Creative Realities Q1 Revenue Climbs 68% to $16.3M, Net Loss $7.9M
CREX•Creative Realities reported Q1 revenue of $16.3 million, up from $9.7 million, driven by $7.9 million from CDM and ARR of $20.1 million. Gross margin fell to 34.2% from 45.7% due to higher hardware mix, transition costs, while net loss was $7.9 million (-$0.74/share) with Adjusted EBITDA of -$0.5 million.
1. Q1 Financial Highlights
Creative Realities achieved $16.3 million in revenue for the fiscal first quarter, a 68% increase year-over-year, with gross profit rising to $5.6 million. Annualized recurring revenue remained steady at $20.1 million, while the company posted a net loss of $7.9 million (-$0.74 per share) and an Adjusted EBITDA loss of $0.5 million.
2. Margin and Profitability Pressure
Consolidated gross margin contracted to 34.2% from 45.7% a year earlier, reflecting a higher proportion of lower-margin hardware sales and $0.5 million in one-time transition costs. Hardware margin fell to 14.0% and service margin to 42.0%, down from 32.1% and 53.0% respectively, due to mix shifts and contract expirations.
3. CDM Acquisition and ARR Stability
The acquisition of Cineplex Digital Media contributed $7.9 million to Q1 revenue and expanded service offerings. With integration substantially complete, ARR held at $20.1 million, underscoring recurring revenue stability and setting the stage for potential upsells and cross-selling opportunities.
4. Expenses and Outlook
Sales and marketing expenses more than doubled to $2.9 million, and G&A rose to $8.9 million, driven by CDM inclusion. Cash on hand increased slightly to $1.8 million while debt load reached $47.5 million, and management expects stronger sales and new installations in Q2 based on an expanding pipeline.
