gorodenkoff/iStock via Getty Images Creative Realities (NASDAQ:CREX) is relatively cheap, poised for impressive growth in 2024, and possesses good operating leverage. In this article, I'll introduce the company briefly, but spend more time discussing why I think the business will do well in Q4 and 2024. Introduction CREX's business revolves around deploying and managing screens for enterprises. It includes the sale of the hardware, installation, software development, managing the content (SaaS), maintenance ...

Creative Realities, Inc. (NASDAQ:CREX) Q3 2023 Earnings Conference Call November 10, 2023 9:00 AM ET Company Participants William Logan - CFO Richard Mills - CEO Conference Call Participants Brian Kinstlinger - Alliance Global Partners Howard Halpern - Taglich Brothers John Roy - Water Tower Research Operator Good morning. At this time, I would like to welcome everyone to the Third Quarter 2023 Creative Realities, Inc. Earnings Conference Call. This call will be recorded and a copy will be available on the ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ Commission File Number 001-33169 Creative Realities, Inc. (Exact Name of Registrant as Specified in its Charter) | Minnesota | ...

Creative Realities, Inc. (NASDAQ:CREX) Q2 2023 Earnings Conference Call August 4, 2023 9:00 AM ET Company Participants William Logan - CFO Richard Mills - CEO Conference Call Participants Brian Kinstlinger - Alliance Global Partners Howard Halpern - Taglich Brothers Operator Good morning. At this time, I would like to welcome everyone to the Second Quarter 2023 Creative Realities, Inc. Earnings Conference Call. This call will be recorded and a copy will be available on the company's website at cri.com follo ...

The Credit Agreement also provides that the Company's outstanding loans from Slipstream at December 31, 2021, consisting of its pre-existing $4,767 senior secured term loan and $2,418 secured convertible loan, with an aggregate of $7,185 in outstanding principal and accrued and unpaid interest under such loans, were consolidated into a term loan (the "Consolidation Term Loan"). The Consolidation Term Loan has an interest rate of 10.0%, with 75.0% warrant coverage (or 898,165 warrants). On the first day of e ...

Financial Data and Key Metrics Changes - The company's Q1 2023 revenue was $9.9 million, with a gross profit of $5.1 million and adjusted EBITDA of $960,000, marking a record for the first quarter [11] - Although revenue decreased by $800,000 compared to the same period in 2022, gross profit and adjusted EBITDA increased by over $1 million and $300,000 respectively, primarily due to a $1.3 million increase in services revenue [13] - The company reaffirmed its full-year 2023 guidance of $60 million in revenue and a 15% adjusted EBITDA margin, with a backlog of approximately $110 million [14][42] Business Line Data and Key Metrics Changes - The revenue mix is driving gross profit and adjusted EBITDA, with a significant increase in services revenue contributing to overall profitability [13] - The company expects its quarterly revenue to double from Q3 2023 onwards, driven by existing customer engagements and new contracts [22] Market Data and Key Metrics Changes - The company has seen a significant increase in outreach to fast-casual brands, with a focus on drive-thru solutions, indicating a growing market demand [35] - The company has a win rate exceeding 80% on a dollar value basis for RFPs since the beginning of 2022, reflecting strong market positioning [38] Company Strategy and Development Direction - The company is positioned to exploit growth opportunities in the digital signage industry, with a focus on expanding annual recurring revenue (ARR) to drive profitability [18][23] - The management team is optimistic about the transformational potential for profit in the coming years, particularly as they capitalize on expanding revenue streams [20] Management's Comments on Operating Environment and Future Outlook - Management anticipates a material increase in revenue and profitability starting in Q3 2023, with expectations of a significant step-up in performance [21][66] - The company has navigated supply chain issues effectively, ensuring that production rollouts are not hindered [65][67] Other Important Information - The company executed a 1:3 reverse stock split to comply with NASDAQ minimum bid rules, resulting in 7.4 million common shares outstanding [26] - The company received an updated offer from Pegasus Capital Advisors to acquire all outstanding shares at $2.85 per share, which is currently under evaluation by the Board of Directors [27] Q&A Session Summary Question: Market dynamics for drive-thru products - The company has significantly increased outreach and added sales assets, engaging with fast-growing QSR drive-thrus [35] Question: Economic challenges and deployment plans - Customers are concerned about cash outlay, but the ROI on digital investments is typically less than 12 months [46] Question: Status of the bowling contract - Contracts are executed, and significant deployments are expected to begin in July, potentially generating $1.5 million in additional revenue per month [51] Question: Cash conversion from EBITDA to cash flow - The company expects 70% of EBITDA to convert into cash as they move past the current investment period [55] Question: Sales mix between hardware and services - The company anticipates a 50/50 split between hardware and services in the current year, with a shift towards more services as they scale [71]

