Earnings call transcript Q4 2022

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Operator

Greetings. Welcome to the Crexendo Fourth Quarter 2022 Earnings Call. [Operator Instructions] Please note this conference is being recorded.

I will now turn the conference over to your host, Steve Mihaylo, Chairman of the Board.

You may begin.

Steve Mihaylo

Jon. you, Thank everyone. Good afternoon, Mihaylo, Chairman Steve Crexendo. of I'm

conference very As us. for to Crexendo year a all you seen, it's the end and XXXX have busy QX I you day of been call. want welcome to

that have brief provide Joining Harbor the Doug CFO; for on to CEO; and a then and Gaylor, will then new Korn, over call and will ask turn I numbers, Doug update I'm sales we our Brinton, to few the statement. CRO; personal up comments. me our questions. Vincent, statements, Buch, our open Jeff our -- going to Jeff our call CSO. sales call business will on the more more Ron provide Jeff our is a will and COO; After Jon President Ron Safe and read details Anand to the

Jeff, Safe the Harbor? would please you read

Jeff Korn

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

discussed of statements. and and The actual including anticipate, whether for company's Forward-looking materially subject are statements forward-looking are revise may be in risk any Exchange to the any statements detail undertake Forms the will could as filed. should uncertainties Form forward-looking or does and estimate, result words expect, to has on similar XXXX today. ended those information, include not in update that cause limited other of to any otherwise. the based future XX-K believe, factors new events, not and forward-looking but the identifying from Investors with differ are aware Crexendo publicly December like assumptions and here statements filings a expectation risks results XXst, obligation or year to, are XX-Q statements explained the Securities fiscal Commission, that

now Steve. Steve? to I'll call the turn back

Steve Mihaylo

decided hands. cleaned Thank enjoy we probably has I November. retire but you, great the and to through balance I my now. a for My retire have This while now, in been not one allowed that And Vincent wanted poised I has Ron I've thoroughly Jeff. a as for good decision retire. some spontaneous greatness. is that know process add XX undertook to to by I will had good you knowing has Well, and health and me sheet health I thought The turn might is board across in retirement. the Crexendo up time

I I take any ownership have my Crexendo decided want my to life to that address my very now have for and in I family have I planning purposes. do My to -- had host shares which in interest. that community foundation. have and haven't stock been will faith addiction, drug given education, This fortunate or sell the I support that going the do had. who me opportunities Let estate that issues, I've not are will lightly those and with foundation and why full other the not foundation. I shared the be shares to issues to women's had have a issues. fortune good advantages is of be

and both the Jeff As a Foundation benefit both a Crexendo. and which matter the Doug of on Board to Foundation fact, is sit

discuss Let me the briefly transition.

is over together have closely with now. and And rest with Jeff XX an a XX I the Jeff management of We Doug team had have management have have have over senior Doug. the for worked worked team. I I I years. steady; history with. Dancer, we years the amazing years operation. Doug is broad of of has Bryan for of and worked Allegiant Networks and worked former in with has President a an I a He have regulatory XX for the that He view understanding legal, business, approximately now. problem exist he he company's excellent issues deep known and solver. communicator

I and we excited the and management our rest about future. could with. team and wealth of transition of the have Doug expertise. telecom be a the This over the as management of is years more I best XXX partners, Jeff’s have experience team worked not

turn And over Jeff. call to Jeff? I Chief Executive the will Officer,

Jeff Korn

but as not lives And Steve. and with have exceptional that it's personally on to everyone the our the you, as belief industry years thank and many it's impacted of room. and been Crexendo for you've here providing Steve's to our in sitting will you've enriched, this positions operate. which products to support and gone over in has XX a must also me principles while continue the it's who at thousands professionally. industry, me under provide whose mentor will that today here Steve Steve, Crexendo customers industry guiding in best everyone a is of tens just a Solutions, the people respect senior well we trailblazer including services you most genuine. people both for Software this And Thank leadership of in to remain not in perfunctory, the

leadership years. he that showed has open to Board strive he to His his an and am example, over for treat taught lead door, out, a that remain both transition. I will generosity, and always He's everyone listen. must pleased very I to in telecom on this of something that team the have the strive agreed time me As XX of have help always to worked by the together and emulate. me and CEO respectfully personal resources, pointed I business, Steve be

dedicated to with thrilled working team. I a such and be am talented executive

XX and well with of worked have for executive and Ron to with an continue relationship over remainder that. the have sure excellent XX have we'll worked working We together team. I'm years, do for Doug the I

and every operations. discuss a as to best and That team and change. excellence. will strong work do not our and our continue of performance culture day drive I will Doug, Ron We meet

