CXDO — Crexendo, Inc.

Summary of Crexendo Q1 2026 Earnings Call

1. Key Financial Results and Metrics:

• Revenue: $20.7 million, up 29% year-over-year, with organic growth of 15.9% (excluding $2.1 million from the ESI acquisition).
• GAAP Net Income: $0.6 million ($0.02 per share); Non-GAAP income: $3.3 million ($0.10 per share).
• EBITDA: $1.6 million; Adjusted EBITDA: $3.2 million.
• Gross Margin: 61%, slightly improved from Q4 2025; Telecom Services gross margin at 57% and Software Solutions at 68%.
• Cash Position: $7.2 million at quarter-end, down from $31.4 million due to acquisition-related expenses.
• Remaining Performance Obligations: Increased to $135.6 million, up 56% from the previous quarter, bolstered by the ESI acquisition.

2. Strategic Updates and Business Highlights:

• Successful integration of the ESI acquisition, which exceeded expectations in sales and operational synergy.
• Continued investment in AI solutions, notably the launch of CAIRO, an AI receptionist, which has shown strong initial sales traction.
• The company is actively pursuing additional acquisition opportunities and has secured $5 million in term debt and a $5 million line of credit to facilitate future growth.
• Strong demand in both retail telecom services and software solutions, with significant increases in sales bookings.

3. Forward Guidance and Outlook:

• Crexendo expects to maintain double-digit organic growth throughout 2026, excluding contributions from ESI.
• The company is confident in achieving a $100 million annual revenue run rate by the end of 2026, driven by strong operational execution and strategic acquisitions.
• Anticipated improvements in gross margins as the integration of ESI continues and operational efficiencies are realized.

4. Challenges and Points of Concern:

• Operating expenses rose by approximately $3.2 million, largely due to acquisition-related costs and increased spending on product revenue.
• The company noted potential macroeconomic headwinds affecting larger enterprise decision-making timelines.
• Competitive pressures remain, particularly in securing larger enterprise deals, which can take longer to close.

5. Notable Q&A Insights:

• The company is experiencing strong organic growth in its Telecom Services segment, with notable contributions from technology service distributors.
• Interest in CAIRO spans both companies looking to replace receptionists and those seeking to enhance existing receptionist capabilities.
• The pipeline for new business opportunities remains robust, with a mix of smaller and larger deals anticipated.
• Management emphasized the importance of having capital readily available for strategic acquisitions, highlighting a proactive approach to growth rather than reacting to immediate needs.

Overall, Crexendo reported a strong quarter with significant growth and strategic advancements, while also acknowledging challenges related to rising costs and competitive dynamics.