Creative Realities - Earnings Call - Q2 2025
August 13, 2025
Executive Summary
- Revenue accelerated sequentially to $13.03M, flat YoY, and materially above Wall Street consensus; EPS missed as mix shifted toward lower-margin hardware. Revenue beat consensus ($11.85M*) while EPS came in at $(0.17) vs $(0.07); hardware pre-buys ahead of tariff uncertainty and lower SaaS/media weighed on margins.
- Gross margin compressed to 38.5% (vs 45.7% in Q1 and 51.8% YoY) on mix; management expects margin expansion in H2 as service deployments catch up and product mix normalizes.
- Balance sheet deleveraging resumed: ~$3.1M debt reduction in Q2 via operating cash; revolver balance $16.1M at quarter-end with $0.6M cash on hand and additional availability; leverage ratios rose due to contingent liability settlement but are expected to improve.
- Near-term catalysts: QSR pilot moving to rollout, live venue wins, Circle K Mexico PoC expansion potential, and anticipated H2 installs; management targets adjusted EBITDA margin returning to ~15% by year-end, supporting estimate revisions and potential stock re-rating on execution.
What Went Well and What Went Wrong
What Went Well
- Sequential revenue growth of 34% vs Q1 on hardware demand (QSR and sports/entertainment); ARR improved to ~$18.1M, and ~$3.1M of debt was paid down using operating cash flow.
- Strong pipeline and QSR drive-thru win: “We’re delivering a 100% turnkey solution... powered by our proprietary CMS platform, Clarity” with pilots in Q3/Q4 and national rollout expected thereafter.
- Live venue momentum with multiple stadium/arena projects and Mexico expansion; Circle K Mexico PoC executed with plan to expand pilots and potential rollout to up to 200 stores.
What Went Wrong
- Gross margin compression to 38.5% (vs 51.8% YoY) due to higher hardware mix and reduced SaaS/media; service margins also declined YoY (54.4% vs 65.2%).
- Q2 EPS of $(0.17) vs $(0.06) YoY and below consensus as operating income swung to a $(1.3)M loss vs $0.6M profit YoY; G&A increased partly from stock-based comp despite cost containment excluding SBC.
- Media exit (effective Oct 1, 2024) and tariff-related pre-buys pressured service revenue ($6.0M vs $8.1M YoY) and hardware margins; working capital dynamics reduced cash on hand to $0.6M though sweep structure mitigates interest expense.
Transcript
Speaker 5
Good morning. At this time, I would like to welcome everyone to Creative Realities, Inc.'s 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, Inc. has prepared remarks summarizing the entry results of the quarter, along with additional industry and company updates. Joining the call today is Rick Mills, Chairman and Chief Executive Officer, George Sautter, Chief Strategy Officer and Head of Corporate Development, and Ryan Mudd, Interim Chief Financial Officer. Mr. Mudd, you may proceed.
Speaker 1
Thank you, and good morning, everyone. Welcome to our earnings call for the second quarter ended June 30, 2025. 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 version 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 such statements. Factors that could cause these results to differ materially are set forth in our Form 10-K and other filings with the U.S. Securities and Exchange Commission. Any forward-looking statements 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 this morning. 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.
Speaker 0
Thanks, Ryan. Good morning, everybody. Thank you for joining the call. I'll start by giving some details of our Q2 financials. We posted revenue of $13 million in the second quarter, up 34% versus Q1, and roughly flat year-over-year, while gross profit was $5 million in 2025 Q2 versus $6.8 million in Q2 2024. Q2 2024 gross margin of $6.8 million was inflated due to the inclusion of $815,000 in media sales revenue as we exited the media sales business. Our consolidated gross margin was 39% versus 52% in the prior year period, with the lower profitability largely due to changes in revenue mix of more hardware versus services. This was driven by few customers who chose to purchase hardware in advance due to the uncertainty of tariffs. We expect margins to rise in the third and fourth quarters as we are installing those products previously purchased in bulk.
As of June 30, 2025, we had an annual recurring revenue run rate, or ARR, of $18.1 million versus $17.3 million at the end of the first quarter. As we have previously discussed, new deployments have a follow-on effect of growing SaaS-based ARR. Adjusted EBITDA rose to $1.2 million for the second quarter of 2025 from $0.5 million in Q1 and was down slightly versus last year's $1.5 million. We anticipate this will improve further going forward as revenue increases and we continue to manage overhead expenses. In fact, we expect adjusted EBITDA as a percent of revenue rising back to 15% by year-end. Notably, we were able to reduce approximately $3.1 million in debt this quarter due to operating cash generated during the period.
