I came across Crexendo, Inc. (NASDAQ: CXDO ) when recently working on my write-up covering its peer Ooma, Inc. ( OOMA ). While I assigned a Hold rating to OOMA stock, I find CXDO to be more attractively valuedAn individual investor primarily focused on undercovered companies, with more than 50 companies on my watchlist. My areas include technology, software, electronics and the energy transition. I have been investing my personal capital for over 7 years in a broad range of companies globally. Through my ye ...

Crexendo to Present at The LD Micro Invitational XVMarch 28, 2025 8:00 AM EDT | Source: LD MicroTempe, Arizona--(Newsfile Corp. - March 28, 2025) - Crexendo (NASDAQ: CXDO) announced today that it will be participating in the 15th Annual LD Micro Invitational at the Westin Grand Central in New York on April 9th and 10th, 2025. Crexendo is scheduled to present on April 10, 2025 at 10:00AM. Doug Gaylor will be representing the company.We are excited to be presenting at the LD Micro Conference in ...

Investors seek growth stocks to capitalize on above-average growth in financials that help these securities grab the market's attention and produce exceptional returns. But finding a growth stock that can live up to its true potential can be a tough task.By their very nature, these stocks carry above-average risk and volatility. Moreover, if a company's growth story is over or nearing its end, betting on it could lead to significant loss.However, the task of finding cutting-edge growth stocks is made easy w ...

Financial Data and Key Metrics Changes - Total revenue for Q4 increased by 15% to $16.2 million compared to $14.2 million in the prior year [30] - Full year revenue increased by 14% to $60.8 million compared to $53.2 million in the prior year [34] - Net income for Q4 was $507,000, up from $61,000 in the prior year [32] - Non-GAAP net income for Q4 was $2 million, compared to $1.6 million in the prior year [33] - Full year non-GAAP net income was $7.7 million, up from $6.7 million in the prior year [37] Business Line Data and Key Metrics Changes - Service revenue for Q4 increased by 4% to $8 million compared to $7.7 million in the prior year [30] - Software solutions revenue for Q4 increased by 32% to $7 million compared to $5.3 million in the prior year [30] - Product revenue for Q4 remained flat at $1.2 million [30] - Full year service revenue increased by 7% to $31.8 million [34] - Full year software solutions revenue increased by 30% to $23.4 million [34] Market Data and Key Metrics Changes - The company reported a 39% organic increase in international revenues, mainly in the European Union and Australia [45] - The remaining performance obligation (backlog) grew by 34% to $85.6 million [48] Company Strategy and Development Direction - The company aims to expand market share in a disciplined and profitable manner, avoiding price wars [10] - Crexendo is positioned as the third largest new path platform provider, leveraging disruptions in the market caused by competitors [11][12] - The company is committed to investing in software development and UCaaS enhancements [18] - The recent launch of an ecosystem vendor partner program is expected to drive substantial revenue growth [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued double-digit growth over the next year and beyond [28] - The company maintained GAAP profitability for six consecutive quarters and non-GAAP profitability for 25 consecutive quarters [23] - Management highlighted the importance of customer satisfaction as a competitive advantage [24] Other Important Information - The company has made significant investments in automation and financial systems to improve operational efficiencies [25] - The transition to Oracle Cloud Infrastructure is expected to generate substantial cost savings [22] Q&A Session Summary Question: What are the priorities for capital allocation? - The company is evaluating acquisitions, particularly in AI, and considering share repurchases if the market deteriorates [61][62] Question: Can you quantify the number of clients that migrated from competitors? - Seven Microsoft Metaswitch licensees and three Cisco BroadSoft licensees migrated to Crexendo in 2024 [65] Question: Did you see any change in sales cycles due to the Metaswitch acquisition? - Sales cycles are varied; some customers are moving quickly while others are taking their time [72] Question: Were there any seven-figure transactions in the software solutions business? - There were a couple of seven-figure transactions, but they are considered outliers [81] Question: What is the expected growth trajectory for 2025? - The company expects to grow adjusted EBITDA margins while reinvesting in the business [84] Question: How does Crexendo's product compare to Alianza's? - Crexendo focuses more on the business and enterprise market, while Alianza has historically targeted residential markets [90][92] Question: What percentage of legacy service provider lines have moved to cloud offerings? - Approximately 40% of businesses are still not on the cloud, but this number is expected to decrease significantly [101] Question: What is the average revenue per user at the retail and wholesale levels? - Retail ARPU is around $20, while wholesale average revenue per licensee is approximately $6,000 per month [106][111]

For the quarter ended December 2024, Crexendo (CXDO) reported revenue of $16.2 million, up 14.4% over the same period last year. EPS came in at $0.06, compared to $0.06 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $15.66 million, representing a surprise of +3.48%. The company delivered an EPS surprise of +20.00%, with the consensus EPS estimate being $0.05.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street ...

