CXDO - Earnings call transcript Q1 2022

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Operator

Good afternoon, ladies and gentlemen, and welcome to the Crexendo First Quarter 2022 Earnings Call. [Operator Instructions] It is now my pleasure to turn the floor over to your host, Steve Mihaylo, CEO. Sir, the floor is yours.

Steve Mihaylo

Okay. Thank you, John. everyone. afternoon, Good Chairman to Mihaylo, QX of and Crexendo, conference I’m all and of want welcome Crexendo you I call. Steve CEO to XXXX the

and a are On statement. our Buch, After brief safe ask Jeff Counsel. Gaylor, me Jeff comments. call call numbers. General Ron will and detail then more and the and Vincent, provide Jeff, up today would that, the some provide Doug our going you the the our CFO; on I we with CSO; President will please harbor I’m COO; give Korn, statement? business Anand questions. open update, to sales read Ron will will harbor our the safe Doug to read for

Jeff Korn

XXXX. such want the meaning the XXXX The conference the than XXXX Private Thank Securities fact this safe this Securities of statements in forward-looking of Steve. take Exchange that listeners statements. are of sir. call opportunity of statements forward-looking within will harbor remind you, this other statements. contain statements historical Act and call of made I a to Securities Act provides forward-looking fact All in Litigation to Reform Act Yes, for

Form assumptions based here could back should prevent may not Commission, other the discussed them filed. Crexendo to with terms are aware factors a from now estimate, however, the cause Exchange results whether to be and XX-K material on December to and Risk year does the new from in any that to to [indiscernible] and filings statements forward-looking. turn revise ended expectation differ events forward-looking result believe, call identifying statements, I’d risks does today. any otherwise. publicly as are statements company’s including uncertainties the in are will expect, like as obligation actual the update undertake being not or or statements, similar forward-looking anticipate, XX-Q Forward-looking include XXXX, subject and that XX, any future explained Steve. for that those like Steve? and Forms forward-looking of of Securities fiscal statements, statements to detail add information, the it Investors those

Steve Mihaylo

Thank you, Jeff.

are million grow to issues able $X.X the closed to were were we business that the pleased XX% we also which customers spending which quarter. solid customers and or the that for These even that certain included affecting is decisions the better the The buying appear the be profit. these we non-GAAP due that with And employment delaying surrounding is dealing and As net uncertainty to believe good is stock to companies, am spikes am country, with manage companies, most COVID these competitors Considering I chain to interest issues, and market XXXX aware, were world. $XXX,XXX want and diluted for difficulty, challenging and and challenging lockdowns, for for or we these everyone rate our the times quarter first the of from went able – and a issues. expectations capital to economy. less issues are income business potential our contracted customers business, all their We non-GAAP supply with, share. corrections slowdowns, uncertainty, per that these common of we we issues, inflation, I subsiding. year-over-year pleased considering basic numbers that news $X.XX also most of faced managed news

now are now coming and necessary. going the We the deferred market. goal – the making or see good and and and job solutions do with are two team of who our integrating back we top are trends, teams, telecom options both common back and team purchase providing to working expenditures continue believe in one services that UCaaS good a people the We to together software our purchases

moving efficiencies, deferred moving the ability the have confident substantial the reengaging to the to to planet will that to everyone are addition, be due process. companies now the on most cloud cloud cost savings. that I’m work – that In anywhere and the from

– to and provide geared take available telecom our the are and migration that and solutions of software solution advantage features products anywhere. divisions the Our are best

of within division, will our software X.X growth announcing weeks that Speaking we that end be our next continues. solutions of users. reached couple expect I the we million

And metric. the I’ve the and I the is unlimited. convinced very platform am is with I appropriate earlier, to end the time carefully, XX% to dynamic award-winning headwinds for for And Our very we grow look accretive of will about acquisitions. very my growing XX% not I and as expectations This am as very is monitor even growth that company of us. ever users our exciting a and we mean carefully. continued will continue I by optimistic I future business I’ve the been. described changed annually. potential organically,

intend I my over a mouth we numbers? of plan that, are once the current give to Ron, always, will enter my call where new period. you into would the a the no us on I turn trade As granularity Ron. put XXbX-X is. And out With money I little

Ron Vincent

million Thank Total to quarter of revenue year. $X.X prior reported for afternoon, the or for everyone. Good quarter million XX% $X.X million Steve compared to the the as you, increased $X.X first

$X.X X% compared million. to service for or quarter to revenue $XXX,XXX increased $X.X Our million the

