Crexendo, Inc. (CXDO): Business Model Canvas [11-2024 Updated]
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Crexendo, Inc. (CXDO) Bundle
In today's fast-paced digital landscape, Crexendo, Inc. (CXDO) stands out with its innovative approach to cloud telecommunications. This blog post dives into the Business Model Canvas of Crexendo, revealing how it leverages key partnerships, activities, and resources to deliver exceptional value to its customers. From its subscription-based revenue model to its robust customer relationships, discover how Crexendo is reshaping the telecommunications industry for small to medium-sized businesses and enterprises alike.
Crexendo, Inc. (CXDO) - Business Model: Key Partnerships
Collaborations with third-party telecommunications providers
Crexendo, Inc. collaborates with various third-party telecommunications providers to enhance its service offerings. These partnerships allow Crexendo to offer a wide range of telecommunications solutions, including VoIP, broadband internet, and managed IT services. The company has reported a total service revenue of $28.27 million for the nine months ended September 30, 2024, a 9% increase from $26.31 million in the same period of 2023 .
Partnerships with cloud service providers like Oracle
In February 2024, Crexendo entered into a five-year hosting service contract with Oracle valued at $5.4 million. This contract includes minimum quarterly commitments, which are crucial for maintaining service levels. As of September 30, 2024, the remaining payments due under this contract include $216,000 in 2024, $757,000 in 2025, $1.2 million in 2026, $1.3 million in 2027, $1.5 million in 2028, and $405,000 in 2029 .
Alliances with software vendors for bundled solutions
Crexendo has established alliances with various software vendors to provide bundled solutions that integrate both telecommunications and software services. This strategy is reflected in the company's software solutions revenue, which amounted to $16.33 million for the nine months ended September 30, 2024, compared to $12.73 million in the same period of 2023, marking a 28% increase .
| Partnership Type | Partner | Contract Value | Revenue Impact | Contract Duration |
|---|---|---|---|---|
| Cloud Service Provider | Oracle | $5.4 million | Expected revenue increase from hosting services | 5 years |
| Telecommunications Provider | Various | N/A | Service revenue of $28.27 million (2024) | N/A |
| Software Vendor | Various | N/A | Software solutions revenue of $16.33 million (2024) | N/A |
Crexendo, Inc. (CXDO) - Business Model: Key Activities
Offering cloud telecommunications services
Crexendo, Inc. provides cloud telecommunications services that utilize Internet Protocol (IP) technology. In the nine months ended September 30, 2024, the service revenue from cloud telecommunications was approximately $23.87 million, compared to $21.98 million for the same period in 2023, reflecting an increase of 8.5% year-over-year.
Contracts for these services typically range from 39 to 90 months, allowing for a stable revenue stream. The backlog for cloud telecommunications services increased by 23% to approximately $52.96 million as of September 30, 2024.
Developing and maintaining software solutions
Crexendo's software solutions segment generated revenue of approximately $16.33 million for the nine months ended September 30, 2024, up from $12.73 million in the same period of 2023, marking a growth of 28%. The increase is largely attributed to higher recurring software license fees and maintenance subscriptions, which rose by $2.37 million.
The costs associated with software solutions revenue were reported at $4.52 million for the same period, increasing from $3.81 million in 2023. This rise in costs is primarily due to increased salaries and third-party hosting service expenses.
Providing customer support and professional services
Crexendo offers a range of professional services including installation, training, and technical support, contributing to its overall service revenue. The revenue from professional services and other related activities was approximately $1.65 million for the nine months ended September 30, 2024.
Customer support services are an integral part of the business model, with significant investments in personnel reflected in the selling and marketing expenses, which amounted to $12.21 million for the same period. The total operating expenses related to customer support and professional services were approximately $15.29 million.
| Key Activity | Revenue (2024) | Revenue (2023) | Change (%) |
|---|---|---|---|
| Cloud Telecommunications Services | $23.87 million | $21.98 million | 8.5% |
| Software Solutions | $16.33 million | $12.73 million | 28% |
| Professional Services | $1.65 million | N/A | N/A |
| Selling and Marketing Expenses | $12.21 million | $10.92 million | 11.8% |
| Total Operating Expenses | $15.29 million | $13.14 million | 16.3% |
Crexendo, Inc. (CXDO) - Business Model: Key Resources
Proprietary cloud communication technology
Crexendo, Inc. leverages a proprietary cloud communication platform that integrates various telecommunications services. This includes features such as Voice over Internet Protocol (VoIP), video conferencing, and managed IT services. The platform is designed to offer scalable solutions tailored for businesses of all sizes, allowing them to reduce capital expenditures while enhancing operational efficiency.
