Cricut, Inc.CRCT
Cricut, Inc. Stock Compensation Disclosure
Stock-Based Compensation
Stock-based Compensation Cost
The following table shows the stock-based compensation cost by award type for the periods indicated:
| Year Ended December 31, | |||||||||||||||||
| 2024 | 2023 | 2022 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Equity-classified awards | |||||||||||||||||
| Restricted stock units | $ | 43,421 | $ | 41,094 | $ | 32,442 | |||||||||||
| Stock options | 772 | 2,388 | 3,579 | ||||||||||||||
| Class B common stock | 3,667 | 6,504 | 9,321 | ||||||||||||||
| Liability-classified awards | 40 | 44 | (54) | ||||||||||||||
| Total stock-based compensation | $ | 47,900 | $ | 50,030 | $ | 45,288 | |||||||||||
The following table sets forth the total stock-based compensation cost included in the Company’s consolidated statements of operations and comprehensive income or capitalized to assets for the periods indicated:
| Year Ended December 31, | |||||||||||||||||
| 2024 | 2023 | 2022 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Cost of revenue | |||||||||||||||||
| Platform | 1,192 | 926 | 443 | ||||||||||||||
| Products | 712 | 1,505 | 487 | ||||||||||||||
| Total cost of revenue | 1,904 | 2,431 | 930 | ||||||||||||||
| Research and development | 15,620 | 18,169 | 17,713 | ||||||||||||||
| Sales and marketing | 12,825 | 12,740 | 12,603 | ||||||||||||||
| General and administrative | 14,718 | 13,986 | 9,875 | ||||||||||||||
| Total stock-based compensation expense | $ | 45,067 | $ | 47,326 | $ | 41,121 | |||||||||||
| Capitalized for software development costs | 1,509 | 1,960 | 2,321 | ||||||||||||||
| Capitalized to inventory | 1,324 | 744 | 1,846 | ||||||||||||||
| Total stock-based compensation | $ | 47,900 | $ | 50,030 | $ | 45,288 | |||||||||||
As of December 31, 2024, there was $67.5 million of unrecognized stock-based compensation cost related to service-based awards, which is expected to be recognized over a weighted-average period of 2.3 years. The total unrecognized compensation expense related to unvested PRSUs that are not probable of vesting was $202.2 million as of December 31, 2024. The tax benefit from stock-based compensation cost during the years ended December 31, 2024, 2023 and 2022, was $9.2 million, $9.3 million, and $8.2 million, respectively.
2021 Equity Incentive Plan
In March 2021, the Company’s 2021 Equity Incentive Plan became effective. The 2021 Equity Incentive Plan provides for the grant of incentive stock options to employees and for the grant of nonstatutory stock options, restricted stock, restricted stock units, stock appreciation rights, performance units and performance shares to our employees, directors and consultants and our parent and subsidiary corporations’ employees and consultants. Outstanding restricted stock units and performance units are entitled to dividend equivalents in the form of additional unvested restricted stock units or unvested performance units equal in value to the amount of any
declared dividend based on the closing price of the Company’s class A stock on the dividend payment date. Dividend equivalents are forfeited if the underlying award does not vest. As of December 31, 2024, 50,565,554 shares of Class A common stock were reserved for issuance under this plan including shares reserved for previously granted awards discussed below as well as shares reserved for issuance of future awards under the plan.
A summary of the Company’s RSU activity under the 2021 Equity Incentive Plan is as follows:
Number of RSUs | Weighted- Average Grant Date Fair Value (per share) | ||||||||||
| Outstanding at December 31, 2023 | 8,893,831 | $ | 14.38 | ||||||||
| Granted | 5,561,981 | $ | 5.88 | ||||||||
| Dividend equivalent grants | 499,066 | $ | — | ||||||||
| Vested | (2,981,495) | $ | 16.04 | ||||||||
| Forfeited/cancelled | (721,880) | $ | 12.17 | ||||||||
| Outstanding at December 31, 2024 | 11,251,503 | $ | 9.86 | ||||||||
The total fair value of RSUs vested as of the vesting dates during the years ended December 31, 2024, 2023 and 2022, was $19.0 million, $17.1 million, and $13.0 million, respectively.
The Company has granted PRSUs under the 2021 Equity Incentive Plan to certain employees of the Company that represent shares potentially issuable in the future. In July 2024, the Company granted PRSUs by which the first tranche of 30% and the second tranche of 70% will vest upon the Company achieving certain adjusted operating income targets during any four consecutive quarters of the respective performance periods, subject to employees remaining with the Company through the vesting date. The performance periods for the first and second tranches is 4 and 5 years, respectively. At grant date, adjusted operating income was defined as GAAP operating income and was subsequently amended to be GAAP operating income adjusted to exclude stock-based compensation expense and payroll expense specifically related to these PRSU awards. This change resulted in a modification whereby additional stock-based compensation of approximately $5.9 million could be recorded if the Company determines it is probable the performance targets will be achieved.
In 2022, the Company granted PRSUs that vest in two equal tranches subject to the Company achieving certain cumulative adjusted earnings per share over eight quarters at any point during the 5-year performance period, subject to employees remaining with the Company through the vesting date. Adjusted earnings per share means GAAP net income adjusted to exclude income tax expenses, as well as stock-based compensation expense and payroll tax expense specifically related to these PRSU awards.
