Creative Realities 2025 Q3 Earnings Record Net Loss Amid Strategic Acquisition

Creative Realities (CREX) reported Q3 2025 earnings marked by a 26.9% revenue decline and a $7.86 million net loss, missing analyst estimates for both metrics. The company attributed the shortfall to a $2 million order delay and a $5.7 million non-cash software impairment. Despite these challenges, management highlighted the transformative potential of its recent Cineplex Digital Media acquisition, which closed post-quarter for $42.7 million. This move, combined with expanded leadership and strategic synergies, is expected to drive growth in 2026.

Revenue

Creative Realities' total revenue for Q3 2025 declined 26.9% year-over-year to $10.55 million, reflecting reduced hardware and service sales. Hardware revenue stood at $4.17 million, while services and other revenue totaled $6.38 million. The decline was attributed to deployment timing, a significant sports and entertainment installation in 2024 that did not recur, and a client insourcing portion of the company's work. A $2 million order shift to Q4 further impacted results, underscoring near-term revenue volatility.

Earnings/Net Income

The company reported a net loss of $7.86 million, or $0.75 per share, compared to a $54,000 profit in Q3 2024—a 14,659% deterioration. This marked a record high for Q3 net income in 9 years, though the negative performance was driven by a $5.7 million non-cash software impairment related to the Stellantis engagement wind-down. The earnings per share (EPS) swing from $0.01 to -$0.75 represented a 7600% negative change, significantly missing analyst expectations and highlighting operational challenges.

Post-Earnings Price Action Review

Following the earnings release, Creative Realities' stock exhibited mixed short-term price movements. The stock rose 4.69% on the day of the report but declined 10.67% during the subsequent trading week, reflecting investor uncertainty. Month-to-date, however, shares gained 3.47%, suggesting partial recovery in confidence. The disparity between daily and weekly performance underscores market skepticism about near-term profitability but hints at potential stabilization as the CDM acquisition integrates and synergies materialize.

CEO Commentary

Rick Mills, CEO and Chairman, emphasized the strategic significance of the Cineplex Digital Media acquisition, stating it "allows us to leapfrog the competition in North America and puts us on an accelerated growth trajectory." He highlighted CDM's recurring revenue base, with 60% of its revenue recurring and 84% based in Canada, as a key asset. Mills also announced Dan McAllister's appointment as Chief Revenue Officer, tasked with accelerating customer acquisition in North America. The CEO expressed confidence in achieving $100 million in revenue by 2026, driven by expanded market reach and synergies from the acquisition.

Guidance

Creative Realities provided forward-looking guidance, projecting revenue exceeding $100 million in 2026 with adjusted EBITDA margins in the high teens. The company anticipates combined annual recurring revenue (ARR) and advertising revenue to exceed $40 million by 2026, supported by the CDM acquisition's synergies. Management reiterated expectations for revenue acceleration, margin improvement, and backlog growth in upcoming quarters, despite current liquidity constraints and increased leverage post-acquisition.

Additional News

Creative Realities announced the completion of its $42.7 million acquisition of Cineplex Digital Media, a move expected to double the company's size and accelerate growth. The acquisition, funded through a $36 million senior term loan and $30 million in convertible preferred equity, expands CREX's footprint in Canada's retail media networks. Additionally, Dan McAllister was appointed Chief Revenue Officer, bringing over 25 years of experience in digital signage and enterprise SaaS. The company also disclosed cash on hand of $0.3 million as of September 30, 2025, and outlined plans to leverage CDM's customer base to digitize Canadian quick-service restaurants.