management within We have joined Jim, that will recently the meetings more as knowledge team our David happens who much a that never valuable. team, so is I I guess group. regular I there believe in I experience we well including change and and sessions agree, from Jon, really is but collaborative know make only with that to as our Allegiant. the can't decide Anand, approach, Bryan, almost if executive consensus the because get

better with our the shareholder to additional available stock belief with buyback. served our the interest of discontinue our is technology, investment, or by in value dividend. trajectory either all our potential cash in investing opportunities and I other my corporate the growth At discussed that potentially acquisitions it would -- We with meeting, for be [indiscernible] believe today's the action, Board Board our a current best quarterly including current

agreed going the uses to have we We other we it as expect forward, do pay Board believe an a for cash. I that action quarter this but we to will not was expected convene will determine the and dividend continue

of important In addition, getting it is investors. to we stories a our to job better do out believe

firm in in noticed IR have to You regard. us that an assist that have our press we retained may release

and to year for exceptional the our results performance. Now Crexendo. getting This and actual was quarter an

to supports In income the ahead substantially financial our belief tracking XX% continuing performance our of track. non-GAAP a $X.X right are to fourth drove consolidated quarter, improved which that plan Our net increase organic we revenue on grow We on the in an while is we basis. million.

the downturn that During we contributed in did period, a heavily the result in market which a to GAAP substantial the write-down record goodwill loss. of as

However, of viewed operations our we on flow, a can comparable be cash positive performance very the and inherent had earnings strong profitability and non-GAAP basis. our underscoring

lot however, managing working the productively. non-GAAP and of be GAAP the That organic working plan the to fully rest We add complete migration to to team want we to We award-winning are the until will software upgrades We discuss all to rest and the in on spend parts year not work our I classic our Crexendo increase to results team. highly-functioning will with a more Allegiant the exciting team. platform. awards and improve Doug we growth integrate the hard VIP particularly team won the of the of and detail. said, and our operating one to we of will want And continue business business expect the customers will will we results which that. to and efficiently as

and We shareholder margins in costs have positive productivity, watch and things, do value. position If carefully cash growth, will generate be improve I believe productivity flow. all to our to continue and we a these we will great work additional increase our

hopefully, concentrating not our are boat. use integration, we and to fish that call intend operations, we loves concentrating accretive We sometimes we cash from are short-term our necessary. generate are from all watching jump the shareholders understand But that -- will than We as acquisitions don't primarily what fishing that any existing in not while the to want are the we pond in fishing more dilute we the acquisitions pond. will on for we acquisitions, intention, do the Doug is as on

and number. of your Ron the for turn all Ron? for will details And on in over support thank that call the interest I you more Crexendo. to I with

Ron Vincent

the million the the quarter the go year some details. into to as highlights to quarter million full Jeff Thank highlights for $X.X year. revenue for for XXXX over prior $X the I'll follows. for as for prior compared fourth increased quarter $XX.X are of XX% Total the compared Jeff. increased for you, $X.X to million the Financial went of the quarter and Service but million to XX% year. the revenue

product increased for to $X.X Software XX% revenue prior to Solutions $XXX,XXX for year. the the million and revenue million compared $X.X to to increased XX% $XXX,XXX, compared quarter

strong. margin $X.X to Consolidated our combined the XX%, year. Software margin for Telecom product quarter XXX% on increased XX%, million. service That's Margins million expenses to gross for compared Solutions remain operating basis $XX our gross prior margin the XX%.

annual asset of a and Allegiant result, acquisition the goodwill a During and The the expenses. we additional operating as increase in impairment $XX.X long-lived of completed goodwill fourth $X we recorded quarter, million. impairment analysis intangible million contributed asset our and

year. a share, of $XX.X reported for basic $X.XX the $XXX,XXX common of million loss and share compared a loss $X.XX quarter, prior net loss to or per company loss diluted diluted the and The for per basic or

million see, we can the that of quarter. impairment long-lived is majority recorded during $XX.X the the and you goodwill As asset

compared loss prior increased quarter the prior year. for $XXX,XXX. prior was That's million $XXX,XXX quarter in year. to EBITDA loss EBITDA the But quarter $X.XX a per per $X net and for share $X.XX of diluted in $X.XX income diluted common $X.XX basic per basic of share income million and Non-GAAP or per $X.X to or for non-GAAP net compared compared adjusted for $XXX,XXX the the the the $XXX,XXX to year. our

increased revenue for Total Now highlights I'll revenue of in December in XX% Allegiant ended $XX.X $X.X acquisition compared million prior million to increase increased the to year. $X.X for total $XX.X revenue. go over in XXst, million Service increase some to of XXXX. service revenue full the million contributed prior XX% for to compared year year the $XX.X $XX.X the and contributed Allegiant the XXXX. million million

