On September 3, Cricut Inc. (NASDAQ:CRCT) unveiled the Cricut Maker 5, a smart cutting and engraving machine built for thicker materials and a smaller footprint than any Maker before it. The launch landed about a month after Cricut posted a second quarter where profit jumped even as revenue fell, a split that sums up where the company sits right now. It is selling more subscriptions at fatter margins while the machines that feed that subscription business bring in less money overall.
Deeper Cuts, Wider Subscriber Base
The Maker 5 can cut and engrave materials up to 3 mm thick, a 25% jump from the prior generation’s 2.4 mm ceiling, which opens the door to leather, acrylic, metal, foam core, corrugated plastic, and felt. It is also 30% more compact than earlier Maker models while keeping the same 12-inch cutting performance, and it works across more than 300 materials and 13 specialized tools. Bundles start at $349 in a new Slate Blue color, with a Teal version sold exclusively through Michaels for the first two weeks after the September 4, 2026 launch before wider retail rollout.
That hardware push sits on top of a platform business already doing the heavy lifting. Platform revenue reached $85.0 million in the second quarter, up more than 5% year over year, as paid subscribers climbed to 3.1 million, up 3%, and platform ARPU rose 5% to $56.37. Gross margin expanded to 74.5% from 59.0% a year earlier, and net income jumped 59% to $39.1 million, pushing diluted earnings per share to $0.19 from $0.11. Cricut also generated $50 million in operating cash flow during the quarter, funding a $0.10 per share dividend paid July 21, 2026, and $7.5 million in buybacks.
Where The Growth Story Cracks
The Maker 5’s expanded capabilities cannot hide that Cricut’s hardware business is contracting. Products revenue fell 22% year over year to $71.3 million, dragging total second quarter revenue down 9% to $156.3 million. User growth has also cooled. Active Users rose just 1% year over year to nearly 6.0 million, and 90-Day Engaged Users were flat at 3.5 million, suggesting the subscriber and ARPU gains are coming more from pricing and retention than from a bigger base of people actually using their machines. International revenue slipped 1% even though it grew as a share of the total, from 21% to 23%.
What The Market Signals Now
Hedge fund ownership held steady at 19 funds in the most recent quarter versus 19 the quarter before, showing no shift in institutional conviction either way. Short interest sits at 8.78% of the float, a level that points to a meaningful bear camp already positioned against the stock. That combination suggests that the market is watching to see whether the new machine can reverse the product slide before taking a firmer stance.
The Tension Investors Must Watch
Cricut’s second quarter showed a company that can grow profit and subscriptions even while product sales shrink, and the Maker 5 is its bet that hardware can start pulling its weight again. For the bull case to hold, the 3 mm cutting depth and smaller design need to translate into machine sell-through that reverses the 22% product decline. For the bear case to hold, flat engagement metrics need to keep showing that subscriber gains are running on pricing rather than a growing user base.
READ NEXT: 10 Best Future Stocks to Buy Under $10 and 12 Best Performing Semiconductor Stocks to Invest In.
Hedge Fund Resource Center