Crexendo Announces Fourth Quarter and Full Year 2022 Results
Crexendo, Inc. (NASDAQ:CXDO) reported financial results for Q4 and full year 2022, showing a 34% revenue increase YoY, totaling $37.6 million. Despite strong top-line growth, the company faced a GAAP net loss of $(35.4) million for the year. In Q4, revenue grew 27% to $11.4 million. Non-GAAP net income for Q4 was $2.5 million, up from $592,000 in Q4 2021. The increase in revenue was significantly influenced by the Allegiant Networks acquisition, which contributed $1.8 million in Q4. However, operating expenses surged 370% to $46 million, largely due to goodwill impairment.
- Total revenue increased 34% YoY to $37.6 million.
- Q4 revenue increased 27% to $11.4 million.
- Non-GAAP net income of $2.5 million in Q4 compared to $592,000 in Q4 2021.
- Software solutions revenue surged 75% YoY to $15.1 million.
- GAAP net loss of $(35.4) million for the full year 2022.
- Operating expenses increased 370% to $46 million in Q4, largely due to goodwill impairment.
- Goodwill impairment charge of $32.6 million for Q4 2022.
PHOENIX, AZ / ACCESSWIRE / March 14, 2023 / Crexendo, Inc. (NASDAQ:CXDO) is an award-winning premier provider of cloud communication platform and services, video collaboration and managed IT services designed to provide enterprise-class cloud solutions to any size business. Our solutions currently support over three million end users globally. Today, the Company reported financial results for the fourth quarter and full year ended December 31, 2022.
Financial highlights:
- GAAP net loss of
$(35.4) million and non-GAAP net income for the year of$4.1 million . - Total revenue for the year increased
34% year-over-year to$37.6 million compared to the prior year. - GAAP net loss of
$(32.6) million and fourth quarter non-GAAP net income of$2.5 million . - Fourth quarter revenue increased
27% to$11.4 million compared to the prior year fourth quarter.
Financial Results for the Fourth Quarter of 2022
Consolidated total revenue for the fourth quarter of 2022 increased
Consolidated service revenue for the fourth quarter of 2022 increased
Consolidated software solutions revenue for the fourth quarter of 2022 increased
Consolidated product revenue for the fourth quarter of 2022 increased
Consolidated operating expenses for the fourth quarter of 2022 increased
The Company reported net loss of
Non-GAAP net income of
EBITDA for the fourth quarter of 2022 of
Financial Results for the Year ended December 31, 2022
Consolidated total revenue for the year ended December 31, 2022 increased
Consolidated service revenue for the year ended December 31, 2022 increased
Consolidated software solutions revenue for the year ended December 31, 2022 increased
Consolidated product revenue for the year ended December 31, 2022 increased
Consolidated operating expenses for the Year ended December 31, 2022 increased
The Company reported a net loss of
Non-GAAP net income of
EBITDA for the Year ended December 31, 2022 of
Total cash and cash equivalents at December 31, 2022 of
Cash used for operating activities for the year ended December 31, 2022 of
Management Commentary
Crexendo Chief Executive Officer Jeff Korn commented, "We finished the year strong and have considerable momentum behind our combined businesses as we head into 2023. In the fourth quarter we drove a
"We will continue recognizing synergies from our Software Solutions acquisition and will benefit from the integration and synergies from our recent Allegiant acquisition. As a combined organization, we expect to drive more new sales and to realize greater expansion revenue opportunities from our collective customer base. We will also improve our cost profile substantially as we aim to increase cash flow and profitability by the end of the year."
Company President and Chief Operating Officer Doug Gaylor added, "We made considerable progress this year in architecting our vision for the future of Crexendo. With the recent management transition, we have continuity in our leadership team with a refreshed perspective on how to take our Company into its next phase of growth. Our sales and marketing teams are operating productively, and we fully expect those efforts to materialize into increased enterprise sales and improved margins in 2023. We also remain committed to our existing customers through a concerted focus on providing the best products, services and support in the industry."
Steve Mihaylo, retiring CEO, commented "I am excited to start my retirement and turn leadership of the company to Jeff and the management team. To see our telecom offerings grow from zero to a
Conference Call
The Company is hosting a conference call today, March 14, 2023, at 4:30 PM EDT.
The dial-in number for domestic participants is 888-506-0062 and 973-528-0011 for international participants and reference participant access code 708813.
Please dial in five minutes prior to the beginning of the call at 4:30 PM EST and reference the Crexendo earnings call and access code 708813.
A replay of the call will be available until March 21, 2023, by dialing toll-free at 877-481-4010 or 919-882-2331 for international callers. The replay passcode is 47743.
About Crexendo
Crexendo, Inc. is an award-winning premier provider of cloud communication platform and services, video collaboration and managed IT services designed to provide enterprise-class cloud solutions to any size business. Our solutions currently support over three million end users globally.
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) having considerable momentum behind its combined businesses; (ii) believing the results underscored the inherent profitability of our operations once our performance can be viewed on a comparable basis; (iii) completing its integration of NetSapiens and further aligning with the Allegiant team; (iv) expecting to drive more new sales and to realize greater expansion revenue opportunities from our collective customer base; (v) improving our cost profile substantially and aiming to increase cash flow and profitability by the end of the year; (vi) having made considerable progress this year in architecting our vision for the Company and having continuity in our leadership team with a refreshed perspective on how to take the Company into its next phase growth; (vii) believing the sales and marketing teams productively, efforts to materialize into increased enterprise sales and improved margins in 2023; (viii) remaining committed to our existing customers through a concerted focus on providing the best products, services and support in the industry; (ix) believing the company will continue to prosper under Jeff's direction."
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, 2022, 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.
Contacts
Company Contact:
Crexendo, Inc.
Doug Gaylor
President and Chief Operating Officer
602-732-7990
dgaylor@crexendo.com
Investor Relations Contact:
Gateway Investor Relations
Matt Glover and Tom Colton
949-574-3860
CXDO@gatewayir.com
CREXENDO, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands, except par value and share data)
CREXENDO, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(In thousands, except per share and share data)
CREXENDO, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(In thousands)
CREXENDO, INC. AND SUBSIDIARIES
Supplemental Segment Financial Data
(In thousands)
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, amortization of intangibles, and long-lived asset impairment. We define EBITDA as U.S. GAAP net income/(loss) before interest expense, interest income and other expense/(income), goodwill and long-lived asset impairments, provision/(benefit) 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 March 14, 2023 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.
Reconciliation of U.S. GAAP Net Income to Non-GAAP Net Income
(Unaudited)
Reconciliation of U.S. GAAP Net Income to EBITDA to Adjusted EBITDA
(Unaudited)
SOURCE: Crexendo, Inc.
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