Company to Compete in the Venues Category with its Implementation at Rogers ArenaLOUISVILLE, Ky., Oct. 08, 2025 (GLOBE NEWSWIRE) -- Creative Realities, Inc. (NASDAQ: CREX), a leading provider of digital signage and media solutions, announced it has been named a finalist in the Venues category of the 2025 Digital Signage Experience Awards, also known as the DIZZIE. The nomination recognizes CRI’s “Digital Transformation at Rogers Arena” project, which elevated fan engagement, streamlined operations, and unlo ...

LOUISVILLE, Ky., Sept. 08, 2025 (GLOBE NEWSWIRE) -- Creative Realities, Inc. (NASDAQ: CREX) (the “Company” or “CRI”), a leading provider of digital signage, media and AdTech solutions, announced today that it will vigorously defend itself against accusations of patent infringement alleged in a lawsuit filed in Texas federal court by Alpha Modus, Corp., a subsidiary of Alpha Modus Holdings Inc. (AMOD). The lawsuit alleges, in essence, that CRI’s digital signage solutions infringe on AMOD’s patented technolog ...

Financial Data and Key Metrics Changes - The company reported revenue of $13 million for Q2 2025, a 34% increase compared to Q1 and roughly flat year-over-year [6] - Gross profit was $5 million in Q2 2025, down from $6.8 million in Q2 2024, with a gross margin of 39% compared to 52% in the prior year [7] - Adjusted EBITDA rose to $1.2 million for Q2 2025 from $500,000 in Q1, but was down slightly from $1.5 million in the previous year [8] - The annual recurring revenue (ARR) run rate was $18.1 million at the end of Q2 2025, up from $17.3 million at the end of Q1 [7] Business Line Data and Key Metrics Changes - The company experienced a shift in revenue mix towards more hardware sales, impacting profitability due to fewer service revenues [7] - The company is focusing on four primary vertical markets: Quick Service Restaurants (QSR), Convenience Stores (C store), Retail, and Sports & Entertainment [17] Market Data and Key Metrics Changes - The company announced a significant engagement with a well-known upscale quick service restaurant chain with over 1,000 locations, currently in pilot program [10] - The retail media network business is expected to grow revenue and recurring SaaS in 2026 and beyond, with over 25 million ads delivered daily [12] Company Strategy and Development Direction - The company aims to improve drive-thru performance in the QSR vertical, with a new digital display solution priced at $14,999, which is 20% lower than competitors [18] - The company is also expanding its presence in the C store vertical, with plans from a long-time customer, 7-Eleven, to open 1,100 new restaurants [19] - The company is focused on digital transformation and expects to see significant growth in the live venue IPTV market [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in revenue acceleration in the second half of the year, driven by a backlog of installations and new customer engagements [13][30] - The management noted that the transition to digital solutions is creating pressure on businesses, particularly in the QSR sector [34] Other Important Information - The company achieved SOC 2 Type 2 certification, enhancing its credibility with enterprise customers [23] - The company reduced approximately $3.1 million in debt during the quarter, reflecting improved cash flow management [8][15] Q&A Session Summary Question: Update on the progression of deals in the pipeline - Management indicated that deals are moving forward slowly but expects announcements in the calendar year [28] Question: Confidence in revenue and profitability acceleration - Confidence stems from a backlog of installations and new customer engagements, with significant deployments expected soon [30] Question: Pressure on businesses to modernize technology - The most pressure is seen in the QSR drive-thru sector, where digital solutions can significantly improve efficiency [34] Question: Impact of pre-buys of screens on hardware side - Pre-buys may create some pressure on hardware revenue but will lead to increased service revenue in subsequent quarters [52] Question: Updates on 7-Eleven deployments - The company expects to service 1,100 new restaurants and 1,300 enhanced stores over the next five years [55] Question: Importance of Circle K project in Mexico - The Circle K project is a proof of concept, with potential for future deployments in Latin America [67] Question: Acquisition strategy update - The company remains interested in acquisitions but is focused on finding the right fit [72] Question: Expectations for debt reduction - Future debt reduction will depend on cash generation and working capital needs, with no drastic reductions expected [74] Question: Competitors' SOC 2 compliance status - The top competitors have achieved SOC 2 compliance, while many smaller companies have not [80] Question: Breakeven quarter expectations - Management anticipates reaching breakeven as they exit the year, driven by revenue growth and operational efficiency [82]

Creative Realities, Inc. (CREX) came out with quarterly earnings of $0.01 per share, beating the Zacks Consensus Estimate of a loss of $0.03 per share. This compares to a loss of $0.06 per share a year ago. These figures are adjusted for non-recurring items. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Creative Realities, Inc. shares have lost about 2.5% s ...

