Creative Realities, Inc. Q3 FY2025 earnings call

• Acquisition of Cineplex Digital Media: Completed on November 7, 2025. CDM is a leader in data experience-based digital marketing solutions in North America, with over 6,000 locations with signage deployments, 30,000 endpoints, and acquired Canada's largest mall retail media network generating over $32 million Canadian in advertising sales revenue this year.
• Q3 2025 Results: Revenue was $10.5 million, gross profit $4.8 million. A $2 million order slipped to the fourth quarter. ARR was $12.3 million, adjusted EBITDA $800,000.
• New Hires: Hired Chief Revenue Officer Dan McAllister to improve new customer acquisition velocity across North America.
• Customer Updates: Large QSR expected to finalize contract by mid-December, c-store customer testing AdLogic ad serving technology, stadium business growing with potential 30-40% growth in 2026.

In the third quarter ended September 30, 2025, Creative Realities posted revenue of $10.5 million, down from $14.4 million in the prior year period. Gross profit was $4.8 million compared to $6.6 million in 2024. The consolidated gross margin was 45%, roughly in line with last year's 46%. The annual recurring run rate (ARR) was $12.3 million as of December 30, 2025, versus $18.1 million at the end of the third quarter in 2024. Adjusted EBITDA was $800,000 for the third quarter versus $2.3 million last year. The acquired Cineplex Digital Media (CDM) had revenue of just under $56 million Canadian dollars in 2024 and is on track for 25% top-line growth in 2025, with over 60% of its revenue being recurring and approximately 84% of sales in Canada.

• Anticipate total company revenue to exceed $100 million in 2026 with an adjusted EBITDA margin in the high teens, and exceed 20% once synergies from CDM acquisition are realized.
• CDM acquisition expected to provide $10 million annual synergies by 2026.
• Combined ARR to exceed $40 million US in 2026.

• Delays in sales cycle and deployments by customers which can impact revenue timing.
• Increased leverage levels due to the CDM acquisition, which may affect financial performance.
• Dependence on successful integration of CDM and execution of growth strategies to realize expected synergies.

Q: Feedback on what's been heard from customers and partners since the CDM acquisition and channel enthusiasm?

A: Customers have been very positive, and CRI is now acknowledged as one of the top 2-4 digital signage integrators in North America.

Q: How to go to market in Canada following the CDM acquisition, especially with QSRs?

A: Will reach out to tier two QSR operators in Canada, leverage drive-through opportunity as Canadian QSRs generally haven't gone digital, and already service some QSRs like A&W, Dairy Queen of Canada, and Tim Hortons.

Q: Update on lottery pipeline and go-to-market in US malls?

A: Received RFP for North Carolina lottery, and plan to engage US mall ownership properties like Westfield and Simon in the next two quarters.

Q: Role of the newly hired Chief Revenue Officer?

A: Dan McAllister will improve customer acquisition velocity, help convert lingering customers, and bring in inbound opportunities due to his 20 years of industry experience and knowledge of customers and professionals in the industry.