Creative Realities (NASDAQ:CREX) reported second-quarter revenue growth of 65% year over year, supported by contributions from its CDM acquisition, increased service revenue and new customer deployments. Management said it expects revenue and adjusted EBITDA to improve further in the second half of 2026 as integration synergies and higher-margin SaaS revenue build.
Revenue for the quarter ended June 30 totaled $21.5 million, compared with $13 million in the year-earlier period and $16.4 million in the first quarter. Chief Executive Officer Rick Mills said the result represented the company’s strongest second quarter and its second-largest quarterly revenue total on record. CDM contributed approximately $7.4 million, or 35% of quarterly sales.
Revenue Growth and Profitability Measures
Hardware revenue rose to $7.5 million from $7.1 million in the prior-year quarter, while service revenue more than doubled to $14 million from $6 million. Koshewa said the service increase reflected approximately $7 million of CDM service sales as well as growth in the company’s legacy business.
Gross profit increased to $8.3 million from $5 million, while consolidated gross margin was largely unchanged at 38.6%, compared with 38.5% a year earlier. Hardware gross margin declined to 17.2% from 25.1%, primarily because of revenue mix. Service gross margin fell to 50.1% from 54.4%, which Koshewa attributed to the expiration of higher-margin customer contracts in 2025.
The company reported a net loss attributable to common shareholders of $4.6 million, or $0.43 per diluted share, compared with a $1.8 million loss, or $0.17 per diluted share, in the prior-year period. Adjusted EBITDA, a non-GAAP measure, increased to $2 million from $1.1 million and improved from an adjusted EBITDA loss of $494,000 in the first quarter.
Sales and marketing expense rose to $2 million from $1.2 million, including approximately $500,000 from CDM. General and administrative expense increased to $9 million from $5.2 million, with CDM accounting for roughly $3.8 million of the increase. Koshewa said legacy Creative Realities G&A expense declined by about $400,000 year over year.
Integration, Liquidity and Outlook
Mills said the company has completed most of the CDM integration and has achieved approximately $7.5 million of its targeted $10 million in annualized synergies. Management expects the remaining synergies and other cost reductions to support adjusted EBITDA margins as revenue scales.
At June 30, Creative Realities had $10.7 million in cash, compared with $1.6 million at the beginning of 2026. Debt totaled $46.6 million, up from $44 million at the start of the year, while the company had approximately $12.8 million in available liquidity under its revolving credit facility.
The company also completed a follow-on equity offering that generated approximately $12 million in net proceeds. Mills said he purchased 5% of the shares sold in the offering and that other leadership team members also participated.
Koshewa said the company provided its auditors with a financial model and supporting documentation related to the going-concern language that had appeared in its financial statements. She said the auditors concluded that the going-concern language was no longer needed and that it would not appear in the company’s forthcoming second-quarter Form 10-Q.
Management said it expects third-quarter revenue to exceed the company’s prior record of $23.9 million, set in the fourth quarter of 2025, and expects fourth-quarter revenue to “significantly” exceed the third quarter. Mills also said the company had $4 million to $5 million of annual recurring revenue backlog expected to begin contributing in 2027. ARR stood at $20.5 million as of June 30, up from $20.1 million at the end of the prior quarter.
Customer Deployments and Pipeline
Mills identified Albertsons as the previously undisclosed grocery retail-media-network customer. Creative Realities has converted roughly 3,000 screens across approximately 220 to 250 locations and expects to consolidate deployment responsibilities from several suppliers over the next 30 days. Mills said the network was running about 1 million advertisements per day and uses the company’s content-management system and advertising technology.
Albertsons operates 2,200 stores under 20 banners in 35 states and receives 36 million customer visits per week, Mills said. He described the project as the largest retail media network deployment in the U.S. this year by screen count.
The company also said it remains on track to recognize most of the revenue during 2026 from its approximately $8.5 million Tennessee Titans and Nissan Stadium project. The project includes thousands of displays and an IPTV system at the new stadium in Nashville.
Other customer developments discussed on the call included:
- Creative Realities completed test sites for an AMC Theatres lobby-media modernization project covering about 285 locations and plans to begin full deployment during the month.
- The company is in contract-stage discussions with a national cellular retailer operating more than 900 locations and a quick-service restaurant chain with more than 1,000 locations. Both projects involve converting existing screens to Creative Realities’ platform and are expected to add SaaS revenue in 2027.
- The company is migrating Lexus Toyota dealerships in Canada to its CMS platform. The approximately 300-location engagement is expected to generate a couple hundred thousand U.S. dollars annually in SaaS and creative-services revenue.
Margin Expectations
Management said service and SaaS revenue should become a larger contributor to profitability over time, though the third quarter is expected to contain a higher proportion of hardware revenue because of planned installations, including the Tennessee Titans project. Koshewa said fourth-quarter revenue mix should return closer to the second-quarter level, aided by CDM media revenue.
Mills said pricing pressure has emerged in services as competitors face business challenges, while hardware margins are expected to remain under pressure through the rest of 2026. The company expects potential hardware-margin improvement in 2027. Management said it aims to return consolidated gross margin to above 40% in 2027 as SaaS revenue increases, though it expects to remain below that level during 2026.
About Creative Realities (NASDAQ:CREX)
Creative Realities, Inc (NASDAQ: CREX) is a technology company specializing in digital engagement solutions for retail, restaurant, corporate and public-facing environments. Headquartered in Dallas, Texas, the company develops and delivers integrated hardware and software platforms designed to create dynamic, interactive experiences. Its offerings include digital signage networks, interactive kiosks and video training systems, all powered by an enterprise-grade content management system that enables clients to deploy, schedule and monitor multimedia content across multiple locations.
The company’s flagship software platform provides real-time analytics, remote asset management and customizable user interfaces that support both touchscreen and traditional display formats.
