Crexendo, Inc. Q1 FY2026 earnings call

Jeff mentioned it was a special quarter with revenue growth, GAAP profitability extending to 11 consecutive quarters. ESI acquisition is exceeding expectations with integration advancing. Operationally, retail has made inroads on enterprise sales. Product side launched new user interface and AI-driven Cairo solution. Marketplace ecosystem is gaining traction.

Consolidated revenue for the quarter was $20.7 million, up 29% year over year. Service revenue increased 29% to $10.6 million with a 63% gross margin. Software solutions revenue increased 12% to $7.7 million with a 68% gross margin. Product revenue increased 141% to $2.4 million with a 31% gross margin. Organic growth for the quarter was 15.9% over the prior year quarter, excluding revenue from the ESI acquisition.

Management guides toward double-digit organic growth of the business outside of ESI. Actively evaluating additional acquisition opportunities. Secured $5 million term debt and line of credit to pursue accretive acquisitions.

Federal Trade Commission has a proposal requiring certain customer service and contact software operations to be completely within the US. It's in early phase with uncertainty but could have positive implications if enacted.

Q: Mike Lattimore asked about 18% organic telecom service growth, service gross margin with ESI, and interest in Cairo.

A: Jeff and Doug responded on organic growth, expected service gross margin improvement, and Cairo's interest from various customer types.

Q: George Sutton asked about pipeline from new logos and AI product opportunity set.

A: John responded on strong pipeline and broad AI product set with partners.

Q: Eric Martinuzzi asked about organic growth including ESI and cash/debt.

A: Jeff and Ron responded on organic growth excluding ESI and cash/debt status.

Q: Scott Buck asked about ESI's performance and Cairo's pricing.

A: Jeff responded on ESI's above-expectation performance and Cairo's pricing structure.

Q: Matthew Moss asked about Cairo's ARPA uplift.

A: Jeff responded on Cairo's potential ARPA uplift based on customer usage