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Crexendo Inc (CXDO)
NASDAQ:CXDO
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Crexendo
(NASDAQ:CXDO)
Rating:76Outperform
Price Target:
$6.50
▲(10.36%Upside)
Positive Factors
Financial Performance
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.
International Growth
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 is well positioned for ongoing market share gains in the wholesale UCaaS market.
Negative Factors
Competition
The company is benefiting from the strategic pivots of major competitors like Microsoft/Metaswitch and Cisco/BroadSoft, which have boosted Crexendo's new logos and pipelines.
Crexendo (CXDO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$170.99M
Dividend YieldN/A
Average Volume (3M)216.35K
Price to Earnings (P/E)72.8
Beta (1Y)1.67
Revenue Growth13.85%
EPS Growth38.33%
CountryUS
Employees179
SectorCommunication Services
Sector Strength82
IndustryTelecommunications Services
Share Statistics
EPS (TTM)0.08
Shares Outstanding29,030,542
10 Day Avg. Volume129,155
30 Day Avg. Volume216,351
Financial Highlights & Ratios
PEG Ratio1.78
Price to Book (P/B)2.92
Price to Sales (P/S)0.00
P/FCF Ratio21.79
Enterprise Value/Market Cap0.86
Enterprise Value/Revenue0.62
Enterprise Value/Gross Profit3.82
Enterprise Value/Ebitda8.07
Forecast
1Y Price Target
$7.90Price Target Upside34.13% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
Crexendo Business Overview & Revenue Model
Company DescriptionCrexendo, Inc. (CXDO) is a telecommunications company that specializes in providing cloud-based unified communications services. The company offers a comprehensive suite of solutions including hosted voice, video conferencing, collaboration, and contact center services. Crexendo primarily serves small and medium-sized businesses, enabling them to improve communication efficiency and reduce traditional telecommunication costs.
How the Company Makes MoneyCrexendo generates revenue through its subscription-based model for cloud communication services. The company charges customers recurring fees for access to its hosted VoIP (Voice over Internet Protocol) services, which include a variety of features such as call management, mobility, and conferencing. Crexendo also offers additional services such as equipment sales, installation, and customer support, which contribute to its revenue. Key partnerships with telecommunications providers and technology companies enhance its service offerings and expand its customer base, further driving earnings growth.
Crexendo Earnings Call Summary
Earnings Call Date:May 06, 2025
(Q1-2025)
| % Change Since: 10.09%|
Next Earnings Date:Aug 05, 2025
Earnings Call Sentiment Positive
Crexendo demonstrated strong revenue growth, user expansion, and improved profitability, particularly in the software solutions segment. However, the decline in product revenue and challenges in the telecom segment indicate areas that need attention. Despite these issues, the company's overall performance and strategic initiatives provide a positive outlook.Q1-2025 Updates
Positive Updates
Revenue Growth
Crexendo's total revenue grew by 12% year-over-year to $16.1 million, with a 33% increase in software solutions revenue.
User Milestone
The software solutions platform surpassed 6 million users during the quarter.
Gross Margin Improvement
Software solutions gross margins increased by 500 basis points to 78% compared to Q1 2024 and 1,000 basis points higher than Q4 2024.
Profitability
Reported strong GAAP net income of $1.2 million and non-GAAP net income of $2.6 million, with adjusted EBITDA of $2.6 million.
Industry Recognition
Crexendo received multiple awards including the 2025 Product of the Year and the Hosted VoIP Excellence Award from Internet Telephony Magazine.
Partnership and Ecosystem Growth
Crexendo's ecosystem vendor partner program is gaining traction, setting the stage for significant revenue in the future.
Negative Updates
Decline in Product Revenue
Product revenue declined by 22% to $1.1 million compared to $1.3 million in the first quarter of the prior year.
Challenges in Telecom Segment
Telecom services retail segment grew only by 1% organically due to proactive reduction in selling lower margin opportunities.
Gross Margin Decline in Service Revenue
Service revenue gross margin decreased by 3% quarter over quarter to 57%.
Company Guidance
During Crexendo's Q1 2025 earnings call, the company provided robust guidance, highlighting a year-over-year revenue growth of 12% to $16.1 million, driven by a 33% increase in software solutions revenue to $6.9 million. The software segment saw gross margins rise by 500 basis points to 78% compared to Q1 2024. Crexendo achieved a GAAP net income of $1.2 million and non-GAAP net income of $2.6 million, both significantly higher than the previous year. The company's adjusted EBITDA stood at $2.6 million. The call emphasized the strategic focus on sustainable growth and profitability, particularly in the competitive UCaaS market, and highlighted significant milestones such as surpassing 6 million software platform users. Guidance for future quarters remains optimistic, with a commitment to double-digit revenue growth, bolstered by strategic investments and market opportunities arising from industry disruptions.Crexendo Financial Statement Overview
Summary
Crexendo exhibits strong financial health with impressive revenue growth and profitability improvements. The balance sheet is solid with low leverage and high equity, and cash flow generation is robust, highlighting strong liquidity. While operational efficiency can be improved, the overall financial outlook is positive.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 |
| EBITDA | 1.82M | 3.42M | -33.37M | -1.20M | 1.25M |
| Net Income | 1.68M | -362.00K | -35.41M | -2.44M | 7.94M |
Balance Sheet | |||||
| Total Assets | 64.94M | 56.16M | 55.63M | 77.15M | 30.70M |
| Cash, Cash Equivalents and Short-Term Investments | 18.19M | 10.35M | 5.47M | 7.47M | 17.58M |
| Total Debt | 2.12M | 2.19M | 4.42M | 2.79M | 2.03M |
| 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
Positive
5.89
Price Trends
5.73
Positive
5.48
Positive
5.51
Positive
Market Momentum
0.02
Positive
52.75
Neutral
56.86
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 5.89 is below the 20-day moving average (MA) of 5.99, above the 50-day MA of 5.73, and above the 200-day MA of 5.51, indicating a neutral trend. The MACD of 0.02 indicates Positive momentum. The RSI at 52.75 is Neutral, neither overbought nor oversold. The STOCH value of 56.86 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 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 (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $170.99M | 72.81 | 4.73% | ― | 13.85% | 38.33% | |
76 Outperform | $225.05M | 26.60 | 9.35% | ― | 18.23% | 81.31% | |
69 Neutral | $148.25M | ― | 6.85% | ― | ― | ||
65 Neutral | $405.16M | ― | -5.17% | ― | 10.20% | ― | |
62 Neutral | $42.18B | -1.51 | -12.07% | 2.79% | 2.09% | -71.01% | |
55 Neutral | $46.16M | ― | 174.77% | ― | -1.52% | 22.36% | |
40 Underperform | $86.14M | ― | -40.25% | ― | 11.55% | -26.87% |
* Communication Services Sector Average
Performance Comparison
CXDO
Crexendo
5.89
1.91
47.99%
RDCM
Radcom
14.50
4.30
42.16%
SIFY
Sify Technologies
5.55
2.96
114.29%
FNGR
FingerMotion
1.80
-0.30
-14.29%
KORE
KORE Group Holdings
2.50
-0.82
-24.70%
SNRE
Sunrise Communications AG Unsponsored ADR Class A
57.07
14.25
33.28%
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.