Wed, May 14, 12:04 PM (41 days ago)
**Creative Realities, Inc. (CREX) Q1 2025 Financial Summary** **Financial Health and Performance:** - **Revenue:** $9,734,000, down 21% from $12,285,000 in Q1 2024. - **Gross Profit:** $4,453,000, down 23% from $5,764,000 in Q1 2024. - **Operating Loss:** $722,000, compared to an operating loss of $76,000 in Q1 2024. - **Net Income:** $3,368,000, a significant improvement from a net loss of $109,000 in Q1 2024, primarily due to a $4,775,000 gain on the settlement of contingent consideration. - **Cash Flow:** Negative operating cash flow of $2,449,000, compared to positive $1,938,000 in Q1 2024. **Key Metrics:** - **Gross Margin:** 46% in Q1 2025, down from 47% in Q1 2024. - **Operating Expenses:** $5,175,000, down 11% from $5,840,000 in Q1 2024. - **Interest Expense:** $321,000, down from $663,000 in Q1 2024. **Trends and Uncertainties:** - **Revenue Decline:** Due to delays in customer deployment planning and reductions in SaaS subscription services. - **Cost Reduction:** Decreases in sales and marketing, and general and administrative expenses. - **Debt and Liquidity:** The company has an accumulated deficit of $53,486,000 and positive working capital of $3,133,000. It remains dependent on improving cash flows and securing additional liquidity. - **Going Concern:** Substantial doubt about the company's ability to continue as a going concern over the next twelve months. **Future Operations Impact:** - **Debt Facilities:** The company is evaluating options for amending debt facilities or accessing capital markets via equity financing. - **Market Conditions:** Plans are subject to market conditions and may not be within the company's control. - **Capital Needs:** The company will need to secure additional financing to meet its financial obligations and execute its business plan. **Segment Performance:** - **Hardware Sales:** Down 18% due to delays in customer deployment. - **Services Revenue:** Down 22%, with managed services down 11% and installation services down 26%. - **SaaS Revenue:** Down 11% due to reductions in licenses subject to software subscriptions. **Customer and Vendor Concentration:** - **Accounts Receivable:** Two customers accounted for 13% and 11% of accounts receivable at March 31, 2025. - **Revenue:** Three customers accounted for 20%, 11%, and 10% of revenue in Q1 2025. - **Accounts Payable:** Two vendors accounted for 14% and 13% of outstanding accounts payable at March 31, 2025. **Conclusion:** Creative Realities, Inc. faced significant revenue declines and operating losses in Q1 2025, primarily due to delays in customer deployment and reductions in SaaS subscription services. The company's financial health remains uncertain, with substantial doubt about its ability to continue as a going concern. It will need to secure additional financing and improve cash flows to meet its financial obligations and execute its business plan.