How are the challenges faced by a competitor creating opportunities for CRI, and what do early discussions look like?

Management confirmed that a competitor's difficulties have enhanced CRI's pipeline, leading to new customer acquisitions. Two customers are currently in the contracting stages, with one specifically coming from the struggling competitor. CRI expects to close multiple new logos quarterly going forward. “As I stated on the call earlier, Jason, I mean, again, here we have 2 customers who are in contracting stages right now, both have to be converted. One actually came from that competitor. The other was not. The other was a new -- came from a different platform. So we are gaining customers. We do expect the pipeline to -- was enhanced as that customer ran into some trouble or that other supplier, a competitor of ours, ran into trouble.”

How do current deals and the pipeline improve visibility and predictability for CRI's financials in 2027?

The influx of 7-9 additional customers with consistent deployments and SaaS revenue significantly improves predictability for 2027. Management believes the company has entered a new stage where revenue will be much more predictable, expressing strong bullishness for 2027. They also reiterated expectations for record Q3 and even larger Q4 revenue in 2026. “Certainly gives us better predictability because when you have 7, 8, 9 additional customers come on that are doing deployments or SaaS, if you will, on a consistent monthly basis. We think we have entered the new stage where our revenue as we enter 2027 will be much more predictable than it has in the past.”

Given the strong awards and second-half revenue ramp, what is the expected split between services and hardware revenue?

SaaS (services) is expected to continue growing. Q3 will have a higher percentage of hardware revenue due to installs like the Tennessee Titans project. Q4 is expected to return to Q2's hardware/service mix, with a large media revenue base coming online, similar to the CDM media business last year. “We do expect that the third quarter is going to have a higher percentage of hardware revenues given the installs that we're planning for the third quarter, in particular, the Tennessee Titans. But then in the fourth quarter, we expect it to get back to the level that it was in Q2. And also because in the fourth quarter, remember, we have a large media revenue base that will come online that we will experience similar to what we did last year with the CDM media business.”

CREX

Creative Realities (CREX) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Information Technology· Aug 13, 2026

Source: earnings call transcript

Executive summary

Creative Realities Q2 FY26 — Record Revenue and Strong Customer Wins Drive Optimism

Creative Realities delivered a record-setting second quarter, driven by strong top-line growth and the successful integration of CDM. The company secured major enterprise customer wins, particularly in retail media networks, and expects continued revenue acceleration through the second half of the year. Management expressed high confidence in future profitability and balance sheet strengthening, with the 'going concern' language removed from financial statements.

Highlights

Q2 FY26 revenue reached $21.5 million, marking the best ever Q2 and second largest revenue quarter in company history, up 65% YoY.
Adjusted EBITDA rose to $2.0 million in Q2 FY26, up from $1.1 million in the prior year period and a loss of $494,000 in Q1 FY26.
Annual Recurring Revenue (ARR) increased to $20.5 million as of June 30, up from $20.1 million last quarter, with an additional $4 million to $5 million in backlog for 2027.
Successfully completed the majority of CDM integration, realizing approximately $7.5 million of the targeted $10 million annualized synergies.
Secured significant new customer contracts and expansions, including Albertsons (retail media network), AMC Theatres, a national cellular organization, and a fast-growing QSR.

Concerns

Net loss attributable to common shareholders was $4.6 million in Q2 FY26, compared to $1.8 million in the prior year period.
Hardware gross margins decreased to 17.2% in Q2 FY26 from 25.1% in Q2 FY25, primarily due to mix.
Service gross margin declined to 50.1% in Q2 FY26 from 54.4% in Q2 FY25 due to the expiration of higher-margin customer contracts.

Guidance & targets

Category	Target	Timeline	Confidence
Q3 FY26 Revenue	Significantly exceed Q4 2025 revenue of $23.9 million high materiality	Q3 · FY26	High
Q4 FY26 Revenue	Significantly exceed Q3 2026 revenue high materiality	Q4 · FY26	High
Annualized Synergies from CDM	At least $10 million medium materiality	Annualized	High
Adjusted EBITDA Margins	Increase in quarters to come medium materiality	Future quarters	Medium
Gross Margin	Increase quarter-over-quarter medium materiality	Future quarters	Medium
Hardware Gross Margins	Expand again in 2027 low materiality	FY27	Medium
North Carolina Lottery Expansion	Significant expansion low materiality	FY27	Medium

Deals & partnerships

Tennessee Titans Official digital signage provider for new Nissan Stadium $8.5 million

Includes installation of thousands of displays and a full IPTV solution throughout the venue.

Albertsons Retail media network deployment

Largest retail media network deployment in the US by screen count. Covers 2,200 stores across 20 banners in 35 states. Utilizes CRI's AdTech stack and CMS. 3,000 screens converted across 220-250 locations, running 1 million ads daily. Full deployment of players and technology transitioning to CRI over the next 30 days.

AMC Theatres / National CineMedia Expand and modernize in-lobby media footprint

Project covers about 285 locations nationwide. Partnership with National CineMedia. Uses CRI's CMS platforms (ReflectView) and AdLogic AdTech solution for ad serving. Test locations completed, moving to full deployment in August.