[FORM 10-Q Filing Information](index=1&type=section&id=FORM%2010-Q) [Registrant Information](index=1&type=section&id=Registrant%20Information) Creative Realities, Inc. is a Minnesota corporation, classified as a non-accelerated filer and a smaller reporting company, with **10,518,932** common shares outstanding as of August 12, 2025 - Creative Realities, Inc. is a **non-accelerated filer** and a **smaller reporting company** Common Stock Outstanding | Date | Shares Outstanding | | :------------- | :----------------- | | August 12, 2025 | 10,518,932 | [PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%201.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents Creative Realities, Inc.'s unaudited condensed consolidated financial statements for the period ended June 30, 2025, detailing financial position, operations, cash flows, equity, and significant accounting policies [Condensed Consolidated Balance Sheets](index=3&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of June 30, 2025, total assets decreased to **$63,653 thousand**, total liabilities decreased to **$34,210 thousand**, and shareholders' equity increased Condensed Consolidated Balance Sheet Key Data (thousands of dollars) | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | | :------------------------- | :----------------------- | :------------- | | **Assets** | | | | Cash and Cash Equivalents | 569 | 1,037 | | Accounts Receivable, Net | 10,569 | 10,605 | | Inventory, Net | 1,055 | 1,995 | | Total Current Assets | 13,114 | 14,496 | | Goodwill | 26,453 | 26,453 | | Other Intangible Assets, Net | 21,692 | 22,841 | | Total Assets | 63,653 | 65,210 | | **Liabilities and Shareholders' Equity** | | | | Accounts Payable | 6,169 | 6,354 | | Deferred Revenue | 1,856 | 1,137 | | Current Contingent Consideration, at Fair Value | - | 12,815 | | Total Current Liabilities | 13,030 | 26,163 | | Revolving Credit Facility | 16,093 | 13,044 | | Long-Term Debt | 3,409 | - | | Total Liabilities | 34,210 | 39,750 | | Total Shareholders' Equity | 29,443 | 25,460 | - As of June 30, 2025, cash and cash equivalents were **$569 thousand**, a **45.1% decrease** from **$1,037 thousand** on December 31, 2024[8](index=8&type=chunk) - As of June 30, 2025, total liabilities were **$34,210 thousand**, a **13.9% decrease** from **$39,750 thousand** on December 31, 2024[8](index=8&type=chunk) [Condensed Consolidated Statements of Operations](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) For the three and six months ended June 30, 2025, sales and gross profit declined, operating loss worsened, but net income for the six-month period turned positive due to a contingent consideration settlement gain Condensed Consolidated Statements of Operations Key Data (thousands of dollars, except per share amounts) | Metric | Q2 2025 | Q2 2024 | Change (QoQ) | YTD 2025 | YTD 2024 | Change (YoY) | | :------------------------- | :------- | :------- | :--------- | :-------- | :-------- | :--------- | | Sales | 13,030 | 13,115 | -0.6% | 22,764 | 25,400 | -10.4% | | Hardware Sales | 7,073 | 5,024 | +40.8% | 10,467 | 9,168 | +14.2% | | Service and Other Sales | 5,957 | 8,091 | -26.4% | 12,297 | 16,232 | -24.3% | | Cost of Sales | 8,013 | 6,327 | +26.6% | 13,294 | 12,848 | +3.5% | | Gross Profit | 5,017 | 6,788 | -26.1% | 9,470 | 12,552 | -24.5% | | Operating (Loss) Income | (1,331) | 592 | -324.8% | (2,053) | 516 | -498.6% | | Gain on Contingent Consideration Settlement | - | - | N/A | (4,775) | - | N/A | | Net (Loss) Income | (1,817) | (615) | -195.4% | 1,551 | (724) | +314.4% | | Basic (Loss) Earnings Per Share | (0.17) | (0.06) | -183.3% | 0.15 | (0.07) | +314.3% | - Q2 2025 sales decreased by **1%** year-over-year, primarily due to a **26% decline** in service and other revenue, despite a **41% increase** in hardware revenue[10](index=10&type=chunk)[119](index=119&type=chunk) - Net income for H1 2025 was **$1,551 thousand**, compared to a net loss of **$724 thousand** in H1 2024, driven by a **$4,775 thousand** contingent consideration settlement gain[10](index=10&type=chunk)[125](index=125&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) For the six months ended June 30, 2025, net cash from operating activities significantly decreased, investing outflows slightly reduced, and financing activities shifted to net inflows due to revolving credit line borrowings and contingent consideration settlement Condensed Consolidated Statements of Cash Flows Key Data (thousands of dollars) | Metric | H1 2025 | H1 2024 | | :------------------------- | :----------- | :----------- | | Net Cash from Operating Activities | 773 | 4,206 | | Net Cash from Investing Activities | (1,264) | (1,495) | | Net Cash from Financing Activities | 23 | (1,535) | | Net Increase (Decrease) in Cash and Cash Equivalents | (468) | 1,176 | | Cash and Cash Equivalents, End of Period | 569 | 4,086 | - Net cash from operating activities for H1 2025 was **$773 thousand**, a significant decrease from **$4,206 thousand** in H1 2024, primarily due to contingent liability settlement gains and depreciation and amortization expenses[13](index=13&type=chunk)[142](index=142&type=chunk) - Net cash from financing activities for H1 2025 was a **$23 thousand** inflow, compared to a **$1,535 thousand** outflow in H1 2024, mainly due to **$3,049 thousand** in net revolving credit line borrowings, partially offset by **$3,000 thousand** paid to former Reflect shareholders[13](index=13&type=chunk)[144](index=144&type=chunk) [Consolidated Statements of Shareholders' Equity](index=6&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20SHAREHOLDERS'%20EQUITY) As of June 30, 2025, total shareholders' equity increased to **$29,443 thousand** from **$25,460 thousand** on December 31, 2024, driven by additional paid-in capital and reduced accumulated deficit from H1 net income Consolidated Statements of Shareholders' Equity Key Data (thousands of dollars, except shares) | Metric | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :------------- | | Common Stock Amount | 