Loading...
01/11 03:43
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary indicates strong financial performance with increased income and EBITDA, substantial cash reserves, and expected double-digit revenue growth. The Q&A section highlights optimism about AI product adoption and OCI migration benefits. Although some guidance was unclear, the potential for increased revenue from AI and retail growth, alongside gross margin improvements, suggests a positive sentiment. The new AI initiatives and Oracle Cloud migration are expected to enhance efficiency and margins, reinforcing a positive outlook for the stock price.
Revenue Consolidated revenue for the quarter increased 12% to $17.5 million. This growth was driven by a 28% increase in software solutions revenue and an 8% increase in service revenue, offset by a 25% decrease in product revenue. The decrease in product revenue is attributed to a proactive reduction in selling lower-margin product opportunities to maintain margins.
Service Revenue Service revenue for the quarter increased 8% to $8.6 million. This growth reflects strong demand for offerings from channel partners and master agent technology service distributors.
Software Solutions Revenue Software solutions revenue for the quarter increased 28% to $7.5 million. This growth highlights the scalability and operating leverage of the software segment, driven by strong demand and the unique pricing and support model.
Product Revenue Product revenue for the quarter decreased 25% to $1.4 million. However, this is slightly higher than the historical average of $1.3 million per quarter. The decrease is due to a proactive reduction in selling lower-margin product opportunities.
Gross Margins Consolidated revenue gross margins increased by 200 basis points year-over-year to 63%. Service revenue gross margins decreased by 100 basis points to 57%, while software solutions revenue gross margins increased by 300 basis points to 74%. Product revenue gross margins decreased to 35%.
Operating Margin The operating margin for the quarter was 7%, compared to 1% for the same period of the prior year, representing a 600-basis point increase. This improvement is attributed to managing costs and driving synergies within the business.
Net Income Net income for the quarter was $1.5 million, or $0.05 per basic and diluted common share, compared to $100,000 or $0.01 per basic and $0.00 per diluted share for the same quarter of the prior year. This increase reflects strong revenue growth and cost management.
Non-GAAP Net Income Non-GAAP net income for the quarter was $3 million, or $0.10 per basic and diluted common share, compared to $1.7 million or $0.06 per basic and diluted common share for the same quarter of the prior year. This increase is due to strong revenue growth and operational efficiencies.
EBITDA EBITDA for the quarter was $2.1 million, compared to $1 million for the same quarter of the prior year. Adjusted EBITDA for the quarter was $2.9 million, or 17% of total revenue, reflecting improved profitability.
Cash and Cash Equivalents Cash and cash equivalents at September 30, 2025, were $28.6 million, compared to $18.2 million at December 31, 2024. This increase is due to $7 million in cash provided by operating activities and $3.4 million in cash provided by financing activities.
AI-driven capabilities: Investments in AI-driven tools to improve productivity and user experience, including AI receptionist orchestrator (Kairo) and AI-powered contact center solutions.
Oracle Cloud Infrastructure: Migration to Oracle Cloud Infrastructure for faster deployment and cost savings.
New marketplace: Introduction of a marketplace for selling applications, generating excitement and revenue.
International expansion: Expanded internationally, including onboarding the first customer in Africa. International revenue is growing rapidly, with potential across EMEA.
Partnership with Oracle Cloud: Partnership with Oracle Cloud Infrastructure opening global opportunities.
Revenue growth: 12% year-over-year revenue growth, with $17.5 million in consolidated revenue for Q3 2025.
Profitability: 9th consecutive quarter of GAAP profitability and 28th consecutive quarter of non-GAAP net income.
Cost management: Cost savings from data center migrations and focus on higher-margin products.
M&A opportunities: Reviewing several strategic acquisition opportunities, with optimism for closing one by early next year.
Focus on AI: AI solutions targeted at making SMBs more successful and profitable, with multiple AI-driven tools already available.
Product Revenue Decline: Product revenue decreased by 25% compared to the previous quarter, which could indicate challenges in maintaining demand for certain product lines. This decline, while partially explained as a return to historical averages, may still impact overall revenue growth.
Service Revenue Gross Margins: Service revenue gross margins decreased by 100 basis points year-over-year, which could signal cost pressures or inefficiencies in service delivery.