Revenue Growth - Cloud Telecommunications service revenue increased by 7% or $2,181 to $31,849 for the year ended December 31, 2024, compared to $29,668 for the year ended December 31, 2023[225]. - Software solutions revenue increased by 30% or $5,327 to $23,374 for the year ended December 31, 2024, compared to $18,047 for the year ended December 31, 2023[229]. - Total revenue for the year ended December 31, 2024, was $60,838, representing a 14% increase from $53,199 in 2023[234]. - The increase in total revenue was attributed to an increase in software solutions revenue, service revenue, and product revenue[234]. - Total revenue for 2024 increased to $60,838,000, up 14.5% from $53,199,000 in 2023[334]. - Service revenue rose to $31,849,000, a 7.4% increase from $29,668,000 in 2023[334]. - Software solutions revenue grew by 29.7% to $23,374,000, compared to $18,047,000 in 2023[334]. Income and Earnings - Income before income tax for the year ended December 31, 2024, was $1,889, a significant increase of $2,153 or 816% from a loss of $264 in 2023[235]. - Net income for the year ended December 31, 2024, was $1,677, compared to a net loss of $362 in 2023[231]. - Basic earnings per common share for the year ended December 31, 2024, was $0.06, compared to a loss of $0.01 in 2023[231]. - U.S. GAAP net income for Q4 2024 was $507,000, compared to a net income of $61,000 in Q4 2023, representing a significant increase[244]. - Non-GAAP net income for Q4 2024 reached $1,971,000, up from $1,590,000 in Q4 2023, indicating a growth of approximately 24%[244]. - The net income for the year ended December 31, 2024, was $1,677,000, a significant turnaround from a net loss of $362,000 in 2023[334]. Operating Expenses - Operating expenses increased by $4,126, primarily due to higher commission expenses and contract labor costs[235]. - Operating expenses for 2024 totaled $59,014,000, up from $54,888,000 in 2023, representing an increase of 7.7%[334]. - Selling and marketing expenses rose by 13% to $11,564,000 in 2024 compared to $10,251,000 in 2023[281]. - General and administrative expenses decreased by 8% to $8,556,000 in 2024 from $9,275,000 in 2023[283]. - Research and development expenses decreased by 33% from $1,172 million in 2023 to $788 million in 2024, primarily due to resource allocation to the Software Solutions segment[284]. Cash Flow and Liquidity - The company had cash and cash equivalents of $18,193 million as of December 31, 2024, compared to $10,347 million in 2023, indicating improved liquidity[299]. - Net cash provided by operating activities for the year ended December 31, 2024, was $6,284 million, an increase of 80% compared to $3,499 million in 2023[300]. - Net cash used in investing activities for the year ended December 31, 2024, was $(27) million, a decrease of 101% from $3,700 million in 2023, primarily due to purchases of property and equipment[303]. - Net cash provided by financing activities for the year ended December 31, 2024, was $1,595 million, a decrease of 169% from $3,901 million in 2023, mainly due to cash received from the exercise of stock options of $2,370 million[305]. Performance Obligations and Future Revenue - Remaining Performance Obligations (RPOs) increased by 24%, or $10,559,000, to $55,369,000 as of December 31, 2024[277]. - Remaining Performance Obligations (RPOs) rose by 58%, from $19,122 million in 2023 to $30,262 million in 2024, indicating strong future revenue potential[290]. - The estimated future revenue expected to be recognized related to unsatisfied performance obligations totals $85,631,000[407]. Tax and Valuation - The company recorded an income tax provision of $(212) for the year ended December 31, 2024, compared to $(98) in 2023[236]. - The company has recorded a valuation allowance of $5,417,000 for deferred tax assets as of December 31, 2024, due to cumulative pretax losses over the past three years[260]. - A valuation allowance of $5,417 million was recorded against the gross deferred tax asset balance as of December 31, 2024, compared to $4,782 million in 2023[380]. Segment Performance - Operating income for the Cloud Telecommunications Services segment was $254,000 in 2024, a recovery from a loss of $1,483,000 in 2023[270]. - The income before income tax for the Software Solutions segment improved from a loss of $140 million in 2023 to a profit of $1,476 million in 2024[287]. - The company has two operating segments: Cloud Telecommunications and Software Solutions, indicating a focus on diversified service offerings[343]. Customer and Market Insights - The company generates 94% of its total revenue from customers within the United States and 6% from international customers[382]. - No customer accounted for 10% or more of total revenue for the years ended December 31, 2024, and 2023[382]. Accounting and Financial Reporting - The company utilizes Non-GAAP financial measures such as Adjusted EBITDA to assess operating performance[239]. - The company recognizes revenue upon transfer of control of services or products, reflecting expected consideration[366]. - The company accounts for business combinations using the acquisition method, with goodwill recorded when the purchase price exceeds the fair value of net identifiable assets[358].

