Creative Realities, Inc. Q4 FY2025 earnings call

• Added new executives: Tamara Koshawa as CFO on Dec 1, Jackie Walker as Chief Experience Officer on Mar 30, Dan McAllister as CRO earlier. - Completed repurchase of Slipstream's 1.7 million outstanding warrants for $200,000. - Integrated CDM business acquired in Nov, with Q4 including two months of CDM performance. - IPTV division awarded $8 million stadium project, expected to double revenue to over $17M. QSR division's next gen drive-through digital menu board system growing, deploying 10+ new locations weekly. Retail, financial, etc. team renewed SAS contracts of top financial institutions, ad tech solutions in test with potential deployments in second half. Announced $6M media network project with AMC theaters. North Carolina Lottery contract in deployment. Weather in Q1 2026 caused $4M+ revenue delay to later quarters.

In Q4 2025, revenue was $23.9 million vs $11 million in prior year. Revenue from CDM was $13.6 million. Gross profit was $11.5 million vs $4.9 million in fiscal 2024. Consolidated gross margin was 47.9% vs 44.2% in prior year. Hardware revenue rose to $6.6 million vs $3.9 million prior year. Service revenue increased to $17.3 million vs $7.2 million in fiscal 2024. ARR was $20.1 million vs $12.3 million at end of third quarter. Adjusted EBITDA was $5.2 million vs $0.5 million last year and $0.8 million in third quarter. CDM serves thousands of quick-serve restaurants, financial institutions, etc. in North America and owns Canada's largest mall retail media network with over 750 screens serving ~750 million shopper visits annually. Synergies of at least $10 million expected annually by end of 2026, currently north of 60% of goal.

• Anticipate adjusted EBITDA and ARR to increase going forward due to synergies and pipeline opportunities. - Expect total company revenue to exceed $100 million in 2026 with adjusted EBITDA margin in mid-teens, and above 20% once all synergies realized. - Revenue expected to accelerate, backlog to grow, margins to improve in 2026, on track for record performance.

Q: Talk about scale gains, tone of customer conversations since acquisition.

A: Tone of conversations different, now in conversations not possible before, especially in QSR, and conversations are serious as now a true leader.

Q: Updates on deals sitting at one yard line, pipeline building with ad tech.

A: Pulled $8M stadium project across line, large QSR contract expected to sign in next couple of weeks, retail media network has C-Store customer in test, others in conversation, sales force tripled.

Q: Recap of lottery sector RFP landscape.

A: Expect 7-8 large RFPs in 2026, one actively participating, others not active yet.

Q: Lottery in C-stores cross-sell opportunity.

A: Today lottery rollout dedicated to lottery, talking to C-Store customers about adding lottery on screens but no results yet.

Q: AMC as customer, revenue, installation vs recurring.

A: AMC was CDM customer, seven figure software customer, hardware and installation likely 70-30 of $6M, ongoing revenue share on ad tech.

Q: 7-Eleven store closings impact.

A: Impact de minimis, 300 new locations will have screens, contract renewal in process.

Q: Strongest quarters after Q1.

A: Q3 set to be significant with stadium installs and drive-throughs, Q4 has largest media revenue from CDM acquisition.

Q: Interest expense expectation.

A: Term loan drives lion's share, between half a million and three-quarters of a million per quarter.

Q: Restaurant chain contract status.

A: SAS revenue due to SAS platforms, hardware procurement and installs halted until new contract signed, expected signed in next couple of weeks, franchisee interest but impact in Q3.

Q: Market share and competitor outlook.

A: Hard to pin down market share, still compete against same few competitors, now occupy different unique position with strategic advantage.