade restrictions, or other trade policies affecting products produced in other countries, or similar recent or additional retaliatory changes by U.S.

trading partners in response to these measures, could adversely affect our business.

A predominant portion of the products we sell is originally manufactured in countries other than the United States.

International trade disputes that result in tariffs and other protectionist measures could adversely affect our business, including disruption in and cost increases for sourcing our merchandise and increased uncertainties in planning our sourcing strategies and forecasting our margins.

Importing and exporting has involved more risk since the beginning of 2018, as there has been increasing rhetoric, in some cases coupled with legislative or executive action, from several United States and foreign leaders regarding tariffs against foreign imports of certain materials.

For example, in September 2018, the U.S.

Trade Representative (the “USTR”) enacted a tariff on the import of other Chinese products, with a combined import value of approximately $200 billion.

Since that time the U.S.

government has continued to impose significant and increasingly large tariffs on a broader range of products imported from China The U.S.

government also has continued to impose stricter export controls on items destined for China In addition, the Bureau of Industry and Security, or BIS, of the U.S.

Department of Commerce has continued to add certain Chinese entities to U.S.

Recent or further changes in U.S.

laws that result in increased tariffs or other trade restrictions could adversely affect our business, including disruption in and cost increases for sourcing our merchandise and increased uncertainties in planning our sourcing strategies and forecasting our margins.

Importing and exporting has involved more risk since the beginning of 2018, as there has been increasing rhetoric, in some cases coupled with legislative or executive action, from several political leaders regarding the imposition of additional or escalated tariffs affecting foreign imports of certain materials.

For example, beginning in 2018, the U.S.

Trade Representative (the “USTR”) enacted additional Section 301 tariffs affecting the import of many Chinese products affecting items, with a combined import value of approximately $550 billion.

The applicable Section 301 tariffs on some of these products have further increased since these tariffs were originally imposed, and additional tariffs are forthcoming, and additional tariffs are forthcoming (including an additional, yet-to-be-announced tariff rate on certain Chinese-origin semiconductors beginning in 2027).

Between February 2025 and February 2026, the U.S.

government began to impose significant additional tariffs of 10 to 145% on a broad range of products imported from China and other countries based on authorities asserted under the International Emergency Economic Powers Act (“IEEPA”).

These additional U.S.

tariffs implemented under IEEPA were rescinded on February 24, 2026, following a Supreme Court decision invalidating the use of IEEPA to authorize these tariffs.

The availability, timing, and amount of any related refunds remain uncertain and subject to further legal, regulatory, and administrative action.

However, the U.S.

government subsequently announced plans to implement a new global “temporary import surcharge” of 15% on many of the same imported products beginning February 24, 2026, under authorities provided for in Section 122 of the Trade Act of 1974, supplementing existing non-IEEPA measures.

Further tariffs may also be ultimately imposed following the initiation and completion of additional Section 301 tariff investigations.

In addition, the U.S.

Department of Commerce is completing Section 232 tariff investigations into imports of various products, including processed critical minerals and derivative products.

In January 2026, the U.S.

government placed an additional 25% Section 232 tariff on imports of certain advanced computing semiconductor chips.

Additional tariffs may be imposed on these or additional products if the President deems such measures necessary based on the findings of these Section 232 tariff investigations.

Considerable uncertainty remains regarding the scope, duration, and rate of current and newly announced tariffs, potential future modifications, and possible retaliatory or other actions that may be taken by U.S.

trading partners in response to recent changes to U.S.

trade policy.

government also has continued to impose stricter export controls on items destined for China In addition, the Bureau of Industry and Security, or BIS, of the Department of Commerce has continued to add certain Chinese entities to U.S.

lists of restricted parties including the Entity List, limiting the ability of U.S.

companies to do business with those entities.

In response to U.S.

government measures, the Chinese government is expanding its control on exports, and these controls or other measures could impact our business.

government may continue to add additional parties to these restricted parties list, which could harm our business, increase the cost of conducting our operations in China or result in additional retaliatory actions against U.S.

government may continue to add additional parties to these restricted parties list, which could harm our business or increase the cost of conducting our operations in China.

