Crexendo (CXDO) investor relations material

Executive summary

• Q1 2026 revenue grew 29% year-over-year to $20.7 million, driven by strong organic performance and the ESI acquisition, which contributed $2.1 million in revenue.

• Achieved GAAP net income of $0.6 million and non-GAAP net income of $3.3 million, marking 11 consecutive quarters of GAAP profitability.

• Integration of ESI is ahead of plan, contributing meaningfully to results and exceeding expectations in sales, profitability, and operational synergy.

• Launched CAIRO, an AI-driven receptionist and orchestrator, with strong initial uptake and further enhancements planned.

• Continued investment in platform, AI, security, and go-to-market, while maintaining efficiency and margin expansion.

Financial highlights

• Service revenue increased 29% to $10.6 million (gross margin 63%), software solutions revenue up 12% to $7.7 million (gross margin 68%), and product revenue up 141% to $2.4 million (gross margin 31%).

• Operating expenses rose 36% year-over-year to $20.3 million, mainly due to ESI integration, higher product costs, acquisition expenses, and third-party hosting.

• Operating margin was 2%, impacted by $800,000 in acquisition-related expenses; would have been 6-7% excluding these costs.

• EBITDA was $1.6 million; adjusted EBITDA $3.2 million, up from $2.7 million year-over-year.

• Cash and equivalents at quarter-end were $7.2 million, down from $31.4 million due to the ESI acquisition.

Outlook and guidance

• Management expects to achieve 100% of annual revenue and Adjusted EBITDA performance targets for 2026, based on Q1 results and forecasts.

• On track to reach $100 million annual revenue run rate by end of 2026, with sustained double-digit organic growth and successful acquisition integration.

• Expect continued margin improvement as integration synergies and cost savings from OCI migration are realized.