Core Insights - Crexendo (CXDO) reported revenue of $16.2 million for the quarter ended December 2024, reflecting a year-over-year increase of 14.4% [1] - The earnings per share (EPS) remained stable at $0.06, matching the EPS from the same quarter last year [1] - The reported revenue exceeded the Zacks Consensus Estimate of $15.66 million by 3.48%, while the EPS surpassed the consensus estimate of $0.05 by 20% [1] Revenue Breakdown - Service revenue was reported at $7.98 million, slightly below the average estimate of $8.04 million, with a year-over-year increase of 3.9% [4] - Product revenue came in at $1.21 million, lower than the estimated $1.52 million, but showed a year-over-year growth of 4.5% [4] - Software solutions revenue reached $7.04 million, exceeding the average estimate of $6.11 million, marking a significant year-over-year increase of 32.4% [4] Stock Performance - Over the past month, Crexendo's shares have returned +3.1%, contrasting with a -2.3% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

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]

Core Viewpoint - Crexendo (CXDO) has received an upgrade to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system is primarily driven by changes in a company's earnings outlook, which is reflected in earnings estimate revisions [2][4]. - An increase in earnings estimates is strongly correlated with near-term stock price movements, as institutional investors adjust their valuations based on these estimates [4][6]. Crexendo's Earnings Outlook - For the fiscal year ending December 2024, Crexendo is expected to earn $0.24 per share, which remains unchanged from the previous year [8]. - Over the past three months, the Zacks Consensus Estimate for Crexendo has increased by 3.7%, indicating a positive trend in earnings expectations [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 (Strong Buy) stocks historically generating an average annual return of +25% since 1988 [7]. - The upgrade of Crexendo to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Financial Data and Key Metrics Changes - Consolidated revenue grew 13% year-over-year to $15.6 million compared to $13.9 million in Q3 of the prior year [21] - GAAP profitability was reported at $1.2 million, marking the fifth consecutive quarter of GAAP profitability [8][9] - Non-GAAP net income for the quarter was $1.7 million, down from $3.3 million in the same quarter last year [26] - Operating expenses increased 15% to $15.5 million due to investments in headcount and Oracle Cloud Infrastructure [24] Business Line Data and Key Metrics Changes - Software solutions revenue increased 25% year-over-year to $5.9 million, while service revenue grew 6% to $8 million [21] - Telecom Services segment gross margins remained consistent at 55% year-over-year [23] - Product revenues increased 9% to $1.8 million compared to $1.7 million in the prior year [21] Market Data and Key Metrics Changes - The telecom backlog grew 22% year-over-year to $77.4 million, indicating strong future revenue potential [40] - The company surpassed 5 million users on its platform, with expectations to reach 6 million by early 2025 [45] Company Strategy and Development Direction - The company is focused on organic growth, with expectations for double-digit growth continuing into 2025 [20] - Significant investments are being made in Oracle Cloud Infrastructure to enhance competitive advantages, particularly in Europe [9][10] - The company is also looking to make strategic acquisitions to further drive growth [12][85] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to attract customers from competitors like Cisco and Microsoft, particularly due to recent instability in those companies [17][18] - The management highlighted the importance of customer service as a key differentiator in a competitive market [8][19] - There is optimism regarding the ongoing industry shift towards cloud communications, which is expected to drive substantial growth [18] Other Important Information - The company has maintained a strong focus on customer satisfaction, ranking number one in 18 categories on G2.com [8][39] - The migration of legacy customers to the new VIP system is expected to yield cost savings and operational efficiencies [11][63] Q&A Session Summary Question: How many expansions did you have in the quarter? - The company had eight new logos and five expansions from existing licensees, indicating strong growth [47] Question: Can you provide a status on tools for managed service providers? - Progress continues with new partners helping to automate migrations from Microsoft and BroadSoft [49] Question: What is the impact of the macro environment on services revenue? - There was a slight increase in churn from one national account, but overall sales channels remain strong [56] Question: How do you view the competitive landscape? - The company is seeing increased interest from customers dissatisfied with competitors, creating opportunities for growth [70] Question: What are the biggest investments planned for the next year? - Key investments will focus on Oracle Cloud Infrastructure, the Oracle accounting system, and potential acquisitions [85]

Core Insights - Crexendo (CXDO) reported revenue of $15.63 million for the quarter ended September 2024, reflecting a year-over-year increase of 12.7% and a surprise of +3.70% over the Zacks Consensus Estimate of $15.07 million [1] - The company's EPS for the quarter was $0.06, down from $0.12 in the same quarter last year, but exceeded the consensus estimate of $0.05 by +20.00% [1] Revenue Breakdown - Service revenue was reported at $7.95 million, which is lower than the estimated $8.21 million, representing a year-over-year increase of +5.8% [3] - Product revenue reached $1.81 million, surpassing the average estimate of $1.46 million, with a year-over-year change of +8.9% [3] - Software solutions revenue was $5.86 million, exceeding the average estimate of $5.40 million, showing a significant year-over-year increase of +24.9% [3] Stock Performance - Over the past month, Crexendo's shares have returned +13.9%, outperforming the Zacks S&P 500 composite, which saw a change of +0.7% [4] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [4]

Core Viewpoint - Crexendo (CXDO) reported quarterly earnings of $0.06 per share, exceeding the Zacks Consensus Estimate of $0.05 per share, but down from $0.12 per share a year ago, indicating a 20% earnings surprise [1] Group 1: Earnings Performance - The company has surpassed consensus EPS estimates three times over the last four quarters [2] - The quarterly revenue for Crexendo was $15.63 million, which is 3.70% above the Zacks Consensus Estimate and an increase from $13.87 million year-over-year [2] - The company has exceeded consensus revenue estimates four times in the last four quarters [2] Group 2: Stock Performance and Outlook - Crexendo shares have increased approximately 20% year-to-date, compared to the S&P 500's gain of 21.2% [3] - The stock's immediate price movement will depend on management's commentary during the earnings call [3] - The current consensus EPS estimate for the upcoming quarter is $0.05 on revenues of $15.37 million, and for the current fiscal year, it is $0.24 on revenues of $59.41 million [7] Group 3: Industry Context - The Internet - Services industry, to which Crexendo belongs, is currently ranked in the top 27% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Crexendo's stock performance [5][6]