Creative Realities Inc (CREX) 2023 Q2 法說會逐字稿

Good morning. At this time, I would like to welcome everyone to the second quarter 2023 Creative Realities, Inc. earnings conference call. This call will be recorded and a copy will be available on the company's website at cri.com. Following the completion of the call, the company has prepared remarks summarizing the interim results along with additional industry and company update. Joining me on the call today is Rick Mills, CEO; and Will Logan, CFO. Thank you very much. Mr. Logan, you may begin.

早安.現在，我歡迎大家參加 Creative Realities, Inc. 2023 年第二季財報電話會議。此次通話將被錄音，副本將在公司網站 cri.com 上提供。電話會議結束後，該公司準備了總結中期業績以及其他行業和公司最新情況的評論。今天加入我電話會議的是執行長 Rick Mills；和首席財務官威爾·洛根。非常感謝。洛根先生，您可以開始了。

Thank you and good morning. This is Will Logan, Chief Financial Officer of Creative Realities, Inc. Welcome to our financial results and earnings call for the three and six months ended June 30, 2023. I would like to take this opportunity to remind you that our remarks today will include forward-looking statements.

謝謝你，早安。我是Creative Realities, Inc. 財務長Will Logan。歡迎參加我們截至2023 年6 月30 日的三個月和六個月的財務業績和收益電話會議。我想藉此機會提醒您，我們今天的演講將包括前瞻性陳述。

The words anticipated, will, believes, expects, intends, plans, estimates, projects, should, may propose and similar expressions of the negative versions of such words or expressions as they relate to us or our management are intended to identify forward-looking statements.

預期、將、相信、期望、打算、計劃、估計、項目、應該、可能建議等詞語以及與我們或我們的管理層相關的此類詞語或表達的負面版本的類似表達旨在識別前瞻性陳述。

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 quarterly financial statements on Form 10-Q filed with the SEC earlier today, August 3, 2023, and in our annual report on Form 10-K filed with the SEC on March 30, 2023.

實際結果可能與這些前瞻性陳述預期的結果有重大差異。可能導致這些結果出現重大差異的因素已在我們今天早些時候（2023 年8 月3 日）向SEC 提交的10-Q 表格季度財務報表以及3 月份向SEC 提交的10-K 表格年度報告中列出 2023 年 30 日。

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.

我們在本次電話會議中所做的任何前瞻性陳述均基於截至目前的假設，我們不承擔因新資訊或未來事件而更新這些陳述的義務。

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 released this morning. It is now my pleasure to introduce Rick Mills, CEO of Creative Realities, Inc.

在本次電話會議中，我們將介紹 GAAP 和非 GAAP 財務指標。我們的公開文件和今天早上發布的收益報告中包含了 GAAP 與非 GAAP 指標的對帳。現在我很高興向大家介紹 Creative Realities, Inc. 的執行長 Rick Mills。

Thanks, Will. Good morning, everybody. Thanks for joining the call. In addition to discussing our second quarter 2023 results, we will cover some important updates and new developments, so let's jump into it. I am pleased to report Q2 2023 revenues of $9.2 million with gross profit of $4.3 million.

謝謝，威爾。大家早安。感謝您加入通話。除了討論 2023 年第二季業績之外，我們還將介紹一些重要的更新和新進展，所以讓我們開始吧。我很高興地報告 2023 年第二季營收為 920 萬美元，毛利為 430 萬美元。

Our gross profit margin for the second quarter came in at 46.7%. That's a 400% basis point improvement over last year and building on improved profitability in the year over year in the first quarter. This brings the year-to-date gross margin percentage to 49% on a gross profit for the first six months of the year of $9.4 million, both CRI records.

我們第二季的毛利率為 46.7%。這比去年提高了 400% 個基點，並且建立在第一季獲利能力較去年同期改善的基礎上。這使得年初至今的毛利率達到 49%，今年前六個月的毛利為 940 萬美元，均創 CRI 紀錄。

On a year to date basis, our gross margin percentage has increased by nearly 1,000 basis points. Owing to the revenue mix shifting towards SaaS and other higher margin services, along with an approximately 600 basis point improvement in hardware margins owing to continued economies of scale.

年初至今，我們的毛利率已增加近 1,000 個基點。由於收入結構轉向 SaaS 和其他利潤率較高的服務，加上持續的規模經濟，硬體利潤率提高了約 600 個基點。

We believe our second quarter results continue to demonstrate the ongoing growth in our revenue as this is the sixth consecutive quarter for which revenues have approximated or exceeded $9 million, benefiting in large part from the expansion in our annual recurring revenue run rate, which is now at a record of $15.2 million and continuing to grow.

我們相信，我們第二季的業績繼續證明我們收入的持續成長，因為這是連續第六個季度收入接近或超過900 萬美元，這在很大程度上受益於我們年度經常性收入運行率的擴大，目前為創紀錄的 1520 萬美元，並且還在持續增長。

This stability within our business is important as it highlights the reduction in reliance on any single individual customer to perform large-scale hardware deployments or refresh activities to produce revenue and profitability. This reduces risk with respect to customer concentration and enhances our operating leverage.

我們業務中的這種穩定性非常重要，因為它凸顯了對任何單一客戶執行大規模硬體部署或更新活動以產生收入和盈利能力的依賴的減少。這降低了客戶集中度的風險並增強了我們的營運槓桿。

As our ARR is approaching a level where it covers our operating expenses, we project significant improvements in our adjusted EBITDA margins as every new dollar flows through to the bottom line at higher more favorable margins.

隨著我們的 ARR 接近覆蓋我們營運費用的水平，我們預計調整後的 EBITDA 利潤率將顯著改善，因為每一美元都會以更高、更有利的利潤率流入底線。

While the current quarter revenue is within the range of our prior expectations, we had approximately $2 million in revenue shift from the second quarter into the back half of the year as a result of an unexpected supply chain challenge for certain route switch equipment that has been procured and delivered by a third party.

