Q1 2026 Crexendo Inc Earnings Call

May 5, 2026

Speaker #2: Greetings. Welcome to the Crescendo First Quarter 2026 earnings call. At this time, all participants are on a listen-only mode. A question-and-answer session will follow the formal presentation.

Operator: Greetings. Welcome to the Crexendo Q1 2026 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star 0 on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Jeff Korn, CEO and Chairman of the Board. You may begin.

Speaker #2: If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Jeff Korn, CEO and chairman of the board.

Speaker #2: You may begin. Thank you, John. And good afternoon, everyone. Welcome to the Crescendo Q1 2026 conference call. I am, as John said, Jeff Korn, chairman of the board and CEO.

Jeff Korn: Thank you, Jon. Good afternoon, everyone. Welcome to the Crexendo Q1 2026 conference call. I'm, as Jon said, Jeff Korn, Chairman of the Board and CEO. On the call with me today are Doug Gaylor, our President and COO, Ron Vincent, our CFO, and Jon Brinton, our CRO. In a moment, I'm going to ask Jon to read the safe harbor statement. After that, I will give some brief comments on our performance and strategy. Ron will then provide more details on the numbers before handing the call over to Doug to provide a business and sales update. After that, I will open the call up for questions. Jon, would you please read the safe harbor?

Speaker #2: On the call with me today are Doug Gaylor, our president and COO; Ron Vincent, our CFO; and John Britton, our CRO. In a moment, I'm going to ask John to read the Safe Harbor statement.

Speaker #2: After that, I will give some brief comments on our performance and strategy. Ron will then provide more details on the numbers before handing the call over to Doug to provide a business and sales update.

Speaker #2: After that, I will open the call up for questions. John, would you please read the Safe Harbor?

Speaker #3: Thank you, Jeff. I want to take this opportunity to remind listeners that this call will contain forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934.

Jon Brinton: Thank you, Jeff. I wanna take this opportunity to remind listeners that this call will contain forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for such forward-looking statements. All statements made in this conference call, other than statements of historical fact, are forward-looking statements. Forward-looking statements include, but are not limited to, words like believe, expect, anticipate, estimate, will, and other similar statements of expectation identifying forward-looking statements. Investors should be aware that any forward-looking statements are based on assumptions that are subject to risks and uncertainties that could cause actual results to differ materially from those discussed here today.

Speaker #3: The Private Securities Litigation Reform Act of 1995 provides a safe harbor for such forward-looking statements. All statements made in this conference call, other than statements of historical fact, are forward-looking statements.

Speaker #3: Forward-looking statements include but are not limited to words like "believe", "expect", "anticipate", "estimate", "will", and other similar statements of expectation identifying forward-looking statements. Investors should be aware on assumptions that are subject to risks and uncertainties that could cause actual results to differ materially from those discussed here today.

Speaker #3: These risk factors are explained in detail in the company's filings with the Securities and Change Exchange Commission, including the Form 10-K for fiscal year ended December 31, 2025, and the Forms 10-Q Q as filed.

Jon Brinton: These risk factors are explained in detail in the company's filings with the Securities and Exchange Commission, including the Form 10-K for fiscal year ended 31 December 2025, and the Forms 10-Q as filed. Crexendo does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. I'd now like to turn the call back to Jeff. Jeff?

Speaker #3: Crescendo does not undertake any obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events, or otherwise.

Speaker #3: I'd now like to turn the call back to Jeff. Jeff?

Speaker #4: Thanks, John. This really was a very special quarter for us, and I can't tell you how proud I am of the entire team and the efforts they made.

Jeff Korn: Thanks. This really was a very special quarter for us, I can't tell you how proud I am of the entire team and the efforts they made. I think the results show how everybody is working together, working in unison, and continuing to make this what I believe is the best UCaaS company in the industry. When I took over as CEO just over three years ago, the team and I made a series of clear and deliberate commitments to our shareholders. We committed to stopping the cash burn, returning the business to positive cash flow. We committed to restoring and sustaining GAAP profitability. We committed to investing in the platform, in sales and marketing, and in strengthening our security infrastructure. We committed to driving constant growth, and we committed to pursuing disciplined, accretive acquisitions.

Speaker #4: And I think the results show how everybody is working together, working in unison, and continuing to make this what I believe is the best UCAS company in the industry.

Speaker #2: When I took over as CEO just over three years ago, the team and I made a series of clear and deliberate commitments to our shareholders.

Speaker #2: We committed to stopping the cash burn, returning the business to positive cash flow, we committed to restoring and sustaining gap profitability, we continued to we committed to investing in the platform, in sales and marketing, and in strengthening our security infrastructure.

Speaker #2: We committed to driving constant growth, and we committed to pursuing disciplined accretive acquisitions. I am very pleased and proud to say that we have delivered on all of those commitments.

Jeff Korn: I am very pleased and proud to say that we have delivered on all of those commitments. More importantly, what you are seeing now is those efforts coming together. The foundation we built is translating into a business that is growing, scaling, and becoming more efficient with increasing strategic flexibility. Q1 is a clear example of that. I and the team are incredibly pleased with our Q1 results, which continue to demonstrate not only strong execution, but the increasing strength, scalability, and durability of our operating model. Revenue for the quarter was $20.7 million, up 29% year-over-year, reflecting both solid organic performance and the contributions from the Estech Systems ESI acquisition. We delivered GAAP net income of $0.6 million and non-GAAP income of $3.3 million.

Speaker #2: More importantly, what you are seeing now is those efforts coming together. The foundation we built is translating into a business that is growing, scaling, and becoming more efficient, with increasing strategic flexibility.

Speaker #2: The first quarter is a clear example of that. I and the team are incredibly pleased with our first quarter results. Which continue to demonstrate not only strong execution but the increasing strength, scalability, and durability of our operating model.

Speaker #2: Revenue for the quarter was $20.7 million up 29% year over year, reflecting both solid organic performance and the contributions from the SDEC system ESI acquisition.

Speaker #2: We delivered gap net income of six-tenths of a million dollars and non-gap income of $3.3 million. Importantly, this marks another quarter of gap profitability extending our strength to $11 consecutive quarters.

Jeff Korn: Importantly, this marks another quarter of GAAP profitability, extending our strength to 11 consecutive quarters, and it's especially impressive this quarter while we absorbed all the acquisition-related expenses and the incremental amortization of intangible assets associated with the ESI transaction. The intangible expenses are fully reflected in our GAAP results. However, they are non-operational in nature, and our non-GAAP performance more accurately reflects the underlying earning power of the business. What that performance shows is a company that is scaling efficiently, expanding profitably, and demonstrating clear operating leverage as we grow. The ESI acquisition is exceeding our expectations and is already contributing meaningfully across the income statement. Integration is advancing ahead of plan across sales, operations, engineering, and we are only beginning to capture early synergies. More importantly, this transaction reinforces a key point. We have disciplined, repeatable M&A framework that is both strategic and financially driven.

Speaker #2: And it's especially impressive this quarter while we absorbed all the acquisition-related expenses and the incremental amortization of intangible assets associated with the ESI transaction.

Speaker #2: The intangible expenses are fully reflected in our GAAP results. However, they are non-operational in nature, and our non-GAAP performance more accurately reflects the underlying earning power of the business.

Speaker #2: What that performance shows is a company that is scaling efficiently, expanding profitably, and demonstrating clear operating leverage as we grow. The ESI acquisition is exceeding our expectations and is already contributing meaningfully across the income statement.

Speaker #2: Integration is advancing ahead of plan across sales, operation, engineering, and we are only beginning to capture early synergies. More importantly, this transaction reinforces a key point.

Speaker #2: We have disciplined, repeatable, M&A framework that is both strategic and financially driven. We are focused on assets that are highly complementary, operationally actionably, and accretive within a short period of time.

Jeff Korn: We are focused on assets that are highly complementary, operationally actionable, and accretive within a short period of time. ESI fits squarely within that framework and strengthens our ability to execute similar opportunities going forward. Operationally, execution continues to improve across the organization. On the retail side, with VIP, we continue to make inroads on enterprise sales, demonstrating continued progress in our capabilities and our ability to compete for and win larger, more complex opportunities. From a product standpoint, we are investing where it matters and seeing results. We've already demonstrated to our licensees and will soon be releasing a new user interface and administrative initiative that has been exceptionally well-received by our community during early previews, reinforcing the competitiveness of our platform.

Speaker #2: ESI fits squarely within that framework and strengthens our ability to execute similar opportunities going forward. Operationally, execution continues to improve across the organization. On the retail side, with VIP, we continue to make inroads on enterprise sales demonstrating continued progress in our capabilities and our ability to compete for and win larger, more complex opportunities.

Speaker #2: For a product standpoint, we are investing where it matters and seeing results. We have already demonstrated to our licensees and will soon be releasing a new user interface and administrative initiative that has been exceptionally well received by our community during early previews.

