Segment Information

12 Months Ended

Dec. 31, 2022

Segment Reporting [Abstract]

Segment Information

Segment Information The Company applies ASC Topic 280, Segment Reporting, in determining reportable segments for its financial statement disclosure. The Company’s operating segments are generally organized by the type of product or service offered. Similar operating segments have been aggregated into three reportable segments: Connected Machines, Subscriptions and Accessories and Materials. Segment information is presented in the same manner that the Company’s Chief Operating Decision Maker (“CODM”) reviews the results of operations in assessing performance and allocating resources. The CODM reviews revenue and gross profit for each of the reportable segments. Gross profit is defined as revenue less cost of revenue incurred by the segment. The Company does not allocate assets at the reportable segment level as these are managed on an entity wide group basis. As of December 31, 2022, long-lived assets located outside the United States, primarily located in Malaysia and China, were $20.3 million.

The Connected Machines segment derives revenue from the sale of its connected machine hardware and related essential software. The Subscriptions segment derives revenue primarily from monthly and annual subscription fees and a minimal amount of revenue allocated to the unspecified future upgrades and enhancements related to the essential software and access to the Company’s cloud-based services. The Accessories and Materials segment primarily consists of craft, DIY, home décor products and heat presses including the Cricut Mug Press and Cricut EasyPress. There are no internal revenue transactions between the Company’s segments.

Key financial performance measures of the segments including revenue, cost of revenue and gross profit are as follows:

	Year Ended December 31,
	2022		2021		2020
(in thousands)
Connected Machines:
Revenue	$	252,563	$	548,205	$	416,714
Cost of revenue	244,260		484,025		351,898
Gross profit	$	8,303	$	64,180	$	64,816
Subscriptions:
Revenue	$	272,344	$	205,858	$	111,337
Cost of revenue	26,375		21,961		13,125
Gross profit	$	245,969	$	183,897	$	98,212
Accessories and Materials:
Revenue	$	361,389	$	552,164	$	430,979
Cost of revenue	265,768		342,791		261,633
Gross profit	$	95,621	$	209,373	$	169,346
Consolidated:
Revenue	$	886,296	$	1,306,227	$	959,030
Cost of revenue	536,403		848,777		626,656
Gross profit	$	349,893	$	457,450	$	332,374