Third Quarter Financial highlights:
- Total revenue increased 44% year-over-year to
$25.2 million - GAAP net income of
$1.1 million , or$0.03 per basic and diluted common share. - Non-GAAP net income of
$4.0 million , or$0.12 per basic and diluted common share. - Adjusted EBITDA of
$4.0 million , compared to$2.9 million for the third quarter of 2025.
Financial Results for the Third Quarter of 2026
Total Revenue: Consolidated total revenue for the third quarter of 2026 increased 44%, or
Service Revenue: Consolidated service revenue for the third quarter of 2026 increased 75%, or
Software Solutions Revenue: Consolidated software solutions revenue for the third quarter of 2026 increased 2%, or
Product Revenue: Consolidated product revenue for the third quarter of 2026 increased 78%, or
Operating Expenses: Consolidated operating expenses for the third quarter of 2026 increased 49%, or
Net Income/(Loss): The Company reported net income of
Non-GAAP: Non-GAAP net income of
EBITDA and Adjusted EBITDA: EBITDA for the third quarter of 2026 of
Financial Results for the nine months ended
Total Revenue: Consolidated total revenue for the nine months ended
Service Revenue: Consolidated service revenue for the nine months ended
Software Solutions Revenue: Consolidated software solutions revenue for the nine months ended
Product Revenue: Consolidated product revenue for the nine months ended
Operating Expenses: Consolidated operating expenses for the nine months ended
Net Income/(Loss): The Company reported net income of
Non-GAAP: Non-GAAP net income of
EBITDA and Adjusted EBITDA: EBITDA for the nine months ended
Cash and Cash Equivalents: Total cash and cash equivalents at
Cash Flow: Cash provided by operating activities for the nine months ended
Management Commentary
"
"The integration of ESI has gone seamlessly, reinforcing our confidence in our ability to identify and successfully integrate strategic, accretive acquisitions. We are actively evaluating additional opportunities to accelerate growth while remaining focused on maximizing organic growth across our business. The exceptional response to our preview of our new platform software release, NetSapiens Flow, at our largest-ever User Group Meeting last week, together with our expanding AI ecosystem and continued progress with
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About Crexendo
Crexendo, Inc. is an award-winning software technology company that is a premier provider of cloud communication platform and services, video collaboration and managed IT services tailored to businesses of all sizes. The Company's solutions currently support over eight million end users globally through its extensive global network of over 250 cloud communication platform software subscribers and its direct retail offering.
Safe Harbor Statement
This press release contains forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for such forward-looking statements. The words "believe," "expect," "anticipate," "estimate," "will" and other similar statements of expectation identify forward-looking statements. Specific forward-looking statements in this press release include Crexendo (i) delivering another exceptional quarter; (ii) having very strong EBITDA which is telling as it does not include intangible costs associated with the recent acquisition; (iii) being excited that through the third quarter it has already won more new platform logos than was secured in all of last year; (iv) believing that these wins expand the foundation for future organic growth as providers migrate subscribers to NetSapiens, grow their businesses and purchase additional capacity; (v) having a substantial opportunity to deepen customer relationships and expand recurring revenue; (vi) believing that the integration of ESI has gone seamlessly, reinforcing confidence in the ability to identify and successfully integrate strategic, accretive acquisitions; (vii) being actively evaluating additional opportunities to accelerate growth while remaining focused on maximizing organic growth across the business; (viii) believing the exceptional response to the preview of the new platform software release, NetSapiens Flow, together with the expanding AI ecosystem and continued progress with CAIRO, gives tremendous confidence in the product roadmap and long-term opportunity; and (ix) believing that by combining innovation, disciplined expense management and selective acquisitions that it is well positioned to deliver sustainable, profitable growth and build lasting and increasing shareholder value.
For a more detailed discussion of risk factors that may affect Crexendo's operations and results, please refer to the company's Form 10-K for the year ended December 31, 2025, quarterly Form 10-Qs as filed with the SEC. These forward-looking statements speak only as of the date on which such statements are made, and the company undertakes no obligation to update such forward-looking statements, except as required by law.