雖然當前季度的收入在我們之前的預期範圍內，但由於某些路由交換機設備的供應鏈出現意外挑戰，我們有約 200 萬美元的收入從第二季度轉移到了下半年。由第三方採購和交付。

This supply chain issue, which has been alleviated in full in the third quarter, delayed the start for the deployment of the Bowling project from April of this year to August of this year, and will affect the timing of revenue recognition for this project. This delay will cause some revenue recognition to shift what was projected in the third quarter to the fourth in 2023 and then possibly shift additional revenue from the fourth quarter to the first quarter in 2024 as we attempt to catch up to the installation schedule.

這項供應鏈問題在第三季得到全面緩解，導致Bowling專案的部署啟動時間從今年4月推遲到今年8月，並將影響該專案的收入確認時間。這種延遲將導致一些收入確認將預計的第三季度轉移到 2023 年第四季度，然後可能將額外收入從第四季度轉移到 2024 年第一季度，因為我們試圖趕上安裝計劃。

Importantly, understand this revenue has not vanished, it is just experiencing a shift in timing. This revenue will be realized and we continue to project a significant change in our run rate revenue on a go-forward basis beginning in the third quarter, with an increasing effect in subsequent quarters thereafter for the foreseeable future.

重要的是，要明白這種收入並沒有消失，它只是經歷了時間的轉變。這筆收入將得以實現，我們繼續預計從第三季開始，我們的運行率收入將發生重大變化，並在可預見的未來在隨後的幾個季度中產生越來越大的影響。

The company expects to generate between $60 million and $80 million in revenue for the next 12- month period, beginning in third quarter of 2023, but expects that generating an $80 million run rate may take an additional quarter or two as a result of the third party supply chain delays that have been recently resolved.

該公司預計從2023 年第三季開始的未來12 個月內將產生6,000 萬至8,000 萬美元的收入，但預計由於第三季的影響，產生8,000 萬美元的運行率可能需要額外一兩個季度的時間。最近已解決的當事人供應鏈延遲問題。

Our pipeline continues to strengthen and our backlog remains steady at $110 million. As a reminder, our calculation is comprised of the anticipated rollout of projects, as indicated by our current customers under contract and include all revenues that would be received by the company by deploying the projects and services necessary to service such projects and includes projected revenues that are not currently subject to binding purchase orders or commitments.

我們的產品線持續加強，積壓訂單穩定在 1.1 億美元。提醒一下，我們的計算包括項目的預期推出，如我們現有客戶根據合約所示，包括公司透過部署為此類項目提供服務所需的項目和服務而獲得的所有收入，並包括預計收入目前不受具有約束力的採購訂單或承諾的約束。

The backlog also has no timeline and includes projects that may be realized if at all in the near future or a much later date. Revenue growth continues to be driven by the fastest rate of new customer acquisition that the company has experienced during my tenure with CRI. We're experiencing wins in CRM key verticals, including retail, digital out-of-home ad networks, foodservice, sports and entertainment venues, and media contracts.

積壓工作也沒有時間表，包括可能在不久的將來或更晚的日期實現的項目。在我任職 CRI 期間，該公司經歷了最快的新客戶獲取速度，並持續推動營收成長。我們在 CRM 關鍵垂直領域取得了勝利，包括零售、數位戶外廣告網路、餐飲服務、體育和娛樂場所以及媒體合約。

As noted in the press release, our RFP win percentage approximates 70% over the past 12 months. CRI's presence in the market is widely acknowledged by vendors and customers, and we experience inbound sales referrals and/or inquiries on a weekly basis.

如新聞稿所述，過去 12 個月我們的 RFP 獲勝率約為 70%。 CRI 在市場上的存在得到了供應商和客戶的廣泛認可，我們每週都會遇到入站銷售推薦和/或詢問。

For context there has been a 300% increase in the past six months. These inbound referrals and inquiries are coming from both vendors who recognize that CRI is the best partner for signing solutions today and direct inbound from end user customers.

就背景而言，過去六個月增長了 300%。這些入站推薦和詢問來自兩家供應商，他們認識到 CRI 是當今簽署解決方案的最佳合作夥伴，並且直接來自最終用戶客戶。

We are actively competing in a significant number of new customer engagements for which an award of business is currently pending and our pipeline has never been stronger. Our vendor partnerships continue to expand. Samsung recently recognized CRI as its 2022 Gold Partner of the Year, marking the second year in a row that CRI has received this award from Samsung.

我們正在積極參與大量新客戶活動，目前正在等待業務授予，而我們的管道從未如此強大。我們的供應商合作夥伴關係不斷擴大。三星最近將 CRI 評為 2022 年度金牌合作夥伴，這也是 CRI 連續第二年獲得三星頒發的獎項。

Finally, I want to be very clear and explicit, CRI is not a $40 million revenue company moving forward. On a go forward 12 month basis, we project between $60 million to $80 million in revenue in both digital signage as an industry and CRI as a company have tremendous tailwinds.

最後，我想非常明確地說，CRI 並不是一家營收 4,000 萬美元的公司。在未來 12 個月的基礎上，我們預計數位看板產業和 CRI 公司的收入將在 6,000 萬至 8,000 萬美元之間，這將帶來巨大的推動力。

This revenue expansion will have a profound effect upon continued improvements in profitability and is working in parallel with paying down our debt. The compound effect of revenue increases, profitability improvements, and reduced debt translates to significant improvements in free cash flow for 2024 as we grow into an optimal leverage ratio and capital structure.

這種收入擴張將對獲利能力的持續改善產生深遠影響，並與償還我們的債務同時進行。隨著我們實現最佳槓桿率和資本結構，收入增加、獲利能力提高和債務減少的複合效應將轉化為 2024 年自由現金流的顯著改善。

We have terrific momentum in the business and are seeing productivity from our business strategy. We continue to win in the market with a corresponding reduction in the timeline to new customer acquisitions and believe the company is uniquely situated to exploit the tremendous growth and opportunity in the industry. I will now turn it back over to Will for a few notes on our business activities.

我們的業務勢頭強勁，並且從我們的業務策略中看到了生產力。我們透過相應縮短新客戶獲取的時間來繼續贏得市場，並相信公司處於獨特的位置，可以利用行業的巨大成長和機會。我現在將其轉回給威爾，以獲取有關我們業務活動的一些註釋。

Thanks, Rick. We're truly excited about the sheer volume of activity in our pipeline, the win rate we are currently experiencing, and the inflection point the company has reached with respect to its operating leverage. As we convert these opportunities to customers, we are pressing subsequently to launch deployments, driving revenue, and ultimately seeding downstream, higher margin SaaS and other services revenue.

