CXDO

CREXENDO INC

Communication Services | Micro Cap

$0.05

EPS Forecast

$19.65

Revenue Forecast

The company already released most recent quarter's earnings. We will publish our AI's next quarter's forecast around 2026-07-16

Crexendo’s Second Quarter 2025: Software Solutions Drive Growth, EPS Edges Higher as Expenses Rise

CXDO, the ticker for Crexendo, Inc., reported its second quarter 2025 results with a clear tilt toward software solutions. The company posted total revenue of $16.6 million for the quarter, up 13% from a year ago, and delivered earnings per share (EPS) of $0.04 on a basic and diluted basis. Non-GAAP net income rose to $2.9 million, or $0.10 basic and $0.09 diluted per share, underscoring how management is balancing GAAP and non-GAAP measures as it scales software and cloud offerings. There’s no formal revenue forecast disclosed in this release, and no stated EPS consensus or earnings surprise figure is presented, which leaves the market to infer how durable the growth looks beyond the quarter.

Key takeaways

  • Total revenue for the quarter: $16.6 million, up 13% year over year (Q2 2024: $14.7 million).
  • GAAP net income: $1.2 million, or $0.04 per basic and diluted share.
  • Non-GAAP net income: $2.9 million, or $0.10 basic and $0.09 diluted per share.
  • EBITDA: $2.0 million; Adjusted EBITDA: $2.8 million (both up from year-ago levels).
  • Segment performance: Software Solutions revenue surged 31% to $7.0 million; Service revenue rose 4% to $8.4 million; Product revenue declined 7% to $1.2 million.
  • Operating expenses: $15.4 million for the quarter, up 10% from the prior year.

In the quarter: where the money came from and where it went

Crexendo’s quarterly strength sits in a software-driven mix. Software Solutions revenue climbed to $7.0 million, a robust 31% year-over-year gain, reflecting a strengthening software portfolio within Crexendo’s cloud communications ecosystem. Service revenue, which complements the software layer, grew 4% to $8.4 million, signaling steady non-software streams alongside the core offerings.

Product revenue slipped 7% to $1.2 million, highlighting the ongoing tension between devices or hardware-related streams and a software-centric growth model. Total operating expenses rose to $15.4 million, a 10% increase, as the company invests in growth initiatives that underpin the software expansion and service delivery.

From a profitability angle, GAAP net income was $1.2 million (EPS $0.04), while the Non-GAAP figure stood at $2.9 million (EPS $0.10 basic, $0.09 diluted). The divergence between GAAP and Non-GAAP earnings suggests adjustments that management views as non-cash or non-operational in nature, a common theme for technology and software-focused issuers during growth inflection periods.

Six months ended June 30, 2025: a software-centric trajectory

The first half of 2025 reinforced the quarterly trend. Total revenue reached $32.6 million, up 13% from the $29.0 million recorded in the prior-year six months. Service revenue for the six months rose 4% to $16.6 million, while Software Solutions revenue jumped 32% to $13.8 million, underscoring a meaningful pivot toward software offerings.

Product revenue for the six months ended June 30, 2025 decreased 15% to $2.2 million, consistent with the quarterly pattern of lighter hardware/adaptation-related sales relative to software.

Operating expenses for the first six months rose 9% to $30.4 million. The combination of higher software-related investment and ongoing operating costs points to a deliberate scaling effort as Crexendo positions itself in cloud communications and managed IT services.

What it might portend for Crexendo and peers

Crexendo’s quarterly narrative is increasingly software-led. A 31% rise in Software Solutions revenue signals that the company’s growth engine is shifting from traditional product sales toward recurring software revenue and cloud-delivered services. If this trajectory persists, the EPS mix could tilt in favor of non-GAAP profitability, assuming the company can maintain or further improve gross margins while absorbing operating-expense growth.

The absence of explicit guidance or an EPS consensus in the release means investors are left to judge the strength of the software lift against historical expectations rather than against a formal forecast. In practice, this often translates to a wider uncertainty band for forward-looking earnings surprises. Yet the strong non-GAAP earnings and EBITDA improvements imply that the core business is generating cash-like earnings even as the company expands its software footprint.

For sector peers—cloud communications, UCaaS players, and managed IT services providers—the Crexendo results underscore a broader industry pattern: if you can convert customers to long-term software and managed offerings, top-line growth can outpace hardware-driven segments. The challenge remains discipline in operating expenses and the maintenance of profitability as growth investments continue.

Questions that analysts and peers might ask

  • Can Crexendo sustain software-solutions revenue growth above 30% in the next couple of quarters, and what will it take to stabilize product revenue?
  • Will operating expenses stabilize as a percentage of revenue, or will continued software investments pressure EBITDA in the near term?
  • Without a stated revenue forecast, how should investors calibrate expectations for the remainder of 2025 and early 2026?
  • How durable is the non-GAAP earnings advantage, and what adjustments drive the gap versus GAAP earnings?

Conclusion: a software-forward cadence with a cost chorus

Crexendo’s Q2 2025 results indicate a company moving decisively toward software solutions as the engine of growth. EPS and non-GAAP profitability tranche higher, even as operating expenses rise to fund the expansion. For CXDO and its peers, the key question remains whether the software-led momentum can be sustained through the seasonally weaker second half and into 2026, and whether the operating-cost rhythm can harmonize with top-line gains to yield steadier margin expansion.

In an earnings season where every instrument is tuned to growth, Crexendo’s performance music hints at a chorus that could outlast the mid-year crescendo—provided the software platform continues to resonate with mid-market customers and managed IT buyers alike.