A summary of the Company’s PRSU activity under the 2021 Equity Incentive Plan is as follows:
Number of PRSUs (a) | Weighted- Average Grant Date Fair Value (per share) | ||||||||||
| Outstanding at December 31, 2023 | 6,766,001 | $ | 23.32 | ||||||||
| Granted | 9,808,000 | $ | 5.55 | ||||||||
| Dividend equivalent grants | 1,366,343 | $ | — | ||||||||
| Forfeited / cancelled | (454,911) | $ | 20.25 | ||||||||
| Outstanding at December 31, 2024 | 17,485,433 | $ | 13.12 | ||||||||
a.Represents the maximum number of PRSUs assuming all performance targets are achieved.
The expense recognized each period for these PRSUs is primarily dependent upon the Company’s estimate of the probability of achieving the performance targets during the performance period. At December 31, 2024, the Company determined it was not probable any performance conditions would be achieved, so no stock-based compensation has been recorded for these PRSUs during the years ended December 31, 2024, 2023 and 2022.
Options under the 2021 Equity Incentive Plan have a contractual term of 10 years. The exercise price of an incentive stock option and non-qualified stock option shall not be less than 100% of the fair market value of the shares on the date of grant.
A summary of the Company’s stock option activity under the 2021 Equity Incentive Plan is as follows:
Number of Options | Weighted- Average Exercise Price | Weighted- Average Remaining Term (Years) | Aggregate Intrinsic Value | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Outstanding at December 31, 2023 | 2,999,085 | $ | 18.65 | 3.5 | $ | — | |||||||||||||||||
| Forfeited/cancelled | (249,007) | 18.51 | |||||||||||||||||||||
Outstanding and expected to vest at December 31, 2024 | 2,750,078 | $ | 18.25 | 2.2 | $ | — | |||||||||||||||||
| Vested and exercisable at December 31, 2024 | 2,750,078 | $ | 18.25 | 2.2 | $ | — | |||||||||||||||||
For the years ended December 31, 2024, 2023 and 2022, no options were granted and the total intrinsic value of options exercised was immaterial.
Certain employees received restricted stock unit equivalents (“RSU equivalents”) which upon vesting are settled for a cash payment equal to the difference between the Company’s stock price on the vesting date less the base price specified at the time of the grant. Due to the cash settlement feature, these awards are liability classified awards and require initial and subsequent measurement at fair value. As of December 31, 2024 and 2023, the total recognized liability for the unvested awards was not material and the number of awards was not material.
Unvested Class B Common Stock
The Company’s unvested Class B common stock resulted from the corporate reorganization in March 2021 and is not part of the 2021 Equity Incentive Plan. Dividends declared on unvested Class B common stock are subject to vesting and are forfeited if the underlying stock does not vest. Activity related to Class B common stock subject to future vesting for the year ended December 31, 2024 is as follows:
Number of Unvested Shares | Weighted- Average Grant Date Fair Value (per share) | ||||||||||
| Outstanding at December 31, 2023 | 1,656,679 | $ | 20.00 | ||||||||
| Vested | (1,450,370) | $ | 20.00 | ||||||||
| Forfeited / Cancelled | (92,731) | $ | 20.00 | ||||||||
| Outstanding at December 31, 2024 | 113,578 | $ | 20.00 | ||||||||
The total fair value of Class B common stock vested as of the vesting dates during the years ended December 31, 2024, 2023 and 2022, was $7.8 million, $27.1 million, and $73.9 million, respectively.
Options to Purchase Class B Common Stock
The Company’s options to purchase Class B common stock resulted from the corporate reorganization in March 2021 and are not part of the 2021 Equity Incentive Plan. A summary of the Company stock option activity for the options to purchase shares of Class B common stock is as follows:
Number of Options | Weighted- Average Exercise Price | Weighted- Average Remaining Term (Years) | Aggregate Intrinsic Value | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Outstanding at December 31, 2023 | 259,425 | $ | 7.69 | 1.9 | $ | — | |||||||||||||||||
| Forfeited / Cancelled | (62,000) | $ | 7.55 | ||||||||||||||||||||
| Outstanding at December 31, 2024 | 197,425 | $ | 7.29 | 0.9 | $ | — | |||||||||||||||||
| Vested at December 31, 2024 | 197,425 | $ | 7.29 | 0.9 | $ | — | |||||||||||||||||
2021 Employee Stock Purchase Plan
In March 2021, the Company’s 2021 Employee Stock Purchase Plan (“2021 ESPP”) became effective. Subject to any limitations contained therein, the 2021 ESPP allows eligible employees to contribute, through payroll deductions, up to 15% of their eligible compensation to purchase the Company’s Class A common stock at a discounted price per share. As of December 31, 2024, 10,602,602 shares of our Class A common stock were available for sale under the 2021 ESPP.
No offerings have been authorized to date by the administrator under the 2021 ESPP. If the administrator authorizes an offering period under the 2021 ESPP, the administrator will establish the duration of offering periods and purchase periods, including the starting and ending dates of offering periods and purchase periods, provided that no offering period may have a duration exceeding 27 months.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2024 | Mar 5, 2025 | Showing above |
| 2023 | Mar 6, 2024 | |
| 2022 | Mar 13, 2023 | |
| 2021 | Mar 9, 2022 | |
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.