Company Contact
Crexendo, Inc.
Doug Gaylor
President and Chief Operating Officer
602-732-7990
dgaylor@crexendo.com
CREXENDO, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited, in thousands, except par value and share data)
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 22,841 | $ | 31,378 | ||||
Trade receivables, net of allowance of | 6,000 | 4,913 | ||||||
Contract assets, net of allowance of | 106 | - | ||||||
Inventories | 995 | 454 | ||||||
Equipment financing receivables, net of allowance of | 2,861 | 1,416 | ||||||
Contract costs | 4,214 | 2,318 | ||||||
Prepaid expenses | 1,778 | 892 | ||||||
Income tax receivable | 207 | 234 | ||||||
Other current assets | 356 | 292 | ||||||
Total current assets | 39,358 | 41,897 | ||||||
Contract assets, net of current portion, net of allowance of | 859 | 402 | ||||||
Long-term equipment financing receivables, net of allowance of | 5,434 | 3,223 | ||||||
Property and equipment, net | 326 | 195 | ||||||
Operating lease right-of-use assets | 634 | 1,006 | ||||||
Intangible assets, net | 36,468 | 17,860 | ||||||
| 14,170 | 9,454 | |||||||
Contract costs, net of current portion | 6,107 | 3,319 | ||||||
Other long-term assets | 471 | 330 | ||||||
Total Assets | $ | 103,827 | $ | 77,686 | ||||
Liabilities and Stockholders' Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 1,543 | $ | 649 | ||||
Accrued expenses | 11,593 | 8,391 | ||||||
Finance leases | - | 2 | ||||||
Notes payable | 454 | 114 | ||||||
Operating lease liabilities | 521 | 493 | ||||||
Income tax payable | - | 151 | ||||||
Contract liabilities | 3,972 | 2,528 | ||||||
Total current liabilities | 18,083 | 12,328 | ||||||
Contract liabilities, net of current portion | 1,255 | 1,008 | ||||||
Notes payable, net of current portion | 4,294 | - | ||||||
Operating lease liabilities, net of current portion | 135 | 529 | ||||||
Total liabilities | 23,767 | 13,865 | ||||||
Stockholders' equity: | ||||||||
Preferred stock, par value | - | - | ||||||
Common stock, par value | ||||||||
shares issued and outstanding as of | ||||||||
and outstanding as of | 33 | 31 | ||||||
Additional paid-in capital | 158,829 | 145,325 | ||||||
Accumulated deficit | (78,972 | ) | (81,719 | ) | ||||
Accumulated other comprehensive income | 170 | 184 | ||||||
Total stockholders' equity | 80,060 | 63,821 | ||||||
Total Liabilities and Stockholders' Equity | $ | 103,827 | $ | 77,686 | ||||
Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except per share and share data)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
Service revenue | $ | 15,052 | $ | 8,607 | $ | 40,481 | $ | 25,163 | ||||||||
Software solutions revenue | 7,695 | 7,521 | 22,745 | 21,364 | ||||||||||||
Product revenue | 2,435 | 1,369 | 7,312 | 3,579 | ||||||||||||
Total revenue | 25,182 | 17,497 | 70,538 | 50,106 | ||||||||||||
Operating expenses: | ||||||||||||||||
Cost of service revenue | 4,910 | 3,664 | 13,663 | 10,707 | ||||||||||||
Cost of software solutions revenue | 2,226 | 1,924 | 6,889 | 5,227 | ||||||||||||
Cost of product revenue | 1,441 | 888 | 4,475 | 2,174 | ||||||||||||
Selling and marketing | 8,372 | 4,522 | 21,994 | 13,182 | ||||||||||||
General and administrative | 5,324 | 3,780 | 15,716 | 10,884 | ||||||||||||
Research and development | 1,827 | 1,414 | 5,224 | 4,374 | ||||||||||||
Total operating expenses | 24,100 | 16,192 | 67,961 | 46,548 | ||||||||||||
Income/(loss) from operations | 1,082 | 1,305 | 2,577 | 3,558 | ||||||||||||
Other income/(expense): | ||||||||||||||||
Interest income | 124 | 199 | 352 | 409 | ||||||||||||
