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Crexendo Inc (CXDO)
NASDAQ:CXDO
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Crexendo
(NASDAQ:CXDO)
75Outperform
Positive Factors
Earnings
Crexendo reported Q4 revenue of $16.2M, which was above consensus expectations, driven by a rise in telco service revenue and significant software solutions growth.
International Expansion
International growth is becoming significant, with Crexendo's software solutions segment seeing success in Europe and Australia, growing 39% and now representing 5% of total revenue.
Market Position
Crexendo continues to be ranked number one in the G2 Reports customer satisfaction rankings, well ahead of RingCentral and 8x8.
Negative Factors
Competitive Landscape
The company continues to benefit from an army of Microsoft Metaswitch and Cisco BroadSoft users evaluating other options given the sunsetting of support for these two platforms.
Mergers and Acquisitions
The company has been building up its M&A cash war chest ever since it purchased Allegiant at the end of 2022.
Platform Transition
The company will be completing a shift of the remaining 20% of its telco Services customers off of the Crexendo Classic platform onto the Crexendo VIP platform, resulting in a boost to gross margin.
Crexendo (CXDO) vs. S&P 500 (SPY)
Market Cap
$114.95M
Dividend YieldN/A
Average Volume (3M)250.47K
Price to Earnings (P/E)71.5
Beta (1Y)1.70
Revenue Growth14.36%
EPS GrowthN/A
CountryUS
Employees179
SectorCommunication Services
Sector Strength74
IndustryTelecommunications Services
Share Statistics
EPS (TTM)0.06
Shares Outstanding27,901,072
10 Day Avg. Volume149,931
30 Day Avg. Volume250,470
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)2.53
Price to Cash Flow (P/CF)17.70
P/FCF Ratio17.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$8.38Price Target Upside103.40% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
Crexendo Business Overview & Revenue Model
Company DescriptionCrexendo, Inc. (CXDO) is a cloud-based communication services company that specializes in providing unified communication solutions to businesses of all sizes. The company's core offerings include cloud telecommunications services, cloud-based hosted phone systems, collaboration tools, and contact center solutions. Crexendo's services are designed to improve business communication efficiency and customer engagement, leveraging advanced technologies to deliver scalable and reliable communication solutions.
How the Company Makes MoneyCrexendo makes money primarily through the sale of its cloud-based communication services, which include subscription fees for its unified communication solutions, hosted phone systems, and contact center services. The company operates on a recurring revenue model, where businesses pay regular subscription fees for access to Crexendo's communication platforms and tools. Additionally, Crexendo may generate revenue from professional services, including implementation, training, and support services that accompany the deployment of its communication solutions. The company's strategic partnerships with technology providers and channel partners also contribute to its revenue, allowing Crexendo to expand its market reach and enhance its service offerings.
Crexendo Financial Statement Overview
Summary
Crexendo exhibits strong financial health, marked by impressive revenue growth and profitability improvements. The balance sheet is well-managed with low leverage and high equity. Cash flow generation is a key strength, providing liquidity and supporting growth. While operational efficiency can be improved further, the overall outlook is positive with a solid foundation for future expansion.Income Statement
Crexendo has demonstrated strong revenue growth, with a 14.37% increase from 2023 to 2024. The gross profit margin improved to 78.49% in 2024, indicating efficient cost management. The net profit margin improved significantly from negative in 2023 to 2.76% in 2024. However, the EBIT margin, while positive at 3.00%, remains modest, suggesting room for operational efficiency improvements.82
Very Positive
Balance Sheet
The company's balance sheet is strong with a low debt-to-equity ratio of 0.04, reflecting minimal leverage. The return on equity improved to 3.26% in 2024, showing better profitability. The equity ratio is robust at 79.17%, indicating a strong capital structure. However, the lower total assets compared to 2021 indicate a potential area of concern for asset growth.75
Positive
Cash Flow
Crexendo's cash flow is robust, with a significant increase in free cash flow from 2023 to 2024, growing by 83.66%. The operating cash flow to net income ratio is healthy at 3.75, highlighting strong cash generation relative to income. The free cash flow to net income ratio is high at 3.73, indicating efficient cash utilization. These metrics suggest strong liquidity and cash management.88
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 60.84M | 53.20M | 37.55M | 28.09M | 16.39M | Gross Profit |
| 47.75M | 31.64M | 23.87M | 17.43M | 11.44M | EBIT |
| 1.82M | -1.69M | -4.71M | -2.81M | 991.00K | EBITDA |
| 1.82M | 3.42M | -33.37M | -1.20M | 1.25M | Net Income Common Stockholders |
| 1.68M | -362.00K | -35.41M | -2.44M | 7.94M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 18.19M | 10.35M | 5.47M | 7.47M | 17.58M | Total Assets |
| 64.94M | 56.16M | 55.63M | 77.15M | 30.70M | Total Debt |
| 2.10M | 2.19M | 4.42M | 2.79M | 2.03M | Net Debt |
| -16.10M | -8.16M | -1.06M | -4.68M | -15.55M | Total Liabilities |
| 13.53M | 11.55M | 14.18M | 11.22M | 4.94M | Stockholders Equity |
| 51.41M | 44.61M | 41.46M | 65.93M | 25.76M |
| Cash Flow | Free Cash Flow | |||
| 6.26M | 3.41M | -700.00K | -10.87M | -274.00K | Operating Cash Flow |
| 6.28M | 3.50M | -411.00K | -1.01M | 647.00K | Investing Cash Flow |
| -27.00K | 3.70M | -1.70M | -9.87M | -921.00K | Financing Cash Flow |
| 1.59M | -2.31M | -54.00K | 650.00K | 13.67M |
Crexendo Technical Analysis
Negative
4.12
Price Trends
5.88
Negative
5.58
Negative
5.06
Negative
Market Momentum
-0.25
Positive
34.28
Neutral
9.07
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CXDO, the sentiment is Negative. The current price of 4.12 is below the 20-day moving average (MA) of 5.47, below the 50-day MA of 5.88, and below the 200-day MA of 5.06, indicating a bearish trend. The MACD of -0.25 indicates Positive momentum. The RSI at 34.28 is Neutral, neither overbought nor oversold. The STOCH value of 9.07 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CXDO.
