CREATIVE REALITIES, INC. Q4 FY2024 earnings call

• Closed the best year in company history with revenue over $50M and adjusted EBITDA of 10%.
• Resolved the outstanding contingent liability from the purchase of Reflect systems in 2022.
• Fourth quarter revenue negatively impacted by deployment timing but had an active pipeline.
• Introduced AdLogic CPM+ platform, an integrated solution for targeted campaigns with reduced cost.
• Hired David Schultz as VP of New Business Development, expanded sports and entertainment team.
• Completed largest deployment in Q3 2024 (NHL arena), awarded 3 MLB projects in Q1 2025, 7 POCs at other venues.
• BCTV had a 90-day pause but expected to resume in June.
• Achieved SOC 2, Type 1 compliance, working towards Type 2 certification.

In the fourth quarter of 2024, revenue was $11 million compared to $14.5 million in the prior year. Gross profit was $4.9 million versus $7.5 million in 2023. Adjusted EBITDA was approximately $0.5 million against $2.8 million last year. Annual recurring revenue (ARR) was at a run rate of $16.8 million. The company closed its best year ever with revenue exceeding $50 million and adjusted EBITDA of 10%.

• Anticipates revenue acceleration in the second half of 2025.
• Expects adjusted EBITDA margin to rise to 15% by year-end.
• Anticipates year-over-year growth in 2025, with stronger operating results driven by economies of scale, higher margins, and increased cash flow.

• Potential headwinds from tariffs affecting project timelines.
• Complexity and time required for large retail media network deals.
• 90-day pause on BCTV due to funding issues from its private equity firm.

Q: Jason Kreyer asked about the frozen pipeline and prospects for it opening up in coming months, and tariff impact on the business.

A: Rick Mills said customers had frozen projects creeping to finish line, some expected to cross soon but market was questioning tariffs. George Sautter added complexity of solutions for enterprise customers takes time but their product suite is a competitive advantage.

Q: Howard Halpern asked about existing customer embrace of AdLogic platform and impact on margins.

A: Rick Mills said customers embraced it as it solves their problems, George Sautter added existing customers converting existing networks to retail media networks provides new returns on sunk costs.

Q: Brian Kinstlinger asked about quantifying warrants from Reflect settlement, revenue growth acceleration, project sizes, and EBITDA margin exit.

A: Rick Mills said warrants are 777,790 with $3.25 strike price and 6-year expiration. Anticipated revenue growth in second half, projects like MLB and NHL stadiums range in value, and expects to finish year with 15% adjusted EBITDA margin.

Q: Laurence Lytton asked about credit facility, project cash flow, and EBITDA margin exit.

A: Ryan Mudd explained credit facility max capacity, Rick Mills discussed project cash flow being 50/50 on deposits and public partnerships, and expects to finish year with 15% adjusted EBITDA margin.

Q: Ben Howard asked about ARR discrepancy, AdTech platform impact, and AdTech flow into managed services.

A: Rick Mills explained ARR discrepancy due to adjustments in large SaaS customers. George Sautter discussed AdTech platform's higher margins and strategic thrust, and AdTech flowing into managed services.