CXDO...NICE results!!!!...Q4 adj EPS $0.09... Q4 Sales $11.4M...Crexendo Announces Fourth Quarter and Full Year 2022 Results
PHOENIX, AZ / ACCESSWIRE / March 14, 2023 / Crexendo, Inc. (NASDAQ:CXDO) is an award-winning premier provider of cloud communication platform and services, video collaboration and managed IT services designed to provide enterprise-class cloud solutions to any size business. Our solutions currently support over three million end users globally. Today, the Company reported financial results for the fourth quarter and full year ended December 31, 2022.
Financial highlights:
GAAP net loss of $(35.4) million and non-GAAP net income for the year of $4.1 million.
Total revenue for the year increased 34% year-over-year to $37.6 million compared to the prior year.
GAAP net loss of $(32.6) million and fourth quarter non-GAAP net income of $2.5 million.
Fourth quarter revenue increased 27% to $11.4 million compared to the prior year fourth quarter.
Financial Results for the Fourth Quarter of 2022
Consolidated total revenue for the fourth quarter of 2022 increased 27%, or $2.4 million to $11.4 million compared to $9.0 million for the fourth quarter of 2021. The Allegiant Networks business acquisition contributed $1.8 million of the increase in consolidated total revenue in the fourth quarter of 2022.
Consolidated service revenue for the fourth quarter of 2022 increased 41%, or $1.8 million to $6.1 million compared to $4.3 million for the fourth quarter of 2021. The Allegiant Networks business acquisition contributed $1.5 million of the increase in consolidated service revenue in the fourth quarter of 2022.
Consolidated software solutions revenue for the fourth quarter of 2022 increased 14%, or $537,000 to $4.4 million compared to $3.9 million for the fourth quarter of 2021.
Consolidated product revenue for the fourth quarter of 2022 increased 16%, or $132,000 to $947,000 compared to $815,000 for the fourth quarter of 2021. The Allegiant Networks business acquisition contributed $228,000 of the additional consolidated product revenue in the fourth quarter of 2022 offset by a decrease in our product revenue of $(96,000) compared to the fourth quarter of 2021.
Consolidated operating expenses for the fourth quarter of 2022 increased 370%, or $36.3 million to $46.0 million compared to $9.8 million for the fourth quarter of 2021. Goodwill and long-lived asset impairment contributed $32.7 million of the increase in operating expenses and the Allegiant Networks business acquisition contributed $2.0 million of the increase in operating expenses. Excluding these items, operating expenses increased $1.5 million, or 16% compared to the fourth quarter of 2021.
The Company reported net loss of $(32.6) million for the fourth quarter of 2022, or $(1.33) loss per basic and diluted common share, compared to net loss of $(602,000), or $(0.03) loss per basic and diluted common share for the fourth quarter of 2021. During the fourth quarter of 2022, we recorded a goodwill impairment charge of $32.6 million and a $69,000 long-lived asset impairment, which contributed to the $(32.6) million net loss for the fourth quarter of 2022.
Non-GAAP net income of $2.5 million for the fourth quarter of 2022, or $0.10 per basic common share and $0.09 per diluted common share, compared to non-GAAP net income of $592,000 or $0.03 per basic common share and $0.02 per diluted common share for the fourth quarter of 2021.
EBITDA for the fourth quarter of 2022 of $(1.0) million loss, compared to $(102,000) loss for the fourth quarter of 2021. Adjusted EBITDA for the fourth quarter of 2022 increased to $596,000, compared to $474,000 for the fourth quarter of 2021.
Financial Results for the Year ended December 31, 2022
Consolidated total revenue for the year ended December 31, 2022 increased 34%, or $9.5 million to $37.6 million compared to $28.1 million for the year ended December 31, 2021. The Allegiant Networks business acquisition contributed $1.8 million of the increase in consolidated total revenue in the year ended December 31, 2022.
Consolidated service revenue for the year ended December 31, 2022 increased 14%, or $2.4 million to $19.5 million compared to $17.1 million for the year ended December 31, 2021. The Allegiant Networks business acquisition contributed $1.5 million of the increase in consolidated service revenue in the year ended December 31, 2022.
