Cricut Inc.

11/04/2026 | Press release | Distributed by Public on 11/04/2026 05:03

Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read together with our interim condensed consolidated financial statements and related notes and other financial information appearing elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements included in our Annual Report. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results could differ materially from these forward-looking statements as a result of many factors, including those discussed, or incorporated by reference, in the sections titled "Risk Factors" and "Note Regarding Forward-Looking Statements."
Overview of Our Business and History
At Cricut, our mission is to help people lead creative lives. We have designed and built a creativity platform that enables our engaged and loyal community of approximately 6.0 million Active Users (as defined below) to turn ideas into professional-looking handmade goods. With our highly versatile Design Space Platform and our products, our users create everything from personalized birthday cards, stickers, mugs and T-shirts, to large-scale interior decorations. Our users' journeys typically begin with the purchase of a connected machine bundle. We currently sell a portfolio of connected machines that cut, write, score, print and create other decorative effects using a wide variety of materials including paper, adhesive vinyl, iron-on vinyl, pens, and more. Our connected machines are designed in a variety of sizes for a wide range of uses. They are available at multiple price points and in various bundle configurations.
Our platform integrates our design apps and connected machines, allowing our users to create and share seamlessly. Our software is cloud-based, meaning that users can access and work on their projects anywhere, at any time, across desktops or mobile devices. We enable our users to be inspired, to create and share projects with the Cricut community and to follow others doing the same. On our platform, users can find inspiration, purchase or upload content like fonts and images, use customizable user templates, design a project from scratch or find a vast array of ready-to-make projects. In addition, our AI functionality within our app enables users to generate unique, cut-ready images from text or image prompts for personalized crafting projects like stickers, decals, and more. Users can leverage the full power of our platform by using our connected machines together with our free design apps, in-app purchases and subscription offerings to design and complete projects. All users can access a select number of free images, fonts and projects from our design apps or upload their own. In addition, we offer a wider selection of images, fonts and projects for purchase à la carte, including licensed content from partners with well-known brands and characters, like major motion picture studios. We also have two subscription offerings:
•Cricut Access Standard: Provides a subscription to fonts, images, templates, projects, and AI credits as well as other member benefits, including exclusive software features and functionality, discounts, and priority Cricut Member Care. Cricut Access Standard is billed monthly starting at $9.99 per month or annually at $95.88 per year.
•Cricut Access Premium: Includes all of the benefits of Cricut Access Standard as well as additional discounts, additional AI credits, and is billed monthly starting at $14.99 per month or annually at $119.88 per year.
As of September 30, 2026, we had approximately 3.1 million Paid Subscribers (as defined below) to Cricut Access Standard and Cricut Access Premium.
We sell a broad range of products in the Cricut ecosystem that help bring designs to life. These products work seamlessly and easily together, which helps build brand loyalty among our user base. Cricut products give users peace of mind with a brand they trust for durability, selection, and compliance. Creating projects drives repeat purchases of Cricut products for years after a user first buys a connected machine bundle, demonstrating a growing customer lifetime value through ongoing engagement with our platform.
We design and develop our software and hardware products, and we work with third-party contract manufacturers to source components and finished goods and with third-party logistics companies to warehouse and distribute our products.
We sell our products through our brick-and-mortar and online retail partners, as well as through our website at Cricut.com. Our partners include Amazon, Hobby Lobby, Michaels, Target, Walmart and many others. We also sell our products, including subscriptions to Cricut Access Standard and Cricut Access Premium, on Cricut.com.
Historically, we have experienced the highest revenue levels in the fourth quarter of the year, coinciding with the holiday shopping season in the United States. For example, in 2023, 2024 and 2025, our fourth quarter represented 30%, 29% and 29% of total revenue for the year, respectively. Our promotional discounting activity is higher in the fourth quarter as well, which negatively impacts gross margin during this period. For example, gross margin in the fourth quarter of 2025 was 47%, compared to gross margin of 55% for all of 2025. As we continue to grow internationally, we expect we may experience seasonality in additional markets, which may differ from the seasonality experienced in the United States.
The current global macroeconomic environment, including regulation, tariffs that have materially increased, and may continue to increase even after tariffs imposed under IEEPA were rescinded, our costs and the potential for further trade barriers, or additional retaliatory changes by U.S. trading partners may impact our business and international expansion. We are experiencing supply-chain cost pressure related to the Middle East conflict, primarily through higher fuel and petrochemical-related input costs. While we continue to evaluate actions to mitigate these pressures, the current environment requires a thoughtful and measured approach given the price sensitivity of the consumer.
