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]

Revenue Performance - Total revenue for the three months ended September 30, 2024, was $15,627,000, representing a 13% increase from $13,874,000 in the same period of 2023[149] - Total revenue for the nine months ended September 30, 2024, was $44,598,000, a 14% increase from $39,035,000 in the same period of 2023[152] - Service revenue increased by $436,000, software solutions revenue increased by $1,169,000, and product revenue increased by $148,000 for the three months ended September 30, 2024[149] - Software solutions revenue for the three months ended September 30, 2024, was $5,860,000, compared to $4,691,000 in the same period of 2023[149] - Cloud telecommunications service revenue for the three months ended September 30, 2024, was $7,953, an increase of 6% from $7,517 in 2023[165] - Product revenue for the three months ended September 30, 2024, was $1,814, representing a 9% increase from $1,666 in 2023[166] - Service revenue for the nine months ended September 30, 2024, was $23,865, an increase of $1,882 or 9% from $21,983 in the same period of 2023[174] - Software solutions revenue for the nine months ended September 30, 2024, was $16,331,000, a 28% increase from $12,729,000 in the same period of 2023[195] Income and Expenses - The company reported a net income of $148,000 for the three months ended September 30, 2024, down from $1,704,000 in the same period of 2023[149] - Income/(loss) before income tax decreased by 89% to $194,000 for the three months ended September 30, 2024, compared to $1,737,000 in the same period of 2023[150] - The income tax provision for the three months ended September 30, 2024, was $(46,000), compared to $(33,000) in the same period of 2023, reflecting a 39% increase[151] - The income tax provision for the nine months ended September 30, 2024, was $(100), up from $(81) in 2023, reflecting a 23% increase[155] - Non-GAAP net income for the nine months ended September 30, 2024, was $5,736, compared to $5,067 in 2023, indicating a year-over-year increase of 13.2%[159] - Adjusted EBITDA for the nine months ended September 30, 2024, was $5,996, compared to $4,081 in 2023, reflecting a significant increase of 47%[161] Operating Expenses - The company experienced an increase in operating expenses of $1,982,000, primarily due to higher commission expenses and salaries[150] - Total operating expenses for the three months ended September 30, 2024, were $5,687,000, up from $4,400,000 in 2023, representing a 29% increase[190] - Selling and marketing expenses for the nine months ended September 30, 2024, totaled $8,580, an increase of $1,013 or 13% from $7,567 in 2023[181] - General and administrative expenses decreased by $521 or 7%, totaling $6,668 for the nine months ended September 30, 2024, compared to $7,189 in 2023[182] - Research and development expenses for the nine months ended September 30, 2024, were $661, a decrease of $246 or 27% from $907 in 2023[184] - Selling and marketing expenses for the three months ended September 30, 2024, were $2,976, an increase of $509 or 21% from $2,467 in 2023[170] - General and administrative expenses increased by 31% to $1,417,000 for the three months ended September 30, 2024, compared to $1,079,000 in 2023[192] - Research and development expenses rose by 40% to $1,339,000 for the three months ended September 30, 2024, compared to $959,000 in 2023[193] Cash Flow and Investments - As of September 30, 2024, the company had cash and cash equivalents of $15,451 million, up from $10,347 million as of December 31, 2023[203] - Net cash provided by operating activities for the nine months ended September 30, 2024, was $4,107 million, a significant increase of 363% compared to $887 million for the same period in 2023[204] - Net cash used in investing activities for the nine months ended September 30, 2024, was $0, compared to $3,792 million in proceeds from the sale of a corporate office building in the same period of 2023[207] - Net cash provided by financing activities for the nine months ended September 30, 2024, was $1,011 million, a turnaround from a net cash used of $2,324 million in the same period of 2023, representing a change of 144%[211] Strategic Initiatives - The company continues to invest in technology and CPaaS offerings to enhance competitiveness and profitability[145] - Crexendo's cloud telecommunication service was recognized as the fastest growing UCaaS platform in the United States[143] - The company completed the acquisition of Allegiant Networks, LLC, for a total consideration of $2.0 million in cash, a $1.1 million promissory note, and 2,461,538 shares of common stock[211] - The outstanding balance of the related party note payable as of September 30, 2024, was $570 million, down from $843 million as of December 31, 2023[211] - The company entered into a consulting agreement with Steven G. Mihaylo, providing him with $14 million monthly for his services, totaling $168 million annually[212] Market Conditions - The company does not believe inflation has had a material effect on its financial condition or results of operations[216] - The company has not experienced significant foreign currency risk as its sales and operating expenses are predominantly denominated in U.S. dollars[214] Backlog - Backlog increased by 23%, or $9,849, reaching $52,963 as of September 30, 2024, compared to $43,114 as of September 30, 2023[167] - The backlog increased by 20%, or $4,089, to $24,408,000 as of September 30, 2024, compared to $20,319,000 as of September 30, 2023[189]

