การประชุมแถลงผลประกอบการไตรมาส 2 ปี 2026 ของ Creative Realities (CREX): รายได้พุ่งขึ้น 65%, คาดการณ์ครึ่งปีหลังทำสถิติสูงสุดใหม่

ประเด็นสำคัญ

• รายได้ในไตรมาส 2/2026 เพิ่มขึ้น 65% เมื่อเทียบรายปี สู่ระดับ 21.5 ล้านดอลลาร์ ซึ่งรวมถึงรายได้ 7.4 ล้านดอลลาร์จาก CDM ส่วนรายได้ของ CRI เดิมเติบโตประมาณ 8%
• กำไรขั้นต้นเพิ่มขึ้นสู่ระดับ 8.3 ล้านดอลลาร์ จาก 5.0 ล้านดอลลาร์ โดยอัตรากำไรขั้นต้นทรงตัวโดยรวมที่ 38.6% เมื่อเทียบกับ 38.5% ในปีก่อนหน้า
• EBITDA ปรับปรุงแล้วปรับตัวดีขึ้นสู่ระดับ 2.0 ล้านดอลลาร์ จาก 1.1 ล้านดอลลาร์ในไตรมาส 2/2025 และขาดทุน EBITDA ปรับปรุงแล้ว 494,000 ดอลลาร์ในไตรมาส 1/2026 อย่างไรก็ตาม ขาดทุนสุทธิส่วนที่เป็นของผู้ถือหุ้นสามัญขยายตัวเป็น 4.6 ล้านดอลลาร์ หรือ 0.43 ดอลลาร์ต่อหุ้นปรับลด
• อัตราการสร้างรายได้ประจำปี (Annual recurring revenue run rate) แตะระดับ 20.5 ล้านดอลลาร์ เพิ่มขึ้นจาก 20.1 ล้านดอลลาร์ในไตรมาสก่อนหน้า ผู้บริหารคาดว่ายอดแบ็กล็อก SaaS และ ARR เริ่มต้นมูลค่าประมาณ 4 ล้านดอลลาร์จะเริ่มสร้างรายได้ในช่วงเริ่มต้นปี 2027
• ผู้บริหารคาดว่ารายได้ในไตรมาส 3 จะสูงกว่าสถิติรายไตรมาสเดิมที่ 23.9 ล้านดอลลาร์ซึ่งทำไว้ในไตรมาส 4/2025 อย่างมาก และจะตามด้วยการเติบโตอย่างมีนัยสำคัญเมื่อเทียบไตรมาสต่อไตรมาสอีกครั้งในไตรมาส 4/2026
• CRI รับรู้ผลประโยชน์จากการควบรวมกิจการต่อปีของ CDM ได้แล้วประมาณ 7.5 ล้านดอลลาร์ หรือ 75% จากเป้าหมายอย่างน้อย 10 ล้านดอลลาร์ นอกจากนี้ บริษัทได้ยกเลิกข้อสงสัยเกี่ยวกับความสามารถในการดำเนินงานได้อย่างต่อเนื่อง หลังจากเสริมความแข็งแกร่งด้านสภาพคล่องผ่านการเสนอขายหุ้นเมื่อเร็ว ๆ นี้

ข้อมูลทางการเงินที่สำคัญ

ผลการดำเนินงานทางธุรกิจและการปฏิบัติการ

รายได้จากการบริการเพิ่มขึ้นมากกว่าเท่าตัวเป็น 14.0 ล้านดอลลาร์ โดยได้รับปัจจัยหนุนจากยอดขายบริการของ CDM จำนวน 7.0 ล้านดอลลาร์และการเติบโตของการติดตั้งของ CRI เดิม ขณะที่รายได้จากฮาร์ดแวร์เพิ่มขึ้นอย่างค่อยเป็นค่อยไปสู่ระดับ 7.5 ล้านดอลลาร์

อัตรากำไรขั้นต้นของฮาร์ดแวร์ลดลงสู่ 17.2% จาก 25.1% เนื่องจากส่วนผสมของรายได้ ส่วนอัตรากำไรขั้นต้นของการบริการลดลงสู่ 50.1% จาก 54.4% สาเหตุหลักมาจากการหมดอายุของสัญญาลูกค้าที่มีอัตรากำไรสูงกว่าในปี 2025