On February 20, 2026, the U.S. Supreme Court ruled that IEEPA tariffs were unauthorized. Following the ruling, CBP established a phased refund process through its CAPE functionality. In April 2026, we submitted a refund request for eligible IEEPA tariff entries through the initial phase of the CAPE process. During the second quarter of 2026, CBP approved refunds, including interest, totaling $20.3 million. As of September 30, 2026, $18.8 million was recognized as a reduction of product cost of revenue, $0.8 million was recorded as a reduction of inventory, and $0.7 million was recognized as interest income. As of September 30, 2026, we had received $20.3 million in cash and recorded a receivable of $0.0 million for the remaining approved refund amount.
For more information regarding our business model, factors affecting our performance, and seasonality, please see "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report, which is incorporated herein by reference.
Key Business Metrics
In addition to the measures presented in our interim condensed consolidated financial statements, we use the following key metrics to evaluate our business, measure our performance, identify trends and make strategic decisions.
As of September 30,
2026 2025
Active Users (in thousands) 5,989 5,883
90-Day Engaged Users (in thousands) 3,466 3,451
Paid Subscribers (in thousands) 3,072 3,004
Twelve Months Ended September 30,
2026 2025
Platform ARPU $ 56.70 $ 54.88
Active Users
We define Active Users as registered users of at least one registered connected machine who have utilized their connected machine to create a project in the last 365 days. One user may own multiple registered connected machines but is only counted once if that user registers those connected machines by using the same email address. If possession of a connected machine is transferred to a new owner and registered by that new owner, the new owner is added to the total Active Users and the prior owner is removed from the total Active Users if the prior owner does not own any other registered connected machines. Active Users is a key indicator of the health of our business, because changes in the number of Active Users excludes non-users to better represent opportunities for us to drive additional platform and product revenue.
90-Day Engaged Users
We define 90-Day Engaged Users as registered users of at least one registered connected machine who have utilized their connected machine to create a project in the last 90 days. One user may own multiple registered connected machines but is only counted once if that user registers those connected machines by using the same email address. If possession of a connected machine is transferred to a new owner and registered by that new owner, the new owner is added to the total 90-Day Engaged Users and the prior owner is removed from the total 90-Day Engaged Users if the prior owner does not own any other registered connected machines. 90-Day Engaged Users excludes non-users to better represent opportunities for us to drive additional platform and product revenue.
Paid Subscribers
We define Paid Subscribers as the number of users with a subscription to Cricut Access Standard or Cricut Access Premium, excluding cancelled, unpaid, paused, or free trial subscriptions, as of the end of a period. Paid Subscribers is a key metric to track growth in our Platform revenue and potential leverage in our gross margin.
Platform ARPU
We define Platform ARPU as Platform revenue in a 12-month period divided by Active Users. Platform ARPU allows us to forecast Platform revenue over time and is an indicator of our ability to expand with users and of user engagement with our subscription offerings.
Components of our Results of Operations
We operate and manage our business in two reportable segments: Platform and Products. We identify our reportable segments based on the information used by management to monitor performance and make operating decisions. See Note 15 to our unaudited condensed consolidated financial statements included elsewhere in this filing for additional information regarding our reportable segments.
Revenue
Platform
We generate Platform revenue primarily from sales of subscriptions to Cricut Access Standard and Cricut Access Premium, digital content, and a minimal amount of revenue allocated to the unspecified future upgrades and enhancements related to the essential software and access to our cloud-based services. For a monthly or annual subscription fee, Cricut Access Standard includes a subscription to fonts, images, templates, projects, and AI credits as well as other member benefits, including exclusive software features and functionality, discounts, and priority Cricut Member Care. Cricut Access Premium includes all the benefits of Cricut Access Standard as well as additional discounts and AI credits. Digital content includes à la carte digital content purchases, including fonts, images, templates, and projects. Platform revenue is recognized on a ratable basis over time, during the term for subscriptions, and at the point in time when control is transferred for à la carte digital content.
