Crexendo(US:CXDO)2025-11-04 22:30Financial Data and Key Metrics Changes - Crexendo reported a 12% year-over-year revenue growth, reaching $17.5 million for Q3 2025 [14] - GAAP net income was $1.5 million, or $0.05 per share, compared to $100,000, or $0.01 per share, in Q3 2024 [15] - Non-GAAP net income increased to $3 million, or $0.10 per share, from $1.7 million, or $0.06 per share, in the same quarter last year [16] - EBITDA for the quarter was $2.1 million, up from $1 million in Q3 2024 [16] - Cash equivalents increased to $28.6 million from $18.2 million at the end of 2024 [16] Business Line Data and Key Metrics Changes - Software solutions revenue grew 28% year-over-year to $7.5 million [14] - Service revenue increased 8% to $8.6 million [14] - Product revenue decreased 25% to $1.4 million, but was slightly above the historical average [14] - Telecom services retail segment grew 2% organically, with telecom service revenue up 8% [20] Market Data and Key Metrics Changes - Remaining performance obligations increased to $87.9 million, up from $83.5 million at the end of June 2025 [15] - International revenue is growing rapidly, although it still represents less than 10% of total revenue [10] Company Strategy and Development Direction - The company is focused on organic growth and strategic M&A opportunities, with plans to close an acquisition by early next year [11] - Investments in AI-driven capabilities and Oracle Cloud Infrastructure are expected to enhance growth and operational efficiency [5][10] - The company aims to maintain its competitive advantage through superior customer service and innovative product offerings [9][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving double-digit growth through the next year [12] - The company is optimistic about the future, citing strong demand for its products and a talented workforce [11][26] - Management highlighted the importance of customer service as a differentiator in a commoditized market [20] Other Important Information - The company surpassed 7 million end users on its platform, marking a significant milestone [7] - The annual user group meeting in Miami was the most successful in history, with record attendance and excitement about innovations [6][8] Q&A Session Summary Question: Pipeline for new licensees and Q4 setup - Management indicated that growth in users can be estimated based on past performance, but specific numbers for new logos are still uncertain [31][32] Question: Measuring success of new AI products - Management plans to monitor adoption rates and will implement aggressive marketing strategies for existing and new customers [33][34] Question: Progress on migrating customers to OCI - Migration to OCI is expected to be completed by the end of Q1 2026 [36][37] Question: Drivers of service revenue growth - Positive market acceptance and execution by retail teams contributed to the 8% growth in service revenue [43][44] Question: Opportunities with AI receptionist technology - The AI receptionist is expected to appeal to a majority of small and mid-sized customers, potentially increasing average revenue per account significantly [49][50] Question: Insights on Version 46 of the platform - Version 46 is expected to be available for previews in Q1 2026, enhancing user interaction with the platform [54][56] Question: M&A strategy and potential acquisitions - The company prefers to acquire technology that integrates seamlessly with its existing platform but remains open to other opportunities if compelling [66][67] Question: Product gross margin decline - Management expects product gross margins to improve and return to historical averages in the upcoming quarters [78][79]