Shares of Crexendo (CXDO) have gained 8.6% over the past four weeks to close the last trading session at $6.96, but there could still be a solid upside left in the stock if short-term price targets of Wall Street analysts are any indication. Going by the price targets, the mean estimate of $8.9 indicates a potential upside of 27.9%.The mean estimate comprises five short-term price targets with a standard deviation of $0.74. While the lowest estimate of $8.00 indicates a 14.9% increase from the current price ...

Core Insights - Crexendo, Inc. has been awarded the 2025 Product of the Year Award by Generative AI Expo for its AI-powered NetSapiens cloud communications platform, marking the second consecutive year the company has received this honor [1] Company Overview - Crexendo, Inc. is a software technology company specializing in cloud communication platform software and unified communications as a service (UCaaS) offerings, which include voice, video, contact center, and managed IT services [1] Industry Recognition - The award from TMC highlights the breakthrough innovation in generative AI and its transformative impact on cloud communications, underscoring the significance of AI in enhancing communication technologies [1]

Company Performance - Crexendo (CXDO) has seen a significant increase in its stock price, rising 24.1% over the past month and reaching a new 52-week high of $7.65 [1] - The stock has gained 43% since the beginning of the year, outperforming the Zacks Computer and Technology sector's 26.9% increase and the Zacks Internet - Services industry's 50.7% return [1] Earnings and Revenue - Crexendo has consistently beaten earnings estimates, achieving positive surprises in the last four quarters [2] - In the latest earnings report on November 4, 2025, Crexendo reported an EPS of $0.10, exceeding the consensus estimate of $0.08, and beat the revenue estimate by 2.71% [2] - For the current fiscal year, Crexendo is projected to earn $0.35 per share on revenues of $67.94 million, reflecting a 34.62% increase in EPS and an 11.74% increase in revenues [3] - For the next fiscal year, the expected earnings are $0.38 per share on revenues of $75.42 million, indicating a year-over-year change of 7.14% in EPS and 11.01% in revenues [3] Valuation Metrics - Crexendo has a Value Score of D, while its Growth and Momentum Scores are A and B, respectively, resulting in a VGM Score of B [6] - The stock trades at 21.4X current fiscal year EPS estimates, aligning with the peer industry average, but on a trailing cash flow basis, it trades at 24.9X compared to the peer group's average of 14X [6] Zacks Rank - Crexendo holds a Zacks Rank of 2 (Buy), supported by favorable earnings estimate revisions from analysts [7] - The recommendation is for investors to select stocks with a Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, indicating that Crexendo may have further upside potential [7] Industry Comparison - The Internet - Services industry is performing well, ranking in the top 35% of all industries, providing a favorable environment for both Crexendo and its peer Akamai Technologies, Inc. (AKAM) [10] - Akamai Technologies has a Zacks Rank of 2 (Buy) and has also shown strong earnings performance, beating consensus estimates by 13.41% [9]

Core Insights - An active investing strategy focuses on identifying breakout stocks that trade within specific price ranges, with investors selling when prices fall below the lower band and holding when they break above the upper band for potential gains [1] Breakout Stock Selection - To identify breakout stocks, it is essential to calculate support and resistance levels, where support is the lower bound and resistance is the upper bound of stock movements [2] - Demand for a stock is lowest at the support level, while traders are more inclined to buy at the resistance level, indicating potential breakout candidates [3] Validating Breakouts - A genuine breakout occurs when the previous resistance level becomes the new support level, which can be confirmed through long-term price trend analysis [5] - Correct identification of breakout stocks can lead to significant returns, even if initial prices seem unattractive [5] Screening Criteria - The screening criteria for breakout stocks include: - A percentage price change over four weeks between 10% and 20% [6] - Current Price / 52-Week High greater than or equal to 0.9 [6] - Zacks Rank less than or equal to 2 [6] - Beta for 60 months less than or equal to 2 [7] - Current price less than or equal to $20 [7] - These criteria narrow down the stock universe to 19 candidates, with South Atlantic Bancshares, Crexendo, and Hecla Mining being the top three [7] Company Profiles - **South Atlantic Bancshares**: Holding company for South Atlantic Bank, expected earnings growth rate of 55.7% for the current year, Zacks Rank 1 [8] - **Crexendo**: Provides cloud communication services, expected earnings growth rate of 26.9% for the current year, Zacks Rank 2 [9] - **Hecla Mining**: Engages in precious and base metals production, expected earnings growth rate of 245.5% for the current year, Zacks Rank 2 [10]

