Good morning. At this time, I would like to welcome everyone to Creative Realities 2024 third quarter earnings conference call. This call will be recorded, and a copy will be available on the company's website at cr.com following the completion of the call. The company has prepared remarks summarizing the interim results for the third quarter, along with additional industry and company updates. Joining me on the call today is Rick Mills, CEO, and Will Logan, CFO. Mr. Logan, you may begin. Thank you, and good morning, everyone. Welcome to our earnings call for the third quarter ended September 30th, 2024. I would like to take this opportunity to remind you that our 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 versions of such words or expressions as they relate to us, our management, or our operations, are intended to identify forward-looking statements. Actual results may differ materially from those contemplated by these forward-looking statements. Factors that could cause these results to differ materially are set forth in our annual report on Form 10-K filed with the SEC for the year ended December 31st, 2023, our quarterly report on Form 10-Q for the quarter ended March 31st, 2024, and the company's subsequent filings with the SEC. Any forward-looking statements that 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 key performance indicators, represent meaningful ways to track our performance. It is now my pleasure to introduce Rick Mills, CEO and Chairman of Creative Realities. Thanks, Will. Good morning, everybody. Thank you for joining the call. Once again, we posted record quarterly results, this time for Q3, our fifth consecutive period of record quarterly revenue. We remain on track for the best year ever. I am pleased to report the following: record third quarter revenue of $14.4 million, up 25% from $11.6 million a year ago. Gross profit of $6.6 million, up 24.5% from $5.3 million in 2023. Adjusted EBITDA of approximately $2.3 million against $1.5 million last year. That's an increase of 53%. Finally, annual recurring revenue, or ARR, at an annual run rate of $18.1 million. We are pleased with our results, and we continue down the path towards record performance for fiscal 2024. The company has a robust pipeline of opportunities being actively pursued, with multiple large contracts expected to be consummated in the coming months and quarters. Our business dev team is hard at work, fostering new relationships, driving additional deployment with current customers, and working hard with new brands and companies to grow our client network. Demand remains strong across all our industry verticals, whether it be with digital menu boards, digital drive-through, retail media networks, or IPTV solutions, which we deploy in sports and entertainment venues. That demand, combined with our ability to scale with a minimal impact on our cost structure, has driven revenue and profitability expansion, both year-over-year as well as sequentially from the second quarter. As a result of our sales mix, consolidated gross margin, which varies quarter to quarter, was 45.6%, roughly in line with last year. While the gross margin percentage remained flat, we are confident that the underlying trend of expansion in gross margin dollars will continue to enhance bottom-line profitability going forward as we leverage our larger size and improved economies of scale, along with some price inelasticity. As the results of our preceding four quarters show, the company's operating leverage is evident, as our adjusted EBITDA as a percent of revenue, which rose to 15.8% in the quarter and is 11.5% year to date, which brings our trailing 12-month adjusted EBITDA to $7.4 million, or 13.6% of trailing 12-month revenue. This is ahead of our projections of a 2024 exit run rate of approximately 12% on revenue of $60 million. As you can see from the numbers, our services are clearly in demand. That said, I want to provide our investors with insights into our anticipated fourth quarter revenue. As noted in our prior calls, we are focused on targeting enterprise-grade customers for our products and services. These high-quality, large-scale customer deployments have created some delays or slowdowns in our anticipated orders and deployments. As a result, our visibility in the remainder of the year remains somewhat murky. Given the customer deployments that remain in flux, we are unable to provide a specific estimate for the fourth quarter and full year. However, we are confident that 2024 will represent record revenue and profitability under any scenario. While we've now achieved record ARR of approximately $18.1 million on an annual run rate basis, the goal of $20 million in ARR by year-end will also be impacted should the timing of these orders or deployments in Q4 slip. Make no mistake, we are on track for our best year ever, but certain large customer orders are anticipated to push into fiscal 2025. Nothing has been lost. Just the timing is in question. We are optimistic about the future and expect to see solid growth and improved results going forward, and we anticipate providing further details and guidance about anticipated 2025 performance early next year. I will now