While some short-term working capital issues impacted Q1, as previously discussed, we're pleased to now be able to once again focus on strategically using cash flow to pay down debt and delever the company whenever possible. Let me take this opportunity to address a question that we sometimes get. We have a lot of credit with a sweep account. At the end of Q2, the balance on that account was $16.1 million, down $3.1 million from the end of Q1 due to the cash generation that I just outlined. At the end of Q2, we had $600,000 in cash on hand with additional availability of $6 million. We do not keep excess cash on hand, and the cash we have on hand at any point is not a proxy for our true working capital capacity.
As stated last quarter, we have a very robust pipeline of opportunities on which we're bidding, reflecting strong demand for our technology as well as generally good economic conditions within our customer base. During Q2, we announced a significant engagement with a well-known upscale quick-service restaurant chain with over 1,000 locations across more than 25 states. We're currently implementing a pilot program in select locations during Q3 and Q4 and expect a national rollout to begin immediately following the completion of the pilot. This is another example of our ability to digitally transform an establishment's menu boards inside and out, shifting from static displays to dynamic digital engagement while increasing basket size and profitability and increased throughput in the drive-thru operations. We are delivering a 100% turnkey solution, all powered by our proprietary CMS platform, Clarity, along with consulting, content strategy, hardware provisioning, deployment support, and ongoing day-two service.
I'll keep everyone updated on the progress of this important implementation, which will result in a more agile, connected restaurant environment that meets guest expectations and provides flexibility for enhanced applications in the future. Our AdLogic CPM+ platform continues to impress customers due to its power and flexibility. It gives clients the tools to deliver targeted campaigns at significantly reduced cost, combining programming capabilities with a self-serve interface that simplifies campaign execution, enhances targeting precision, and eliminates unnecessary intermediation fees. This past quarter, we saw increased traction and interest from existing and new customers. We currently have three customers who are in the testing evaluation phase of the platform, which, if chosen, would power their in-store retail media networks. We have been in the retail media network business for some time and are currently delivering greater than 25 million ads daily.
We expect in-store retail media networks to grow our revenue and recurring SaaS in 2026 and beyond. The bottom line is that we remain on track for another year of solid performance. As stated last quarter, we expect revenue to accelerate in the second half, backlog to grow, and margins to improve, putting us in position for tremendous results in 2026. I'll turn it back over to Ryan to share some additional comments on our financials.
Speaker 1
Thank you, Rick. An overview of our financial results for the second quarter of 2025 was provided in our earnings release in Form 10-Q, which included the condensed consolidated balance sheet as of June 30, 2025, the statements of operations for the three and six months ended June 30, 2025, the statement of cash flows for the six months ended June 30, 2025, and a detailed reconciliation of net income to EBITDA and Adjusted EBITDA for the quarter ended June 30, 2025, as well as the preceding four quarters. While Rick reviewed our operational results in detail, let me provide a couple of points of context related to our balance sheet. As of June 30, 2025, the company had cash on hand of approximately $600,000 versus $1 million at the start of 2025.
As previously mentioned, our consolidated balance sheet reflects minimal cash on hand as the company has set up a sweep instrument to apply cash against the revolving debt facility to further manage our interest expense. Our gross and net debt stood at approximately $20.1 million and $19.5 million, respectively, at the end of the second quarter, as compared to $13 million and $12 million, respectively, at the start of 2025. Our debt level was reduced by approximately $3.1 million during the period, as Rick previously discussed, due to operating cash flow as we continue to delever the company whenever possible to strengthen the balance sheet. At the end of the second quarter, our leverage on gross and net basis was 4.53 and 4.4, respectively, versus 2.59 and 2.39 at the beginning of fiscal 2025.
The increase in the leverage was caused by the settlement of the contingent liability in Q1 of 2025. We see this as continuing to improve going forward and remain dedicated to managing our debt as we evaluate and migrate to an optimized capital structure in support of our growth. I will now turn it back to Rick for additional comments on our results and customer activities.
Speaker 0
Thanks, Ryan. In closing here, our engagement with prospects is at an all-time high. We are pleased with the pipeline and the sheer number of discussions going on with potential prospects. We continue to focus on our primary four vertical markets: QSR, C-Store, retail, sports, and entertainment. The demand for improved drive-through performance in the QSR vertical continues to accelerate. We have introduced our latest drive-through hardware and software solution, which features a 1x3 55-inch digital display at a market price of $14,999 fully installed. This represents a new price point in the drive-through industry and a price reduction of 20% below most of our competitors. This will allow the smaller mid-market regional QSRs to adopt and implement digital drive-throughs. In the C-Store vertical, our longtime customer, 7-Eleven, stated in a news release on August 6, it plans to open 1,100 new restaurants in its U.S. stores by 2030.
