Conference Transcript - CREX 2026-06-17

Rick Mills, CEO

with Creative Reality. Thank you very much. Welcome to today's presentation. For those of you who have attended some of my meetings in the past, you will see just a continued growth story as the business moves forward. Of course, you know, forward-looking statements, don't believe anything I say, and then the math says don't believe any of the numbers, right? So, all right, Let's get started. So what do we do? We're a digital marketing company. We do digital signage. We are a trusted advisor and supplier of digital signage at scale. So you will see when I go through some customers, they're all enterprise level customers. Our business model is actually pretty simple we sell screens and players to put them on the wall think of it as the raise is the razor it connects to our SAS our software in the cloud drives every screen no matter where it is anywhere in the world think of it as a razor blade we put these screens in any premise location anywhere in the world but think you've all walked through retail spaces you've walked through sports and entertainment spaces and venues you see screens on walls playing content you walk around this casino screens on walls playing content it's typically connected to our software in the cloud okay customers do it because they want a better customer experience they want engagement at the end of the day what do our customers really want to do they want to generate more revenue and financial returns based upon those screens. Okay, our sources of revenue. We really have four sources of revenue. We do sell the hardware. We don't own it. We sell it to the customer. So it's not something that stays on our balance sheet, right? That's about 30% of our business over time is selling of the hardware, right? Then we include the services with that. We install it. We get it on the wall and then that that screen requires content it requires ongoing management of the content so that's the second bucket of revenue third bucket of revenue is recurring SAS that's really what we're all about is the recurring SAS revenue generated by that screen so we charge for that software on a monthly basis so every time we put a screen on a wall that adds an additional license. You know, we have some people ask about AI. Well, how's AI gonna affect you? Because AI is affecting a bunch of software SaaS platforms, but those are software SaaS platforms that are people-based. Their license is based upon people and number of users. Our license base is not. Our license based is is based upon the number of screens on the wall so it's very different how many people think somebody went in the office today and said let's take down let's take down that screen and put up a poster that didn't happen but somewhere in America today somebody walked into an office and said take down that poster and put up a digital screen so digital screens continue to grow last but not least we have media and ad tech revenue okay because some of our customers want to monetize that investment by actually selling add time on those screens and we'll talk about that are the ideal customer profile there you go you can read them all those are we're in every one of those verticals you'll see that as I talk about customers the value prop we absolutely are software as a service a SaaS company with media and ad tech revenue and we're focused on one thing increasing the number of subscription devices period that's that's it how do we build this company i'm the founder and the ceo i started the company in 2010 i did a merger my company was called connexus world i merged merged it into cri that was a pink sheets company at the time we've grown that business over time 2018 i uplisted i did an acquisition of allure 2021 i built reflect and then most recently in 2025 November we bought a company in Canada called CDM or cineplex digital media up in Canada okay why did we buy CDM well number one we're better together we picked up some great accounts Dairy Queen Tim Hortons Chick-fil-a a&w and others up north of the border. But we're different together, creative and execution all under one roof. We're a much larger company, one partner end-to-end, built for what's next in our industry, and more importantly we are now the number one partner that straddle, number one company that straddles U.S. and Canada offering these services. If you look at our customers, those are all brands that people know. You're familiar with the customer base. Up in retail, you know, we do every Best Buy in America. Everybody had been in Best Buy, buy a TV recently. The TV wall, that's our software powers every TV wall. Anybody here a Verizon subscription guy or gal going to a Verizon store, every screen in that Verizon store is powered by us. Anybody shop at Macy's? Every screen in Macy's, powered by us. Anybody here going to 7-Eleven convenience store? Every screen in 7-Eleven is powered by us. So in a number of QSR brands, you can see, okay? Anybody ever been to a Dallas Cowboys game? Every screen in that building, 3,300, powered by us. Except for the Jumbotron. We don't do the Jumbotron. Everybody asked do you do the jumbotron no we don't but we do every screen in the building as part of the acquisition of cdm we acquired the largest retail media network platform in canada so we actually own the the network in the mall throughout canada so we're in 75 of the 100 most productive shopping centers I'm in 95 malls you know we reach 750 million shoppers annually this is actually our fastest growing business for grew 25% in 2025 we expect it to grow again in 2026 but this is pure ad revenue it's it's generated from selling media time on those screens and we own them and if you've ever been in a mall in Canada that's our product I'll show you a couple pictures very typical double-sided totem screen