Sun, 22 May 2022

Crexendo Announces First Quarter 2022 Results

ACCESSWIRE
13 May 2022, 06:13 GMT+10

PHOENIX, AZ / ACCESSWIRE / May 12, 2022 / Crexendo, Inc. (NASDAQ:CXDO) is an award-winning premier provider of Unified Communications as a Service (UCaaS), Call Center as a Service (CCaaS), communication platform software solutions, and collaboration services designed to provide enterprise-class cloud communication solutions to any size business through our business partners, software licensees, agents and direct channels. Our solutions currently support over 2.4 million end users globally and was recently recognized as the fastest growing UCaaS platform in the United States. We provide our services through two divisions, our Telecommunications Division and our Software Division. Today, the Company reported financial results for the first quarter ended March 31, 2022.

First Quarter Financial highlights:

  • Total revenue increased 81% year-over-year to $8.2 million.
  • Service revenue increased 6% year-over-year to $4.4 million.
  • GAAP net loss of $(1,220,000) or a $(0.05) loss per basic and diluted common share.
  • Non-GAAP net income of $405,000 or $0.02 per basic and diluted common share.

Financial Results for the First Quarter of 2022

Consolidated total revenue for the first quarter of 2022 increased 81% to $8.2 million compared to $4.5 million for the first quarter of 2021.

Consolidated service revenue for the first quarter of 2022 increased 6% to $4.4 million compared to $4.1 million for the first quarter of 2021.

Consolidated software solutions revenue for the first quarter of 2022 of $3.3 million compared to $0 for the first quarter of 2021.

Consolidated product revenue for the first quarter of 2022 increased 34% to $492,000 compared to $368,000 for the first quarter of 2021.

Consolidated operating expenses for the first quarter of 2022 increased 79% to $9.6 million compared to $5.3 million for the first quarter of 2021.

The Company reported net loss of $(1,220,000) for the first quarter of 2022, or a $(0.05) loss per basic and diluted common share, compared to net loss of $(715,000), or $(0.04) loss per basic and diluted common share for the first quarter of 2021.

Non-GAAP net income of $405,000 for the first quarter of 2022, or $0.02 per basic and diluted common share, compared to non-GAAP net income of $308,000 or $0.02 per basic and diluted common share for the first quarter of 2021.

EBITDA for the first quarter of 2022 decreased to a $(774,000) loss, compared to a $(721,000) loss for the first quarter of 2021. Adjusted EBITDA for the first quarter of 2022 increased to $302,000, compared to $245,000 for the first quarter of 2021.

Total cash and cash equivalents at March 31, 2022 was $5.7 million compared to $7.5 million at December 31, 2021.

Cash used for operating activities for the first quarter of 2022 of $(1.7) million compared to $(248,000) used for the first quarter of 2021. Cash used for investing activities for the first quarter of 2022 of $(34,000) compared to $(2,192,000) used for the first quarter of 2021. Cash provided by financing activities for the first quarter of 2022 of $3,000 compared to $965,000 for the first quarter of 2021.

Steven G. Mihaylo, Chief Executive Officer commented, 'I am pleased with our total revenue increasing 81% year-over-year to $8.2 million for the quarter. That is a very solid number and gives me confidence on our ability to perform. Also, our ability to maintain Non-GAAP net income of $405,000 for the first quarter of 2022, or $0.02 per basic and diluted common share is a solid metric. These numbers were particularly impressive considering that we faced headwinds in the first quarter, which do appear to be subsiding. We noted an increase in customers that contracted or closed their businesses toward the end of the year. In December it appeared that both customers and potential customers were spending less and delaying certain capital expenditures due to the uncertainty surrounding the economy, inflation, and supply chain issues. Product revenue was down quarter over quarter since the deferred purchasing decisions affected the sale of newer desktop devices. We believe these conditions are improving and we expect those effects to be short lived. We believe it is not a matter of if but when before most companies move to the cloud and Crexendo is particularly suited to benefit from that migration.