In addition, the U.S.

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On December 5, 2024, the U.S.

Department of Commerce published final

rules in the Federal Register, establishing the terms under which the Department of Commerce may investigate transactions involving the use of information communications technology products or services provided by persons owned or controlled by certain nations, including China, and potentially to modify or prohibit those transactions.

Department of Commerce published final rules in the Federal Register, establishing the terms under which the Department of Commerce may investigate transactions involving the use of information communications technology products or services provided by persons owned or controlled by certain nations, including China, and potentially to modify or prohibit those transactions.

These rules took effect as of February 4, 2025.

In addition, the White House, the Department of Commerce and other executive branch agencies have implemented additional restrictions and may implement still further restrictions that would affect conducting business with certain Chinese companies.

A substantial portion of our products are manufactured in China.

As a result of tariffs and other trade controls, our cost of goods imported from China increased substantially, and could increase further because of threatened increases in U.S.

tariff rates on products from China.

The risk of such U.S.

tariff increases has materially increased in light of the new administration, which has repeatedly communicated an intention to impose additional duties on imports from China and a number of other countries.

Although we continue to work with our vendors to mitigate our exposure to current or potential tariffs, there can be no assurance that we will be able to offset any increased costs.

The trade and tariff policies of the U.S.

and other countries are currently fluid and subject to further changes.

As a result of recent changes to tariffs and other trade controls, our cost of goods imported from non-US sources increased substantially, and could increase further because of threatened increases in U.S.

tariff rates on products imported into the U.S.

Although we continue to work with our vendors to mitigate the impact of current or potential tariffs, there can be no assurance that we will be able to offset any increased costs.

Other changes in U.S.

tariffs, quotas, trade relationships or tax provisions could also reduce the supply of goods available to us or increase our cost of goods.

tariffs, quotas, trade relationships, tax provisions, or the imposition of retaliatory tariffs on U.S.

goods could also reduce the supply of goods available to us or increase our cost of goods.

We may fail to effectively adapt to and manage the adjustments in strategy that would be necessary in response to those changes.

In addition to the general uncertainty and overall risk from potential changes in U.S.

laws and policies, as we make business decisions in the face of such uncertainty, we may incorrectly anticipate the outcomes, miss out on business opportunities or fail to effectively adapt our business strategies and manage the adjustments that are necessary in response to those changes.

These risks could adversely affect our revenue, reduce our profitability and negatively impact our business.

In addition to the general uncertainty and overall risk from potential changes in the laws and policies of the U.S.

or its trading partners, as we make business decisions in the face of such uncertainty, we may incorrectly anticipate the outcomes, miss out on business opportunities or fail to effectively adapt our business strategies and manage the adjustments that are necessary in response to those changes.

These risks could adversely affect our revenue, reduce our profitability and negatively impact our business, financial condition, and the results of operations.

Risks Related to Privacy, Data Protection and Cybersecurity

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The same decision also imposed additional conditions with respect to use of the Standard Contractual Clauses, or the SCCs, to lawfully transfer personal data from Europe to the United States and most other countries.

The Swiss Federal Data Protection and Information

Commissioner also has stated that it no longer considers the Swiss-U.S.

The Swiss Federal Data Protection and Information Commissioner also has stated that it no longer considers the Swiss-U.S.

Privacy Shield adequate for the purposes of personal data transfers from Switzerland to the United States.

On October 7, 2022, President Biden signed an Executive Order on Enhancing Safeguards for United States Signals Intelligence Activities, directing the United States to take certain steps to implement the EU-U.S.

On October 7, 2022, then President Biden signed an Executive Order on Enhancing Safeguards for United States Signals Intelligence Activities, directing the United States to take certain steps to implement the EU-U.S.

Data Privacy Framework or the DPF.

Following a July 10, 2023 adequacy decision issued by the European Commission, the DPF, along with a United Kingdom extension to the DPF that allows the transfer of personal data from the United Kingdom to the U.S., or UK DPF Extension, are available for companies to use to legitimize personal data transfers from the EEA and United Kingdom to the U.S.

available for companies to use to legitimize personal data transfers from the EEA and United Kingdom to the U.S.