Our was $X.X software the for million. solutions quarter revenue

the compared $X.XX common quarter in when share and as of cost $XXX,XXX solutions on the diluted increases $X.XX diluted million net the $X.XX as for related basic to or year. and per directly or diluted non-GAAP share, the and share loss quarter for million no $X.X $XXX,XXX first quarter compared income $XXX,XXX income for in $XXX,XXX XX% were was quarter EBITDA and to year. to prior common per $X.X to basic common and period the for per million revenue prior the for same the for quarter increased increased a quarter contributed loss million XX% first or product the prior $X.X share of or Consolidated prior. operating the increase basis, of $XXX,XXX operating to of loss of expenses. $X.X compared expenses loss $XXX,XXX diluted the the reported the prior $X.X $X.XX or with of a On year. the increased for as for of same the and loss The period we first to higher prior Our comparable $XXX,XXX compared per of common a the remaining marketing. period spend The the quarter basic million to expenses net of Net software sales to XXX,XXX net segment, a of for basic of compared sales Steve of year. of or non-GAAP mentioned,

was quarter to the period compared $XXX,XXX Our of $XXX,XXX adjusted as same earnings the prior year. EBITDA for for of the

and and will in of our activities period. COO $X.X Our compared accounts cost the provided the to of investing used sales $XXX,XXX accounts XX, Doug activities our cash, cash was comments for XXXX. of and primarily at President $XXX,XXX payable quarter, for million $X.X and equivalents. and Gaylor, cash for over $X.X accrued expenses $X,XXX equivalents to activities We turn our operations. additional $XXX,XXX, for it on increases resulting million contract now I in $XX,XXX at We December increases cash, during million receivable March reduction XX financing use operating from

Doug Gaylor

Thanks, Ron.

trend shows potential, nicely the benefit quarter acquisition non-GAAP $XXX,XXX year-over-year results substantial XX% of the or of with growth. non-GAAP of first continue earnings which we continue growth income that Our $X.XX to a positioned and and share, our of NetSapiens are

milestone our software with combined XX% platform. nearly the of our on to close get solutions end growth user organic million Our helped winning us award addition, X.X

now backlog to Our million of grow continues end north QX. at and of $XX.X is the

backlog the well our backlog our customers number backlog $X and from represents direct XX% of backlog at increase over XXXX. our Crexendo Our number backlog amounts includes a software million now the XXXX. our of QX number end from reported increased as And as solutions

We add is businesses. very for utilize new that licensees our pipeline new And run strong. continue platform licensees our their to to UCaaS

the licensees as they migration from session growing with grow. the that Crexendo additional purchases rapid and we are Our with benefit to cloud

applications solutions develop monetize solutions Crexendo additional from drive organic to even to more these new continue segment. We to growth help software the and new further services in

exciting service, with omnichannel, which perfectly engagement, new automations CCaaS, also chatbots, that these center and our offerings of called is customer are as applications. is One call a center Crexendo contact designed larger new for

for offering in with growth. we the revenues. increased additional partnership we very this shortly Mavenir up announced customers Mavenir believe into we our similar further and could conjunction is releasing The be with And to excited exciting increase sets what will very will recently which be that recognized. partnership future revenue also add and We both our us about partnerships, can offer are and opportunities enter

are platforms have their differentiate ourselves using funnel to continue licensees and seat Sessions our pricing with over excited and based front models. to XXX largest our now higher significantly platform Not have the Cisco’s new we us on price Metaswitch our Seats add continues about which prospects that BroadSoft per Microsoft competitors, model of in licensees. We are Our from two offerings cost

see sales optimistic Consulting, and Telecom master Crexendo projections from well our groups partnerships. We TCG, very growth and program the Consulting agent OTG as groups continue as pipeline like these like we Group, strong other with partnerships to from agent that sales growth about multiple has are

we organizations operational a pleased we guarantee has on and benefits agent the new Our and VIP lifetime we’ll with agent offering agent be to seeing, continue together these to Crexendo a in our And excited opportunities new to the along programs coming that are and bringing are continue to program are about and add that two with see the highlight to the of our continue table. and Crexendo partners synergies larger and nicely. partners the uptime extremely they phones. integrations warranty XXX% funnel are our I the

teams are our the releasing QX. focused of XX at combined Our end engineering software version on

tech unison. extremely teams in is support And are on world’s marketplace customer and one overall the pleased providers. satisfaction high largest and GX.com, ranked trusted Crexendo which performer working that customer VoIP number Our is most for website, I’m

very score X is end that customers. end this is a high-performer out user by of X.X a ranking of because that have this customers providers. their for user and And We VoIP is verified important,

have the experience, and Our sales great momentum teams industry continue building. to knowledge benefit from exceptional we and

with how our consolidated about excited productivity, We our are personnel I’m our grow forward to our executing have and two the very come cost. to of accounting organization. pleased and maximize very plans plans I’m to organizations efficiencies, go on continue together and all have

with previously mentioned, associated have the the managing earnings. us non-GAAP based the we intangible our merger on costs As amortization of and acquisition have business assets