謝謝，瑞克。我們對管道中的大量活動、我們目前所經歷的勝率以及公司在營運槓桿方面所達到的轉折點感到非常興奮。當我們將這些機會轉化為客戶時，我們隨後迫切需要啟動部署、增加收入，並最終為下游帶來更高利潤的 SaaS 和其他服務收入。

We struggle with patience, but even where deployments are developing slower than anticipated, they are growing in quantity and opportunity size, which will ultimately drive adjusted EBITDA, free cash flow and bottom-line results.

我們需要耐心等待，但即使部署的發展速度比預期慢，它們的數量和機會規模也在增長，最終將推動調整後的 EBITDA、自由現金流和利潤。

A few other comments with respect to the period as of and for the period ended June 30, 2023. With respect to the company's cash position, we had cash on hand as of June 30, 2023, increased to $3.3 million from $1.6 million as of December 31, 2022, as a result of collections on accounts receivable, annual billings associated with our SaaS based contracts, and increases in customer deposits on future deployments, partially offset by investments in software development projects and the repayment of debt.

關於截至2023 年6 月30 日期間和截至2023 年6 月30 日止期間的其他一些評論。關於公司的現金狀況，截至2023 年6 月30 日，我們手頭現金從截至2023 年6 月30 日的160 萬美元增加到330 萬美元。2022 年 12 月31 日，由於應收帳款催收、與我們基於SaaS 的合約相關的年度帳單以及未來部署的客戶押金增加，部分被軟體開發專案投資和債務償還所抵消。

We continue to uncover long-term strategic opportunities within our existing customer base that will further entrench our platforms within the customer's designed infrastructure and digital ecosystem, be it through API integration to other applications or unique adaptations of our platforms for specific customer use cases.

我們不斷在現有客戶群中發現長期策略機會，這些機會將進一步鞏固我們的平台在客戶設計的基礎設施和數位生態系統中的地位，無論是透過與其他應用程式的API 集成，還是針對特定客戶用例對我們的平台進行獨特的調整。

These customizations, similar to what we've discussed with respect to our automotive platform do typically require an upfront capital investment that feed material expansion of our downstream SaaS revenue within the existing customer base and build a competitive moat around our business.

這些客製化與我們討論的汽車平台類似，通常需要前期資本投資，以在現有客戶群中實現下游 SaaS 收入的實質擴張，並圍繞我們的業務構建競爭護城河。

Throughout 2022 and 2023, we've diligently managed our cash position and capital stack to enable continued servicing of our debt, including repayment of principal and deployment of capital to capitalize on strategic investment in our platforms, which will enhance the long term ARR of the business.

在整個2022 年和2023 年，我們一直在努力管理我們的現金狀況和資本堆棧，以便能夠繼續償還我們的債務，包括償還本金和部署資本以利用我們平台的戰略投資，這將提高我們的長期ARR商業。

Those investments are beginning to pay real dividends in the form of new customer acquisition via our best-in-class platforms and have seeded the future for material cash flow generation. We will continue to manage our cash position through the balance of 2023, the utilization of customer deposits, and advance SaaS billings associated with our ARR.

這些投資開始以透過我們一流的平台獲取新客戶的形式支付真正的紅利，並為物質現金流的產生奠定了基礎。我們將在 2023 年餘下繼續管理我們的現金部位、客戶存款的利用以及與我們的 ARR 相關的預付 SaaS 帳單。

With the anticipated ramp in our revenues beginning in the third quarter of 2023 and from there forward, we see 2024 as generating material free cash flow from operations. With respect to our debt, through June 30, 2023, the company has repaid in excess of $2.5 million in principal.

隨著我們的收入預計從 2023 年第三季開始以及今後的成長，我們預計 2024 年將產生來自營運的實質自由現金流。關於我們的債務，截至 2023 年 6 月 30 日，本公司已償還超過 250 萬美元的本金。

Subsequent to the quarter end date, we've made additional payments on debt principal, bringing that total to approximately $3.2 million, driving reductions in the company's leverage ratio. Effective this week, the company has now repaid in full the $2 million note drawn in October 2022 and has begun making incremental principal debt payments of approximately [$399,000] per month related to the company's $7.2 million amortizing note that matures in February of 2025.

在季度結束日之後，我們額外支付了債務本金，使總額達到約 320 萬美元，從而降低了公司的槓桿率。自本週起，該公司現已全額償還2022 年10 月提取的200 萬美元票據，並開始每月支付與該公司2025 年2 月到期的720 萬美元攤銷票據相關的約[399,000 美元] 的增量本金債務。

We're executing our operating plan, onboarding new customers at a record pace and continuing to grow our SaaS base revenue. However, we are exploring options to either refinance or recapitalize this debt so that working in tandem with improvements in profitability, we reduce leverage and achieve a migration to the optimal capital structure in conjunction with growth.

我們正在執行我們的營運計劃，以創紀錄的速度吸引新客戶，並繼續增加我們的 SaaS 基礎收入。然而，我們正在探索這些債務進行再融資或資本重組的選擇，以便在提高盈利能力的同時，降低槓桿率，並在增長的同時實現向最佳資本結構的轉變。

A quick update on the auto platform globalization project that I referenced, we're rapidly approaching the anticipated US launch of the upgraded automotive platform preliminarily targeted for December 2023. This will represent the culmination of two years' worth of work on modernization of the product and will prepare the company to launch internationally in 2024.

我提到的汽車平台全球化專案的快速更新，我們正在迅速接近預計於 2023 年 12 月在美國推出升級版汽車平台。這將代表兩年來產品現代化工作的頂峰並將為該公司在2024 年進軍國際市場做好準備。

Perhaps more importantly, completing this development will allow the company to significantly scale down its software development expenses, which while capitalized have represented a $0.5 million in spend quarterly during the project. We are excited to both free up certain key resources for other investment projects and to scale down our spending via reductions in third-party development professionals, who have been assisting us along the way.

