Creative Realities Reports Fiscal 2025 Second Quarter Results

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].