grow fantastic to able Crexendo see during excited to we that $X.XX our ensure able the opportunity we per can the amortization, continue we amount stock the non-GAAP be direction share are power work quarter about increased our we and I’m the very cost most I to team synergies second has that the acquisition and is for half addition team more a In head in efficiencies a our into hard that what together the to leverage we will as and our keep expense we quarter sector. combination. invest that generate feel we And help opportunity earnings together. programs as to Crexendo. feel with of in employee to comp I’m as future basic this to tremendous cost common proof and quickly of the make more growth. very talented continue believe XXXX, the retention the this finally, pleased for and couldn’t and combined common been – of have strong is and come to thankful effort successful organization succeed We I have

pricing perfectly have disruptive great with demand solutions We talented offerings and that for for a the with an along model positioned tremendous us workforce future. amazing our has product combined

to I’ll continue our best We best to our in comments. the committed over our to our further With shareholders. Steve to that, for offering returns to and the our any turn partners customers, it will for industry delivering and the delivering UCaaS licensees back

Steve Mihaylo

Doug. you, Thank

the next agree or quarter At only it earnings I the is person I’ll with based on I quarter to have GAAP the of and Other the earnings. appropriate and questions. I you. comment expect time, be than up questions, that, year. John, within I the think non-GAAP first this fourth we’ll will moderator answer have open I

Operator

the open ladies Thank you. for floor you, gentlemen, questions. is and Thank

first you from Nichols Riley. If the Josh with And question Instructions] any is questions have B. coming [Operator

live. Your line is

Josh Nichols

for Thanks taking questions. the

Steve Mihaylo

Good afternoon, Josh.

Josh Nichols

Steve? going, it Hey, how’s

Steve Mihaylo

guess, It’s very I each going you. we’re talking other. Thank over well.

Josh Nichols

That software continued on the to given backlog the is was the help kind backlog detail see to down, that if solutions to that provide was you continues on, going to I the growth. Good little grow. a on but what’s bit going of of wondering business. side more flip growth could when

Steve Mihaylo

that, I’m let Well, would guys our to going first of handle comment. I like all, one make but

division solutions for we’re or the But in is numbers quarters. going to software choppiness Our their what see two three more is doing things. next four

In going so improve there and to subscription. we’re where the better that we other margins can there the at. words, We’re to continuing improve revenue forecast going we’re

company will, color Anand to our all Doug you would company now acceptable. was Buch. Doug, and that? to bit guys Brinton But have As way shareholders add that. you and they a the it like more know, a were perfectly public clarity, private were a our they and expect of if to in talk going three have little I’m and doing what see. to we’re some public they you Jon about

Doug Gaylor

bit color. little the a of with start I’ll Yes.

have low then our of about, a the So historical through invested solutions have one-time services. platform the us That software pocket of fact little most had large into at upfront bit the choppiness in past, higher Josh, a of have and to the talked platform non-recurring offering that in and when with that the look we’re instead of the solutions with folks costs, they about cost monthly. offering gives we division obviously lower fairly one out that of means software Steve to that that talked subscription a recurring numbers, buy for somebody a a monthly come things Subscription as that services our of platform upfront costs they’d we’ve very lot we’re a entry. is because excited

subscription great, great to has involved so And in get people services and the more the more the people response. platform had platform, onboarding

cost. we’re that services. seeing is board subscription The so that And logos only the of have lot upfront on don’t one challenge a with with new you coming time

subscription will give a choppiness to to more bit platform sales sales logos And little bring And new we of color have bit service a see Brinton so migrate on I’ll from of a you type NRC Jon as all board. on little that. type more

Jon Brinton

Yes.

within the I Josh, we’re that new that, the real just progress So base. expand logos our wins and with about platform new excited on customer with

quantify As Doug the for in about said saw of bookings period, $XXX,XXX in a to revenue. kind increase QX subscription we

to So CapEx. what you’re going as that to see opposed with

time. it that’s over get higher over amortized term be expecting revenue backlog. that said, is on get business The Doug on you’re growth what front. subscription time. And there rate revenue run in – CapEx transitions going a for about that recognizing it revenue more a to basis that one-time that on predictable revenue see So great thing the up where continued quarterly few what as stream is and books with that to quarters of already the But we’re to of we to a Steve’s won’t will longer percentage the this because be it is will that’s takes, revenue a and color in

Doug Gaylor

that’s Yes. last million reiterate the $X again, backlog, to that year. just million in a end of And from increase just $XX.XX number

So increased we $X million. in months, backlog by three

of sign And bring that’s models we that that backlog board. color? going a number. subscription as so Anand, really, to these any encouraging It’s really further ongoing on more increase

Anand Buch

Yes, sure.