การรวมกิจการของ CDM ส่วนใหญ่เสร็จสมบูรณ์แล้ว ค่าใช้จ่ายในการขายและการตลาดเพิ่มขึ้นสู่ 2.0 ล้านดอลลาร์ จาก 1.2 ล้านดอลลาร์ ซึ่งรวมถึงประมาณ 500,000 ดอลลาร์จาก CDM ค่าใช้จ่ายในการบริหาร (G&A) เพิ่มขึ้นสู่ 9.0 ล้านดอลลาร์ จาก 5.2 ล้านดอลลาร์ โดย CDM มีส่วนร่วม 3.8 ล้านดอลลาร์ ส่วนค่าใช้จ่าย G&A ของ CRI เดิมลดลงประมาณ 400,000 ดอลลาร์เมื่อเทียบรายปี

CRI ระบุว่าโครงการ Tennessee Titans และ Nissan Stadium แห่งใหม่ มูลค่า 8.5 ล้านดอลลาร์ ยังคงเป็นไปตามแผน โดยคาดว่ารายได้ส่วนใหญ่จะเกิดขึ้นในปี 2026 การติดตั้งครอบคลุมจอแสดงผลหลายพันจอและโซลูชัน IPTV แบบครบวงจร

Albertsons ได้รับการระบุว่าเป็นลูกค้าเครือข่ายสื่อค้าปลีกที่ CRI เคยประกาศไว้ก่อนหน้านี้ โดย ณ เวลาที่มีการพูดคุย มีการปรับเปลี่ยนหน้าจอไปแล้วประมาณ 3,000 จอในสถานที่ 220 ถึง 250 แห่ง ซึ่งเครือข่ายดังกล่าวนำเสนอโฆษณาประมาณ 1 ล้านครั้งต่อวัน ทั้งนี้ Albertsons ใช้ CMS และชุดเครื่องมือ AdTech ของ CRI

CRI ได้เสร็จสิ้นการทดสอบในสถานที่ของ AMC Theatres และกำลังเคลื่อนไปสู่การติดตั้งเต็มรูปแบบในสถานที่ประมาณ 285 แห่ง บริษัทยังอยู่ระหว่างการเจรจากับผู้ค้าปลีกโทรศัพท์มือถือระดับประเทศที่มีสาขามากกว่า 900 แห่ง และเครือร้านอาหารบริการด่วนที่มีร้านอาหารมากกว่า 1,000 แห่ง การปรับเปลี่ยนแพลตฟอร์มเหล่านี้คาดว่าจะช่วยสนับสนุนรายได้ SaaS ในปี 2027

นอกจากนี้ บริษัทยังอยู่ระหว่างการย้ายตัวแทนจำหน่าย Lexus และ Toyota ประมาณ 300 แห่งในแคนาดามายังแพลตฟอร์ม CMS ของตน โดยผู้บริหารคาดว่าข้อตกลงนี้จะสร้างรายได้ SaaS และบริการสร้างสรรค์สื่อประมาณหลายแสนดอลลาร์ต่อปี

แนวทางจากผู้บริหาร

ผู้บริหารคาดว่าไตรมาส 3/2026 จะกลายเป็นไตรมาสที่มีรายได้สูงที่สุดของ CRI ซึ่งจะสูงกว่าระดับ 23.9 ล้านดอลลาร์ที่รายงานในไตรมาส 4/2025 อย่างมาก และยังคาดว่ารายได้ในไตรมาส 4/2026 จะสูงกว่าไตรมาส 3 อย่างมีนัยสำคัญ

คาดว่าไตรมาส 3 จะมีสัดส่วนรายได้จากฮาร์ดแวร์สูงขึ้น โดยเฉพาะอย่างยิ่งจากการติดตั้งสำหรับ Tennessee Titans ส่วนในไตรมาส 4 คาดว่าสัดส่วนจะกลับเข้าใกล้ระดับไตรมาส 2 เนื่องจากฐานรายได้สื่อขนาดใหญ่ของ CDM เริ่มเปิดดำเนินการ

ผู้บริหารคาดว่าอัตรากำไรขั้นต้นรวมจะปรับตัวดีขึ้นตามลำดับในช่วงครึ่งปีหลัง ส่วนอัตรากำไรของฮาร์ดแวร์น่าจะยังคงเผชิญแรงกดดันตลอดปี 2026 ขณะที่คาดว่าจะเริ่มผ่อนคลายลงในปี 2027 และเมื่อรายได้ SaaS ขยายตัว บริษัทตั้งเป้าจะผลักดันอัตรากำไรขั้นต้นให้กลับมาสูงกว่า 40% แม้ผู้บริหารจะระบุว่าระดับดังกล่าวไม่น่าจะเกิดขึ้นในปี 2026 ก็ตาม

