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[2morrowsGains]

CXDO...CC NOTES:

(Stock price = $1.58. Market cap = approx $41M)

- Software Solutions increased 75% to $15.1M for 2022.

- Re: Recent acquisition of Allegiant: Allegiant was a Crexendo platform customer and we are already seeing great synergies as we integrate their customers onto ours. They offer managed services, IT services and network services to their clients, services that we intend to offer our Crexendo customer base in the near term.

- We continue to see tremendous demand in growth in the UCaaS industry.

- Our unique model combined with our robust platform continues to drive new partners to Crexendo. It allows us to differentiate ourselves from our 2 largest competitors, Cisco's BroadSoft and Microsoft's Metaswitch offerings which are significantly higher priced based on their cost per seat model. We recently announced new partners that left the likes of Cisco and Avaya and hope to secure more partner wins in the year ahead.

- We also continue to see strong traction in the European market reflected by the large increase in bookings and new logos added in 2022.

- 100% uptime guarantee along with a lifetime warranty on our Crexendo phones.

- Backlog increased 12% YoY, excluding the Allegiant acquisition.

- Our Software Solutions revenue increased nicely from 53% in 2021 to 65% in 2022. And our product gross margins also saw a nice increase from 34% to 43% year over year.

- During Q4 we released our newest version of software version 43 to great reviews and acceptance and we just released our Insight Management Application [ph] for the platform and have had great adoption from our licensees. We also recently released our Contact Center as a Service, or CCaaS offering which provides omnichannel customer engagement, chatbots and automations into our platform for larger call center applications. We have begun receiving orders for the new offering and are seeing a lot of larger opportunities being proposed.

- WE HAVEN'T SEEN A SLOW DOWN IN SALES. WE SEE LOTS OF DEMAND FOR OUR PRODUCTS, both on the direct side from end user customers and on the platform side.

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

- We continue to see a lot of opportunity coming to us looking for our products and services.

- We did see growth from Allegiant from 2021 to 2022 on an overall basis. We've got a great pipeline of opportunities, so we see strong growth opportunity there. We don't give forward guidance but I anticipate seeing good organic growth coming out of Allegiant and their numbers along with good organic growth coming out of both segments of the Crexendo side of the house.


- None of our licensees, including Crexendo, are having an issue with the lack of opportunities. There's a lot of business out there that still needs to migrate to the cloud and we're taking advantage of it, as are our partners.

- Still not a material contribution to our numbers, but we saw tremendous growth in the international markets as well. And the international markets are even further behind on adoption than the U.S. markets.
So we continue to see nice traction in the U.K. and the European markets. And in Australia, we've got significant momentum in Australia right now as well.

- For our licensee applications out there, we are anticipating a price increase that was not announced to the community yet. We do anticipate a little bit of a price increase coming down the pipe for our licensees that'll be announced soon.

- If you think about BroadSoft and Metaswitch owning the majority of the markets out there from a platform perspective, they are notoriously tough to deal with and very expensive to deal with.
And so when people are looking for alternatives for the platform, we are the third largest platform provider and the fastest-growing platform provider domestically.
Seeing a lot of great demand Internationally because our product is so easy to use, so simple to implement and easy to expand. And so we’re getting a lot of excitement and a lot of traction there.

- We have positive cash flows, we run the business incredibly conservatively and carefully, we don't make stupid decisions or stupid investments. I'll tell you what does keep me up at night. To be honest, in this market, our stock, in my opinion, is tremendously undervalued. We are in a weak sector and we've been hit even harder than some of our competitors. The stock prices will keep me up at night because I'm very concerned that somebody might try and make a run at us before we've had the opportunity to fully value and fully appreciate the value that I know is going to be unlocked here.
https://capedge.com/transcript/1075736/2022Q4/CXDO