也許更重要的是，完成這項開發將使公司能夠大幅縮減其軟體開發費用，儘管該費用已資本化，但專案期間每季的支出為 50 萬美元。我們很高興能夠為其他投資項目騰出某些關鍵資源，並透過減少一直為我們提供幫助的第三方開發專業人員來減少支出。

Lastly, I wanted to note that CRI has elected to modernize its operating and ERP applications by moving to one consolidated platform NetSuite by the end of 2023. This will ultimately provide deeper insights and analytics, improve operational efficiencies and visibility, and actually reduce the company's operating costs marginally as we move to retire at least six disparate applications currently in use.

最後，我想指出的是，CRI 已選擇在2023 年底之前遷移到統一平台NetSuite，實現其營運和ERP 應用程式的現代化。這最終將提供更深入的見解和分析，提高營運效率和可見性，並實際上降低公司的成本。隨著我們逐步淘汰目前使用的至少六個不同的應用程序，營運成本會略有下降。

This project was launched in June 2023 and is expected to be completed by the end of the current year. Rick, would you please provide an update on our customer acquisitions and previously announced customer activities?

該計畫於2023年6月啟動，預計今年底完工。 Rick，您能否提供有關我們的客戶獲取和先前宣布的客戶活動的最新資訊？

Thanks, Will. First, I'd like to provide an update on a previous announcement. During our 2022 year-end earnings call, we discussed an RFP victory, whereby we were selected as the go-forward digital signage provider for a national fast casual restaurant chain.

謝謝，威爾。首先，我想更新之前發布的公告。在 2022 年年終財報電話會議上，我們討論了 RFP 的勝利，我們被選為全國快餐連鎖店的前進數位看板提供商。

Throughout 2023, we've worked hand-in-hand with this customer on test sites, content layout, custom integrations within our software to provide maximum flexibility and capability to the customer moving forward.

在整個 2023 年，我們在測試網站、內容佈局、軟體內的自訂整合方面與該客戶攜手合作，為客戶的前進提供最大的靈活性和能力。

We're pleased today to be able to announce the customer is Panera Bread. Panera has over 2,000 location and is just beginning their digital journey. We expect to install both indoor digital menu boards and digital drive-thru outdoor solutions for Panera, beginning with new construction and remodel sites in September of this year.

今天我們很高興能夠宣布客戶是 Panera Bread。 Panera 擁有 2,000 多個地點，並且剛開始其數位化之旅。我們預計將從今年 9 月的新建築和改建工地開始，為 Panera 安裝室內數位菜單板和數位得來速戶外解決方案。

We're actively working with Panera on their evaluation of existing site retrofit activities and a launch to allow franchisees to opt into the digital program. Panera will be utilizing CRI for hardware in deployment as well as day two services, including our Clarity CMS and other content services. When a brand like Panera trust you, many others are set to follow. We're working with Panera on a mutual press release and hope to announce something officially by the end of August.

我們正在積極與 Panera 合作，評估他們對現有場地改造活動的評估，並推出允許特許經營商選擇加入數位計畫的活動。 Panera 將利用 CRI 進行硬體部署以及第二天的服務，包括我們的 Clarity CMS 和其他內容服務。當像 Panera 這樣的品牌信任您時，許多其他品牌就會效仿。我們正在與 Panera 合作共同發布新聞稿，並希望在 8 月底之前正式宣布一些消息。

Next, I'd like to address artificial intelligence or AI and specifically, generative AI. Expect an additional press release in the next month or so in which we will update the market on how CRI intends to utilize generative AI to enhance the capabilities and offerings of our content management systems.

接下來，我想談談人工智慧，特別是生成式人工智慧。預計在下個月左右發布額外的新聞稿，我們將向市場通報 CRI 打算如何利用生成式人工智慧來增強我們內容管理系統的功能和產品。

Generative AI will fundamentally change what we think about when we discuss content management systems and how using AI will completely overhaul how content is generated and shared with consumers. AI has the potential to revolutionize the CMS marketplace and will ultimately enable our clients to deliver more contextual messaging, drive consumer behavior and improve operational throughput, basket size, and profitability. We're exploring generative AI now and anticipating adding it to our road map in 2024.

當我們討論內容管理系統時，生成式人工智慧將從根本上改變我們的想法，以及使用人工智慧將如何徹底改變內容的生成方式和與消費者共享的方式。人工智慧有可能徹底改變 CMS 市場，並最終使我們的客戶能夠提供更多上下文訊息、推動消費者行為並提高營運吞吐量、購物籃規模和獲利能力。我們現在正在探索生成式人工智慧，並預計在 2024 年將其添加到我們的路線圖中。

Third area of interest, we're launching a channel partner program. CRI's target market has historically been marquee enterprise grade customers with 500-plus endpoints or devices generating ARR. Traditionally, there is a segment of the market that we have not serviced, which includes small to medium-sized business customers that work with smaller integrators.

第三個感興趣的領域是，我們正在啟動通路合作夥伴計畫。 CRI 的目標市場歷來是擁有 500 多個產生 ARR 的端點或裝置的大型企業級客戶。傳統上，我們還沒有服務過一部分市場，其中包括與小型整合商合作的中小型企業客戶。

As we continue to grow, we see an opportunity to roll out a channel partner program, leveraging our best-in-class software platforms to these integrators under a SaaS-based subscription license model. We do not anticipate a full services approach for these integrators as they will provide some services to their customer base.

隨著我們的不斷發展，我們看到了推出通路合作夥伴計畫的機會，在基於 SaaS 的訂閱授權模式下向這些整合商利用我們一流的軟體平台。我們預計這些整合商不會採用全面的服務方法，因為他們將為其客戶群提供一些服務。

These integrators will have an a-la-carte ability to pick and choose what CRI services it makes sense for them to deploy to their end users. We've recently hired a long-time industry veteran to assist in launching this program, and we see a huge, underpenetrated SMB market available for digital signage, software and services.

這些整合商將有能力挑選對他們有意義的 CRI 服務來部署給最終用戶。我們最近聘請了一位長期的行業資深人士來協助啟動該計劃，我們看到數位看板、軟體和服務有一個巨大的、尚未滲透的中小企業市場。

Media sales momentum, we have a media sales division that performs direct sales activities on behalf of our customers in helping them monetize their digital networks. This division produced $1.5 million in revenue in 2022 as we emerged from COVID.

