Creative Realities, Inc.

Good morning. At this time, I would like to welcome everyone to the Creative Realities 2024 Fourth Quarter Earnings Conference Call. This call will be recorded and a copy will be available on the company's website at cri.com following the completion of the call. The company has prepared remarks summarizing the interim results for the fourth quarter along with additional industry and company updates. Joining the call today is Rick Mills, Chief Executive Officer, George Sautter, Chief Strategy Officer, and Ryan Mudd, Interim Chief Financial Officer. Mr. Mudd, you may begin.

Thank you, and good morning, everyone. Welcome to our earnings call for the fourth quarter into December 31, 2024. I would like to take this opportunity to remind you that remarks today will include forward-looking statements. The words anticipated, will, believes, expects, intends, plans, estimates, projects, should, may, propose, and similar expressions, or the negative versions of such words or expressions as they relate to us or our management are intended to identify forward-looking statements. Actual results may differ materially from those contemplated by these forward-looking statements. Factors that could cause these results to differ materially are set forth in our Form 10-K filed with the SEC Friday evening, March 14, 2025, and in our other filings with the SEC. Any forward-looking statements that we make on this call are based on assumptions as of today, and we undertake no obligation to update these statements as a result of new information or future events. During this call, we will present both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in our public filings and in our earnings release that was issued Friday evening, March 14, 2025. We believe the use of certain non-GAAP measures, such as adjusted EBITDA and several other important KPIs, represent meaningful ways to track our performance. It is now my pleasure to introduce Rick Mills, CEO of Creative Realities.

Thanks, Ryan. Good morning, everybody. Thanks for joining. Today, there are two big milestones to discuss. First, number one, we just closed out our best year in the company history. with revenue exceeding 50 million and adjusted EBITDA of 10%. Number two, we have resolved our outstanding contingent liability from the purchase of Reflect Systems in 2022. But first, let me review our fourth quarter highlights as follows. Revenue of 11 million versus 14.5 million a year ago. Gross profit of 4.9 million versus 7.5 million in 2023. Adjusted EBITDA of approximately a half a million against 2.8 million last year. And annual recurring revenue, or ARR, at a run rate of 16.8 million. While completing our best year ever, the fourth quarter, as expected, was negatively impacted by deployment timing. However, with an active pipeline of opportunities ahead of us, we remain on track for another period of record performance in fiscal 2025. As mentioned on our third quarter call, we have numerous large opportunities currently being pursued, all of which give us a great degree of confidence in the quarters to come. We see revenue accelerating as the year progresses with especially strong results in the second half. Demand for our unique solutions continues to grow. A trend we anticipate will continue, particularly with the introduction of our AdLogic CPM Plus platform. This integrated, innovative solution provides customers with the tools to deliver targeted, high-performing campaigns at significantly reduced cost. It combines robust programmatic capabilities with a user-friendly self-serve interface that simplifies campaign execution, enhances targeting precision, and eliminates unnecessary intermediation fees. It also positions creative realities uniquely as a one-stop shop for required ad tech solutions, and allows us to benefit from advertising revenue. From deploying on-premise screens to offering sophisticated ad serving and campaign execution tools, our full-service approach addresses the challenges faced by modern in-store retail media networks. We believe it's a game changer in the industry that can significantly enhance the in-store media experience. As we expect top line growth to accelerate in the second half, we should see stronger operating results driven by better economies of scale, higher margins, and increased cash flow. We see adjusted EBITDA as a percentage of revenue rising back to 15% by year end. Early today, pre-market, in a separate press release and filing, we announced a settlement related to our contingent consideration obligation with former Reflect shareholders, an issue which has been on our investors' minds for an extended period of time. We worked hard to resolve this liability in a way that was a win-win to the company, its investors, and the former Reflex stockholders. We believe that settlement accomplishes this objective and provides a great deal of financial flexibility while removing a substantial overhang on our shares. The key metrics are as follows. CRI will pay $3 million in cash utilizing the existing reserve in our current credit agreement. In addition, we entered into a $4 million 30-month promissory note that includes a balloon payment in September of 2027. This long-term note, along with warrants, provides us time to continue growing the company and enhance shareholder value while also giving former Reflex stockholders an additional return on their investment. Again, I think this is a win-win for all involved that quantifies a payment plan and eliminates uncertainty through a clear, simplified financing structure. We are very pleased with this development that allows us to focus on growth and improved operating results for the remainder of fiscal 2025. Going forward, the combination of our active pipeline and new AdLogic CPM Plus platform puts us on track for revenue acceleration and increased performance. with no further overhang or distraction from the dispute. As the quick serve restaurant and retail market requirements continue to become more complex and demand driven, CRI remains at the forefront of improving the customer experience in a growing list of innovative clients and brands. While we are not providing specific guidance at this time, we anticipate the year ahead will be one of accomplishment and new records. I'll turn it back over to Ryan to share some additional comments on our financials.