Software or Solutions year, prior compared the for $XX.X That's in the months $X.X to XXXX. million Xst. of XX% to the June prior acquisition X let's year increased date from say the million for

of impairment Goodwill revenue product XXX% Operating compared earlier operating prior and purposes, the only million to compared segment operating million increase year. Allegiant to XX% discussed for for $X $XX.X this XXXX asset acquisition in included $X.X million in to And of of Software XXXX the increased year. expenses. contributed operating XXXX million million $XX.X $XX.X to additional comparison for business long-lived the loss. months for $X.X Solutions for The expenses. million Our X Networks the increased expenses we contributed prior to

of compared million basic $X per a XXXX. reported per That's and share, per and diluted prior $X.XX for and a common year. common million common share $X.XX and EBITDA in a $X.X year for share it prior our compared common compared basic $X.X loss loss for year. in EBITDA year. to at $X.XX a the $X.X income common and per million adjusted net our came basic prior Non-GAAP good per asset long-lived was or the XXXX million $X.XX goodwill year. was of company XXXX, in loss million million $X.XX $XX.X loss of the million million the $X.X that back net or compared for The to $X.X intangible, diluted per $XX.X diluted Again, loss the of for loss non-GAAP million year. of $X.XX pretty impairment, for share in But out basic to prior you if net or $X.X to diluted and

million. was at at equivalents to of That's compared prior the the cash December end $X.X year. XXst million $X.X Cash,

During We a Allegiant activities year million, Solutions the activities cash the for of prior $X.X $XXX,XXX. that's we part that's for used to which acquisition for in Cash used investing in acquisition, of so million the the $XX,XXX large year. provided by investing prior Cash $X the Software cash compared operating was to in That's paid million compared of year. acquisition in of $X cash, $XXX,XXX of million the decrease. used for activities financing in compared prior to $X.X the year activities the XXXX. used

and President for operations. turn Doug Gaylor, I'll and on sales it over to our comments that, With CEO, additional

Doug Gaylor

was and XX% for revenue revenue on performance plus I'm with end revenues XXXX. over million the Thanks, $XX.X and and a quarter a the XXXX year. have very annual us $XX.X of in our million Highlighting XX% in prior in year pleased revenue QX our increase year-over-year revenue million QX Ron. for increase trajectory $XX our for a numbers.

Our great as momentum strong of we the start with Allegiant acquisition our for combined organic gives Networks November, quarter, in us XXXX. performance

asset results or a mentioned, were goodwill onetime by an share $X.XX strong quarter or the large were Ron a impairment $X.X the year. our charge per acquisition-related totaling charges for impairment earnings while million $X.XX for As million non-GAAP and and very charge, GAAP share $X.X our affected and

us continue for same to the future. phenomenal realize while success validate and power synergies time leverage Much improving believe efficiencies rapidly tremendous team to we our synergies results scale amount cost effort greater our work past who quickly of through of opportunity allowing and will foundation laid and that at are due growth. to continue from the a financial acquisitions We organic Our our success business. significant is as realizing we the hard in the more we has our to growth

announced our acquisition. Networks, all synergistic we know, checked you the acquisition Xst. of on of of highly a one Allegiant of and boxes most As November licensees, Allegiant the complementary

to was highly services north annual we platform are a we as services great it Allegiant their million and already revenue Crexendo ours; was network onto profitable; generating seeing customer Allegiant services, that First, was second, their and accretive, services IT in offers and of third, synergies customer of We Crexendo clients, integrate the Doug's managed customers using intend $XX to Allegiant The ideal the business the fishing to candidates we run are in trophy pond. additional licensees UCaaS to fishes their near for our pond believe [ph] the term. offer base from first XXX-plus find Crexendo our many platform us acquisitions. highly-accretive marked

tailwinds X.X we to nearly see robust the in milestone on in platform, broadly, growth These to recent of our July had tremendous UCaaS eclipsing demand users the continue million double X More industry contributed million in XXXX. we end of industry. users our

to continue cloud. the level licensees enterprise to benefit mid-sized and from agents migration Crexendo rapid and Our of businesses small, the

organic Crexendo from services additional need they which Software grow, in growth. licensees our Solutions As turn drives

were this of our model, compared XX% fourth Solutions demand in last organic on Software up to QX year. unique basis an Highlighting quarter, the

combined secure to significantly and Cisco platform announced continues left higher per Crexendo. It with are to model that ourselves allows of their in our the and differentiate competitors, us Avaya X model. new wins new drive unique likes more Cisco's hope BroadSoft Microsoft's seat on largest our to Our partners ahead. cost the and to robust year recently Metaswitch priced We offerings which from based partner partners

in the logos to new reflected continue in traction added by the in and strong see European large increase also bookings We market XXXX.