you get the idea okay we were these type of screens were in 88 locations 632 screens and we've just refreshed and added about 80 new screens at various malls throughout Canada. We also have big spectacular Yorkdale number one performing mall in Canada. So very large screen 33 location 87 of the what we call big spectacular screens. This year we expect that business to generate about 25 million in U.S. revenue 32 too Canadian. Is that right ma'am? I'll introduce Tamara in a moment, our CFO. So, okay, so these are just some pictures to give you a sense. This is a typical Verizon store, okay, and that's our software powering the screen in the front of the window. This is a 7-Eleven. Many people think of 7-Eleven is a c-store chain they would tell you they're a food destination within 7-eleven they have 13 000 locations in the u.s another 2400 in canada the 13 000 in the u.s they have 1600 i think it's 1611 restaurant locations buried within uh 7-eleven throughout u.s laredo taco If you've ever heard of that brand, that's actually a 7-Eleven brand. But here's one where they actually have two restaurant brands in one store, right? They have the Chicken Roost and Parlor Pizza. Today, our deployment of screens throughout 7-Eleven is approximately 17,000 screens. Over the next several years, they want to grow it to about 40,000 displays. That's their stated goal. black rifle coffee they have retail locations throughout the u.s uh also i think it's walmart's number one selling coffee brands black rifle coffee inside of walmart but so we do all the menu boards we did the redesign of their menu board uh and we continue to install at every black rifle coffee as they open locations today high-end luxury brand chanel we do every chanel store in america every boutique i think there's uh 32 of the large chanel boutiques and 165 store in store chanels throughout you know some of the higher end retail chains but so a little bit of luxury work our tech we own our own cms's so cms stands for content management system we own it um our first one is called clarity It's purpose-built for food, so you will see clarity in anywhere that is a food venue. Anybody here heard of Freddy's Frozen Custard? There you go. We do every Freddy's in America, every Dairy Queen, every Culver's. Okay, Culver's is in the process of switching to digital. Every week we install five new Culver's a week, approximately, something like that. It's going to go up to about 10. They have 1,400 locations. We've penetrated 280 of them. They want to be done by the end of 2028. So we got 1,100 locations to go, right? Every time we turn on a Freddy's, it adds $150 a month in recurring additional revenue or SaaS. ReflectView, that is our commercial grade, high-end CMS for folks like Best Buy, tens of thousands of screens. At Best Buy alone, we power about 70,000 screens, right? Because take all those TVs and every Best Buy and you add them up, there's about 1,000 Best Buys. It's an estimated number. We believe we're driving 70,000 screens in Best Buy, right? but it is driven by reflect view that's used by all our retail customers think Macy's all our mall customers etc so we use that product our third product is ad logic that is an ad serving platform that sits on top of reflect view that powers retail media networks and we will spend some time talking about retail media networks today. And then CPM Plus adds programmatic. We have a full content team. Our content team is about 50 people. So think of Tim Hortons in Canada. We've done every piece of content for Tim Hortons for the last 12 years. Best Buy, we've done content for Best Buy for 18 years. We do all the content Verizon. Verizon has been a customer now for 20 years. So we want to talk about Sticky. they're not going anywhere do you have a question john yeah we would meet with we have all the assets but sometimes we generate or create assets in tim hortons we've actually shot food you know taking captured pictures of the food but yes we produce every bit of content for tim hortons and have for 12 13 years yep and so there's two parts to content number one is creating the content and then number two loading it on the system scheduling it and managing it because you know think if you're in a convenience store what do you want to sell from 7 to 10 in the morning you want to sell hot coffee right two to five in the afternoon you want to sell cold beer so our system needs to be able to accommodate those kinds of things and they do retail media networks what is it what does that really mean because it's it's a phrase that people hear okay retail media networks the retailer owns their own ad services that allows market marketers to purchase advertising space across all digital assets owned by a retailer so it's pretty simple if you ever gone to the internet and you ordered something for Walmart didn't that Walmart little pop-up chase you for the next hundred years every time you logged on the internet there was the Walmart pop-up right okay so that's where it all started second piece your phone you have the Walmart app or the Target app and you bought something you interact interacted with that all of a sudden that apps chasing you every time you pick up your phone well that's the genesis or the start of retail media networks, but the next big wave is in-store digital assets. People have figured out traffic matters, okay? Everybody's, you know, we all heard for 10 years, the death of retail, the death of retail, retail's died, there'll be no more stores. Here's the real story. 