Speaker #2: Reinforcing the competitiveness of our platform. We also lost launched Cairo, our AI-driven solution, which we believe positions us well as AI continues to become an increasingly vital component of our communication stack.

Jeff Korn: We also launched CAIRO, our AI-driven solution, which we believe positions us well as AI continues to become an increasingly vital component of our communication stack. We are actively reviewing and testing other AI solutions. We will continue to roll out AI applications which will overlay onto our platform, increase our productivity, and more importantly, increase our customers' productivity, and therefore, increase our sales per customer. At the same time, our marketplace is gaining traction and beginning to validate the broader ecosystem strategy. While still early from a revenue standpoint, it is strategically important as it expands our reach, deepens customer engagement, and creates incremental monetization layers that should scale over time. From a profitability standpoint, we are executing with discipline and intent and increasing recurring revenue.

Speaker #2: We are actively reviewing and testing other AI solutions and we will continue to roll out AI applications which will overlay onto our platform, increase our productivity, and more importantly, increase our customers' productivity.

Speaker #2: And therefore, increase our sales per customer at the same time our marketplace is gaining traction and beginning to validate the broader strategy. While still early from a revenue standpoint, it is strategically important as it expands our reach.

Speaker #2: Deepens customer engagement and creates incremental monetization layers that should scale over time. From a profitability standpoint, we are executing with discipline and intent, and increasing recurring revenue.

Speaker #2: We are continuing to invest in the platform, AI security, and go-to-market capabilities. But we are doing so in a way that is driving increased efficiency across the business.

Jeff Korn: We are continuing to invest in the platform, AI, security, and go-to-market capabilities, but we are doing so in a way that is driving increased efficiency across the business. As a result, we are seeing early indications of margin expansion and improving EBITDA conversion, even while integrating acquisitions and continuing to invest for growth. The trend is expected to become more evident over time. Looking ahead, we remain confident in our ability to deliver sustained double-digit organic growth. While macro conditions may continue to impact timing on larger enterprise decisions, underlying demand remains strong and our pipeline supports continued momentum. In parallel, we are actively evaluating additional acquisition opportunities. The environment continues to present attractive opportunities, particularly among companies already operating on our platform or those that can be integrated efficiently into our ecosystem.

Speaker #2: As a result, we are seeing early indications of margin expansion and improvement EBITDA conversion. Even while integrating acquisitions and continuing to invest for growth.

Speaker #2: The trend is expected to become more evident over time. Looking ahead, we remain confident in our ability to deliver sustained double-digit organic growth. While macro conditions may continue to impact timing on larger enterprise decisions, underlying demand remains strong and our pipeline supports continued momentum.

Speaker #2: In parallel, we are actively evaluating additional acquisition opportunities. The environment continues to present attractive opportunities particularly among companies already operating on our platform. Or those that can be integrated efficiently into our disciplined, but we believe we are well positioned to selectively deploy capital in a way that enhances both growth and profitability.

Jeff Korn: Our approach remains disciplined. We believe we are well-positioned to selectively deploy capital in a way that enhances both growth and profitability. We are clearly on a trajectory toward $100 million in annual revenue. More importantly, we are doing so with a business that is becoming more efficient, more scalable, and more profitable as it grows. Additionally, as you may have seen or will shortly see, we just secured $5 million in term debt along with a line of credit, both of which we believe are on highly attractive terms. This will enable us to have a seat at the table to discuss additional acquisitions, and will assist in our expectation of growing the company strategically and profitably. Let me make clear, we didn't borrow the money because we need it. We borrowed the money to secure future acquisitions.

Speaker #2: We are clearly on a trajectory toward $100 million in annual revenue. More importantly, we are doing so with a business that is becoming more efficient, more scalable, and more profitable as it grows.

Speaker #2: Additionally, as you may have seen or will shortly see, we just secured $5 million in term debt along with a line of credit. Both of which we believe are on highly attractive terms.

Speaker #2: This will enable us to have a seat at the table to discuss additional acquisitions, and will assist in our expectation of growing the company strategically and profitably.

Speaker #2: Let me lay clear we didn't borrow the money because we need it. We borrowed the money to secure future acquisitions. We are, as I said, not raising capital out of necessity.

Jeff Korn: We are, as I said, not raising capital out of necessity. We are doing it from a position of strength. Our objective is to ensure that we remain aggressively positioned to pursue accretive acquisitions as opportunities arise. Based on our experience, having capital readily available and meaningfully available improves both access and negotiating leverage, allowing us to act decisively when others cannot. We do not anticipate deploying this capital in the immediate quarter or two. We firmly believe in the principle that you secure capital when it is available on favorable terms, not when it is required. This approach preserves optionality and ensures we maintain a leadership position when evaluating strategic opportunities. We're building not just for today, but shaping a future where we intend to be the premier cloud communication company in our sector. This is one more step in that direction.

Speaker #2: We are doing it from a position of strength. Our objection is to ensure that we remain aggressively positioned to pursue accretive acquisitions as opportunities arise.

Speaker #2: Based on our experience, having capital readily available—and meaningfully available—improves both access and negotiating leverage, allowing us to act decisively when others cannot.

Speaker #2: We do not anticipate deploying this capital in the immediate quarter or two. We firmly believe in the principle that you secure capital when it is available on favorable terms, not when it is required.

Speaker #2: This approach preserves optionality and ensures we maintain a leadership position when evaluating strategic opportunities. We're building not just for today, but shaping a future where we intend to be the premier cloud communication company in our sector.

Speaker #2: And this is one more step in that direction. We continue to build the platform and company for the future. We are excited to design a business that will make our customers and shareholders proud.

Jeff Korn: We continue to build the platform and company for the future. We are excited to design a business that will make our customers and shareholders proud, and we will continue to attract new customers and shareholders. We are also closely monitoring developing regulatory dynamics that could create a meaningful opportunity for the company. The Federal Trade Commission has advanced a proposal that, if adopted, will require certain customer service and contact center operations to be located completely within the United States. At this stage, the proposal remains in the early phase. There is approximately a 1-year period for public comment and evaluation, and it is not assured this proposal will ultimately be implemented or adopted in the current form. However, if enacted, it could have significant positive implications for the customer experience and customer center markets.

Speaker #2: And we will continue to attract new customers and shareholders. We are also closely monitoring developing regulatory dynamics that could create a meaningful opportunity for the company.

Speaker #2: The Federal Trade Commission has advanced a proposal that if adopted, will require certain customer service and contact operations to be located completely within the United States.

Speaker #2: At this stage, the proposal remains in the early phase. There is approximately a one-year period for public comment and evaluation. And it is not assured this proposal will ultimately be implemented or adopted in the current form.

Speaker #2: However, if enacted, it could have significant positive implications for the customer experience and customer-centered markets. We continue to improve our offerings in this arena and our objective is to ensure that we are prepared and positioned to respond quickly and effectively to take advantage of what we believe could be a significant incremental sales opportunities if these changes are required.

Jeff Korn: We continue to improve our offerings in this arena, and our objective is to ensure that we are prepared and positioned to respond quickly and effectively to take advantage of what we believe could be a significant incremental sales opportunities if these changes are required. In summary, this was a very, very strong quarter and reflects a company executing at a high level, integrating acquisitions successfully, expanding its platform capabilities, and positioning itself to drive both growth and margin expansion over time. I remain highly confident in our strategy, our execution, our team, and our ability to continue delivering meaningful long-term shareholder value. The best is yet to come, and the team and I work every day to make the best telecom platform support engineering, software provider, and platform in the industry. I started with discussing commitments we made. Let me now add to that.

Speaker #2: In summary, this was a very, very strong quarter. And reflects a company executing at a high level integrating acquisitions successfully expanding its platform capabilities and positioning itself to drive both growth and margin expansion over time.

Speaker #2: I remain highly confident in our strategy, our execution, our team, and our ability to continue delivering meaningful long-term shareholder value. The best is yet to come.

Speaker #2: And the team and I work every day to make the best telecom platform support, engineering, software provider, and platform in the industry. I started with discussing commitments we made.

Speaker #2: Let me now add to that. I want you all to understand we will work tirelessly every day to grow the company profitably, both organically and inorganically.

Jeff Korn: I want you all to understand we will work tirelessly every day to grow the company profitably, both organically and inorganically, while continuing to build the best software telecom in the industry and provide the best service in the industry. As I said before, the best is yet to come. This is a very, very exciting time for us. With that, I will turn the call over to Ron, who will provide more details on the finances.

Speaker #2: While continuing to build the best software telecom in the industry and provide the best service in the industry. As I said before, the best is yet to come.

Speaker #2: This is a very, very exciting time for us. And with that, I will turn over the call over to Ron, who will provide more details on the finances.

Speaker #1: Thank you, Jeff. Good afternoon, everyone. As Jeff said, very strong quarter with consolidated revenue growth of 29%. Organic growth for that quarter was 15.9% over the prior year quarter.