Core Insights - Crexendo (CXDO) reported $17.5 million in revenue for Q3 2025, marking an 11.9% year-over-year increase and a 2.71% surprise over the Zacks Consensus Estimate of $17.04 million [1] - The company achieved an EPS of $0.10, up from $0.06 a year ago, resulting in a 25% surprise over the consensus EPS estimate of $0.08 [1] Revenue Breakdown - Service revenue was $8.57 million, exceeding the estimated $8.47 million, reflecting a 7.8% increase year-over-year [4] - Product revenue was $1.41 million, slightly below the estimated $1.46 million, showing a significant decline of 22.4% compared to the previous year [4] - Software solutions revenue reached $7.52 million, surpassing the average estimate of $7.12 million, with a year-over-year growth of 28.3% [4] Stock Performance - Over the past month, Crexendo's shares have returned +9.2%, outperforming the Zacks S&P 500 composite's +2.1% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Core Insights - Crexendo (CXDO) reported quarterly earnings of $0.1 per share, exceeding the Zacks Consensus Estimate of $0.08 per share, and showing an increase from $0.06 per share a year ago, resulting in an earnings surprise of +25% [1] - The company achieved revenues of $17.5 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 2.71% and up from $15.63 million year-over-year [2] - Crexendo has consistently outperformed consensus EPS and revenue estimates over the last four quarters [2] Earnings Outlook - The future performance of Crexendo's stock will largely depend on management's commentary during the earnings call and the sustainability of the recent price movements [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.08 on revenues of $17.83 million, and for the current fiscal year, it is $0.33 on revenues of $67.47 million [7] Industry Context - The Internet - Services industry, to which Crexendo belongs, is currently ranked in the top 37% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - The performance of Crexendo's stock may also be influenced by the overall industry outlook and trends in earnings estimate revisions [5][8]

Financial Data and Key Metrics Changes - Crexendo reported a 12% year-over-year revenue growth, reaching $17.5 million for Q3 2025 [14] - GAAP net income was $1.5 million, or $0.05 per share, compared to $100,000, or $0.01 per share, in Q3 2024 [15] - Non-GAAP net income increased to $3 million, or $0.10 per share, from $1.7 million, or $0.06 per share, in the same quarter last year [16] - EBITDA for the quarter was $2.1 million, up from $1 million in Q3 2024 [16] - Cash equivalents increased to $28.6 million from $18.2 million at the end of 2024 [16] Business Line Data and Key Metrics Changes - Software solutions revenue grew 28% year-over-year to $7.5 million [14] - Service revenue increased 8% to $8.6 million [14] - Product revenue decreased 25% to $1.4 million, but was slightly above the historical average [14] - Telecom services retail segment grew 2% organically, with telecom service revenue up 8% [20] Market Data and Key Metrics Changes - Remaining performance obligations increased to $87.9 million, up from $83.5 million at the end of June 2025 [15] - International revenue is growing rapidly, although it still represents less than 10% of total revenue [10] Company Strategy and Development Direction - The company is focused on organic growth and strategic M&A opportunities, with plans to close an acquisition by early next year [11] - Investments in AI-driven capabilities and Oracle Cloud Infrastructure are expected to enhance growth and operational efficiency [5][10] - The company aims to maintain its competitive advantage through superior customer service and innovative product offerings [9][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving double-digit growth through the next year [12] - The company is optimistic about the future, citing strong demand for its products and a talented workforce [11][26] - Management highlighted the importance of customer service as a differentiator in a commoditized market [20] Other Important Information - The company surpassed 7 million end users on its platform, marking a significant milestone [7] - The annual user group meeting in Miami was the most successful in history, with record attendance and excitement about innovations [6][8] Q&A Session Summary Question: Pipeline for new licensees and Q4 setup - Management indicated that growth in users can be estimated based on past performance, but specific numbers for new logos are still uncertain [31][32] Question: Measuring success of new AI products - Management plans to monitor adoption rates and will implement aggressive marketing strategies for existing and new customers [33][34] Question: Progress on migrating customers to OCI - Migration to OCI is expected to be completed by the end of Q1 2026 [36][37] Question: Drivers of service revenue growth - Positive market acceptance and execution by retail teams contributed to the 8% growth in service revenue [43][44] Question: Opportunities with AI receptionist technology - The AI receptionist is expected to appeal to a majority of small and mid-sized customers, potentially increasing average revenue per account significantly [49][50] Question: Insights on Version 46 of the platform - Version 46 is expected to be available for previews in Q1 2026, enhancing user interaction with the platform [54][56] Question: M&A strategy and potential acquisitions - The company prefers to acquire technology that integrates seamlessly with its existing platform but remains open to other opportunities if compelling [66][67] Question: Product gross margin decline - Management expects product gross margins to improve and return to historical averages in the upcoming quarters [78][79]

