Crexendo (CXDO) AI Stock Analysis

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Crexendo

(NASDAQ:CXDO)

Rating:77Outperform

Price Target:

$7.00

▲(7.86% Upside)

Crexendo's strong financial performance and positive earnings call sentiment are the primary drivers of its overall score. The company's robust cash flow and strategic initiatives in AI and cloud infrastructure support its growth potential. However, the high P/E ratio and competitive market pressures present valuation concerns. Technical indicators show a positive trend, further supporting the stock's outlook.

Positive Factors

Financial Performance

CXDO reported a solid 2Q with revenue and non-GAAP EPS modestly above estimates.

Growth Opportunities

Crexendo's NetSapiens software solutions business grew 32% in the quarter and 30% for the year, powering the company's beat for both revenue and EPS.

Market Positioning

Crexendo is well positioned for ongoing market share gains in the wholesale UCaaS market.

Negative Factors

Competitive Landscape

The acquisition of US Cellular by TMobile could lead to incremental opportunities for telecom services.

Crexendo (CXDO) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$193.99M

Dividend YieldN/A

Average Volume (3M)213.43K

Price to Earnings (P/E)62.4

Beta (1Y)1.75

Revenue Growth13.10%

EPS Growth1.03%

CountryUS

Employees179

SectorCommunication Services

Sector Strength96

IndustryTelecommunications Services

Share Statistics

EPS (TTM)0.09

Shares Outstanding30,169,530

10 Day Avg. Volume97,435

30 Day Avg. Volume213,430

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)N/A

P/FCF RatioN/A

Enterprise Value/Market Cap0.87

Enterprise Value/Revenue2.61

Enterprise Value/Gross Profit4.24

Enterprise Value/Ebitda25.43

Forecast

1Y Price Target

$7.90

Price Target Upside21.73% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering5

Crexendo Business Overview & Revenue Model

Company DescriptionCrexendo (CXDO) is a technology company specializing in cloud-based communication solutions and web services. Founded with a focus on providing small to medium-sized businesses with advanced tools to enhance their digital presence and communication capabilities, Crexendo offers a range of products including VoIP phone systems, unified communications, and website development services. The company operates primarily in the telecommunications and technology sectors, aiming to boost efficiency and connectivity for its clients through innovative solutions.

How the Company Makes MoneyCrexendo generates revenue through several key streams, primarily focusing on subscription-based services for its cloud communication solutions. The company charges monthly fees for its VoIP and unified communications products, which provide businesses with essential telephony and collaboration tools. Additionally, Crexendo earns income from website development and hosting services, offering businesses a comprehensive digital presence package. Strategic partnerships with telecommunications providers and technology platforms also enhance their service offerings, allowing for broader market reach and customer acquisition. The recurring revenue model, combined with value-added services, contributes significantly to the company's overall earnings.

Crexendo Earnings Call Summary

Earnings Call Date:Aug 05, 2025

(Q2-2025)

% Change Since: |

Next Earnings Date:Nov 06, 2025

Earnings Call Sentiment Positive

Crexendo demonstrated strong revenue growth and consistent profitability with positive developments in its software solutions and partnerships. However, challenges in product revenue decline, increased operating expenses, and a competitive market environment present areas of concern. Overall, the company is on a solid path with expectations of future improvements in margins and growth opportunities.

Q2-2025 Updates

Positive Updates

Revenue Growth

Crexendo reported a 13% increase in total revenue to $16.6 million, driven by 31% year-over-year organic growth in software solutions revenue.

Consistent Profitability

The company achieved its eighth consecutive quarter of GAAP profitability with a net income of $1.2 million and delivered $2.8 million in adjusted EBITDA.

Strong Cash Position

Crexendo reported a strong cash position of $23.5 million, showing an increase compared to $18.2 million at the end of December 2024.

Successful Partnerships

The ecosystem vendor partner program (EVP) continues to gain momentum with a focus on AI, analytics, and automation, enabling new integrations and driving value for partners.

International Expansion

Completion of international data center migration to Oracle Cloud Infrastructure, indicating operational efficiency improvements.

Inclusion in Russell 2000 Index

Crexendo was included in the Russell 2000 Index, reflecting its strong performance and growth potential.

Negative Updates

Product Revenue Decline

Product revenue decreased by 7% to $1.2 million compared to $1.3 million for the second quarter of the prior year.

Operating Expenses

Operating expenses for the quarter increased 10% to $15.4 million compared to $14.1 million for the second quarter of the prior year.

