Crexendo Inc (CXDO) Q1 2025 Earnings Call Highlights: Strong Revenue Growth Amid Competitive ...
Release Date: May 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Crexendo Inc (NASDAQ:CXDO) reported a 12% year-over-year increase in total revenue, reaching $16.1 million.
The software solutions revenue grew by 33%, with gross margins in this segment increasing by 500 basis points to 78%.
The company achieved GAAP profitability for the seventh consecutive quarter, with a net income of $1.2 million.
Crexendo Inc (NASDAQ:CXDO) surpassed 6 million users on its software solutions platform, indicating strong demand.
The company is strategically investing in innovation and infrastructure, including a migration to Oracle Cloud Infrastructure, expected to drive cost savings and margin expansion.
Product revenue declined by 22% to $1.1 million compared to the previous year.
Service revenue gross margin decreased by 3% quarter over quarter to 57%.
The telecom market remains highly competitive, with some competitors engaging in unsustainable pricing practices.
Operating expenses increased by 8% to $14.9 million, impacting overall profitability.
There is uncertainty in the market due to macroeconomic factors, although Crexendo Inc (NASDAQ:CXDO) has not yet seen a measurable weakening in demand.
Warning! GuruFocus has detected 5 Warning Signs with CXDO.
Q: Jeff, you mentioned sustainable double-digit growth. Is this guidance relevant for the entire year 2025 or specifically for Q2? A: Jeff Korn, CEO: The guidance is for year-over-year growth. While there can be quarterly variances, we are confident in achieving a minimum of 10% year-over-year growth.
Q: Are there any changes in competitor behavior regarding aggressive pricing and incentives? A: Jeff Korn, CEO: The behavior remains similar to 2024. We believe these practices are unsustainable, and we continue to focus on profitable growth by delivering superior service and customer experience.
Q: Can you provide more details on the impressive software gross margin improvement and its sustainability? A: Ron Vincent, CFO: The margin improvement is driven by increased revenue in the software solutions division. While we had a great quarter, we target a 73-75% range for the full year.
Q: How is the acquisition of Metaswitch by Allianza affecting the market, and what are you seeing in terms of competition? A: Jeff Korn, CEO: We haven't seen significant changes yet. Our differentiated model and service level continue to attract interest, and we are confident in winning more business due to our superior product and flexibility.
Q: Can you provide an update on the EVP app ecosystem and its integration progress? A: Anan Bosch, CSO: We are onboarding 10 to 12 partners regularly, with a recent increase in interest for AI and customer service applications. The ecosystem is growing, and we are seeing significant interest in these areas.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
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