Creative Realities, Inc. reported third‑quarter 2025 revenue of $10.5 million, a 27% decline from the $14.4 million earned in the same period last year and a miss of $3.2 million against the consensus estimate of $13.70 million. The shortfall reflects a 30% drop in service revenue and a 19% decline in hardware sales, driven by lower demand for legacy hardware and a shift toward lower‑margin, subscription‑based services.
Hardware revenue fell to $4.2 million, a 19% year‑over‑year decline, while service revenue dropped to $6.4 million, a 30% decline. The mix shift toward higher‑margin SaaS contracts partially offset the hardware loss, but the overall revenue contraction was amplified by the $2 million order that slipped into the fourth quarter. Gross margin contracted to 45.3% from 45.6% in Q3 2024; hardware margin improved to 30.0% from 24.1% year‑over‑year, whereas service margin fell to 55.3% from 57.9%.
Operating loss widened to $7.3 million, largely due to a $5.7 million non‑cash software impairment charge related to the wind‑down of the Stellantis engagement. Net loss expanded to $7.9 million, with the impairment charge and the delayed order accounting for the majority of the loss. Adjusted EBITDA stood at $0.8 million, reflecting the company’s ongoing cost‑control efforts amid declining top line.
Cash on hand was $0.3 million at quarter‑end, and total debt stood at $22.2 million, underscoring the company’s liquidity challenges and the “going concern” uncertainty disclosed in prior filings. In the days following the earnings release, Creative Realities completed a debt refinancing and raised capital through a preferred‑stock issuance, actions aimed at bolstering its balance sheet.
The company closed its acquisition of Cineplex Digital Media on November 7, 2025, a transaction valued at $120 million that adds a blue‑chip Canadian customer base and cross‑selling opportunities. Management highlighted that the deal is “transformational,” expecting immediate revenue synergies and a stronger subscription pipeline. CEO Rick Mills noted that the acquisition “significantly improves our growth trajectory” and should begin improving bottom‑line results in fiscal 2026.
Earnings per share missed the consensus estimate of –$0.08 by $0.67, a 0.67‑dollar shortfall that reflects the combined impact of the impairment charge and the delayed order. Management guided for a modest revenue decline in Q4 2025 and a full‑year 2026 revenue outlook of $100 million, citing the integration of Cineplex Digital Media and a focus on high‑margin SaaS. Mills emphasized that the company is “on a solid foundation for greater returns in fiscal 2026 and beyond,” while acknowledging the need for tighter cost discipline and stronger cash flow generation.
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