Financial Data and Key Metrics Changes - Consolidated revenue for Q1 2020 increased by 11% to $3.9 million compared to $3.5 million in Q1 2019 [11] - Service revenue for Q1 2020 increased by 16% to $3.5 million compared to $3 million in Q1 2019 [11] - Net income for Q1 2020 was $140,000 or $0.01 per share, down from $239,000 or $0.02 per share in Q1 2019 [11] - Non-GAAP net income for Q1 2020 was $275,000 or $0.02 per share, compared to $343,000 or $0.02 per share in the same period of the prior year [12] - EBITDA for Q1 2020 was $284,000, up from $263,000 in the same period of the prior year [12] Business Line Data and Key Metrics Changes - UCaaS service revenue increased by 18% to $3.3 million in Q1 2020 compared to $2.8 million in Q1 2019 [11] - Product revenue decreased by 22% to $379,000 in Q1 2020 compared to $484,000 in Q1 2019 [11] - Web Service Segment service revenue decreased by 12% or $22,000 in Q1 2020 [11] Market Data and Key Metrics Changes - The company reported a 172% increase in usage of collaboration tools in March 2020 [16] - Sales backlog increased to $26.6 million, a 10% increase year-over-year [20] Company Strategy and Development Direction - The company is focused on increasing investment in the business to support long-term growth [9] - Plans to list on NASDAQ as the company has met all organic requirements [10] - The company is looking for accretive acquisitions to accelerate growth while maintaining focus on sales and service [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing the essential nature of their services during the COVID-19 pandemic [5] - The pandemic is expected to accelerate the migration of businesses to cloud communications [16] - Management believes the company is well-positioned to capitalize on post-COVID-19 opportunities [8] Other Important Information - The company took the FCC's Keep America Connected Pledge, agreeing not to disconnect customers for nonpayment during the crisis [7] - The company purchased its office building for $2.5 million, which is expected to save over $100,000 annually on facility costs [22] Q&A Session Summary Question: Changes in customer phone usage during lockdown - Management noted an increase in talk time due to remote work, with significant spikes in calling traffic [26] Question: Uptick in small business churn due to economic shutdown - Management indicated it is too early to assess the full impact but noted low attrition rates of less than 1% per quarter [27][28] Question: Impact of COVID-19 on product segments - Management attributed the decline in product revenue primarily to COVID-19, with previous high product revenue in Q1 2019 due to a rush install [30] Question: Changes in sales cycle since the pandemic - Management observed a slowdown in decision-making during the initial lockdown but noted that this is starting to recover [32] Question: Feedback from new partners - Management reported positive feedback from partners, especially those in non-telecom sectors who are now offering Crexendo products [34] Question: Competitive environment changes - Management acknowledged a competitive market but emphasized their strong positioning and focus on smaller, accretive acquisitions [41][42] Question: Metrics for purchasing the office building - Management evaluated the decision based on current lease rates and expected savings on operating expenses [44][45]
Crexendo(CXDO) - 2020 Q1 - Earnings Call Transcript