媒體銷售動力，我們有一個媒體銷售部門，代表我們的客戶進行直接銷售活動，幫助他們透過數位網路獲利。當我們擺脫新冠疫情後，該部門在 2022 年創造了 150 萬美元的收入。

In early 2023, we elected to invest in the opportunity to expand our team and pursue additional out-of-home networks as clients. This division is on pace to ultimately produce in excess of $3 million in revenue in the current year and has continued to gain momentum.

2023 年初，我們選擇投資擴大團隊的機會，並作為客戶尋求更多的戶外網路。該部門本年度的收入最終預計將超過 300 萬美元，並繼續保持成長動能。

To understand the progress being made, one example, our team has recently received confirmation of a contract worth $1 million annually for eight years at one individual theme park, an individual deal already on the books for 2024, which is almost equal to what the entire division produced in 2022. We could not be more excited about the momentum our team is experiencing. As we scale the revenue, it will generate opportunities to further in-source our sales activities while enhancing profitability in future periods.

為了了解正在取得的進展，舉個例子，我們的團隊最近收到了一份為期八年、每年價值100 萬美元的合約確認函，該合約在一個單獨的主題公園中進行，這項單獨的交易已經在 2024 年預訂，這幾乎等於整個主題公園的合約金額。在 2022 年產生的部門。我們對我們團隊正在經歷的勢頭感到非常興奮。隨著我們擴大收入，它將產生進一步內包我們的銷售活動的機會，同時提高未來時期的獲利能力。

And lastly, a few updates on some previous announcements. Starlite Media, we discussed how the company CRI had developed a custom digital outdoor fixture for their advertising network with an opportunity to deploy in more than 2,000 locations.

最後，對先前的一些公告進行了一些更新。 Starlite Media，我們討論了 CRI 公司如何為其廣告網路開發客製化數位戶外固定裝置，並有機會在 2,000 多個地點進行部署。

During July, the company deployed the first batch of units and has now been awarded the opportunity to do an additional 20 units in August. Assuming all goes well, the customer has indicated their intent to scale quickly to 500 locations throughout the balance of the calendar year 2023.

7 月期間，該公司部署了第一批設備，目前已獲得在 8 月再部署 20 台設備的機會。假設一切順利，客戶已表示他們打算在 2023 年餘下時間將分公司快速擴展到 500 個。

Revenue generated from the hardware and installation of these devices represent a current year opportunity of approximately $6 million with a 2024 and beyond opportunity in excess of an additional $17 million over a two-year period.

這些設備的硬體和安裝產生的收入代表了今年約 600 萬美元的機會，2024 年及以後的機會在兩年內額外超過 1700 萬美元。

Lastly, let's talk about our drive-thru. CRI continues to secure commitments for our drive-thru products and solutions. The product is in high demand, and we are well-situated to capture a significant portion of the $3 billion market opportunity.

最後說說我們的自駕遊吧。 CRI 繼續兌現對我們的得來速產品和解決方案的承諾。該產品需求量很大，我們處於有利位置，可以抓住 30 億美元市場機會的很大一部分。

During the second quarter and through July of 2023, we've added four new drive-thru customers to our roster of new logos. Expect additional announcements concerning these customer acquisitions throughout the balance of the year. Will, any further commentary you'd like to add on our second quarter 2023 results?

從第二季到 2023 年 7 月，我們在新商標名冊中新增了四位新的得來速客戶。預計今年餘下時間將有更多有關這些客戶收購的公告。您想對我們 2023 年第二季的業績添加任何進一步的評論嗎？

Thank you, Rick. An overview of our financial results for the quarter and year to date periods were provided in our earnings release report this morning, which included the condensed consolidated balance sheets as of June 30, 2023, and the prior year, along with the condensed consolidated statements of operations and statement of cash flows for the six months ended June 30, 2023, and a detailed reconciliation of net income to EBITDA and adjusted EBITDA for the current and immediately preceding four quarters.

謝謝你，瑞克。今天早上的收益發布報告概述了我們本季和年初至今的財務業績，其中包括截至 2023 年 6 月 30 日和上一年的簡明合併資產負債表，以及截至2023 年6 月30 日的六個月的營運和現金流量表，以及當前和前四個季度的淨利潤與EBITDA 和調整後EBITDA 的詳細調整表。

Regarding the results for the three and six months ended June 30, 2023, we note that the MD&A section of our interim report on Form 10-Q provides reviewed financial information. In the interest of time and in light of insights and comments provided earlier in this call, we'll move to the Q&A portion of the call at this time.

關於截至 2023 年 6 月 30 日的三個月和六個月的業績，我們注意到我們的 10-Q 表格中期報告的 MD&A 部分提供了經過審查的財務資訊。為了節省時間，並根據本次電話會議早些時候提供的見解和評論，我們現在將進入電話會議的問答部分。

(Operator Instructions) Brian Kinstlinger, Alliance Global Partners.

（操作員說明）Brian Kinstlinger，Alliance Global Partners。

Great. Thanks for taking my questions, guys. Good morning. First is related to your next four quarter outlook, if you will, do you expect to be below the $60 million run rate in the second half of the year, given the timeline you've discussed with the Bowling contract. I know the fourth quarter is usually seasonally weak, but it sounds like this year the third quarter might be the weakest given some of that timing, may be little help as it relates to the next two quarters based on your outlook.

偉大的。謝謝你們回答我的問題，夥伴們。早安.首先與你接下來四個季度的前景有關，如果你願意的話，考慮到你與保齡球合約討論的時間表，你是否預計下半年的運行率會低於 6000 萬美元。我知道第四季通常是季節性疲軟的，但聽起來今年第三季可能是最疲軟的，考慮到某些時間點，可能沒什麼幫助，因為根據您的前景，它與未來兩個季度相關。

Yeah, thanks. Thanks, Brian, for calling, and thanks for the question. Now we've put the range of $60 million to $80 million because we've got the backlog that's out there. And the biggest challenge that we've had is that Bowling contract and getting it going. We had some Cisco route switch equipment that was -- didn't come in, right.