คาดว่า EBITDA ปรับปรุงแล้วและกระแสเงินสดที่เกี่ยวข้องจะปรับตัวดีขึ้นในช่วงครึ่งปีหลัง โดยได้รับการสนับสนุนจากการเติบโตของรายได้และมาตรการด้านต้นทุน ทั้งนี้ CRI ยังคงดำเนินงานตามแผนเพื่อให้บรรลุผลประโยชน์จากการควบรวมกิจการ CDM ต่อปีอย่างน้อย 10 ล้านดอลลาร์ โดยมีการปรับใช้ในระดับอัตราการดำเนินงานแล้วประมาณ 7.5 ล้านดอลลาร์

ความเสี่ยงและประเด็นที่ต้องติดตาม

• ขาดทุนสุทธิส่วนที่เป็นของผู้ถือหุ้นสามัญขยายตัวเป็น 4.6 ล้านดอลลาร์ แม้ว่ารายได้และ EBITDA ปรับปรุงแล้วจะสูงขึ้นก็ตาม
• อัตรากำไรขั้นต้นของฮาร์ดแวร์ยังคงได้รับแรงกดดันจากส่วนผสมผลิตภัณฑ์และอัตราเงินเฟ้อ และผู้บริหารไม่ได้คาดหวังว่าจะฟื้นตัวอย่างมีนัยสำคัญจนกว่าจะถึงปี 2027
• ราคาค่าบริการเผชิญแรงกดดันขาลงบ้าง เนื่องจากคู่แข่งที่กำลังประสบปัญหากำลังพยายามรักษาลูกค้าเอาไว้
• อัตรากำไรจากการบริการได้รับผลกระทบจากการหมดอายุของสัญญาที่มีอัตรากำไรสูงกว่า
• หนี้สินเพิ่มขึ้นสู่ระดับ 46.6 ล้านดอลลาร์ ณ สิ้นไตรมาส การลดสัดส่วนหนี้สินขึ้นอยู่กับกระแสเงินสดจากการดำเนินงานที่เป็นบวกในอนาคตเป็นส่วนหนึ่ง
• จังหวะเวลาและการสร้างรายได้จากการติดตั้งตามสัญญา การปรับเปลี่ยนแพลตฟอร์ม และรายได้ SaaS ที่คาดการณ์ไว้ ยังคงมีความสำคัญต่อแนวโน้มในช่วงครึ่งปีหลังและปี 2027

ประเด็นสำคัญจากการถาม-ตอบกับนักวิเคราะห์

ผู้บริหารกล่าวว่าการติดตั้งสำหรับ Albertsons ช่วยเสริมความแข็งแกร่งให้กับตำแหน่งของ CRI ในเครือข่ายสื่อค้าปลีก และอาจเร่งการเติบโตของดีลในท่อส่ง โดยบริษัทได้อ้างถึงการนำ AdTech ไปใช้ที่มีอยู่แล้วโดย Albertsons, 7-Eleven, Macy’s และ Best Buy

หนึ่งในการปรับเปลี่ยนแพลตฟอร์มของลูกค้ารอการดำเนินการ 2 รายนั้นมาจากคู่แข่ง โดย CRI คาดว่าจะเพิ่มโลโก้ลูกค้ารายใหม่หลายรายในแต่ละไตรมาส แม้ว่าจะไม่ได้การันตีตัวเลขที่แน่นอนหรือสัดส่วนรายได้ทางการเงินก็ตาม

ผู้บริหารระบุว่าจำนวนลูกค้าติดตั้งและ SaaS ที่เพิ่มขึ้นน่าจะทำให้รายได้ในปี 2027 มีความคาดการณ์ได้มากขึ้น นอกจากนี้ บริษัทยังคาดว่ารายได้ SaaS เริ่มต้นจะเริ่มสร้างผลกำไรขั้นต้นสูงตั้งแต่วันที่ 1 มกราคม 2027 โดยประมาณ

สำหรับลูกค้ารอการดำเนินการที่มีกำหนดจะปรับเปลี่ยนแพลตฟอร์มภายในสิ้นเดือนกันยายน CRI อธิบายว่าไม่จำเป็นต้องติดตั้งใหม่ ฮาร์ดแวร์และเครื่องเล่นเดิมจะถูกย้ายระบบทางไกลไปยัง CMS ของ CRI โดยงานก่อสร้างและสาขาใหม่ที่อาจเกิดขึ้นคาดว่าจะอยู่ในช่วงปี 2027

CRI ยังคงดำเนินการติดตั้งระบบไดรฟ์ทรูให้กับ Culver’s อย่างต่อเนื่องเป็นประจำทุกเดือน และยังอยู่ระหว่างการเจรจากับองค์กรสลากกินแบ่งเพิ่มเติมอีก 7 ถึง 8 แห่ง ในขณะที่สลากกินแบ่งรัฐนอร์ธแคโรไลนากำลังพิจารณาขยายงานเพิ่มเติมในปี 2027

บันทึกการประชุมแถลงผลประกอบการฉบับเต็ม

บทถอดเสียงฉบับเต็มของการประชุมทางโทรศัพท์ผลประกอบการ

คำชี้แจงจากฝ่ายบริหาร

Operator

Good morning. At this time, I would like to welcome everyone to Creative Realities' 2026 Second Quarter Earnings Conference Call. This call will be recorded, and a copy will be available on the company's website at cri.com following its completion. Creative Realities has prepared remarks summarizing the interim reports for the quarter, along with additional industry and company updates.