97% all food and beverage is bought in the store. okay auto parts 95 in the store so you get down to electronics and furniture electronics is done they've lost some market share to online but the rest of it that's where the buys really happen let me give you some examples costco 93 kroger 92 of lows walmart 87 still happens in the store okay so what does that mean what does that translate to okay i'll show you first off here's the spend on the retail media and how quick that's growing almost 20 percent of total digital ad spend will be spent in the store by 2029 okay used to be i i just i want to buy a Super Bowl ad, right? That was the big deal. Super Bowl ad. I get an ad in the Super Bowl. My company's made it. You don't want to own an ad in the Super Bowl. You're paying $65 CPM. You're paying $107.5 million for a 30-second ad cost. You can buy that because every month, every month in Walmart, you get two super bowls every month okay so that's where the real traffic happens look at target every month super bowl in terms of audience and measurement in store matters it's where all the money's headed industries reach the consensus mark boydman solomon physical retail is no longer just a point of sale a dynamic media channel valued not just for sales but its ability to deliver measurable impressions true attribution we work with customers today and I can prove that you stood in front of our screen for 34 seconds that had a green beans advertising on it for buying green beans to pick up something and then I get attribution because I know when your cart went through the checkout and you use the loyalty app etc I know you bought the green beans I can prove 100% attribution at the cash register that's the holy grail and we are arriving at the holy grail moment in physical retail with retail media networks. Okay, some other stuff. We have some new executives. Tamara Koshua is here in the front. She's our new CFO, joined us six months ago, and she's still here, so I'm doing something right. Okay. Jackie Walker is our chief experience officer. She came from 17 years with Publicis Sapient, one of the largest consulting firms. She single-handedly wrote the digital strategy and did consulting for seven of the top 10 QSRs. Okay and then Dan McAllister is our chief revenue officer. Okay our market position where are we? We're one of the top 10 software providers in the world. We're a leading provider in the stadium and arena market. We today control about 85 to 90 stadiums and arenas we did an announcement for example we're doing all the tech that's going in the new tennessee titan stadium it's about an eight million dollar project we announced that about maybe a month ago give or take we own the largest retail media mall network in canada we own our own ad tech and we're poised for significant growth we talk about a six point value creation plan you can read the bullets in bold because that's really what we're focused on in 2026 and we just announced we joined the Russell micro cap indexes of July 2026 so we published that most recently think of us this is some of the parts valuation okay because part of our business is in signage business part of it's in the out-of-home media part of it's in advertising and ad tech and then sas software so when you add up the sum of the parts valuation of crex today as every ceo would say i'm tremendously undervalued um these are 2026 that's analyst consensus We're on track for north of $100 million in revenue. We're comfortable. We met Q1. We expect to exceed every quarter throughout the balance of the year. And you see our EBITDA. So this thing is really scaling dramatically. Our plans for the near term, we believe we're very bullish, $100 million in revenue. We will deliver Q4 at 20% adjusted EBITDA. We're growing SAS 30% year over year. We do, we have a verbal and expect to execute a contract for the largest retail media network in the U.S. Okay, over 1,200 locations, 20,000 screens. That alone will add an additional 4 million in SAS. We have made that announcement that we have a verbal. We expect to sign the contract next week or two or three, and we would make announcements around that. 2027, those are our goals. Probably the most focus is our systemic debt reduction. We have done acquisitions and then we've reduced debt and we will continue to do that throughout 2027. We also believe that there's a great acquisition story to tell before you see the math, typical $10 million competitor does EBITDA of $800,000. once we acquire them cleanse them put them on our platform that same 10 million generates 4 million in profitability it's very simple okay questions I've only got a couple minutes left don't want to run over time sure lottery we entered we and we made an announcement North Carolina lottery it was a 10-year contract 54 million we are finished deploying all throughout the state of North Carolina, we will finish that lottery deployment. John, be done sometime end of July, early August. Then beginning January 1, 2027, it's a $4 million a year SaaS revenue. So our SaaS will automatically go up on January 1st, $4 million already. Under contract for the next nine years. Okay? So pretty simple. hardware revenues about 20 points services is about 50 staffs is between 80 and 85 three different sustained margin profiles yeah north carolina does get us into other lotteries north carolina by the way is the fourth largest lottery in the united states for some reason the people in north carolina love lottery tickets so it's the fourth largest lottery in the u.s and you know we're we're in discussions with california we're in discussion with about eight other states more to come okay any other questions yes sir um you know the sas software itself james makes it harder to switch but yeah the ability to create the content and the fact that we have such a massive team i have 50 people 30 people to create it 20 people just to schedule it and manage it so it is a it's a differentiator for sure um they do not to the same extent that we do no we're much we're much more advanced we're an agency level creative source and that's really the difference okay thank you i appreciate it