turn it over to Will to share some additional comments on our financials. Thank you, Rick. An overview of our financial results for the third quarter of 2024 was provided in our earnings release and Form 10-Q filed this morning, which included the condensed consolidated balance sheet as of September 30th, 2024, the statement of operations and the statement of cash flows for the three and nine months ended September 30th, 2024, and a detailed reconciliation of net income to EBITDA and adjusted EBITDA for the quarter ended September 30th, 2024, as well as the preceding four quarters. We are pleased with our progress this year, having now achieved revenue of $54 million on a trailing 12-month basis. The company remains on track to finish 2024 with record results, even as we continue to evaluate our capital structure and balance sheet for further improvement, along with investigating strategic opportunities for growth. Now, a couple of additional points of context related to the balance sheet. As of September 30th, 2024, the company had cash on hand of approximately $0.9 million versus $2.9 million at the end of 2023. 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 $11.0 million and $10.1 million, respectively, at the end of the third quarter, as compared to $15.1 million and $12.2 million, respectively, at the start of 2024. Our debt level rose slightly from the end of Q2 due to working capital requirements, and we anticipate, due to the nature and timing of our annual SaaS-based billings, Q4 will likely be higher than current levels, in line with normal historical working capital trends. We have already achieved our short-term goal to deleverage below two times adjusted EBITDA. On a trailing 12-month basis, our leverage ratio on a gross and net basis is 1.49 and 1.37 times, respectively, down from 2.97 and 2.4 times at the beginning of the year. Keep in mind, our line of credit has a variable interest rate, which should reduce interest rate expense as rates ease. We remain dedicated to managing our debt as we continue to optimize our capital structure in support of organic and strategic growth. Our NetSuite ERP migration was finalized and up and running at the close of June. Our teams are utilizing this system on a day-to-day basis, and we have completed our first full financial quarterly close process in this application. While we continue to iterate to find efficiencies, we believe it will begin driving improved operating efficiency and profitability in 2025 and beyond. I'll turn it back to Rick for additional comments on our results and customer activities. Thanks, Will. Our IPTV division, which is managing deployments at sports and entertainment venues, has been reorganized and expanded in order to continue to facilitate our actual and anticipated growth in this sector as we move into 2025. The company just completed its largest deployment of this kind during the third quarter of 2024, an entire NHL arena. We have tremendous momentum in the market moving into the new year. With regard to BCTV, this project continues to move forward, recently crossing the threshold of 200 total installations. CRI participated in an off-site all-hands meeting with all the vendors for the BCTV project and continue to be encouraged that further efficiencies can be identified to drive additional scale and profitability on this engagement in 2025. We completed 51 site installations in the third quarter at an average sale price of $26,500. While we expect this number to increase moderately in 2025, the fourth quarter will lag on a sequential quarter-over-quarter basis as a result of the busy holiday season for bowling centers, and we have previously spoken about the ERP implementation, but our cloud operations team has launched another project which we believe will generate further differentiators for CRI. This is SOC compliance, which is a valuable credential that can strengthen the trustworthiness and credibility of our software and hosting products to our enterprise customers. The team has already made a great deal of progress, and we anticipate moving towards execution of a Type 1 SOC audit in late Q4 or early first quarter 2025. Before turning it back over to the operator, let me add that we've spoken with dozens of investors in the past several months at the LD Micro conference in Los Angeles, SEMCO Capital event in Chicago, and during other opportunities. We'll also be at the Craig-Hallum conference in New York next week, where we look forward to meeting potential additional institutional investors and analysts. It's always great to hear from existing or potential shareholders and gather feedback on our results and growth trajectory. As always, this helps solidify our strategic plans, hones our messaging, and ultimately drives value for all our shareholders. With that said, we'll now move to the Q&A portion of the call. Please go ahead, Operator. Thank you. As a reminder, if you would like to ask a question, please press star 11 on your telephone. You will then hear an automated message advising that your hand is raised. We also ask that you please wait for your name and company to be announced before you proceed with your question. And our first question