So, great Josh I mean, question. think I

quarter, as there and of a I you transaction you in think from the the if piece line. team third standpoint bit little getting sentiment the of just post well. the echo to to kind is background accounting a just give of for will, This full

expanded lumpiness a continuing our we’re more to non-recurring for an you is but again, handle as as continue And be Steve the We the So we we from seeing to what, the folks that’s kind offering, typically saying, product standpoint. you us you more that – that, out, quarter and manage we’re again, infrastructure. adoption the build. kind give plumbing, to But you essence, also an solution, in service of area. a sees which as handle you SNAPaccel idea, in infrastructure predictable, are of the service more first more as want can challenge we’ve just between to this pointed see okay, know

a So very very, which transition choppy to of NRC this we’ve migration, kind of impact revenue model. of fundamentally obviously a from of kind will seen a recurring that lot model but is more strong,

general, on that So with industry category. terms in migration promising BroadSoft folks that seeing types it’s types like we’re we of in in in from see. but the very to logos respect the wins in the And and going folks then that what’s the away Microsoft and of and the of general,

Josh Nichols

that traditional million, take sequential for it’ll it the a quarter. was to $X.X then maybe to more non-recurring or in model how of or in is basis? pivot to quarter fair the see And this the And just a two really much grow then like of clarify before revenue that baseline – subscription another versus starts on

Steve Mihaylo

Well, or before or bit take there, fellas Ron? probably turn ship But the take four Doug did all, of of Doug on something the – expectations other answer five going instead one that three quarters. it’s Josh, what little or add totally you want around. a – would revenue of And quarters, to longer model to first two taking a are or to going recurring to it’s we’ll we mostly my that three four next within be the

Ron Vincent

Hi, million $X.X was approximately Josh. Yes, the $XXX,XXX one-time of revenue.

Josh Nichols

last think year that transition under moving the think net-net, bit me improve the customers? more then came regarding Is throughout question as just I forward the of little of I a these margins, is, And thought they Great. XX%. for kind in you gross process? to What’s going

Steve Mihaylo

XX%. get like see gradually telecom the the division, at for want least which the to a long high to XX%. And blended means probably were comments it? it improve most it And That Anand to division. on is to his see Did to as of have XX%, up I’d head. that you as I expect margins of software to come I going I some from the rate go time. solutions shaking

Anand Buch

same comment this was on I to too. going And can that think. echo thing, I then, Ron just

that I costs making place think like part of putting systems understand that. pointed out the with of are the the as associated our can was we capitalized notion so things sure in that exercise, and Steve metrics earlier, we

going the let I’ll so a specifics financial part on And of that. but we’re the Ron from is touch there that exactly exercise perspective, through

three integration. the now quarters We’re into

making the systems the right that perspective. so place things And exercise the place financial are in is we so put part we sure allocating of in from that a

Ron, don’t you I to So, want if on know touch that.

Ron Vincent

I’ll Yes, the add to of tracking support of just type rigor functionality maintenance future the and the on platform and engineering to as the product. continue develop continuing and work time between the itself, that we’re R&D process and services

to so it properly we And be to place, processes R&D as with revenue right accounting, report we’re put of able the the the cost of versus cost. tracking, rest in service going combining or

Josh Nichols

Last then for someone turn me, a Thanks. take I’ll out. question and else let

customers I more significant, move are lift, Or right the it’s relative you priced though this terms to positive user a on like, So up the you’ve different for guess, several… a being once transition subscription more gone over not, if there net these it revenue? you a wind know through whenever just – is next I like per of a ARPU you it’ll basis, an curious subscription Are are traditional over word, a upfront? I’m how better the business. getting to a lack call even

Steve Mihaylo

five that. made I’m that four days. completely talk in we Anand let We about yet, will it the to next make going or haven’t but Josh, decision

Anand Buch

price proceed the notice what that as Yes. out and with start more just guys, ARPU we again, so appropriately on services effective you are you contribution increasing of – subscription actually can they’re not pretty managed more Josh, it licensed, we margin. will to as that that report is the an you high services of is at are fundamentally, most that these from models effectively developing at, looking standpoint effectively given but additional coming start

price going an typically, seeing time. average – up it’s effective So selling over we’re

answer So does your that question?

Josh Nichols

in back the It queue. does. Thanks. I’ll hop

Steve Mihaylo

John? Okay.

Operator

Sakai Chris, live. [Operator Instructions] Singular have Research. next, line with Up is we Chris your

Steve Mihaylo

afternoon. Good Chris,

Chris Sakai

Hi. had Yes, good afternoon. the question Mavenir I on a partnership.

as Just want some break things them, business, how that of as there out to you know, going quarter? far do this new guys are

Steve Mihaylo

very as quarter. of but Doug this well, don’t it’s start until selling going Well, to we probably end expect that said, the

currently, Brinton let going but to are Jon you talk to exactly that about small, sales So Doug very know we be where the going so I’m and stand.