Financial Performance - As of September 30, 2025, the Annualized Exit Monthly Recurring Subscriptions (AERR) was $56,100, an increase from $49,039 as of September 30, 2024, representing a growth of approximately 21%[178] - Total revenue for the three months ended September 30, 2025, was $17,497,000, representing a 12% increase from $15,627,000 in the same period of 2024[189] - Total revenue for the nine months ended September 30, 2025, was $50,106,000, a 12% increase from $44,598,000 in the same period of 2024[192] - Net income for the three months ended September 30, 2025, was $1,450,000, compared to $148,000 in the same period of 2024, marking a significant increase[188] - Non-GAAP net income for the three months ended September 30, 2025, was $3,034,000, compared to $1,700,000 in 2024[202] Revenue Breakdown - Software solutions revenue increased by $1,661,000 to $7,521,000 for the three months ended September 30, 2025, while service revenue rose by $616,000[189] - Service revenue for the three months ended September 30, 2025, increased to $8,607,000, representing an 8% increase from $7,953,000 in the same period of 2024[210] - Software solutions revenue increased by 28% to $7,521 million for the three months ended September 30, 2025, compared to $5,860 million in 2024, attributed to higher recurring software license and maintenance subscriptions[237] - Software solutions revenue increased by 31% to $21,364 million for the nine months ended September 30, 2025, compared to $16,331 million in the same period of 2024[246] Expenses and Costs - The company reported an increase in operating expenses of $3,148,000 for the nine months ended September 30, 2025, primarily due to higher salaries and benefits[193] - Cost of service revenue for the three months ended September 30, 2025, rose to $3,664,000, a 10% increase from $3,336,000 in 2024[213] - Selling and marketing expenses for the three months ended September 30, 2025, increased to $3,215,000, an 8% rise from $2,976,000 in 2024[216] - General and administrative expenses decreased to $1,928,000 for the three months ended September 30, 2025, down 15% from $2,278,000 in 2024[218] - Research and development expenses for the three months ended September 30, 2025, were $122,000, a decrease of 9% from $134,000 in 2024[219] Cash Flow and Financial Position - Net cash provided by operating activities increased by 69% to $6,950 million for the nine months ended September 30, 2025, compared to $4,107 million in 2024[259] - Cash and cash equivalents amounted to $28,573 million as of September 30, 2025, compared to $18,193 million as of December 31, 2024[258] - Other income increased significantly by 283% to $398 million for the nine months ended September 30, 2025, compared to $104 million in 2024, mainly from higher interest income[233] Customer Metrics - The Net Monthly Subscription Dollar Retention Rate was 99% for cloud telecommunications services and 102% for software solutions, indicating strong customer retention and growth potential[186] - The company supports over six million end users globally through more than 235 cloud communication platform software subscribers[162] - Remaining Performance Obligations (RPOs) increased by 11%, or $6,030, to $58,993,000 as of September 30, 2025, compared to $52,963,000 in 2024[212] Market and Operational Insights - The cloud telecommunications contracts typically have a term of 36 to 60 months, contributing to the company's recurring revenue model[165] - The company continues to invest in technology and CPaaS offerings to enhance competitiveness and profitability in the market[173] - The cloud telecommunications services include a range of essential and advanced features, providing significant value to customers without requiring capital investments[171] Other Financial Information - The income tax provision for the nine months ended September 30, 2025, was $(135,000), an increase of 35% from $(100,000) in 2024[194] - Basic earnings per share for the three months ended September 30, 2025, was $0.05, compared to $0.01 in the same period of 2024[188] - The company believes exposure to foreign currency fluctuation from operating expenses is immaterial, as costs do not constitute a significant portion of total expenses[273] - Inflation has not had a material effect on the company's business or financial condition, but significant inflationary pressures could harm operations[275]