great [ph] program OTG X and success partnerships agent. master our We've agent signed to Consulting newest recently large as our from Distributors Jenne well. Talaris agent seen Crexendo grow with and traditional master Our continues as

lifetime traditional Crexendo program Crexendo Our powered uptime has a guarantee warranty along our agent highlights offering on XXX% NetSapiens and our phones. VIP by with

partner to We that these continue excited bringing larger and about funnel partners agent Crexendo. to are to new the program add and new and the opportunities the are agents

Allegiant, up which XX% over at line, Along $XX.X that year. exceeded year backlog, end million excluding was our year

our As and contract XX Solutions the will the is Services on of be over a a recognized sliding sum months. next customers for reminder, Software our values scale Telecom remaining the backlog that

by Services XX% we margins revenue from to affected synergies to contribution. the for Telecom year, the margin Our the the range XX% expect quickly declined the lower acquisition. service Telecom Services to But slightly return Allegiant's as recognize we margins from

XX% Software costs margins also and XX% XX% better Our cost XXXX. XX% a increased management Solutions our from product And nice XXXX. shipping revenue over increase from nicely assisted that lower to year, gross in XXXX year spiked in to in saw by

and talent Business improve Use premier the in Easiest to by engineering We add software Support site, award-winning Winter review XXXX With recently Our awarding were awards. continues Do leader business the to the and to us and as recognized along and our services Voice-over-IP with GX, tremendous its to Report technology. the Best Easiest

During QX for Management software licensees. just newest and we acceptance of version our platform our XX adoption released to great [ph] great and we from the and had have Application released Insight our reviews version

We CCaaS provides center larger for as engagement, a Center offering platform automations which and Service, also into applications. recently our or Contact omnichannel call our released chatbots customer

offering receiving and begun opportunities the have of a being We are proposed. lot larger seeing for orders new

perfectly couldn't world-class team more for XXXX, and about for we our direction excited the demand I Crexendo. As model disruptive opportunity have pricing be future. product for the The start offerings, positioned burgeoning us and

end positioned continued will our years strong for our success well in our fastest-growing offerings, user which the to to and UCaaS the in platform are With partners we growth for We are our industry direct in along solution shareholders. and committed the offering extremely believe ahead. of deliver enable with the combination returns delivering the customers best our we country, to

leadership, his look amazing I and you mentorship Steve for want been over life. personal ride worked to helping thank tremendous his of have a on that we friendship next your enjoy It's note, your I to a his years XX finally, And forward and the together. chapter

the best, You're Steve.

with any And over for I that, turn further will comments. it Jeff to back now

Jeff Korn

you, Doug. no, Steve. Well, questions. now open thank We'll you, call you, Thank Ron. Thank the to

Operator

[Operator Instructions] with Eric And Martinuzzi Lake the first question from comes Street.

Eric Martinuzzi

retirement. comment. on a your Steve, Congratulations, First

business General You your rate. be first a congratulations actually to going I. And the caps? you plus to Are certainly both going I my guess to promotion $XX at question is side. million adding wonderful on wearing a are be ball a Jeff, on have here you created management Counsel, or run

Jeff Korn

period, caps current to because can approachable the very wear what junior do when to and to For as going ask reach to much I'm nice have that. me more do primarily question, both salesperson It's contract you out with we do ball and feel this me do a General they I'm a Counsel. like or can have

getting make have organization. everybody I information like how works. I find changes. this way. support we'll it's We some the too So within from see We'll taxing, If it do some

get assistance that. being, will I for I some So But time intend both. to in do the

Eric Martinuzzi

wanted on of most take to continued -- be get message I macro technology-oriented across And environment the to the my your demand take where seems headwinds companies. Okay. coverage

If there as the you service macro? you are Software could seeing the in out well Solutions as business, address the from both it business what

Jeff Korn

a more that good information. over to but it I'm think I turn looks little Doug to going for

