Creative Realities(CREX) - 2025 Q3 - Quarterly Results

Credit Agreement - The amended credit agreement is dated as of November 6, 2025, involving multiple U.S. Borrowers including Allure Global Solutions, Inc. and Creative Realities, Inc.[1] - The agreement includes provisions for revolving credit advances, term loans, and borrowings, with specific terms outlined for interest rates and applicable margins[2] - The loan parties are required to maintain compliance with various financial covenants, including the maintenance of existence and conduct of business[3] - The agreement stipulates the need for regular financial information disclosures and compliance with laws, including tax obligations[4] - The Amended and Restated Credit Agreement was executed on November 6, 2025, involving multiple entities including Allure Global Solutions, Inc. and Creative Realities, Inc.[13] - The agreement includes provisions for increasing and syndicating credit facilities to refinance existing debt and provide working capital financing[15] - The Applicable Margin for Senior Funded Debt to Adjusted EBITDA Ratio is set at 2.75% for ratios less than 2.50x and 3.25% for ratios greater than 2.50x[27] - The Adjusted Term SOFR Rate is defined as the Term SOFR Rate plus 0.11%, with a floor of 1.00%[20] - The financial covenants will be assessed based on the Senior Funded Debt to Adjusted EBITDA Ratio at the end of each fiscal quarter, starting December 31, 2025[28] - The agreement allows for adjustments to the Applicable Margins based on the financial performance of the Borrowers, with potential increases if financial covenants are violated[28] - The agreement outlines the purpose of funds, including working capital, financing for acquisitions, and general corporate purposes[15] - The term "Adjusted EBITDA" is defined to include net income from operations plus various expenses, excluding extraordinary gains[19] - The agreement specifies that failure to deliver required financial statements may result in the application of a higher pricing level[28] Financial Performance - The company reported a revenue increase of 15% year-over-year, reaching $1.2 billion in Q3 2023[10] - The company reported a significant increase in revenue, achieving $1.5 billion in Q3 2023, representing a 20% year-over-year growth[1] - User data showed a growth of 25% in active users, totaling 5 million by the end of the quarter[10] - User data showed a total of 5 million active users, up from 4 million in the previous quarter, indicating a 25% increase[2] - The company provided guidance for Q4 2023, projecting revenue between $1.6 billion and $1.7 billion, which reflects a growth rate of 10-13% compared to Q3 2023[3] - The company provided guidance for the next fiscal year, projecting revenue growth of 20% and an Adjusted EBITDA margin of 30%[121] - The company reported a significant increase in Adjusted EBITDA for the fiscal year, amounting to $150 million, representing a 25% growth year-over-year[121] - The gross margin improved to 45%, up from 42% in the previous quarter, reflecting better cost management[8] - Excess Cash Flow for the year was reported at $20 million, allowing for potential reinvestment into growth initiatives[121] Market Expansion and Product Development - New product launches contributed to a 30% increase in sales, with the latest product line accounting for $300 million in revenue[10] - New product launches included a state-of-the-art software platform that is expected to drive an additional $200 million in revenue over the next year[4] - The company is investing $50 million in R&D for new technologies aimed at enhancing user experience[10] - The company is investing $10 million in R&D for new technologies aimed at enhancing user experience and operational efficiency[121] - Market expansion efforts have led to a 40% increase in international sales, particularly in Europe and Asia[10] - The company is expanding its market presence in Europe, targeting a 15% market share by the end of 2024[5] - Market expansion efforts include entering three new countries, which are projected to generate $30 million in additional revenue[121] - The company announced a strategic acquisition of a smaller tech firm for $300 million, aimed at enhancing its product offerings[7] - The company completed a strategic acquisition of a competitor for $200 million, expected to enhance market share and operational capabilities[121] Operational Efficiency and Cost Management - The company has reduced operational costs by 10%, improving overall profit margins[10] - Operating expenses were reduced by 5%, resulting in a more efficient cost structure[10] - The company plans to implement cost-saving measures that could reduce operational expenses by 10% over the next year[121] Customer Engagement and Satisfaction - Customer satisfaction ratings improved to 90%, reflecting the success of recent service enhancements[10] - A new marketing strategy is expected to increase brand awareness by 15% over the next year[10] - The company plans to implement a new customer loyalty program, which is expected to increase customer retention by 30%[9] Legal and Compliance - "Charges" include all governmental Taxes and levies related to the Loan Party's business[68] - "Collateral" encompasses all property covered by the Security Agreement and other related documents[73] - "Default" refers to any event that could lead to an Event of Default if not cured or waived[86] - "Compliance Certificate" confirms that financial statements were prepared in accordance with GAAP and there has been no Material Adverse Effect[79] - "Cineplex Share Purchase" involves the purchase of common shares of DDC Group and indirectly of Cineplex DM[70] - "Contingent Obligation" includes any direct or indirect liability of a Person related to another's obligations[81] - "Documents" refer to all rights and interests of each Loan Party in their respective documents as defined in the Code[91] - Eligible Accounts must be paid within 60 days after the original due date to be considered valid[98] - Accounts owing by a debtor are ineligible if 25% or more of their total accounts are overdue[98] - Accounts from foreign debtors are only eligible if they qualify as Eligible Foreign Accounts[98] - Accounts that exceed 15% of all Eligible Accounts from a single debtor are ineligible, with a higher threshold of 25% for Canadian Borrowers[98] - Accounts must have an acceptable invoice sent to the debtor to be considered eligible[99] - Accounts are ineligible if the debtor is in bankruptcy or has suspended business operations[99] - Inventory must be subject to a first priority perfected lien to be considered eligible[104] - Inventory that is obsolete, defective, or not salable at cost is deemed ineligible[105] - Inventory located outside the U.S. or Canada is ineligible unless approved by the Agent[106] - Environmental liabilities include all costs related to claims under environmental laws, including fines and damages[109] - The term "General Intangibles" encompasses all rights, titles, and interests of each Loan Party in various intangible assets, including contracts, customer lists, and intellectual property[144] - "Goods" includes all rights, titles, and interests in goods as defined in the Code or the PPSA, covering items like manufactured homes and standing timber[145] - "Governmental Authority" refers to the government entities of the United States, Canada, or any other nation, including regulatory bodies and courts[146] - "Indebtedness" includes all forms of borrowed money obligations, letters of credit, and capital lease obligations, excluding unsecured trade creditor obligations[150] - "Indemnified Taxes" refers to taxes imposed on payments made by any Loan Party under any Loan Document, excluding Excluded Taxes[152] - "Intellectual Property" includes all licenses, patents, industrial designs, copyrights, trademarks, and associated goodwill[158] - "Investment Property" encompasses all rights and interests in securities, securities accounts, and commodity contracts held by any Loan Party[163] - "Instruments" includes all rights and interests in instruments such as certificated securities and promissory notes[156] - "Inventory" refers to all rights and interests in inventory, merchandise, and personal property held for sale or lease[161] - "Hazardous Materials Contamination" means contamination of property by hazardous materials, which could cause damage to health or the environment[149]