Further, a framework similar to the DPF, the Swiss-U.S.

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Further, the United Kingdom has established its own domestic regime with the UK General Data Protection Regulation, or UK GDPR, and other domestic data protection laws, such as the UK Data Protection Act of 2018, which provide for penalties for noncompliance of up to the greater of £17.5 million or 4% of worldwide revenues.

Although the European Commission adopted an adequacy decision for the United Kingdom in June 2021 that allows for the continued flow of personal data from the EU to the United Kingdom, this decision may be revoked or modified and will need to be renewed after four years from the date of adoption.

Although the European Commission adopted an adequacy decision for the United Kingdom in June 2021 that allows for the continued flow of personal data from the EU to the United Kingdom, this decision may be revoked or modified and requires renewal after four years from the date of adoption.

In February 2022, the United Kingdom’s Information Commissioner’s Office issued new standard contractual clauses, or the UK SCCs, to support personal data transfers out of the United Kingdom, which went into effect in March 2022.

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We continue to monitor and review the impact of any resulting changes to EU or United Kingdom law, or related developments, that could affect our operations.

We may incur liabilities, expenses, costs and other operational losses relating to the GDPR and privacy laws of applicable EU Member States and the United Kingdom, including in connection with any measures we take to comply with them.

The EU also recently extended its regulation of data processing to cover aspects of the processing of non-personal data with the EU’s Data Act, or Data Act, which became applicable on September 12, 2025, imposes certain data and cloud service interoperability and switching obligations to enable users to switch between providers without undue delay or cost, as well as certain requirements concerning cross-border international transfers of, and government access to, non-personal data outside the EEA.

Depending on how the Data Act is implemented and interpreted, we may be required to adjust contract terms and technical measures for data portability in order to comply.

These changes may result in additional compliance and operational costs, which may affect our business.

Other jurisdictions also are considering, and in certain cases have adopted, obligations in connection with the processing of personal and non-personal data.

Laws, regulations, and other actual or asserted obligations relating to privacy, data protection, information security, or the collection, use, transfer or other processing of data, including existing laws, regulations, and obligations, and new or modified laws, regulations, and obligations may impact our operations, and we may incur liabilities, expenses, costs and other operational losses relating to such laws, regulations, and obligations, including in connection with any measures we take to comply with them.

In Brazil, the Lei Geral de Proteção de Dados Pessoais – Law No.

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On August 15, 2022, the Vietnamese government issued Decree 53, which elaborates on requirements relating to data protection and went into effect on October 1, 2022.

To comply with the decree, we may be required to further invest in potentially duplicative infrastructure and personnel in

Vietnam, establish and maintain a local data protection program, and incur other costs and expenses related to these new requirements.

To comply with the decree, we may be required to further invest in potentially duplicative infrastructure and personnel in Vietnam, establish and maintain a local data protection program, and incur other costs and expenses related to these new requirements.

California has also enacted legislation affording consumers expanded privacy protections.

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For example, Virginia, Colorado, Utah, Connecticut, Florida, Montana, Oregon, Texas Tennessee, Delaware, Iowa, Indiana, Maryland, Minnesota, Nebraska, New Hampshire, New Jersey, Kentucky and Rhode Island have enacted similar laws that have gone into effect, or will go into effect through 2026.

The CCPA, these other state laws and other proposed laws at the state and federal level in the United States are far-reaching and in certain cases are overlapping but different l, resulting in further uncertainty and potentially requiring changes in our business practices and policies and our incurring, require us to incur additional costs and expenses in an effort to comply.

The CCPA, these other state laws and other proposed laws at the state and federal level in the United States are far-reaching and in certain cases are overlapping but different, resulting in further uncertainty and potentially requiring changes in our business practices and policies and our incurring, require us to incur additional costs and expenses in our efforts to comply.

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.