Doug Gaylor

& using that for thanks. X of of the the And matter very It's we show older over going telecom that's be question. statistics and it's Frost not equipment. communication X adoption next The I business still Eric, reports see still a market if from No, and Gartner approximately half is Great to cloud rapid a legacy still years. to others to to that U.S. when. a continue think services. lot the move to the of they show the cloud, migration Sullivan all

of out seeing So we're when see there, our tremendous the that we amount at in of look sales. we still amount opportunity and opportunity

from a haven't for seen direct both the We user on customers a lot We and platform on our in demand end side slowdown see sales. side. product, the of

exhibiting the Cisco platform. As -- I comments, Avaya Miami and hosted over, tremendous at in just clients had We Crexendo platform. done got to over my BroadSoft recently the IT mentioned tremendous, move offerings in had from clients we excitement Expo BroadSoft their our about move

So see coming we and couldn't be more continue opportunity and to our lot to excited opportunity a growth we about services. products for us looking of for the

Eric Martinuzzi

me. for question final And Okay.

probably [ph] think been -- think you’ve trending finish did a I X.XX% we Ron. trending year? it’s up for retention monthly churn at had the basis. at been through I The around on least How QX,

Ron Vincent

We were at in QX coming around that X.XX%.

Eric Martinuzzi

Right.

did in sorry, was you take Sorry, that? with I line didn’t on, the -- give QX

Ron Vincent

Sorry, out. X.XX% Yes, was reporting. absolutely it the previously with QX we were just line that in got

Operator

comes Josh Nichols from next with The B. question Riley.

Josh Nichols

directly first integration more mentioned bit left little I the congratulations, working back rather bit further here. ‘XX? to to call the get you a Yes. about half first off, long more forward regarding dive Today be bit Is you’re could Steve. with sometime acquisition? a half And focused how looking to Well, a what’s services you going the you And acquisitions. Allegiant Jeff, within know on talk until back those little done forward on than of to with that just the then that or level? margin, your XX% gross comment little on

Jeff Korn

second group our very the they're a have more of of very, so engineers are one Allegiant group answer answer And versa, is company. let want them have they to to brand. spread them. talented and with is very what talented working providing half. and the all engineers do facets I'll first closely group just What the of to we talented salespeople support and vice to the question. across want do the half I'll with organization we We a out, of all Doug be

hopefully the they're as can an telecom side them the offering is we of to that that expertise add exciting so that us. little extend his the As and Doug MSP business, to we mentioned want a to comments, in Because bit an very our fact increase Crexendo's sales.

organization. is And take amazingly, to and rolled his working he's tirelessly challenge So a to providing up It's exciting bit it's it. everybody in working time. sleeves support Bryan very a little the at but going we're an hard of

get So us going I integrated. a great we be think win it's to fully when that for

Ron Vincent

finalized that accounting And I’ll our the with be local we’ve then numbers the our giving the them a GAAP just close and footnotes will process assistance. the to price team during valuation, completed oversight in purchase allocation from add presented XXX year financial end standpoint, and work we’re accounting [ph] continuing so final.

So working a perspective. from everything’s well accounting finance and

Jeff Korn

You want margins, the to discuss Doug?

Doug Gaylor

finally a great on as Solutions said, on gross And year-over-year the on a gross Yes. the margins, basis. margins I saw Software we increase

Telecom decline and side, we be those On of buying the a opportunities back synergies range of anticipate I’m but getting we’ll Services saw but a as back to we if we’ll bringing we group the the advantage with aspect obviously QX cost much XX% organization. Crexendo little of sure those cost see the have And into bit larger quickly. them get management in that take in Allegiant able quickly. relatively margins. a business, not definitely relatively expect The some of the will to to

Josh Nichols

Perfect.

like just XQ, quick that, something I’ll probably pretty XQ that’s So for front. assume latest the at or expansion margin the

-- million of I you Allegiant actually running months. for because here, question especially acquisition rate, have company other starting guess, you’re on the Xst already only believe Looking top I considering is that line November the north the run right, the the X $XX

going forward expectation So XQ? for what’s to was the organic you that in put And up growth growing? what relative business

Doug Gaylor

both Allegiant see We anticipate organic growth house. but We've I with good growth basis. see there. out of guidance Crexendo a pipeline of along side did of seeing good their so an got numbers organic and segments out of from we growth the don't coming give we there, opportunity of coming on opportunities forward XXXX the Yes, to great growth strong from overall Allegiant XXXX

Josh Nichols

I then And hear. to for thing last Great me. guess

have might I you is missed think Did it. today? at the backlog where I mention

Doug Gaylor

mentioned comments. I did. I that in my

year So the end $XX.X quick let pull me I here real backlog at up -- at just million finished believe... it of -- the

Ron Vincent

Yes, $XX.XXX million [ph].

Jeff Korn

$XX.XXX million.

Doug Gaylor

XX% is of from which the million end XXXX. up $XX.XXX

Josh Nichols

And out that was as much much, break maybe Allegiant how versus...

