Company: CRCT
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0001828962-25-000153
Chunk: 64

Company: Cricut, Inc.
Filing Date: 2025-11-05
Form: 10-Q
Item: Part I, Item 8
Chunk 64
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 as applicable for the interest period in effect for such borrowing plus the applicable rate. 

8.Income Taxes

The Company computes interim period income taxes by applying an estimated annual effective tax rate to our year-to-date income from operations before income taxes, except for significant unusual or infrequently occurring items. The estimated effective tax rate is adjusted each quarter. The estimated effective tax rate was 20.0% and 25.2% for the three and nine months ended September 30, 2025, respectively, and 18.9% and 29.5% for the three and nine months ended September 30, 2024, respectively. The Company’s provision for income taxes was $5.1 million and $23.2 million for the three and nine months ended September 30, 2025, respectively, and $2.7 million and $21.3 million for the three and nine months ended September 30, 2024, respectively. The provision for income taxes varied from the tax computed at the U.S. federal statutory income tax rate for the three and nine months ended September 30, 2025, primarily due to a decrease in stock-based compensation difference attributable to the decrease in stock price upon vesting versus the stock price at the grant date. The Company reviews its deferred tax assets for realization based upon historical taxable income, prudent  and feasible tax planning strategies, the expected timing of the reversals of existing temporary differences and expected future taxable income. The Company has concluded that it is more likely than not that the net deferred tax assets will be realized. Accordingly, the Company has not recorded a valuation allowance against net deferred tax assets for any of the periods presented.On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into law. Among other provisions, this act includes permanently extending and modifying certain expiring provisions of the 2017 Tax Cuts and Jobs Act and immediate expensing of domestic research and development expenses. The Company is evaluating the impacts of these provisions and does not expect OBBBA to have a material impact on our consolidated financial statements or annual effective tax rate for 2025.

9.Capital Structure 

As of September 30, 2025, the Company had authorized 100,000,000 shares of preferred stock, par value $0.001 per share, and 1,250,000,000 shares of common stock, par value $0.001 per share, which was divided between two series: Class