As of September 30, 2024, Crexendo reported total revenue of $44.6 million for the nine-month period ending, compared to $39.0 million for the same period in 2023, reflecting a growth of 14% year-over-year. The revenue breakdown includes:
| Revenue Source | 2024 (Nine Months) | 2023 (Nine Months) | Dollar Change | Percent Change |
|---|---|---|---|---|
| Cloud Telecommunications Services | $28.3 million | $26.3 million | $2.0 million | 7.6% |
| Software Solutions | $16.3 million | $12.7 million | $3.6 million | 28.3% |
| Total Revenue | $44.6 million | $39.0 million | $5.6 million | 14.4% |
Skilled workforce in software development and IT services
Crexendo's competitive edge is further strengthened by its skilled workforce specializing in software development and IT services. The company has invested in hiring and retaining talent, which is crucial for ongoing product development and customer support.
Research and development expenses for the nine months ended September 30, 2024, were reported at $3.4 million, up from $2.7 million in the same period of 2023, marking a 26% increase in investment in innovation. This reflects the company's commitment to enhancing its cloud communication technology and service offerings. The breakdown of expenses includes:
| Expense Type | 2024 | 2023 | Dollar Change | Percent Change |
|---|---|---|---|---|
| Salaries and Benefits | $2.2 million | $1.7 million | $0.5 million | 29.4% |
| Outsourced Engineering Services | $0.5 million | $0.3 million | $0.2 million | 66.7% |
| Other R&D Expenses | $0.7 million | $0.7 million | $0 million | 0% |
| Total R&D Expenses | $3.4 million | $2.7 million | $0.7 million | 25.9% |
Customer relationships and brand reputation
Crexendo has built strong customer relationships and a reputable brand in the cloud communication space. The company focuses on customer satisfaction and retention, which is reflected in its increasing revenue and expanding customer base.
As of September 30, 2024, Crexendo reported a customer base that has grown significantly, with total cloud telecommunications service revenue increasing by 7.6% year-over-year. The customer retention strategies include:
- Providing reliable customer support and service quality.
- Offering competitive pricing models and flexible service packages.
- Engaging customers through regular feedback and product enhancement initiatives.
Financially, the company’s total liabilities stood at $12.8 million as of September 30, 2024, with stockholders' equity amounting to $49.5 million. This financial stability supports its ability to invest in customer service and relationship management, further solidifying its market position.
Crexendo, Inc. (CXDO) - Business Model: Value Propositions
Comprehensive, scalable cloud communication solutions
Crexendo, Inc. provides a wide range of comprehensive and scalable cloud communication solutions tailored to businesses of all sizes. The company has established itself as a prominent player in the cloud telecommunications market, generating significant revenue through its services. For the nine months ended September 30, 2024, Crexendo reported total revenue of $44.6 million, reflecting a 14% increase compared to $39.0 million during the same period in 2023.
| Revenue Source | Revenue (2024) | Revenue (2023) | Change |
|---|---|---|---|
| Service Revenue | $23.9 million | $22.0 million | 9% |
| Software Solutions Revenue | $16.3 million | $12.7 million | 28% |
| Product Revenue | $4.4 million | $4.3 million | 2% |
Cost-effective services without heavy capital investments
Crexendo’s cloud communication offerings are designed to be cost-effective, allowing businesses to access advanced communication technologies without incurring heavy capital investments. The company's cloud telecommunications services enable users to manage their communications efficiently while minimizing upfront costs associated with traditional telecommunication infrastructure. As of September 30, 2024, Crexendo's backlog—representing the total contract value of all contracts signed—amounted to $52.96 million, an increase of 23% from $43.11 million in 2023.
Enhanced features compared to traditional telecom services
Crexendo differentiates itself in the market by offering enhanced features in its cloud communication solutions compared to traditional telecom services. These enhanced features include integrated web-based support, customizable service plans, and advanced analytics. The company's revenue from cloud telecommunications services reached $28.27 million for the nine months ended September 30, 2024, up from $26.31 million in the same period of 2023.
| Service Type | Revenue (2024) | Revenue (2023) | Change |
|---|---|---|---|
| Cloud Telecommunications Services | $28.3 million | $26.3 million | 7.6% |
| Software Solutions | $16.3 million | $12.7 million | 28% |
Crexendo, Inc. (CXDO) - Business Model: Customer Relationships
Subscription-based model fostering long-term engagement
Crexendo, Inc. operates primarily on a subscription-based revenue model. As of September 30, 2024, total revenue reached $15.6 million, representing an increase of 13% compared to $13.9 million for the same period in 2023. Service revenue, a significant component of this model, was $7.95 million, up 6% from $7.52 million in the previous year.