Financial Performance - For the three months ended March 31, 2023, sales were $9,944,000, a decrease of 8% compared to $10,757,000 in the same period of 2022[152] - Gross profit increased by 31% to $5,089,000 from $3,892,000 year-over-year[152] - Operating loss improved by 91%, decreasing to $(90,000) from $(1,014,000) in the prior year[152] - Net loss for the period was $(1,000,000), a 140% increase compared to a net income of $2,502,000 in the same quarter of 2022[152] - Sales for the three months ended March 31, 2023, were $9,944 million, a decrease of $813 million or 8% compared to the same period in 2022[154] - Hardware revenues decreased by $2,137 million or 33% year-over-year, while services and other revenues increased by $1,324 million or 31%[154] - Managed services revenue grew by 51% year-over-year, reaching $4,072 million, driven by expansion in SaaS revenue and full inclusion of Reflect revenue[154] - Gross profit increased by $1,197 million or 31%, with a gross profit margin rising to 51.2% from 36.2% year-over-year[156] Expenses - The company reported a 29% reduction in cost of sales, decreasing from $6,865,000 to $4,855,000[152] - Sales and marketing expenses increased by 61% to $1,136,000 from $707,000 year-over-year[152] - Research and development expenses rose by 52% to $366,000 compared to $241,000 in the previous year[152] - Sales and marketing expenses increased by $429 million or 61%, primarily due to the acquisition of Reflect and enhanced investments in sales and marketing activities[157] - Research and development expenses rose by $125 million or 52%, driven by the completion of the Reflect Merger and the integration of development teams[158] Cash Flow - Cash provided by operating activities was $3,868 million for the three months ended March 31, 2023, compared to $1,201 million for the same period in 2022[169] - Net cash used in investing activities was $1,034 million, significantly lower than $17,969 million in the same period in 2022 due to the completion of the Merger[170] - Net cash used in financing activities was ($562) million, a change from net cash provided of $19,873 million in the same period in 2022[171] Corporate Actions - The company executed a 1-for-3 reverse stock split effective March 27, 2023, reducing the total number of authorized shares from 200,000,000 to 66,666,666[144][145] - The company received an unsolicited acquisition proposal from Pegasus Capital Advisors at a price of $2.85 per share, which is currently under review by the Special Committee[148] Future Outlook - Recurring subscription licensing and support revenue is expected to grow continuously as digital signage adoption expands across various vertical markets[141] - The company anticipates continued elevated capital expenditures through the third quarter of 2023 for the modernization and internationalization of its automotive platform[170]

Creative Realities, Inc. (NASDAQ:CREX) Q4 2022 Earnings Conference Call March 30, 2023 9:00 AM ET Company Participants Will Logan - CFO Rick Mills - CEO Conference Call Participants Brian Kinstlinger - Alliance Global Partners Howard Halpern - Taglich Brothers Operator Good morning. At this time, I would like to welcome everyone to the Creative Realities Incorporated 2022 Year-end Earnings Conference Call. This call will be recorded and a copy will be available on the company's website at CRI.com following ...

