Crexendo(US:CXDO)2025-11-04 22:18Financial Performance - As of September 30, 2025, the Annualized Exit Monthly Recurring Subscriptions (AERR) was $56,100, an increase from $49,039 as of September 30, 2024, representing a growth of approximately 21%[178] - Total revenue for the three months ended September 30, 2025, was $17,497,000, representing a 12% increase from $15,627,000 in the same period of 2024[189] - Total revenue for the nine months ended September 30, 2025, was $50,106,000, a 12% increase from $44,598,000 in the same period of 2024[192] - Net income for the three months ended September 30, 2025, was $1,450,000, compared to $148,000 in the same period of 2024, marking a significant increase[188] - Non-GAAP net income for the three months ended September 30, 2025, was $3,034,000, compared to $1,700,000 in 2024[202] Revenue Breakdown - Software solutions revenue increased by $1,661,000 to $7,521,000 for the three months ended September 30, 2025, while service revenue rose by $616,000[189] - Service revenue for the three months ended September 30, 2025, increased to $8,607,000, representing an 8% increase from $7,953,000 in the same period of 2024[210] - Software solutions revenue increased by 28% to $7,521 million for the three months ended September 30, 2025, compared to $5,860 million in 2024, attributed to higher recurring software license and maintenance subscriptions[237] - Software solutions revenue increased by 31% to $21,364 million for the nine months ended September 30, 2025, compared to $16,331 million in the same period of 2024[246] Expenses and Costs - The company reported an increase in operating expenses of $3,148,000 for the nine months ended September 30, 2025, primarily due to higher salaries and benefits[193] - Cost of service revenue for the three months ended September 30, 2025, rose to $3,664,000, a 10% increase from $3,336,000 in 2024[213] - Selling and marketing expenses for the three months ended September 30, 2025, increased to $3,215,000, an 8% rise from $2,976,000 in 2024[216] - General and administrative expenses decreased to $1,928,000 for the three months ended September 30, 2025, down 15% from $2,278,000 in 2024[218] - Research and development expenses for the three months ended September 30, 2025, were $122,000, a decrease of 9% from $134,000 in 2024[219] Cash Flow and Financial Position - Net cash provided by operating activities increased by 69% to $6,950 million for the nine months ended September 30, 2025, compared to $4,107 million in 2024[259] - Cash and cash equivalents amounted to $28,573 million as of September 30, 2025, compared to $18,193 million as of December 31, 2024[258] - Other income increased significantly by 283% to $398 million for the nine months ended September 30, 2025, compared to $104 million in 2024, mainly from higher interest income[233] Customer Metrics - The Net Monthly Subscription Dollar Retention Rate was 99% for cloud telecommunications services and 102% for software solutions, indicating strong customer retention and growth potential[186] - The company supports over six million end users globally through more than 235 cloud communication platform software subscribers[162] - Remaining Performance Obligations (RPOs) increased by 11%, or $6,030, to $58,993,000 as of September 30, 2025, compared to $52,963,000 in 2024[212] Market and Operational Insights - The cloud telecommunications contracts typically have a term of 36 to 60 months, contributing to the company's recurring revenue model[165] - The company continues to invest in technology and CPaaS offerings to enhance competitiveness and profitability in the market[173] - The cloud telecommunications services include a range of essential and advanced features, providing significant value to customers without requiring capital investments[171] Other Financial Information - The income tax provision for the nine months ended September 30, 2025, was $(135,000), an increase of 35% from $(100,000) in 2024[194] - Basic earnings per share for the three months ended September 30, 2025, was $0.05, compared to $0.01 in the same period of 2024[188] - The company believes exposure to foreign currency fluctuation from operating expenses is immaterial, as costs do not constitute a significant portion of total expenses[273] - Inflation has not had a material effect on the company's business or financial condition, but significant inflationary pressures could harm operations[275]