Joining the call today is Rick Mills, Chief Executive Officer; Tamra Koshewa, Chief Financial Officer; and George Sautter, Chief Strategy Officer and Head of Corporate Development. Ms. Koshewa, you may begin.

Tamra Koshewa

Thank you, and good morning, everyone. Welcome to our earnings call for the second quarter ended June 30, 2026.

I would like to take this opportunity to remind you that 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, our operations are intended to identify forward-looking statements. Actual results may differ materially from those contemplated by such statements. Factors that could cause these results to differ materially are set forth in our Form 10-K and other filings with the SEC. Any forward-looking statements that we make on this call are based on assumptions and information as of today, and we undertake no obligation to update these statements after today.

During this call, we will present both GAAP and non-GAAP financial measures. We believe the use of certain non-GAAP measures such as adjusted EBITDA, ARR and several other important key performance indicators represent meaningful ways to track our performance. A reconciliation of GAAP to certain non-GAAP measures is included in our public filings and in our earnings release that was issued this morning.

It is now my pleasure to introduce Rick Mills, CEO of Creative Realities. Rick?

Richard Mills

Thanks, Tamra. Good morning, everybody. We appreciate you joining today's call. I'll start by giving some highlights of our quarterly financials and other recent developments.

We posted revenue of $21.5 million in Q2 versus $13 million in the prior year period, including roughly $7.4 million from CDM. This is our best ever Q2 quarter revenue number and the second largest revenue quarter ever in the history of CRI. We are pleased with the strong top line growth and improved gross margins, which we expect this top line growth and margin enhancement to continue for the balance of the year. Our second quarter gross profit was $8.3 million as compared to $5.0 million in fiscal 2025 quarter, and our consolidated gross margin was 38.6% versus 38.5% in the prior year period. All trends are pointing in the right direction, and we believe we have tremendous upward momentum into the second half of the year.

As of June 30, we had an annual recurring run rate or ARR of $20.5 million, up from $20.1 million last quarter. And as we previously discussed, we have about 4 -- somewhere between $4 million and $5 million in backlog that will -- in backlog of ARR that will show up as we turn the clock and start 2027. So on January 1, that number automatically goes up significantly.

Net loss attributable to common shareholders was $4.6 million for the 3 months ended June 30, 2026, compared to a net loss of $1.8 million in the prior year period. Adjusted EBITDA rose to $2 million for the second quarter of 2026 versus $1.1 million last year. Our financial results are improving, and our team is putting in the hard work to increase operating efficiencies and leverage opportunities across our much larger technologically advanced customer-centric organization. We have now completed the majority of the integration with CDM.

We announced earlier this year, we expect to realize synergies of at least $10 million on an annualized basis. Currently, our run rate is approximately 75% of the total synergy number or approximately $7.5 million has been realized. This will help us to drive adjusted EBITDA margins in the quarters to come as we scale revenue. As we grow our adjusted EBITDA, we expect to use the free cash flow to further delever the balance sheet, as many of you know, exactly as we have done in the past.

The bottom line is we remain on track for the best year ever as we anticipate Q3 will be the largest quarter of revenue in the company's history. We expect Q3 this quarter to significantly exceed Q4 2025 when we achieved $23.9 million in revenue. And one other comment to note, we are also confident that Q4 will significantly exceed Q3 2026. So next 2 quarters, upward trajectory, tremendous growth.

One other thing, we recently completed a follow-on offering, raising approximately $12 million in net proceeds to help strengthen the balance sheet and provide capital for future growth. One additional note about the capital raise. I personally as the CEO, purchased 5% of the shares in the offering and several other members of the leadership team participated in the offering. Clearly, we believe in and are committed to growing this business. CRI is on track to be well positioned for the next 2 quarters and 2027.

I'll come back in a minute to talk about some customer updates, but we'll now turn it over to Tamra to share some additional comments on our second quarter financials. Tamra?