Doug Gaylor

of number backlog. include Yes. not That does Allegiant's any

calculation backlog. do on to Allegiant's have able full So not been we a

So does all number backlog any $XX.X pure no that organic hopefully Allegiant QX not call. include growth We'll that backlog the Allegiant our there. It's organic numbers is backlog. backlog. numbers million But and in backlog for earnings Allegiant have

Josh Nichols

Oh, great.

over year XX% the So year acquisition? excluding

Doug Gaylor

correct. That's

Josh Nichols

And Steve. congratulations again,

Looking you the to in future, with forward working Jeff. more

Operator

Capital The from with next Mike is coming Okay. Market. Northland Latimore question

Mike Latimore

Congrats on changes Steve, hope you have the here, a retirement. And I and Steve Jeff. great

Steve Mihaylo

to. plan I you. Thank

Mike Latimore

Sounds good.

software strong a growth over a mostly detail detail systems clearly little current on million expanding You’re service that? it Is or subscribers really little on? you on go Doug, [ph]. there. you what’s providers it Just Are could is greenfield? into bit replacing X legacy it the Maybe, and coming platform more driving [ph]? more Was new

Doug Gaylor

Yes, great question, Mike.

And so seeing really from we're that coming growth all angles.

are we new amount adding a new logos. of We considerable XXXX. added So logos in

their those on bring have from logos to platform. those Now over migrate seats seats existing but

coming It's a slow when we onboard onboard, don't So of seats see -- a new comes migration. logo we don't thousands see immediately.

we our continuing see have great now, licensees out existing licensees over which the board. across are growth licensees, existing there to of XXX Our

So, verticals they're in yes, different in markets, and all different specialties. all

their we for and businesses in And group user are record had because October licensees, so our all those when from enthusiasm all nicely. meeting had we of growing licensees record our of turnout

just organic cloud. that's the seeing they're demand from premise-based everybody leaving moving over of So the to growth and equipment

advantage none we Mitel when and think challenges our productivity So of premise the and cloud, that providers the about and it, including the cloud opportunities. the with are taking still are and needs Crexendo, that partners. to having migrate of to out we're of and licensees, There's and of cost an lack lot efficiencies benefits as the Avaya other moving our are there a to based business of issue having

mentioned include So also the numbers international. I

And international material not markets. further still the contribution saw are even -- on tremendous numbers to markets U.S. tremendous growth a in but seen haven't than the international a our adoption the We markets as behind we well.

in traction we've And continue nice Australia right U.K. see Australia, got we in the now markets. momentum the as well. So European significant to in and

Mike Latimore

other that good. there Allegiant's in little or going about detail base, And Crexendo how just package then sounds information? any timing, cross-selling Okay, the you're relevant a you can to terms give more into of managed services that,

Doug Gaylor

give I’m to Yes. network that but color IT little bit Jon he’ll services of services, is to benefit pass that services. more and over they the with along had going Allegiant a managed

of so are that didn’t our user And services as direct to we offer those end all core necessarily competency customers. components X at a Crexendo

job single-source has customers. that end And provider great into a their done so boxing Allegiant user of all of for a

And larger using Jon a that side. for there we a our out little the color more Crexendo And anticipate of so to at on bit I’ll that. direct lot have opportunities

Jon Brinton

Yes.

areas is expertise had the Allegiant of business. one in than our omnichannel that did that that CCaaS a So the of greater can offerings we some within core fruit level already see we of

employees So and we we're about perspective. in good with really their to services, success earlier, already all And that were to to a associates talked them opportunities us there. and business those customers help deploy we're now having are those us scope that share-of-wallet greenfield leveraging from

interesting through our even system through and offerings platform look when those expanded several licensees. their to And offer And that to ones in at looking us have that other distribution. they then our an could cases to deploy bringing our retail portfolio, you Crexendo in we're through really partners on to them other working some we for at able are our services be offer

billings excited really through average being Allegiant. So our based offerings on our per more to about offer, through expand drive customer able we're additional

Mike Latimore

and Great. [ph]? little detail And this price a have year at the start of a you one. just then increase just maybe more Did last

Doug Gaylor

Yes.

soon. there, applications anticipate so our up coming not to out a yet, are of on down community giving them pipe that'll Mike, a announced the licensee for be increase bit heads thanks, a that So we licensees increase for we for do that. But price announced little the a anticipating our price was

Operator

The from Sakai is question next Singular with Research. coming Chris

Chris Sakai

again I -- dividend the what question can over reasoning far now? stopping first go dividend will as Just had, and the use as you you for money the that for

