Financial Data and Key Metrics Changes - Total revenue increased by 13% to $16.6 million compared to $14.7 million in the same quarter last year [7][16] - GAAP net income was $1.2 million, up from $0.6 million year-over-year [7][17] - Adjusted EBITDA for the quarter was $2.8 million, compared to $2.2 million in the prior year [17] - Remaining performance obligation (backlog) increased to $83.5 million, up 17% from the previous year [22] Business Line Data and Key Metrics Changes - Software solutions revenue grew by 31% to $7 million compared to $5.3 million in the same quarter last year [7][16] - Telecom service revenue increased by 4% to $8.4 million, while product revenue decreased by 7% to $1.2 million [16][21] - Gross margin for software solutions improved to 74%, while telecom services gross margin was 56% [23] Market Data and Key Metrics Changes - The master agent technology service distributors saw an 88% increase in sales bookings year-over-year [22] - The telecom services retail segment grew at 2% organically for the quarter [21] Company Strategy and Development Direction - The company is focused on transitioning to Oracle Cloud Infrastructure, which is expected to yield significant cost savings and improve innovation [12][20] - Crexendo is actively reviewing several potential acquisitions, ensuring they align with the vision of strategic profitable growth [13] - The company is enhancing its AI capabilities, with plans to roll out AI call bots and operator functions [10][25] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's trajectory, highlighting strong demand for its offerings and a commitment to delivering best-in-class services [14][26] - The company is not pursuing low-margin opportunities, focusing instead on profitable growth [11][22] Other Important Information - The company reported a strong cash position of $23.5 million, supporting continued innovation and strategic initiatives [13][18] - The company has successfully completed its international data center migration to Oracle Cloud Infrastructure [20] Q&A Session Summary Question: What is the pipeline for the second half of the year? - Management expects continued growth in new licensees and upgrades, with the total active licensee count around 240 [31][32] Question: How will the T-Mobile acquisition of UScellular impact the relationship? - Management sees tremendous opportunities with the T-Mobile acquisition and anticipates expanding the successful partnership with UScellular [34][36] Question: What margin improvements can be expected after closing international data centers? - Major savings are expected next year when domestic data centers are closed, with minimal immediate impact from international closures [37] Question: What is driving the strong growth in master agent sales? - Strong relationships and excellent customer service have fostered growth in the master agent channel [40][41] Question: What is the outlook for software revenue growth? - The company anticipates maintaining double-digit organic growth, with software solutions expected to continue growing at over 30% [45] Question: How is the remaining performance obligation structured? - The remaining performance obligation is heavily weighted towards the first three years of contracts, indicating strong future revenue streams [50] Question: What is the status of product revenue? - The company is strategically moving away from low-margin product sales, which has led to fluctuations in product revenue [53][54] Question: How is international expansion progressing? - The company continues to see strong demand in international markets, particularly in Europe and Australia [68]