Revenue Growth and Sources - The company reported continuous growth in recurring SaaS revenue as digital signage adoption expands across various vertical markets [154]. - The company’s revenue sources include services revenue from digital signage network management and hardware sales from OEMs like Samsung and BrightSign [169]. - Managed services revenue grew by 156% year-over-year, reaching $14,320 in 2022, compared to $5,596 in 2021, due to Reflect's SaaS subscription revenue [184]. - Total sales increased by $24,913, or 135%, in 2022 compared to 2021, largely due to the Reflect acquisition and enhanced sales activities [204]. - Services and other revenues rose by $14,468 to $23,455 in 2022, attributed to the acquisition of Reflect and successful post-Merger sales activities [184]. - The company’s recurring subscription licensing and support revenue is primarily generated from its SaaS digital signage software platforms [307]. Acquisitions and Strategic Moves - The company acquired Reflect Systems, Inc. in February 2022 as part of its strategic acquisition strategy to enhance growth [302]. - The company rejected an unsolicited acquisition proposal from Pegasus Capital Advisors, stating it undervalued the company based on its intrinsic value and future prospects [157]. - The company’s management team continuously evaluates acquisition opportunities to accelerate growth in targeted markets [309]. Financial Performance - Net income for 2022 was $1,876, a significant increase of $1,644, or 709%, compared to $232 in 2021 [203]. - The company's EBITDA for the year was $9,220 million, with an adjusted EBITDA of $3,845 million, reflecting a significant increase from the previous year's adjusted EBITDA of $1,221 million [226]. - The company incurred a loss on debt waiver consent amounting to $1,212 million, which impacted the overall financial performance [226]. - The fair value of warrant liability resulted in a loss of $7,902 million, indicating a significant adjustment in the company's financial statements [226]. - The company recorded a gain of $1,624 million related to the settlement of the Seller Note, which positively influenced the financial results for the year ended December 31, 2021 [224]. - The company has generally incurred losses and may never become or remain profitable [261]. Expenses and Cost Management - The company’s expenses are primarily categorized into sales and marketing, research and development, and general and administrative costs [155]. - General and administrative expenses rose by $4,571, or 62%, primarily due to increased headcount and operations following the Reflect acquisition [187]. - Research and development expenses increased by $701, or 127%, for the year ended December 31, 2022, driven by the acquisition of Reflect and the retention of its software development team [207]. - Sales and marketing expenses surged by $2,498, or 217%, in 2022, influenced by the Reflect acquisition and increased investments in marketing activities [206]. - Depreciation and amortization expenses increased by $1,469, or 108%, in 2022, due to the addition of $17,160 in amortizing intangible assets from the Merger [209]. Market Position and Competitive Advantages - The company emphasizes its competitive advantages, including a managed labor pool and network scalability, which enhance service delivery and customer satisfaction [147][148]. - The company’s digital signage solutions cater to various sectors, including retail, healthcare, and automotive, showcasing its market versatility [139]. - The company has in-house media sales expertise, which differentiates it from competitors and provides an additional revenue stream [232]. - The company has a curated labor pool of thousands of qualified field technicians, enabling quick service nationwide [303]. Risks and Challenges - The company is facing challenges in ensuring the long-term successful operation of its digital marketing business due to a rapidly changing market [233]. - The company faces significant risks related to the unpredictability in financing markets, which could impair its ability to grow through acquisitions [264]. - The company’s business operations are susceptible to interruptions caused by events beyond its control [294]. - The company’s reliance on information management and transaction systems exposes it to cyber incidents and hacking risks [269]. - The company faces risks related to the timely development of new technologies and the retention of key personnel in a competitive market [321]. Customer Concentration and Demand - In 2022, three customers accounted for 44.0% of the company's revenue, indicating a significant customer concentration risk [316]. - The company anticipates increased demand for its services due to new construction and remodeling activities in retail and event venues [314]. Stock and Financing - Following a reverse stock split effective March 27, 2023, the total number of authorized shares was reduced from 200 million to 66.67 million [156]. - The company relies on the continued support of a related party for adequate financing of its operations [241]. - The company does not intend to pay dividends on its common stock for the foreseeable future [251]. - The aggregate market value of the voting and non-voting common equity held by non-affiliates was $13,263,727 as of the last business day of the registrant's most recently completed second fiscal quarter [257]. Advertising and Engagement - The company’s ad management platform, Reflect AdLogic, currently delivers approximately 50 million ads daily, indicating strong engagement and monetization capabilities [170]. - The company achieved approximately 50 million ads delivered daily through its ad management platform, Reflect AdLogic [307].

Creative Realities, Inc. (NASDAQ:CREX) Q3 2022 Earnings Conference Call November 14, 2022 9:00 AM ET Company Participants Will Logan - Chief Financial Officer Rick Mills - Chief Executive Officer Conference Call Participants Brian Kinstlinger - Alliance Global Partners Howard Halpern - Taglich Brothers Operator Good morning. At this time, I would like to welcome everyone to the Creative Realities Inc. Third Quarter Earnings Conference Call. This call will be recorded and a copy will be available on the comp ...