Creative Realities Inc. (NASDAQ: CREX) reported Q1 revenue for the quarter came in at $9.5 million versus the consensus estimate of $9.12 million.

2019 First Quarter Financial Overview

• Revenues were $9.5 million for the three-month period ended March 31, 2019, an increase of $5.4 million, or 133%, compared to the same period in 2018.
• Hardware revenue grew approximately $0.4 million, or 33%, in the first quarter of 2019 as compared to the same period in the prior year. Gross margin on hardware revenue was 14%, compared to 11% in 1Q18.
• Services and other revenue grew approximately $5.0 million, or 177%, in the first quarter of 2019 as compared to the same period in the prior year. Gross margin on services and other revenue was 44%, compared to 49% in 1Q18. Excluding one engineering services project in the period, gross margin on services and other revenue would have been approximately 49%.
• Managed services revenue, which includes both SaaS and help desk technical subscription services, represented approximately $1.5 million revenue in the first quarter of 2019, an increase of $1.0 million, or 200%, as compared to the same period in the prior year.
• Gross profit was $3.7 million for the first quarter of 2019, an increase of $2.2 million, or 144%, compared to the same period in 2018. Gross margin increased to 39% in 1Q19 versus 37% in 1Q18, driven primarily by the aforementioned mix of hardware and services and other revenue.
• The company achieved operating breakeven during 1Q19 as compared to an operating loss of $1.8 million in 1Q18.
• General and administrative expenses increased $0.6 million to $2.3 million in 1Q19 versus 1Q18 as the result of incremental payroll, benefit and office expenses associated with the acquisition of Allure Global Solutions, Inc. in November 2018.
• EBITDA was $0.4 million for the first quarter of 2019 compared to an EBITDA loss of $1.2 million for the same period in 2018.

Rick Mills, Chief Executive Officer, remarked, "CRI achieved record quarterly revenue of approximately $9.5 million in the first quarter of 2019 and we are on track to our previously issued guidance for the first half. We produced a small operating profit during the quarter and positive EBITDA of $368 thousand. As we finalize the integration of financial and operating activities of Allure, we expect to drive reductions in operating expenses and take further advantage of the economies of scale achieved thus far. We are proud of the continued progress."

2019 Financial Guidance

The Company reaffirms its previous guidance of $18 to 20 million in revenue for the first half of 2019.

Mr. Mills concluded, "We continue to see strong and improving market demand for our products and services as clients look to take advantage of the benefits of digital marketing in their evolving ecosystems, including deployments of digital technology and development of integrated applications to support those deployments. We are pleased to see that our recurring portion of our revenue is increasing substantially and look forward to continued progress on this front. We believe our end-to-end services offerings position us well within the industry to compete for new and growing opportunities with partners in a variety of key verticals including but not limited to retail, sports and entertainment venues, quick service restaurants and convenience stores. As we move through 2019, we remain committed to further execution of our strategy to gain more scale and act as a key participant in what we believe should be an industry rollup aimed at driving shareholder value."

For earnings history and earnings-related data on Creative Realities Inc. (CREX) click here.