Crexendo, Inc. (CXDO) | Investment Case

1. Company Snapshot

1.a. Company Description

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.

Show Full description

1.b. Last Insights on CXDO

Crexendo's recent performance was negatively impacted by a lack of significant earnings growth and a decline in revenue. The company's Q4 2024 earnings release highlighted a net income of $1.7 million, which is a decrease from previous quarters. Additionally, the company's revenue growth has been sluggish, with no notable increase in sales. This is concerning, as the company's growth prospects are heavily reliant on its ability to expand its customer base and increase revenue.

1.c. Company Highlights

Last Price	7.54
Change Percentage	15.29%
Open	6.67
Previous Close	6.54
Market Cap ( Millions)	235
Volume	1112662
Year High	7.8
Year Low	5.08
M A 50	6.42
M A 200	6.46

FCF Yield	3.95%
Dividend Yield	0.00%
ROE	8.50%
Debt / Equity	1.78%
Net Debt / EBIDTA	-376.14%
Price To Book	3.51
Price Earnings Ratio	44.13
Price To FCF	25.31
Price To sales	3.45
EV / EBITDA	25.45

2. Crexendo Climbs to New Heights with Record Q4 and Strategic Acquisition

Crexendo delivered a robust fiscal year, with revenue up 12% YoY to $68.2 million and net income of $5.1 million, while non‑GAAP earnings reached $11.4 million. EPS hit $0.09 versus a $0.08 consensus, underscoring solid profitability. The company trades at a P/E of 35.88 and EV/EBITDA of 19.99, reflecting market confidence in its growth trajectory.

Publication Date: Apr -14

                                    📋 Highlights
                                    Full-Year Revenue & Growth::
                                                2025 revenue reached $68.2M, up 12% YoY, with Q4 revenue of $18.1M (+11% YoY).
Earnings Performance::
                                                2025 net income was $5.1M, non-GAAP $11.4M; Q4 net income $1.2M, non-GAAP $2.8M.
ESI Acquisition::
                                                Acquired for $35M ($27.3M cash + $7.7M stock), ESI generated $26M in 2025 revenue with 80% UCaaS recurring revenue.
Software Solutions Growth::
                                                2025 organic growth of 28%, Q4 revenue $8.3M (+18% QoQ), RPO increased to $89.1M (+4% QoQ).
AI & Strategic Goals::
                                                CAIRO AI solutions could boost ARPU by >25%; target $100M revenue run rate by 2026, driven by ESI integration and cloud migration cost savings.

                                

Revenue Momentum and Margin Strength

The quarter saw an 11% revenue lift to $18.1 million, driven by an 18% jump in software solutions and an 8% rise in service revenue. Gross margins improved to 56% in telecom services, aided by a shift toward higher‑margin UCaaS sales, positioning Crexendo well against industry peers.

Software Solutions Surge and AI Innovation

Software solutions grew 18% in Q4 and 28% organically over 2025, buoyed by 14 upgrade orders and five new logos. AI initiatives like CAIRO promise a 25% ARPA boost, while the Ecosystem Vendor Partner Program adds fresh revenue streams, reinforcing the platform’s competitive edge.

ESI Acquisition: Growth Catalyst

Acquiring Estech Systems for $35 million (≈1.35x 2025 revenue) will inject $26 million in recurring UCaaS income, 80% of which is contract‑backed. Integration is slated for March 2026, with anticipated cost synergies from Oracle Cloud migration and data‑center consolidation.

Performance Obligations and Cash Flow Outlook

Remaining performance obligations climbed to $89.1 million, a 4% increase from Q4 2024, reflecting strong future revenue commitments. EBITDA of $2 million and a free‑cash‑flow yield of 4.86% demonstrate healthy cash generation, supporting potential dividend or reinvestment strategies.

Cost Management and Data Center Consolidation

Operating expenses rose 8% to $16.9 million, but strategic data‑center consolidation and migration to cloud platforms are projected to trim costs, enhancing gross margins. The focus on higher‑margin UCaaS and legacy migration will further improve profitability in subsequent quarters.

Forward Guidance and Market Position

Crexendo targets a $100 million revenue run rate by end‑2026, leveraging ESI’s assets and AI product roadmap. With a strong customer base, partner network, and a clear path to double‑digit organic growth, the company is poised to deliver shareholder value and maintain its market leadership.

3. NewsRoom

Crexendo, Inc. to Issue First Quarter 2026 Financial Results on May 5, 2026, at 4:30 PM ET

Apr -27

Source: accessnewswire.com

Crexendo and Pronto Mobile Partner to Power Breakthrough Mobile Reliability for Business

Apr -07

Source: accessnewswire.com

Crexendo Redefines Large-Scale Event Communications for the 2026 NABC Convention

Mar -23

Source: accessnewswire.com

Crexendo Inc. (NASDAQ:CXDO) Given Average Rating of “Moderate Buy” by Analysts

Mar -19

Source: defenseworld.net

Crexendo Strengthens Market Leadership in G2 Spring 2026 Reports

Mar -17

Source: accessnewswire.com

Crexendo: AI, Acquisitions And A Growing Software

Mar -10

Source: seekingalpha.com

Crexendo, Inc. (CXDO) Q4 2025 Earnings Call Transcript

Mar -04

Source: seekingalpha.com

Compared to Estimates, Crexendo (CXDO) Q4 Earnings: A Look at Key Metrics

Mar -04

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.84%)

6. Segments

Cloud Telecommunications Service

Expected Growth: 8.5%

Crexendo's Cloud Telecommunications Service growth is driven by increasing demand for cloud-based communication solutions, expansion into new markets, strategic partnerships, and innovative product offerings. Additionally, the shift towards remote work and digital transformation across industries has accelerated adoption, contributing to the 8.5% growth rate.

