Crexendo, Inc. (CXDO) Market Cap
Crexendo, Inc. has a market capitalization of $208.7M.
Financials based on reported quarter end 2025-12-31
Price: $6.70
▲ 0.12 (1.82%)
Market Cap: 208.72M
NASDAQ · time unavailable
CEO: Jeffrey G. Korn
Sector: Communication Services
Industry: Telecommunications Services
IPO Date: 2018-03-27
Website: https://www.crexendo.com
Crexendo, Inc. (CXDO) - Company Information
Market Cap: 208.72M · Sector: Communication Services
Crexendo, Inc. provides cloud communication, unified communications as a service, call center, collaboration, and other cloud business services for businesses in the United States, Canada, and internationally. It operates through two segments, Cloud Telecommunications and Web Services. The Cloud Telecommunications segment provides telecommunications services that transmit calls using Internet protocol (IP) or cloud technology, which converts voice signals into digital data packets for transmission over the Internet or cloud; and resells broadband Internet services. This segment is also involved in the sale and lease of cloud telecommunications equipment. In addition, it offers hardware, software, and unified communication solutions for businesses using IP or cloud technology over high-speed internet connection through various devices and user interfaces, such as desktop phones and/or mobile, and desktop applications under the Crexendo brand name. The Web Services segment provides website hosting and other professional services. The company was formerly known as iMergent, Inc. and changed its name to Crexendo, Inc. in May 2011. Crexendo, Inc. was incorporated in 1995 and is headquartered in Tempe, Arizona.
Analyst Sentiment
Based on 6 ratings
Analyst 1Y Forecast: $9.50
Average target (based on 2 sources)
Consensus Price Target
Low
$9
Median
$10
High
$10
Average
$10
Potential Upside: 41.8%
Price & Moving Averages
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Fundamentals Overview
📊 AI Financial Analysis
Powered by StockMarketInfo"CXDO reported revenue of $18.1M for the year ended December 31, 2025, with a net income of $1.22M. The company shows signs of growth, although the revenue, while respectable for its scale, indicates a modest size relative to larger competitors. Its operating cash flow is positive at $2.35M, leading to a net cash position with total assets of $77.7M and total liabilities of $13.9M. The equity stands strong at $63.8M, reflecting a healthy balance sheet with negative net debt of $30.2M. With a share price of $6.29, the stock has experienced a 10.54% increase over the past year, though year-to-date performance is down by 5.13%. The company pays minimal dividends, totaling $0.02 in the last year, resulting in a limited impact on overall shareholder returns. Analyst target prices range from $9 to $10, suggesting potential upside; however, current returns appear restrained by the slower revenue growth and share performance."
Revenue Growth
Revenue of $18.1M indicates some growth, but overall it is modest for the market.
Profitability
Net income of $1.22M provides profitability but at a low margin relative to revenue.
Cash Flow Quality
Positive operating cash flow of $2.35M supports a solid cash position.
Leverage & Balance Sheet
Strong balance sheet with total equity of $63.8M and negative net debt is impressive.
Shareholder Returns
Limited dividend yield and recent share price performance yield low returns overall.
Analyst Sentiment & Valuation
Analyst targets suggest potential upside; however, performance lags behind expectations.
Disclaimer:This analysis is AI-generated for informational purposes only. Accuracy is not guaranteed and this does not constitute financial advice.
Crexendo’s Q4 2025 results show continued profitable growth: revenue +11% to $18.1M and GAAP profitability extended to the 10th consecutive quarter, with non-GAAP net income of $2.8M. Margin mix was the main swing factor—service gross margin improved +300 bps to 60%, while software solutions gross margin fell -500 bps to 63%, pulling consolidated gross margin down -100 bps to 60%. For the full year, consolidated gross margin rose +100 bps to 63% and adjusted EBITDA scaled to 17% of revenue (up from 13.5%). The major event is the announced $35M acquisition of Estech Systems (ESI), expected to close March 1, 2026, with unaudited ~2025 revenue of ~$26M and ~80% recurring UCaaS; management expects multiple near-term and long-term efficiency levers via OCI migration, licensing consolidation, and cross-sell. Guidance is largely directional: double-digit organic growth in 2026 (profitably) and a $100M revenue run-rate target by end of 2026, but EBITDA margin impact from ESI is deferred until the audit is completed under SEC rules.