Doug Gaylor

that of symbiotic relationship, a Yes. There’s two very it’s portions because relationship.

be own end going is Mavenir platform their their to our users. as platform UCaaS So to selling

that they’re speak. So as we deploying

in to going stream we’ll of off But licensee So seeing revenue that’s be that. start relationship. coming just

form. So out or it broken won’t be way, shape any

Steve we’ll as quarter, the real on we of see On the CCaaS offering, said, a as out roll it’s this end CCaaS, the that. because exciting at nice QX, monetization of beginning

drive Jon because explain we’ll higher type revenue. much on a I’ll center have start seeing much, uptick contact nice So that a really seat how seats per price

Jon Brinton

Doug. Thanks,

solutions So Chris, once and software other revenue in to Mavenir begins clients. be – with UCaaS if stated, that our would as along propose sell Doug our reflected you

times For we the contact are opportunity, would is that offering center about overall the the user. workforce, about percentage per exciting get thing retail user from small would VIP customer while revenue four brand workers of that under revenue in the average be the UCaaS a our experience a Crexendo that the CCaaS

there. there. can a to our be incorporate lot they would share the licensees substantial that is as opportunity with so intent NetSapiens their for that well. And user to wallet also in And there’s received that increase per we expanded platform offer of then that partnership average that CCaaS offers into So for revenue a our

our that we to deliver. a to So great capabilities to and It’s customers otherwise share to be able opportunity it’s wouldn’t a opportunity expand wallet. bring also great functionality

Chris Sakai

Great.

then Thanks. something there was else – Okay. there? And

Steve Mihaylo

question, was answered that no, just if I ask Chris. Well, your going to

Chris Sakai

you that good wanted That that helps. about just ask and a that have is if backlog. growing much for the I seems is much like number of just how how XXXX, for yes. number. to It Yes, Also for XXXX

Steve Mihaylo

a works, way know XX you backlog if Well, our month XX on to it’s contract. the

be immediately and it to XX part over XX, of is be a So rest of of it’ll probably rate recognized the blended going months.

Doug Gaylor

break in Yes. We XX-Q. that the do down

up now. it pulling right Ron’s so And

it’ll a can you but an kind down basis that on So give see you snapshot. that annual break so an that of we idea,

But up So backlog we’ll we’re just right again, pulling a now and Steve increase that that’s because the as loaded. momentarily. highlighted, exciting, it is have and you revenue for locked stream that’s

So much contracted just so that out haven’t in we next yet. break on. of the to how our backlog revenue as following that’s we recognized that to reiterate, year, and revenue that And Q, is in this year, year

million that So down breaks this format. $XX.XX in

Ron Vincent

Yes.

So is million. million. by too a for approximately XXXX a a $XX.X it year There’s remainder, schedule. our down it’s XXXX for $XX.X in breaks table that five-year footnote

Steve Mihaylo

kind by, it’s words, lower time the front a back end, goes a time loaded, know, been as as other like little the diminishing but by, goes it’s as lease you In and bit has of on backlog increasing.

Chris Sakai

Right. Right.

great. that. for answers. And thanks Okay, the for Thanks

Steve Mihaylo

Chris. Thanks,

Operator

[ph], from Investor. next your line The coming live. is Ronald Saul Ronald, question is Okay.

Unidentified Analyst

any I wondering the going fourth guide little giving of by you. just next insight the guidance GAAP year. net more on or if earnings Thank forward? a quarter was is earnings company the considering also quarter first then And

Steve Mihaylo

Well, beat positive. edge if you it, give or to you will, sword me something, a guidance make two tell you it’s if let it out it’s

our miss reasons will sales one said XX%. you have expect it, a If lot XX% you why might it’s I thing expect to or miss increase it that The there’s that is I negative. of and we

are, be million north on If if I it’s this where $XX should you disappointed that of analyst million, that’s at year. we hit look right higher we $XX just expect than but now just I’ll any based hasn’t said. And

about there a right it. might I that are think But million. $XX couple be at think

are for put a take should revenue. in to do $X.X our million licensees, these revenue. million going customers. the just can our products, $X million but have that take more our so little charging normal $XX mostly add we’re that to be you quarter for that, If bit more to fact about current you going And $XX we or on in we’re million growth and Then the

wanted kick fold are because to Now up the potential And their $XX of licensees, million, why continuing hard. acquisitions. into is you’re $XX million, the revenue. real we of we million to one reasons $XX bring NetSapiens And bushes their the all of in to

we I’d the don’t by So end acquisition surprised of an be if year. have this

Let’s the the as for number they’re a second just of use that doing. That’s $XX million half $X million year.

$XX $XX to million, everything million around are to up you’re And in we on here. revenue. work we continuing expenses, about Now measure

We’re buy I you with agree continuing to it’s they this a to move do that, if get all going us agree money out I’m can they revenue more if But little our of don’t that you, And more people streamlined, earnings. so GAAP is predictable. with get anybody And it, pointing their to soliciting can me. agree I’m they and just more. here. not to anything with Ronald hope

Unidentified Analyst

a But earnings to NetSapiens seems respect in GAAP this to little longer Yes. I merger? path out stretched you. with agree No, to no.

