Crexendo (CXDO) Planet MicroCap Showcase: VEGAS 2025 summary

Industry catalysts and market opportunity

• Major competitors Microsoft and Cisco have faced platform challenges, leading to customer migrations and growth opportunities.

• Legacy premise providers like Avaya and Mitel have experienced financial distress, further opening the market.

• Only about 60% of U.S. businesses have adopted cloud communications, leaving significant runway for growth domestically and internationally.

• AI-driven features and automation are increasingly driving adoption of unified communications solutions.

Business model and financial performance

• Operates with both wholesale (platform for telecom providers) and retail (direct to SMBs) segments, with wholesale growing 30% and retail 7% organically in 2024.

• Achieved nearly $61 million in revenue last year, with 14% total organic growth and 217% revenue growth over three years.

• Maintains strong profitability: $2 million GAAP income, $7.7 million non-GAAP net income, $8.2 million adjusted EBITDA, and 14% adjusted EBITDA margin.

• Recurring revenue is high, with 75% of revenue on a monthly recurring basis and $85.6 million in remaining performance obligations.

Customer base, retention, and pricing

• Supports over 6 million users, adding about 100,000 users monthly, with 235 wholesale licensees and a sticky customer base.

• Wholesale pricing is session-based, offering 45-50% cost savings over seat-based competitors, with churn just above 1% and gross margins at 72%.

• Retail segment averages $20 per user per month, with 80% recurring revenue and gross margins at 57% (higher if excluding a lower-margin acquisition).

• Retail churn is about 1% monthly, slightly elevated due to a large customer loss but expected to normalize.