With laws and regulations such as the GDPR, LGPD and CCPA imposing new and relatively burdensome obligations, and with substantial uncertainty over the interpretation and application of these and other laws and regulations, there is a risk that the requirements of these or other laws and regulations, or of contractual or other obligations relating to privacy, data protection or information security, are interpreted or applied in a manner that is, or is alleged to be, inconsistent with our management and processing practices, our policies or procedures, or the features of our products and services.

With laws and regulations such as the GDPR, LGPD and CCPA imposing new and relatively burdensome obligations, and with substantial uncertainty over the interpretation and application of these and other laws and regulations, there is a risk that the requirements of these or other laws and regulations, or of contractual or other obligations relating to privacy, data protection, information security, or the storing, sharing, use, processing, transfer, disclosure and protection of data or other content, are interpreted or applied in a manner that is, or is alleged to be, inconsistent with our management and processing practices, our policies or procedures, or the features of our products and services.

We may face challenges in addressing their requirements and making any necessary changes to our policies and practices, and we may find it necessary or appropriate to assume additional burdens with respect to data handling, to restrict our data processing or otherwise to modify our data handling practices and to incur significant costs and expenses in these efforts.

Any failure or perceived failure by us to comply with our privacy policies, our privacy, data protection or information security-related obligations to brick-and-mortar and online retail partners, users or other third parties, or any of our other legal obligations relating to privacy, data protection or information security may result in governmental investigations or enforcement actions, litigation, claims or public statements against us by consumer advocacy groups or others, and could result in significant liability or cause our users to lose trust in us, which could adversely affect our reputation and business.

Any failure or perceived failure by us to comply with our privacy policies, our privacy, data protection, data processing or information security-related obligations to brick-and-mortar and online retail partners, users or other third parties, or any of our other legal obligations relating to privacy, data protection, information security or the storing, sharing, use, processing, transfer, disclosure and protection of data or other content may result in governmental investigations or enforcement actions, litigation, claims or public statements against us by consumer advocacy groups or others, and could result in significant liability or cause our users to lose trust in us, which could adversely affect our reputation and business.

Furthermore, the costs of compliance with, and other burdens imposed by, the laws, regulations and policies that are applicable to the businesses of our brick-and-mortar and online retail partners may limit the adoption and use of, and reduce the overall demand for, our products and services.

Additionally, if third parties we work with, such as vendors or developers, violate applicable laws or regulations or our contracts and policies, such violations may also put our users’ content and personal information at risk and could in turn adversely affect our business.

Additionally, if third parties we work with, such as vendors or developers, violate applicable laws or regulations or our contracts and policies, such violations may also put our users’ content and data at risk and could in turn adversely affect our business.

Any significant change to applicable privacy laws or relevant industry practices could increase our costs and require us to modify our platform, design apps and features, possibly in a material manner, which we may be unable to complete and may limit our ability to store and process user data or develop new design apps and features.

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Information technology helps us operate more efficiently, interface with users and brick-and-mortar and online retail partners, offer features for our products and services, maintain financial accuracy and efficiency and accurately produce our financial statements.

If we do not allocate and effectively manage the resources necessary to build, sustain and secure necessary information technology infrastructure, we could be subject to transaction errors, processing inefficiencies, the loss of brick-and-mortar and online retail partners or users, business disruptions or the loss of or unauthorized access to personal information or personal data or loss or damage to intellectual property through a cyberattack or other security breach or incident.

intellectual property through a cyberattack or other security breach or incident.

Cyberattacks and other means of attempting and causing security breaches and incidents, are becoming increasingly sophisticated, including as a result of the proliferation of artificial intelligence and machine learning.

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Any cybersecurity incidents related to our use of artificial intelligence and machine learning applications could adversely affect our reputation and results of operations.

We have been subject to cyberattacks and security breaches and

incidents in the past, and cyberattacks, security breaches and incidents could expose us to a risk of lost, exposed or corrupted information, unauthorized disclosure of information, litigation and possible liability to employees, users, brick-and-mortar and online retail partners and regulatory authorities.

We have been subject to cyberattacks and security breaches and incidents in the past, and cyberattacks, security breaches and incidents could expose us to a risk of lost, exposed or corrupted information, unauthorized disclosure of information, litigation and possible liability to employees, users, brick-and-mortar and online retail partners and regulatory authorities.

