Crexendo, Inc. reported significant financial developments in its latest 10-Q filing for the quarter ending September 30, 2024. The company, a provider of cloud communication platforms and services, experienced a 13% increase in total revenue, rising to $15.6 million from $13.9 million in Q3 2023. This growth was driven by a $1.2 million increase in software solutions revenue and a $436,000 rise in service revenue. For the nine months ended September 30, 2024, total revenue reached $44.6 million, a 14% increase from $39.0 million in the same period last year.
Despite the revenue growth, Crexendo's profitability faced challenges. The net income for Q3 2024 was $148,000, a significant decline from $1.7 million in Q3 2023. For the nine-month period, net income improved to $1.2 million from a loss of $423,000 in the prior year. The increase in operating expenses, which rose to $15.5 million in Q3 2024 from $13.5 million in Q3 2023, contributed to the decline in quarterly net income. Notably, expenses related to commissions, hosting service fees, and contract labor increased significantly.
The company’s total assets increased to $62.3 million as of September 30, 2024, up from $56.2 million at the end of 2023. Cash and cash equivalents also saw a notable rise, reaching $15.5 million compared to $10.3 million at the end of 2023. The accumulated deficit improved slightly to $(87.3 million) from $(88.5 million) at the end of 2023.
Crexendo has reorganized its operations into two segments: cloud telecommunications services and software solutions, following its merger with NetSapiens, Inc. This strategic move aims to enhance operational efficiency and market competitiveness. The backlog of contracts increased by 23% year-over-year, indicating strong future revenue potential.
The company also reported a notable increase in research and development expenses, reflecting its commitment to innovation and product development. Additionally, Crexendo entered into a five-year hosting service contract with Oracle valued at $5.4 million, further solidifying its technological infrastructure.
Overall, while Crexendo demonstrated revenue growth and improved net income over nine months, the quarterly performance highlighted challenges in profitability due to rising operational costs.
About Crexendo, Inc.
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