for the day will be coming from Jason Kreyer of Craig-Hallum. Your line is open. Great. Thank you, guys. Say, Rick, I want to talk more about your pipeline. Just curious if you're seeing any specific bottlenecking of the opportunities as they progress through the pipeline. Just wondering if these deals are maybe just slower to get to contract, or is it an install issue, or where along the continuum are you seeing things kind of slow down a little bit? Jason, good morning. Thanks for the question. It is certainly not in the installation in any of those areas. It's really just been in the decision-making as these companies have got more factors that they have now continued to evaluate. Most specifically, it's, okay, I've made a decision, I'm putting in digital signage, I'm putting it at all of my locations, and how do my retail media network plans factor into that? Retail media networks was not a big play two, three years ago. Today, it is. And so there's an additional factor that they're looking at as they make a decision. So we've seen nothing other than that. Is it fair to characterize that maybe the size of the opportunities has the potential to expand, just given that the buyers are looking at not only just an install, like a digital signage install, but additional items that would layer in on top of that, creating potentially more of a pipeline on deals than you were seeing in the past? Yeah, very much so. The impetus of retail media network, just in the nature of what it is, will increase the volume of the deployments on a per-customer basis, generally speaking. Okay. Thank you. I want to pivot over to Will. You've had a really nice uptick in profitability over the last couple of quarters, and that's happened even in light of what we just talked about, where some deals may not be coming in on the timing that you had expected. So curious if you're thinking differently about the long-term profit in the model, just given you're already hitting that mid-teens EBITDA margin on a lower base of revenue than expected? Yeah. Great question, Jason. I think that this quarter continues to show the operating leverage that this business has at scale. We've previously talked about 12% at $60 million, 15% at $80 million. The current quarter obviously shows some flexibility upward on that level, and we think that that's conservative. We're not yet fully prepared to say this is the new normal, and we would raise those expectations, but we certainly believe that this shows what is possible, and we'll be taking another hard look at it as we finalize the 2025 budget. All right. Great. Thank you, guys. Thanks, Jason. Thank you. One moment for the next question, please. And our next question will be coming from the line of Brian Kinstlinger of Alliance Global Partners. Your line is open. Great. Thanks, guys. Nice results. You mentioned a robust pipeline, multiple large contracts to be consummated in the coming months and quarters. Is there a way to add more context besides the pipeline, number of contracts with whatever you define as large, and maybe which industries are strongest? Sure, Brian. I can take an attempt at that. Good morning. Thanks for the question. In the past, there's always been two or three big ones that we tend to work at any one time. Brian, I would tell you right now, our pipeline is fuller than it's ever been. I would tell you I've got 5 to 10 of them significant projects, and those are at the one-yard line, right, and so we have not lost anything. We have some customers taking a little bit longer to make some decisions, but other than that, we are never more thrilled with the pipeline. Specific vertical areas, I would look at three of them. Number one, QSR. We continue to make strong inroads in QSR, a couple of very large ones, and then two or three regional in nature. A regional in nature is four or five hundred locations. Of course, the nationals are all thousand plus. So, seeing some strength there. Seeing strength in QSR retail in general as everybody is evaluating a retail media network. And so those are probably the two verticals. Automotive, nothing specific in that vertical. Finance, nothing specific that we would talk about. The other vertical that is strong for us is convenience or C-Store, and we see a couple of those continue to move forward. And then last but not least, I would also talk about our IPTV, what we've called, we've used the term sports and entertainment in the past. We've kind of put a new label on that internally. That's our IPTV division led by Lee Summers. We expect strong results in 2025 in that group. So those would be the verticals. Yeah. I'm glad you mentioned that because you mentioned, I think, you used the word restructuring the IPTV business following that large upgrade. Restructuring, I usually think about things aren't going well. You're adjusting the cost basis, but then you follow that with, you've got substantial opportunity. So maybe just reconcile those. And then where are we in the upgrade cycle in terms of stadiums right now in your view? Yeah. Restructure is probably not the best choice of the word, right? So actually, we've kind of allocated more resources to the IPT division. We've added some