105 | 104 | | Additional Paid-in Capital | 84,641 | 82,210 | | Accumulated Deficit | (55,303) | (56,854) | | Total Shareholders' Equity | 29,443 | 25,460 | - Additional paid-in capital increased by **$2,431 thousand** in H1 2025, including **$1,040 thousand** from warrant issuance and **$1,251 thousand** from stock-based compensation[15](index=15&type=chunk) - As of June 30, 2025, the accumulated deficit decreased to **$55,303 thousand** from **$56,854 thousand** on December 31, 2024, reflecting H1 2025 net income[15](index=15&type=chunk) [Note 1: Nature of Organization and Operations](index=7&type=section&id=NOTE%201:%20NATURE%20OF%20ORGANIZATION%20AND%20OPERATIONS) Creative Realities, Inc., a Minnesota corporation, provides digital marketing technology and solutions across the US and internationally, facing significant going concern doubts due to accumulated deficit and reliance on external financing - The company offers innovative digital marketing technology and solutions, including digital merchandising, omnichannel customer engagement, interactive shopping assistants, and kiosks[18](index=18&type=chunk) - As of June 30, 2025, the company had an accumulated deficit of **$55,303 thousand** and positive working capital of **$84 thousand**, but still faces substantial doubt about its ability to continue as a going concern[21](index=21&type=chunk)[22](index=22&type=chunk) - The company relies on improved cash flow, revenue growth, or external financing to meet working capital needs and maturing debt obligations[21](index=21&type=chunk)[22](index=22&type=chunk) [Note 2: Summary of Significant Accounting Policies](index=8&type=section&id=NOTE%202:%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines the company's significant accounting policies for preparing condensed consolidated financial statements, covering GAAP basis, consolidation, recent accounting pronouncements, revenue recognition, and asset valuation - The company's financial statements are prepared in accordance with GAAP and Form 10-Q instructions, consolidating Creative Realities, Inc. and its wholly-owned subsidiaries[24](index=24&type=chunk)[25](index=25&type=chunk) - FASB issued ASU 2023-09 (Income Tax Disclosures) and ASU 2024-03 (Expense Disaggregation), which the company is currently evaluating for financial statement impact[27](index=27&type=chunk)[28](index=28&type=chunk) - The company recognizes revenue using a five-step model under ASC 606, based on contract terms and when customers obtain control of promised goods or services[30](index=30&type=chunk)[33](index=33&type=chunk) Allowance for Credit Losses Activity (thousands of dollars) | Metric | June 30, 2025 | June 30, 2024 | | :------------------- | :------------ | :------------ | | Beginning Balance | 699 | 701 | | Provision Amount | 57 | 130 | | Write-offs | (126) | - | | Ending Balance | 630 | 831 | Inventory Composition (thousands of dollars) | Metric | June 30, 2025 | December 31, 2024 | | :----------- | :------------ | :------------- | | Raw Materials | 667 | 1,465 | | Work-in-Process | 388 | 530 | | Total Inventory | 1,055 | 1,995 | [Note 3: Fair Value Measurement](index=11&type=section&id=NOTE%203:%20FAIR%20VALUE%20MEASUREMENT) The company measures certain financial assets at fair value under ASC 820-10-30 using a three-level hierarchy, with goodwill and identifiable intangible assets valued via discounted cash flow models incorporating unobservable management judgments as Level 3 estimates - Fair value measurements use a three-level hierarchy: Level 1 (quoted prices in active markets), Level 2 (observable inputs), and Level 3 (unobservable inputs)[46](index=46&type=chunk)[47](index=47&type=chunk) - Fair value calculations for identifiable intangible assets and goodwill use discounted cash flow models, with inputs like weighted average cost of capital and future financial performance projections involving management judgment, classified as Level 3 estimates[48](index=48&type=chunk)[49](index=49&type=chunk) [Note 4: Revenue Recognition](index=12&type=section&id=NOTE%204:%20REVENUE%20RECOGNITION) The company recognizes revenue under ASC 606, disaggregating it by major source; hardware sales are recognized upon shipment or customer acceptance, while service revenue is recognized over time or at a point in time based on contract nature and performance obligation completion Revenue Disaggregated by Major Source (thousands of dollars) | Revenue Source | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :----------------- | :------- | :------- | :-------- | :-------- | | Hardware | 7,073 | 5,024 | 10,467 | 9,168 | | Services: | | | | | | Managed Services | 4,484 | 4,847 | 8,731 | 9,621 | | Installation Services | 1,239 | 2,038 | 2,834 | 4,198 | | Other Services | 234 | 1,206 | 732 | 2,413 | | **Total Services** | **5,957**| **8,091**| **12,297**| **16,232**| | **Total Hardware and Services** | **13,030**| **13,115**| **22,764**| **25,400**| - Q2 2025 hardware revenue increased by **40.8%** year-over-year, while service revenue decreased by **26.4%**, primarily due to reduced installation and other service revenue[50](index=50&type=chunk) - Managed services (including SaaS subscription services) revenue decreased by **7%** year-over-year in Q2 2025, mainly due to a single customer insourcing a portion of their hosted environment, reducing software subscription licenses[50](index=50&type=chunk)[119](index=119&type=chunk) [Note 5: Business Combinations](index=14&type=section&id=NOTE%205:%20BUSINESS%20COMBINATIONS) On March 14, 2025, the company settled contingent consideration obligations related to the Reflect merger, paying **$3,000 thousand** cash, issuing **$4,000 thousand** in subordinated promissory notes, and **$1,040 thousand** in warrants to former Reflect shareholders, recognizing a **$4,775 thousand** settlement gain - On March 14, 2025, the company settled contingent consideration obligations from the Reflect merger, terminating and releasing **$12,815 thousand** in contingent consideration