Crexendo (NASDAQ:CXDO) Posts Earnings Results, Beats Estimates By $0.02 EPS

Key Points

• Crexendo beat Q1 estimates with $0.10 EPS vs. $0.08 consensus and revenue of $20.7M (up ~29% YoY), marking its 11th consecutive GAAP profitable quarter.
• The March acquisition of Estech Systems added about $2.1M, is integration‑ready and materially increased backlog and near‑term sales activity, though visibility on ESI’s sustained run‑rate is limited with only one month of results.
• Operating expenses rose—leaving operating margin at just 2% due to migration and acquisition costs—and the stock trades at a relatively high P/E (~57), so upside hinges on sustaining growth and margin expansion.

Crexendo (NASDAQ:CXDO - Get Free Report) released its quarterly earnings results on Tuesday. The company reported $0.10 earnings per share for the quarter, topping the consensus estimate of $0.08 by $0.02, FiscalAI reports. The firm had revenue of $20.71 million for the quarter, compared to analysts' expectations of $19.63 million. Crexendo had a net margin of 7.44% and a return on equity of 13.74%.

Here are the key takeaways from Crexendo's conference call:

• Crexendo reported a strong quarter with $20.7M revenue (up 29% YoY), GAAP net income of $0.6M and non‑GAAP net income of $3.3M, marking its 11th consecutive GAAP profitable quarter.
• The March 1 acquisition of Estech Systems (ESI) contributed about $2.1M in the quarter, integration is “ahead of plan,” and ESI added materially to backlog and near‑term sales activity.
• Product innovation and AI are strategic drivers — the newly launched CAIRO AI receptionist/orchestrator and a growing EVP partner program (48 partners, 11 AI-focused) are expected to boost ARPU and licensee monetization.
• Organic performance remains healthy (management expects sustained double‑digit organic growth excluding ESI) and remaining performance obligations rose to $135.6M, but visibility on ESI’s sustained monthly run‑rate is limited with only one month of included results.
• Operating expenses rose (~$3.2M excluding ESI) and margin headwinds included OCI migration costs, acquisition‑related charges (~$800K), and increased product sales at low margins, leaving operating margin at 2% this quarter.

Crexendo Price Performance

Crexendo stock traded up $1.43 during mid-day trading on Wednesday, reaching $9.74. 1,082,569 shares of the stock traded hands, compared to its average volume of 203,037. The business's 50-day moving average is $6.44 and its 200-day moving average is $6.58. The stock has a market capitalization of $303.25 million, a PE ratio of 57.27 and a beta of 0.93. Crexendo has a 12-month low of $5.07 and a 12-month high of $9.78.

Insider Buying and Selling at Crexendo

In related news, CTO David Tzat-Kin Wang sold 20,482 shares of the business's stock in a transaction that occurred on Monday, March 9th. The stock was sold at an average price of $7.00, for a total transaction of $143,374.00. Following the completion of the transaction, the chief technology officer directly owned 629,949 shares in the company, valued at approximately $4,409,643. The trade was a 3.15% decrease in their position. The sale was disclosed in a legal filing with the SEC, which can be accessed through this link. 47.20% of the stock is currently owned by insiders.

Hedge Funds Weigh In On Crexendo

Hedge funds and other institutional investors have recently added to or reduced their stakes in the company. Bank of America Corp DE boosted its stake in Crexendo by 71.7% during the fourth quarter. Bank of America Corp DE now owns 6,174 shares of the company's stock worth $32,000 after buying an additional 2,578 shares during the period. NewEdge Advisors LLC raised its holdings in shares of Crexendo by 28.1% in the first quarter. NewEdge Advisors LLC now owns 74,125 shares of the company's stock valued at $361,000 after acquiring an additional 16,267 shares in the last quarter. Goldman Sachs Group Inc. bought a new position in shares of Crexendo during the first quarter valued at approximately $431,000. Geode Capital Management LLC lifted its stake in shares of Crexendo by 120.1% during the 2nd quarter. Geode Capital Management LLC now owns 318,001 shares of the company's stock worth $1,930,000 after purchasing an additional 173,530 shares during the last quarter. Finally, JPMorgan Chase & Co. purchased a new position in shares of Crexendo in the 2nd quarter worth approximately $41,000. 9.53% of the stock is owned by institutional investors.

Wall Street Analysts Forecast Growth

Several research analysts recently weighed in on CXDO shares. Needham & Company LLC upped their price objective on shares of Crexendo from $9.00 to $12.00 and gave the stock a "buy" rating in a research report on Wednesday. Weiss Ratings restated a "hold (c)" rating on shares of Crexendo in a research report on Wednesday, April 8th. Wall Street Zen cut shares of Crexendo from a "strong-buy" rating to a "buy" rating in a report on Friday, January 23rd. Finally, Lake Street Capital reissued a "buy" rating and issued a $11.00 target price on shares of Crexendo in a research note on Wednesday. Four analysts have rated the stock with a Buy rating and one has assigned a Hold rating to the stock. According to MarketBeat, the stock currently has a consensus rating of "Moderate Buy" and an average target price of $10.40.

Key Stories Impacting Crexendo

Here are the key news stories impacting Crexendo this week:

• Positive Sentiment: Q1 results beat expectations — Crexendo reported revenue of $20.7M (up ~29% Y/Y) and GAAP net income of $0.6M; EPS was $0.10 vs. consensus $0.08, reflecting improving margins and profitable growth. This is the primary near-term catalyst for the rally. Press Release
• Positive Sentiment: Analyst upgrade — Needham & Company raised its price target from $9 to $12 and initiated/maintained a Buy, signaling ~26% upside versus the prior share level and likely attracting fresh interest from growth-oriented investors. Benzinga
• Neutral Sentiment: Additional coverage and context — Multiple outlets (Zacks, MarketBeat, Seeking Alpha transcript) highlight the quarter’s key metrics, the conference call detail, and comparisons to estimates; useful for due diligence but not new catalysts by itself. Earnings Call Transcript
• Neutral Sentiment: Volume and momentum — Intraday volume is well above average, suggesting momentum-driven trading; that can amplify moves but also raises short-term volatility risk. MarketBeat
• Negative Sentiment: Valuation and durability questions — Even after the beat, CXDO trades at a relatively high P/E for a small-cap (consensus forward EPS still modest), so further upside may depend on sustaining growth and margin expansion in coming quarters. Zacks Analysis

About Crexendo

Crexendo, Inc NASDAQ: CXDO is a provider of cloud-based communications and collaboration solutions tailored to businesses of varying sizes. The company's flagship offering, CXsuite, integrates enterprise-grade voice, video conferencing, instant messaging, presence, and contact center functionality into a single platform delivered over the internet. By leveraging hosted infrastructure and a subscription-based model, Crexendo aims to reduce on-premises hardware costs and simplify management for IT teams and resellers.

Crexendo's product portfolio includes a multi-tenant cloud PBX, SIP trunking, session border controllers and an application programming interface (API) suite that allows partners and customers to embed real-time communications into custom workflows.

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