folks, added some staff to it. Last year, we did somewhere between three and six stadiums from partial to full, okay? In 2025, we expect that number to double. Now, some are going to be partials, some are going to be full, but we expect that to at minimum double. That's number one. Number two, we are seeing a strong uptick in our adoption of the menu program within stadium venues. So even though I may not have the entire IPTV and control all of the displays, but they've got two or three hundred menu boards, and we're seeing strong adoption of CRI as the menu board vendor of choice across a number of stadiums. Great. That's super helpful. Thanks for those comments. Now, in terms of the order delays, if you will, there are multiple going on, it sounds like, at the same time. So I wanted to make sure I understand. Do you think it's because these are larger contracts, or do you think it's ahead of the holiday season? It's hard to make those decisions right now. I guess I'm curious why you think there's multiple delays. I mean, it's not just one-off customer. First off, I think we've had a couple of customers who have gone through the entire cycle, right, and then ultimately decided, you know what, they really needed some more input as they put the entire project in front of their C-Store or C-Suite, and so they really wanted to take a look at some additional factors. We've had two customers involved in that now, so we're still at the finish line, just haven't pushed them across. Yeah. Brian, I would add, yes, the scale matters. The size of these opportunities has grown and is significant. What Rick's talking about is independent RFP processes within perhaps the marketing or IT functions of a business. They get to the finish line. A couple of our examples, those things happened this summer. We thought we'd be moving to deployment in late in the year. They ultimately then engaged third-party consulting firms to evaluate and validate their choice because these are becoming more and more mission-critical systems and protocols. We believe we're very well positioned in that third-party consultant world to continue to win these opportunities, but that's part of the slowdown is the process in large-scale opportunities has gotten longer. Got it. Two more for me. You made your comments quarterly on the bowling contract, which were helpful. The fourth quarter clearly is going to be a tad slower deployment than last quarter. I'm curious, did anything happen that gives you more or less confidence that we might see a steeper ramp in 2025 in deployments? There have been some all-hands meetings. There are multiple vendors in that project, as we've talked about historically. We have had some in-person all-hands meetings in the last quarter to help drive and identify efficiencies for that project. Ultimately, several of those need to happen on the software side of the program, which we cannot control, but there are things on the deployment side that we've provided our input, and certainly no one's more interested in helping them scale faster than CRI is. But ultimately, those are slightly outside of our control at the moment. Got it. My last question, Will, for you. Your G&A, less depreciation and amortization dropped significantly in the third quarter compared to the previous two quarters. What were the factors that drove this? And is this a new expense base that you'll start to grow off of, or is it more one-time or non-recurring in nature? Yeah. A few comments there, Brian. Thank you for the question. So at the end of the second quarter, we did make a few changes in personnel, more about reallocation of resources to areas that we think are the growth drivers for the business moving forward. So I would say there was some short-term third quarter reduction in expense that we are scaling back up here as we enter the fourth quarter to support the business in 2025. There's also probably about $250,000 of expense that moved around in the P&L capitalizing software expenses and some items that moved into cost of goods that you don't see hitting gross margin as the SaaS and services have expanded. So I do believe there will be a reduction, that this is the right trend. We're not ready yet to say, "Make third quarter the model going forward." As we get to the end of the year, we will reset that expectation for 2025 and certainly believe there's upside to retaining a reduced expense model moving forward. Brian, this is Rick. I'd just add one more. Just general statement, you're starting to see a flattening of our cost structure again, evident as to the leverage in this business. If today the organization is built, we're all on the new software, things are running reasonably well. It could always certainly fix this, that, or the other. But generally, we're very pleased about where we're at. For us to significantly expand revenue, we don't see SG&A keeping pace with any rapid expansion of revenue. We've talked about this for a number of years, even with you, Brian, right? It's been three years coming to get to this leverage or four years, and here we are. Great. Great execution over that time period, really. Thank you. Thanks. Thanks, Brian. Thank you. One moment for the next question. And