Software Solutions

Expected Growth: 9.5%

Crexendo's 9.5% growth in Software Solutions is driven by increasing demand for cloud-based unified communications, expansion into new markets, and strategic partnerships. The company's focus on innovation, customer acquisition, and retention also contribute to its growth. Additionally, the rising need for digital transformation and remote work solutions amid the pandemic has accelerated adoption of Crexendo's software solutions.

7. Detailed Products

Crexendo Cloud Communication Platform

A cloud-based communication platform that provides a suite of communication and collaboration tools, including video conferencing, screen sharing, and instant messaging.

SIP Trunking

A VoIP-based SIP trunking solution that enables businesses to make and receive calls over the internet, reducing communication costs and increasing scalability.

Hosted Call Center

A cloud-based call center solution that provides advanced call management features, including IVR, ACD, and call recording.

Unified Communications as a Service (UCaaS)

A cloud-based unified communication platform that integrates voice, video, messaging, and collaboration tools.

WebRTC

A real-time communication platform that enables businesses to build custom communication applications with video, voice, and messaging capabilities.

Cloud Contact Center

A cloud-based contact center solution that provides advanced features for customer service, sales, and marketing teams.

8. Crexendo, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Crexendo, Inc. operates in the technology industry, which is highly competitive. However, the company's focus on cloud-based communication and collaboration solutions provides some level of differentiation, reducing the threat of substitutes.

Bargaining Power Of Customers

Crexendo, Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's solutions are often customized to meet specific customer needs, making it difficult for customers to switch to alternative providers.

Bargaining Power Of Suppliers

Crexendo, Inc. relies on a few key suppliers for its technology infrastructure and services. While the company has some negotiating power due to its size, suppliers may still have some bargaining power due to the specialized nature of their products and services.

Threat Of New Entrants

The technology industry is highly competitive, and new entrants can easily disrupt the market with innovative solutions. Crexendo, Inc. must continually innovate and improve its offerings to stay ahead of new competitors.

Intensity Of Rivalry

The technology industry is highly competitive, with many established players and new entrants vying for market share. Crexendo, Inc. must differentiate its offerings and focus on customer retention to maintain its market position.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	3.88%
Debt Cost	3.95%
Equity Weight	96.12%
Equity Cost	9.70%
WACC	9.48%
Leverage	4.04%

11. Quality Control: Crexendo, Inc. passed 8 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

ATN International

A-Score: 5.3/10

Value: 9.0

Growth: 4.7

Quality: 3.2

Yield: 6.0

Momentum: 5.5

Volatility: 3.7

1-Year Total Return ->

TDS

A-Score: 5.3/10

Value: 8.3

Growth: 3.2

Quality: 3.3

Yield: 3.0

Momentum: 8.5

Volatility: 5.3

1-Year Total Return ->

Shentel

A-Score: 4.7/10

Value: 8.0

Growth: 5.1

Quality: 2.6

Yield: 6.0

Momentum: 2.0

Volatility: 4.7

1-Year Total Return ->

Crexendo

A-Score: 4.6/10

Value: 2.4

Growth: 7.7

Quality: 7.4

Yield: 0.0

Momentum: 8.0

Volatility: 2.3

1-Year Total Return ->

Cable One

A-Score: 3.8/10

Value: 9.8

Growth: 4.1

Quality: 3.1

Yield: 3.0

Momentum: 0.0

Volatility: 2.7

1-Year Total Return ->

Consolidated Communications Holdings

A-Score: 2.8/10

Value: 6.5

Growth: 0.7

Quality: 1.2

Yield: 0.0

Momentum: 6.5

Volatility: 1.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

9.69%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

9.48%

Crexendo, Inc. - US2265521078

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on CXDO

1.c. Company Highlights

Strong Momentum

Better Quality

Expensive

Revenues Beats

Earnings Beats

Medium Volatility

Higher Growth

Revenues Miss

2. Crexendo Climbs to New Heights with Record Q4 and Strategic Acquisition

Revenue Momentum and Margin Strength

Software Solutions Surge and AI Innovation

ESI Acquisition: Growth Catalyst

Performance Obligations and Cash Flow Outlook

Cost Management and Data Center Consolidation

Forward Guidance and Market Position

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.84%)

6. Segments

Cloud Telecommunications Service

Expected Growth: 8.5%

Software Solutions

Expected Growth: 9.5%

7. Detailed Products

Crexendo Cloud Communication Platform

SIP Trunking

Hosted Call Center

Unified Communications as a Service (UCaaS)

WebRTC

Cloud Contact Center

8. Crexendo, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Crexendo, Inc. passed 8 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

7.54$

Current Price

7.54$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA