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Increased customer/guest engagement
−Removed: Through a combination of organically grown platforms and a series of strategic acquisitions, including our acquisition of Reflect Systems, Inc., a Delaware corporation (“Reflect”), in February 2022, the Company assists customers to design, deploy, manage, and monetize their digital signage networks.
+Added: Through a combination of organically grown platforms and a series of strategic acquisitions, the Company assists customers to design, deploy, manage, and monetize their digital signage networks.
The Company sources leads and opportunities for its solutions through its digital and content marketing initiatives, close relationships with key industry partners, equipment manufacturers, and the direct efforts of its in-house industry sales experts.
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This also provides us purchasing power to source products and services for our customers, enabling us to deliver cost effective, reliable, and powerful solutions to small and medium size business customers.
−Removed: Ad management platform – Our customers are increasingly interested in monetizing their digital signage networks through advertising content.
−Removed: However, efficiently scheduling advertising content into digital signage playlists to meet campaign objectives can be a challenging and labor-intensive process for our customers.
−Removed: AdLogic, our home-grown, content management-agnostic platform, automates this process, allowing network owners to capture more revenue with less expense.
−Removed: Media sales – Few digital signage solution providers offer their customers media sales as a service.
−Removed: We have in-house media sales expertise to elevate conversations with our customers interested in better understanding network monetization.
−Removed: We believe this meaningful differentiation in the sales process provides us an additional revenue stream compared to our competitors.
+Added: AdTech platforms – The Company has developed and deployed the AdLogic and Adlogic CPM+ platforms, which, working in conjunction with our CMS platforms, present completely integrated digital advertising solutions for existing and prospective customers seeking to monetize their in-store retail media networks.
+Added: These platforms anchor the Company's vertical expansion into AdTech bringing new, and expanding existing, addressable markets.
Market sector expertise – Creative Realities has in-house experts in key market segments such as automotive, retail, quick-serve restaurants (“QSR”), convenience stores, and Digital Out of Home (“DOOH”) advertising.
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The NOC resolves many issues remotely and when field support is required, it can be dispatched quickly from the NOC, leveraging our managed labor pool to resolve customer issues quickly and effectively.
−Removed: Integrations and Application Development – The future of digital signage is not still images and videos on a screen.
−Removed: We believe that interactive applications and integrations with other data sources will dominate the future.
−Removed: From social media feeds, mobile integrations, corporate data stores, or Point of Sale (“POS”) systems, our proven ability to build scalable applications and integrations is a key advantage that customers can leverage to deliver more compelling and engaging experiences for their customers.
−Removed: Hardware support – A number of digital signage providers sell a proprietary media player or align themselves with just one operating system.
+Added: Integrations and Application Development – From social media feeds, mobile integrations, corporate data stores, and Point of Sale (“POS”) systems, our proven ability to build scalable applications and integrations is a key advantage that customers can leverage to deliver more compelling and engaging experiences for their customers.
+Added: Hardware support – Some digital signage providers sell a proprietary media player or align themselves with just one operating system.
We utilize a range of media players including Windows, Android and BrightSign to provide customers the flexibility they need to select the appropriate hardware for any application knowing the entire network can still be served by a single digital signage platform, reducing complexity and improving the productivity of our customers.
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Reflect AdLogic , the Company’s ad management platform for digital signage networks, which presently delivers approximately 50 million ads daily;
−Removed: Clarity , the Company’s menu board solution, which has become a market leader for a range of restaurant and convenience store applications;
+Added: Reflect AdLogic CPM+ , the Company’s demand side and supply side platform with campaign management and extensive capabilities for programmatic advertising;
+Added: Clarity , the Company’s menu board solution, which has become a market leader for a range of restaurant, including QSR and convenience store applications;
Reflect Zero Touch , which allows customers to turn any screen into an interactive experience by allowing guests to engage using their mobile device;
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OSx+ , a digital VIN-level checklist used to assist in the tracking and delivery of new vehicles in the transportation sector, providing measurable lift in customer satisfaction scores and connected vehicle enrollments and subscription activations.
−Removed: While hardware sales and support services revenues can fluctuate more significantly year over year based on new, large-scale network deployments, the Company expects to see continuous growth in recurring SaaS revenue for the foreseeable future as digital signage adoption/utilization continues to expand across the vertical markets we serve.
−Removed: We believe that the adoption and evolution of our digital signage technology solutions will increase substantially in years to come in the industries in which we currently focus and in others.
−Removed: Throughout the COVID-19 pandemic, our current and potential customer base reduced capital expenditures, including capital expenditures that we believe would have been used to implement digital technology solutions.
−Removed: The costs of hardware configurations and software media players used to process and display content also increased during that period as a result of supply constraints for semiconductors, a key input to both digital display and digital media player products.
−Removed: Throughout 2021, we faced significant supply chain challenges which limited the availability of each of these components to our sold solutions;
−Removed: however, those supply constraints have materially subsided and the cost of hardware products has again begun to reduce in the most recent trailing twelve month period.
−Removed: We believe that the costs of such hardware will decrease over time as it has done so historically and will do so at an accelerating rate.
−Removed: Flat panel displays and players typically constitute a large portion of the expenditure customers make relative to the entire cost of implementing a digital marketing system implementation and can be a barrier to customer deployment.
+Added: While hardware sales and support services revenues can fluctuate more significantly year over year based on new, large-scale network deployments, the Company is focusing on maintaining and increasing recurring SaaS revenue as digital signage adoption/utilization expands across the vertical markets we serve.
+Added: We believe that the adoption and evolution of our digital signage technology solutions will increase substantially in years to come in the industries in which we currently focus and in other industries.
+Added: We believe that the costs of such hardware will decrease over time as it has done so historically.
+Added: Flat panel displays, along with LED technology and digital media players typically constitute a large portion of the expenditure customers make relative to the entire cost of implementing a digital marketing system implementation and can be a barrier to customer deployment.
As a result, we believe that the broader adoption of digital marketing technology solutions is likely to increase, although we cannot predict the rate at which such adoption will occur.
−Removed: Another component of our business strategy, given the evolving dynamics of the industry in which we operate, is to acquire and integrate other operating companies in the industry in conjunction with pursuing our organic growth objectives.
+Added: We believe the proliferation of in-store retail media networks will be an industrial catalyst for infrastructure and AdTech sales for which the Company is well situated from product set and technology stack standpoints.
+Added: Another component of our business strategy is to acquire and integrate other operating companies in the industries we operate.
We believe that the selective acquisition and successful integration of certain companies will:
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Our management team and Board of Directors have broad experience with the execution, integration, and financing of acquisitions and seek only accretive strategic transactions with material cost synergies as a result of overlapping or concurrent content management system capabilities with focus on eliminating the associated cost structure for these systems.
−Removed: We believe that the COVID-19 pandemic has adversely affected our smaller competitors, and as a result, there may exist acquisition opportunities in the future.
−Removed: We also believe that, based on the foregoing, we can successfully serve as a consolidator of multiple business and technology platforms serving similar markets.
−Removed: As part of our acquisition strategy, we acquired Allure Global Solutions, Inc., a Georgia corporation (“Allure”) in 2018, and Reflect in February 2022.
Business Strategy
We believe that our existing business model is highly scalable and can be expanded successfully as we continue to grow organically, seek to acquire and integrate other companies in our target markets, strengthen our operational practices and procedures, further streamline our administrative office functions, and continue to capitalize on various marketing programs and activities.
+Added: With a focus on SaaS revenues, we believe that our gross margins will rise as our business scales.
Industry Background
37 unchanged sentences
While we do see reductions in retail footprints across the U.S., we see a continued focus on integration of digital into the retail marketplace and a focus on digital refreshes within the retail space to stay relevant in an evolving e-commerce marketplace.
−Removed: Recent general economic improvements generally make it easier for our customers to justify decisions to invest in digital marketing technology solutions.
+Added: Recent general economic conditions have generally make it easier for our customers to justify decisions to invest in digital marketing technology solutions.
A change in the macroeconomic trend in the U.S.
could have a negative impact on our customers’ ability and/or willingness to advance their digital initiatives.
−Removed: Effect of Supply Chain Constraints
−Removed: A key component of our business includes the sale of digital media players, digital displays, and mounts supplied by third-party manufacturing partners.
−Removed: While the disruptions we experienced throughout 2021 and the first half of 2022 with respect to semiconductors have mostly subsided, we are still exposed to potential disruptions and delays related to fulfillment of inventory purchases from vendors as a result of increased lead times post-COVID-19 pandemic, which represent the key components to our digital signage solutions, because of a global shortage of semiconductor chips.
−Removed: In instances in which inventory was available, we experienced delays in the transportation of these goods from manufacturers to the Company, and in delivery of our solutions to our customers.
+Added: Government Regulation
We are subject to regulation by various federal and state governmental agencies.
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Major Customers
+Added: We had three customers that accounted for 15%, 13% and 10% of revenue for the year ended December 31, 2024.
No customer accounted for more than 10% of revenue for the year ended December 31, 2023.
−Removed: We had three customers that accounted for 44% of revenue for the year ended December 31, 2022.
−Removed: We had two and three customers that in the aggregate accounted for 50% and 49% of accounts receivable as of December 31, 2023 and 2022, respectively.
+Added: We had one customer that accounted for 16% of accounts receivable at December 31, 2024 and two customers that accounted for 26% and 23% of accounts receivable at December 31, 2023.
Decisions by one or more of these key customers to not renew, terminate, or substantially reduce their use of our products, technology, services, and platform could substantially slow our revenue growth and lead to a decline in revenue.
Our business plan assumes continued growth in revenue, and it is unlikely that we will become profitable without a continued increase in revenue.
+Added: For more information, see Item 1A.
+Added: Risk Factors, “Our continued growth and financial performance could be adversely affected by the loss of several key customers.”
We sell products and services primarily throughout North America, with limited software licensing agreements operating in other international jurisdictions.
Human Capital
−Removed: We have a workforce comprised of approximately 152 employees as of March 20, 2024.
−Removed: We do not have any employees that operate under collective-bargaining agreements.
−Removed: Our principal offices are located at 13100 Magisterial Drive, Ste 100, Louisville, Kentucky 40223, and our telephone number at that office is (502) 791-8800.
−Removed: We have additional offices in the Dallas, TX, Atlanta, GA, and Windsor, Ontario (Canada) metro areas.
+Added: We strive to foster a great work environment and offer an exceptional experience through competitive pay, benefits, and training programs to our employees.
+Added: Our objective is to attract, develop, retain, and reward individuals with the talent and skills to help support our business objectives.
+Added: As of December 31, 2024, we had 146 employees.
Corporate Organization
4 unchanged sentences
On February 17, 2022, we acquired Reflect.
+Added: Our principal offices are located at 13100 Magisterial Drive, Ste 100, Louisville, Kentucky 40223, and our telephone number at that office is (502) 791-8800.
+Added: We have additional offices in the Dallas, TX, Atlanta, GA, and Windsor, Ontario (Canada) metro areas.
+Added: Our internet address is www.cri.com.
+Added: Information on our website does not constitute part of this Report.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.