Products
We generate Products revenue from sales of connected machine bundles and ancillary products, net of sales discounts, rebates and returns. Our connected machines portfolio consists of machines in five product families: Cricut Maker, which includes Maker, Maker 3, Maker 4, and Maker 5; Cricut Explore, which includes Explore Air 2, Explore 3, Explore 4, and Explore 5; Cricut Joy, which includes Joy, Joy Xtra, and Joy 2; Cricut Venture, and Cricut StickerPix, which includes Cricut StickerPix Print and StickerPix Print + Cut. Our ancillary products include Cricut EasyPress, Cricut MugPress, Cricut AutoPress 2, hand tools, machine replacement tools and blades, and project materials such as adhesive vinyl and iron-on vinyl. Products revenue is recognized at the point in time when control is transferred, which is either upon shipment or delivery to the customer in accordance with the terms of each customer contract.
Cost of Revenue
Platform
Cost of revenue related to Platform consists primarily of hosting fees, digital content costs, amortization of capitalized software development costs, software maintenance costs, and royalties. We expect our cost of revenue related to Platform as a percentage of revenue to fluctuate in the near term as we expand our content offerings, including localized content for international target markets, and decrease over time as we drive greater scale and efficiency in our business.
Products
Cost of revenue related to Products consists of product costs, including costs of components, cost of contract manufacturers for production, inspecting and packaging, shipping, receiving, handling, warehousing and fulfillment, duties and other applicable importing costs, warranty replacement, excess and obsolete inventory write-downs, tooling and equipment depreciation and royalties. We expect our cost of revenue related to Products as a percentage of revenue to fluctuate in the near term as we continue selling through end of life machines, address global supply chain challenges and continue to invest in the growth of our business and to decrease over the long term as we drive greater scale and efficiency in our business.
Operating Expenses
Research and Development
Research and development expenses consist primarily of costs associated with the development of our platform and products, including personnel-related expenses for engineering, product development and quality assurance, as well as prototype costs, service fees incurred by contracting with vendors and allocated overhead. We expect our research and development expenses to increase in the near term as we refine our product roadmaps.
Sales and Marketing
Sales and marketing expenses consist primarily of advertising and marketing of our products, third-party payment processing fees, personnel-related expenses, including salaries and bonuses, benefits and stock-based compensation expense, as well as customer rebates, professional services, promotional items, and allocated
overhead costs. We expect our sales and marketing expenses as a percentage of revenue to fluctuate in the near term.
General and Administrative
General and administrative expenses consist of personnel-related expenses for our finance, legal, human resources and administrative personnel, including salaries and bonuses, benefits and stock-based compensation expense, as well as the costs of professional services, any allocated overhead, information technology, impairment charges of unused equipment, and other administrative expenses. We expect our general and administrative expenses as a percentage of revenue to increase in the near term as we expand our operations, and invest in systems enhancements.
Other Income
Other income, net consists primarily of interest income from our investments in marketable securities, offset by interest expense associated with our debt financing arrangements and amortization of debt issuance costs.
Provision for Income Taxes
Provision for income taxes consists of income taxes in the United States and certain state and foreign jurisdictions in which we conduct business. We have not recorded a valuation allowance against our deferred tax assets as we have concluded that it is more likely than not that the deferred tax assets will be realized.
Results of Operations
The following tables set forth the components of our interim condensed consolidated statements of operations for each of the periods presented and as a percentage of our revenue for those periods. The period-to-period comparison of results of operations is not necessarily indicative of results of future periods.