liabilities[64](index=64&type=chunk)[65](index=65&type=chunk) - As settlement consideration, the company paid **$3,000 thousand** in cash, issued **$4,000 thousand** in promissory notes, and issued warrants with a fair value of **$1,040 thousand**[64](index=64&type=chunk)[65](index=65&type=chunk) - The company recognized a **$4,775 thousand** gain on the settlement of contingent consideration for the six months ended June 30, 2025[65](index=65&type=chunk) [Note 6: Supplemental Cash Flow Statement Information](index=15&type=section&id=NOTE%206:%20SUPPLEMENTAL%20CASH%20FLOW%20STATEMENT%20INFORMATION) This note provides supplemental non-cash investing and financing activities for the six months ended June 30, 2025 and 2024, along with cash paid for interest, operating leases, and income taxes Supplemental Non-Cash Investing and Financing Activities (thousands of dollars) | Metric | H1 2025 | H1 2024 | | :------------------------------------- | :----------- | :----------- | | Capitalized Software in Accounts Payable | 65 | 65 | | Property and Equipment in Accounts Payable | 24 | - | | Right-of-Use Assets Obtained from New Operating Lease Liabilities | 1,509 | - | | Term Notes Issued as Partial Settlement of Contingent Consideration | 4,000 | - | | Warrants Issued as Partial Settlement of Contingent Consideration | 1,040 | - | Cash Paid During the Period (thousands of dollars) | Metric | H1 2025 | H1 2024 | | :--------- | :----------- | :----------- | | Interest | 748 | 601 | | Operating Leases | 269 | 306 | | Income Taxes, Net | 53 | 44 | [Note 7: Intangible Assets, Including Goodwill](index=15&type=section&id=NOTE%207:%20INTANGIBLE%20ASSETS,%20INCLUDING%20GOODWILL) This note details the company's intangible asset composition, amortization, and goodwill impairment testing methods; as of June 30, 2025, net intangible assets were **$21,692 thousand**, with no goodwill impairment found in Q1 2025 quantitative testing Intangible Asset Composition (thousands of dollars) | Intangible Asset Class | Net Carrying Value June 30, 2025 | Net Carrying Value December 31, 2024 | | :--------------- | :---------------------- | :----------------------- | | Technology Platform | 3,676 | 4,099 | | Purchased and Developed Software | 8,791 | 8,774 | | Customer Relationships | 8,913 | 9,560 | | Trademarks and Trade Names | 312 | 408 | | **Total** | **21,692** | **22,841** | - As of June 30, 2025, goodwill carrying value was **$26,453 thousand**, consistent with December 31, 2024[8](index=8&type=chunk) - In Q1 2025, due to sustained stock price decline and market capitalization below reporting unit carrying value, the company performed a quantitative goodwill impairment test, concluding fair value exceeded carrying value, thus no impairment charge was recorded[73](index=73&type=chunk) [Note 8: Debt](index=16&type=section&id=NOTE%208:%20DEBT) This note details the company's debt, including a revolving credit facility and promissory notes; as of June 30, 2025, net total debt was **$19,901 thousand**, with the credit facility revised and promissory notes issued at **14%** interest as part of a contingent consideration settlement Debt Composition (thousands of dollars) | Debt Instrument | June 30, 2025 | December 31, 2024 | | :----------------- | :------------ | :------------- | | Revolving Credit Facility | 16,093 | 13,044 | | Promissory Notes | 4,000 | - | | **Total Debt (Gross)** | **20,093** | **13,044** | | Less: Deferred Financing Costs | 192 | 243 | | **Total Debt (Net)** | **19,901** | **12,801** | | Less: Current Portion | 591 | - | | **Total Long-Term Debt (Net)** | **19,310** | **12,801** | - The revolving credit facility, executed on May 23, 2024, provides a **$22,100 thousand** secured revolving credit line maturing May 23, 2025, with **$16,093 thousand** outstanding and **$6,007 thousand** available as of June 30, 2025[77](index=77&type=chunk)[81](index=81&type=chunk) - Promissory notes totaling **$4,000 thousand** were issued on March 14, 2025, bearing a fixed annual interest rate of **14.0%**, maturing September 14, 2027, with a final balloon payment of **$2,277 thousand** due at maturity[83](index=83&type=chunk) [Note 9: Commitments and Contingencies](index=18&type=section&id=NOTE%209:%20COMMITMENTS%20AND%20CONTINGENCIES) As of the end of the reporting period, the company was not involved in any material legal proceedings or other significant commitments and contingencies - The company is not involved in any material legal proceedings, only routine litigation incidental to its business[85](index=85&type=chunk) [Note 10: Income Taxes](index=18&type=section&id=NOTE%2010:%20INCOME%20TAXES) The company's deferred tax assets, primarily from federal and state NOLs, are fully offset by a valuation allowance due to IRC Section 382 limitations and historical losses; Q2 2025 reported a **$26 thousand** tax benefit versus a **$25 thousand** tax expense in Q2 2024 - The company has significant NOLs, but their utilization is limited by IRC Section 382, and a full valuation allowance has been recorded against net deferred tax assets[86](index=86&type=chunk) Income Tax Benefit (Expense) (thousands of dollars) | Period | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :------------- | :------- | :------- | :-------- | :-------- | | Income Tax Benefit (Expense) | 26 | (25) | (73) | (34) | [Note 11: Warrants](index=18&type=section&id=NOTE%2011:%20WARRANTS) As of June 30, 2025, the company had **5,364,802** warrants classified as equity instruments with a weighted average exercise price of **$4.66**; **777,800** settlement warrants were issued to former Reflect shareholders on March 14, 2025, with an exercise price of **$3.25** per share and a fair value of **$1.34** per share as part of a contingent consideration settlement Warrant Overview | Metric | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :------------- | | Number of Warrants | 5,364,802 | 4,587,002 | | Weighted Average Exercise Price | $4.66 | $4.90 | | Weighted Average Remaining Contractual Term (Years) | 3.06 | 3.11 | - The company issued **777,800** settlement warrants with an exercise price of **$3.25** per share and an issuance date fair value of **$1.34** per share, estimated using the Black-Scholes option pricing model[89](index=89&type=chunk)[151](index=151&type=chunk) [Note 12: Stock-Based Compensation](index=19&type=section&id=NOTE%2012:%20STOCK-BASED%20COMPENSATION) This note summarizes outstanding options under the company's stock-based compensation plans, including time-vesting, performance-