Tamra Koshewa

Thanks, Rick. An overview of our financial results for the second quarter of 2026 was provided in our earnings release filed this morning, which include the condensed consolidated balance sheet as of June 30, 2026, the statement of operations and cash flows for the 3 and 6 months ended June 30, 2026, and a detailed reconciliation of net income to EBITDA and adjusted EBITDA for the quarter ended June 30, 2026, as well as the preceding 4 quarters. We anticipate filing the Form 10-Q for the second quarter tomorrow. While Rick provided our operating results briefly, let me provide more context related to our performance and outlook.

Looking at the income statement, as Rick mentioned, second quarter sales rose to $21.5 million. This is an increase of $5.1 million compared to the first quarter and 65% higher than the same quarter in 2025. CDM contributed $7.4 million during the quarter or 35% of the total. Sales from our legacy CRI business increased approximately 8% year-over-year, driven by new installs across multiple new customers, including catching up on some of the installs that were delayed from Q1. Hardware sales rose to $7.5 million versus $7.1 million in the prior year period, reflecting both new deployments and the inclusion of CDM. Service revenue more than doubled to $14 million from $6 million in fiscal 2025, reflecting $7 million of CDM service sales and positive growth in the legacy CRI business from new installs.

Consolidated gross profit was $8.3 million in the second quarter of '26 versus $5 million in the prior year period, and consolidated gross margin was 38.6% versus 38.5% in the second quarter of '25. Gross margin on hardware revenue was 17.2% during the quarter as compared to 25.1% in the prior year period, while gross margin on services amounted to 50.1% versus 54.4% in the second quarter of '25. Hardware gross margins decreased year-over-year, primarily due to mix, while service gross margin declined due to the expiration of higher-margin customer contracts in '25. We anticipate gross margin to increase quarter-over-quarter as we realize sales growth from new business.

Sales and marketing expenses in the second quarter rose to $2 million versus $1.2 million in the prior year period, with CDM contributing approximately $500,000. General and administrative expenses were $9 million in the second quarter compared to $5.2 million in fiscal 2025, the increase driven by $3.8 million in CDM expenses during the quarter. Legacy CRI G&A expenses were down approximately $400,000 year-over-year. We remain on track to achieve the $10 million of synergies that Rick mentioned and cost reductions -- other cost reductions that have previously been announced for fiscal 2026, while also investing in the business to accelerate growth going forward.

We posted an operating loss of approximately $2.7 million in the second quarter of fiscal 2026 compared to an operating loss of $1.3 million in fiscal 2024 (sic) [ 2025 ], reflecting the items I just discussed. CRI reported a net loss of $4.2 million and a net loss attributable to common shareholders of $4.6 million or $0.43 per diluted share in the quarter ended June 30, 2026, versus a net loss of $1.8 million or $0.17 per diluted share in the prior year period. Adjusted EBITDA rose to $2 million in the second quarter of '26 as compared to $1.1 million in the prior year period and a loss of $494,000 in the first quarter. While adjusted EBITDA greatly improved over Q1 results, we continue to anticipate that it and associated cash flows will further improve during the second half of fiscal 2026, given the forecasted business growth and cost initiatives previously discussed.

In terms of the balance sheet, as of June 30, 2026, the company had cash on hand of approximately $10.7 million versus $1.6 million at the start of 2026. As Rick mentioned, we completed an equity offering that raised net proceeds of approximately $12 million to provide capital for growth and strengthen the balance sheet. Our debt stood at $46.6 million at the end of the second quarter as compared to $44 million at the beginning of the fiscal year. We had approximately $12.8 million of available liquidity under our revolving credit facility as of June 30, 2026.

We intend to use positive operating cash generation and the equity proceeds to support our growth projections, fund capital expenditures and lower our debt when possible. We remain dedicated to maintaining an optimized capital structure in support of financial flexibility. We believe given our recent capital raise and general positive outlook for the business, we are in a strong position to continue supporting this growth while strengthening the balance sheet.

One other item to mention. We provided a comprehensive financial model and corresponding documentation to our auditors in support of alleviating the going concern that has been on our financial statements for multiple periods. The auditors have reviewed our analysis and have concluded that the going concern is no longer needed. When our 10-Q is released tomorrow morning, the going concern language will not be there. We are confident in the plan we have laid out for the second half of 2026 and 2027 that models our ability to generate profitable growth and adequate cash flow and liquidity to sustain the business.

I will now turn it back to Rick for additional comments around customer activities.

Richard Mills

Thanks, Tamra. Great news about the removal of the going concern. Thanks for all the hard work.