Ron Vincent: Thank you, Jeff. Good afternoon, everyone. As Jeff mentioned in his comments, we had another very strong quarter with consolidated revenue growth of 29%. Organic growth for that quarter was 15.9% over the prior year quarter. Excluding $2.1 million in revenue contributed from the ESI acquisition that we completed on 1 March of this year. On 1 March of this year, we closed the acquisition of Estech Systems, or as we refer to, ESI. The consolidated results of operations of ESI for one month are included in our operating results for the three months ended 31 March 2026. Since our last call, ESI completed their historical audit for the year ended 31 December 2025, and we filed pro forma financial disclosures as required with the SEC on Form 8-K/A on 4 May of this month.

Speaker #1: So, excluding $2.1 million in revenue contributed from the ESI acquisition that we completed on March 1st of this year. On March 1st this year, we closed the acquisition of Aztec Systems, or as we refer to it, ESI. The consolidated results of operations of ESI for one month are included in our operating results.

Speaker #1: For the three months ended March 31, 2026. Since our last call, ESI completed their historical audit for the year ended December 31, 2025, and we filed pro forma financial disclosures as required with the SEC on Form 8-K/A on May 4th of this month.

Speaker #1: I encourage you to review the Form 8K filing if you would like to see what the operating results of the combined company would have looked like on a pro forma basis if we had closed the transaction on January 1st, 2025.

Ron Vincent: I encourage you to review the Form 8-K filing if you would like to see what the operating results of the combined company would have looked like on a pro forma basis if we had closed the transaction on 1 January 2025. Let's talk about details for the quarter. For the quarter, we had service revenue that increased 29% to $10.6 million, and our gross margin was 63% for the quarter. Software solutions revenue increased 12% to $7.7 million, and our gross margin was 68% for the quarter. During the quarter, we booked 5 new logos and had 9 upgrade orders from existing customers. Product revenue increased 141% to $2.4 million, and our gross margin was 31% for the quarter.

Speaker #1: Now let's talk about details for the quarter. For the quarter, we had service revenue that increased 29% to 10.6 million. And our gross margin was 63% for the quarter.

Speaker #1: Software solutions revenue increased 12% to 7.7 million. And our gross margin was 68% for the quarter. During the quarter, we booked five new logos.

Speaker #1: And had nine upgrade orders from existing customers. Product revenue increased 141% to 2.4 million. And our gross margin was 31% for the quarter. During the quarter, our service revenue gross margin improved by 300 basis points.

Ron Vincent: During the quarter, our service revenue gross margin improved by 300 basis points, and our software solutions revenue gross margin improved by 500 basis points compared to the Q4 of last year. Product revenue gross margins decreased by 1,100 basis points compared to the Q4. Although product revenue increased significantly during the quarter, the additional network equipment product sales were with very low margins. Operating expenses increased approximately $3.2 million, excluding the ESI operations. The increases are attributed to $1 million directly related to the increase in product revenue, $800,000 in acquisition related expenses related to the ESI acquisition, and $500,000 related to the OCI expenses for our hosting arrangement.

Speaker #1: And our software solutions revenue gross margin improved by 500 basis points compared to the fourth quarter of last year. Product revenue gross margins decreased by 1,100 basis points compared to the fourth quarter.

Speaker #1: Although product revenue increased significantly during the quarter, the additional network equipment product sales were with very low margins. Operating expenses increased approximately 3.2 million.

Speaker #1: Excluding the ESI operations, the increases are attributed to $1 million directly related to the increase in product revenue. $800,000 in acquisition-related expenses related to the ESI acquisition.

Speaker #1: And $500,000 related to the OCI expenses for our hosting arrangement. In the first quarter of the prior year, we had no operating expenses related to OCI.

Ron Vincent: In Q1 of the prior year, we had no operating expenses related to OCI, it's a big increase. Our operating margin for the quarter came in at 2%. That's a decrease in operating margin from the prior period. Without the acquisition related expenses of $800,000, our operating margins will return to 6% or 7% as they had been in the historical years. Earnings for Q1. We reported net income of $0.6 million for the quarter. That's $0.02 per basic and diluted common share. On non-GAAP basis, we reported non-GAAP net income of $3.3 million. That's $0.10 per basic and diluted common share. We reported EBITDA for the quarter of $1.6 million and adjusted EBITDA of $3.2 million.

Speaker #1: So it's a big increase. Our operating margin for the quarter came in at 2%. That's a decrease in operating margin. From the prior period, but without the acquisition-related expenses of $800,000, our operating margins will return to 6% or 7% as they have been in the historical years.

Speaker #1: Earnings for the first quarter, we reported net income of $0.6 million. For the quarter, that's $0.02 per basic and diluted common share. On a non-GAAP basis, we reported non-GAAP net income of $3.3 million.

Speaker #1: That's $0.10 per basic and diluted common share. We reported EBITDA for the quarter of $1.6 million, and adjusted EBITDA of $3.2 million. Our cash and cash equivalents at the end of the quarter was $7.2 million.

Ron Vincent: Our cash and cash equivalents at the end of the quarter was $7.2 million compared to $31.4 million at the end of 31 December 2025. As we've been discussing the acquisition, we paid for a large majority of that acquisition in cash on hand that we generated from operations. Investing activities for the quarter utilized $26.2 million in cash. Operating activities for the quarter provided $2 million in cash, and financing activities provided about $100,000 in cash. As Doug or as Jeff mentioned, we completed our debt financing credit facility with Wells Fargo Bank for a $5 million term loan and a $5 million revolving credit facility. Additional information.

Speaker #1: Compared to '31.4 million at the end of December 31, 2025. As we've been discussing the acquisition, we paid for a large majority of that acquisition in cash on hand that we generated from operations.

Speaker #1: So investing activities for the quarter utilized 26.2 million in cash. Operating activities for the quarter provided 2 million in cash. And financing activities provided about $100,000 in cash.

Speaker #1: As Doug or as Jeff mentioned, we completed our debt financing credit facility with Wells Fargo Bank. For a $5 million term loan and a $5 million revolving credit facility.

Speaker #1: Additional information, our remaining performance obligations at the end of the first quarter was $135.6 million. That's compared to 89.1 million at December 31, 2025.

Ron Vincent: Our remaining performance obligations at the end of the first quarter was $135.6 million. That's compared to $89.1 million at 31 December 2025. The additional addition of ESI's remaining performance obligations contributed $49.6 million of the increase. With that, I'll turn it over to Doug Gaylor, our President and COO, for additional comments on sales and operations.

Speaker #1: The additional addition of ESI's remaining performance obligations contributed $49.6 million of the increase. With that, I'll turn it over to Doug Gaylor, our President and COO, for additional comments on sales and operations.

Speaker #2: Thanks, Ron. I'm extremely pleased with our strong results to start the year. Strong demand for both our retail telecom services solutions, combined with our wholesale software solutions, propelled us to our 11th consecutive GAAP profitable quarter and our 30th consecutive quarter of non-GAAP net income.

Doug Gaylor: Thanks, Ron. I'm extremely pleased with our strong results to start the year. Strong demand for both our retail telecom services solutions, combined with our wholesale software solutions, propelled us to our 11th consecutive GAAP profitable quarter and our 30th consecutive quarter of non-GAAP net income. The 29% increase in revenue for the quarter was a combination of strong organic growth in both segments of the business, combined with 1 month of revenue from our ESI acquisition. Our telecom services segment saw an 18% organic growth year over year, combined with 12% organic growth from our software solutions segment. When you layer in the 1 month of revenue from our ESI acquisition, our telecom services segment increased 41% year over year.

Speaker #2: The 29% increase in revenue for the quarter was a combination of strong organic growth in both segments of the business combined with one month of revenue from our ESI acquisition.

Speaker #2: Our telecom services segment saw an 18% organic growth year over year combined with 12% organic growth from our software solutions segment. When you layer in the one month of revenue from our ESI acquisition, our telecom services segment increased 41% year over year.

Speaker #2: The stronger demand for all of our offerings continues and we are seeing strong traction with our new AI applications including our recently released Crescendo AI receptionist orchestrator that we refer to as Cairo.

Doug Gaylor: The stronger demand for all of our offerings continues. We are seeing strong traction with our new AI applications, including our recently released Crexendo AI Receptionist and Orchestrator that we refer to as CAIRO. Our GAAP profitability continues to be positively affected by controlling costs while making necessary investments and driving synergies within the business. We were able to post GAAP profits of $578,000, despite having over $800,000 of acquisition related costs, as well as over $400,000 of intangible amortization costs associated with the ESI acquisition. Our strong GAAP income, combined with strong cash flow, free cash flow, allows us to continually reinvest in our people and our products and to continue delivering the best solutions and the best customer satisfaction in the industry.

Speaker #2: Our GAAP profitability continues to be positively affected by controlling costs while making necessary investments and driving synergies within the business. We were able to post-GAAP profits of $578,000 despite having over $800,000 of acquisition-related costs as well as over $400,000 of intangible amortization costs associated with the ESI acquisition.

