CREX

• Overall Financial Performance

  • Q2 2026 is the best Q2 revenue quarter in company history, and the second largest revenue quarter overall. Annual recurring revenue (ARR) reached $20.5 million as of June 30, 2026, up from $20.1 million at the end of Q1 2026, with an additional $4–5 million in backlogged ARR that will activate in January 2027.
  • Gross profit was $8.3 million versus $5.0 million year-over-year, with consolidated gross margin of 38.6% up slightly from 38.5% year-over-year. Adjusted EBITDA rose to $2 million from $1.1 million in Q2 2025.
  • Net loss attributable to common shareholders was $4.6 million (43 cents per diluted share), compared to a $1.8 million net loss (17 cents per diluted share) in Q2 2025.
  • A recent follow-on equity offering raised $12 million in net proceeds, with CEO Rick Mills purchasing 5% of the offering and other leadership team members also participating. Cash on hand reached $10.7 million as of June 30, 2026, up from $1.6 million at the start of the year. Auditors have removed the going concern designation from the company's financial statements.

• Acquisition and Integration

  • The majority of the CDM acquisition integration is now complete. The company has realized $7.5 million (75%) of the targeted $10 million in annualized synergies, which will support adjusted EBITDA margin expansion as revenue scales. Legacy CRI general and administrative expenses are down $400,000 year-over-year.

• Customer and Business Development

  • The $8.5 million Tennessee Titans Nissan Stadium digital signage project remains on track, with most revenue expected to be realized in 2026.
  • The previously announced large grocery retail media network client is confirmed as Albertsons, the largest retail media network being deployed in the U.S. this year by screen count, covering 2,200 stores across 34 states. Around 3,000 screens across 220–250 locations have already been converted, with phase one completion expected over the next 30 days, running 1 million ads per day on CRI's full ad tech stack.
  • Full deployment of the AMC theater lobby media modernization project across 285 locations began in August 2026 after successful test locations.
  • Two additional large customer conversions are in late contracting: a national cellular brand with over 900 retail locations, and a fast-growing QSR with over 1,000 locations. One conversion will complete by end of September 2026, the other by end of 2026, growing recurring SaaS revenue starting in 2027.
  • CRI is migrating 300 Lexus Toyota dealerships in Canada to its CMS platform, generating ~$200,000 annual revenue in SaaS and creative services.

• Revenue is expected to continue a strong upward trajectory through the second half of 2026. Q3 2026 is projected to be the largest revenue quarter in company history, exceeding the $23.9 million revenue record set in Q4 2025, and Q4 2026 revenue is expected to significantly exceed Q3 2026 revenue.
• Gross margins are expected to increase quarter-over-quarter through the second half of 2026, with meaningful margin expansion starting in 2027. The company targets a long-term consolidated gross margin in the low 40% range, which will be achieved as higher-margin SaaS revenue grows. The $3.5–4 million in backlogged ARR activating in January 2027 alone is expected to lift composite gross margins by approximately 2 percentage points. Hardware margins are expected to remain under pressure through the end of 2026, with recovery and expansion in 2027.
• Adjusted EBITDA and operating cash flow are expected to further improve in the second half of 2026, driven by forecasted revenue growth and completed cost synergy initiatives. The company expects to quickly grow profitability as new business scales from 2027 onward, with more predictable annual revenue starting in 2027 than in prior periods. 2026 is on track to be the best full year in company history.

Total Q2 2026 revenue: $21.5 million, a 65% year-over-year increase versus $13 million in Q2 2025.

• CDM segment: Contributed $7.4 million in revenue, accounting for 35% of total Q2 2026 revenue. Legacy CRI revenue grew 8% year-over-year.
• Hardware segment: Revenue of $7.5 million, up from $7.1 million in Q2 2025. Gross margin was 17.2% in Q2 2026, down from 25.1% year-over-year, driven by mix changes.
• Service segment: Revenue more than doubled to $14 million from $6 million in Q2 2025, with $7 million of this contribution coming from CDM service sales. Gross margin was 50.1% in Q2 2026, down from 54.4% year-over-year due to the expiration of higher-margin legacy customer contracts in 2025.

• Pricing for service contracts faces downward pressure from struggling competitors that are cutting prices to retain market share, creating ongoing pricing headwinds for the business.
• Consolidated gross margins for both hardware and services are lower than year-ago levels, driven by product mix changes from the CDM acquisition and expiration of higher-margin legacy contracts, with full margin recovery not expected until 2027.
• Forward-looking statements around future revenue, profitability, and integration outcomes carry inherent uncertainty, and actual results may differ materially from projections based on a variety of unforeseen factors.

Q: The large Albertsons retail media deal adds a major blue-chip reference; how much deployment is complete, and what impact will this have on the retail media pipeline? / A: Approximately 3,000 screens across 220 to 250 Albertsons locations are already converted and running 1 million ads daily on CRI technology. The remaining phase one deployment will be completed over the next 30 days, consolidating work from multiple prior suppliers. The Albertsons win strengthens CRI's positioning as one of the top three retail media network providers in the U.S., alongside existing blue-chip clients including 7-Eleven, Macy's, and Best Buy. Management expects this large reference to accelerate already ongoing retail media pipeline conversations.

Q: Recent trouble at a major competitor has created market opportunity; how is this impacting CRI's pipeline? / A: One of the two pending large customer conversions CRI is currently negotiating came directly from this struggling competitor, with the other being a new opportunity from an unrelated platform. The competitor's distress has already enhanced CRI's sales pipeline, and management expects to close multiple new blue-chip client logos every quarter going forward as this trend continues.

Q: What will the split between hardware and services revenue be in the second half of 2026, and when will hardware margins recover? / A: Q3 2026 will have a higher share of hardware revenue driven by the Tennessee Titans Nissan Stadium installation, but Q4 2026 will return to a similar service-heavy mix seen in Q2 2026, with most second half overall growth coming from services. Hardware margins will remain under pressure for the rest of 2026, but management expects margin relief and expansion for hardware in 2027. Service pricing has faced some downward pressure from distressed competitors, but CRI has largely withstood this pressure.

Q: What is the long-term target gross margin, and what revenue level is needed to reach operating break-even? / A: Management targets a consolidated long-term gross margin in the low 40% range, which will be achieved as higher-margin SaaS revenue scales in 2027. Around $3.5–4 million in high-margin backlogged ARR will activate in January 2027 alone, which is expected to lift composite margins by ~2 percentage points. A revenue increase of approximately $6 million at the targeted low 40% margin level would be sufficient to reach operating break-even, which is a reasonable projection as growth continues.