Dedicated customer support and professional services
Customer support is a critical aspect of Crexendo's customer relationships. The company offers dedicated support services, which include technical assistance and maintenance. For the nine months ended September 30, 2024, selling and marketing expenses, which encompass customer support costs, totaled $12.2 million, an increase of 12% from $10.9 million during the same period in 2023.
Crexendo also provides professional services such as consulting, technical support, and installation services. The revenue from professional services contributes to the overall service revenue, which amounted to $23.87 million for the nine months ended September 30, 2024, compared to $21.98 million in 2023.
Regular updates and maintenance to ensure customer satisfaction
The company emphasizes continuous improvement and customer satisfaction through regular updates and maintenance of its services. Amortization expenses related to customer relationship intangible assets were $526,000 for the three months ended September 30, 2024, slightly down from $552,000 in the same period of 2023. This reflects Crexendo's commitment to maintaining high service standards and ensuring that customers receive timely updates and support.
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Total Revenue | $15.6M | $13.9M | 13% |
| Service Revenue | $7.95M | $7.52M | 6% |
| Selling and Marketing Expenses | $12.2M | $10.9M | 12% |
| Amortization of Customer Relationships | $526K | $552K | -5% |
Crexendo, Inc. (CXDO) - Business Model: Channels
Direct sales through online platforms and sales teams
Crexendo, Inc. utilizes multiple online platforms for direct sales, enhancing customer access to their cloud telecommunications services and software solutions. As of September 30, 2024, the company's total revenue reached $15,627,000, marking a 13% increase from $13,874,000 in the same quarter of the previous year. This growth is attributed to effective online sales strategies and a dedicated sales team that engages directly with customers.
Partnerships with resellers and third-party vendors
The company maintains strategic partnerships with resellers and third-party vendors, facilitating broader distribution of its services. As of September 30, 2024, Crexendo reported a backlog of $52,963,000 in their cloud telecommunications segment, reflecting a 23% increase from $43,114,000 the previous year. This backlog indicates strong future revenue potential driven by these partnerships.
Marketing through digital channels and trade shows
Crexendo invests significantly in marketing through digital channels and participation in trade shows. For the nine months ended September 30, 2024, selling and marketing expenses totaled $3,626,000, an 8% increase compared to $3,357,000 the previous year. This investment in marketing is crucial for brand visibility and customer acquisition, helping the company to capture a larger market share in the competitive telecommunications landscape.
| Category | Q3 2024 Revenue | Q3 2023 Revenue | Change (%) |
|---|---|---|---|
| Total Revenue | $15,627,000 | $13,874,000 | 13% |
| Cloud Telecommunications Backlog | $52,963,000 | $43,114,000 | 23% |
| Selling and Marketing Expenses | $3,626,000 | $3,357,000 | 8% |
Crexendo, Inc. (CXDO) - Business Model: Customer Segments
Small to medium-sized businesses seeking cloud solutions
Crexendo, Inc. primarily targets small to medium-sized businesses (SMBs) that are in search of scalable and cost-effective cloud solutions. As of September 30, 2024, the company reported total revenue of $44.6 million, with substantial contributions from its cloud telecommunications services. Specifically, the service revenue from cloud telecommunications reached $28.3 million for the nine months ended September 30, 2024, reflecting a 7% increase compared to the same period in 2023.
| Customer Segment | Revenue Contribution (2024) | Growth Rate (2024 vs 2023) | Key Services |
|---|---|---|---|
| Small to Medium-Sized Businesses | $28.3 million | 7% | Cloud telecommunications services, managed IT services |
Enterprises needing scalable communication services
Crexendo also serves larger enterprises requiring robust and scalable communication solutions. The company's offerings are designed to accommodate the complex needs of these organizations. For the nine months ended September 30, 2024, the software solutions segment generated $16.3 million in revenue, a significant increase from $12.7 million in the prior year, marking a growth rate of 28%.
| Customer Segment | Revenue Contribution (2024) | Growth Rate (2024 vs 2023) | Key Services |
|---|---|---|---|
| Enterprises | $16.3 million | 28% | Unified communications, video conferencing, contact center solutions |
Customers looking for integrated IT and telecommunications
Crexendo's integrated solutions appeal to customers looking for a blend of IT and telecommunications services. The company has invested in enhancing its platform to provide seamless communication and IT management. The total revenue from integrated services for the nine months ended September 30, 2024, was $44.6 million, with a breakdown that shows a 9% increase in service revenue compared to the previous year.