Interest expense | (81 | ) | (3 | ) | (143 | ) | (18 | ) | ||||||||
Other income/(expense), net | 19 | (8 | ) | 41 | 39 | |||||||||||
Total other income/(expense), net | 62 | 188 | 250 | 430 | ||||||||||||
Income/(loss) before income tax | 1,144 | 1,493 | 2,827 | 3,988 | ||||||||||||
Income tax (provision)/benefit | (26 | ) | (43 | ) | (80 | ) | (135 | ) | ||||||||
Net income/(loss) | $ | 1,118 | $ | 1,450 | $ | 2,747 | $ | 3,853 | ||||||||
Earnings per common share: | ||||||||||||||||
Basic | $ | 0.03 | $ | 0.05 | $ | 0.08 | $ | 0.13 | ||||||||
Diluted | $ | 0.03 | $ | 0.05 | $ | 0.08 | $ | 0.12 | ||||||||
Weighted-average common shares outstanding: | ||||||||||||||||
Basic | 33,281,303 | 30,397,144 | 32,535,272 | 29,292,516 | ||||||||||||
Diluted | 34,233,646 | 31,818,738 | 33,768,539 | 31,418,659 | ||||||||||||
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
| Nine Months Ended | ||||||||
| 2026 | 2025 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net income/(loss) | $ | 2,747 | $ | 3,853 | ||||
Adjustments to reconcile net income/(loss) to net cash provided by/(used for) operating activities: | ||||||||
Depreciation and amortization | 4,950 | 2,466 | ||||||
Allowance for credit losses | 66 | (82 | ) | |||||
Share-based compensation | 2,674 | 2,254 | ||||||
Non-cash operating lease amortization | 6 | 13 | ||||||
Amortization of debt discount | 20 | - | ||||||
Changes in assets and liabilities: | ||||||||
Trade receivables | (754 | ) | (394 | ) | ||||
Contract assets | (44 | ) | (67 | ) | ||||
Equipment financing receivables | (53 | ) | (932 | ) | ||||
Inventories | 361 | (247 | ) | |||||
Contract costs | (671 | ) | (591 | ) | ||||
Prepaid expenses | (668 | ) | (596 | ) | ||||
Income tax receivable | 27 | (181 | ) | |||||
Other assets | (193 | ) | (374 | ) | ||||
Accounts payable and accrued expenses | 893 | 799 | ||||||
Income tax payable | (151 | ) | 3 | |||||
Contract liabilities | 465 | 1,026 | ||||||
Net cash provided by/(used for) operating activities | 9,675 | 6,950 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Acquisition of a business, net of cash acquired | (26,209 | ) | - | |||||
Purchase of property and equipment | - | (18 | ) | |||||
Net cash provided by/(used for) investing activities | (26,209 | ) | (18 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Repayments made on finance leases | (2 | ) | (20 | ) | ||||
Repayments made on notes payable | (239 | ) | (356 | ) | ||||
Proceeds from exercise of options | 4,042 | 4,137 | ||||||
Taxes paid on the net settlement of stock options and RSUs | (643 | ) | (340 | ) | ||||
Proceeds from issuance of note payable, net of debt issuance costs | 4,853 | - | ||||||
Net cash provided by/(used for) financing activities | 8,011 | 3,421 | ||||||
Effect of exchange rate changes on cash | (14 | ) | 27 | |||||
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS | (8,537 | ) | 10,380 | |||||
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD | 31,378 | 18,193 | ||||||
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD | $ | 22,841 | $ | 28,573 | ||||
Cash used during the year for: | ||||||||
Income taxes, net | $ | (202 | ) | $ | (315 | ) | ||
Interest expense | $ | (124 | ) | $ | (16 | ) | ||
Supplemental disclosure of non-cash investing and financing information: | ||||||||
Capitalized software development costs | $ | - | $ | 411 | ||||
Stock issued for the acquisition of a business | $ | 7,433 | $ | - | ||||
Use of Non-GAAP Financial Measures