The aggressive investment in restaurants is part of an updated transformation plan released by the retailer's Tokyo-based parent company, 7 & I Holdings. In addition to adding more than 1,000 restaurants over the next five years, 7-Eleven said it intends to open a total of 1,300 new larger format stores during that timeframe, all of them with an enhanced focus on food service. Assuming this occurs and 7-Eleven continues as a customer, we would expect this to add an additional 17,000 plus displays, generating $30 million in revenue and an additional $5 million annually in SaaS over a five-year period. One additional note on the C-Store vertical, we did deploy our first C-Store in Mexico. This is a proof of concept for Circle K Mexico. More to come on that opportunity in 2026.
As the transition to digital continues to move forward in our key verticals, the adoption and conversion opportunities continue to grow in scope and complexity. This leads to increasingly long sales cycles and requires patience and persistence. As CRI's market share and influence continues to grow, we expect to be the provider of choice. Other areas of continued growth are coming from our live venue IPTV team. Along with growing our existing live venue customers through seasonal projects, highlights of Q2 would include the conversion of a large D1 college campus stretching across six athletic venues, the expansion of club-level enhancements for two different NHL arenas and one NBA arena, and finally, the successful IPTV deployment to our first soccer stadium in Mexico. Menu board mobile phone-to-screen language translation for an NFL stadium that will be a host venue for several World Cup matches.
By the way, it's the first stadium to deploy this type of fan experience in the U.S. Finally, the award of two additional minor league baseball stadiums. With more than 12 net new logos or customers in the first half of the year, we expect to continue to secure our portion of the live venue market by providing IPTV solutions, digital signage, and content strategies throughout the United States, as well as we will build on the recent wins in Canada and Mexico. One additional network we have previously announced is the DigiPoint Media Network. This is a retail media network on ice boxes across groceries and C-Stores. The anticipated deployment, which we originally estimated to begin in Q3, is behind schedule. We now expect this network to begin deployment in Q4 of this year.
This is expected to be approximately 2,000 sites and generate in excess of $4 million in hardware and installation revenue, with additional SaaS revenue from our CMS and AdTech software solutions. One quick update on our SOC 2 Type 2 certification. We achieved SOC 2 Type 1 compliance in Q1 and have now achieved SOC 2 Type 2 certification. This compliance is a valuable credential that demonstrates the trustworthiness and credibility of our products to enterprise customers. This is yet another indicator of our acceleration in the marketplace. We've remained well positioned in the digital transformation landscape and look forward to delivering further improved operating results. With that, we'll now move to the Q&A portion of the call. Please go ahead, operator.
Speaker 5
Thank you. At this time, if you would like to ask a question, please press star one-one on your telephone. You will then hear an automated message advising your hand is raised. If you would like to remove yourself from the queue, press star one-one again. We also ask that you wait for your name and company to be announced before proceeding with your question. One moment while we compile the Q&A roster. My first question today will be coming from the line of Jason Crayor of Crayor Gowling. Your line is open.
Speaker 3
Great. Thank you, guys. Rick, for the last few quarters, we've talked about this growing pipeline, and a bunch of volume kind of getting jammed up at the one-yard line. It was great to see last quarter you get that QSR win. Just curious if you can give general updates on the progression of those deals through the pipeline and any visibility into any unlock.
Speaker 0
Jason, great question. Everything continues to move forward. They move forward, it seems like, an inch at a time. The quality of our top 10 is really spectacular. We just simply do not have anything that we are comfortable announcing at this time. We do expect to make some announcements in this calendar year.
Speaker 3
That's good to hear. When you talk about the acceleration in the back half of the year in terms of revenue and profitability, what is that predicated on? Is that visibility that you have to those deals getting through? Is that pipeline of new wins that are going to roll out? Just trying to understand what gives you that confidence.
Speaker 0
What gives us the confidence is when we announced the QSR wins last quarter or the quarter before, all of those are now piling up. We had expected to be installing some of those right at the end of Q2. That did not happen. It turned out in that particular instance that every one of those restaurants had to actually pour a new footer with their drive-thru. That is now getting caught up. In the next month, we begin deploying a significant quantity of new sites. It has been kind of just held up. When that catches up, we will be installing just tremendous amounts of locations. There is that, and there are a couple of stadium announcements. Those are the things that give us confidence.