Speaker #2: Our strong GAAP income combined with strong cash flow, free cash flow, allows us to continually reinvest in our people and our products and to continue delivering the best solutions and the best customer satisfaction in the industry.

Speaker #2: We continue to see strong organic growth from our software solutions segment of the business that saw a 12% organic growth in the quarter. And benefited from five new logos new logo orders along with nine upgrade orders from our existing licensees.

Doug Gaylor: We continue to see strong organic growth from our software solutions segment of the business that saw 12% organic growth in the quarter and benefited from five new logos, along with nine upgrade orders from our existing licensees. This is a dramatic improvement from Q1 2025, which had no new logos for the quarter. Two of the five new logos in Q1 are migrating from Metaswitch, we continue to see opportunities created by uncertainties created by the competition. The new logos that we are winning love our proven platform. They love our open API, along with our solid suite of AI applications and solutions, combined with our unique pricing and support model, that makes our software solution platform the best in the industry.

Speaker #2: This is a dramatic improvement from Q1 2025, which had no new logos for the quarter. Two of the five new logos in Q1 are migrating from MetaSwitch, and we continue to see opportunities created by uncertainties caused by the competition.

Speaker #2: The new logos that we are winning love our proven platform. They love our open along with our solid suite of AI applications and solutions combined with our unique pricing and support model and that makes our software solution platform the best in the industry.

Speaker #2: Our telecom services retail segment grew at 18% organically for the quarter and was positively impacted by some very large impactful wins that were sold and delivered during the quarter.

Doug Gaylor: Our telecom services retail segment grew at 18% organically for the quarter and was positively impacted by some very large, impactful wins that were sold and delivered during the quarter. I'm extremely pleased that we are seeing double-digit organic growth in such a strong fashion from this segment of the business. The heavy retail demand for our offerings was led by a 51% year-over-year increase in sales bookings from master agent Technology Service Distributors, combined with strong traction on our new AI Receptionist and a nice increase in SMB retail orders. Our remaining performance obligation, also referred to as our backlog, continues to grow and is now at $135.5 million, an increase of 56% from just the end of last year, December 31st.

Speaker #2: I'm extremely pleased that we are seeing double-digit organic growth in such a strong fashion from this segment of the business. The heavy retail demand for our offerings was led by a 51% year over year increase in sales bookings from master agent technology service distributors combined with strong traction on our new AI receptionist and a nice increase in SMB retail orders.

Speaker #2: Our remaining performance obligation also referred to as our backlog continues to grow and is now at 135.5 million dollars an increase of 56% from just the end of last year, December 31.

Speaker #2: A large portion of that increase in the remaining performance obligation is attributable to the acquisition of ESI, the majority of ESI's retail customers are on long-term agreements typically five-year terms.

Doug Gaylor: A large portion of that increase in the remaining performance obligation is attributable to the acquisition of ESI. The majority of ESI's retail customers are on long-term agreements, typically 5-year terms, thus giving us a very sticky customer base from this acquisition. The remaining performance obligation for the rest of 2026 is currently at $46 million. As a reminder, our remaining performance obligation number is the sum of the remaining contract values for our telecom services and our software solutions customers that will be recognized on a sliding scale over the next 60 months, and it's a very strong indicator of our future revenue stream. Consolidated gross margin for Q1 was 61%, which was up slightly from Q4 of last year.

Speaker #2: Thus giving us a very sticky customer base from this acquisition. The remaining performance obligation for the rest of 2026 is currently at 46 million dollars.

Speaker #2: And as a reminder, our remaining performance obligation number is the sum of the remaining contract values for our telecom services and our software solutions customers that will be recognized on a sliding scale over the next 60 months.

Speaker #2: And it's a very strong indicator of our future revenue stream. Consolidated gross margin for Q1 was 61%, which was up slightly from Q4 of last year.

Speaker #2: Our gross margin for the quarter was impacted by higher costs for the quarter for our Oracle Cloud Infrastructure or OCI hosting as we completed migrations from our legacy hosting to OCI on the software solutions segment of the business.

Doug Gaylor: Our gross margin for the quarter was impacted by higher costs for the quarter for our Oracle Cloud Infrastructure, or OCI, hosting as we completed migrations from our legacy hosting to OCI on the software solution segment of the business. The migrations for the quarter significantly increased our OCI utilization and spend while we were still incurring legacy hosting costs as well. With our migration now complete and our legacy-hosted environment fully decommissioned, we will see cost savings going forward with improved margins. For the quarter, the software solutions margins were 68%, down 10% year over year due to the OCI cost that I just mentioned, but up 5% from Q4, which included our UGM conference expenses.

Speaker #2: The migrations for the quarter significantly increased our OCI utilization and spend, while we were still incurring legacy hosting costs as well. With our migration now complete and our legacy hosted environment fully decommissioned, we will see cost savings going forward with improved margins.

Speaker #2: For the quarter, the software solutions margins were 68% down 10% year over year due to the OCI costs that I just mentioned, but up 5% from Q4, which included our UGM conference expenses.

Speaker #2: Our telecom services segment gross margin was 57% for the quarter, which was up from 56% in Q1 of 2025. And our telecom services gross margins were positively affected in Q1 by the revenue contribution from ESI, and we would anticipate the margins for this sector to improve with a full quarter's contribution from ESI.

Doug Gaylor: Our telecom services segment gross margin was 57% for the quarter, which was up from 56% in Q1 of 2025. Our telecom services gross margins were positively affected in Q1 by the revenue contribution from ESI. We would anticipate the margins for this sector to improve with a full quarter's contribution from ESI. We are confident that we should continue to see gross margin improvements in both segments of the business in the future. As Jeff mentioned, the ESI acquisition is exceeding our expectations. We're seeing historically strong sales bookings from the ESI team in our first 2 months together. ESI has a strong and loyal reseller base, along with a talented direct sales team. We are very pleased with the first 2 months' sales performance from each sector.

Speaker #2: We are confident that we should continue to see gross margin improvements in both segments of the business in the future. As Jeff mentioned, the ESI acquisition is exceeding our expectations and we're seeing historically strong sales bookings from the ESI team in our first two months together.

Speaker #2: ESI has a strong and loyal reseller base along with a talented direct sales team and we are very pleased with the first two months' sales performance from each sector.

Speaker #2: As I've previously stated, we believe that artificial intelligence will be the biggest game changer in the communication sector since the move to the cloud began over 20 years ago.

Doug Gaylor: As I've previously stated, we believe that artificial intelligence will be the biggest game changer in the communications sector since the move to the cloud began over 20 years ago. Crexendo's leading the AI charge with many new releases that allow small and mid-sized businesses to be more efficient and more productive. Our AI solutions are targeted at making small and mid-sized businesses more successful and more profitable by giving them affordable efficiency tools to help them run their business. In January of this year, we released CAIRO, Crexendo's AI Receptionist Orchestrator. CAIRO allows new and existing customers to leverage the power of an AI receptionist to answer all incoming calls, answer frequently asked questions, schedule, reschedule, or cancel appointments, access customer records, and talk to a live person when needed.

Speaker #2: Crescendo's leading the AI charge with many new releases that allow small and mid-sized businesses to be more efficient and more productive. Our AI solutions are targeted at making small and mid-sized businesses more successful and more profitable by giving them affordable efficiency tools to help them run their business.

Speaker #2: In January of this year, we released Cairo Crescendo's AI receptionist orchestrator and Cairo allows new and existing customers to leverage the power of an AI receptionist to answer all incoming calls, answer frequently asked questions, schedule, reschedule, or cancel appointments, access customer records, and talk to a live person when needed.

Speaker #2: The initial sales success of the product has been strong over the first two months, and we're excited to see the momentum continue. For the typical SMB customer, this technology will allow their business to be more effective and productive for a minimal cost.

Doug Gaylor: The initial sales success of the product has been strong over the first 2 months, and we're excited to see the momentum continue. For the typical SMB customer, this technology will allow their business to be more effective and productive for a minimal cost. Crexendo's average retail revenue per account is roughly $350 per month per account. By adding the CAIRO solution, that customer's monthly could increase by over 25%. Crexendo's Ecosystem Vendor Partner program, or as we refer to our EVP program, that was introduced last year, continues to gain great traction and now has 48 official partners in the program. These partners provide products, software, and application solutions to our platform that allow Crexendo and our partners to benefit from selling solutions that end users will make their businesses more efficient, productive, and profitable.

Speaker #2: Crescendo's average retail revenue per account is roughly $350 per month per account. And by adding the Cairo solution, that customer's monthly could increase by over 25%.

Speaker #2: Crescendo's ecosystem vendor partner program, or as we refer to our EVP program, that was introduced last year continues to gain great traction and now has 48 official partners in the program.

Speaker #2: These partners provide products, software, and application solutions to our platform that allow Crexendo and our partners to benefit from selling solutions that end users will use to make their businesses more efficient, productive, and profitable.