[Executive Summary & Highlights](index=1&type=section&id=FOR%20IMMEDIATE%20RELEASE) [Key Financial Highlights](index=1&type=section&id=Highlights) Q2 2025 total revenue was **$13.0 million**, a slight year-over-year decrease but a sequential increase from Q1, with gross profit and Adjusted EBITDA declining, while Annual Recurring Revenue (ARR) showed sequential growth | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :----- | :------ | :------ | :----------- | | Revenue | $13.0M | $13.1M | -0.8% | | Gross Profit | $5.0M | $6.8M | -26.5% | | Adjusted EBITDA | $1.2M | $1.5M | -20.0% | | ARR (end of quarter) | $18.1M | $17.3M (Q1 2025) | +4.6% (QoQ) | [CEO's Outlook and Strategic Focus](index=1&type=section&id=Management%20Commentary) CEO Rick Mills anticipates a strong H2 2025 with accelerating top-line growth, expanding gross margins, and improved bottom-line results for 2026 and beyond, emphasizing debt reduction and a stronger balance sheet - Anticipated pickup in business with even **stronger performance in the second half of fiscal 2025**[3](index=3&type=chunk) - Commitment to an **improved balance sheet** to provide financial flexibility, support growth, and reduce interest expense[3](index=3&type=chunk) - Expect **top line growth to accelerate** and **gross margins to expand** due to improved product mix and increased service revenue[3](index=3&type=chunk) [Detailed Second Quarter Financial Performance](index=1&type=section&id=2025%20Second%20Quarter%20Financial%20Results) [Revenue Breakdown by Segment](index=1&type=section&id=Revenue%20Analysis) Total sales for Q2 2025 were **$13.0 million**, a slight decrease from **$13.1 million** in Q2 2024, driven by a significant increase in hardware revenue to **$7.1 million** due to anticipated tariffs, offset by a decrease in service revenue to **$6.0 million** from reduced SaaS subscriptions and media sales exit | Revenue Segment | Q2 2025 (in millions) | Q2 2024 (in millions) | YoY Change | | :-------------- | :-------------------- | :-------------------- | :--------- | | Hardware | $7.1 | $5.0 | +42.0% | | Services | $6.0 | $8.1 | -25.9% | | Total Sales | $13.0 | $13.1 | -0.8% | - Hardware revenue increase primarily due to purchases from QSR and sports/entertainment verticals, reflecting hardware bought in advance of scheduled deployments later in 2025, due to pricing uncertainty of potential tariffs[4](index=4&type=chunk) - Service revenue decrease primarily due to a reduction in SaaS subscription services and the Company's prior exit from media sales effective October 1, 2024[4](index=4&type=chunk) [Gross Profit and Margin Performance](index=1&type=section&id=Gross%20Profit%20and%20Margin%20Analysis) Consolidated gross profit for Q2 2025 was **$5.0 million**, down from **$6.8 million** in Q2 2024, resulting in a consolidated gross margin of **38.5%**, with hardware and service gross margins also declining due to product mix and reduced SaaS subscriptions, ending with an ARR run-rate of approximately **$18.1 million** | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :----- | :------ | :------ | :----------- | | Consolidated Gross Profit | $5.0M | $6.8M | -26.5% | | Consolidated Gross Margin | 38.5% | 51.8% | -13.3 pp | | Hardware Gross Margin | 25.1% | 30.1% | -5.0 pp | | Service Gross Margin | 54.4% | 65.2% | -10.8 pp | - Gross margin on hardware revenue primarily reflected product mix[5](index=5&type=chunk) - Gross margin on service primarily due to a reduction in SaaS subscription services and the Company's prior exit from media sales[5](index=5&type=chunk) - Annual Recurring Revenue (ARR) run-rate of approximately **$18.1 million** at the end of Q2 2025[5](index=5&type=chunk)[9](index=9&type=chunk) [Sales, Marketing, and G&A Expenses](index=1&type=section&id=Operating%20Expenses) Sales and marketing expenses decreased to **$1.2 million** in Q2 2025 from **$1.7 million** in the prior-year period, while general and administrative expenses rose to **$5.2 million** from **$4.5 million**, though excluding stock-based compensation, G&A expenses decreased by **$678 thousand** due to cost containment efforts | Expense Category | Q2 2025 (in millions) | Q2 2024 (in millions) | YoY Change | | :--------------- | :-------------------- | :-------------------- | :--------- | | Sales and Marketing | $1.2 | $1.7 | -29.4% | | General and Administrative | $5.2 | $4.5 | +15.6% | - General and administrative expenses decreased by **$678 thousand**, excluding stock-based compensation, reflecting cost containment efforts[6](index=6&type=chunk) [Operating and Net Income/Loss](index=1&type=section&id=Operating%20and%20Net%20Loss) The company reported an operating loss of approximately **$1.3 million** in Q2 2025, a significant decline from an operating profit of **$0.6 million** in Q2 2024, leading to a net loss of **$1.8 million**, or **$(0.17)** per diluted share, compared to a net loss of **$0.6 million**, or **$(0.06)** per diluted share, in the prior-year period | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | YoY Change | | :----- | :-------------------- | :-------------------- | :--------- | | Operating (Loss) Income | $(1.3) | $0.6 | N/A | | Net (Loss) Income | $(1.8) | $0.6 | N/A | | Diluted EPS | $(0.17) | $(0.06) | N/A | [Adjusted EBITDA Performance](index=1&type=section&id=Adjusted%20EBITDA) Adjusted EBITDA for Q2 2025 was **$1.2 million**, a decrease from **$1.5 million** in the prior-year period | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | YoY Change | | :----- | :-------------------- | :-------------------- | :--------- | | Adjusted