Workflow
Creative Realities(CREX) - 2024 Q4 - Earnings Call Transcript
CREXCreative Realities(CREX)2025-03-17 16:51
Filings

Financial Data and Key Metrics Changes - The company reported revenue of 11millionforQ42024,downfrom11 million for Q4 2024, down from 14.5 million in Q4 2023, with gross profit decreasing to 4.9millionfrom4.9 million from 7.5 million year-over-year [8][9] - Adjusted EBITDA for Q4 2024 was approximately 0.5million,comparedto0.5 million, compared to 2.8 million in the same quarter last year [8] - Annual recurring revenue (ARR) is at a run rate of 16.8million,withexpectationsforrevenueaccelerationinfiscal2025[9][10]−Thecompanyachievedover16.8 million, with expectations for revenue acceleration in fiscal 2025 [9][10] - The company achieved over 50 million in revenue for the full year, with an adjusted EBITDA margin of 10% [7] Business Line Data and Key Metrics Changes - The company is focusing on its new AdLogic CPM+ platform, which is expected to enhance revenue through targeted advertising solutions [10][11] - The deployment of on-premise screens and sophisticated ad serving tools is part of the full-service approach to address modern retail media network challenges [12] Market Data and Key Metrics Changes - The company has seen increased demand for its solutions, particularly in the quick-service restaurant and retail sectors, indicating a growing market for its services [16] - The company has completed significant installations, including 56 site installations in Q4 2024, with an average sale price of 30,000[24]CompanyStrategyandDevelopmentDirection−ThecompanyaimstoleverageitsAdLogicCPM+platformtopositionitselfasaone−stopshopforAdTechsolutions,enhancingitscompetitiveadvantage[11][12]−Themanagementisoptimisticabouttheactivepipelineofopportunitiesandanticipatesrecordperformanceinfiscal2025[9][10]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementnotedthatthefourthquarterwasnegativelyimpactedbydeploymenttimingbutexpectsstrongrevenuegrowthinthesecondhalfof2025[9][10]−Thecompanyisnotprovidingspecificguidancebutanticipatesayearofaccomplishmentsandnewrecords[17]OtherImportantInformation−ThecompanyresolvedacontingentliabilityrelatedtothepurchaseofReflectSystems,whichisexpectedtoprovidefinancialflexibility[14][15]−Thecompanyhasminimalcashonhand,approximately30,000 [24] Company Strategy and Development Direction - The company aims to leverage its AdLogic CPM+ platform to position itself as a one-stop shop for AdTech solutions, enhancing its competitive advantage [11][12] - The management is optimistic about the active pipeline of opportunities and anticipates record performance in fiscal 2025 [9][10] Management's Comments on Operating Environment and Future Outlook - Management noted that the fourth quarter was negatively impacted by deployment timing but expects strong revenue growth in the second half of 2025 [9][10] - The company is not providing specific guidance but anticipates a year of accomplishments and new records [17] Other Important Information - The company resolved a contingent liability related to the purchase of Reflect Systems, which is expected to provide financial flexibility [14][15] - The company has minimal cash on hand, approximately 1 million, down from 2.9millionattheendof2023,withgrossandnetdebtatapproximately2.9 million at the end of 2023, with gross and net debt at approximately 13 million and 12 million, respectively [19][20] Q&A Session Summary Question: Can you provide commentary on customer conversations regarding the frozen pipeline? - Management expects some projects to finalize soon, but customers are concerned about potential tariffs affecting their projects [28][30] Question: How are existing customers embracing the new AdLogic platform? - Customers are transitioning to retail media networks, which incorporate the AdLogic platform, solving significant operational challenges [44][46] Question: What is the impact of the new ERP system on infrastructure control? - The new ERP system is expected to provide significant cost management benefits and improve expense controls [49][51] Question: Can you quantify the number of warrants issued to Reflect? - The company issued 777,790 warrants with a strike price of 3.25, valid for six years [61] Question: What is the expected revenue growth in the second half of the year? - Management expects adjusted EBITDA profitability in Q1 and anticipates year-over-year growth exceeding 2024 levels [64][66] Question: What is the average contract value for MLB or NHL stadium projects? - Projects can range from 150,000formenuboardsto150,000 for menu boards to 2 million to 3millionforfullstadiumrefreshes[66][68]Question:Whatledtothe90−daypauseonBCTV?−ThepausewasduetofundingdiscussionsbetweenBCTVanditsinvestors,withexpectationstoresumeinJune[76]Question:Whatisthecurrentstatusofthecreditfacility?−Thecompanyhasamaximumcapacityof3 million for full stadium refreshes [66][68] Question: What led to the 90-day pause on BCTV? - The pause was due to funding discussions between BCTV and its investors, with expectations to resume in June [76] Question: What is the current status of the credit facility? - The company has a maximum capacity of 22.1 million on its revolver, with approximately 6millionto6 million to 7 million available [80][82] Question: How does cash flow work for major projects? - Cash flow can vary, with significant deposits required for private projects, while public partnerships may experience negative cash flow initially [92][96] Question: What are the expectations for adjusted EBITDA margins? - The company aims to achieve a 15% adjusted EBITDA margin by the end of the year, with expectations for revenue growth [98][100]