Steve Mihaylo

agree Anand revenue stream and why we of predictable I’ve software get less and one told We looking most of expenses, I at agrees I’ve more me, my that’s reasons you. division. higher And on effort been putting the the margins with and need there. to and

Doug Gaylor

I and million $X the I worth that for at stock asset you Ronald of had over mean, numbers, $XXX,XXX look highlight we if amortization. would our And of comp quarter, expense intangible

So big those numbers. are

GAAP. when the the so you our of about numbers are headwind those the to two And get size think organization,

books and non-GAAP So you some that assets the intangible that’s on amortization be out, time. but we’ve we’re those the stronger take numbers been profitability, why highlighting of position, in much a for that’ll when because

Steve Mihaylo

tell we’ve recession, we in is employment market maybe the who not, difficulties, we’ve stock issues a and had be. and And rate more let right a slowdowns, we’ve knows next just had hope mess I quarter in had be had will And lockdowns, supply now. one me chain could interest uncertainty. but headwinds that COVID We’ve the time, we’ve had inflation, you we’ve spikes, had business

Ronald. You take excited I’m managing of little here, get And that said. I’m everything all proud very for to of that. our managers sorry a spite I’ve of in

Doug Gaylor

Any follow-up Ronald?

Unidentified Analyst

GAAP earnings net in think what’s and going really No, stock. that’s market to drive the for stock looking I I – think that’s the the is

Doug Gaylor

Agreed. Yes.

Steve Mihaylo

purchases Well, marketplace seeing for emotional more you’re on I going right. probably next now, or in GAAP market, irrational days line quarter The the are top us. you’re right more becomes further to so rational are downside, of stock more this as people on rational, looking behind it the is, and think The based Absolutely. earnings. probably but be it’s and are in

Unidentified Analyst

Okay. that questions. my Well, answers

Steve Mihaylo

questions. Good you. Thank

Operator

Up Chris with Alpine we next, [ph] have Capital. Blum

live Your line is

Steve Mihaylo

Good afternoon. How are you doing?

Unidentified Analyst

strategy because And Maybe also, acquisition a that on the maybe what’s Thanks, strategy need going acquisition now? environment, paid on multiples front of in follow-up on any the then seeing on good. the like just change right more to you the the pipeline. based are on things Steve. Good, current maybe detail

Steve Mihaylo

First growth. we’re Doug, to to XX% a that who’s answer of least of from let and question. of closer am half it revenue half approximately of it to XX% from little than at that But going the organic acquisitions I get going all, to I’m

Doug Gaylor

Yes. Obviously, opportunities out Chris, there’s lots of there.

doing. a accretive We’re going to that in going we’re it’s that in be look to be is anything Obviously, fit. very looking selective we at what for good

there. of And think market current the with opportunities so I environment, lots out there’s

closed if as opportunity and the end said, wouldn’t be have opportunities year. we we’re of Steve considering an before lots I surprised the We of I mean, that have

it’s strategy, So acquisition when revenue and our at we accretive look it’s revenue, synergies.

get a one under excited think bill. fit really so and to bill we’ve the I that opportunities we’ll next got our be And the lot of

Steve Mihaylo

to to to GAAP back way, that get got with need they have question, be positive and the preferably plan they’ve cash or the cash flow this – Ronald’s goes Chris, mind, positive. in to by flow And a

Unidentified Analyst

Got it. Thanks.

Operator

Finaldi Okay. with Up next, Damon have we Telecloud.

Damon Finaldi

I’m sorry.

Steve Mihaylo

you? Okay. are Damon, how

Damon Finaldi

Nice Nice. guys. hear backlog. to was question you. My on Hi from

you. it You already earlier. answered Thank

Steve Mihaylo

you. Okay. Thank

Operator

Okay.

Partners. Quinn Rafe have BARC with We

is line live. Your

Rafe Quinn

Hey guys, you? how are

Doug Gaylor

Hey, Rafe. How are Great. you?

Steve Mihaylo

well. doing Rafe. Thank you, We’re

Rafe Quinn

if have I a Hey don’t you mind. few questions,

software the with segment, NetSapiens. starting solutions So

million approach reported the and the XX look $X.X of So made pushing companies just you in quarter, when where sounds an some transition. more saw, versus business, of I beyond was really are the perpetual. the a more that if software traditional SaaS you like of accounting of in were know, lot ago years back you don’t We and of the change, guys because expectations versus it sort where shortfall

that was the and bookings provide things the period. current did for the of sort period on metric previous they a One of

year be I NetSapiens the private of back So in guys you then. versus case, was first reported. just quarter what it’d this last realized

yet. didn’t them own You

not lot from the of can what’s being a the instead guess market happening. I’m negative through of look what the that point data So like, response looks focus sort you underlying the economics the that – I of on just sure but and

wondering what year quarter was sort versus this I any like can for share that if bookings a So division. around metric specific you ago look of guys