Mihaylo added, 'Our integration continues to be going well and will provide substantial benefits to both customers of the software solutions division and the telecom division. We are seeing continued excitement for the Crexendo VIP™ platform powered by the award winning NetSapiens® technology which I am convinced provides the best benefits in the industry as well as the best support package offered which includes our 100% uptime guarantee. VIP™ and other enhancements will continue to fuel our growth. My focus will be to continue to work on improving margins, manage expenses and improve our sales and marketing programs, all of which will benefit the Company, its customers, its employees and most importantly its shareholders. I continue to be highly confident that we will continue to grow the business both organically as well as through additional accretive acquisitions and stand behind my earlier expectation of growing the business this year by 40% to 50%. This is a very exciting time for Crexendo.'

Doug Gaylor, President, and Chief Operating Officer, stated, 'I agree with Steve that the results are solid, and that we are beginning to see improvements in the deferred purchasing decisions which I believe should continue to improve our results. We will continue to work aggressively on increasing sales while focusing on cost management and improving margins. We will also work aggressively to add new partnerships as we recently did with Mavenir, which I believe will be a substantial benefit to our shareholders.'

Conference Call

The Company is hosting a conference call today, May 12, 2022, at 4:30 PM EDT. The dial-in number for domestic participants is 877-545-0523 and 973-528-0016 for international participants. Please dial in five minutes prior to the beginning of the call at 4:30 PM EDT and reference Crexendo earnings call. A replay of the call will be available until May 19, 2022, by dialing toll-free at 877-481-4010 or 919-882-2331 for international callers. The replay passcode is 45490.

About Crexendo

Crexendo, Inc. is an award-winning premier provider of Unified Communications as a Service (UCaaS), Call Center as a Service (CCaaS), communication platform software solutions, video conferencing and collaboration services designed to provide enterprise-class cloud communication solutions to any size business through our business partners, agents, and direct channels. Our solutions currently support over two million end users globally and was recently recognized as the fastest growing UCaaS platform in the United States.

Safe Harbor Statement

This press release contains forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides a 'safe harbor' for such forward-looking statements. The words 'believe,' 'expect,' 'anticipate,' 'estimate,' 'will' and other similar statements of expectation identify forward-looking statements. Specific forward-looking statements in this press release include information about Crexendo (i) being pleased with total revenue increasing 81% year-over-year to $8.2 million for the quarter with believing that is a very solid number giving confidence on the ability to perform; (ii) believing the ability to maintain Non-GAAP net income of $405,000 for the first quarter of 2022, or $0.02 per basic and diluted common share is a solid metric; (iii) believing the results were particularly impressive considering that it faced headwinds in the first quarter; (iv) believing that the headwinds do appear to be subsiding; (v) believing that both customers and potential customers were spending less and delaying certain capital expenditures due to the uncertainty surrounding the economy, inflation, and supply chain issues which affected product revenue; (vi) believing those conditions are improving and expecting those effects to be short lived; (vii) believing it is not a matter of if but when before most companies move to the cloud and that the Company is particularly suited to benefit from that migration; (vii) believing that the integration continues to be going well and will provide substantial benefits to both customers of the software solutions division and the telecom division; (viii) believing that there is continued excitement for the Crexendo VIP™ platform and being convinced provides the best benefits in the industry as well as the best support which will continue to fuel growth; (ix) that Company focus will be to continue to work on improving margins, manage expenses and improving sales and marketing programs which will benefit the Company, its customers, its employees and shareholders; (x) continuing to be highly confident that the business will grow both organically as well as through additional accretive acquisitions by 40% to 50%; (xi) believing this is a very exciting time for the Company; (xii) believing there are improvements in the deferred purchasing decisions which should continue to improve results; (xiii) continuing to work aggressively on increasing sales while focusing on cost management and improving margins; (xiv) working aggressively to add new partnerships such as Mavenir and (xv) believing partnerships will be a substantial benefit to shareholders.

