GET DAILY SIGNALSCrexendo (CXDO) Reports 44% Revenue Growth in Q3 as Service Revenue Climbs
Key Takeaways
- Total revenue reached $25.2 million, up 44% year over year, slightly ahead of the $25.18 million consensus estimate.
- Non-GAAP earnings per share (EPS) came in at $0.12, beating the $0.11 analyst estimate by one cent.
- GAAP (generally accepted accounting principles) net income was $1.1 million, or $0.03 per diluted share, down from $1.45 million, or $0.05, a year earlier.
- Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) rose 36% to $4.0 million.
- Service revenue surged 75% to $15.1 million, powered by the integration of Estech Systems (ESI).
- The company added five new platform licenses during the quarter, lifting its year-to-date total to 16.
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Why This Quarter Matters
Crexendo's third-quarter report provides a useful look at how its cloud communications approach is building financial momentum. The company has extended its streak of profitability even while absorbing costs from the recent acquisition, which serves as a practical test of its operating model. I am watching the Estech Systems integration closely because it should support recurring service revenue and create synergies, along with early progress in artificial intelligence offerings. With revenue expanding at a double-digit rate and management aiming for a $100 million annual run rate, these results help show whether the growth can hold and whether expenses are being controlled without hurting margins.
Q3 Performance Breakdown
Crexendo reported total revenue of $25.2 million for the third quarter of 2026, a 44% increase from $17.5 million in the prior-year period and modestly above the $25.18 million consensus estimate. Service revenue climbed 75% to $15.1 million, while software solutions revenue rose 2% to $7.7 million and product revenue increased 78% to $2.4 million. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.
On a GAAP basis, net income was $1.1 million, or $0.03 per diluted share, compared with $1.45 million, or $0.05 per diluted share, in the year-ago quarter. The decline reflects higher operating expenses, including increased selling and marketing costs and greater amortization tied to the ESI acquisition. Non-GAAP net income, which excludes items such as share-based compensation, acquisition-related costs, and amortization, reached $4.0 million, or $0.12 per diluted share, up 32% from $3.0 million, or $0.10, a year earlier and ahead of the $0.11 consensus. Adjusted EBITDA increased 36% to $4.0 million.
Market Reaction and Investor Sentiment
Heading into the report, sentiment had been cautious, with the stock trading down roughly 13.6% over the prior three months and about 10.8% over the trailing 12 months, closing near $5.76 ahead of the release. The modest revenue and non-GAAP EPS beats reinforce the view that CXDO's growth engine remains intact, but the decline in GAAP net income and a 49% jump in operating expenses highlight the near-term cost pressures tied to the ESI deal. Investors appear to be weighing the strength of top-line momentum and profitability trends against the heavier expense base and still-early AI monetization, which is expected to become more meaningful in 2027.
Forward Outlook and Key Factors to Monitor
Following this quarter, investors will likely focus on how quickly the ESI integration translates into sustained service revenue growth and margin expansion. Management has reiterated a disciplined, growth-oriented approach, with double-digit organic growth expectations for the year and a goal of reaching a $100 million revenue run rate. Watching whether selling and marketing expenses begin to moderate relative to revenue will be important for gauging operating leverage.
Another factor to monitor is platform adoption. Crexendo added five new platform licenses in the third quarter, bringing its year-to-date total to 16, already ahead of the 14 recorded for all of 2025. Continued momentum in new logos could support future recurring revenue, though initial orders remain smaller than some prior-year transactions.
Finally, early AI initiatives such as the Crexendo AI Receptionist/Orchestrator (CAIRO) and the newly previewed NetSapiens Flow platform are worth tracking. While AI-related revenue is not yet a meaningful contributor, management expects it to become significant in 2027, and progress on adoption and usage could shape the longer-term growth narrative.
Using AI Tools in My Research Process
One resource I turn to regularly for scanning comparable names and technical setups is Tickeron’s AI Screener. It helps filter thousands of stocks and ETFs by industry, patterns, and performance metrics, which can save time when evaluating results like these against peers. In my view, combining it with traditional analysis gives a clearer picture of where momentum may be building.
Disclaimer
The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.
Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
CXDO's RSI Indicator ascending out of oversold territory
The RSI Indicator for CXDO moved out of oversold territory on October 15, 2026. This could be a sign that the stock is shifting from a downward trend to an upward trend. Traders may want to buy the stock or call options. The A.I.dvisor looked at 31 similar instances when the indicator left oversold territory. In 29 of the 31 cases the stock moved higher. This puts the odds of a move higher at 90%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on October 27, 2026. You may want to consider a long position or call options on CXDO as a result. In 83 of 96 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 86%.
The Moving Average Convergence Divergence (MACD) for CXDO just turned positive on October 21, 2026. Looking at past instances where CXDO's MACD turned positive, the stock continued to rise in 36 of 50 cases over the following month. The odds of a continued upward trend are 72%.
Following a +5.42% 3-day Advance, the price is estimated to grow further. Considering data from situations where CXDO advanced for three days, in 188 of 239 cases, the price rose further within the following month. The odds of a continued upward trend are 79%.
Bearish Trend Analysis
The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In 43 of 55 cases where CXDO's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are 78%.
CXDO moved below its 50-day moving average on October 30, 2026 date and that indicates a change from an upward trend to a downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where CXDO declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 84%.
CXDO broke above its upper Bollinger Band on October 28, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Aroon Indicator for CXDO entered a downward trend on September 29, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron Price Growth Rating for this company is 71 (best 1 - 100 worst), indicating slightly worse than average price growth. CXDO’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron SMR rating for this company is 81 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Valuation Rating of 84 (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (2.452) is normal, around the industry mean (2.069). CXDO has a moderately high P/E Ratio (41.143) as compared to the industry average of (-4.311). Projected Growth (PEG Ratio) (0.000) is also within normal values, averaging (8.005). Dividend Yield (0.003) settles around the average of (0.120) among similar stocks. P/S Ratio (2.281) is also within normal values, averaging (5.777).
The Tickeron PE Growth Rating for this company is 85 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. CXDO’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 83, placing this stock worse than average.
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General Information
a company, which engages in the provision of telecommunications services, broadband Internet services, and other cloud business services.
Industry MajorTelecommunications
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