| Customer Segment | Total Revenue (2024) | Service Revenue Growth Rate | Key Services |
|---|---|---|---|
| Integrated IT and Telecommunications Customers | $44.6 million | 9% | Cloud services, software solutions, managed IT |
Crexendo, Inc. (CXDO) - Business Model: Cost Structure
Operating expenses related to service delivery
For the nine months ended September 30, 2024, Crexendo reported a total cost of service revenue amounting to $9,691,000, an increase from $9,312,000 in the same period of 2023. This includes:
- Cost of service revenue: $3,336,000 (Q3 2024) vs. $3,173,000 (Q3 2023)
- Cost of product revenue: $1,081,000 (Q3 2024) vs. $923,000 (Q3 2023)
The increase in costs is attributed to higher expenses from third-party telecommunications carriers and broadband Internet providers, as well as increased customer support salaries and benefits.
| Cost Category | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Cost of Service Revenue | $3,336,000 | $3,173,000 | $163,000 |
| Cost of Product Revenue | $1,081,000 | $923,000 | $158,000 |
| Total Cost of Service | $9,691,000 | $9,312,000 | $379,000 |
Research and development costs for software enhancements
Crexendo's research and development (R&D) costs for the nine months ending September 30, 2024, were $4,050,000, compared to $3,605,000 in the prior year, reflecting an increase of 12.3%. The R&D expenses for Q3 2024 were $1,473,000 compared to $1,276,000 in Q3 2023.
| Period | R&D Costs | Change |
|---|---|---|
| Q3 2024 | $1,473,000 | $197,000 |
| Q3 2023 | $1,276,000 | - |
| Nine Months 2024 | $4,050,000 | $445,000 |
| Nine Months 2023 | $3,605,000 | - |
Marketing and sales expenses to acquire new customers
In the nine months ended September 30, 2024, Crexendo's selling and marketing expenses reached $12,206,000, compared to $10,924,000 for the same period in 2023, reflecting an increase of 11.7%. For Q3 2024, the selling and marketing expenses were $4,221,000, up from $3,502,000 in Q3 2023.
| Period | Selling and Marketing Expenses | Change |
|---|---|---|
| Q3 2024 | $4,221,000 | $719,000 |
| Q3 2023 | $3,502,000 | - |
| Nine Months 2024 | $12,206,000 | $1,282,000 |
| Nine Months 2023 | $10,924,000 | - |
Crexendo, Inc. (CXDO) - Business Model: Revenue Streams
Recurring revenue from cloud telecommunications services
Crexendo generates significant recurring revenue from its cloud telecommunications services. For the nine months ended September 30, 2024, the company reported service revenue of $23,865,000, up from $21,983,000 during the same period in 2023, reflecting a growth of 9% year-over-year. The increase is attributed to higher telecommunications services fees, which rose by $1,541,000.
| Period | Service Revenue | Year-over-Year Change |
|---|---|---|
| 9 Months Ended September 30, 2024 | $23,865,000 | +9% |
| 9 Months Ended September 30, 2023 | $21,983,000 | - |
Software licensing and maintenance fees
The software solutions segment contributes significantly to Crexendo's revenue, primarily through software licensing and maintenance fees. For the nine months ended September 30, 2024, software solutions revenue was reported at $16,331,000, an increase of 28% from $12,729,000 in the same period of 2023. This growth was driven by a $2,373,000 increase in recurring software license and maintenance subscriptions, alongside $895,000 from perpetual software licenses and an additional $334,000 from professional services.
| Period | Software Solutions Revenue | Year-over-Year Change |
|---|---|---|
| 9 Months Ended September 30, 2024 | $16,331,000 | +28% |
| 9 Months Ended September 30, 2023 | $12,729,000 | - |
Revenue from professional services and equipment sales
Crexendo also earns revenue from professional services and equipment sales. For the nine months ended September 30, 2024, product revenue amounted to $4,402,000, a slight increase from $4,323,000 in the previous year, marking a 2% growth. The product revenue is primarily derived from the sale of desktop phone devices and third-party equipment.
| Period | Product Revenue | Year-over-Year Change |
|---|---|---|
| 9 Months Ended September 30, 2024 | $4,402,000 | +2% |
| 9 Months Ended September 30, 2023 | $4,323,000 | - |
Updated on 16 Nov 2024
Resources:
- Crexendo, Inc. (CXDO) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Crexendo, Inc. (CXDO)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Crexendo, Inc. (CXDO)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.