Geopolitical conflicts and tensions may also increase our risks from cyberattacks and security breaches and incidents.

In addition, a significant portion of our data and information is hosted in a cloud-computing environment, where design apps and data are hosted, accessed and processed through a third-party provider over a broadband Internet connection.

In a cloud-computing environment, we could be subject to outages, security breaches and incidents and cyberattacks affecting the third-party service provider.

More of our and our service providers’ personnel are working remotely in recent years than prior to the COVID-19 pandemic, which increases the risks of cyberattacks and security breaches and incidents.

Certain of our third-party service providers in cloud-computing environments have been and in the future may be, subject to outages, security breaches and incidents and cyberattacks.

More of our and our service providers’ personnel have been working remotely in recent years, which increases the risks of cyberattacks and security breaches and incidents.

If our data management systems do not effectively and securely collect, store, process and report relevant data and information for the operation of our business, whether due to equipment malfunction or constraints, software defects or deficiencies, bugs, vulnerabilities, computer viruses, malware, ransomware, phishing attacks, distributed denial-of-service attacks, security breaches or incidents, cyberattacks, catastrophic events, human error or malfeasance or otherwise, our ability to effectively plan, forecast and execute our business plan and comply with applicable laws and regulations will be impaired, potentially in a material manner.

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While we have implemented security measures designed to protect our hardware and software products from unauthorized access and cyberattacks, these measures may not be effective in securing these products, particularly since techniques used to obtain unauthorized access or otherwise sabotage systems, change frequently and may not be recognized until launched against a target.

A cyberattack, security breach or incident or other event that causes the loss or public disclosure of, or unauthorized access by third parties to, sensitive information stored by us or our brick-and-mortar and online retail partners, or the perception that any of these have occurred, could have serious negative consequences for our business, including loss of information, indemnity obligations, claims, regulatory investigations, fines, penalties and damages, reduced demand for our products and services, an unwillingness of our users to use our products or services, harm to our reputation and brand, and time consuming and expensive litigation, any of which could adversely affect our

financial results.

cyberattack, security breach or incident or other event that causes the loss or public disclosure of, or unauthorized access by third parties to, sensitive information stored by us or our brick-and-mortar and online retail partners, or the perception that any of these have occurred, could have serious negative consequences for our business, including loss of information, indemnity obligations, claims, regulatory investigations, fines, penalties and damages, reduced demand for our products and services, an unwillingness of our users to use our products or services, harm to our reputation and brand, and time consuming and expensive litigation, any of which could adversely affect our financial results.

We also expect to incur significant costs in an effort to detect and prevent cyberattacks and security breaches and incidents, and we may face increased costs and requirements to expend substantial resources in the event of an actual or perceived cyberattack or security breach or incident.

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Governments in the United States and internationally have enacted, have considered or are considering legislation or regulations that could significantly restrict the ability of companies and individuals to engage in these activities, such as by regulating the level of consumer notice and consent required before a company can employ electronic tracking tools or the use of data gathered with such tools.

For example, the European Commission has proposed a regulation, known as the Regulation of Privacy and Electronic Communications, or the ePrivacy Regulation, which would replace the current ePrivacy Directive.

The ePrivacy Regulation remains in the negotiation stage.

If adopted, the ePrivacy Regulation is anticipated to have broad potential impacts on the use of internet-based services and tracking technologies, such as cookies.

We expect to incur additional costs to comply with the requirements of the ePrivacy Regulation and national implementation laws once they are enacted .

In addition to the EU and United Kingdom, other regulators are increasingly focusing on compliance with requirements related to the online behavioral advertising ecosystem.

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In February 2022, Google announced its Privacy Sandbox initiative, including plans to adopt similar restrictions to restrict tracking activity across Android devices.

In July 2024, Google announced its plans to roll out a new user choice mechanism regarding third-party cookies.