Consolidated software solutions revenue for the year ended December 31, 2022 increased 75%, or $6.5 million to $15.1 million compared to $8.7 million for the year ended December 31, 2021. Software solutions revenue from 2021 represents revenue from the NetSapiens business combination from the acquisition date of June 1, 2021.
Consolidated product revenue for the year ended December 31, 2022 increased 24%, or $567,000 to $2.9 million compared to $2.3 million for the year ended December 31, 2021. The Allegiant Networks business acquisition contributed $228,000 of the additional consolidated product revenue in the in the year ended December 31, 2022.
Consolidated operating expenses for the Year ended December 31, 2022 increased 143%, or $44.0 million to $74.9 million compared to $30.9 million for the year ended December 31, 2021. Goodwill and long-lived asset impairments contributed $32.7 million of the increase in operating expenses. The Allegiant Networks business acquisition contributed $2.0 million of the increase in operating expenses. Additionally, during the year ended December 31, 2022, we incurred $55,000 of acquisition related general and administrative expenses. Excluding these items, operating expenses increased 30%, or $9.3 million compared to the year ended December 31, 2021.
The Company reported a net loss of $(35.4) million for the year ended December 31, 2022, or a $(1.54) loss per basic and diluted common share, compared to $(2.4) million net loss, or $(0.12) per basic and diluted common share for the year ended December 31, 2021. During the fourth quarter of 2022, we recorded a goodwill impairment charge of $32.6 million and a $69,000 long-lived asset impairment, which contributed to the $(35.4) million net loss for the year ended December 31, 2022.
Non-GAAP net income of $4.1 million for the year ended December 31, 2022, or $0.18 per basic common share and $0.16 per diluted common share, compared to a non-GAAP net income of $1.7 million or $0.09 per basic common share and $0.07 per diluted common share for the year ended December 31, 2021.
EBITDA for the Year ended December 31, 2022 of $(2.0) million loss, compared to $(1.2) million loss for the year ended December 31, 2021. Adjusted EBITDA for the year ended December 31, 2022 increased to $2.5 million, compared to $1.6 million for the year ended December 31, 2021.
Total cash and cash equivalents at December 31, 2022 of $5.5 million compared to $7.5 million at December 31, 2021.
Cash used for operating activities for the year ended December 31, 2022 of $(411,000) compared to $(1.0) million used for operating activities for the year ended December 31, 2021. Cash used for investing activities for the year ended December 31, 2022 of $(1.7) million compared to $(9.9) million used for investing activities for the year ended December 31, 2021. Cash used for financing activities for the year ended December 31, 2022 of $(54,000) compared to cash provided by financing activities of $650,000 for the year ended December 31, 2021.
Management Commentary
Crexendo Chief Executive Officer Jeff Korn commented, "We finished the year strong and have considerable momentum behind our combined businesses as we head into 2023. In the fourth quarter we drove a 34% increase in consolidated revenue while continuing to grow on an organic basis as well. We substantially improved non-GAAP net income to $4.1 million, underscoring the inherent profitability of our operations once our performance can be viewed on a comparable basis.
"We will continue recognizing synergies from our Software Solutions acquisition and will benefit from the integration and synergies from our recent Allegiant acquisition. As a combined organization, we expect to drive more new sales and to realize greater expansion revenue opportunities from our collective customer base. We will also improve our cost profile substantially as we aim to increase cash flow and profitability by the end of the year."
Company President and Chief Operating Officer Doug Gaylor added, "We made considerable progress this year in architecting our vision for the future of Crexendo. With the recent management transition, we have continuity in our leadership team with a refreshed perspective on how to take our Company into its next phase of growth. Our sales and marketing teams are operating productively, and we fully expect those efforts to materialize into increased enterprise sales and improved margins in 2023. We also remain committed to our existing customers through a concerted focus on providing the best products, services and support in the industry."
Steve Mihaylo, retiring CEO, commented "I am excited to start my retirement and turn leadership of the company to Jeff and the management team. To see our telecom offerings grow from zero to a $45M+ run rate over the last decade has been a tremendous accomplishment and I am excited to watch the company continue to prosper under Jeff's direction."
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