是的，謝謝。謝謝布萊恩的來電，也謝謝你提出的問題。現在我們的投資範圍是 6,000 萬到 8,000 萬美元，因為我們還有積壓的訂單。我們面臨的最大挑戰是保齡球合約以及如何讓它繼續下去。我們有一些思科路由交換設備——沒有進來，對吧。

But we have since in late July, received quantities sufficient to effectively do half the project. So we're back running here in August and starting to do the first installations. We have hundreds that are site-surveyed and we're ready to rock and roll.

但自 7 月下旬以來，我們收到的數量足以有效完成一半的專案。因此，我們將在八月回到這裡並開始進行第一次安裝。我們已經對數百個進行了現場調查，並準備好進行搖滾活動。

So the question of getting from $60 million to $80 million is really all about throughput and how quickly that customer can move as opposed to whether the demand is there for the products and services and whether we can execute on it.

因此，從 6000 萬美元增加到 8000 萬美元的問題實際上完全取決於吞吐量以及客戶移動的速度，而不是產品和服務是否有需求以及我們是否可以執行。

So we feel really comfortable with the $60 million based on the current backlog pipeline and existing customer expansion activities. Getting up to that $80 million is really just a question of timing as opposed to demand and whether the customer can move fast enough. We're certainly working hand -in-hand with them to catch up as quickly as we can on the original schedule.

因此，根據目前的積壓訂單和現有的客戶擴展活動，我們對 6000 萬美元感到非常放心。達到 8000 萬美元實際上只是一個時間問題，而不是需求問題以及客戶是否能夠足夠快地採取行動。我們當然正在與他們攜手合作，盡快趕上原來的時間表。

Okay. And if I recall correctly, the Bowling Alley themselves have to opt in, maybe any commentary on either the number or percentage or what how have opt-in going really well, given there's a revenue share piece, but maybe any comments related to that?

好的。如果我沒記錯的話，保齡球館本身必須選擇加入，也許有任何關於數量或百分比的評論，或者考慮到有收入分成部分，選擇加入如何進展順利，但也許有任何與此相關的評論？

Yeah. I believe the -- we -- the third party, right, the customer controls the opt-in process, but we're certainly privy to it. I believe the numbers are well in excess of 300 have already opted in with line of sight to another 300-plus that are in process. So we feel good that the pipeline of locations has been built, and we're starting to run and execute against it.

是的。我相信——我們——第三方，對吧，客戶控制著選擇加入的過程，但我們當然對此知情。我相信已經有超過 300 人選擇加入，另外還有 300 多人正在處理中。因此，我們對位置管道已經建置感到滿意，並且我們開始對其進行運行和執行。

Great. And then congrats on the Panera news. That's very big for the company resume, maybe touch on the QSR space overall. First, can you quantify the number of screens for the four new drive-thru customers? And then just on QSR overall, is that where you're seeing the most incoming or is that more of an outgoing RFP process?

偉大的。然後恭喜帕內拉新聞。這對於公司的履歷來說非常重要，也許會觸及整個 QSR 領域。首先，您能否量化四個新的得來速顧客的螢幕數量？然後就 QSR 整體而言，您看到的是最多傳入的流程還是更多的是傳出的 RFP 流程？

Yeah, we're seeing -- so we're seeing demand in ad networks, food service, and retail. But foodservice, in particular, the digital drive-thru has been an incredibly hot commodity and product. That's where we've picked up four or five brand new customers in the current year that, frankly, we didn't know at the turn of last year and we're seeing inbound and RFP activities regularly on those.

是的，我們看到了廣告網路、食品服務和零售領域的需求。但餐飲服務，特別是數位得來速餐廳一直是一種非常熱門的商品和產品。今年我們在這裡吸引了四、五個全新客戶，坦白說，去年年初我們並不知道這些客戶，但我們定期看到這些客戶的入站和 RFP 活動。

You look at Panera, it's 2,000 locations, 1,000 drive-thrus. And certainly their intent is to go digital. They're less than [$100,000] of revenue year to date. So we're expecting some of these opportunities to really expand in flow. And there is significant proof of concept and RFP inbound activity in excess of what we have in our backlog number. So we're really excited about that we continue to iterate on the physical product itself to trim cost and position the product as a market leader and are being -- that's been very successful.

你看看 Panera，它有 2,000 家分店，1,000 家得來速餐廳。當然，他們的目的是走向數位化。今年迄今為止，它們的收入還不到 [10 萬美元]。因此，我們預計其中一些機會能夠真正擴大流量。而且，大量的概念驗證和 RFP 入站活動超出了我們的積壓數量。因此，我們非常興奮的是，我們繼續迭代實體產品本身，以削減成本並將產品定位為市場領導者，並且非常成功。

And then just wanted to follow-up on QSR, when there is a large enterprise RFP, what is the competitive landscape look like?

然後想跟進QSR，當有大型企業RFP時，競爭格局是什麼樣的？

Typically there are, we see about four to five folks who are in that space. I think there's a couple of traditional sign providers like a Howard sign that are attempting to hold on to some of that business as it converts to digital. And then there are two or three digital signage players who are primarily focused in the food vertical, not a broader digital signage company servicing multiple market verticals.

通常，我們會看到大約有四到五個人在那個空間。我認為有一些傳統標牌提供者（例如霍華德標牌）在向數位轉型時試圖保留部分業務。然後有兩三個數位看板玩家主要專注於食品垂直領域，而不是服務多個垂直市場的更廣泛的數位看板公司。

Those folks tend to be a little bit smaller and we've competed very well against them given our size. And more importantly, how the individual customer we're pursuing looks as a percentage of the total overall portfolio of customers or revenue, right. That concentration risk that the customer perceives of their vendor has been an important factor for CRI. And as we grow, that will be another tool in our toolbox that makes us look more important and less risky.

這些人的體型往往要小一些，考慮到我們的體型，我們與他們的競爭非常好。更重要的是，我們所追求的個人客戶佔整個客戶組合或收入的百分比，對嗎？客戶對其供應商的感知集中風險一直是 CRI 的重要因素。隨著我們的成長，這將成為我們工具箱中的另一個工具，讓我們看起來更重要、更有風險。

Great, thanks. One last question. You've got these two really large enterprise ad network solutions for Starlite Media and strike 10 BPAA, they seem to me to be long term the biggest driver of value because they are going to be recurring in addition to up-size. Can you just discuss from a high level, the opportunity and pipeline you see with those solutions compared to just your digital signage?