Okay. Now some customer updates. I previously announced that we were selected as the official digital signage provider for the Tennessee Titans and the new Nissan Stadium under construction in Nashville, Tennessee. As a reminder, this is about an $8.5 million deal that includes the installation of thousands of displays in a full IPTV solution throughout the venue. We are on track for most of this revenue to be realized in 2026.

Additional perspective on the retail media network grocery client. I can now say that this new customer is Albertsons, an incredible brand, well-known company with thousands of locations across the U.S. To our knowledge, it is the largest retail media network being deployed in the United States this year. This is being measured by screen count. So why is Albertsons investing in this in-store media network? Why does in-store media networks work, right? Well, all the reasons we've discussed on prior calls, but in Albertsons, think along these lines, 2,200 stores, 20 well-known store banners in 35 states. Think of the names Albertsons, Safeway, Vons, Jewel-Osco, premium brands with locations all across the country. They get 36 million customers per week, which equates to 543 million annual customer trips. A tremendous network. We're thrilled to be part of it and excited. They use -- are using our entire AdTech stack, our CMS, all the things we talked about previously.

Another customer, AMC. As a reminder, on April 13, we announced a project to expand and modernize AMC Theatres' in-lobby media footprint across about 285 locations nationwide. This is a partnership between CRI and National CineMedia. They are the leading cinema advertising platform in the U.S. This media network utilizes our CMS platforms, again, including ReflectView and then our AdLogic, AdTech solution to provide ad serving for all the screens. We have completed the test locations and are moving to full deployment this month.

As we mentioned in the earnings press release, we are in the contract stage with two additional customers. One is a national cellular organization, which operates more than 900 retail locations across 45 states. The other is a fast-growing QSR, which today operates more than 1,000 restaurants across 22 states. Both customers are converting existing screens with plans for significant growth over the next few years. These conversions -- actually, one conversion will be completed by the end of September. The other conversion will be completed by the end of the year. They will help us grow our SaaS revenue in 2027.

One additional customer to talk about, we are in the process of migrating all of the Lexus, Toyota dealerships in Canada to our CMS platform. This engagement includes significant creative work to be delivered by our team. It includes approximately 300 locations, and it will generate a couple of hundred thousand a year in SaaS and creative services.

In closing, I want to take a moment and point out to everyone, our plans to go big, scale up and focus on the enterprise customer is working. We believe we have reached the stage where our profitability will grow quickly as we layer on additional business. Our sales pipeline is strong and most importantly, continues to grow significantly. The combined teams in the U.S. and Canada are working well together and frankly, delivering exceptional customer value. The reception from the customer to the new C -- combined CRI has been significant.

I want to do a quick shout-out to the new members of our C-suite who joined CRI in the last 7 months. Dan McAllister, Jackie Walker and Tamra on this call, they're all having a significant impact in the business. And as they take over the daily operations, and they truly are starting to run the business, I'm turning my focus on strategic growth areas in the marketplace where CRI will have an advantage over our much smaller competitors. Expect more to come in the future as I talk about that in future quarters.

With that, we'll now move to the Q&A portion of the call. Please go ahead, operator.

Operator

[Operator Instructions] Our first question will be coming from the line of Jason Kreyer of Craig-Hallum.

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Jason Kreyer

Rick, great to hear all the deal flow that's happening. Particularly on the Albertsons front, good to hear things are moving in the right direction there. Can you maybe talk about what work, if any, has been done thus far? And then when you look at getting a big deal like that in the retail media sector, what does that do for prospects in the pipeline? Do you think that opens up more retail media opportunities? Or does that accelerate conversations you're already having?

Richard Mills

It certainly does. I'll come back to that, but I'll answer the first part of your question first. As of today, we have converted about 3,000 screens, and we're currently running 3,000 screens across 220 to 250 locations. We take over the deployment of those screens and the deployment of players and all the technology here over the next 30 days that will transition to us from -- they've had a plethora of suppliers doing it. It will all consolidate and we'll finish out the rest of Phase 1. So currently, today, they're running about 1 million ads a day, Jason. So it's very successful for them. They're excited. They're using our CMS, our AdTech, et cetera.

In terms of what it does for the pipeline, well, I got to tell you, it strengthens our position as we like to claim that we're one of the top 3 providers of retail media networks in the U.S. or North America today, the U.S. and Canada. And certainly, having a customer like Albertsons backs it up. We, again, have 3 or 4 customers today that have chosen our ad tech. You've got Albertsons, of course, 7-Eleven using our AdTech at now over 2,000 stores. Macy's, Best Buy has adopted our AdTech. So with growing references of that type of blue-chip brands, we expect that to accelerate our retail media network pipeline.