Speaker #2: Of the 48 EVP partners that we have, 11 of them are focused on AI solutions and applications. The EVP program is currently generating new and increasing revenue streams and we're extremely encouraged by the growth potential.

Doug Gaylor: Of the 48 EVP partners that we have, 11 of them are focused on AI solutions and applications. The EVP program is currently generating new and increasing revenue streams, and we're extremely encouraged by the growth potential. Crexendo's had a great start for 2026, and I fully expect that trend to continue as we continue to meet and exceed our targeted goals. We had previously set a goal of getting to a $100 million revenue run rate by the end of 2026, and with our strong organic growth combined with our exciting acquisition of ESI, we are well on our way to meeting that goal. We have continually highlighted how a strong M&A strategy could positively impact our company, and we continue to prove that with the ESI acquisition becoming our third meaningful acquisition and game-changing acquisition in the last 5 years.

Speaker #2: Crescendo's had a great start for 2026 and I fully expect that trend to continue as we continue to meet and exceed our targeted goals.

Speaker #2: We had previously set a goal of getting to $100 million revenue run rate by the end of 2026 and with our strong organic growth combined with our exciting acquisition of ESI, we are well on our way to meeting that goal.

Speaker #2: We have continually highlighted how a strong M&A strategy could positively impact our company and we continue to prove that with the ESI acquisition, becoming our third meaningful acquisition and game-changing acquisition in the last five years.

Speaker #2: I am thrilled about the future direction and opportunity for Crescendo, our strong double-digit organic growth combined with our ESI acquisition and our gap profitability and our strong positive cash flow combined with our growing remaining performance obligation have laid a great foundation for our future success.

Doug Gaylor: I am thrilled about the future direction and opportunity for Crexendo. Our strong double-digit organic growth, combined with our ESI acquisition and our GAAP profitability and our strong positive cash flow, combined with our growing remaining performance obligation, have laid a great foundation for our future success. We're positioned perfectly with a combination of great products, strong demand, and great solutions with a disruptive pricing model. Combine that with the best and most talented workforce in the industry, we're a force to be reckoned with. We're excited about the additional opportunities to drive growth and innovation that our new AI offerings will infuse into our business, and are very optimistic that applications like our AI receptionist will drive even more demand and higher revenues.

Speaker #2: We're positioned perfectly with a combination of great products, strong demand, and great solutions with a disruptive pricing model. And, combine that with the best and most talented workforce in the industry, we're a force to be reckoned with.

Speaker #2: We're excited about the additional opportunities to drive growth and innovation at our new AI offerings we'll infuse into our business and our very optimistic that applications like our AI receptionist will drive even more demand and higher revenues.

Speaker #2: As the fastest growing platform solution in the country now supporting well over 7 million end users, we are laser-focused on growing our business, enhancing our solutions, improving our efficiencies, and continuing to return strong results.

Doug Gaylor: As the fastest-growing platform solution in the country, now supporting well over 7 million end users, we are laser-focused on growing our business, enhancing our solutions, improving our efficiencies, and continuing to return strong results. With that, I'll turn it back over to Jeff for any further comments.

Speaker #2: With that, I'll turn it back over to Jeff for any further comments.

Speaker #1: Thank you, Doug. Actually, I don't have any further comments at this time, so John, let's open the call to questions.

Jeff Korn: Thank you, Doug. Actually, I don't have any further comments at this time. Jon, let's open the call to questions.

Speaker #3: Certainly. At this time, we will be conducting a question-and-answer session. If you would like to ask a question, please press *1 on your telephone keypad.

Operator: Certainly. First question comes from Mike Latimore with Northland Capital Markets. Please proceed.

Speaker #3: A confirmation tone will indicate your line is in the question queue. You may press *2 if you would like to remove your question from the queue.

Speaker #3: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions.

Speaker #3: Once again, please press *1 if you have a question or a comment. First question comes from Mike Latimore with Northland Capital Markets. Please proceed.

Speaker #1: Hello, Mike.

Jeff Korn: Hello, Mike.

Speaker #4: Yeah, good afternoon. Fabulous quarter there.

Mike Latimore: Yeah, good afternoon. Fabulous quarter there.

Speaker #1: And before you start, Mike, I want to make clear to everybody listening the static you heard on the line was not from us. It was from our operator and we're going to be talking to them about getting a Crescendo system.

Jeff Korn: Before you start, Mike, I want to make clear to everybody listening, the static you heard on the line was not from us, it was from our operator. We're going to be talking to them as we had about getting a Crexendo system after the call is over. Sorry to interrupt you, go ahead, Mike.

Speaker #1: After the call is over. Sorry to interrupt you, but go ahead, Mike.

Speaker #4: That's a funny one. Thanks for the clarification. Yeah, so again, fabulous quarter. I guess one number that jumps out is the 18% organic telecom service growth.

Mike Latimore: That's funny. Thanks for the clarification. That was crazy. Yeah. Again, fabulous quarter. You know, the I guess one number that jumps out is the 18% organic telecom service growth. I guess, can you elaborate a little bit on, you know, kind of what you're seeing there? It sounds like there were some big deals, you know. How big were those? Just a little bit more color on that would be great.

Speaker #4: I guess can you elaborate a little bit on kind of what you're seeing there? It sounds like there's some big deals, how big were those, just a little bit more color on that would be great.

Speaker #1: We're not going to detail exactly how large the deals are because we think that's anti-competitive, but as you know, Mike, as well as anybody, enterprise deals take a long time and we've been working on this one for over a year.

Jeff Korn: We're not gonna detail exactly how large the deals are because we think that's anti-competitive. As you know, Mike, as well as anybody, enterprise deals take a long time, and we've been working on this one for over a year, and we have several other in the hoppers that we've been working on for some time. It's hard to tell you when they're gonna come through because enterprise deals tend to work at their own schedule. We're very, very excited about this deal. We believe we're gonna get others, and we think this is.

Speaker #1: And we have several other in the hoppers that we've been working on for some time. It's hard to tell you when they're going to come through because enterprise deals tend to work at their own schedule.

Speaker #1: But we're very, very excited about this deal. We believe we're going to get others and we think this is going to continue to see growth in the telecom retail telecom sector and I'll let Doug add something if he wishes to.

Jeff Korn: gonna continue to see growth in the telecom, retail telecom sector, and I'll let Doug add something if he wishes to.

Speaker #4: Yeah, Mike, and I think that combined with the nice increase that we saw from the technology service distributors of 51% really just added to a great quarter.

Doug Gaylor: Yeah, Mike, I think that combined with the nice increase that we saw from the technology service distributors of 51%, really just added to a great quarter. We just executed extremely well on all aspects of the business on the retail side this quarter.

Speaker #4: So we just executed extremely well on all aspects of the business on the retail side this quarter.

Speaker #1: Great, great. And then the service growth margin, looks really good. I think it's the best in three or maybe over three years. I know ESI helped there some.

Mike Latimore: Very good. The service gross margin looks really good. I think it's the best in 3, maybe over 3 years. I know ESI helped there some. That was only 1 month of ESI. What should we think about? What would be a good range for service gross margin, you know, kind of as we get into a full quarter of ESI?

Speaker #1: I guess, but that was only one month of ESI. What should we think about? What would be a good range for service growth margin kind of as we get into a full quarter of ESI?

Speaker #4: Yeah, so Mike, Ron here. So I think we're going to see continue to improvements. I would expect in the next quarter that we could see improvement of our percent or two.

Ron Vincent: Yeah. Mike, Ron here. I think we're gonna see continued improvement. Would expect in the next quarter that we could see improvement of 1% or 2% in the next quarter.

Speaker #4: In the next quarter.

Speaker #1: Got it, got it. Okay, great. And then on Cairo, it sounds like a lot of opportunity there. I guess with the initial work you've done, is the interest from companies that have receptionists and they want to kind of lower the cost, or is it they don't have any real professional kind of receptionists, they want to add a capability and automate it through technology?

Mike Latimore: Got it. Got it. Okay, great. On, on Cairo, sounds like a lot of opportunity there. I guess, with the initial work you've done, is the interest from companies that, you know, have receptionists and they want to, you know, kind of lower the cost? Or is it they don't have any real professional, you know, kind of receptionists, they wanna add the capability and automate it, you know, through technology? Or do they wanna replace, you know, legacy IVRs or something? Like what are you seeing in terms of, you know, where is the interest for Cairo? What's the use case?

Speaker #1: Or do they want to replace legacy IVRs or something? What are you seeing in terms of where is the interest for Cairo? What's the use case?

Speaker #5: Well, I think it's kind of both. We see some people who don't have a receptionist who sees this as a way to not have the expense.

Jeff Korn: Find them both. We see some people who don't have a receptionist who sees this as a way to not have the expense. We see some of the larger customers who have a receptionist or have multiple receptionists, they can then use this, keep the receptionist for questions that CAIRO may not want to answer or don't answer as well.

Speaker #5: And we see some of the larger customers who have a receptionist or have multiple receptionists and they can then use this to keep the receptionist for questions that Cairo may not want to answer or don't answer as well.

