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].
Crexendo(CXDO) - 2024 Q4 - Annual Report