• Revenue: $11 million for Q4 2024, down from $14.5 million in Q4 2023.
• Gross Profit: $4.9 million for Q4 2024, compared to $7.5 million in Q4 2023.
• Adjusted EBITDA: Approximately $0.5 million for Q4 2024, down from $2.8 million in Q4 2023.
• Annual Recurring Revenue (ARR): Run rate of $16.8 million.
• Cash on Hand: Approximately $1 million as of December 31, 2024, compared to $2.9 million at the end of 2023.
• Gross Debt: Approximately $13 million at the end of Q4 2024.
• Net Debt: Approximately $12 million at the end of Q4 2024.
• Leverage Ratio: Gross leverage of 2.59 times and net leverage of 2.39 times at the end of fiscal 2024.
• Settlement Payment: $3 million in cash and a $4 million 30-month promissory note related to Reflect Systems acquisition.

• Warning! GuruFocus has detected 4 Warning Signs with CREX.

Release Date: March 17, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Creative Realities Inc (NASDAQ:CREX) closed out its best year in company history with revenue exceeding $50 million and an adjusted EBITDA of 10%.
• The company resolved its outstanding contingent liability from the purchase of Reflect Systems in 2022, providing financial flexibility and eliminating uncertainty.
• The introduction of the AdLogic CPM+ platform is expected to drive growth by offering a comprehensive ad tech solution, enhancing targeting precision, and reducing costs.
• Creative Realities Inc (NASDAQ:CREX) anticipates revenue acceleration and improved performance in the second half of 2025, driven by a strong pipeline of opportunities.
• The company achieved SOC 2 Type 1 compliance and expects to achieve SOC 2 Type 2 certification, enhancing the credibility of its enterprise-grade offerings.

Negative Points

• Fourth-quarter revenue decreased to $11 million from $14.5 million a year ago, with gross profit also declining from $7.5 million to $4.9 million.
• Adjusted EBITDA for the fourth quarter was approximately $0.5 million, down from $2.8 million in the previous year.
• Cash on hand decreased to approximately $1 million at the end of 2024, compared to $2.9 million at the end of 2023.
• The company expects minimal or no tariff issues, but potential increases in steel prices could impact costs.
• Creative Realities Inc (NASDAQ:CREX) anticipates a slow start to 2025, with adjusted EBITDA profitability expected to be just barely positive in the first quarter.

Q & A Highlights

Q: Can you provide insights into the current state of customer conversations and the potential impact of tariffs on your business? A: Richard Mills, CEO: We have a frozen pipeline of projects nearing completion, with some expected to finalize soon. Tariffs are a concern, particularly regarding steel and display screens, but we anticipate minimal impact on most projects. The market is still assessing tariff implications.

Q: How are retail media opportunities affecting deal sizes and timelines? A: Richard Mills, CEO: Retail media networks involve complex planning and significant CapEx, leading to extended timelines. These projects are substantial, often ranging from $40 million to $100 million, with a strong ROI expected within 24 months. George Sautter, Chief Strategy Officer, added that CRI's comprehensive solutions simplify deployment, providing a competitive advantage.

Q: How are existing customers responding to the new AdLogic platform, and what impact will it have on margins? A: Richard Mills, CEO: Customers are embracing AdLogic as it enhances their digital operations, offering programmatic capabilities. George Sautter, Chief Strategy Officer, noted that the platform expands CRI's addressable market, driving both new customer acquisition and existing customer upgrades to retail media networks.

Q: Can you elaborate on the financial outlook for the second half of the year and the factors driving revenue growth? A: Richard Mills, CEO: We expect adjusted EBITDA profitability in Q1, with significant revenue growth in the second half driven by large projects. We anticipate exceeding 2024's revenue and EBITDA, with several major retail media networks and QSR projects poised to launch.

Q: What is the status of the BCTV project and its impact on installations? A: Richard Mills, CEO: BCTV installations paused for 90 days due to funding discussions with their private equity backers. We expect installations to resume in June, with moderate increases in the second half of 2025.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.