In addition, the most commonly used Internet browsers—Chrome, Firefox, Internet

Explorer and Safari—allow Internet users to modify their browser settings to prevent cookies from being accepted by their browsers, and a number of other software tools allow users to block or otherwise limit the functionality of cookies.

In July 2024, Google announced its plans to roll out a new user choice mechanism

regarding third-party cookies.

In addition, the most commonly used Internet browsers—Chrome, Firefox, Internet Explorer and Safari—allow Internet users to modify their browser settings to prevent cookies from being accepted by their browsers, and a number of other software tools allow users to block or otherwise limit the functionality of cookies.

Users can decide to opt out of nearly all cookie data creation, which could negatively impact operations.

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• varying levels of Internet technology adoption and infrastructure, and increased or varying network and hosting service provider costs;

• tariffs and other non-tariff barriers, such as quotas and local content rules, as well as tax consequences;

• tariffs and other non-tariff trade barriers, such as quotas and local content rules, as well as tax consequences;

• fluctuations in currency exchange rates and the requirements of currency control regulations, which might restrict or prohibit conversion of other currencies into U.S.

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These risks can make it more expensive to operate our business outside the United States, meaning that our international business may be less profitable than our U.S.

We have limited experience with international regulatory environments and market practices and may not be able to penetrate or successfully operate in the markets we choose to enter.

We have relatively limited experience with international regulatory environments and market practices and may not be able to penetrate or successfully operate in the markets we choose to enter.

In addition, we may incur significant expenses as a result of our international expansion, and we may not be successful or may not execute our strategy successfully.

We currently face limited brand recognition in certain parts of the world that could lead to non-acceptance or delayed acceptance of our products by consumers in new markets.

Our failure to successfully manage these risks could harm our international operations and adversely affect our business, financial condition and results of operations.

In addition, changes related to Brexit could subject us to heightened risks in that region, including disruptions to trade and free movement of goods, services and people to and from the United Kingdom, disruptions to the workforce of our business partners, increased foreign exchange volatility with respect to the British pound and additional legal, political and economic uncertainty.

Our failure to successfully

manage these risks could harm our international operations and adversely affect our business, financial condition and results of operations.

If these actions impacting our international distribution and sales channels result in increased costs for us or our international partners, such changes could result in higher costs to us, adversely affecting our operations, particularly as we expand our international presence.

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The United States and various foreign governments have imposed controls, license requirements and restrictions on the import and/or export of certain technologies, products, software and services.

Compliance with applicable regulatory requirements regarding the export of our products and services may create delays in the introduction of our products and services in some international target markets, prevent our international users from accessing our products and services, and, in some cases, prevent the export of our products and services to some countries altogether.

Furthermore, U.S.

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We could be subject to future enforcement action with respect to compliance with governmental export and import controls and economic sanctions laws that result in penalties, costs and restrictions on export privileges that could adversely affect our business, financial condition and results of operations.

Failure to comply with anti-corruption and anti-money laundering laws, including the FCPA and similar laws associated with our activities outside of the United States, could subject us to penalties and other adverse consequences.

Failure to comply with anti-corruption, anti-bribery, and anti-money laundering laws, including the FCPA and similar laws associated with our activities outside of the United States, could subject us to penalties and other adverse consequences.

We operate a global business and may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities.

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Travel Act, the USA PATRIOT Act, the U.K.

Bribery Act and possibly other anti-bribery and anti-money laundering laws in countries in which we conduct activities.

Bribery Act and possibly other anti-corruption and anti-bribery laws and anti-money laundering laws in countries in which we conduct activities.

These laws prohibit companies and their directors, officers, employees and third-party business partners and intermediaries, representatives, contractors and agents from corruptly promising, authorizing, offering or providing, directly or indirectly, improper payments or anything of value to foreign government officials, political parties and private-sector recipients for the purpose of obtaining or retaining business, directing business to any person or securing any improper advantage.

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In addition, U.S.

public companies are required to maintain records that accurately and fairly represent their transactions and maintain internal controls and compliance procedures designed to prevent violations of anti-

corruption laws.