International Revenue Contribution: International revenue represents less than 10% of total revenue, indicating limited global market penetration and potential over-reliance on domestic markets.
Data Center Migration Costs: The ongoing migration of U.S. data centers to Oracle Cloud Infrastructure is expected to yield cost savings, but the transition may involve upfront costs and operational risks.
Competitive Pressures: The company faces competition from Cisco's BroadSoft and Metaswitch, which could impact its ability to win new customers and retain existing ones.
AI Integration Challenges: While AI-driven tools and applications are being developed, their successful integration and adoption by customers remain uncertain and could pose execution risks.
Economic Uncertainties: Macroeconomic conditions could impact customer spending, particularly in the SMB market, which is sensitive to economic fluctuations.
M&A Execution Risks: The company is actively pursuing strategic acquisitions, but there is a risk of overpaying or failing to integrate acquired businesses effectively.
Revenue Growth: The company expects to maintain double-digit growth through next year, driven by strong demand for its offerings and strategic initiatives.
AI-driven Capabilities: Crexendo is accelerating the rollout of AI-driven tools, including the AI receptionist orchestrator (Kairo), which is expected to increase average revenue per account and improve customer productivity.
Oracle Cloud Infrastructure Migration: The migration of U.S. data centers to Oracle Cloud Infrastructure is expected to be completed by early 2026, leading to additional cost savings.
International Expansion: The company is expanding internationally, with rapid growth in EMEA and beyond, and has onboarded its first customer in Africa.
M&A Opportunities: Crexendo is reviewing several strategic acquisition opportunities and expects to close one by early next year to enhance growth and capabilities.
Gross Margin Improvements: Gross margins are expected to improve due to cost savings from data center migrations and the sunsetting of legacy offerings.
AI Solutions Impact: AI solutions, such as Voice AI Studio and AI-powered contact centers, are expected to drive demand and revenue, particularly for SMB customers.
Software Solutions Growth: The software solutions segment is experiencing strong organic growth, with a 28% increase in Q3 2025 and a 31% year-to-date growth rate.
Retail Segment Growth: The retail segment is expected to grow at a faster pace, driven by strong demand from channel partners and master agent technology service distributors.
New Product Releases: Version 46 of the NetSapiens platform is planned for release in 2026, featuring enhancements that leverage open API integrations and AI capabilities.
The selected topic was not discussed during the call.
The earnings call summary indicates strong financial performance with increased income and EBITDA, substantial cash reserves, and expected double-digit revenue growth. The Q&A section highlights optimism about AI product adoption and OCI migration benefits. Although some guidance was unclear, the potential for increased revenue from AI and retail growth, alongside gross margin improvements, suggests a positive sentiment. The new AI initiatives and Oracle Cloud migration are expected to enhance efficiency and margins, reinforcing a positive outlook for the stock price.
The earnings call reflects strong software revenue growth, margin expansion, and a solid future revenue stream. The Q&A section provided clarity on growth strategies, successful partnerships, and positive market positioning. Despite some uncertainties in hardware revenue and international data center savings, the overall sentiment is positive, supported by reiterated growth expectations and strategic acquisitions. The company's focus on high-margin software solutions and partnerships, such as with T-Mobile, further enhances the positive outlook.
The earnings call indicates strong financial performance with a 12% revenue increase, improved margins, and a 22% rise in backlog. The company shows resilience with strategic growth investments and profitability focus, despite some product revenue decline. The Q&A reveals confidence in sustainable margin improvements and growth potential in Europe. Although shareholder return plans are not explicit, the overall sentiment is positive, driven by strong fundamentals and strategic positioning. The lack of clear guidance on customer acquisition and market changes slightly tempers the outlook, but the overall sentiment remains positive.
The earnings call presents a strong financial performance with a 12% revenue increase and significant margin improvements, particularly in software solutions. The company's strategic positioning as a major platform provider and its focus on cost savings and customer satisfaction further bolster its outlook. Despite some uncertainties in the Q&A, the overall sentiment remains positive due to consistent profitability, strong cash flow, and optimistic growth guidance. The lack of explicit shareholder return plans is offset by sustainable growth and profitability commitments.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