EX-99.1 2 cxdo_ex991.htm PRESS RELEASE EXHIBIT 99.1 Crexendo Delivers Strong Third Quarter Results PHOENIX, AZ / ACCESSWIRE / November 6, 2024 / Crexendo, Inc. (NASDAQ: CXDO), an award-winning software technology company that is a premier provider of cloud communication platform and services, video collaboration and managed IT services tailored to businesses of all sizes, today announced financial results for the third quarter ended September 30, 2024. Financial highlights: · Revenue of $15.6 million, up 13 ...

Company Overview - Crexendo (CXDO) shares increased by 15.1% to $5.11 in the last trading session, with a higher-than-average trading volume, contrasting with a 0.5% loss over the past four weeks [1] - The company is experiencing strong demand for its Software Solutions and Telecom Services [1] Earnings Expectations - Crexendo is expected to report quarterly earnings of $0.05 per share, reflecting a year-over-year decline of 58.3% [2] - Revenue is anticipated to be $15.07 million, which is an increase of 8.7% compared to the same quarter last year [2] Stock Performance Insights - The consensus EPS estimate for Crexendo has remained unchanged over the last 30 days, indicating that stock price movements may not sustain without earnings estimate revisions [3] - The stock currently holds a Zacks Rank of 3 (Hold), suggesting a neutral outlook [3] Industry Comparison - Crexendo operates within the Zacks Internet - Services industry, where Lyft (LYFT) also belongs [3] - Lyft's consensus EPS estimate has increased by 16.7% over the past month to $0.19, although this still represents a year-over-year decline of 20.8% [4] - Lyft also holds a Zacks Rank of 3 (Hold) [4]

Crexendo (NASDAQ: CXDO ) stock was firing on all cylinders last year, gaining upwards of 104%. Over the past six months, though, the stock has hit a lull, but its fundamentals remain as strong as ever. Hence, the stock now Muslim Farooque is a leading financial journalist and market analyst with over five years of expertise in covering the stock and cryptocurrency markets. His work has been widely featured on platforms such as Seeking Alpha, InvestorPlace, GuruFocus, BarCharts, TipRanks, and Equities, reach ...

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) Crexendo achieved significant financial growth in Q2 and H1 2024, marked by strong revenue increases, a turnaround to net income, and improved cash position [Financial Results for the Second Quarter of 2024](index=1&type=section&id=Financial%20Results%20for%20the%20Second%20quarter%20of%202024) Q2 2024 saw Crexendo's total revenue increase by 16% to $14.7 million, driven by 35% growth in Software Solutions, achieving a net income of $0.6 million Q2 2024 Key Financial Metrics (YoY) | Metric | Q2 2024 | Q2 2023 | Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | **$14.7M** | **$12.7M** | **+16%** | | Service Revenue | $8.1M | $7.3M | +10% | | Software Solutions Revenue | $5.3M | $3.9M | +35% | | Product Revenue | $1.3M | $1.4M | -10% | | **Net Income/(Loss)** | **$0.6M** | **($0.5M)** | **+220%** | | **EPS (basic & diluted)** | **$0.02** | **($0.02)** | **+200%** | | Non-GAAP Net Income | $2.1M | $1.1M | +91% | | Adjusted EBITDA | $2.2M | $1.2M | +78% | [Financial Results for the Six Months Ended June 30, 2024](index=1&type=section&id=Financial%20Results%20for%20the%20six%20months%20ended%20June%2030%2C%202024) For H1 2024, total revenue grew 15% to $29.0 million, with Software Solutions up 30%, resulting in a net income of $1.0 million and increased cash balance Six Months 2024 Key Financial Metrics (YoY) | Metric | H1 2024 | H1 2023 | Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | **$29.0M** | **$25.2M** | **+15%** | | Service Revenue | $15.9M | $14.5M | +10% | | Software Solutions Revenue | $10.5M | $8.0M | +30% | | **Net Income/(Loss)** | **$1.0M** | **($2.1M)** | **N/A** | | **EPS (basic)** | **$0.04** | **($0.08)** | **N/A** | | Non-GAAP Net Income | $4.0M | $1.7M | +135% | | Adjusted EBITDA | $4.2M | $2.0M | +110% | - Cash and cash equivalents increased to **$13.6 million** at June 30, 2024, from **$10.3 million** at December 31, 2023[6](index=6&type=chunk) - Cash provided by operating activities was **$2.5 million** for the first six months of 2024, compared to cash used of **$(0.7) million** in the prior-year period[7](index=7&type=chunk) [Management Commentary](index=2&type=section&id=Management%20Commentary) Management attributes strong Q2 2024 results, exceeding expectations, to robust software performance, effective cost management, and increased cash for future growth - Q2 2024 results exceeded analyst expectations, with consolidated revenue growing **16%** YoY[8](index=8&type=chunk) - The software division was a key performer, with **35% growth**, indicating strong market demand for its platforms[8](index=8&type=chunk) - A remarkable turnaround from a net loss of **$(0.5) million** in Q2 2023 to a net income of **$0.6 million** in Q2 2024 is attributed to effective cost management and operational efficiencies implemented in late 2023[9](index=9&type=chunk) - The company's cash balance increased to **$13.6 million**, providing flexibility for investment and strengthening its market position[9](index=9&type=chunk) [Consolidated Financial Statements](index=3&type=section&id=Consolidated%20Financial%20Statements) This section presents Crexendo's financial position, operational performance, and cash flows, highlighting key metrics from the balance sheet, income statement, and cash flow statement [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2024, total assets reached $59.6 million, driven by increased cash, with total liabilities stable at $11.5 million and equity rising to $48.2 million Balance Sheet Highlights (in thousands) | Account | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | **Cash and cash equivalents** | **$13,611** | **$10,347** | | Total current assets | $21,885 | $16,949 | | **Total Assets** | **$59,639** | **$56,160** | | Total current liabilities | $10,441 | $10,261 | | **Total Liabilities** | **$11,451** | **$11,547** | | **Total stockholders' equity** | **$48,188** | **$44,613** | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2024 total revenue increased 16% to $14.7 million, resulting in an operating income of $0.6 million and net income of $0.6 million, or $0.02 per share Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2024 | Q2 2023 | H1 2024 | H1 2023 | | :--- | :--- | :--- | :--- | :--- | | **Total revenue** | **$14,685** | **$12,670** | **$28,971** | **$25,161** | | Gain/(loss) from operations | $580 | $(517) | $1,063 | $(2,091) | | **Net income/(loss)** | **$588** | **$(545)** | **$1,022** | **$(2,127)** | | **EPS (Basic)** | **$0.02** | **$(0.02)** | **$0.04** | **$(0.08)** | | **EPS (Diluted)** | **$0.02** | **$(0.02)** | **$0.03** | **$(0.08)** | [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For H1 2024, cash from operating activities was $2.5 million, leading to a net increase in cash of $3.3 million and an end-of-period balance of $13.6 million Cash Flow Summary for Six Months Ended June 30 (in thousands) | Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net cash provided by/(used for) operating activities | $2,486 | $(673) | | Net cash used for investing activities | $0 | $(92) | | Net cash provided by/(used for) financing activities | $778 | $(486) | | **Net increase/(decrease) in cash** | **$3,264** | **$(1,275)** | | **Cash and cash equivalents at end of period** | **$13,611** | **$4,200** | [Supplemental and Non-GAAP Information](index=6&type=section&id=Supplemental%20and%20Non-GAAP%20Information) This section details segment performance and reconciles GAAP to Non-GAAP financial measures, including Non-GAAP net income and Adjusted EBITDA, for a comprehensive view of operational results [Supplemental Segment Financial Data](index=6&type=section&id=Supplemental%20Segment%20Financial%20Data) Q2 2024 segment performance shows Cloud Telecommunications Services with $9.4 million revenue and $0.1 million operating income, and Software Solutions with $5.3 million revenue and $0.5 million operating income Segment Performance for Q2 2024 vs Q2 2023 (in thousands) | Segment | Revenue (Q2'24) | Revenue (Q2'23) | Operating Income/(Loss) (Q2'24) | Operating Income/(Loss) (Q2'23) | | :--- | :--- | :--- | :--- | :--- | | Cloud telecommunications services | $9,360 | $8,740 | $120 | $(207) | | Software solutions | $5,325 | $3,930 | $460 | $(310) | [Reconciliation of Non-GAAP Financial Measures](index=6&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) This section reconciles GAAP net income to Non-GAAP net income of $2.1 million and Adjusted EBITDA of $2.2 million for Q2 2024, adjusting for non-cash items - The company uses Non-GAAP measures like **Non-GAAP net income** and **Adjusted EBITDA** to evaluate business performance, excluding effects of share-based compensation, amortization, and acquisition-related expenses[20](index=20&type=chunk) Reconciliation of GAAP Net Income to Non-GAAP Net Income (Q2 2024, in thousands) | Metric | Amount | | :--- | :--- | | U.S. GAAP net income | $588 | | Share-based compensation | $784 | | Amortization of intangible assets | $758 | | **Non-GAAP net income** | **$2,130** | Reconciliation of GAAP Net Income to Adjusted EBITDA (Q2 2024, in thousands) | Metric | Amount | | :--- | :--- | | U.S. GAAP net income | $588 | | Depreciation and amortization | $836 | | Interest & other expense/(income) | $(35) | | Income tax provision | $27 | | **EBITDA** | **$1,416** | | Share-based compensation | $784 | | **Adjusted EBITDA** | **$2,200** |