Jeff Korn

Yes, Chris.

of at the we We are. know, we're of We if a industry didn't uses using now start a manage stock for buyback think accretive you our growth to but As trajectory, it throwing which to off microcap for are a to we business from use better at point could buying just be in of than it. we and would there in at to and might just a It we make we as a were thought ton to money have not companies continue we're investment a dividend. sense technologies. paying us it it anything better growth money, this to this right of again the money. lot And doesn't uses mean where it point, look there

Chris Sakai

Okay, good. that sounds

we for For future what can acquisitions, XXXX? expect

Jeff Korn

that other to sell often Solutions We Well, about people. acquisitions reach fishing pond. to reached that community have is in will accretive ability accretive for something along. primary Software so any at to business. But look our who talks us, community within almost come we an the the be people We looking appropriate out their out our Obviously immediately would interest. Doug always

Chris Sakai

in Okay. share of And there then will you mentioned market Australia same much you Europe. mention the out Can how have that future? talk you do grow growth or about and and in

Jeff Korn

we're but yet to hoping large change that. It's not

Doug Gaylor

do I said, at the is we It’s opportunity not as U.S. this but there. tremendous material for market Chris, the domestic our see of contributions financials growth large not outside point in yet,

U.K. So got when X I we think logos opportunities, the those we’ve look in XX the X Zealand, of logos, the Philippines. New X in market, in Australia, in internationally, most maybe and at European XX

So we continue to see opportunities there.

owning perspective, expensive with. from deal there out BroadSoft and the Metaswitch are they platform markets about of think majority a with and the deal to you tough very to notoriously If

third are platform, we when the provider looking people platform and so platform are domestically. provider And fastest-growing alternatives largest for the for the

that we’re we’re the product to is our waters use, so seeing the and of because a easy to so great there. And implement to to simple on across so of And lot both sides easy expand. message pond same starting demand take

a getting of of we’re so lot And lot excitement a and there. traction

Jon, So, you to color add any to that? want

Jon Brinton

UCaaS as structure offering the irrespective times, are Metaswitch, the the opportunities that the understand, And built I them somebody they're first would funnel worked for those just there that's the in about BroadSoft had time. larger Microsoft to just of technology. the licensees over enough in country to of couple are so talked a a come of on opportunities, none Almost platforms we've and of solutions with our seen most with are time. the there's new for offering some virtually that you starting all platform and add them a Cisco else's that us, partners and in. way now past with far in And more date, that and being change people have between time our the acquisitions supported

are as very its use call on customers said, the in cricket and Doug the in model our largely deploying the So like different platforms like to, in ease but areas that scalability monetizing that growing as got you've where of and what we who our funnel you good solution countries for of well. have Europe

Chris Sakai

for Okay. the quarter about it for And your Can improved has you about then one me. last -- or this same? talk quarter, from last

Jon Brinton

Churn's Yes. at for the at same average. rate percentage X.XX% currently QX it [ph] was

Operator

[indiscernible]. The comes next question from

Unidentified Analyst

EPS actually you quite over one-off QX look -- $X.XX. this this as This this accelerate $X.XX can from year Is year diluted at forward? acceleration $X.XX of an going do you from $X.XX is level or

Jeff Korn

better I'll that. ahead, to to continue let than but go we're but not answer want do to better we Ron. Ron to $X.XX commit Obviously, going

Ron Vincent

to We guidance the strong improve like forward can’t the we would guidance of but give to give end time this to trend. continue really were that this don’t excited EPS where we and quarter fourth but strong on we ending very and as Yes. our at XXXX about would

Operator

question [Operator Michael Kaufman Instructions] with The comes Investments. next from MK

Michael Kaufman

great luck management company of hope be for wish Steve and will his the a him building best I which thank I and first leadership in to his and want many many, team years. I retirement

Steve Mihaylo

you, Thank Michael.

Michael Kaufman

helpful marketing basically up very at to and Also under I to the for in very in financing. cash for growth this night profitability you gun in for and for the small-cap Korn’s Silicon what the to going debt I the be keeps And leadership I and question of comment small with positive wanted the Jeffrey failure, terms and forward key? it's thank pressure window. think are minimum is are to I shy. on leverage closing are I and Jeffrey guess companies banks IPO down his flow and the nervous And and clearly sales the environment look fact company. where Doug regulators will that experience driving just which Bank be want Valley

Jeff Korn

Well, me what keep does you at just which mentioned not is up night.

