Crexendo, Inc.

What they do

Crexendo operates in two segments: Cloud Telecommunications Services and Software Solutions. Cloud Telecommunications transmits calls via IP/cloud technology, offering calling plans with basic and enhanced features, and generates recurring revenue from services, broadband, managed IT, software licenses, and infrastructure as a service, with contracts typically 36-60 months. Software Solutions derives revenue from perpetual and term software licenses, SaaS subscriptions, maintenance support, and professional services.

Revenue drivers

• Cloud Telecommunications Service Revenue — Grew 6% to $33.8 million in 2025 from $31.8 million in 2024; in Q2 2026, service revenue rose 78% year-over-year to $14.9 million.
• Software Solutions Revenue — In Q2 2026, revenue increased 5% to $7.3 million; for H1 2026, up 9% to $15.1 million.
• Cloud Telecommunications Product Revenue — Decreased 16% to $4.7 million in 2025; in Q2 2026, product revenue increased 104% to $2.5 million.

Recent performance

For Q2 2026, total revenue increased 49% year-over-year to $24.6 million. GAAP net income was $1.1 million ($0.03 per share), non-GAAP net income was $4.1 million ($0.12 per share), and adjusted EBITDA was $4.1 million. For H1 2026, revenue rose 39% to $45.4 million, with net income of $1.6 million. Cash and equivalents were $18.3 million at June 30, 2026, down from $31.4 million at year-end 2025.

Strategy

Crexendo focuses on expanding its cloud communication platform and UCaaS offerings, with a broad network of over 240 subscribers supporting over seven million end users (per the 10-K) or over 245 subscribers and six million users (per the 10-Q). The company aims to grow recurring revenue through multi-year contracts and increasing software solutions revenue. Recent initiatives include entering a material agreement and taking on a direct financial obligation in May 2026, and continued investment in service and product offerings to drive year-over-year growth.

Risks

• Public health crises — Past pandemics caused slower revenue growth, higher costs, and a goodwill impairment of $32.1 million in 2022.
• Adverse macroeconomic conditions — Inflation, interest rate volatility, tariffs, and recession could reduce customer spending, increase churn, and delay purchasing; fixed multi-year pricing limits ability to pass on cost increases.
• Dependence on cloud infrastructure — Service quality and growth rely on third-party internet and cloud infrastructure; disruptions could adversely affect operations.
• Competition and technology changes — The UCaaS market is competitive; failure to keep pace with technology could erode market share.

Outlook

Management highlights strong revenue growth in Q2 2026, with total revenue up 49% year-over-year. They expect continued growth in service and software solutions revenue, supported by an expanding subscriber base. The company is focused on maintaining profitability and positive operating cash flow, with cash from operations of $4.8 million in H1 2026.