Just to be clear, Jason, if we get some wins this year that we announce, these things from announcement to actually deploying generally take a number of months.
Speaker 3
Got it. Okay. Last question from me. If you look across the different verticals that you serve, where do you see the most pressure on businesses to kind of modernize their technology and, you know, adopt the digital solutions that you guys can provide?
Speaker 0
Clearly, that would be QSR drive-through. The post-pandemic, the drive-through in the QSR business really matters. Transitioning to digital can improve drive-through times, 10, 15, 20 seconds per car. You add that up to six hours of a packed drive-through line queue, it really makes a significant difference in revenue for the QSR operator. There is tremendous pressure, if you will, for them to update and innovate. That's number one in the QSR. Number two, I would tell you, retail media networks, everybody is circling it. In-store digital is a game changer. However, in-store digital takes a tremendous investment in your physical retail presence, and it takes a tremendous amount of time to get ready to deploy it just internally. Forget a supplier like myself. We're talking with three, four. We have three pilots underway now or three test cases. Probably got six other retailers in the queue.
We believe in 2026, we will actually execute or land our first large new retail media network. Those retail media networks, Jason, are in the tens of millions of dollars of deployment.
Speaker 3
Looking forward to hearing more about those as they come through. Thanks. Great update. Appreciate it.
Speaker 0
Thanks, Jason.
Speaker 5
Thank you. One moment for the next question. The next question will be coming from the line of Brian Kinstlinger of Alliance Global Partners. Your line is open.
Speaker 2
Great. Thanks so much. Just a follow-up. I was confused. The QSR installs in the second half of the year that give you confidence, is that 1,000-store location that you recently announced? Because I thought that was a pilot, or is that a different one? I'm just trying to understand what the driver of that is.
Speaker 0
No, that's the driver of that, Brian, is the customer. Yeah, that we are deploying 50 POC locations, but we already have a queue of locations behind that. We're already getting sign-ups, deposits, etc. That's not like we're going to deploy X number of locations, and then they're going to evaluate. That's not how that is being framed. It's really they're going full steam ahead because that project from the customer was delayed a year. They feel like they're already a year behind. That is moving forth with relatively consistent speed once we got through the construction hiccup of everybody has to pour new footers at the drive-thru.
Speaker 2
Got it. I think last time we talked, there was an initial survey that had 600 locations on board or, you know, opting in. Has there been another survey? Has there been more commitments? Just kind of where are you with opt-ins?
Speaker 0
I don't have an update on that, Brian, but it's still very consistent. I can reach out to you and get an update, but I believe it is very consistent.
Speaker 2
Okay. As it relates to sports and entertainment, clearly, we've got baseball, the only really sport going on right now. NHL and NBA, obviously, are in the offseason. Does that drive increased installs, opportunities in the short term, or is the sales cycle too long in the installation process? I'm just trying to understand how that impacts revenues in the short term.
Speaker 0
Yeah. No, we would expect to, in the offseason for those sports, it's typically when we have engagements. We have a number of proposals out, and it just depends upon who finds budget. Those happen relatively quickly. It would be they make a decision, sign it, and 60 days later, we're actually installing. It's not like they sign and nine months later. Those tend to happen relatively quickly.
Speaker 2
Thanks. My last question is, you clearly had customers buying screens ahead of tariffs. How are tariffs now that are in place impacting decisions? Is it leading to longer sales cycles? Is it not impacting that much? Just kind of frame for how that changes, if at all, the discussions you're having right now.
Speaker 0
We had a couple of customers who were concerned around the uncertainty of tariffs. A couple of customers made some bulk buys of screens just to give them some comfort through the balance of this year. Number one. Number two, at this point in time, none of the manufacturers whose screens we deploy have raised their price due to tariffs at this time. I believe we are ultimately coming to the end of our tariffs on the uncertainty period. It appears that there's some finalization of tariffs spreading across the various countries. There could be some impacts in the future. We just do not know what they are.
Speaker 2
Okay, thanks so much.
Speaker 0
Thank you, Brian.
Speaker 5
Thank you. As a reminder, if you would like to ask a question, please press star one-one on your telephone. The next question is coming from the line of John Hickman of Leitenberg and Fuhrman. Your line is open.