Steve Mihaylo

and Korn it’s information But and going if me feel, what anything. guessing Rafe, I probably there, Well, we’re and be have Doug we to like And of touch, like I’d the And at guess at measure, to get first you’ll to that. forward-looking. Anand Gaylor that the answer doing, both Jeff be answer we know. and don’t then measure, if measure, can to the smell, one let it. measure. of we metrics, guys have and going And all first a I’m that’s rest to have all,

Rafe Quinn

With everybody way. else, the by

be clear. Just to

Steve Mihaylo

Yes. like that you yet. so just where And more Rafe. position a in I want our to and a a want do information. matrix. insider of is That’s to been we’re get business everyone that But point you, We And good don’t predictable that But point. we’re going. to where the includes understands idea where give not to a we’ve we

Doug Gaylor

bookings, bookings bookings probably the Rafe, subscription again, that services year. doing services would previously we or January subscription tell look last of I they if weren’t we because we Yes. it what look in But are of information at up. XXX% when were almost the you, are we do double at from that have,

more have quarter-over-quarter, I we’ve bit the that in after think increase have that. increase little on increase after But software traditionally, I’ll color seen a give So bookings. Anand solutions

Anand Buch

in as very figure closely out a to different. Ron a Yes. very that to can in think revenue closely measurements metrics what versus we’re exactly made is doing Rafe, question. want I being working were the and that think how we And that’s to the We public good much point very things a terms organization provide done organization reason make private historically. for more dig are that predictable. actually of you one also great solutions on But the side things here side the Ron Jon on a with to software of I very working with

as not those, need as And just appropriate, manage to be or but business ballpark to giving you want would probably so the we kind obviously because develop number absolutely of we inaccurate – we some those well.

And forward, model so the as to increases be those business the you. what kind we dig to how we’re with is in subscription side. of as we the into we’ll significant seeing go happy of contract total on But share models value

Doug Gaylor

to know if I to add don’t Ron, that. want you

Rafe Quinn

didn’t That – talk to Ron. sorry. I’m you. ahead, Okay. over I mean Go

Ron Vincent

No, covered it. He fine. you’re

in So need to I add didn’t anything really addition.

Rafe Quinn

accounting Yes. guess versus the economics. the from trying just And is underlying the I noise to point understand

of market about can a we about of that. of a related on the sort you just some that solutions from happened. of $XXX,XXX And bit a a which of then then And item, would the it decent second recurring. I the the had that what one layer there of $X.X forward reduce so point Is kind to baseline guess quarterly mentioned that software gets reset the million the should going top time, that sort go here on response was that, extent sort of is, business of that basis and was question the for sort line of to off imply

Ron Vincent

Yes.

that. with as a of that You’re history would yes. on that’s I top proxy assessment the future, say growth for fair

Rafe Quinn

the just find I then you M&A Okay. point guys side, final to, the if great, Excellent. on which And here with guess, respect is opportunities.

to cash? the about would cash you with at guys that stock plan in $X end on deals million at environment? how about that of it think quarter. of you the Or through combined sort you like Looking the Would a sheet, current finance looked had balance

Doug Gaylor

Yes.

lots of deals I said, got we’ve Rafe, As in hopper. the

so table table financing opportunity, stock different for probably And of them or moment. cash, but that of those on But components at are say the I all on looking how we’re all and that considerations would the we deals all would probably that depending do combination the acquisitions. of any the the have up make in on

Steve Mihaylo

There’s basically, there’s no – formula. set

Rafe Quinn

Thanks questions. Those great. all are Okay, my guys.

Steve Mihaylo

Yes.

welcome. You’re time. for Thanks your

question. John, Okay, next

Operator

next, Kaufman, your Private have line live. we Investor. Michael Up right. Michael, All is

Steve Mihaylo

Michael, afternoon, Good

Michael Kaufman

congratulate doing headwinds in Doug to that very How everybody good and the Steve? progress economic you and team want is the facing. I you spite for of

Steve Mihaylo

was And my you. very complain management everything thank except it about team. do Well, little I around here.

Michael Kaufman

One because of the offer much entrenched you is after base. me have basically better a the an players things low where the larger exciting you and the installed large that have excites a can go strategy they cost cost, about pricing players, opportunity really

and overhead. they you if And they with So terms salaries in try to very of hit. have equal they pricing, infrastructure high a big corporate a have huge large

there’s So very to pricing. opportunity a big, get with competitive very fast real

Steve Mihaylo

And there. Metaswitch we’re others BroadSoft winning true. and That’s deals out and against

So have in all it of that And the marketplace. true. be saying what face is let’s you’re they competitive to

to et with that’s so If the user, their cetera, can in money, So for they the or going charge their cetera. their cost business. this they’re to et employees money end cost they more get it’s much all but about can – pockets in down, pay

Michael Kaufman

compelling… so is market you that the huge offer And if a

Steve Mihaylo

it’s least at think market We trillion $XXX worldwide.

