Financial Data and Key Metrics Changes - Total revenue for Q4 increased by 15% to 14.2 million in the prior year [30] - Full year revenue increased by 14% to 53.2 million in the prior year [34] - Net income for Q4 was 61,000 in the prior year [32] - Non-GAAP net income for Q4 was 1.6 million in the prior year [33] - Full year non-GAAP net income was 6.7 million in the prior year [37] Business Line Data and Key Metrics Changes - Service revenue for Q4 increased by 4% to 7.7 million in the prior year [30] - Software solutions revenue for Q4 increased by 32% to 5.3 million in the prior year [30] - Product revenue for Q4 remained flat at 31.8 million [34] - Full year software solutions revenue increased by 30% to 85.6 million [48] Company Strategy and Development Direction - The company aims to expand market share in a disciplined and profitable manner, avoiding price wars [10] - Crexendo is positioned as the third largest new path platform provider, leveraging disruptions in the market caused by competitors [11][12] - The company is committed to investing in software development and UCaaS enhancements [18] - The recent launch of an ecosystem vendor partner program is expected to drive substantial revenue growth [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued double-digit growth over the next year and beyond [28] - The company maintained GAAP profitability for six consecutive quarters and non-GAAP profitability for 25 consecutive quarters [23] - Management highlighted the importance of customer satisfaction as a competitive advantage [24] Other Important Information - The company has made significant investments in automation and financial systems to improve operational efficiencies [25] - The transition to Oracle Cloud Infrastructure is expected to generate substantial cost savings [22] Q&A Session Summary Question: What are the priorities for capital allocation? - The company is evaluating acquisitions, particularly in AI, and considering share repurchases if the market deteriorates [61][62] Question: Can you quantify the number of clients that migrated from competitors? - Seven Microsoft Metaswitch licensees and three Cisco BroadSoft licensees migrated to Crexendo in 2024 [65] Question: Did you see any change in sales cycles due to the Metaswitch acquisition? - Sales cycles are varied; some customers are moving quickly while others are taking their time [72] Question: Were there any seven-figure transactions in the software solutions business? - There were a couple of seven-figure transactions, but they are considered outliers [81] Question: What is the expected growth trajectory for 2025? - The company expects to grow adjusted EBITDA margins while reinvesting in the business [84] Question: How does Crexendo's product compare to Alianza's? - Crexendo focuses more on the business and enterprise market, while Alianza has historically targeted residential markets [90][92] Question: What percentage of legacy service provider lines have moved to cloud offerings? - Approximately 40% of businesses are still not on the cloud, but this number is expected to decrease significantly [101] Question: What is the average revenue per user at the retail and wholesale levels? - Retail ARPU is around 6,000 per month [106][111]
Crexendo(CXDO) - 2024 Q4 - Earnings Call Transcript