Speaker 4
Hey, Rick. Could you, I want to follow up on Brian's question. The pre-buys of the screens, does that put pressure on the next couple of quarters on the hardware side?
Speaker 0
It certainly puts a little bit of pressure on the hardware side, John, but it also, you'll see increased services because we're now deploying screens in subsequent quarters, right, that we didn't take the services revenue because we hadn't performed the service yet.
Speaker 4
Okay. That doesn't affect your guidance for, you know, increased revenues over the back half of this year?
Speaker 0
Not significantly, no.
Speaker 4
Okay. Could you, I think I missed it, but the 7-Eleven deployments, that's over, you're counting on that over a five-year period?
Speaker 0
Yes.
Speaker 4
The new, okay.
Speaker 0
That was an announcement 7-Eleven made, okay? Yeah. You know, they put new, once the bid from Qstar, whatever the takeover ended, right, didn't happen. 7-Eleven put new management on August 6. 7-Eleven made a number of announcements to the market over the leadership, if you will. It was 1,100 new restaurants, I believe, inside the 7-Eleven stores, which we service today, and then 1,300 additional locations that they called new enhanced stores. They started the new enhanced store footprint in 2024. We've been installing new enhanced store footprints for about the last year, year and a half, approximately.
Speaker 4
Okay, you're expecting that to happen in a measured way over the next five years?
Speaker 0
That is correct. They've been a very consistent customer. As we have mentioned in the past, every single business day here in the U.S., we typically would install between one and three stores every single business day. That's either a new store location, a remodel, or a restaurant brand popping up inside of an enhanced 7-Eleven.
Speaker 4
Okay. Any updates that you want to share on the bowling alley customer?
Speaker 0
The bowling alley customer has, in effect, I want to say they are currently not rolling out any additional sites. I believe the bowling, you know, we've deployed 300 and it's 330 to 350 ballpark is the range. I believe they have, because it has taken them, the bowling center project, they have taken so long to roll it out. I believe that has potentially caused some funding issues between them and the private equity partner. I'm not involved in those discussions, but we currently have no bowling centers on the schedule on a go-forward basis.
Speaker 4
Okay. Thank you. That's it for me.
Speaker 5
Thank you. One moment for the next question. Our next question will come from the line of Howard Halpern of Taglich Brothers. Your line is open.
Speaker 2
Good morning, guys. Congratulations on a great Q2. In terms of the digital retail networks, you know, your expectations for 2026, what type of leverage can we expect even if one large deployment occurs?
Speaker 0
When you say what kind of leverage?
Speaker 2
How does it drop to the bottom line or operating line?
Speaker 0
Oh, significant. I mean, it would because, again, we know of two retail media networks currently on the books for folks across the U.S. We know of two being rolled out. Each of them, well, one was an expected $180 million project over 24 months. The other is a $100 million project being rolled out in a six-month period. We obviously did not win those. We came very close second on one of them. These are the first two we know that are being broadly deployed in the U.S. You can see the dollar volume is highly concentrated, and there would be tremendous flow-through to the bottom line just because of pure volume.
Speaker 2
Okay. Circling back, I guess, maybe to ARR, with deployments occurring now and the day-two revenue coming in in the second half, should we expect by the run rate by the end of the year somewhere north of $19 million?
Speaker 0
That's a great question. We've had some lumpiness in the ARR as some customers, we had one customer that had a medical network that had been deployed in the field for a number of years, and they decided to end of life some of their experiences in their customer locations. At this point in time, we're not predicting. We're not giving forecasts around potential growth of ARR.
Speaker 2
Okay. Now, in terms of the Circle K Mexico, how important is that project and how important is that project to potentially moving to other countries in Latin America?
Speaker 0
We are in discussions with a couple of other retailers that have operations across Central America, but nothing specific. For example, that's a true POC where they want to understand how the network in that store, the signage in that network moves their revenue needle and basket size. For example, we do not expect any additional Circle K Mexico deployments until potentially 2026 in Mexico.
Speaker 2
Okay. Okay.
Speaker 0
I would note, I mean, we've done certainly this quarter, past quarter, we did a Mexican stadium. I think it was a soccer stadium, IPTV. We've got several bids in on multiple stadiums in and around Mexico. We expect a combination of sports and entertainment and C-Store will be the focus in Mexico.
Speaker 2
Okay. Okay, guys. Keep up the great work.
Speaker 0
Thanks.
Speaker 5
Thank you. One moment for the next question. The next question will be coming from the line of Kevin Sheldon, private investor. Please go ahead.
