Crexendo — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue increased 44% year-over-year to $25.2 million for the third quarter of 2026, compared to $17.5 million in Q3 2025.
• Service revenue grew 75% year-over-year to $15.1 million in Q3 2026, up from $8.6 million in Q3 2025.
• Software solutions revenue increased 2% year-over-year to $7.7 million in Q3 2026, compared to $7.5 million in Q3 2025.
• Product revenue surged 78% year-over-year to $2.4 million in Q3 2026, up from $1.4 million in Q3 2025.
• Consolidated operating expenses rose 49% year-over-year to $24.1 million in Q3 2026, compared to $16.2 million in Q3 2025.
• GAAP net income was $1.1 million ($0.03 per share) for Q3 2026, down from $1.5 million ($0.05 per share) in Q3 2025.
• Non-GAAP net income was $4.0 million ($0.12 per share) for Q3 2026, up from $3.0 million ($0.10 per share) in Q3 2025.
• Adjusted EBITDA was $4.0 million for Q3 2026, compared to $2.9 million in Q3 2025.
• For the nine months ended September 30, 2026, total revenue increased 41% to $70.5 million, compared to $50.1 million in the same period in 2025.
• Service revenue for the nine months ended September 30, 2026, increased 61% to $40.5 million, compared to $25.2 million in 2025.
• Software solutions revenue for the nine months ended September 30, 2026, increased 6% to $22.7 million, compared to $21.4 million in 2025.
• Product revenue for the nine months ended September 30, 2026, increased 104% to $7.3 million, compared to $3.6 million in 2025.
• Operating expenses for the nine months ended September 30, 2026, increased 41% to $68.0 million, compared to $46.5 million in 2025.
• GAAP net income for the nine months ended September 30, 2026, was $2.7 million ($0.08 per share), down from $3.9 million ($0.13 basic/$0.12 diluted per share) in 2025.
• Non-GAAP net income for the nine months ended September 30, 2026, was $11.3 million ($0.35 basic/$0.34 diluted per share), up from $8.6 million ($0.29 basic/$0.27 diluted per share) in 2025.
• Adjusted EBITDA for the nine months ended September 30, 2026, was $11.3 million, compared to $8.4 million in 2025.
• Cash and cash equivalents were $22.8 million as of September 30, 2026, down from $31.4 million as of December 31, 2025.
• Cash provided by operating activities for the nine months ended September 30, 2026, was $9.7 million, compared to $7.0 million in 2025.
• Cash used in investing activities for the nine months ended September 30, 2026, was $26.2 million, compared to nil in 2025.
• Cash provided by financing activities for the nine months ended September 30, 2026, was $8.0 million, compared to $3.4 million in 2025.
• Contract liabilities increased to $3.972 million (current) and $1.255 million (long-term) as of September 30, 2026, from $2.528 million (current) and $1.008 million (long-term) as of December 31, 2025.
• Notes payable increased to $4.748 million total ($454k current, $4.294k long-term) as of September 30, 2026, from $114k (current) as of December 31, 2025.

Business Segments and Product Lines:

• The company secured 5 new licensees in Q3 2026, bringing the year-to-date total to 16, compared to 14 for all of 2025.
• The company's solutions now support more than eight million end users globally.
• The company previewed its new platform software release, NetSapiens Flow, at its largest-ever User Group Meeting.
• The company is actively expanding its AI ecosystem and making continued progress with CAIRO.

Management Commentary and Tone:

• CEO Jeff Korn described the quarter as "exceptional and profitable," citing strong revenue growth, adjusted EBITDA, and cash position.
• Management expressed confidence in the seamless integration of ESI and the ability to identify and successfully integrate strategic, accretive acquisitions.
• Management stated they are actively evaluating additional opportunities to accelerate growth while focusing on maximizing organic growth.
• Management believes the combination of innovation, disciplined expense management, and selective acquisitions positions the company to deliver sustainable, profitable growth.

Other Key Points:

• The company completed the acquisition of a business in the first nine months of 2026, resulting in $26.2 million in cash used for investing activities and $7.433 million in stock issued for the acquisition.
• The company issued a new note payable, generating $4.853 million in proceeds net of debt issuance costs during the nine months ended September 30, 2026.
• Proceeds from the exercise of options were $4.042 million for the nine months ended September 30, 2026.
• The company reported $2.674 million in share-based compensation for the nine months ended September 30, 2026.
• The company reported $1.019 million in acquisition-related expenses for the nine months ended September 30, 2026.
• The company's balance sheet reflects an increase in intangible assets to $36.468 million and goodwill to $14.170 million as of September 30, 2026, compared to $17.860 million and $9.454 million respectively as of December 31, 2025.