Speaker #5: And at the same time, defer these people to other parts of the business. So it's all across the board and John who sells them more than the rest of us can handle on the telco because he wants to.

Jeff Korn: defer these people to other parts of the business. It's all across the board. Jon sells them more than the rest of us combined, so I'll let him talk.

Jon Brinton: Mike, Jeff's comments are correct. One of the key areas is staff augmentation. Many companies today.

Speaker #1: Mike, Jeff's comments are correct. So one of the key areas is staff augmentation. So many companies today that the person in that role is not necessarily full-time.

Jon Brinton: that the person in that role is not necessarily full-time, they've got three other jobs. Does it deflect calls so that they can focus on other things and only take the escalated calls? In others, we're seeing like healthcare applications where you're, you know, they're in office environments where you are putting them in front of somebody that would normally take those calls in order to help with the call diversion. The great thing about CAIRO is, you know, obviously we're having our retail success, but quite a few of our licensees are now enrolled to offer it as well. We're excited to see what they bring to the use cases that are out there.

Speaker #1: They've got three other jobs. So, does it deflect calls so that they can focus on other things and only take the escalated calls? In others, we're seeing healthcare applications where you're in office environments, where you are putting them in front of somebody that would normally take those calls in order to help with the call diversion.

Speaker #1: And the great thing about Cairo is obviously we're having our retail success, but quite a few of our licensees are now enrolled to offer it as well.

Speaker #1: So we're excited to see what they bring to the use cases that are out there.

Speaker #3: Yeah, excellent. Yeah, great. Thanks a lot. Congratulations.

Mike Latimore: Yeah. That's fine. Yeah. Great. Thanks a lot. Congratulations.

Speaker #4: Thanks, Mike.

Jeff Korn: Thanks, Mike.

Speaker #1: Thank you.

Doug Gaylor: Thank you.

Speaker #3: The next question comes from George Sutton with Craig Hallam. Please proceed.

Operator: The next question comes from George Sutton with Craig-Hallum. Please proceed.

Speaker #1: Hi, George.

Jeff Korn: Hi, George.

Speaker #6: Thank you. Nice to see the five new logos particularly after last year. And consistent with Q4, can you just give us a sense of the pipeline that you see for the next few quarters coming from the opportunities you have there?

George Sutton: Thank you. Nice to see the 5 new logos, particularly after last year. Consistent with Q4, can you just give us a sense of the pipeline that you see for the next few quarters, coming from the opportunities you have there?

Jeff Korn: I'll let Jon answer that. We're not gonna give very specific numbers as obviously there's a lot of competition out there. We have a strong pipeline, but I can let Jon give a little more detail.

Speaker #1: I'll let John answer that. We're not going to give very specific numbers as obviously there's a lot of competition out there, but we have a strong pipeline, but I can let John give a little more detail.

Speaker #4: Yeah, hi, George. We do have a strong pipeline. We've commented in the past that some of the deal sizes have been slightly smaller initially because of some of what we think are the macro geopolitical things.

Jon Brinton: Yeah. Hi, George. We.

Jon Brinton: We do have a strong pipeline. We've commented in the past that some of the deal sizes have been slightly smaller initially because of some of what we think are the macro geopolitical things. The number of opportunities that are in the pipeline is very strong, both here and in EMEA, and we're just looking to continue to harvest those. As you know, sometimes the larger ones take a little longer, and we're just working them through. That continues to be very positive and we don't foresee, you know, having a quarter like we did in Q1 and Q2 of last year. It's actually, there's a lot of strength now from multiple competitors in a more, you know, pronounced way than we've had before.

Speaker #4: But the number of opportunities that are in the pipeline is very strong. Both here and in EMEA and we're just looking to continue to harvest those.

Speaker #4: As you know, sometimes the larger ones take a little longer and we're just working them through. But that continues to be very positive. And we don't foresee having a quarter like we did in Q1 and Q2 of last year.

Speaker #4: It's actually there's a lot of strength, a lot of strength now from multiple competitors in a more pronounced way than we've had before. So we're looking forward to getting these people into our community and having them participate in what we're doing globally.

Jon Brinton: We're looking forward to getting these people into our community and having them participate in what we're doing globally.

Speaker #1: You mentioned Levin Partners that are working with you on AI opportunities. Can you give us a sense of how broad the AI product opportunity set might be?

George Sutton: You mentioned 11 partners that are working with you on AI opportunities. Can you give us a sense of how broad the AI product opportunity set might be? When might we see additional products?

Speaker #1: And when might we see additional products?

Speaker #4: Yeah, those 11 partners out of the EVP program are all working on different aspects of AI, including our Cairo solution, our Cairo solution was developed by one of our partners there.

Doug Gaylor: Yeah. Those 11 partners out of the EVP program are all working on different aspects of AI, including our CAIRO solution. Our CAIRO solution was developed by one of our partners there. We obviously sell that as a Crexendo labeled product, but it was developed for us as one of our AI EVP partners. Those AI applications range anywhere from the CAIRO application to call sentiment analysis, and call recording summation AI solutions. We've got AI solutions that use agentic AI for call center, contact center applications. The list is endless from the amount of opportunities that these guys can continue to develop. We're really trying to focus on what's gonna be the most impactful for us and for our customers out there.

Speaker #4: We obviously sell that as a crescendo labeled product, but it was developed for us as one of our AI EVP partners. So those AI applications range anywhere from the Cairo application to call sentiment analysis and call recording summation AI solutions.

Speaker #4: We've got AI solutions that use agentic AI for call center contact center applications. So the list is endless from the amount of opportunities that these guys can continue to develop.

Speaker #4: We're really trying to focus on what's going to be the most impactful for us and for our customers out there. Again, when you talk about the SMB market, these customers are chomping at the bit for applications that will help improve their efficiency and productivity.

Doug Gaylor: Again, when you talk about the SMB market, you know, these customers are chomping at the bit for applications that'll help improve their efficiency and productivity, and that's what a lot of these AI solutions bring to the table. If you think about just AI call summation and AI capabilities when it comes to call recording, call recording's been around for 25 years, but when you record a conversation and you've got 100 call recordings at the end of the day, it's playing Whac-A-Mole to try and find what you're looking for.

Speaker #4: And that's what a lot of these AI solutions bring to the table. If you think about just AI call summation and AI capabilities when it comes to call recording, call recording has been around for 25 years.

Speaker #4: But when you record a conversation and you've got 100 call recordings at the end of the day, it's playing whack-a-mole to try and find what you're looking for.

Speaker #4: Now with AI summation, we can actually go in there and tell the system, "Hey, only send me the recordings where somebody mentioned this word or used profanity or got upset at my customer service representative." And now you skinny that down to getting exactly what you're looking for.

Doug Gaylor: Now, with AI summation, you know, we can actually go in there and tell the system, Hey, only send me the recordings where somebody, you know, mentioned this word or used profanity or got upset at my customer service representative. Now you skinny that down to getting exactly what you're looking for. Those AI applications are only gonna continue to improve and get better, and that's gonna bring more sales to us.

Speaker #4: So those AI applications are only going to continue to improve and get better. And that's going to bring more sales to us.

Speaker #1: George, I think John can add a little color to that.

Jeff Korn: George, I think Jon can add a little color to that.

Speaker #4: Yeah, so Doug gave you a great outline there. Just a couple of other things besides the conversational analytics, and some of the areas—just, George, to let you see how deep this goes.

Jon Brinton: Yeah. Doug gave you a great outline there. Just a couple other things besides the conversational analytics in some of the areas, just George, to let you see how deep this goes. If you're familiar with our industry, some of these applications actually help our licensees operate their platform more efficiently, with even things down to applications that help with 10 DLC registration, which has kind of become the bane of existence of when you add a customer or move them to our services when they're gonna use texting or SMS marketing in our industry. I think the great thing is the partners that we're working with tend to understand our business well and they're finding their own use cases to help end customers and our licensees.

Speaker #4: If you're familiar with our industry, some of these applications actually help our licensees operate their platform more efficiently with even things down to applications that help with 10DLC registration, which has kind of become the bane of existence when you add a customer or move them to our services when they're going to use texting or SMS marketing in our industry.

Speaker #4: So I think the great thing is the partners that we're working with tend to understand our business well and they're fine in their own use cases to help end customers and our licensees.

Speaker #1: Gotcha. Might sound redundant, but great job, guys. Thanks, George.

Eric Martinuzzi: Gotcha. Might sound redundant, but great job, guys.

Doug Gaylor: Thank you.

Jeff Korn: Thanks, George.

Speaker #4: Thanks, George.

Jon Brinton: Thanks, George.

Speaker #3: The next question comes from Eric Martinuzzi with Lake Street. Please proceed.

Operator: The next question comes from Eric Martinuzzi with Lake Street. Please proceed.

Speaker #1: Good afternoon, Eric.

Jeff Korn: Afternoon, Eric.