To evaluate our business, we consider and use non-generally accepted accounting principles ("Non-GAAP") net income and Adjusted EBITDA as a supplemental measure of operating performance. These measures include the same adjustments that management takes into account when it reviews and assesses operating performance on a period-to-period basis. We consider Non-GAAP net income to be an important indicator of overall business performance because it allows us to evaluate results without the effects of share-based compensation and related taxes, acquisition related expenses, changes in fair value of contingent consideration, amortization of intangibles, and goodwill and long-lived asset impairment. We define EBITDA as
In our
- EBITDA and Adjusted EBITDA do not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;
- they do not reflect changes in, or cash requirements for, our working capital needs;
- they do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our debt that we may incur;
- they do not reflect income taxes or the cash requirements for any tax payments;
- although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will be replaced sometime in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements;
- while share-based compensation is a component of operating expense, the impact on our financial statements compared to other companies can vary significantly due to such factors as the assumed life of the options and the assumed volatility of our common stock; and
- other companies may calculate EBITDA and Adjusted EBITDA differently than we do, limiting their usefulness as comparative measures.
We compensate for these limitations by relying primarily on our
Reconciliation of Non-GAAP Financial Measures
In accordance with the requirements of Regulation G issued by the
Reconciliation of
(Unaudited, in thousands, except for per share and share data)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| $ | 1,118 | $ | 1,450 | $ | 2,747 | $ | 3,853 | |||||||||
Share-based compensation and related taxes (1) | 1,048 | 799 | 2,769 | 2,422 | ||||||||||||
Acquisition related expenses | - | - | 1,019 | - | ||||||||||||
Amortization of intangible assets | 1,834 | 785 | 4,792 | 2,292 | ||||||||||||
Non-GAAP net income | $ | 4,000 | $ | 3,034 | $ | 11,327 | $ | 8,567 | ||||||||
Non-GAAP earnings per common share: | ||||||||||||||||
Basic | $ | 0.12 | $ | 0.10 | $ | 0.35 | $ | 0.29 | ||||||||
Diluted | $ | 0.12 | $ | 0.10 | $ | 0.34 | $ | 0.27 | ||||||||
Weighted-average common shares outstanding: | ||||||||||||||||
Basic | 33,281,303 | 30,397,144 | 32,535,272 | 29,292,516 | ||||||||||||
Diluted | 34,233,646 | 31,818,738 | 33,768,539 | 31,418,659 | ||||||||||||
Reconciliation of
(Unaudited, in thousands)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| $ | 1,118 | $ | 1,450 | $ | 2,747 | $ | 3,853 | |||||||||
Depreciation and amortization | 1,884 | 839 | 4,950 | 2,466 | ||||||||||||
Interest expense | 81 | 3 | 143 | 18 | ||||||||||||
Gain on the sale of property and equipment | (11 | ) | - | (11 | ) | - | ||||||||||
Other, net | (132 | ) | (191 | ) | (382 | ) | (448 | ) | ||||||||
Income tax provision | 26 | 43 | 80 | 135 | ||||||||||||
EBITDA | 2,966 | 2,144 | 7,527 | 6,024 | ||||||||||||
Acquisition related expenses | - | - | 1,019 | - | ||||||||||||
Share-based compensation and related taxes (1) | 1,048 | 799 | 2,769 | 2,422 | ||||||||||||
Adjusted EBITDA | $ | 4,014 | $ | 2,943 | $ | 11,315 | $ | 8,446 | ||||||||
(1) For the three months ended
SOURCE:
View the original press release on ACCESS Newswire