Revenue Growth - Total revenue for Q3 2025 increased 12% year-over-year to $17.5 million, up from $15.6 million in Q3 2024[3] - Service revenue for Q3 2025 rose 8% to $8.6 million compared to $8.0 million in Q3 2024[3] - Software solutions revenue surged 28% to $7.5 million, up from $5.9 million in Q3 2024[4] - The company reported a 31% increase in software solutions revenue for the nine months ended September 30, 2025, totaling $21.4 million[8] - Total revenue for Q3 2025 was $17,497,000, representing a 12% increase from $15,627,000 in Q3 2024[26] - Service revenue increased to $8,569,000 in Q3 2025, up 8% from $7,953,000 in Q3 2024[26] - Software solutions revenue grew by 28% to $7,521,000 in Q3 2025, compared to $5,860,000 in Q3 2024[26] Net Income and Earnings - GAAP net income for Q3 2025 was $1.5 million, or $0.05 per share, compared to $0.1 million, or $0.01 per share in Q3 2024[5] - Non-GAAP net income for Q3 2025 was $3.0 million, or $0.10 per share, compared to $1.7 million, or $0.06 per share in Q3 2024[6] - Net income for the nine months ended September 30, 2025, was $3,853,000, a significant increase from $1,170,000 in the same period of 2024[26] - Basic earnings per share for Q3 2025 was $0.05, compared to $0.01 in Q3 2024[27] Cash and Cash Equivalents - Total cash and cash equivalents increased to $28.6 million as of September 30, 2025, from $18.2 million at December 31, 2024[14] - Cash and cash equivalents at the end of Q3 2025 were $28,573,000, up from $15,451,000 at the end of Q3 2024[29] - The company reported a net cash provided by operating activities of $6,950,000 for the nine months ended September 30, 2025, compared to $4,107,000 in the same period of 2024[29] Operating Expenses - Operating expenses for Q3 2025 increased 5% to $16.2 million compared to $15.5 million in Q3 2024[5] - Operating expenses totaled $16,192,000 in Q3 2025, an increase from $15,492,000 in Q3 2024[26] Other Financial Metrics - Adjusted EBITDA for Q3 2025 was $2,943,000, up from $1,761,000 in Q3 2024, reflecting a 67% increase[38] - Total other income for Q3 2025 was $188,000, compared to $59,000 in Q3 2024, indicating improved financial performance[26] User Growth and Strategic Outlook - The company surpassed 7 million users on the Crexendo platform, indicating strong growth and market presence[16] - Management expressed confidence in continued growth driven by investments in AI-driven capabilities and strategic M&A opportunities[16]

Core Insights - Gamma Communications plc and Crexendo, Inc. have announced a strategic cooperation aimed at accelerating international growth for service providers globally [1] - Both companies have chosen Oracle Cloud Infrastructure (OCI) to enhance their platforms and provide secure, scalable cloud services worldwide [1] Company Overview - Gamma Communications is recognized as a leading provider of technology-based communication solutions across Europe [1] - Crexendo is identified as a premier provider of cloud communication platform software [1] Strategic Cooperation - The partnership between Gamma and Crexendo is focused on expanding their reach and capabilities in the international market [1] - The collaboration is expected to benefit service providers by leveraging the strengths of both companies [1] Technology Infrastructure - The selection of Oracle Cloud Infrastructure (OCI) indicates a commitment to utilizing advanced cloud technology for service delivery [1] - OCI will support both companies in delivering secure and scalable cloud services, enhancing their operational efficiency [1]