• Revenue: $15.6 million, up 13% year over year.

• Software Solutions Revenue: $5.9 million, up 25% year over year.

• Service Revenue: $8 million, up 6% year over year.

• Product Revenue: $1.8 million, up 9% year over year.

• Consolidated Gross Margin: 61%, consistent with the prior year.

• Software Solutions Gross Margin: 71%, consistent with the prior year.

• Telecom Services Gross Margin: 55%, consistent with the prior year.

• Net Income: $148,000, or 1 per basic common share.

• Non-GAAP Net Income: $1.7 million, or 6 per basic and diluted common share.

• EBITDA: $1 million, compared to $1.2 million in the prior year.

• Adjusted EBITDA: $1.7 million, compared to $2.1 million in the prior year.

• Cash and Cash Equivalents: $15.5 million as of September 30, 2024.

• Cash Provided by Operating Activities: $4.1 million for the nine-month period.

• Telecom Backlog: $77.4 million, up 22% from Q3 2023.

• Warning! GuruFocus has detected 5 Warning Signs with CXDO.

Release Date: November 06, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Crexendo Inc (NASDAQ:CXDO) reported a 13% year-over-year increase in consolidated revenue, driven by a 25% growth in its software division.

• The company maintained GAAP profitability for the fifth consecutive quarter and non-GAAP net income for the 24th consecutive quarter.

• Crexendo Inc (NASDAQ:CXDO) has increased its cash and cash equivalents to $15.5 million, up from $10.3 million at the end of 2023.

• The company successfully added eight new logos and five expansions from existing licenses in the software solutions segment.

• Crexendo Inc (NASDAQ:CXDO) is experiencing strong international growth, with new wins in Australia and Africa, and is averaging over 100,000 new users added to its platform monthly.

Negative Points

• Operating expenses increased by 15% to $15.5 million due to investments in headcount, Oracle Cloud infrastructure, and accounting system implementation.

• Net income decreased to $148,000 for the quarter compared to $1.7 million in the prior year, partly due to the absence of a gain from the sale of a corporate office building.

• Product margins decreased to 40% from 45% in the third quarter of the prior year.

• The company is facing challenges in maintaining high margins and is working on improving them.

• Crexendo Inc (NASDAQ:CXDO) anticipates that future acquisitions may impact GAAP profitability due to intangible costs.

Q & A Highlights

Q: How many new logos and expansions did Crexendo have in the quarter? A: Doug Gaylor, President and COO, stated that Crexendo added eight new logos and had five expansions from existing licenses during the quarter, marking a significant achievement in their software solutions segment.