our next question will be coming from the line of Howard Halpern of Taglich Brothers. Your line is open. Congratulations, guys. Great quarter. Can I ask about how many screens and devices do you have under your control, and how is that driving services and other revenue? Okay. We have hundreds of thousands. Today, the number that we have articulated to the market is approximately 400,000 screens, Howard, and so most of those screens, certainly some significant number, are a one-to-one ratio. That screen is generating X amount of SaaS revenue on a monthly basis. We have a couple older legacy contracts. One of those is a very large AV retailer across America where our software today runs their entire TV wall. We estimate that at 75,000 devices alone, but it is not generating one-to-one. That was a rooftop contract done with that customer years ago, and we are in discussions with them as we speak to transition them or one of the last, if not the last, to transition over to a traditional SaaS one-to-one relationship. Does that help, Howard? Yes. Yeah. But are you seeing more activity from your customers coming to you to utilize those screens in terms of digital advertising and such? Yeah, very much so. That's why we talk about retail media networks all the time. Again, for folks who are on the call, you look at all the great retailers of the world, right, and all the big box and these retailers that have thousands of locations all across the U.S., and they've done a great job at monetizing two of the three legs of their stool. Leg number one is they've monetized their website. We all know that. Everybody on this call has gone to a website, and then that website's chased us for months, right? So they do a great job at monetizing the website. Number two, they do a great job of monetizing their mobile app, and we've all got lots of these retailer mobile apps loaded on our phone. Today, as we move into 2025, they are all trying to figure out, "How do I monetize the third leg of the stool?" What's the third leg of the stool? That's eyeballs. That's traffic in their physical locations. In order to do that, you need a number of screens, X amount of screens per sq ft, if you will, to get proper viewing throughout a venue, so number of screens, we expect it to increase. Number of locations, we expect it to increase significantly, and we have an ad tech software stack to address that problem for our retail customers. Okay. In terms of we talked about it, I guess, in the last quarter, a little bit of the international expansion into Mexico, South America. How is that proceeding? What are the initial stages of that that you're seeing? I'm proud to report we got our first PO from Mexico. It's a proof of concept for a large C-Store chain. Will Logan, I believe we're installing that the last half of November, maybe the first week of December. Is that directionally correct? Yeah. This This quarter, that's correct. Yeah. This quarter. So already got our first proof of concept going in. We're talking to another customer that's got 400 Starbucks. We're talking to several opportunities throughout Mexico right now. Okay. And Howard, by the way, we did not expect that 2025, we're going to see significant revenue. We felt like the Mexicans to go into Mexico, our U.S. customers wanted us there, etc. We think that will bear fruit in the 2026 timeframe. Okay. And talk a little bit more. I know we had the loss earlier this year, but has the channel partner program continued to bear fruit? Great question. Yes, it continues to bear fruit. Every month, we add new licenses through our channel program. I will certainly admit, we are attempting to find the next right leader for that role. I have not identified them as of yet, but expect more news in 2025. Okay. Thanks, and keep up the great work, guys. Thanks, Howard. Thank you. One moment for the next question. Our next question will be coming from the line of Jon Hickman of Ladenburg Thalmann. Your line is open. Hey, John, how are you? Oh, sorry. I was confused there for a minute. Can you hear me okay? I can. You're fine. Okay, so I'm trying to put some words in your mouth, but so you're saying that even if all of the projects that you've identified that are on the bubble don't go your way in Q4, you're still going to be up over 2023. Is that what you're saying? No, Jon. Are you talking 2024 Q4 over 2023 Q4? Is that the question specifically, Jon? No, I thought it was year over year, not quarter over quarter. It's for the year because you said the year would be a record under any scenario. I'm trying to understand what that means. Yeah. In any scenario, the full year 2024, we expect to be a record. The quarter over quarter, 4Q24 versus 4Q23, is where these material potential deployments could give us a challenge. But even in a scenario where those orders do not come in, the full year will be a record year over year. Okay. Yeah. That's what I would, and then could you elaborate on, besides the bowling center, is there a vertical? Is it the retail sector? Is it the stadiums? Is it the QRS? Is there any specific vertical where those delays are happening? Yeah. I think, as Rick mentioned briefly earlier with Brian, QSR and retail media