Crexendo Risk Analysis
Crexendo disclosed 50 risk factors in its most recent earnings report. Crexendo reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Crexendo Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $114.95M | 71.53 | 3.49% | ― | 14.36% | ― | |
62 Neutral | $1.74B | ― | -2.21% | ― | 14.44% | 84.58% | |
60 Neutral | $2.05B | ― | 16.58% | ― | 8.99% | 63.84% | |
60 Neutral | $353.50M | ― | -2.14% | ― | 24.52% | 61.08% | |
58 Neutral | $25.04B | 3.12 | -9.31% | 4.26% | 2.35% | -43.03% | |
57 Neutral | $1.95B | ― | -936.62% | ― | 13.14% | 17.06% | |
51 Neutral | $226.51M | ― | -40.78% | ― | -2.23% | 19.48% |
* Communication Services Sector Average
Performance Comparison
CXDO
Crexendo
4.12
-0.95
-18.74%
EGHT
8X8
1.72
-0.81
-32.02%
RNG
RingCentral
22.61
-10.36
-31.42%
FIVN
Five9
23.00
-36.69
-61.47%
APPN
Appian
26.40
-13.42
-33.70%
BAND
Bandwidth
12.35
-5.35
-30.23%
Crexendo Earnings Call Summary
Earnings Call Date: Mar 4, 2025 | % Change Since: -28.60% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong positive sentiment with record-breaking revenue growth, sustained profitability, and strategic expansions both domestically and internationally. While there are challenges and uncertainties in the competitive landscape, Crexendo's strategic positioning and operational efficiencies provide a solid foundation for continued success.Highlights
Strong Revenue Growth
Revenue increased by 14% for the year to $60.8 million, with a fourth quarter revenue increase of 15% to $16.2 million.
Record Profitability
Crexendo achieved GAAP profitability for the sixth consecutive quarter and non-GAAP net income for the 25th consecutive quarter. Net income for the year was $1.7 million, with non-GAAP net income of $7.7 million.
Software Solutions Segment Success
The software solutions revenue increased by 30% for the year, reaching $23.4 million, and the segment experienced a 32% growth in the fourth quarter.
International Expansion
The company saw a 39% organic increase in international revenues, particularly in the European Union, Australia, and the first new licensee in Africa.
Awards and Recognition
Crexendo received the 2024 North American Strategy Leadership Award and was recognized by Deloitte Technology Fast 500 as one of the fastest-growing companies in North America.
Operational Efficiency
Cash and cash equivalents increased to $18.2 million from $10.3 million the previous year, and the company reported substantial cost savings from transitioning to a colocation facility and closing legacy data centers.
Lowlights
Competitive Market Challenges
The UCaaS market remains highly competitive, with price pressures from competitors Cisco and Microsoft, which have affected the market dynamics.
Limited Information on Competitor Actions
Uncertainty around competitor actions, such as Cisco's pricing changes and Microsoft's divestment of the Metaswitch division, creates an unpredictable market environment.
Dependency on Market Disruption
A significant portion of Crexendo's growth opportunities relies on the disruption caused by competitors, particularly the divestment of Microsoft Metaswitch and Cisco BroadSoft.
Company Guidance
During the Crexendo Fourth Quarter and Yearend 2024 Earnings Call, the company provided detailed guidance and metrics showcasing strong growth. Crexendo reported a 15% increase in total revenue for Q4, amounting to $16.2 million, and a 14% increase for the full year to $60.8 million. The software solutions segment saw significant growth, with a 32% increase in Q4 revenue and a 30% increase for the year. The company maintained a GAAP profitability streak for the sixth consecutive quarter, with a net income of $507,000 for Q4 and $1.7 million for the year. Non-GAAP net income was $2 million for the quarter and $7.7 million for the year. Crexendo's cash reserves nearly doubled to $18.2 million, and the remaining performance obligation, or backlog, grew by 34% to $85.6 million. The company emphasized its competitive advantages, such as a flexible sessions-based pricing model, and highlighted disruptions in the market due to Microsoft's Metaswitch division sale, positioning Crexendo for further market share gains. Looking ahead, Crexendo anticipates continued double-digit growth, driven by strategic investments in engineering, service, and support, particularly in Europe.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.