Core Viewpoint - Crexendo (CXDO) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive trend in earnings estimates which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in a company's earnings picture, which is crucial for predicting near-term stock price movements [2][4]. - 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]. Crexendo's Earnings Outlook - The upgrade for Crexendo reflects an improvement in its underlying business, which is expected to drive the stock price higher as investors respond positively to this trend [5][10]. - For the fiscal year ending December 2024, Crexendo is projected to earn $0.24 per share, with a recent 8% increase in the Zacks Consensus Estimate over the past three months [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks which have averaged a +25% annual return since 1988 [7]. - The upgrade to Zacks Rank 2 places Crexendo in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Crexendo, Inc. (NASDAQ:CXDO) Q2 2024 Earnings Call Transcript August 6, 2024 4:30 PM ET Company Participants Jeff Korn - Chairman & CEO Jon Brinton - CRO Ron Vincent - CFO Doug Gaylor - President and COO Anand Buch - CSO Conference Call Participants Mike Latimore - Northland Capital Markets Josh Nichols - B. Riley Ryan Koontz - Needham & Company Mark Hagen - Lake Street Capital Chris Sakai - Singular Research Sam McColgan - Breakout Investors Michael Kaufman - MK Investments Operator Greetings, and welcome ...

Core Insights - Crexendo (CXDO) reported revenue of $14.69 million for the quarter ended June 2024, reflecting a year-over-year increase of 15.9% and surpassing the Zacks Consensus Estimate of $14.18 million by 3.60% [1] - The company's EPS for the quarter was $0.07, an increase from $0.04 in the same quarter last year, resulting in an EPS surprise of 16.67% compared to the consensus estimate of $0.06 [1] Revenue Breakdown - Service revenue was reported at $8.07 million, slightly above the average estimate of $7.99 million from two analysts, marking a year-over-year increase of 10.4% [3] - Product revenue was $1.29 million, which fell short of the average estimate of $1.33 million from two analysts, representing a year-over-year decline of 9.7% [4] - Software solutions revenue reached $5.33 million, exceeding the estimated $4.86 million from two analysts, and showing a significant year-over-year increase of 35.5% [5] Stock Performance - Over the past month, Crexendo's shares have returned 29.8%, contrasting with a decline of 6.7% in the Zacks S&P 500 composite [5] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [5]