Growth Catalysts
- Software solutions segment growth: +18% QoQ in Q4 and +28% organic growth for 2025
- CAIRO AI receptionist orchestrator launched mid-January; early feedback strong; potential to lift avg retail revenue/account by 25%+
- Record Q4 sales bookings for retail segment; larger opportunities up to ~1,000 stations won
- Oracle Cloud Infrastructure (OCI) migration completed for hosted infrastructure licensees; last legacy NetSapiens data center decommission later in month to improve margins
- Altigen telecom provider win announced in Q4; Crexendo platform deployed for future growth
Business Development
- Acquisition: Estech Systems (ESI) licensee acquired for $35.0M (expected to close March 1, 2026) with ~80% recurring UCaaS revenue
- Partnership: Added AppDirect as a leading technology service distributor (partner lineup) announced last month (prior to call)
- EVP ecosystem vendor partner program: 41 partners officially in the program (as of Q4 2025)
- CAIRO availability expanded: made available for NetSapiens platform licensees to offer to their customers
Financial Highlights
- Revenue: +11% QoQ to $18.1M; service revenue +8% to $8.6M; software solutions revenue +18% to $8.3M; product revenue -6% to $1.1M
- Gross margin (Q4) bps: service gross margin +300 bps to 60%; software solutions gross margin -500 bps to 63%; consolidated gross margin -100 bps to 60%
- Full-year gross margin (bps): consolidated revenue gross margin +100 bps to 63%; software solutions gross margin +100 bps to 72%; service revenue gross margin -1% YoY to 58%; product revenue gross margin -3% to 40%
- Operating margin (Q4) bps: +200 bps to 6%
- EPS: GAAP net income $1.2M or $0.04 basic/diluted; non-GAAP net income $2.8M or $0.09 basic and $0.09 diluted
- Remaining Performance Obligations (backlog): $89.1M, +$1.5M vs Sep 30, 2025 ($87.9M) and +4% vs Q4 2024 ($85.6M)
- Free cash flow: non-GAAP free cash flow $9.3M; 14% free cash flow margin
- ESI economics (unaudited): ESI generated ~$26M in 2025 revenue; projected acquisition accounting implies ~$2.23M in income post-audit if results confirm; majority ~80% recurring UCaaS; ESI gross margins on UCaaS ~86%
Capital Funding
- Cash & cash equivalents: $31.4M at Dec 31, 2025 vs $18.2M at Dec 31, 2024
- Operating cash flow: $9.3M for 2025 vs $6.3M prior year
- Capex: $18,000 capitalized expenditures for 2025 (as stated)
- Investing cash flow: -$18,000 for 2025
- Financing cash flow: +$3.9M for 2025
- Buybacks/dividend: not mentioned in transcript
- Debt levels: not mentioned in transcript
Strategy & Ops
- OCI migration: completed full migration of all hosted infrastructure licensees to Oracle Cloud Infrastructure; remaining step is decommissioning last legacy NetSapiens data centers later in the month to drive margin improvement
- Legacy retail classic migration: near completion referenced; expected to support margins
- Margin focus: proactively reduced selling lower-margin product opportunities on managed services front to improve margins
- RPO/backlog recognized over next 60 months (sliding scale) as indicator of future revenue stream
- Sales model differentiation: unique pricing/support model, open APIs, AI applications/integrations; win momentum driven by competitive uncertainty among Metaswitch/BroadSoft-era buyers
- Staffing/efficiency approach for ESI: expects coordinated functions, licensing consolidation, move off ESI servers to Crexendo OCI for discounts, back-office coordination, and cross-sell efficiencies; noted ESI already “well run” with reduced staff to a sustainable number
Market Outlook
- Organic growth target: management aiming for double-digit organic growth (stated as '10% organic' / 'double-digit organic growth') in 2026 while remaining profitable
- Revenue run-rate target: reach $100M annual revenue run rate hopefully by end of 2026 (with ESI cited as key contributor)
- CAIRO adoption: no sales projections yet; will monitor; strong early feedback post mid-January launch
- EBITDA margin guidance constraint: company will not discuss post-ESI EBITDA margin benefit until audit completion under SEC guidelines
Risks & Headwinds
- EBITDA margin / acquisition impact transparency limited until ESI audit completion (SEC guidelines)
- Q4 consolidated gross margin down 100 bps YoY driven by software solutions gross margin -500 bps YoY
- No further service gross margin increases projected immediately (management indicated 'not projecting further increases' and to reassess in a couple of quarters)
- Execution risk implied around ESI integration synergies and OCI/legacy migrations driving margin improvements (no explicit mitigation quantification provided)
Sentiment: POSITIVE
Note: This summary was synthesized by AI from the CXDO Q4 2025 earnings transcript. Financial data is complex; please verify all metrics against official SEC filings before making investment decisions.