While we have policies, procedures and training to foster compliance with these laws, we cannot assure you that our employees or third-party business partners or intermediaries, contractors, representatives and agents will not take actions in violation of our policies or applicable law for which we may ultimately be held responsible.

While we have policies, procedures and training to foster compliance with these laws, we cannot

assure you that our employees or third-party business partners or intermediaries, contractors, representatives and agents will not take actions in violation of our policies or applicable law for which we may ultimately be held responsible.

Any violation of the FCPA, other applicable anti-corruption laws or anti-money laundering laws could result in whistleblower complaints, adverse media coverage, investigations, loss of export privileges, fines, damages, severe criminal or civil penalties against us, our officers or our employees, disgorgement of profits, suspension or debarment from government contracts, any of which could adversely affect our reputation, business, results of operations, stock price, financial condition and prospects.

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or foreign tax laws further change or the way in which such laws are implemented change, if our current or future structures and arrangements are challenged by a taxing authority, or if we are unable to appropriately adapt the manner in which we operate our business, we may have to undertake further costly modifications to our international structure and our tax liabilities and results of operations may be adversely affected.

In addition, increases in corporate tax rates could increase our effective tax rate and have an adverse effect on our results of operations.

For example, the United States enacted the Inflation Reduction Act in 2022, which imposes a 1% excise tax on certain stock repurchases (including potentially pursuant to our stock repurchase program) and a 15% alternative minimum tax on adjusted financial statement income.

In addition, the Organization for Economic Co-Development has proposed a global minimum tax of 15%, which has been adopted by EU member countries effective as of January 1, 2024.

For example, the United States enacted the Inflation Reduction Act of 2022, which imposes a 1% excise tax on certain stock repurchases (including potentially pursuant to our stock repurchase program) and a 15% alternative minimum tax on adjusted financial statement income.

In addition, the One Big Beautiful Bill Act (the “OBBB Act”) was signed into law on July 4, 2025 and introduced significant changes to U.S.

federal tax law.

We are continuing to evaluate the full impact of the OBBB Act on us.

Further, the Organization for Economic Co-Development has proposed a global minimum tax of 15% (“Pillar 2”), which has been and is being adopted by EU member countries and certain other jurisdictions.

The United States has withdrawn support for Pillar 2, but the G7 and the U.S.

Treasury Department announced an agreement that the U.S.

international tax regime will operate “side-by-side” with Pillar 2 rules.

We are continuing to monitor the enactment and implementation of Pillar 2 legislation, and the impact on our financial position and results of operations.

We may face exposure to foreign currency exchange rate fluctuations.

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We may reduce or discontinue the payment of cash dividends in the future.

We recently announced the declaration of a semi-annual, regular cash dividend program of $0.10 per share.

In addition, we declared a $0.35 per share special dividend payable February 15, 2023, for stockholders of record on February 1, 2023, an additional $1.00 per share special dividend payable July 17, 2023, for stockholders of record on July 3, 2023, and an additional $0.40 per share special dividend payable July 19, 2024, for stockholders of record on July 2, 2024.

In November 2024, we announced the declaration of a semi-annual, regular cash dividend program of $0.10 per share.

In addition, we declared a $0.35 per share special dividend payable February 15, 2023, for stockholders of record on February 1, 2023, an additional $1.00 per share special dividend payable July 17, 2023, for stockholders of record on July 3, 2023, an additional $0.40 per share special dividend payable July 19, 2024, for stockholders of record on July 2, 2024, and an additional $0.75 per share special dividend payable on July 21, 2025 to stockholders of record as of July 7, 2025.

However, we are not obligated to pay dividends on our Class A and Class B common stock and we may not pay any other dividends in the future.

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• eliminating the ability of stockholders to call special meetings of stockholders;

• prohibiting stockholder action by written consent prior to the Final Conversion Date unless the action is first recommended or approved by the board, and prohibiting stockholder action by written consent from and after the Final Conversion Date, which requires stockholder actions to be taken at a meeting of our stockholders;

• prohibiting stockholder action by written consent prior to the Final Conversion Date unless the action is first recommended or approved by the board of directors, and prohibiting stockholder action by written consent from and after the Final Conversion Date, which requires stockholder actions to be taken at a meeting of our stockholders;

• certain litigation against us can only be brought in Delaware;

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The time required to evaluate such indications of interest could require significant attention from management, disrupt the ordinary functioning of our business and adversely affect our business, financial condition and results of operations.