we carefully, don't flows, in this and have at market, in We night. tell is or run me To we my make stock, honest, investments. cash business stupid incredibly you I'll the decisions tremendously stupid positive opinion, be up our conservatively undervalued. what keep does

competitors. had prices a than harder know of weak to value even stock try that will hit we've in I the and unlocked and appreciate keep make value concerned run to up we've at somebody is our some been are be opportunity and the here. I'm me sector going a us The because We fully before night very fully at might that

can we if by happening, our very that about future. get So without I'm excited

Michael Kaufman

some a I a And and structure comment, our guess can’t and installed lot Ring they because last have competitors others lower brought XxX base. really the as have they on of of debt. pricing like their

there regard they because not we do an that base is pricing strategy. they So to be we’re we win have going opportunity in a react installed huge Anything can because our share to yet. with great have can’t and market

luck the company in So you this of multi-hundred-million-dollar guys happen making wish that a and making quickly. I best

Jeff Korn

even rest running start with business going assured, the Thank retirement, recklessly. And Steve's you, to Michael. we're not

unnecessary We debt. on will not take any

We're We that our team. similarly fundamentals. management and business will upon cohesive at any We take look world very a we on not issues don't we based need run the to.

Doug Gaylor

you think and holdings or since have past. also important that is I Bank, Silicon Valley with no it’s them dealings the in brought no at up the we note, to present

there. So we any don’t have exposure

Jeff Korn

I stock which out. owned some yourself. wiped for Speak got actually

Doug Gaylor

Sorry.

Operator

Our next Private Ron from comes [ph], question Investor.

Unidentified Analyst

thought the participate Is back dividend the correct? was market. I in That dividend. want that to I institutional of topic go to the anyway, necessary to,

Jeff Korn

it's correct. some funds only Ron Well, that are a invest There pay [ph], companies will which dividend. in partially

with it and And expecting, in paying we thought number made took and we in sense of were materialize they those without of that detriments the a as the the interested the of us, And since looked spoken don't interest the or to tend funds the benefits a hoping cost have of were of we would dividend, those as suspend large the kind they to where didn't paying be it. We getting at funds microcaps cancel dividend. more it we paying return dividend be.

Unidentified Analyst

Yes.

rather. that for the leaves for smaller target investment, principal the as then investors So -- buyers

to a little if in just those are price there they're spikes, let's So of, selling a say, I the fast the that's off case, spike the lot as as involved, be that had is the is many of a problem buck if I've got quick in always you've price investors share going for and and think.

that? small just for detrimental So increase I investors maybe to the I in reliance investors. on being. see agree Do don't know, the you share price as guys with

Jeff Korn

the Most investors. we’ve going us and with believe looking us you slightly -- the crazy they’re sector put dividend. as looking it spoken with improving. investors I’m and to to larger back to I see institutional And dividend as about a disagree us to start they’re for starts paying the for we of will were not improving,

small out small some stayed with time. had a get investor who’ve a quickly right, long investors us we’ve may You’re for but

say a if to to ears, think in have promise. have like to our God’s jumps lot as loyalty And from I a -- the if We stock of a I think mouth of lot start. don’t and they we $X, stock that’s your

lot we Will will not that happens the investors. people table? with I lose but money Probably some off success. a think always of take

Doug Gaylor

to. I Ron with been audiences we haven't to individuals, we that realized a relations -- And decided get high-net-worth also there's because to message think there reason, opportunity lot invest [ph], able in of another our investor that's we out why out

being and front to on you. make we want execute I IR hiring to so our we able haven't front And we get because long-term as continue and that undervalued able with we front prior see in to of We to like, get the stock and anticipate opportunity. an agree firm, long-term the that as story that investors more in because new is in our audiences investment tell we get by sure plan bigger feel said, of Jeff really we today of been

group new firm. hopefully be message of with we'll a out that's investors our that to the And getting IR so

Unidentified Analyst

Yes.

doing You company. I'm just a so that's well, like for been loyalty card vouch your in a really because one, I small is I investor around your because guys that hand. are can while that a

your much time. very for So thank you

Jeff Korn

[ph]. Thank appreciate We you, your support. Ron

Operator

no questions further have We time. at this

back the We now will closing turn question-and-answer and the end have reached call session Jeff remarks. I for to of the

Jeff Korn

we I great thank forward look your for afternoon. of QX speaking results with XXXX joining to results. and announce attention Everybody not-too-distant you And to QX in future we the you us when you. Well, the all call. a and want on conference time and have Thank

Doug Gaylor

Thanks, everybody.

Steve Mihaylo

you. Thank

Operator

conference Thank your participation. concludes this This for time. and disconnect at may you you lines today's your

Crexendo (CXDO) 14 Mar 232022 Q4 Earnings call transcript