EBITDA | $1.2 | $1.5 | -20.0% | [Balance Sheet Overview](index=2&type=section&id=Balance%20Sheet) [Balance Sheet Highlights](index=2&type=section&id=Balance%20Sheet%20Highlights) As of June 30, 2025, cash on hand decreased to **$0.6 million** from **$1.0 million** at year-end 2024, while outstanding debt significantly increased to **$20.1 million** from **$13.0 million**, primarily due to contingent consideration settlement, leading to higher leverage ratios | Metric | June 30, 2025 (in millions) | Dec 31, 2024 (in millions) | Change | | :----- | :-------------------------- | :------------------------- | :----- | | Cash on Hand | $0.6 | $1.0 | -$0.4M | | Outstanding Debt | $20.1 | $13.0 | +$7.1M | | Gross Leverage Ratio (TTM Adj. EBITDA) | 4.53x | 2.59x | +1.94x | | Net Leverage Ratio (TTM Adj. EBITDA) | 4.40x | 2.39x | +2.01x | - Increase in outstanding debt primarily reflects the settlement of the contingent consideration liability[10](index=10&type=chunk) [Conference Call Information](index=2&type=section&id=Conference%20Call%20Details) [Investor Conference Call Details](index=2&type=section&id=Investor%20Conference%20Call%20Details) Creative Realities hosted a conference call on August 13, 2025, at 9:00 am Eastern Time to discuss Q2 2025 results and provide additional commentary, featuring CEO Rick Mills, CSO George Sautter, and Interim CFO Ryan Mudd, with registration available online - Conference call held on August 13, 2025, at 9:00 am ET to review Q2 2025 results and provide commentary[11](index=11&type=chunk) - Participants included CEO Rick Mills, CSO George Sautter, and Interim CFO Ryan Mudd[11](index=11&type=chunk) - Registration and webcast details provided via a specific link, with an archived edition available on the company's website[12](index=12&type=chunk) [Non-GAAP Financial Measures](index=2&type=section&id=Use%20of%20Non-GAAP%20Measures) [Definition and Rationale](index=2&type=section&id=Definition%20and%20Rationale) Creative Realities uses non-GAAP measures like EBITDA and Adjusted EBITDA to provide additional insights into its operating performance, believing they offer a more complete understanding when coupled with GAAP results, excluding items such as interest, income taxes, depreciation, amortization, stock-based compensation, and fair value adjustments - EBITDA is defined as earnings before interest, income taxes, depreciation, and amortization of intangibles[13](index=13&type=chunk)[24](index=24&type=chunk) - Adjusted EBITDA further excludes stock-based compensation, fair value adjustments, and both cash and non-cash non-recurring gains and charges[13](index=13&type=chunk)[24](index=24&type=chunk) - Non-GAAP measures are used internally for planning and evaluation and are believed to offer investors a more complete view of operations, but should not be considered alternatives to GAAP measures[13](index=13&type=chunk)[25](index=25&type=chunk) [Adjusted EBITDA Reconciliation](index=7&type=section&id=RECONCILIATION%20OF%20GAAP%20NET%20LOSS%20TO%20ADJUSTED%20EBITDA) The reconciliation table details adjustments made to GAAP net loss to arrive at EBITDA and Adjusted EBITDA for various quarters, including Q2 2025, where a GAAP net loss of **$(1,817) thousand** was adjusted to reach an Adjusted EBITDA of **$1,228 thousand** | Metric | Q2 2025 (in thousands) | Q1 2025 (in thousands) | Q2 2024 (in thousands) | | :----- | :--------------------- | :--------------------- | :--------------------- | | GAAP Net (Loss) Income | $(1,817) | $3,368 | $(615) | | Interest expense | $513 | $321 | $304 | | Amortization of intangible assets | $1,165 | $1,136 | $878 | | Amortization of employee share-based awards | $1,249 | $2 | $3 | | Depreciation of property & equipment | $52 | $51 | $52 | | Income tax (benefit) expense | $(26) | $99 | $25 | | **EBITDA** | **$1,136** | **$4,977** | **$856** | | Adjustments (e.g., stock-based comp - Director grants) | $93 | $0 | $0 | | **Adjusted EBITDA** | **$1,228** | **$467** | **$1,525** | [Company Overview](index=2&type=section&id=About%20Creative%20Realities%2C%20Inc.) [Business Description](index=2&type=section&id=Business%20Description) Creative Realities, Inc. specializes in designing, developing, and deploying digital signage-based experiences for enterprise-level networks, providing recurring SaaS and support services across diverse markets like retail, automotive, QSR, and entertainment, utilizing its CMS and programmatic advertising platforms to help clients achieve business objectives - Designs, develops, and deploys digital signage-based experiences for enterprise-level networks[14](index=14&type=chunk) - Provides recurring SaaS and support services across diverse vertical markets including retail, automotive, DOOH, QSR, gaming, theater, and stadium venues[14](index=14&type=chunk) - Utilizes CMS platforms (Clarity™, ReflectView™, iShowroom™) and programmatic advertising platforms (AdLogic™, AdLogic CPM+™) to monetize on-premise foot traffic[14](index=14&type=chunk) [Legal & Investor Information](index=3&type=section&id=Cautionary%20Note%20on%20Forward-Looking%20Statements) [Forward-Looking Statements Disclaimer](index=3&type=section&id=Cautionary%20Note%20on%20Forward-Looking%20Statements) This section serves as a disclaimer regarding forward-looking statements, which are based on management's opinions and beliefs and are subject to known and unknown risks and uncertainties, cautioning readers not to place undue reliance on these statements, and the company assumes no obligation to update or revise them, except as required by law, with key risks discussed in SEC filings - Forward-looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties, assumptions, and other factors[15](index=15&type=chunk) - Readers should not place undue reliance upon any forward-looking statements, and the company assumes no obligation to update them except as required by law[15](index=15&type=chunk) - Important factors affecting actual results are discussed in the 'Risk Factors' section of