Summary of Key Points Core Viewpoint - Crexendo (CXDO) shows potential for significant upside, with a mean price target of $8.5 indicating a 41.4% increase from the current price of $6.01, reflecting positive sentiment among analysts [1][11]. Price Targets and Analyst Estimates - The mean estimate consists of six short-term price targets with a standard deviation of $1.26, suggesting variability in analyst predictions. The lowest target is $7.50 (24.8% increase), while the highest is $11.00 (83% increase) [2][9]. - Analysts have recently revised earnings estimates upward, with a 10.3% increase in the Zacks Consensus Estimate for the current year, indicating a positive trend that correlates with potential stock price movements [12][11]. Analyst Behavior and Price Target Reliability - Analysts often set overly optimistic price targets due to business incentives, which can mislead investors. This behavior raises questions about the reliability of price targets as indicators of actual stock performance [8][7]. - A low standard deviation in price targets indicates a high degree of agreement among analysts, which can serve as a starting point for further research into the stock's fundamental drivers [9][10]. Zacks Rank and Investment Potential - CXDO holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates, suggesting a strong potential for upside in the near term [13][11]. - While the consensus price target may not be a definitive measure of potential gains, it does provide a directional guide for investors [14].

Core Insights - Crexendo (CXDO) reported revenue of $16.55 million for the quarter ended June 2025, marking a year-over-year increase of 12.7% and exceeding the Zacks Consensus Estimate by 2.2% [1] - The earnings per share (EPS) for the same period was $0.09, compared to $0.07 a year ago, resulting in a surprise of 50% over the consensus EPS estimate of $0.06 [1] Revenue Breakdown - Service revenue was reported at $8.37 million, surpassing the average estimate of $8.23 million by analysts, reflecting a year-over-year increase of 3.8% [4] - Product revenue was $1.2 million, exceeding the average estimate of $1.13 million, but showing a year-over-year decline of 7% [4] - Software solutions revenue reached $6.98 million, above the average estimate of $6.82 million, with a significant year-over-year increase of 31% [4] Stock Performance - Over the past month, Crexendo's shares have returned -8.1%, contrasting with the Zacks S&P 500 composite's increase of 1% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Group 1 - Crexendo reported quarterly earnings of $0.09 per share, exceeding the Zacks Consensus Estimate of $0.06 per share, and showing an increase from $0.07 per share a year ago, resulting in an earnings surprise of +50.00% [1] - The company achieved revenues of $16.55 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 2.20%, and up from $14.69 million year-over-year [2] - Crexendo has consistently outperformed consensus EPS and revenue estimates over the last four quarters [2] Group 2 - The stock has gained approximately 12.2% since the beginning of the year, outperforming the S&P 500's gain of 7.6% [3] - The future performance of Crexendo's stock will depend on management's commentary during the earnings call and the outlook for earnings estimates [4][6] - The current consensus EPS estimate for the upcoming quarter is $0.07 on revenues of $17.14 million, and for the current fiscal year, it is $0.29 on revenues of $67.19 million [7] Group 3 - The Internet - Services industry, to which Crexendo belongs, is currently ranked in the bottom 35% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Another company in the same industry, Upwork, is expected to report quarterly earnings of $0.26 per share, with revenues projected to decline by 3.5% from the previous year [9][10]

Financial Data and Key Metrics Changes - Total revenue increased by 13% to $16.6 million compared to $14.7 million in the same quarter last year [7][16] - GAAP net income was $1.2 million, up from $0.6 million year-over-year [7][17] - Adjusted EBITDA for the quarter was $2.8 million, compared to $2.2 million in the prior year [17] - Remaining performance obligation (backlog) increased to $83.5 million, up 17% from the previous year [22] Business Line Data and Key Metrics Changes - Software solutions revenue grew by 31% to $7 million compared to $5.3 million in the same quarter last year [7][16] - Telecom service revenue increased by 4% to $8.4 million, while product revenue decreased by 7% to $1.2 million [16][21] - Gross margin for software solutions improved to 74%, while telecom services gross margin was 56% [23] Market Data and Key Metrics Changes - The master agent technology service distributors saw an 88% increase in sales bookings year-over-year [22] - The telecom services retail segment grew at 2% organically for the quarter [21] Company Strategy and Development Direction - The company is focused on transitioning to Oracle Cloud Infrastructure, which is expected to yield significant cost savings and improve innovation [12][20] - Crexendo is actively reviewing several potential acquisitions, ensuring they align with the vision of strategic profitable growth [13] - The company is enhancing its AI capabilities, with plans to roll out AI call bots and operator functions [10][25] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's trajectory, highlighting strong demand for its offerings and a commitment to delivering best-in-class services [14][26] - The company is not pursuing low-margin opportunities, focusing instead on profitable growth [11][22] Other Important Information - The company reported a strong cash position of $23.5 million, supporting continued innovation and strategic initiatives [13][18] - The company has successfully completed its international data center migration to Oracle Cloud Infrastructure [20] Q&A Session Summary Question: What is the pipeline for the second half of the year? - Management expects continued growth in new licensees and upgrades, with the total active licensee count around 240 [31][32] Question: How will the T-Mobile acquisition of UScellular impact the relationship? - Management sees tremendous opportunities with the T-Mobile acquisition and anticipates expanding the successful partnership with UScellular [34][36] Question: What margin improvements can be expected after closing international data centers? - Major savings are expected next year when domestic data centers are closed, with minimal immediate impact from international closures [37] Question: What is driving the strong growth in master agent sales? - Strong relationships and excellent customer service have fostered growth in the master agent channel [40][41] Question: What is the outlook for software revenue growth? - The company anticipates maintaining double-digit organic growth, with software solutions expected to continue growing at over 30% [45] Question: How is the remaining performance obligation structured? - The remaining performance obligation is heavily weighted towards the first three years of contracts, indicating strong future revenue streams [50] Question: What is the status of product revenue? - The company is strategically moving away from low-margin product sales, which has led to fluctuations in product revenue [53][54] Question: How is international expansion progressing? - The company continues to see strong demand in international markets, particularly in Europe and Australia [68]