Jason Kreyer

That's great. We've also heard a lot about the challenges facing one of your competitors. It seems like that would create a great opportunity for CRI. Can you just talk about the early discussions that you're having with customers in the pipeline and what the prospects look like there?

Richard Mills

As I stated on the call earlier, Jason, I mean, again, here we have 2 customers who are in contracting stages right now, both have to be converted. One actually came from that competitor. The other was not. The other was a new -- came from a different platform. So we are gaining customers. We do expect the pipeline to -- was enhanced as that customer ran into some trouble or that other supplier, a competitor of ours, ran into trouble. So it certainly has helped our pipeline. But we do expect to be closing multiple "logos" on a quarterly basis, on a go-forward basis. So we're excited about it.

Jason Kreyer

Terrific. Last question for me. Just -- so given the deals that you've already won, the deployment pipeline you have today, if we combine that with the things that you have in your pipeline that you just alluded to, wondering if you can talk about how that changes your visibility as we look towards 2027 and gives you maybe a little bit better predictability around the financials.

Richard Mills

Certainly gives us better predictability because when you have 7, 8, 9 additional customers come on that are doing deployments or SaaS, if you will, on a consistent monthly basis. We think we have entered the new stage where our revenue as we enter 2027 will be much more predictable than it has in the past. We've been working on this for many years for this to catch up. And I would tell you that it's finally here. It's finally caught up or catching up, and we are incredibly bullish about 2027.

And I would also point out the comments I made earlier. We expect our Q3 to be the largest quarter in the company's history. Oh, by the way, we expect Q4 to be significantly larger than Q3. Well, that tells you there is pending revenue coming our way.

Operator

And our next question will come from the line of Brian Kinstlinger of Alliance Global Partners.

Richard Mills

Hey, Brian.

Operator

Brian, your line is open.

Richard Mills

Brian is never this quiet.

Brian Kinstlinger

Can you hear me?

Richard Mills

There you go.

Brian Kinstlinger

Hello?

Richard Mills

We hear you now, Brian.

Brian Kinstlinger

Interesting. I never hit mute, and I was on mute. Sorry about that. I was saying hi to you, Rick.

So on the strong awards and second half ramp in revenue, I'm curious with what's known, how you see the split between services and hardware.

Richard Mills

We see the SaaS continuing to grow from a services perspective, Brian. There is some hardware in the second half growth, but most of it is all services related which leads to, in theory, you should see the margin -- composite margin of the company increase in Q3, but even particularly Q4.

Brian Kinstlinger

Yes. Now that margin is improving on mix. Maybe you could touch on, there were a few comments on each of the pieces, the services and the hardware. Obviously, there's inflation, supply chain issues. How are you adjusting prices? Will we see margin recover at all in hardware specifically? And then on the service side, maybe speak to pricing trends.

Richard Mills

Pricing trends on the services, there's been some downward pressure, Brian, just due to when you have competitors suffering in the marketplace as they lose market share or their business falters, that tends to put pressure on price. We've been able to withstand that to a great extent, but it's always a challenge. In terms of hardware, we expect hardware margins to continue to be under pressure through the balance of this year, but we do expect in 2027 to get some additional relief in hardware margins. We believe we will expand them again in 2027.

Brian Kinstlinger

Got it. And just one more question, just to make sure I heard it right. One of your two pending negotiations or wins, it's August, and you expect to deliver by the end of September. Is it because you have the screens in inventory? I'm just trying to reconcile expecting to complete the installation that quickly.

Richard Mills

That one, is -- there is no installs, it's conversion of every one of their stores over to our platform. So they already have hardware in place. They already have players in place. We've developed scripts to go take over every one of their 1,000 locations "remotely," and it will deploy our CMS and all new content, and that literally will be done by the end of September. Now out of that customer in November, December, I then expect to pick up new builds and new construction, new store openings all throughout 2027, but there is no large hardware chunk that goes with the initial conversion. Makes sense, Brian?

Brian Kinstlinger

Totally. Great work on all the awards.

Richard Mills

Yes.

Tamra Koshewa

Brian, let me just clarify a couple of things that Rick was talking about with respect to your question on services versus hardware in the second half. We do expect that the third quarter is going to have a higher percentage of hardware revenues given the installs that we're planning for the third quarter, in particular, the Tennessee Titans. But then in the fourth quarter, we expect it to get back to the level that it was in Q2. And also because in the fourth quarter, remember, we have a large media revenue base that will come online that we will experience similar to what we did last year with the CDM media business.

Operator

And our next question will be coming from the line of Jon Hickman of Ladenburg.

Jon Hickman

On the margin side of things, is there some longer-term target gross margin that you are after that you could share with us?