Our business is subject to the risk of earthquakes, fire, power outages, floods, public health crises, such as post-COVID-19 factors, and other catastrophic events, and to interruption by man-made problems such as war or terrorism.

Our business is vulnerable to damage or interruption from earthquakes, fires, pandemics, floods, power losses, telecommunications failures, terrorist attacks, acts of war, including the current conflicts between Russia and Ukraine and in the Middle East, human errors, break-ins, public health crises, such as the impacts of the COVID-19 pandemic and similar events.

Our business is subject to the risk of earthquakes, fire, power outages, floods, public health crises, and other catastrophic events, and to interruption by man-made problems such as war or terrorism.

The third-party systems and operations and manufacturers we rely on are subject to similar risks.

For example, we engage third-party service providers, a portion of whose software development staff

resides in Ukraine.

For example, we engage third-party service providers, a portion of whose software development staff resides in Ukraine.

Due to the current conflict, we may experience an interruption in the services provided by these parties.

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To the extent there are disruptions in our payment processing systems, increases in payment processing fees, material changes in the payment ecosystem, such as large re-issuances of payment cards, delays in receiving payments from payment processors or changes to rules or regulations concerning payment processing, our revenue, operating expenses and results of operation could be adversely impacted.

We leverage our third-party payment processors to bill users on cricut.com and Paid Subscriber on our behalf.

We leverage our third-party payment processors to bill users on Cricut.com and Paid Subscribers on our behalf.

If these third parties become unwilling or unable to continue processing payments on our behalf, we would have to find alternative methods of collecting payments, which could adversely impact user and Paid Subscriber acquisition and retention.

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Such restrictions or limitations on the availability of consumer credit could have an adverse impact on our business, results of operations and financial condition.

The estimates of market size included in our Annual Report on Form 10-K or that we have provided publicly may prove to be inaccurate, and even if the market in which we compete is of the size we estimate, we cannot assure you that our business will penetrate some or all of our SAM or TAM.

The estimates of market size that we have provided publicly may prove to be inaccurate, and even if the market in which we compete is of the size we estimate, we cannot assure you that our business will penetrate some or all of our SAM or TAM.

Market size estimates are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate.

The estimates of market size in our Annual Report on Form 10-K or that we have provided publicly relating to our SAM and TAM, including estimates based on our commissioned surveys or our own internal survey data, may prove to be inaccurate.

The estimates of market size that we have provided publicly relating to our SAM and TAM, including estimates based on our commissioned surveys or our own internal survey data, may no longer be current or may prove to be inaccurate.

Even if the market is of the size we estimate, we may not further penetrate our SAM or TAM, or at all.

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Compliance with these rules and regulations will likely strain our financial and management systems, internal controls and employees.

The Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business and results of operations and the Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures, and internal control, over financial reporting.

maintain effective disclosure controls and procedures, and internal control, over financial reporting.

In order to maintain and, if required, improve our disclosure controls and procedures, and internal control over, financial reporting to meet this standard, significant resources and management oversight may be required.

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Although we believe that we currently collect and remit sales taxes in all states in which we are required to do so, a successful assertion by one or more states requiring us to collect sales taxes where we presently do not do so, or to collect more taxes in a jurisdiction where we currently do collect some sales taxes, could result in substantial tax liabilities, including taxes on past sales, as well as interest and penalties.

The adoption of new laws by, or a successful assertion by taxing authorities of such laws, could also require us to incur substantial costs to capture data and

collect and remit taxes.

The adoption of new laws by, or a successful assertion by taxing authorities of such laws, could also require us to incur substantial costs to capture data and collect and remit taxes.

If such obligations were imposed, the additional costs associated with tax collection, remittance and audit requirements could adversely affect our business, financial condition and results of operations.

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 1A. Risk Factors