Revenue Growth - Total revenue for Q4 2024 increased by 15%, or $2.0 million, to $16.2 million compared to Q4 2023[2] - Total revenue for the full year 2024 increased by 14%, or $7.6 million, to $60.8 million compared to 2023[7] - Total revenue for 2024 reached $60,838 million, a 14.4% increase from $53,199 million in 2023[28] Software Solutions Performance - Software solutions revenue for Q4 2024 increased by 32%, or $1.7 million, to $7.0 million compared to Q4 2023[3] - Software solutions revenue for the full year 2024 increased by 30%, or $5.4 million, to $23.4 million compared to 2023[8] - Software solutions revenue grew by 29.8% to $23,374 million from $18,047 million in 2023[28] - The company is experiencing strong growth in its software solutions segment, driven by opportunities created by competitors not focusing on that part of their business[15] Net Income and Earnings - Net income for Q4 2024 was $0.5 million, or $0.02 per share, compared to net income of $0.1 million for Q4 2023[4] - Net income for the full year 2024 was $1.7 million, compared to a net loss of $(0.3) million for 2023[11] - Net income for 2024 was $1,677 million, compared to a net loss of $362 million in 2023[29] - Basic earnings per share improved to $0.06 in 2024 from a loss of $0.01 in 2023[29] Cash and Cash Equivalents - Cash and cash equivalents at December 31, 2024, were $18.2 million, up from $10.3 million at December 31, 2023[13] - The company reported a net increase in cash and cash equivalents of $7,846 million, ending the year with $18,193 million[32] Operating Performance - EBITDA for the full year 2024 was $5.2 million, compared to $1.9 million for 2023[13] - Adjusted EBITDA for 2024 was $8,157 million, compared to $5,734 million in 2023, reflecting a 42.3% increase[40] - Cash provided by operating activities was $6,284 million, up from $3,499 million in 2023[31] Operating Expenses - Operating expenses totaled $59,014 million, an increase of 7.3% from $54,888 million in 2023[28] - Research and development expenses rose to $5,552 million, up from $4,860 million in 2023, indicating a focus on innovation[28] Service Revenue - Service revenue increased to $31,849 million, up 7.4% from $29,668 million in 2023[28]

Core Insights - Crexendo (CXDO) shares increased by 11.3% to close at $6.98, supported by strong trading volume, and have gained 11% over the past four weeks [1] - The company is experiencing robust organic growth, particularly in its Software Solutions segment, which reported a 25% increase in Q3 2024, alongside a growing customer base transitioning from competitors like Cisco and Microsoft [2] - Crexendo is expected to report quarterly earnings of $0.05 per share, reflecting a year-over-year decline of 16.7%, while revenues are projected to be $15.66 million, up 10.6% from the previous year [3] - The consensus EPS estimate for Crexendo has remained stable over the last 30 days, indicating that stock price movements may not sustain without trends in earnings estimate revisions [4] Company Performance - Crexendo's strong performance is attributed to its expanding international presence, with new business wins in Australia and Africa [2] - The stock currently holds a Zacks Rank of 3 (Hold), suggesting a neutral outlook [4] Industry Context - Crexendo operates within the Zacks Internet - Services industry, which includes other companies like Sprout Social (SPT), which recently closed down 2.2% and has seen a return of -10.5% over the past month [4] - Sprout Social's consensus EPS estimate has remained unchanged at $0.15, representing a significant year-over-year increase of 650%, but it currently holds a Zacks Rank of 4 (Sell) [5]

Core Insights - Crexendo has been recognized for its AI-enhanced cloud communications platform, achieving superior usability and exceptional customer satisfaction according to G2's Winter 2025 Reports [1] Group 1: Recognition and Awards - Crexendo's platform received high marks in usability and customer satisfaction, indicating strong performance in the competitive cloud communications market [1] Group 2: Market Position - The recognition from G2 positions Crexendo favorably among peers, potentially attracting new customers and enhancing its market presence [1]

Group 1 - Crexendo (NASDAQ: CXDO) is gaining a significant position in the unified communications sector due to a well-valued product and the exit of a strong competitor, Microsoft [1] - The company is focused on quality-growth investments, aiming for a ~15% return over the next five years with conservative assumptions [1] - Key attributes of a quality company include sustained top-line growth, a profitable bottom line, a healthy balance sheet, free cash flow generation, high ROCE, and an attractive potential market [1]