EX-99.1 2 cxdo_ex991.htm EX-99.1 EXHIBIT 99.1 Net Income/(Loss): The Company reported net income of $1.2 million for the second quarter of 2025, or $0.04 per basic and diluted common share, compared to net income of $0.6 million, or $0.02 per basic and diluted common share for the second quarter of 2024. Crexendo Announces Strong Second Quarter 2025 Results PHOENIX, AZ / ACCESSWIRE / August 5, 2025 / Crexendo, Inc. (NASDAQ: CXDO), an award-winning software technology company that is a premier provider of cl ...

Group 1 - The article provides a buy rating for Crexendo, Inc. (CXDO) due to its innovative concurrent-session pricing model, which is expected to help the company capture significant market share [1] - CXDO's platform is noted for its technical flexibility and deep integration, enhancing its competitive position in the market [1] - The author emphasizes a fundamental, valuation-driven investment approach, focusing on businesses with potential for scalability and long-term free cash flow generation [1] Group 2 - The author has a decade of experience in investment banking and is currently managing personal funds, indicating a strong background in financial analysis [1] - The motivation for writing is to share investment insights and receive feedback from the investment community, aiming to assist readers in identifying long-term equity value drivers [1] - The analysis is intended to be both analytical and accessible, targeting high-quality, long-term investment opportunities [1]

Group 1: Momentum Investing Overview - Momentum investing involves following a stock's recent trend, with the aim of buying high and selling higher, capitalizing on established price movements [1] - The Zacks Momentum Style Score helps define momentum characteristics, with Crexendo (CXDO) currently holding a Momentum Style Score of B [2] Group 2: Performance Metrics - Crexendo has seen a 14.67% increase in shares over the past week, outperforming the Zacks Internet - Services industry, which rose by 1.57% [5] - Over the past quarter, Crexendo shares have risen by 47.14%, and by 99.07% over the last year, while the S&P 500 increased by 16.66% and 14.76%, respectively [6] Group 3: Trading Volume and Earnings Outlook - The average 20-day trading volume for Crexendo is 260,073 shares, indicating a bullish sign with rising stock prices [7] - In the past two months, two earnings estimates for Crexendo have increased, raising the consensus estimate from $0.28 to $0.29 [9] Group 4: Investment Recommendation - Crexendo is rated as a 2 (Buy) stock with a Momentum Score of B, making it a potential candidate for near-term investment [11]

Core Viewpoint - Crexendo (CXDO) shows potential for significant upside, with a mean price target of $8.30 indicating a 55.1% increase from the current trading price of $5.35 [1] Price Targets and Analyst Estimates - The mean estimate consists of five short-term price targets with a standard deviation of $0.97, suggesting variability in analyst predictions [2] - The lowest estimate of $7.50 indicates a 40.2% increase, while the highest estimate suggests an 86.9% surge to $10 [2] - A low standard deviation indicates strong agreement among analysts regarding the stock's price direction [9] Analyst Sentiment and Earnings Estimates - Analysts have shown increasing optimism about CXDO's earnings prospects, as evidenced by a positive trend in earnings estimate revisions [11] - The Zacks Consensus Estimate for the current year has risen by 18.2% over the past month, with two estimates increasing and no negative revisions [12] - CXDO holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates [13]

Core Viewpoint - Crexendo (CXDO) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system emphasizes the importance of earnings estimate revisions, which are strongly correlated with near-term stock price movements [4][6]. - An increase in earnings estimates typically leads to higher fair value calculations by institutional investors, resulting in buying or selling actions that affect stock prices [4]. Recent Performance and Projections - For the fiscal year ending December 2025, Crexendo is projected to earn $0.29 per share, reflecting an 11.5% increase from the previous year [8]. - Over the past three months, the Zacks Consensus Estimate for Crexendo has risen by 56%, indicating a significant upward revision in earnings expectations [8]. Zacks Rank System - The Zacks Rank system classifies stocks based on earnings estimate revisions, with only the top 20% of stocks receiving a 'Strong Buy' or 'Buy' rating, suggesting superior potential for market-beating returns [9][10]. - Crexendo's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong likelihood of price appreciation in the near term [10].

Core Viewpoint - Crexendo (CXDO) has shown a significant price increase of 24.2% over the past four weeks, with analysts suggesting further upside potential based on a mean price target of $8.30, indicating a 42.9% increase from the current price of $5.81 [1] Price Targets and Analyst Estimates - The mean price target consists of five short-term estimates with a standard deviation of $0.97, where the lowest estimate is $7.50 (29.1% increase) and the highest is $10 (72.1% increase) [2] - A low standard deviation among price targets suggests a high degree of agreement among analysts regarding the stock's price movement [9] Earnings Estimates and Analyst Consensus - Analysts have shown increasing optimism about CXDO's earnings prospects, with a strong consensus in revising EPS estimates higher, which correlates with potential stock price increases [11] - Over the last 30 days, two earnings estimates have been revised upward, leading to an 18.2% increase in the Zacks Consensus Estimate for the current year [12] Zacks Rank and Investment Potential - CXDO holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate factors, indicating strong potential for upside in the near term [13]