EXHIBIT 99.1

Crexendo Announces Third Quarter 2023 Results

PHOENIX, AZ / ACCESSWIRE / November 9, 2023 / Crexendo, Inc. (NASDAQ: CXDO), 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, today announced financial results for the third quarter ended September 30, 2023.

Third Quarter Financial highlights:

Financial Results for the Third Quarter of 2023 (in thousands, except per share data)

Consolidated total revenue for the third quarter of 2023 increased 52%, or $4.7 million, to $13.9 million compared to $9.1 million for the third quarter of 2022.

Consolidated service revenue for the third quarter of 2023 increased 68%, or $3.0 million, to $7.5 million compared to $4.5 million for the third quarter of 2022.

Consolidated software solutions revenue for the third quarter of 2023 increased 21%, or $0.8 million, to $4.7 million compared to $3.9 million for the third quarter of 2022.

Consolidated product revenue for the third quarter of 2023 increased 119%, or $0.9 million, to $1.6 million compared to $0.7 million for the third quarter of 2022.

Consolidated operating expenses for the third quarter of 2023 increased 40%, or $3.8 million, to $13.5 million compared to $9.7 million for the third quarter of 2022.

The Company reported net income of $1.7 million for the third quarter of 2023, or $0.07 per basic common share and $0.06 per diluted common share, compared to net loss of $(0.7) million, or $(0.03) loss per basic and diluted common share for the third quarter of 2022.

Non-GAAP net income of $3.3 million for the third quarter of 2023, or $0.13 per basic common share and $0.12 per diluted common share, compared to non-GAAP net income of $0.7 million or $0.03 per basic and diluted common share, for the third quarter of 2022.

EBITDA for the third quarter of 2023 of $1.2 million compared to $0.1 million for the third quarter of 2022. Adjusted EBITDA for the third quarter of 2023 of $2.1 million compared to $0.9 million for the third quarter of 2022.

Financial Results for the nine months ended September 30, 2023 (in thousands, except per share data)

Consolidated total revenue for the nine months ended September 30, 2023 increased 49%, or $12.9 million, to $39.0 million compared to $26.1 million for the nine months ended September 30, 2022.

Consolidated service revenue for the nine months ended September 30, 2023 increased 64%, or $8.5 million, to $21.9 million compared to $13.4 million for the nine months ended September 30, 2022.

Consolidated software solutions revenue for the nine months ended September 30, 2023 increased 19%, or $2.0 million, to $12.7 million compared to $10.7 million for the nine months ended September 30, 2022.

Consolidated product revenue for the nine months ended September 30, 2023 increased 122%, or $2.4 million, to $4.3 million compared to $1.9 million for the nine months ended September 30, 2022.

Consolidated operating expenses for the nine months ended September 30, 2023 increased 41%, or $11.9 million, to $40.8 million compared to $28.9 million for the nine months ended September 30, 2022.

The Company reported net loss of $(0.4) million for the nine months ended September 30, 2023, or $(0.02) loss per basic and diluted common share, compared to net loss of $(2.8) million, or $(0.13) loss per basic and diluted common share for the nine months ended September 30, 2022.

Non-GAAP net income of $5.1 million for the nine months ended September 30, 2023, or $0.20 per basic common share and $0.18 per diluted common share, compared to non-GAAP net income of $1.6 million, or $0.07 per basic common share and $0.06 per diluted common share for the nine months ended September 30, 2022

EBITDA for the nine months ended September 30, 2023 of $0.9 million , compared to a loss of $(0.9) million for the nine months ended September 30, 2022. Adjusted EBITDA for the nine months ended September 30, 2023 of $4.1 million compared to $1.9 million for the nine months ended September 30, 2022.

Total cash and cash equivalents at September 30, 2023 was $7.7 million compared to $5.5 million at December 31, 2022.

Cash provided by operating activities for the nine months ended September 30, 2023 was $0.9 million compared to $(2.6) million used in operating activities in the nine months ended September 30, 2022. Cash provided by investing activities for the nine months ended September 30, 2023 was $3.7 million compared to $(0.2) million used in the nine months ended September 30, 2022. Cash used in financing activities for the nine months ended September 30, 2023 was $(2.3) million compared to less than $(0.1) million used in financing activities for the nine months ended September 30, 2022.

Management Commentary

“Crexendo had a very strong performance in the third quarter with 52% year-over-year revenue growth to $13.9 million, GAAP profitability, and strong positive cash flow. In addition to exceeding our internal goals for the quarter, we announced exceeding 3.5 million users on our platform, as well as new CPaaS, API, and new generative AI capabilities on our platform. We continued our effective management of costs and completed our integration plans. This was a remarkable quarter and convinces me that the moves we have made are gaining traction and making the company more effective and profitable.” said Crexendo Chief Executive Officer Jeff Korn. “I am very pleased and excited by our results and the traction we are seeing; this is a testament to the hard work and dedication by our team.”

“Our strong results continue to reinforce why we are the third largest, and fastest growing Unified communications as a service (UCaaS) platform in the industry. We work closely with our licensees to make certain the NetSapiens platform remains cutting edge and the best in the industry. We just completed our most successful User Group Meeting where we rolled out enhanced APIs, making third-party integration easier for customers. These integrations will help accommodate the needs of our customers and should also enable us to receive revenue sharing on approved software used by our licensees. We continue to see record demand and installations in our Telecommunication Services segment and expect that demand to continue. We will continue to invest in and improve our offerings and services. We will continue to work on selling larger opportunities and increasing organic sales while again starting to review accretive acquisitions which could further accelerate our growth. I am confident that our strong performance will continue, and I am very encouraged by our progress and extremely excited by our future."

Conference Call

Crexendo management will hold a conference call today, November 9, 2023, at 4:30 PM Eastern time to discuss these results.

Company CEO Jeff Korn, CFO Ron Vincent, and President and COO Doug Gaylor will host the call, followed by a question-and-answer period.

Dial-in Numbers:

Domestic Participants: 888-506-0062

International Participants: 973-528-0011

Participant Access Code 305599

Please dial in five minutes prior to the beginning of the call at 4:30 PM Eastern time and reference the Crexendo earnings call.

A replay of the call will be available until November 16, 2023 by dialing toll-free at 877-481-4010 or 919-882-2331 for international callers. The replay passcode is 49361.

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.

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 had a very strong performance in the third quarter and exceeding internal goals for the quarter; (ii) continuing the effective management of costs and completing the integration plans; (iii) believing that the third quarter was a remarkable quarter and that the moves made are gaining traction and making the company more effective and profitable; (iv) being very pleased and excited by our results and the traction with the results being a testament to the hard work and dedication by the team; (v) strong results continuing to reinforce why it is the third largest, and fastest growing Unified communications as a service (UCaaS) platform in the industry; (vi) working closely with its licensees to make certain the NetSapiens platform remains cutting edge and the best in the industry; (vii) completing the most successful User Group Meeting where enhanced APIs were introduced making third-party integration easier for customers, and that the integrations should also enable revenue sharing on approved software used by our licensees; (viii) continuing to see record demand and installations in our Telecommunication Services segment with expectations that demand will continue; (ix) continuing to invest in and improve offerings and services and continuing to work on selling larger opportunities and increasing organic sales while starting to review accretive acquisitions and being confident that the strong performance will continue and being encouraged by progress and extremely excited by the future.

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

CREXENDO, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(Unaudited, in thousands, except per share and share data) 

CREXENDO, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited, 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 goodwill 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 November 9, 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:

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.