Michael Kaufman

lower their have go hard corporate offer activity, of under which is because can for So a compelling price point, they overheads. to if ergs umbrella, big you you

so And that’s…

Steve Mihaylo

Bingo.

on nail the head. hit You the

Michael Kaufman

– addition in great real no a everything that game – behind And and product times of the And in know number. longer tackling, maybe opportunity that Those there’s a like the some foo-foo real and blocking to we guys may I – us about. used and you are past coocoo not So had market else it’s it’s which a do, that where think… people I maybe you like XX for revenue RingCentral while, days, was to.

Steve Mihaylo

rational is pie or to metrics at market look and they’re I going versus in going back Getting sky. his think to Ronald’s the the question comments, to more be

Michael Kaufman

of had of spoken meeting out the it’s going things you this that one do a because strategically take to as the this is you profitable moving some to last so really investors of longer with at from that, blow And and are dividend. small of all to that reward Is you’re thinking table patient or that. away other that still because small on have issues allowing the the company a big

Steve Mihaylo

going that. I’m let Korn answer to Jeff

Jeff Korn

of couple of couple – moving a there’s moving parts, Michael. Well,

have we to all, NASDAQ of to before we First a announce dividend. announce

the it little board But a We So on wanted numbers. week. some in have additional I call discuss anyway. to to wouldn’t later see the that do a we meeting

week. from you’ll I something So us expect next hear

Michael Kaufman

people that has, share. companies, in the Okay. buy stock guess, I the for other to below market because the smaller general, $X a collapsed thing And is for a that harder is technology it’s

and opportunity team good. get a going think resolved, quickly I business supporter I’ve that’s very been promising hopefully I to will the you a So really have long-term because continued believe and do

Steve Mihaylo

very you Thank much.

Michael Kaufman

would wish too. I that you With

Steve Mihaylo

Thank you.

Operator

Thank you. Ron, [indiscernible] we have line [Operator next, Private Instructions] your live. Investor. is Up

Unidentified Analyst

your having general? was happy virtual nice a what day. Oppenheimer was the Good, Doug, that with went other I wondering, in of conference just the how flavor day

Doug Gaylor

extremely individual Went or think decent fairly them with institutional family one and one size, offices. well. of We six all meetings had on I

overall think I so and our comments just And had great on potential. the growth we

that on to opportunity the undervalued very like a investors this. is the do based the I and we stock institutions think opportunity tremendous where with feel we take our and met have feel that as we it’s

a perspective, we we’re And ahead, the and where we to We the our done so previous when we perspective. highlight highlight rodeo. first sector. And fact what the the trying we know in highlight we are the accomplish. isn’t this opportunities fact history highlight And an acquisition growth our highlight from that the opportunities we that opportunities from in this we’ve

so that diligent we’ve made met the like they And we all of that that in fact and the commitments past. very are we’ve the

did were profitability, major We going we stated acquisition, that. did one with stated did in We NASDAQ, we that. stated presentations, the of that. we stated these the do to to on we We we funds, successful a uplist fact we We that raise. that So we were do to successful to going going that. the were GAAP going to fact going have did an investor highlighting we the we we get we that we’re the when stated get We Microcap did we that. on indexes the Russell do go were were to been

on that. execute to continue we so And

and going family yet we to. do things committed to message. so that and the we where they the opportunity to all And this seen, like the to bankers talked be that we’ve to on we’ve that continue we’re Love today. the there’s sit is but call tremendous execute and with institutions What on offices that feel

Unidentified Analyst

I all That’s you. had. Nice. Thank

Doug Gaylor

Okay.

Steve Mihaylo

You’re Ron. you, welcome. Thank

Operator

Okay.

We queue have I’d this remarks. closing floor questions time. for Mihaylo no at back in Steve turn the further to like to

Steve Mihaylo

to have win. lot QX the we’ll of hate spread will of with we in equity, fact going and just to very return a in here that a at losing. My hard. to a after skin we’ve we’ll closing improvement we’re the game, room bit going see Everyone work not want this and win hard and is sure all process in to wish numbers. and be that, This I’m hard everyone a one We like remarks everyone And to very, is continue a And shareholders. our it’s nice we the delivers little a and Crexendo, dollars working you’re is work shareholder either actual are numbers. It’s to a and we make going summer done. the or back process good QX got to

Doug Gaylor

Thanks, everybody.

Operator

Thank you, conclude conference does This ladies today’s gentlemen. call. and

You your this at participation. phone lines you and wonderful may a have Thank time day. for disconnect your

Crexendo (CXDO) 15 May 222022 Q1 Earnings call transcript