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Crexendo Inc (CXDO)
NASDAQ:CXDO
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Crexendo
(NASDAQ:CXDO)
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Rating:77Outperform
Price Target:
$7.00
▲(4.48% 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
Revenue Growth
The significant revenue growth in software solutions indicates strong demand and market acceptance, supporting long-term business expansion.
Cash Flow Strength
Strong cash flow growth enhances liquidity and financial flexibility, enabling strategic investments and supporting sustainable growth.
Leadership Change
The appointment of an experienced leader in cloud operations can drive operational excellence and innovation, strengthening competitive positioning.
Negative Factors
Product Revenue Decline
A decline in product revenue suggests challenges in product sales, which could impact overall revenue growth if not addressed.
Operating Expenses
Rising operating expenses can pressure margins and profitability, necessitating cost control measures to maintain financial health.
Competitive Landscape
Intense competition and aggressive pricing strategies by rivals can erode market share and impact Crexendo's pricing power and margins.
Crexendo (CXDO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$202.14M
Dividend YieldN/A
Average Volume (3M)125.73K
Price to Earnings (P/E)66.8
Beta (1Y)1.75
Revenue Growth13.10%
EPS Growth1.03%
CountryUS
Employees179
SectorCommunication Services
Sector Strength97
IndustryTelecommunications Services
Share Statistics
EPS (TTM)0.09
Shares Outstanding30,169,530
10 Day Avg. Volume154,858
30 Day Avg. Volume125,730
Financial Highlights & Ratios
PEG Ratio-0.15
Price to Book (P/B)2.72
Price to Sales (P/S)2.30
P/FCF Ratio22.37
Enterprise Value/Market Cap0.83
Enterprise Value/Revenue2.61
Enterprise Value/Gross Profit4.24
Enterprise Value/Ebitda25.43
Forecast
1Y Price Target
$7.90Price Target Upside17.91% 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
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 | 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
Positive
6.70
Price Trends
6.21
Positive
5.95
Positive
5.71
Positive
Market Momentum
0.15
Positive
54.22
Neutral
40.72
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 6.7 is above the 20-day moving average (MA) of 6.63, above the 50-day MA of 6.21, and above the 200-day MA of 5.71, indicating a bullish trend. The MACD of 0.15 indicates Positive momentum. The RSI at 54.22 is Neutral, neither overbought nor oversold. The STOCH value of 40.72 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
UnderperformOutperform
Sector (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $202.14M | 66.80 | 5.74% | ― | 13.10% | 1.03% | |
76 Outperform | $229.94M | 25.30 | ― | ― | 18.18% | 89.73% | |
69 Neutral | $150.36M | ― | -8.39% | 6.81% | ― | ― | |
61 Neutral | $932.60M | ― | -3.90% | ― | 10.20% | ― | |
49 Neutral | $44.26M | -0.61 | 146.66% | ― | 0.24% | 68.22% | |
47 Neutral | $95.65M | -16.08 | -37.45% | ― | 11.55% | -26.87% | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% |
* Communication Services Sector Average
CXDO
Crexendo
6.70
2.06
44.40%
RDCM
Radcom
14.34
4.00
38.68%
SIFY
Sify Technologies
12.89
10.73
496.76%
FNGR
FingerMotion
1.61
-0.57
-26.15%
KORE
KORE Group Holdings
2.53
0.27
11.95%
SNREY
Sunrise Communications ADR
57.88
15.06
35.17%
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.