Richard Mills

Jon, I think ideally, we'd like to, as we enter 2027, get back in -- out of the 30s back into the 40s. Tamra, I'll let you add comments, but just generally, we've had margin [ compression ] of 5% or 6%, and we're trying to get back as we enter 2027 through enhanced product mix, et cetera. Tamra, anything to add?

Tamra Koshewa

Yes, I think that's correct. I mean we have seen both the inflation as well as the mix of our revenues bring the margins down compared to last year. But as we build that SaaS base, then we can start to get back closer to that 40% plus target. But we're still going to be short of that this year. Certainly, in the second half, we'll see some improvements, but really not until 2027 when we get more of that SaaS revenue flowing through the P&L that we will start to get a lift on the margin rate.

Richard Mills

Yes. I would -- Jon, let me just add one more. I mean the point is, if you think to my earlier comments, we've got about $4 million -- certainly $3.5 million to $4 million of seeded SaaS already that is -- will "magically" turn on, on January 1. So that in itself brings incredibly high margin to the mix [indiscernible]. So that alone could push us up. We haven't done the math, pushes up the [indiscernible] up 2 points at the moment that turns on January 1. Go ahead and ask your question, sorry.

Jon Hickman

Okay. So if you have the kind of margins you would like in the, say, low 40% range, so you would need -- if you had that now, you would need another $6 million or so in revenues to breakeven on an operation basis. Do I have that -- does that math work out?

Tamra Koshewa

Yes, I think that's reasonable to assume.

Jon Hickman

Okay. Then any comments on Culver's and on the lottery stuff that's going on?

Richard Mills

Culver's continues to go well. We continue to deploy every month. We are installing new drive-thrus. There is, I think, a 3-year target to complete all of their restaurants. That's their target, not ours. And we are certainly well on track.

In terms of the lottery, we're seeing a lot of traction. We're in significant discussions with 7, 8 additional lotteries right now. North Carolina Lottery has talked about some significant expansion in 2027. I don't have orders today as we speak, but they continue to be extremely pleased and are looking to and continue to grow their lottery network in 2027. And we would expect to have some announcements as we get closer to year-end about a lottery expansion in 2027.

Operator

And our next question will be coming from the line of Kevin Sheldon, a private investor.

Unknown Attendee

Hello?

Richard Mills

Hey, Kevin.

Unknown Attendee

How are you, sir?

Richard Mills

Doing great. Yourself?

Unknown Attendee

All things considered, not bad.

Richard Mills

Go ahead.

Unknown Attendee

So just quick, when -- I guess it's a 2-part question or multiple, but regarding the SG&A being at $9 million, where do you need to be revenue-wise to be able to cover that? Or are there plans to improve efficiencies so that, that number isn't as large?

Richard Mills

It's really a combination of both. We expect the next 2 quarters to add significant ongoing revenue to the business that we will certainly be north of $25 million, closer to $30 million, if not exceed $30 million on a quarterly basis. We believe that's in the imminent future, Kevin.

Number two, there are -- we've taken out $7.5 million. It has not all showed up, but it's already been done. And so it will show up as we enter 2027. And we've got a couple of million of additional costs that we want to take out throughout 2027 as we migrate. We have customers on other networks, they're not running our software today. They're our customer, but they're running on third-party platforms that do cost us money. And the goal is to migrate them over to our platforms in 2027. So it's a combination of taking some SG&A out, leaving our expenses flat as the top line grows fairly significantly here over the next 3, 4 quarters.

Tamra Koshewa

And just one other thing I'd like to mention with respect to the G&A. What rolls in there is a fairly large amortization accounting expense for leases that we have in our mall network. And that amortization changes as we go throughout the year, and it's a noncash amortization that is just required for the way that we book that. So that certainly increases in certain periods of the year and then decreases back down. So it's not related to actual hard G&A costs that we can take out.

Richard Mills

Yes. Well said, Tamra.

Operator

And I would now like to turn the call back to Rick for closing remarks.

Richard Mills

Okay. I just do want to do a quick shout out. I want to give special thanks. There's about -- at CRI, we have about 230 employees now. I want to thank all of them for their incredible effort this year. I use the term what a great, sometimes crazy journey, this acquisition of CDM and putting the companies together and emerging as one of the top 3 competitors in North America. It's been pretty special. It's been fun, but we couldn't have done without the hard work of all the CRI employees. So a special shout-out to them.

So let me conclude the call by thanking all our shareholders, clients and partners for your continuing efforts, commitment and support as we work together to transform CRI into the leading brand in digital signage solutions. We look forward to speaking with you again next quarter. Thanks.

Operator

And this concludes today's conference call. Thank you for your participation. You may now disconnect.