For a more detailed discussion of risk factors that may affect Crexendo's operations and results, please refer to the company's Form 10-K for the year ended December 31, 2021, and quarterly Form 10-Qs as filed with the SEC. These forward-looking statements speak only as of the date on which such statements are made, and the company undertakes no obligation to update such forward-looking statements, except as required by law.

CONTACT:
Crexendo, Inc.
Doug Gaylor
President and Chief Operating Officer
602-732-7990
dgaylor@crexendo.com

Crexendo, Inc., Wednesday, May 11, 2022, Press release picture

CREXENDO, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(Unaudited, in thousands, except per share and share data)

Crexendo, Inc., Wednesday, May 11, 2022, Press release picture

CREXENDO, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited, in thousands)

Crexendo, Inc., Wednesday, May 11, 2022, Press release picture


CREXENDO, INC. AND SUBSIDIARIES

Supplemental Segment Financial Data

(In thousands)

Crexendo, Inc., Wednesday, May 11, 2022, Press release picture

Use of Non-GAAP Financial Measures

To evaluate our business, we consider and use non-generally accepted accounting principles ('Non-GAAP') net income and Adjusted EBITDA as a supplemental measure of operating performance. These measures include the same adjustments that management takes into account when it reviews and assesses operating performance on a period-to-period basis. We consider Non-GAAP net income to be an important indicator of overall business performance because it allows us to evaluate results without the effects of share-based compensation, acquisition related expenses, changes in fair value of contingent consideration and amortization of intangibles. We define EBITDA as U.S. GAAP net income/(loss) before interest income, interest expense, other income and expense, provision for income taxes, and depreciation and amortization. We believe EBITDA provides a useful metric to investors to compare us with other companies within our industry and across industries. We define Adjusted EBITDA as EBITDA adjusted for acquisition related expenses, changes in fair value of contingent consideration and share-based compensation. We use Adjusted EBITDA as a supplemental measure to review and assess operating performance. We also believe use of Adjusted EBITDA facilitates investors' use of operating performance comparisons from period to period, as well as across companies.

In our May 12, 2022, earnings press release, as furnished on Form 8-K, we included Non-GAAP net income, EBITDA and Adjusted EBITDA. The terms Non-GAAP net income, EBITDA, and Adjusted EBITDA are not defined under U.S. GAAP, and are not measures of operating income, operating performance or liquidity presented in analytical tools, and when assessing our operating performance, Non-GAAP net income, EBITDA, and Adjusted EBITDA should not be considered in isolation, or as a substitute for net income/(loss) or other consolidated income statement data prepared in accordance with U.S. GAAP. Some of these limitations include, but are not limited to:

  • EBITDA and Adjusted EBITDA do not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;
  • they do not reflect changes in, or cash requirements for, our working capital needs;
  • they do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our debt that we may incur;
  • they do not reflect income taxes or the cash requirements for any tax payments;
  • although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will be replaced sometime in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements;
  • while share-based compensation is a component of operating expense, the impact on our financial statements compared to other companies can vary significantly due to such factors as the assumed life of the options and the assumed volatility of our common stock; and
  • other companies may calculate EBITDA and Adjusted EBITDA differently than we do, limiting their usefulness as comparative measures.

We compensate for these limitations by relying primarily on our U.S. GAAP results and using Non-GAAP net income, EBITDA, and Adjusted EBITDA only as supplemental support for management's analysis of business performance. Non-GAAP net income, EBITDA and Adjusted EBITDA are calculated as follows for the periods presented.

Reconciliation of Non-GAAP Financial Measures

In accordance with the requirements of Regulation G issued by the SEC, we are presenting the most directly comparable U.S. GAAP financial measures and reconciling the unaudited Non-GAAP financial metrics to the comparable U.S. GAAP measures.

Crexendo, Inc., Wednesday, May 11, 2022, Press release pictureCrexendo, Inc., Wednesday, May 11, 2022, Press release picture

SOURCE: Crexendo, Inc.



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