Competitive Landscape

The UCaaS landscape remains highly competitive, with competitors not pulling back from irrational pricing, thus putting pressure on Crexendo's market position.

Margin Impact from Investments

While international data centers were shut down, the cost savings were minimal due to reinvestment into the business, implying that margin improvements are expected more next year.

Company Guidance

During the Crexendo Second Quarter 2025 Earnings Call, CEO Jeff Korn reported a 13% increase in total revenue to $16.6 million, driven by a 31% year-over-year growth in software solutions revenue. GAAP net income was $1.2 million, and adjusted EBITDA was $2.8 million, marking the eighth consecutive quarter of GAAP profitability. The company surpassed 6 million users on its software platform and is migrating to Oracle Cloud Infrastructure for cost savings. Crexendo is also focused on AI capabilities, planning to introduce AI call bots and operator functions. The company's strong cash position of $23.5 million supports its strategic M&A activities. The call highlighted a 212% year-over-year increase in GAAP profitability and an 88% increase in sales bookings from master agent technology service distributors. The remaining performance obligations rose to $83.5 million, indicating a strong future revenue stream.

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

Very Positive

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.

Balance Sheet

Positive

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.

Cash Flow

Very Positive

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.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	64.48M	60.84M	53.20M	37.55M	28.09M	16.39M
Gross Profit	39.69M	47.75M	31.64M	23.87M	17.43M	11.44M
EBITDA	6.62M	5.26M	3.42M	-33.37M	-1.20M	1.25M
Net Income	3.06M	1.68M	-362.00K	-35.41M	-2.44M	7.94M
Balance Sheet
Total Assets	71.36M	64.94M	56.16M	55.63M	77.15M	30.70M
Cash, Cash Equivalents and Short-Term Investments	23.45M	18.19M	10.35M	5.47M	7.47M	17.58M
Total Debt	1.70M	2.12M	2.19M	4.42M	2.79M	2.03M
Total Liabilities	13.06M	13.53M	11.55M	14.18M	11.22M	4.94M
Stockholders Equity	58.30M	51.41M	44.61M	41.46M	65.93M	25.76M
Cash Flow
Free Cash Flow	6.29M	6.26M	3.41M	-700.00K	-10.87M	-274.00K
Operating Cash Flow	6.33M	6.28M	3.50M	-411.00K	-1.01M	647.00K
Investing Cash Flow	-45.00K	-27.00K	3.70M	-1.70M	-9.87M	-921.00K
Financing Cash Flow	3.51M	1.59M	-2.31M	-54.00K	650.00K	13.67M

Crexendo Technical Analysis

Technical Analysis Sentiment

Positive

Last Price6.49

Price Trends

50DMA

6.00

Positive

100DMA

5.64

Positive

200DMA

5.59

Positive

Market Momentum

MACD

0.13

Negative

RSI

60.29

Neutral

STOCH

79.71

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CXDO, the sentiment is Positive. The current price of 6.49 is above the 20-day moving average (MA) of 6.16, above the 50-day MA of 6.00, and above the 200-day MA of 5.59, indicating a bullish trend. The MACD of 0.13 indicates Negative momentum. The RSI at 60.29 is Neutral, neither overbought nor oversold. The STOCH value of 79.71 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CXDO.

Crexendo Risk Analysis

Crexendo disclosed 1 risk factors in its most recent earnings report. Crexendo reported the most risks in the "Legal & Regulatory" 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 (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CXDO	77 Outperform	$193.99M	62.41	5.74%	―	13.10%	1.03%
RDCM	76 Outperform	$213.99M	23.54	9.74%	―	18.18%	89.73%
SNREY	69 Neutral	$155.86M	―		6.60%	―	―
SIFY	61 Neutral	$711.20M	―	-5.17%	―	10.20%	―
Sector *	60 Neutral	$46.28B	4.13	-13.12%	4.13%	1.85%	-42.71%
FNGR	47 Neutral	$91.49M	―	-40.25%	―	11.55%	-26.87%
KORE	46 Neutral	$42.86M	―	174.77%	―	0.24%	68.22%

* Communication Services Sector Average

Performance Comparison

CXDO

Crexendo

6.49

2.12

48.51%

RDCM

Radcom

13.35

3.51

35.67%

SIFY

Sify Technologies

10.24

7.55

280.67%

FNGR

FingerMotion

1.46

-0.58

-28.43%

KORE

KORE Group Holdings

2.30

-0.25

-9.80%

SNREY

Sunrise Communications ADR

59.88

17.06

39.84%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Aug 19, 2025