Speaker 4
Yes. Thanks, gentlemen. One of the touch bases from last call, you had mentioned about being aggressive in the acquisition marketplace, and I was wondering if there was any update on anything like that that's occurring.
Speaker 0
Kevin, it's a great question. We have been very blunt about our desire to accomplish an acquisition. I would tell you that we still have the same mindset. It's got to be the right fit for the company. It is still our desire to accomplish something this year, but I have nothing that we could discuss. Nothing to discuss at this time.
Speaker 4
I appreciate that. The second question real quick. Based upon your debt reduction over the second quarter, is it safe to project that out through the end of the year and you're looking at probably another $6 million taken off the debt?
Speaker 0
I don't know if we would reduce debt that drastically throughout the rest of the year. That's just the timing between payables and receivables. We generated cash in Q2. We expect to generate cash in future quarters. We don't have any increased investment plans. Whatever cash we generate will be used to reduce our credit facility. I'd also ask George Sautter, who is our Chief Strategy Officer. George, anything to add or comment on that?
Speaker 4
No. As we've stated, Kevin, great. Thank you for the questions. As we've stated, we continue to work towards what we deem to be the optimal capital structure. It is a function of working capital needs and reinvestment into the business, obviously, to drive organic growth. It's fair to say that if there's any excess cash, and we talked about that earlier on the call, that essentially we're going to be paying down the balance on the line of credit. We pursued a very disciplined strategy and financial management over the past couple of years to decrease our leverage. That works hand in glove with pursuing those strategic opportunities that you alluded to. We obviously want all the tools in the tool chest to pursue both strategic and organic growth. Part of that playbook is maintaining an appropriate leverage ratio.
We also know that debt is one of the most inexpensive ways to finance the activities of a company. It's not a zero-debt thing. It's the optimal capital structure, but a great question. My last question is, you talked about the SOC 2 compliance. Based upon your competition, how many of your competitors do you think are at that same level of SOC 2 compliance versus yourselves, percentage-wise or number-wise? I'm fairly flexible.
Speaker 0
That's a great question, Kevin. This answer is coming from my gut. I don't have anything other than that to tell you. The top two, three, or four competitive CMSs are at the same level and have achieved it. Where you will see companies that have not achieved it is all of the mom-and-pop CMSs around the country. You know, it's an $810 million CMS company that's got $7-8 million in revenue. They just simply do not have enough staying power to get that type of certification. The bottom 80% don't. The top 20%, which is four, five, or six of us, have achieved it. That's what my gut is telling me.
Speaker 4
Yeah. Rick, maybe I can chime in on that because we do deem it to be a competitive advantage. You know, per Rick's comments, the fact that so many companies that are in the industry will never achieve it, simply don't have the resources, don't have the competencies to achieve it, means that for the types of enterprise clients that we're dealing with, the types of processes that we're in, particularly with respect to retail media networks, it's just the smaller population of industry constituents who can actually go after that type of business. There are a number of smaller companies out there that actually do have very large customers. We think when those opportunities are presented again, when those contracts expire, that we're going to be in a terrific position to compete tenaciously for that business. I totally agree that I believe it is a competitive advantage.
I don't disagree with that.
Speaker 0
Yep. My last question is, do you have a speculation as to when you'll first get to your break-even quarter? You know, we think as we exit this year, Kevin, we will have achieved that. It's through a combination of increased revenue and also operating efficiency. You know, you look at our last six quarters, we've continued to manage our SG&A expenses down. It's not managing people out of the business. What it is, it's a consolidation of our multiple systems into one. You know, we talked a lot about a year, year and a half ago, the conversion to NetSuite. Today, we're already full-app. We're in our second year on our full ERP, our shipping software, and our shipping solutions. All of those things, we're managing those and becoming much more efficient, along with revenue growth, has us achieving that as we exit this year.
Speaker 4
Gentlemen, I appreciate you taking my call.
Speaker 0
Yep. Thanks, Kevin. We appreciate your support.
Speaker 5
Thank you. This does conclude today's Q&A session. I would like to go ahead and turn the call back over to Rick Mills for closing remarks. Please go ahead.
Speaker 0
Let me conclude the call by thanking all the shareholders, clients, partners, and our employees for the continuing efforts, commitment, and support as we work together to transform Creative Realities, Inc. into the leading brand in digital signage solutions. We look forward to speaking with everyone again next quarter. Thank you.
Speaker 5
Thank you all for joining today's conference call. This does conclude today's meeting. You may now disconnect.