The following table is presented in thousands:
Three Months Ended September 30, Nine Months Ended September 30,
2026 2025 2026 2025
(in thousands)
Revenue:
Platform $ 85,878 $ 82,783 $ 255,655 $ 243,466
Products 102,744 87,654 248,723 261,717
Total revenue 188,622 170,437 504,378 505,183
Cost of revenue:
Platform(1)
8,657 8,957 23,980 26,441
Products(1)
71,087 67,384 162,414 184,759
Total cost of revenue 79,744 76,341 186,394 211,200
Gross profit 108,878 94,096 317,984 293,983
Operating expenses:
Research and development(1)
17,082 16,865 50,543 49,284
Sales and marketing(1)
41,211 37,467 115,534 110,029
General and administrative(1)
16,697 17,113 47,715 52,573
Total operating expenses 74,990 71,445 213,792 211,886
Income from operations 33,888 22,651 104,192 82,097
Other income, net 2,484 2,980 7,579 9,998
Income before provision for income taxes 36,372 25,631 111,771 92,095
Provision for income taxes 8,530 5,119 24,557 23,181
Net income $ 27,842 $ 20,512 $ 87,214 $ 68,914
(1) Includes stock-based compensation expense as follows:
Three Months Ended September 30, Nine Months Ended September 30,
2026 2025 2026 2025
(in thousands)
Cost of revenue
Platform $ 165 $ 246 $ 561 $ 786
Products 24 11 64 26
Total cost of revenue 189 257 625 812
Research and development 2,316 2,636 7,185 9,432
Sales and marketing 1,885 2,149 5,650 8,000
General and administrative 1,590 2,342 4,715 9,278
Total stock-based compensation expense $ 5,980 $ 7,384 $ 18,175 $ 27,522
Comparison of the Three and Nine Months Ended September 30, 2026 and 2025
Revenue
Three Months Ended September 30, Change Nine Months Ended September 30, Change
2026 2025 $ % 2026 2025 $ %
(dollars in thousands)
Revenue:
Platform $ 85,878 $ 82,783 $ 3,095 4 % $ 255,655 $ 243,466 $ 12,189 5 %
Products 102,744 87,654 15,090 17 % 248,723 261,717 (12,994) (5) %
Total revenue $ 188,622 $ 170,437 $ 18,185 11 % $ 504,378 $ 505,183 $ (805) - %
Three Months Ended September 30, 2026 and 2025
Platform revenue increased by $3.1 million, or 4%, to $85.9 million for the three months ended September 30, 2026, from $82.8 million for the three months ended September 30, 2025. The increase was driven by an increase in Paid Subscribers from 3.0 million as of September 30, 2025 to nearly 3.1 million as of September 30, 2026.
Products revenue increased by $15.1 million, or 17%, to $102.7 million for the three months ended September 30, 2026, from $87.7 million for the three months ended September 30, 2025. The increase was primarily driven by higher sales volume from Connected Machines, supported by new product launches.
Nine Months Ended September 30, 2026 and 2025
Platform revenue increased by $12.2 million, or 5%, to $255.7 million for the nine months ended September 30, 2026, from $243.5 million for the nine months ended September 30, 2025. The increase was driven by an increase in Paid Subscribers from 3.0 million as of September 30, 2025 to nearly 3.1 million as of September 30, 2026.
Products revenue decreased by $13.0 million, or 5%, to $248.7 million for the nine months ended September 30, 2026, from $261.7 million for the nine months ended September 30, 2025. The decrease was primarily driven by lower average selling prices from increased promotional activity compared to the prior year.
Cost of Revenue, Gross Profit and Gross Margin
Three Months Ended
September 30, 		Change Nine Months Ended September 30, Change
2026 2025 $ % 2026 2025 $ %
(dollars in thousands)
Cost of Revenue:
Platform $ 8,657 $ 8,957 $ (300) (3) % $ 23,980 $ 26,441 $ (2,461) (9) %
Products 71,087 67,384 3,703 5 % 162,414 184,759 (22,345) (12) %
Total cost of revenue $ 79,744 $ 76,341 $ 3,403 4 % $ 186,394 $ 211,200 $ (24,806) (12) %
Gross Profit:
Platform 77,221 73,826 3,395 5 % 231,675 217,025 14,650 7 %
Products 31,657 20,270 11,387 56 % 86,309 76,958 9,351 12 %
Total gross profit $ 108,878 $ 94,096 $ 14,782 16 % $ 317,984 $ 293,983 $ 24,001 8 %
Gross Margin
Platform 90 % 89 % 91 % 89 %
Products 31 % 23 % 35 % 29 %
Three Months Ended September 30, 2026 and 2025
Platform cost of revenue decreased by $0.3 million, or 3%, to $8.7 million for the three months ended September 30, 2026, from $9.0 million for the three months ended September 30, 2025. The decrease was primarily driven by lower software development costs due to higher capitalization associated with the launch of new machines in 2026.
Gross margin for Platform was 90% for the three months ended September 30, 2026, and 89% for the three months ended September 30, 2025. The increase was primarily driven by lower software development costs due to higher capitalization.
Products cost of revenue increased by $3.7 million, or 5%, to $71.1 million for the three months ended September 30, 2026, from $67.4 million for the three months ended September 30, 2025. The increase was primarily driven by higher Products sales volume.
Gross margin for Products was 31% for the three months ended September 30, 2026 and 23% for the three months ended September 30, 2025. The increase was primarily driven by lower inventory procurement costs and a reduction in net inventory impairment charges.
Nine Months Ended September 30, 2026 and 2025
Platform cost of revenue decreased by $2.5 million, or 9%, to $24.0 million for the nine months ended September 30, 2026, from $26.4 million for the nine months ended September 30, 2025. The decrease was primarily driven by a favorable legal outcome.