the Annual Report on Form 10-K for 2024 and Quarterly Report on Form 10-Q for Q1 2025[15](index=15&type=chunk) [Media and Investor Relations Contacts](index=3&type=section&id=Contacts) Provides contact information for media inquiries (Christina Davies) and investor relations (Chris Witty), including email addresses, phone number, and the investor relations website - Media Contact: Christina Davies (cdavies@ideagrove.com)[16](index=16&type=chunk) - Investor Relations Contact: Chris Witty (cwitty@darrowir.com, 646-438-9385, ir@cri.com, https://investors.cri.com/)[16](index=16&type=chunk) [Condensed Consolidated Financial Statements](index=4&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Balance Sheets](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of June 30, 2025, total assets were **$63.7 million**, a decrease from **$65.2 million** at December 31, 2024, with current assets decreasing, total liabilities decreasing to **$34.2 million** from **$39.8 million** due to contingent consideration settlement, and shareholders' equity increasing to **$29.4 million** from **$25.5 million** | Balance Sheet Item (in thousands) | June 30, 2025 | Dec 31, 2024 | Change | | :------------------------------ | :------------ | :----------- | :----- | | Cash and cash equivalents | $569 | $1,037 | $(468) | | Total Current Assets | $13,114 | $14,496 | $(1,382) | | Total Assets | $63,653 | $65,210 | $(1,557) | | Short-term contingent consideration | $0 | $12,815 | $(12,815) | | Revolving credit facility | $16,093 | $13,044 | $3,049 | | Long-term debt | $3,409 | $0 | $3,409 | | Total Liabilities | $34,210 | $39,750 | $(5,540) | | Total Shareholders' Equity | $29,443 | $25,460 | $3,983 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) For Q2 2025, total sales were **$13.0 million**, with hardware sales up **40.8%** and services down **26.3%**, resulting in a **$5.0 million** gross profit and **$1.3 million** operating loss, leading to a **$1.8 million** net loss or **$(0.17)** diluted EPS, while the six-month period reported **$1.6 million** net income or **$0.15** diluted EPS, primarily due to a significant gain on contingent consideration settlement | Metric (in thousands) | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :-------------------- | :------ | :------ | :------ | :------ | | Total Sales | $13,030 | $13,115 | $22,764 | $25,400 | | Gross Profit | $5,017 | $6,788 | $9,470 | $12,552 | | Operating (Loss) Income | $(1,331) | $592 | $(2,053) | $516 | | Gain on settlement of contingent consideration | $0 | $0 | $(4,775) | $0 | | Net (Loss) Income | $(1,817) | $(615) | $1,551 | $(724) | | Diluted EPS | $(0.17) | $(0.06) | $0.15 | $(0.07) | - Six-month net income of **$1.551 million** in 2025 was significantly influenced by a **$4.775 million** gain on settlement of contingent consideration[20](index=20&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) For the six months ended June 30, 2025, net cash provided by operating activities was **$0.773 million**, a decrease from **$4.206 million** in the prior year, with investing activities using **$1.264 million** and financing activities providing **$0.023 million**, resulting in an overall decrease in cash and cash equivalents by **$0.468 million**, ending the period at **$0.569 million** | Cash Flow Activity (in thousands) | 6M 2025 | 6M 2024 | | :------------------------------ | :------ | :------ | | Net cash provided by operating activities | $773 | $4,206 | | Net cash used in investing activities | $(1,264) | $(1,495) | | Net cash provided by (used in) financing activities | $23 | $(1,535) | | Increase (decrease) in cash and cash equivalents | $(468) | $1,176 | | Cash and cash equivalents, end of period | $569 | $4,086 | - Operating cash flow decreased significantly year-over-year, despite a positive net income for the six-month period in 2025[22](index=22&type=chunk) - Financing activities included **$18.3 million** in proceeds from revolving credit facility and **$15.3 million** in repayments, alongside a **$3.0 million** settlement of contingent consideration[22](index=22&type=chunk)

Core Viewpoint - Creative Realities, Inc. reported a revenue growth of 34% sequentially in the second quarter of fiscal 2025, with expectations for stronger performance in the second half of the year, aiming for record results in 2025 [3][4]. Financial Performance - Sales for the second quarter of fiscal 2025 were $13.0 million, slightly down from $13.1 million in the same period of fiscal 2024 [4][8]. - Hardware revenue increased to $7.1 million from $5.0 million year-over-year, driven by demand from quick-serve restaurants and sports/entertainment sectors [4][8]. - Service revenue decreased to $6.0 million from $8.1 million, attributed to a reduction in SaaS subscriptions and the exit from media sales [4][5]. Profitability Metrics - Consolidated gross profit was $5.0 million, down from $6.8 million in the prior-year period, with a gross margin of 38.5% compared to 51.8% [5][8]. - Adjusted EBITDA for the second quarter was $1.2 million, down from $1.5 million in the prior-year period [9][8]. Operating Expenses - Sales and marketing expenses decreased to $1.2 million from $1.7 million, while general and administrative expenses rose to $5.2 million from $4.5 million [6][8]. - The company reported an operating loss of approximately $1.3 million, compared to an operating profit of $0.6 million in the same quarter of the previous year [7][8]. Balance Sheet and Cash Flow - As of June 30, 2025, the company had cash on hand of approximately $0.6 million, down from $1.0 million at the end of 2024, with outstanding debt increasing to $20.1 million from $13.0 million [10][8]. - The trailing twelve-month gross and net leverage ratios were 4.53x and 4.40x, respectively, compared to 2.59x and 2.39x at the beginning of 2025 [10][8]. Annual Recurring Revenue - The company ended the second quarter with an annual recurring revenue (ARR) run-rate of approximately $18.1 million, up from $17.3 million as of March 31, 2025 [5][8].

