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    CREX
    Earnings call· Jun 2026(Q2 FY26)

    CREATIVE REALITIES Q2 FY26 earnings call CREX

    Aug 13, 2026 Source

    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

    5

    • 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

    3

    • 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

    7
    CategoryTargetConfidence
    Q3 FY26 Revenue
    Significantly exceed Q4 2025 revenue of $23.9 million
    high materiality
    High
    Q4 FY26 Revenue
    Significantly exceed Q3 2026 revenue
    high materiality
    High
    Annualized Synergies from CDM
    At least $10 million
    medium materiality
    High
    Adjusted EBITDA Margins
    Increase in quarters to come
    medium materiality
    Medium
    Gross Margin
    Increase quarter-over-quarter
    medium materiality
    Medium
    Hardware Gross Margins
    Expand again in 2027
    low materiality
    Medium
    North Carolina Lottery Expansion
    Significant expansion
    low materiality
    Medium

    Operational metrics

    16
    Consolidated gross margin
    38.6%vs 38.5% in Q2 FY25
    Q2 FY26

    Consolidated gross margin for the quarter.

    Consolidated gross margin
    38.5%
    Q2 FY25

    Consolidated gross margin for the prior year period.

    Hardware gross margin
    17.2%vs 25.1% in Q2 FY25
    Q2 FY26

    Hardware gross margin, decreased primarily due to mix.

    Hardware gross margin
    25.1%
    Q2 FY25

    Hardware gross margin for the prior year period.

    Service gross margin
    50.1%vs 54.4% in Q2 FY25
    Q2 FY26

    Service gross margin, declined due to expiration of higher-margin customer contracts.

    Service gross margin
    54.4%
    Q2 FY25

    Service gross margin for the prior year period.

    Annual Recurring Revenue (ARR)
    $20.5 millionup from $20.1 million last quarter
    as of June 30, 2026

    Annual Recurring Revenue at the end of the second quarter.

    ARR backlog
    $4 million-$5 million
    as of June 30, 2026

    Backlog of ARR expected to convert at the start of 2027.

    Net proceeds from equity offering
    $12 million
    Q2 FY26

    Net proceeds raised from a follow-on equity offering to strengthen the balance sheet and provide capital for growth.

    Available liquidity
    $12.8 million
    as of June 30, 2026

    Available liquidity under the revolving credit facility.

    Albertsons annual customer trips
    543 million
    annual

    Total annual customer trips across Albertsons' network of stores, equating to 36 million customers per week.

    Albertsons screens converted
    3,000
    as of Q2 FY26

    Number of screens converted and currently running across 220-250 Albertsons locations.

    Albertsons ads running daily
    1 million
    daily

    Number of ads currently running daily on the converted Albertsons screens.

    Employee count
    230
    Q2 FY26

    Approximate number of employees at Creative Realities.

    Legacy CRI G&A expenses
    $400,000down YoY
    Q2 FY26

    Legacy CRI General and Administrative expenses decreased year-over-year.

    SaaS revenue from Lexus/Toyota Canada
    couple hundred thousand
    annual

    Expected annual SaaS and creative services revenue from migrating Lexus/Toyota dealerships in Canada.

    Industry KPIs

    6
    MetricValueDetails
    Total revenue$21.5 millionUSD
    Net income EPS$0.43per diluted share
    Adjusted EBITDA$2.0 millionUSD
    Total operating expenses$11 millionUSD
    Cash marketable securities$10.7 millionUSD
    M a integration cost synergies$10 millionUSD

    Deals & partnerships

    8
    Tennessee TitansOfficial digital signage provider for new Nissan Stadium$8.5 million

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

    AlbertsonsRetail 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 CineMediaExpand 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 organizationConversion 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 QSRConversion 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 CanadaMigration to CRI's CMS platform

    Engagement includes significant creative work. Covers approximately 300 locations.

    Culver'sDeployment of new drive-thrus3-year target to complete all restaurants

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

    North Carolina LotteryExpansion 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

    3
    Hardware gross margin pressurethrough 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 declineQ2 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 servicesongoing

    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

    5

    Q3 FY26 Revenue

    next quarter
    Current$21.5 million (Q2 FY26)
    TargetSignificantly 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.

    Q&A highlights

    5

    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 read5 chapters

    Detailed Narrative

    01

    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.

    02

    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.

    03

    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.

    04

    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.

    05

    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.

    AI-generated summary of the company’s earnings call. Not investment advice.