Gross margin for Platform was 91% for the nine months ended September 30, 2026, and 89% for the nine months ended September 30, 2025. The increase was primarily driven by a favorable legal outcome.
Products cost of revenue decreased by $22.3 million, or 12%, to $162.4 million for the nine months ended September 30, 2026, from $184.8 million for the nine months ended September 30, 2025. The decrease was primarily driven by IEEPA tariff refunds.
Gross margin for Products was 35% for the nine months ended September 30, 2026 and 29% for the nine months ended September 30, 2025. The increase was primarily driven by IEEPA tariff refunds and lower inventory procurement costs, partially offset by an increase in net inventory impairment charges.
Operating Expenses
Research and Development
Three Months Ended
September 30, 		Change Nine Months Ended September 30, Change
2026 2025 $ % 2026 2025 $ %
(dollars in thousands)
Research and development $ 17,082 $ 16,865 $ 217 1 % $ 50,543 $ 49,284 $ 1,259 3 %
As a percentage of total revenue 9 % 10 % 10 % 10 %
Research and development expenses increased by $0.2 million, or 1%, to $17.1 million for the three months ended September 30, 2026 from $16.9 million for the three months ended September 30, 2025. The increase was primarily due to a $0.6 million increase in personnel related expenses. This was partially offset by a $0.3 million decrease in professional services.
Research and development expenses increased by $1.3 million, or 3%, to $50.5 million for the nine months ended September 30, 2026 from $49.3 million for the nine months ended September 30, 2025. The increase was primarily due to a $1.5 million increase in personnel related expenses and a $0.7 million increase in product development expense. This was partially offset by a $0.6 million decrease in professional services.
Sales and Marketing
Three Months Ended
September 30, 		Change Nine Months Ended September 30, Change
2026 2025 $ % 2026 2025 $ %
(dollars in thousands)
Sales and marketing $ 41,211 $ 37,467 $ 3,744 10 % $ 115,534 $ 110,029 $ 5,505 5 %
As a percentage of total revenue 22 % 22 % 23 % 22 %
Sales and marketing expenses increased by $3.7 million, or 10%, to $41.2 million for the three months ended September 30, 2026 from $37.5 million for the three months ended September 30, 2025. The increase was primarily driven by a $3.8 million increase in advertising and other marketing costs.
Sales and marketing expenses increased by $5.5 million, or 5%, to $115.5 million for the nine months ended September 30, 2026 from $110.0 million for the nine months ended September 30, 2025. The increase was primarily driven by a $6.0 million increase in advertising and other marketing costs and a $1.0 million increase in software subscriptions. This was partially offset by a $1.3 million decrease in payment processing fees.
General and Administrative
Three Months Ended
September 30, 		Change Nine Months Ended September 30, Change
2026 2025 $ % 2026 2025 $ %
(dollars in thousands)
General and administrative $ 16,697 $ 17,113 $ (416) (2) % $ 47,715 $ 52,573 $ (4,858) (9) %
As a percentage of total revenue 9 % 10 % 9 % 10 %
General and administrative expenses decreased by $0.4 million, or 2%, to $16.7 million for the three months ended September 30, 2026 from $17.1 million for the three months ended September 30, 2025. The decrease was
primarily driven by a $0.6 million decrease in professional services expense. This was partially offset by a $0.2 million increase in foreign currency translation.
General and administrative expenses decreased by $4.9 million, or 9%, to $47.7 million for the nine months ended September 30, 2026 from $52.6 million for the nine months ended September 30, 2025. The decrease was primarily driven by a $4.5 million decrease in professional services expense and a $3.1 million decrease in personnel related expenses. This was partially offset by an increase of $1.6 million driven by a reversal of bad debt expense in 2025 and a $1.2 million increase in foreign currency translation.
Other Income
Three Months Ended
September 30, 		Change Nine Months Ended September 30, Change
2026 2025 $ % 2026 2025 $ %
(dollars in thousands)
Other income, net $ 2,484 $ 2,980 $ (496) (17) % $ 7,579 $ 9,998 $ (2,419) (24) %
Other income, net decreased by $0.5 million or 17% to $2.5 million for the three months ended September 30, 2026 from $3.0 million for the three months ended September 30, 2025. The decrease was primarily driven by a decrease in interest income.