萬分感謝。最後一個問題。 Starlite Media 和 Strike 10 BPAA 這兩個非常大型的企業廣告網路解決方案，在我看來，從長遠來看，它們是最大的價值驅動因素，因為除了規模擴大之外，它們還會重複出現。您能否從高層次討論一下與數位看板相比，您在這些解決方案中看到的機會和管道？

Yeah. I think those opportunities individually, we've talked about Bowling being somewhere in the ballpark of a $40 million opportunity. Starlite Media certainly has the capability of getting up to and in excess of $30 million on the one-time deployment revenue. And both of those certainly would be positioned to be [$1 million-plus] SaaS customers.

是的。我認為這些機會是單獨的，我們已經討論過保齡球的機會約為 4000 萬美元。 Starlite Media 當然有能力獲得高達或超過 3000 萬美元的一次性部署收入。這兩家公司肯定都會成為價值超過 100 萬美元的 SaaS 客戶。

I think when you flip the script and look at something as an example in food service, there is still tremendous value there. If you took the Panera footprint as an example and said, okay, they deployed 100% of their network, what does that look like? That likely translates into $50 million of one-time hardware installation services activities, but leaves behind another $2.5 million to $3 million of SaaS revenue.

我認為，當你翻轉劇本並以餐飲服務為例時，你會發現那裡仍然存在著巨大的價值。如果您以 Panera 足跡為例並說，好吧，他們部署了 100% 的網絡，那會是什麼樣子？這可能意味著 5,000 萬美元的一次性硬體安裝服務活動，但留下了另外 250 萬至 300 萬美元的 SaaS 收入。

So there are still very material SaaS growth opportunities within that food service or drive-thru space because again, that's one customer. And we have three or four customers, certainly not the size right now of Panera being 2,000 locations, but several in the pipeline that are 200 to 500 sites and you can do the same inverse math.

因此，餐飲服務或得來速空間中仍然存在非常重要的 SaaS 成長機會，因為這只是一個客戶。我們有三到四個客戶，當然不是 Panera 目前 2,000 個地點的規模，而是正在籌備中的幾個客戶，有 200 到 500 個地點，你可以做同樣的逆向數學。

Great. Thanks so much for taking all my questions.

偉大的。非常感謝您回答我所有的問題。

Yeah, absolutely. Thanks for calling, Brian.

是的，絕對是。感謝您致電，布萊恩。

Howard Halpern, Taglich Brothers.

霍華德·哈爾彭，塔格利奇兄弟。

Congratulations, guys. Thanks, I appreciate the call. With regard to -- well, the supply chain issue is corrected at this point, but is there any lingering impact on and margins in the third quarter upcoming?

恭喜你們，夥伴們。謝謝，我很感謝您的來電。關於——嗯，供應鏈問題目前已得到糾正，但對即將到來的第三季的利潤率是否有任何揮之不去的影響？

No, there are not. That issue has been resolved and we do not see any forward impact. Certainly, we had a little bump there in July as far as waiting on that product. But otherwise, no, we look and feel similarly moving forward as we have in the past from a margin standpoint.

不是，沒有。該問題已解決，我們沒有看到任何未來影響。當然，就等待該產品而言，我們在七月遇到了一些困難。但除此之外，不，從利潤的角度來看，我們看起來和感覺都與過去類似。

And Will, there you talked about, you know, consolidating into NetSuite and some other activities, is there going to be any incremental bump in G&A expenses in the second half of the year?

威爾，您提到，合併到 NetSuite 和其他一些活動中，下半年的一般管理費用是否會出現增量成長？

Nothing in particular, Howard. We may have some moderate rise with respect to head count as we deliver on the revenue, but it should be incrementally slower than the top-line growth, so expect that to lead to expanding margins. There's no other particular driver of higher expense in the next half of the year.

沒什麼特別的，霍華德。當我們實現收入時，我們的員工數量可能會有一些適度的成長，但它應該逐漸慢於營收成長，因此預計這將導致利潤率擴大。下半年沒有其他特定的費用上漲的驅動因素。

And certainly as we look into 2024, we've got a couple of things that should fall off the radar. And with the introduction of NetSuite, as an example, I referenced disparate applications that are going away. We think that will be net neutral at worse despite a significant upgrade in our operating platform.

當然，當我們展望 2024 年時，有一些事情應該被忽略。以 NetSuite 的推出為例，我提到了正在消失的不同應用程式。我們認為，儘管我們的營運平台進行了重大升級，但更糟糕的是，這將是淨中性的。

Okay. And if you could just discuss a little bit like Rick talked about what is the opportunity over the next two, three, four, five years for the ad revenue on all the signage that's already deployed, the screens that are already out there because it seems like it's just starting and it's starting out pretty well.

好的。如果你能像里克談到的那樣討論一下未來兩年、三年、四年、五年所有已經部署的標牌和已經在那裡的屏幕上的廣告收入的機會是什麼，因為看起來就好像一切才剛開始，而且開始得很好。

Yeah, great observation, Howard. I don't even -- I don't know that we're ready to even quantify that yet. What I can say is we effectively have two customers today in this realm and are doubling in size in 2023 and expect to double that again in 2024. We're spending a lot of time this year on chasing other ad networks as customers. And that will give us a further enhanced access to grow those media revenues.

是的，很棒的觀察力，霍華德。我什至不知道我們是否已經準備好量化這一點。我能說的是，我們今天在這個領域實際上擁有兩個客戶，其規模將在2023 年翻一番，並預計在2024 年再翻一番。今年我們花了很多時間來爭取其他廣告網絡作為客戶。這將使我們有更多機會增加這些媒體收入。

Separate and apart from that, we've talked in the past about taking this platform monetization to existing customers, who are using our traditional digital signage services. We're getting a lot of questions and inquiries and demos for those existing customers. And we see a real large opportunity there. We think that this could easily be a $10 million-plus business beyond 2024 and maybe 20, right. So a little early to really say and commit to that. But certainly all signs point to growing demand, and we're delivering for the customers that we have.