Eric Martinuzzi: Yeah. Jeff. Hey. Jeff, you talked about the double-digit organic growth expectation for 2026. I was wondering, does that include the acquired ESI business as well?

Speaker #5: Jeff, hey, Jeff, you talked about the double-digit organic growth expectation for 2026. I was wondering, does that include the acquired the ESI business as well?

Speaker #1: No, by organic, I meant excluding ESI. I am guiding toward double-digit organic growth of the business outside of ESI.

Jeff Korn: No. By organic, I meant excluding ESI. I am guiding toward double-digit organic growth of the business outside of ESI.

Speaker #5: Okay, then I guess it's more modeling question that the 2.1 million that was recorded in the quarter, so the month of March, just kind of is that a good run rate to run with there?

Eric Martinuzzi: Okay. I guess it's more a modeling question. The $2.1 million that was recorded in the quarter, so the month of March, is that a good run rate to run with there? Maybe it's a question for Ron.

Speaker #5: Maybe it's a question for Ron.

Jeff Korn: I would say that's as good a run rate at this point as ever. We're all on the same boat. We have to see if it will sustain that high. It may be lower, it may be higher. It is hard for us with one month of experience to give you a strong idea of what we expect on a monthly basis. Ron, do you have any further thoughts on that?

Speaker #1: I would say that's as good a run rate at this point as ever. We're all on the same boat. We have to see if it'll sustain that high.

Speaker #1: It may be lower. It may be higher. But it's hard for us with one month of experience to give you a strong idea of what we expect on a monthly basis.

Speaker #1: Ron, do you have any further thoughts on that?

Speaker #3: Yeah, Eric, good point you do those pro formas that we just filed yesterday. So those have been filed with SEC. So those are available for you to look at '25 and what that was.

Ron Vincent: Yeah. Eric, I'd point you to those pro formas that we just filed yesterday. Those have been filed with SEC, so those are available for you to look at 25 of what that was. You can use that for a little growth trajectory into 2026, and we can talk about it further when you get to your model.

Speaker #3: And then you can use that for low-growth trajectory. Into '26 and we can talk about it further when you get to your model.

Speaker #1: Gotcha. Okay. And then kind of a housekeeping item here. There were some puts and takes with the acquisition with equity issuance. And then there was the debt the term loan just curious kind of as of a month-end April 30th, what's our cash debt and shares outstanding?

Eric Martinuzzi: Gotcha. Okay. Kind of a housekeeping item here. There were some puts and takes with the acquisition with equity issuance, and then there was the debt, the term loan. Just curious, kind of as of month end, 30 April, what's our cash, debt, and shares outstanding?

Speaker #3: So, we obviously just closed on the debt financing that funded yesterday. So, we haven't drawn on that debt, other than.

Ron Vincent: We obviously just closed on the debt financing. It funded yesterday. We haven't drawn on the debt.

Speaker #1: And nor do we have any short-term intention to draw on.

Eric Martinuzzi: Nor do we have any short-term intention to draw on.

Jeff Korn: Nor do we have any short-term intention to draw on.

Speaker #3: And the cash, obviously, the cash increased from operating activities in the first quarter. I don't have the cash balance as end of April, but we're not declining or decreasing cash balance.

Ron Vincent: The cash, obviously the cash increased from operating activities in Q1. I don't have the cash balance as end of April, but we're not declining.

Eric Martinuzzi: Oh, okay.

Ron Vincent: decreasing cash balance at this point.

Eric Martinuzzi: I was assuming the term loan, you had drawn the term loans. That's not the case?

Speaker #1: I was assuming the term loan—you had drawn the term loans. That's not the case? Well, it's a term loan that we can draw on when we choose to.

Eric Martinuzzi: I was assuming the term loan, you had drawn the term loans. That's not the case?

Ron Vincent: No.

Jeff Korn: Well, it's a term loan that we can draw on when we choose to. We have a term and a credit facility.

Speaker #3: We have a term and a credit facility. So we have $5 million term loan and a $5 million line of credit.

Eric Martinuzzi: Yeah

Jeff Korn: a $5 million term loan and a $5 million line of credit.

Speaker #1: Gotcha. Okay. Thanks for clarifying. And congrats on the quarter and the continued double-digit outlook.

Eric Martinuzzi: Gotcha. Okay. Thanks for clarifying and congrats on the quarter and the continued double-digit outlook.

Speaker #3: Thank you.

Doug Gaylor: Thank you.

Ron Vincent: Thank you.

Speaker #2: Thank you, Eric.

Jeff Korn: Thank you, Eric.

Speaker #3: The next question comes from Scott Buck with Titan Partners. Please proceed.

Operator: The next question comes from Scott Buck with Titan Partners. Please proceed.

Speaker #6: Hi, good afternoon, guys. Thanks for taking my questions. Jeff, you mentioned the prepared remarks that the ESI is delivering above expectations. I was wondering if you could give us a little bit more color on what you're seeing there.

Scott Buck: Hi, good afternoon, guys. Thanks for taking my questions. Jeff, you mentioned in the prepared remarks that the ESI is, you know, delivering above expectations. I was wondering if you could give us a little bit more color on what you're seeing there. Are we talking top line? Are we talking profitability? Are we just talking about the way, you know, the integration is going?

Speaker #6: Are we talking top line? Are we talking profitability? Are we just talking about the way the integration is going?

Speaker #1: We're actually talking all of the above. The sales were higher than to be honest, I expected, which is why answering the previous question was a little difficult because it's hard to model where the whole yield will be.

Jeff Korn: We're actually talking all of the above. The sales were higher than, to be honest, I expected, which is why answering the previous question was a little difficult, because it's hard to model where the whole year will be. The profitability was great, especially if you take out the intangible costs, which they're not responsible for. More importantly, the spirit of the team there. They have all rolled up their sleeves. They are coming to us and going, "What can we help with?" We are combining purchasing. We've just purchased a substantial amount of phones for the combined organization at a substantial savings. We are moving other things over to savings. We are going to be moving. They have hosted data centers. We're gonna be moving those to ESI. There's savings.

Speaker #1: The profitability was great. Especially if you take out the intangible costs, which they're not responsible for. And more importantly, the spirit of the team there.

Speaker #1: They have all rolled up their sleeves. They are coming to us and going, "What can we help with?" They are now we are combining purchasing.

Speaker #1: We've just purchased a substantial amount of phones for the combined organization. It's a substantial savings. We are moving other things over to savings. We are going to be moving they have hosted data centers.

Speaker #1: We're going to be moving those to ESI. They're savings. We have a whole list excuse me, to OCI. We have a whole list of things that we intend to be doing as the year goes on to reduce costs, improve efficiency.

Jeff Korn: We have a whole list, excuse me, to OCI. We have a whole list of things that we intend to be doing as the year goes on to reduce costs, improve efficiency. The manner in which the ESI team has worked to join with us, to ask what they could do to help us, not with us even having to ask, is amazing. The sales teams are working closely together, marketing teams are working closely together, engineering teams are working closely together. I have a great relationship with their president. Doug is working with their SVP of operations on a close basis. Ron is in contact every day and managing the accounting system. It has just moved faster and more efficiently than I anticipated, and I am very pleasantly surprised.

Speaker #1: But the manner in which the ESI team has worked to join with us, to ask what they could do to help us—not with us even having to ask—is amazing.

Speaker #1: The sales teams are working closely together. Marketing teams are working closely together. Engineering teams are working closely together. I have a great relationship with their president.

Speaker #1: Doug is working with their SVP of Operations on a close basis. Ron is in contact every day and managing the accounting systems. It has just moved faster and more efficiently than I anticipated.

Speaker #1: And I am very pleasantly surprised.

Speaker #6: Great. That's great to hear. And then my second one, I want to ask about Cairo. Maybe you could remind us how you guys price the product.

Scott Buck: Great. That's great to hear. My second one, I wanted to ask about CAIRO. Maybe you could remind us how you guys price the product. Is that flat fee on a monthly basis, or is that based on usage?

Speaker #6: Is that flat fee on a monthly basis? Or is that based on usage?

Speaker #5: Yeah, so it's different with the retail and our licensees, but I'll just give you an outline. Cairo, we have packages that have a bundled number of minutes.

Doug Gaylor: Yeah. It's different with the retail and our licensees, but I'll just give you an outline. CAIRO, we have packages that have a bundled number of minutes, and then in excess of that bundle, customers pay for overage on it. With our licensee, it's slightly different, but it's more tied to an overall minute cost after a monthly minimum. It is to help customers understand it, there is a, you know, small, medium, large, and then we can expand the large pricing methodology that then, we bill for additional minutes used in excess of the bundle.

Speaker #5: And then in excess of that bundle, customers pay for overage on it. With our licensee, it's slightly different, but it's more tied to an overall minute cost after a monthly minimum.

Speaker #5: So but it is to help customers understand that there is a small, medium, large, and then we can expand the large pricing methodology that then we bill for additional minutes used in excess of the bundle.

