In This Article:
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Revenue: Q1 2024 revenue reached $12.3 million, up 23.5% from $9.9 million in Q1 2023.
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Gross Profit: Increased to $5.8 million in Q1 2024 from $5.1 million in Q1 2023.
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Adjusted EBITDA: Approximately $0.8 million in Q1 2024, down from $1 million in Q1 2023.
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Annual Recurring Revenue (ARR): Reached $17.7 million at an annual run rate, up from $16.3 million at the end of 2023.
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Gross Margin: Lower on a percentage basis compared to Q1 2023 but increased in absolute dollars.
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Cash on Hand: Approximately $2.9 million as of March 31, 2024.
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Gross and Net Debt: Gross debt was $14 million and net debt was $11.1 million at the end of Q1 2024.
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Leverage Ratio: On a trailing 12-month basis, the leverage ratio was 2.9 on a gross basis and 2.3 on a net basis as of March 31, 2024.
Release Date: May 10, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Creative Realities Inc reported a record first quarter revenue of $12.3 million, a 23.5% increase from the previous year.
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The company achieved a record first quarter gross profit of $5.8 million, up from $5.1 million in 2023.
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Annual Recurring Revenue (ARR) reached an all-time high of approximately $17.7 million on an annual run rate basis, an increase of $1.4 million from the end of 2023.
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Creative Realities Inc secured a commitment for a new $20 million senior revolving credit facility, enhancing financial flexibility and strategic options.
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The company continues to expand its sales funnel and customer base, indicating strong future growth potential.
Negative Points
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Adjusted EBITDA for Q1 2024 was approximately $0.8 million, down from $1 million in the same period last year.
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The consolidated gross margin percentage decreased year-over-year, despite an increase in absolute dollars, due to a higher proportion of lower-margin installation services.
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Some project deployments, like the BCTV project, are progressing slower than originally anticipated.
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Administrative expenses have increased, partly due to investments in ERP applications and expansion of sales and media teams.
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While the new credit facility is beneficial, it comes with a variable interest rate, which introduces some uncertainty regarding future financial costs.
Q & A Highlights
Q: Can you talk about business development? What verticals are seeing the most demand and can you quantify bookings in the quarter? A: Richard Mills, CEO of Creative Realities, highlighted significant activity in the QSR space, led by drive-thru solutions, and in sports and entertainment, with engagements with 10-15 professional teams for large stadium overhauls. The retail media networks are also a key area, though transactions there tend to be slower and larger. Mills noted that there weren't many new logo wins in Q1 but expects this to change in Q2 and beyond.