Core Viewpoint - Creative Realities (CREX) is set to release its second-quarter 2025 results on August 13, with expected revenues of $12.1 million, reflecting a year-over-year decline of 7.48% [1][7]. Financial Performance - The Zacks Consensus Estimate for CREX's second-quarter loss is projected at 3 cents per share, an improvement from the previous year's loss of 6 cents per share [1]. - CREX has beaten the Zacks Consensus Estimate for earnings in three of the last four quarters, with an average surprise of 86.56% [2]. Operational Insights - The second-quarter performance is anticipated to be influenced by a larger project pipeline and expanded operational capacity, following an agreement with a quick-service restaurant chain for over 1,000 locations across 25 states [3]. - Preparatory work for this contract, including procurement and site readiness, may have contributed to revenue and improved backlog visibility [3]. - The company achieved SOC 2 Type 1 compliance in the first quarter, which is expected to enhance its appeal to enterprise clients [3]. Challenges - The first quarter saw a net income of $3.4 million, which included a one-time gain of $4.8 million from settling a contingent consideration liability, masking underlying operational pressures [4]. - Total debt increased to $23.2 million from $13 million at the beginning of the year, indicating elevated leverage ratios and ongoing liquidity concerns [4]. - Deployment delays on three large projects in the first quarter may impact the pace of project execution and overall second-quarter performance [4]. Earnings Expectations - According to the Zacks model, CREX currently has an Earnings ESP of 0.00% and a Zacks Rank of 3 (Hold), indicating a lower likelihood of an earnings beat [5].

Core Insights - Creative Realities, Inc. has successfully deployed a proof-of-concept digital signage system at Circle K Mexico, which includes four promotional screens showcasing localized content aimed at enhancing customer engagement and reducing environmental impact [1][2][3] Company Overview - Creative Realities is a leading provider of digital signage and media solutions, actively expanding into the Latin American market, with a focus on sustainability and customer engagement [2][6] - The company offers a range of services including hardware, content management software, network strategy, and technical assistance for digital signage deployments [4][6] Environmental Impact - The initiative at Circle K Mexico reduces reliance on printed signs, supporting sustainability goals by cutting costs and significantly decreasing paper and plastic waste [3][4] - The deployment is expected to create a more engaging shopping experience while reducing the store's environmental footprint [4] Sales and Expansion Potential - Circle K Mexico anticipates a significant sales lift and cost savings from the digital signage initiative, with plans to expand the pilot to five additional stores and potentially up to 200 stores nationwide [5] - The digital signage system allows for tracking sales behavior and linking campaign performance directly to results on the shelf, enhancing the effectiveness of promotions [3][5] Industry Transformation - The deployment of digital signage at Circle K Mexico is seen as a transformative moment for convenience retail across Latin America, positioning Circle K as a leader in digital-first retail [4][6] - The initiative exemplifies how innovation and sustainability can drive business growth and environmental responsibility [6]

Core Viewpoint - Creative Realities, Inc. is set to release its financial results for the second quarter of 2025 on August 13, 2025, with a conference call scheduled for the same day to discuss the results [1]. Company Overview - Creative Realities, Inc. specializes in designing, developing, and deploying digital signage solutions for enterprise-level networks, utilizing platforms such as Clarity, ReflectView, and iShowroom Content Management System (CMS) [3]. - The company provides recurring SaaS and support services across various sectors, including retail, automotive, digital-out-of-home advertising, convenience stores, foodservice, gaming, theater, and stadium venues [3]. - Creative Realities assists clients in leveraging place-based digital media to achieve business goals, such as increasing revenue and enhancing customer experiences, through its AdLogic and AdLogic CPM+ programmatic advertising platforms [3]. Upcoming Events - A conference call to review the financial results will be hosted by key executives, including the Chairman and CEO, Chief Strategy Officer, and Interim CFO [1]. - Participants are required to register for the call in advance, and an archived version will be available on the company's website for one year following the event [2].