networks are the two areas in particular in this period in the year. There's substantial momentum in IPTV and other areas as we move into 2025. But the opportunities that have been percolating through this year that are in or out for fourth quarter or as we head into 2025 are primarily in that QSR retail media network environment. Okay. And my last question has to do with your M&A, I guess, appetite or target. You have been inquisitive in the past, and are you still looking to do that, or what's happening there? Okay. So I think you asked two things. The first one, you mentioned appetite, right? I got to tell you, our appetite is significant, particularly if you look. We believe we've conquered our "debt stack," and we have our debt at the right leverage ratio to historical earnings. We're kind of under that one and a half, certainly under two, and we're now one and a half, right, Will, directionally? So we kind of feel like our cap stack is really starting to come into shape, and we have potential dry powder should we choose to use it. The challenge is everybody else is so small, right? They're all $7-$12 million. In the perfect world, we'd love to buy a $20-$25 million-dollar organization, and they're just hard to find. But I would tell you that we continue to talk, and my guess is this year we've certainly had discussions with a dozen or so competitors, and some of those are at, some of them we no longer talk to, but some of them are at various conversation stages. Just nothing to announce today, but the appetite is strong. Okay. Will Logan, anything to add? I think that's correct. Okay. Well, thank you and nice quarter. Thanks. Thank you. As a reminder, if you would like to ask a question, please press star 11 on the record. One moment for the next question. And our next question is from the line of John Roy of Water Tower Research. Your line is open. Thank you and again, congratulations, like everyone else is saying, on the quarter so looking kind of maybe taking a step back just for a second, and certainly the 20% growth is excellent. I was curious as to what you see are the major growth drivers over the next few years that will kind of keep you hopefully going at a similar rate, just kind of major buckets. I currently see our same verticals continuing to grow. We look at QSR. We estimate today we believe QSR is approximately 30%-35% penetrated, okay? So there's tremendous white space to penetrate QSR. C-Store, the argument is C-Store is less penetrated. The C-Store is under 25% penetrated. So tremendous opportunity in those two areas. We believe IPTV, the stadium and arena, are getting a whole new look as dollars are translating into out-of-home exposure to folks. So every stadium and arena is a logical candidate, And generally speaking, all of them are interested in how can they upgrade and add their infrastructure, and it's the reason we're investing highly in that. Fourth piece, we believe that IPTV over the next two to five years will convert to a SaaS-based screen business instead of CapEx. That bodes well for us. So really a combination. Then fourth, I'd say the fourth one is retail media networks. They want to generate profitability by adding retail media network to their revenue mix. Every retailer wants to do that. Will Logan, anything else to add? No, I think that appropriately captures where we think the growth will come from in 2025 and beyond. Great. Thanks so much. Thank you. Thank you. I'm not showing any more questions in my queue, and I would like to turn the call back over to William Logan. Please go ahead. Thank you. Thank you. We did have one other question that came into our investor relations inbox during the call. It was with respect to recent news that Couche-Tard was seeking to acquire 7-Eleven, who we have as a customer today, and whether we had any comment or identification of what the impact to CRI might be in that transaction. I would say first, our belief is that the transaction likely would not occur just because we've seen 7-Eleven invoke a response within Japan about national security in the event of a pandemic and other items. We do have historical experience operating with Couche-Tard. We previously operated as an installation partner for Circle K stores in the 2016 to 2018 timeframe. What we would say is Couche-Tard operates very regionally, highly independent decision-making at the regional level. 7-Eleven is much more highly centralized corporate decision-making and operating control. So certainly, if there were a transaction, there could be an impact. But if it were to consummate, we really do not anticipate any material change in either relationship, and it may open up an opportunity for us to be a service provider on the other side of the house. There are no other questions from the IR inbox, so please let me conclude the call by thanking all of our shareholders, clients, partners, and employees for continuing their efforts and commitment and support as we work together to transform Creative Realities into the leading brand in digital signage solutions. We look forward to speaking with you again next quarter. Thanks, folks. This concludes today's conference call. You may all disconnect. Have a great day.