除此之外，我們過去曾討論過將這個平台貨幣化給使用我們傳統數位看板服務的現有客戶。我們收到了很多針對現有客戶的問題、詢問和演示。我們在那裡看到了一個真正巨大的機會。我們認為，到 2024 年之後，這很可能會成為一項價值超過 1000 萬美元的業務，甚至可能達到 20 美元，對吧。所以現在真正說出並承諾這一點還為時過早。但毫無疑問，所有跡像都表明需求不斷增長，而我們正在為現有客戶提供服務。

And that's a relatively high margin business.

這是一項利潤率相對較高的業務。

That's correct.

這是正確的。

Okay. Thanks, and keep up the great work.

好的。謝謝，並繼續努力。

Thank you, Howard.

謝謝你，霍華德。

Brian Kinstlinger, Alliance Global Partners.

Brian Kinstlinger，聯盟全球合作夥伴。

Hey, guys. Sorry, one more question as it relates to Panera, first, did I understand correctly, do the franchisees have to opt in? And then my second part of the question is, is there a significant piece that's represented in your backlog? That was confusing the timing of when it was signed. And so I'm also then confused if the [$110 million] backlog includes anything from Panera.

大家好。抱歉，還有一個與 Panera 相關的問題，第一，我理解是否正確，加盟主必須選擇加入嗎？然後我的問題的第二部分是，您的積壓工作中是否有重要的部分？簽署的時間令人困惑。因此，我也很困惑，[1.1 億美元]積壓訂單中是否包含 Panera 的任何產品。

So two good questions there. One, with Panera, it's similar to other large scale enterprise customers that we've work with, that have a franchise network. The CRI solution and CRI as a vendor had been adopted at the corporate level, and there is no option for a franchisee to choose digital signage from another provider.

這是兩個好問題。第一，Panera 與我們合作過的其他大型企業客戶類似，擁有特許經營網絡。 CRI 解決方案和 CRI 作為供應商已在企業層級採用，加盟商無法選擇其他供應商的數位看板。

The opt-in by franchisee does have to occur. But actually, in the current situation, Brian, we've got franchisees who are pressuring corporate to bring them a digital option. Corporate is finalizing their scope of work. We did a proof of concept. They want to make sure what they take to the franchisees meet their demand.

特許經營商必須選擇加入。但實際上，在目前的情況下，布萊恩，我們的特許經營商正在向企業施壓，要求他們提供數位化選擇。公司正在最終確定他們的工作範圍。我們做了概念驗證。他們希望確保向特許經營者提供的東西能夠滿足他們的需求。

So we have franchisees who are driving the bus as far as forcing corporate's hand to move forward on this initiative. So we don't anticipate any pushback or challenge in quote-unquote selling through to the franchisees. It will be corporate-sponsored and we will be the only option within that network.

因此，我們有特許經營商在推動這項舉措，迫使企業推動這項舉措。因此，我們預計在向特許經營商進行報價銷售時不會出現任何阻力或挑戰。它將由企業贊助，我們將是該網路中的唯一選擇。

On the second question --

關於第二個問題——

[And then does it relate to the backlog?]

【那麼這跟積壓工作有關係嗎？】

Yeah, on the backlog, there is some level of Panera in that backlog, Brian, there has been since we signed them in 2022.

是的，在積壓訂單中，布萊恩，自從我們在 2022 年簽署它們以來，積壓訂單中有一定程度的 Panera。

Okay. Thanks so much.

好的。非常感謝。

That completes the questions from the line today. Mr. Logan, are there any additional inquiries from the Investor Relations inbox that you would like to address?

今天的問題就到此結束了。洛根先生，您還想從投資者關係收件匣中提出任何其他問題嗎？

Yeah, thank you. There was one question that has come into the inbox with respect to merger and acquisition activity and what if any updates the company could provide there?

是的，謝謝。收件匣中出現了一個關於併購活動的問題，如果公司可以在那裡提供任何更新呢？

So I think that what I would say there is that we have and will continue to evaluate strategic options, including M&A. We're in a highly fragmented space. Strategic combinations can drive highly accretive value creation, both for ARR, EBITDA, free cash flow, and EPS bases.

所以我認為我想說的是，我們已經並將繼續評估策略選擇，包括併購。我們處於一個高度分散的空間。策略組合可以推動 ARR、EBITDA、自由現金流和 EPS 基礎上的高度增值價值創造。

The deals come in all shapes and sizes and the company has and will continue to evaluate them. Given our anticipated growth and market position along with strengthening profitability, there have been a number of discussions for opportunities with favorable deal structure.

這些交易的形式和規模各不相同，公司已經並將繼續對其進行評估。鑑於我們的預期成長和市場地位以及獲利能力的增強，我們對具有有利交易結構的機會進行了多次討論。

We could utilize that perspective M&A in conjunction with some kind of capital stack play by the issuance of equity in those prospective strategic combinations would likely only be considered if the currency was inefficient use of capital. So we've had a few that have been on the sidelines, frankly, while we wait for a resolution or response to the growth that we anticipate.

我們可以利用這個觀點，將併購與某種資本堆疊遊戲結合起來，透過在這些預期的策略組合中發行股權，只有在貨幣使用資本效率低下的情況下才可能考慮。因此，坦白說，在我們等待解決方案或對我們預期的成長做出反應時，有些人一直處於觀望狀態。

That was the only question from the inbox today. Okay, no other questions have come in. So let me conclude the call by thanking all of our shareholders, clients, partners, and employees for their continuing efforts, commitment, and support as we work together to transform Creative Realities into the leading brand in digital signage solutions. This concludes the Creative Realities' 2023 second quarter earnings call.

這是今天收件匣中唯一的問題。好的，沒有其他問題了。因此，在結束這次電話會議時，我要感謝我們所有的股東、客戶、合作夥伴和員工，感謝他們在我們共同努力將Creative Realities 轉變為行業領先品牌的過程中所做的持續努力、承諾和支持。數位看板解決方案。 Creative Realities 的 2023 年第二季財報電話會議到此結束。

This concludes today's conference call. Thank you for participating. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。