Crexendo, Inc. Q2 FY26 Results

Crexendo delivered another strong quarter, with total revenue increasing 49% year-over-year to $24.6 million and adjusted EBITDA increasing 46% to $4.1 million. I am particularly pleased and excited that we secured eleven new platform logos through the second quarter of 2026, compared with only two over the same period last year. This substantial increase reinforces our belief that the Crexendo NetSapiens platform is increasingly the platform of choice for providers seeking a new, improved and scalable communications platform. These wins should provide a meaningful recurring revenue opportunity as these customers convert more of their existing subscriber bases to our platform, expand their businesses and purchase additional licenses in the future. In addition, I could not be more pleased with the ESI acquisition and the contributions the ESI team is already making to Crexendo. The integration is progressing exceptionally well, the employees are engaged, sales are exceeding our initial expectations, and we are already realizing the benefits of combining our accounting, legal, marketing, and engineering capabilities. ESI has significantly improved our revenue, strengthened our customer base, and added an experienced team that shares our commitment to innovation and outstanding customer service. The acquisition is performing exactly as we had hoped and further validates our disciplined approach to identifying and integrating strategic, accretive acquisitions. I am also very pleased with our continued margin improvement and the substantial expansion in operating cash flow, with cash provided by operating activities increasing 89% to $4.8 million during the first six months of the year compared to the same period of the prior year. This increased cash generation strengthens our balance sheet and provides us with greater flexibility to pursue additional strategic M&A opportunities while seeking to minimize dilution to our shareholders. Our recently released AI offerings, while not yet meaningful contributors to revenue, continue to receive strong praise and market acceptance. I expect adoption to continue expanding and believe AI-related revenue can become meaningful in 2027. With accelerating platform momentum, a highly successful acquisition, improving margins and increasing cash generation, I remain extremely enthusiastic about our ability to deliver profitable growth and enhance long-term shareholder value.