Other income, net decreased by $2.4 million or 24% to $7.6 million for the nine months ended September 30, 2026 from $10.0 million for the nine months ended September 30, 2025. The decrease was primarily driven by a decrease in interest income.
Provision for Income Taxes
Three Months Ended
September 30, 		Change Nine Months Ended September 30, Change
2026 2025 $ % 2026 2025 $ %
(dollars in thousands)
Provision for income taxes $ 8,530 $ 5,119 $ 3,411 67 % $ 24,557 $ 23,181 $ 1,376 6 %
Provision for income taxes increased by $3.4 million, or 67%, to $8.5 million for the three months ended September 30, 2026 from $5.1 million for the three months ended September 30, 2025. The increase was primarily due to a $10.7 million increase in pre-tax book income and an increase in stock-based compensation difference attributable to the decrease in stock price upon vesting versus the stock price at the grant date.
Provision for income taxes increased by $1.4 million, or 6%, to $24.6 million for the nine months ended September 30, 2026 from $23.2 million for the nine months ended September 30, 2025. The increase was primarily due to a $19.7 million increase in pre-tax book income.
Liquidity and Capital Resources
Our operations during the periods presented have been financed primarily through cash flow from operating activities. We believe our balances of cash and cash equivalents and marketable securities, which totaled $174.6 million and $98.1 million, respectively, as of September 30, 2026, along with forecasted cash expected to be generated by ongoing operations and $300.0 million in available borrowings and the option to increase the aggregate amount of our New Credit Agreement by up to an additional amount not to exceed the greater of $225.0 million and 1.5 times consolidated EBITDA (see Note 16) will be sufficient to satisfy our cash requirements over the next 12 months and beyond. Except for the semi-annual dividends and our continuing share repurchase program, our cash requirements have not changed materially since our Annual Report.
During the nine months ended September 30, 2026, we paid cash dividends of $42.1 million to holders of Class A and Class B common stock. On October 30, 2026, our Board of Directors approved a special dividend of
$0.70 per share and a recurring semi-annual dividend of $0.10 per share on our Class A and Class B common stock, payable on January 21, 2027 to shareholders of record as of January 7, 2027.
Our future capital requirements may vary materially from those currently planned and will depend on many factors, including our rate of revenue growth, the timing and extent of spending on research and development efforts and other growth initiatives, the expansion of sales and marketing activities, the timing of new product introductions, market acceptance of our products and overall economic conditions, including the impact of regulatory and economic uncertainty, as well as heightened, new, or proposed tariffs. To the extent that current and anticipated future sources of liquidity are insufficient to fund our future business activities and requirements, we may be required to seek additional equity or debt financing. The sale of additional equity would result in additional dilution to our stockholders. The incurrence of debt financing would result in debt service obligations, and the instruments governing such debt could provide for operating and financing covenants that would restrict our operations. There can be no assurances that we will be able to raise additional capital. The inability to raise capital would adversely affect our ability to achieve our business objectives.
Cash Flows
Nine Months Ended September 30,
2026 2025
(in thousands)
Net cash flows provided by operating activities
$ 100,878 $ 117,798
Net cash flows provided by (used in) investing activities (107,323) 67,891
Net cash flows used in financing activities
(75,082) (230,483)
Operating Activities
The change in net cash flows from operating activities for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 is due to a net decrease in operating assets and liabilities of $12.1 million in 2026 compared to a net increase of $34.2 million in 2025, partially offset by higher net income and non-cash items in net income in 2026 compared to 2025.
Investing Activities
The change in net cash flows from investing activities for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 is due to purchases of marketable securities in 2026, lower proceeds from maturities of marketable securities received in 2026 as compared to 2025, and higher purchases of property and equipment, including capitalized software development costs in 2026 compared to 2025.
Financing Activities
The change in net cash flows from financing activities for the nine months ended September 30, 2026 compared to nine months ended September 30, 2025 is due to lower cash dividends and employee tax withholding payments on stock-based awards in 2026 as compared to 2025, partially offset by higher repurchases of common stock in 2026 as compared to 2025.
Critical Accounting Estimates
Our management's discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with United States generally accepted accounting principles ("GAAP"). The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenues and expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. The critical accounting policies that reflect our more significant judgments and estimates used in the preparation of our condensed consolidated financial statements include those described in Note 2 of the notes to our condensed consolidated financial statements in the section titled "Summary of Significant Accounting Policies" in Part I, Item 1 of this Quarterly Report on Form 10-Q and in our Annual Report.
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