Creative Realities, Inc.

Good morning. At this time, I would like to welcome everyone to Creative Realities' 2026 second quarter earnings conference call. This call will be recorded, and a copy will be available on the company's website at CRI.com following its completion. Creative Realities has prepared remarks summarizing the interim reports for the quarter along with additional industry and company updates. Joining the call today is Rick Mills, Chief Executive Officer, Tamra Koshewa, Chief Financial Officer, and George Sautter, Chief Strategy Officer and Head of Corporate Development. Ms. Koshewa, you may be in.

Thank you, and good morning, everyone. Welcome to our earnings call for the second quarter ended June 30th, 2026. 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, our management, our operations, are intended to identify forward-looking statements. Actual results may differ materially from those contemplated by such statements. Factors that could cause these results to differ materially are set forth in our Form 10-K and other filings with the SEC. Any forward-looking statements that we make on this call are based on assumptions and information as of today, and we undertake no obligation to update these statements after today. During this call, we will present both GAAP and non-GAAP financial measures. We believe the use of certain non-GAAP measures, such as adjusted EBITDA, ARR, and several other important key performance indicators, represent meaningful ways to track our performance. A reconciliation of GAAP to certain non-GAAP measures is included in our public filings and in our earnings release that was issued this morning. It is now my pleasure to introduce Rick Mills, CEO of Creative Realities. Rick?

Thanks, Tamra. Good morning, everybody. We appreciate you joining today's call. I'll start by giving some highlights of our quarterly financials and other recent developments. We posted revenue of $21.5 million in Q2 versus $13 million in the prior year period, including roughly $7.4 million from CDM. This is our best ever Q2 quarter revenue number and the second largest revenue quarter ever in the history of CRI. We are pleased with the strong top line growth and improved gross margins, which we expect this top line growth and margin enhancement to continue for the balance of the year. Our second quarter gross profit was $8.3 million as compared to $5.0 million in fiscal 2025 quarter. and our consolidated gross margin was 38.6 versus 38.5 in the prior year period. All trends are pointing in the right direction and we believe we have tremendous upward momentum into the second half of the year. As of June 30th, we had an annual recurring run rate or ARR of 20.5 million up from 20.1 million last quarter. and as we previously discussed we have about four somewhere between four and five million in backlog that will in backlog of ARR that will show up as we turn the clock and start 2027. So on January 1st that number automatically goes up significantly. Net loss attributable to common shareholders was 4.6 million for the three months ended June 30th, 2026, compared to a net loss of 1.8 million in the prior year period. Adjusted EBITDA rose to 2 million for the second quarter of 2026 versus 1.1 million last year. Our financial results are improving and our team is putting in the hard work to increase operating efficiencies and leverage opportunities across our much larger, technologically advanced, customer-centric organization. We have now completed the majority of the integration with CDM. We announced earlier this year we expect to realize synergies of at least 10 million on an annualized basis. Currently, our run rate is approximately 75% of the total synergy number, or Approximately $7.5 million has been realized. This will help us to drive adjusted EBITDA margins in the quarters to come as we scale revenue. As we grow our adjusted EBITDA, we expect to use the free cash flow to further de-lever the balance sheet, as many of you know, exactly as we have done in the past. The bottom line is we remain on track for the best year ever as we anticipate Q3 will be the largest quarter of revenue in the company's history. We expect Q3 this quarter to significantly exceed Q4 2025 when we achieve 23.9 in revenue. And one other comment to note, We are also confident that Q4 will significantly exceed Q3 2026. So next two quarters, upward trajectory, tremendous growth. One other thing, we recently completed a follow-on offering, raising approximately $12 million in net proceeds to help strengthen the balance sheet and provide capital for future growth. One additional note about the capital raise. I personally, as the CEO, purchased 5% of the shares in the offering, and several other members of the leadership team participated in the offering. Clearly, we believe in and are committed to growing this business. CRI is on track to be well positioned for the next two quarters and 2027. I'll come back in a minute to talk about some customer updates. but we'll now turn it over to Tamra to share some additional comments on our second quarter financials. Tamra.