GICS Sector : Technology
Creative Realities, Inc., together with its subsidiaries, provides digital marketing technology and solutions to retail companies, individual retail brands, enterprises, and organizations in the United States and internationally.Its technology and solutions include digital merchandising systems and omni-channel customer engagement systems; interactive digital shopping assistants; advisors and kiosks; and other interactive marketing technologies, such as mobile, social media, point-of-sale transactions, beaconing, and Web-based media that enables its customers to engage with their consumers.The company also provides system hardware; professional and implementation services; software design and development; and software licensing, deployment, and maintenance and support services, as well as media management and distribution software platforms and networks; device and product management; and customized software service layers, systems, experiences, workflows, and integrated solutions.
Creative Realities, Inc.'s (CREX) Q3 2025 earnings report revealed a revenue decline to $10.5 million from $14.4 million in the prior year period, accompanied by a gross profit decrease to $4.8 million from $6.6 million in 2024. The adjusted EBITDA also witnessed a downturn, falling to $800,000 from $2.3 million last year. The earnings per share (EPS) came in at -$0.32, missing estimates of -$0.08. The company's financial performance was impacted by the challenging market conditions, as noted by the management during the earnings call.
Publication Date: Dec -02
The acquisition of Cineplex Digital Media (CDM) for $50 million US, completed on November 7, 2025, is expected to more than double the size of CREX and significantly increase its operations outside the US. The deal is anticipated to provide synergies of at least $10 million across North America on an annualized basis by 2026. The combined entity is expected to deliver total company revenue exceeding $100 million in 2026, with an adjusted EBITDA margin in the high teens. The management is confident that the acquisition will bring credibility and expertise to US customers, allowing for quicker traction.
CREX has a strong pipeline of opportunities, including a large QSR chain with over 1,000 locations across more than 25 states. The company is also expecting to leverage CDM's position in Canada to expand its presence in US malls, with discussions underway with mall ownership properties like Westfield and Simon. Additionally, the company has a robust opportunity in the lottery business, with an RFP from a US state received and more expected. The management is optimistic about the growth prospects, with a growth rate of 30-40% expected in the stadium vertical in 2026.
Analyzing the valuation metrics, CREX's P/S Ratio stands at 0.62, indicating a relatively low revenue multiple. However, the EV/EBITDA ratio is -80.46, suggesting that the company's enterprise value is not justified by its current EBITDA. The ROE and ROIC are also negative, at -4.36% and -3.0%, respectively. With analysts estimating revenue growth at 83.7% for next year, the current valuation may be justified if the company is able to execute its growth plans.
The company financed the CDM acquisition through a combination of debt and preferred equity, including a three-year $36 million senior term loan and $30 million of convertible preferred equity. As of September 30, 2025, CREX had cash on hand of approximately $300,000 and gross debt of $22.2 million. The management is comfortable with its growth potential and capital, with $17-17.5 million available. The combined ARR of the companies is expected to exceed $40 million US, with high-margin revenue going into 2026.
Creative Realities Announces Addition of Tamra Koshewa as CFO
Nov -25
Creative Realities, Inc. (CREX) Q3 2025 Earnings Call Transcript
Nov -12
Creative Realities, Inc. (CREX) Reports Q3 Loss, Lags Revenue Estimates
Nov -12
Creative Realities Reports Fiscal 2025 Third Quarter Results
Nov -12
Creative Realities Announces Addition of Dan McAllister as CRO
Nov -11
Creative Realities to Participate in Upcoming Craig-Hallum Conference
Nov -05
Creative Realities, Inc. Announces Third Quarter 2025 Earnings Release Date and Conference Call Information
Oct -31
Creative Realities, Inc. (CREX) M&A Call Transcript
Oct -16
Creative Realities' 9.9% growth in Hardware is driven by increasing demand for digital signage and interactive kiosks, expansion into new markets, and strategic partnerships. The company's focus on innovative display technologies, such as LED and OLED, also contributes to its growth. Additionally, the rising need for immersive customer experiences in retail and entertainment industries fuels the demand for Creative Realities' hardware solutions.
Creative Realities' Managed Services segment growth of 12.03% is driven by increasing demand for digital signage and experiential solutions, expansion into new markets, and strategic partnerships. Additionally, the company's focus on providing comprehensive services, including installation, maintenance, and content management, has led to higher customer retention and upselling opportunities, contributing to the segment's growth.
Creative Realities' Installation Services growth is driven by increasing demand for digital signage and experiential displays, expansion into new markets, and strategic partnerships. The company's expertise in designing and installing complex display systems, combined with its ability to provide comprehensive services, has enabled it to capitalize on the growing need for immersive brand experiences.
Creative Realities' 9.98% growth in Other Services is driven by increasing demand for digital signage and experiential marketing solutions, expansion into new markets, and strategic partnerships. The company's focus on innovative technologies, such as augmented reality and artificial intelligence, also contributes to its growth.
Creative Realities' digital signage solutions provide engaging and interactive experiences for customers, employees, and visitors across various industries.
Self-service kiosks and interactive displays designed to provide customers with easy access to information, products, and services.
Digital menu boards designed to display menu items, prices, and nutritional information in a clear and visually appealing way.
Interactive wayfinding and directory solutions that provide visitors with easy navigation and information about a location.
A cloud-based content management system that enables users to create, schedule, and distribute content across multiple screens and locations.
Data analytics and insights solutions that provide businesses with valuable insights into customer behavior and engagement.
The threat of substitutes for Creative Realities, Inc. is medium due to the availability of alternative digital signage solutions.
The bargaining power of customers is low due to the specialized nature of Creative Realities' products and services.
The bargaining power of suppliers is medium due to the availability of multiple suppliers for the company's hardware and software components.
The threat of new entrants is high due to the relatively low barriers to entry in the digital signage industry.
The intensity of rivalry is high due to the competitive nature of the digital signage industry and the presence of several established players.
| Value | |
|---|---|
| Debt Weight | 32.72% |
| Debt Cost | 19.86% |
| Equity Weight | 67.28% |
| Equity Cost | 19.86% |
| WACC | 19.86% |
| Leverage | 48.64% |
Value: 9.2
Growth: 4.9
Quality: 5.1
Yield: 0.0
Momentum: 9.5
Volatility: 2.0
1-Year Total Return ->
Value: 7.7
Growth: 4.2
Quality: 5.7
Yield: 0.0
Momentum: 9.0
Volatility: 3.0
1-Year Total Return ->
Value: 4.0
Growth: 6.2
Quality: 6.3
Yield: 0.0
Momentum: 9.0
Volatility: 3.3
1-Year Total Return ->
Value: 4.8
Growth: 5.4
Quality: 4.5
Yield: 0.0
Momentum: 6.5
Volatility: 3.7
1-Year Total Return ->
Value: 5.5
Growth: 5.9
Quality: 4.0
Yield: 0.0
Momentum: 0.5
Volatility: 3.0
1-Year Total Return ->
Value: 9.0
Growth: 2.8
Quality: 4.8
Yield: 0.0
Momentum: 0.5
Volatility: 1.0
1-Year Total Return ->