Company: CRCT
Filing Date: 2025-05-07
Form Type: 10-Q
Source: 0001828962-25-000075
Chunk: 66

Company: Cricut, Inc.
Filing Date: 2025-05-07
Form: 10-Q
Item: Part I, Item 8
Chunk 66
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 original invoice amounts less estimates for credit losses. Management determines the allowance for credit losses by specifically identifying troubled accounts and by using historical write off experience, adjusted for current market conditions and reasonable supportable forecasts of future economic conditions, applied to an aging of all other accounts receivable. Accounts receivable are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded when received.

9

As of March 31, 2025, December 31, 2024, and January 1, 2024, the Company had net accounts receivable balances of $72.3 million, $102.0 million and $111.2 million, respectively. As of March 31, 2025, and December 31, 2024, the Company had an allowance for credit losses against accounts receivable of $1.3 million and $2.6 million, respectively. 

3.Revenue and Deferred Revenue

Deferred revenue relates to performance obligations for which payments have been received from the customer prior to revenue recognition. Deferred revenue primarily consists of deferred subscription-based services. Deferred revenue also includes amounts allocated from the sale of a connected machine to the unspecified upgrades and enhancements and the Company’s cloud-based services. Contract costs consist of amounts paid to obtain contracts with customers in connection with sales of subscriptions through third-party apps. Contract costs are amortized over the subscription term. As of March 31, 2025 and December 31, 2024 the Company had $1.5 million and $1.2 million recorded for capitalized contract costs, respectively.The following table summarizes the changes in the deferred revenue balance for the three months ended March 31, 2025 and 2024: Three Months Ended March 31,20252024(in thousands)Deferred revenue, beginning of period$48,253 $43,235 Recognition of revenue included in beginning of perioddeferred revenue(24,890)(23,479)Revenue deferred, net of revenue recognized on contracts inthe respective period30,410 26,877 Deferred revenue, end of period$53,773 $46,633 As of March 31, 2025, the aggregate amount of the transaction price allocated to remaining performance obligations was equal to the deferred revenue balance. The Company expects the following recognition of deferred revenue as of March 31, 2025:Year Ended December 31,2025 (remainder of year)202620272028Total(in thousands)Revenue expected