Cricut enters its third-quarter report with a promise to keep. Last quarter, management argued that the business had stabilized and that momentum would build through the back half of the year. The numbers were messy, though. Total revenue fell 9% from a year earlier, the steepest decline in four quarters, and a $0.19 profit was inflated by one-time tariff refunds and a royalty reserve release. The report due after the close on November 3 is the first clean look at whether the inflection story holds up once the accounting tailwinds are gone.
The Street is asking for a modest but meaningful turn. Consensus calls for revenue of about $173.7 million, up 1.9% from $170.4 million a year ago. A low single-digit gain sounds unremarkable. Coming right after a 9% drop, however, it would mark a real swing in direction. Earnings expectations go the other way. Analysts look for just $0.03 a share, down 70% from $0.10 last year. That gap points to an expected squeeze on margins. Existing tariffs are still a cost the company has not quantified, and the new global brand campaign and product launches cost money to support. With no numeric guidance on the table beyond management's commitment to a profitable, cash-generative year, the bar is defined mostly by the narrative rather than by a stated range.
The central question is whether the healthy half of Cricut can finally outrun the weak half. Platform revenue has climbed every quarter, reaching $85 million, up 5%. Paid subscribers have edged up to 3.1 million, and average revenue per user is rising. Management has said platform revenue should grow every quarter. Another sequential gain, helped by early uptake of the new premium tier priced from $14.99 a month, would support that claim. Active users held flat sequentially last quarter for the first time in a second quarter since 2022, and continued stability there matters because engaged crafters are the feeder for both subscriptions and materials purchases. The products side is the problem. Products revenue fell 22% last quarter on a tough tariff pull-forward comparison, lower prices on the Joy 2 and Explore 5 machines, heavier promotions, and ongoing erosion in accessories and materials. Double-digit growth in machine sellout units has to start showing up as stabilizing product sales. If it does not, the bull case starts to look like it is built on units sold at thinner economics.
Several secondary checks will help. International sales slipped 1% after a 16% gain the prior quarter, which management blamed on a temporary inventory air bubble from a European distribution change it described as largely resolved. A rebound would confirm that explanation. Commentary on the AutoPress heat press, the planned marketing push for direct-to-film services, and the AI-driven Creative Labs features will show whether these new catalysts are generating revenue or are still mostly branding. Gross margin also needs a careful read. Stripped of refunds, it was roughly 58.9% last quarter. Holding near that level despite tariffs and promotions would be reassuring.
The market has already moved toward the optimistic view. Shares have gained about 21% since the last report while the S&P 500 slipped 2%, and the stock at $6.25 sits well above its 200-day moving average of $4.82. Its entire post-earnings range now sits above the prior quarter's high, though the stock remains below the $6.82 peak. Sentiment readings have barely moved, easing from mildly bearish to closer to neutral. That suggests the rally has not been matched by broad enthusiasm.
Ultimately, this quarter comes down to whether total revenue returns to growth while underlying margins hold. A positive top line with platform gains and a narrowing products decline would validate management's second-half inflection. Another contraction would leave the recent rally looking ahead of the fundamentals.