National cellular organization Conversion of existing screens to CRI platform

Operates more than 900 retail locations across 45 states. Conversion of existing screens, with plans for significant growth over the next few years. Initial conversion to be completed by end of September.

Fast-growing QSR Conversion of existing screens to CRI platform

Operates more than 1,000 restaurants across 22 states. Conversion of existing screens, with plans for significant growth over the next few years. Initial conversion to be completed by end of year.

Lexus, Toyota dealerships in Canada Migration to CRI's CMS platform

Engagement includes significant creative work. Covers approximately 300 locations.

Culver's Deployment of new drive-thrus 3-year target to complete all restaurants

Continues to deploy new drive-thrus every month, well on track for their 3-year target.

North Carolina Lottery Expansion of lottery network

Significant discussions with 7-8 additional lotteries. North Carolina Lottery has talked about significant expansion in 2027. Expect announcements closer to year-end 2026.

Risks & headwinds

Hardware gross margin pressure through the balance of FY26

Hardware gross margin decreased to 17.2% in Q2 FY26 from 25.1% in Q2 FY25

Mitigation:Expect hardware margins to expand again in 2027 due to additional relief.

Service gross margin decline Q2 FY26

Service gross margin declined to 50.1% in Q2 FY26 from 54.4% in Q2 FY25

Mitigation:Due to expiration of higher-margin customer contracts in FY25; anticipate gross margin to increase quarter-over-quarter with sales growth from new business.

Competitive pricing pressure on services ongoing

Downward pressure on services pricing

Mitigation:Company has been able to withstand this to a great extent, but it remains a challenge.

What to watch in Q3 FY26

Q3 FY26 Revenue

next quarter

Current $21.5 million (Q2 FY26)

Target Significantly exceed $23.9 million (Q4 FY25)

Why it matters

This is a key indicator of the company's growth trajectory and ability to achieve its stated record revenue targets for the second half of the year.

We expect Q3 this quarter to significantly exceed Q4 2025 when we achieved $23.9 million in revenue.

Find out whether CREX delivers this. Inve re-checks your case every morning.

Q&A highlights

What work has been done on the Albertsons deal, and how does this win impact future retail media opportunities and the pipeline?

CRI has converted about 3,000 screens across 220-250 Albertsons locations, running 1 million ads daily. This deal, along with other blue-chip clients like 7-Eleven, Macy's, and Best Buy, strengthens CRI's position as a top-three retail media network provider and is expected to accelerate their pipeline in this sector.

“As of today, we have converted about 3,000 screens, and we're currently running 3,000 screens across 220 to 250 locations. We take over the deployment of those screens and the deployment of players and all the technology here over the next 30 days that will transition to us from -- they've had a plethora of suppliers doing it. It will all consolidate and we'll finish out the rest of Phase 1. So currently, today, they're running about 1 million ads a day, Jason.”

asked by Jason Kreyer · answered by Richard Mills

2 min read 5 chapters

Detailed narrative

Strong Q2 Performance and CDM Integration

Creative Realities reported its best-ever Q2 revenue of $21.5 million, a 65% year-over-year increase, making it the second-largest revenue quarter in company history. This growth was significantly bolstered by $7.4 million from the CDM acquisition. The company has completed the majority of the CDM integration, achieving approximately 75% of the targeted $10 million in annualized synergies, which is expected to drive future adjusted EBITDA margin expansion.

Key Customer Wins and Retail Media Network Expansion

CRI announced several major customer engagements, highlighting its strategy to focus on enterprise clients. The company confirmed Albertsons as a key retail media network client, with 3,000 screens already converted and running approximately 1 million ads daily across 220-250 locations.

Other significant wins include an expansion project with AMC Theatres across 285 locations, and new contracts with a national cellular organization (over 900 locations) and a fast-growing QSR (over 1,000 restaurants), both involving conversions to CRI's platform.

SaaS Growth and Predictable Revenue Outlook

The company's Annual Recurring Revenue (ARR) reached $20.5 million, with an additional $4 million to $5 million in backlog expected to convert to ARR by January 1, 2027. Management emphasized that the increasing SaaS base from new customer deployments will lead to more predictable revenue streams in 2027.

This shift towards higher-margin service revenue is anticipated to improve the company's composite gross margin, aiming for the low 40% range in 2027.

Balance Sheet Strengthening and 'Going Concern' Removal

Creative Realities completed a follow-on equity offering, raising approximately $12 million in net proceeds, which strengthened the balance sheet and provided capital for growth. Cash on hand increased to $10.7 million by June 30, 2026, from $1.6 million at the start of the year.

Notably, the company's comprehensive financial model was accepted by auditors, leading to the removal of the 'going concern' language from its financial statements, signaling improved financial stability and outlook.

Strategic Focus and Leadership Transition

CEO Rick Mills reiterated the company's strategy to 'go big, scale up, and focus on the enterprise customer,' which is proving successful. With new C-suite members taking over daily operations, Mills is shifting his focus to strategic growth areas and market advantages over smaller competitors. This strategic realignment aims to capitalize on CRI's position as a top-tier provider in digital signage solutions.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.