The chart below shows how CXDO performed 10 days before and after its earnings report, based on data from the past quarters. Typically, CXDO sees a -0.04% change in stock price 10 days leading up to the earnings, and a +8.00% change 10 days following the report. On the earnings day itself, the stock moves by +1.18%. This data can give you a slight idea of what to expect for the next quarter's release.
Positive
Earnings Beat Expectations: Crexendo, Inc. beats earnings expectations with reported EPS of $0.06, exceeding expectations of $0.05.
Q4 Revenue Increase: The company reported a 15% increase in Q4 revenue to $16.2 million compared to $14.2 million in the prior year.
Total Revenue Increase: For the full year, total revenue increased by 14% to $60.8 million, up from $53.2 million in the previous year.
Software Solutions Revenue Surge: The software solutions segment saw a remarkable 32% revenue increase in Q4, reaching $7 million compared to $5.3 million in the prior year.
Sustained GAAP Profitability: Crexendo maintained GAAP profitability for the sixth consecutive quarter, with a net income of $507,000 for Q4 and $1.7 million for the full year.
Net Income Increase: Non-GAAP net income for the year was $7.7 million, or $0.29 per basic common share, compared to $6.7 million in the prior year.
Gross Margin Improvement: The company achieved a consolidated gross margin increase to 61% in Q4, up from 59% in the prior year.
Fastest-Growing UCaaS Provider: Crexendo was recognized as the fastest-growing UCaaS platform provider in North America by Frost & Sullivan, highlighting its competitive position in the market.
International Revenue Growth: The company added 17 new licensees in 2024 and saw a 39% organic increase in international revenues, particularly in the European Union and Australia.
Backlog Growth Potential: Crexendo's remaining performance obligation (backlog) grew by 34% to $85.6 million, indicating strong future revenue potential.
Negative
Service vs. Software Growth: The service revenue growth of 4% in Q4 was significantly lower than the software solutions revenue growth of 32%, indicating a potential weakness in the core service segment.
Net Income Recovery: Despite a net income of $1.7 million for the year, the company had a net loss of $362,000 in the prior year, suggesting that while there is improvement, the company is still recovering from previous losses.
Stagnant Product Revenue Growth: The product revenue growth of only 2% for the year indicates stagnation in this segment, which could be a concern for future growth.
Net Income Analysis: The company reported a GAAP net income of $507,000 for Q4, which, while positive, is relatively low compared to the overall revenue of $16.2 million, indicating that profit margins may be tight.
Telecom Retail Growth Challenges: The telecom services retail segment only grew at 7% organically, which is lower than the growth rates seen in other segments, suggesting potential challenges in this area.
Gross Margin Concerns: The gross margin for product revenue increased only by 1% to 42%, which may indicate that this segment is not as profitable as others and could be a concern for overall profitability.
Competitive Market Challenges: The company is facing significant competition from larger players like Cisco and Microsoft, which could impact future growth and market share.
Cloud Transition Risks: The transition to Oracle Cloud Infrastructure and the closing of data centers may involve risks and challenges that could affect operational efficiency in the short term.
Crexendo, Inc. (NASDAQ:CXDO) Q4 2024 Earnings Call Transcript
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