Crexendo (CXDO) Q2 2024 earnings summary

Executive summary

• Achieved record Q2 2024 results with revenue of $14.7 million, up 16% year-over-year, and a turnaround to net income of $0.6 million from a net loss in the prior year, driven by strong software solutions and service revenue growth.

• Software solutions division led with 35% year-over-year growth, reflecting robust demand for cloud communication platforms and nearing 5 million users.

• Maintained GAAP profitability for the fourth consecutive quarter, supported by operational improvements, margin expansion, and cost management.

• Strategic investments in Oracle Cloud Infrastructure and NetSuite, including a $5M, five-year hosting contract, to support future growth and integration.

• International operations, especially in Europe and the Pacific Rim, are gaining traction, with a strong pipeline and new customer additions.

Financial highlights

• Q2 2024 revenue: $14.7M (up 16% year-over-year); six-month revenue: $29.0M (up 15%).

• Net income for Q2 2024: $0.6M ($0.02 per share) vs. net loss of $0.5M prior year; non-GAAP net income: $2.1M ($0.08 per share).

• EBITDA: $1.4M (up 270%); Adjusted EBITDA: $2.2M (up 78%) year-over-year.

• Cash and cash equivalents at June 30, 2024: $13.6M, up from $10.3M at year-end 2023; strong positive cash flow from operations.

• Backlog reached $71.16 million, up 39% year-over-year, with cloud telecommunications backlog at $51.7M (up 45%) and software solutions backlog at $19.5M (up 26%).

Outlook and guidance

• Management expects continued double-digit organic revenue growth for the full year, with strong backlog supporting future revenue visibility.

• Anticipate software solutions segment to continue strong growth, though not committing to 35% growth rates.

• Migration to Oracle Cloud Infrastructure and VIP Platform expected to be completed by end of Q1 2025, with cost savings and operational benefits.

• Operations and liquidity are expected to meet cash requirements for at least the next 12 months.