Speaker #6: Great. And I know it's early, but how often are you seeing folks move over their limits as they get more comfortable with the product?

Scott Buck: Great. I know it's early, but how often are you seeing folks move over their limits as they get more comfortable with the product?

Speaker #5: Yeah, the customer acceptance and partner acceptance has been excellent. So

Jon Brinton: Yeah. The customer acceptance and partner acceptance has been excellent.

Doug Gaylor: Yeah. The customer acceptance and partner acceptance has been excellent.

Jeff Korn: I think he was talking about usage. How often are we seeing usage?

Speaker #4: We were talking about usage. How often are we seeing I'm sorry. I missed that word. Actually, we are seeing quite a few customers exceed the usage bundle in the minimums for their package.

Jon Brinton: Oh, usage. I'm sorry, I missed that word. Actually, we are seeing quite a few customers exceed the usage bundle in the minimums for their package. Apologies for misunderstanding the question.

Doug Gaylor: Oh, usage. I'm sorry, I missed that word. Actually, we are seeing quite a few customers exceed the usage bundle in the minimums for their package. Apologies for misunderstanding the question.

Speaker #4: Apologies for misunderstanding the question.

Speaker #6: No, that's perfect. Well, I appreciate the time, guys. Thank you very much.

Scott Buck: No, that's perfect. Well, I appreciate the time, guys. Thank you very much.

Speaker #1: Thank you, Scott.

Jeff Korn: Thank you, Scott.

Speaker #3: Once again, if you have a question or a comment, please press star one on your touchstone phone. The next question comes from Matthew Maus with B Reilly Securities.

Operator: Once again, if you have a question or comment, please press star one on your touchtone phone. The next question comes from Matthew Maus with B. Riley Securities. Please proceed.

Speaker #3: Please proceed.

Speaker #4: Hey, this is Matthew. Thanks for taking my questions. Great quarter. I guess just following up on that Cairo question, I'm pretty sure previously you guys mentioned a range of ARPU uplift between like 25 to 40 percent.

Matthew Maus: Hey, this is Matthew. Thanks for taking my questions. Great quarter. I guess just following up on that CAIRO question, I'm pretty sure previously you guys mentioned a range of ARPU uplift between like 25% to 40%. This call you mentioned 25%. You also just mentioned how, you know, customers are kind of using it more than expected. I guess, like, what would get you closer toward that 40% uplift end of the range?

Speaker #4: And then this call you mentioned 25 percent. And you also just mentioned how customers are kind of using it more than expected. I guess what would get you closer toward that 40 percent uplift end of the range?

Speaker #5: Yeah, I'm not sure we mentioned percentage uptake. Again, we've only been selling the product for two months now. So we really don't have a percentage of sales where we're actually attaching Cairo to that we've reported.

Doug Gaylor: Yeah, I'm not sure we mentioned a percentage uptake. Again, we've only been selling the product for 2 months now, so we really don't have a percentage of sales where we're actually attaching CAIRO to that we've reported. I'm not sure where you got that 25% to 40%. The 25% to 40% increase in price would be the average revenue contribution per account. If you think about our average account paying us $350 per month, the $350 per month payment, when they add CAIRO, you know, could go upwards of 25% to 40% increase in their monthly payment to us.

Speaker #5: So I'm not sure we got that 25 to 40 percent. But the 25 to 40 percent increase in price would be the average revenue contribution per account.

Speaker #5: So if you think about our average account paying us $350 per month, the $350 per month payment, when they add Cairo, could go upwards of a 25 to 40 percent increase in their monthly payment to us.

Speaker #5: So that $350 a month account that's just using pure UCAS, they decide they add Cairo to their solution. Now all of a sudden, they're paying us $500 a month.

Doug Gaylor: That $350 a month account that's just using pure UCaaS, they decide they add CAIRO to their solution, now all of a sudden they're paying us $500 a month, and then they pay usage on top of that if they exceed their usage targets. You know, that's a pretty nice significant increase on a revenue per account basis. We see that as a great pull-through item for our existing revenue per account numbers. Again, we'll have, as we get another quarter or two into it, you know, we'll have better metrics to report on the take rate on what we're selling as far as CAIRO to new customers.

Speaker #5: And then they pay usage on top of that if they exceed their usage targets. That's a pretty nice, significant increase on a revenue per account basis.

Speaker #5: So we see that as a great, great pull-through item for our existing revenue per account numbers. And again, we'll have as we get another quarter or two into it, we'll have better metrics to report on the take rate on what we're selling as far as Cairo to new customers.

Speaker #4: Got it, thanks. And you mentioned some OCI cost overlap hitting margins this quarter. Can you give us a sense of when we would get a clean quarter?

Matthew Maus: Got it. Thanks. You mentioned some OCI cost overlap hitting margin this quarter. Can you give us a sense of when we would get a clean quarter? Is that Q2? Would that be more of like a fully normalized level, or would there still be some legacy costs trickling through there?

Speaker #4: Is that 2Q and that would that be more of like a fully normalized level? Or would there still be some legacy costs trickling through there?

Speaker #5: Yeah, so just in the prior year, Q1, we hadn't started the migration to OCI. So we weren't incurring any cost. It was in the second quarter that we started that project.

Ron Vincent: Yeah. Just, in the prior year, Q1, we hadn't started the migration to OCI, so we weren't incurring any cost. It was in the second quarter that we started that project. You'll see comparable cost in the next quarter. And you can look back at Q3 and Q4 as well, where we disclose what we paid to OCI. The information's out there. We just didn't have any activity in Q1 of the prior year.

Speaker #5: So you'll see comparable cost in the next quarter. But and you can look back at Q3 and Q4 as well where we disclose what we paid to OCI.

Speaker #5: So the information is out there. We just didn't have any activity in the Q1 of the prior year.

Speaker #4: And in addition to that, Matt, we have decommissioned our legacy hosted offering on the software solution side. So all of those costs from the decommissioning were in Q1.

Doug Gaylor: In addition to that, Matt, we have decommissioned our legacy hosted offering on the software solution side. All of those costs from the decommissioning were in Q1. We'll see a cost pickup there and hopefully improve margins based on that fully being decommissioned as of the end of Q1.

Speaker #4: So we'll see a cost pickup there. And hopefully improve margins based on that fully being decommissioned as of the end of Q1.

Speaker #6: Got it. Great. Last one from me. Yeah, you mentioned 50% increase in master agent and TSV bookings. I'm just wondering, what's the specific dynamic driving that?

Matthew Maus: Got it. Great. Last one from me. You mentioned a 50% increase in master agent and TSD bookings. I'm just wondering, like, what's the specific dynamic driving that? Is that AppDirect ramping or what's going on there that's driving a lot of that?

Speaker #6: Is that AppDirect ramping or what's going on there that's driving a lot of that?

Speaker #5: Yeah, I would say that what's driving it is great acceptance with that community for our ur solutions. Teams have been working with them for a long time.

Doug Gaylor: Yeah, I would say that what's driving it is, great acceptance with that community for our solutions. Teams have been working with them for a long time, have some very productive relationships. They've spotlighted CAIRO specifically as our AI applications, and we have high partner acceptance with that. I just think there's increasing demand and brand awareness for Crexendo in that overall community.

Speaker #5: Have some very productive relationships. They've spotlighted Cairo specifically as our AI applications. And we have high partner acceptance with that. So I just think there's increasing demand in brand awareness for Crescendo in that overall community.

Speaker #6: Got it. Great. That was all from me. Thanks for your time.

Matthew Maus: Got it. Great. That was all for me. Thanks for your time.

Speaker #1: Thank you.

Jeff Korn: Thank you.

Speaker #3: The next question comes from Joshua Reilly with Needham. Please proceed.

Operator: The next question comes from Joshua Reilly with Needham. Please proceed.

Speaker #4: Hey, guys. Thanks for taking my hey, guys. Thanks for taking my couple of quick questions here. I'm in a car, so hopefully you can hear me okay.

Jeff Korn: Hi, Joshua.

Joshua Reilly: Hey, guys. Thanks for taking my couple quick questions here. I'm in a car, so hopefully you can hear me okay. The first one was, I just wanted to get a feel for the 18% organic retail telecom services revenue growth rate. Super impressive. What would you say, you know, how much are you outperforming the market growth rate there? I know there's a little bit of an anomaly with some big deals there, but what would you characterize the underlying UCaaS demand environment like at this point? I had one follow-up.

Speaker #4: The first one was I just wanted to get a feel for the 18% organic retail telecom services revenue growth rate. It's super impressive. What would you say how much are you outperforming the market growth rate there?

Speaker #4: I know there's a little bit of an anomaly with some big deals there. But what would you characterize the underlying UCAS demand environment like at this point?

Speaker #4: And then I had one follow-up.

Speaker #1: Well, Josh, as you know, last year, we still grew by double-digit growth. And I am not aware of any other telecom company that did that.

Jeff Korn: Well, Joshua, as you know, last year we still grew by double-digit growth, and I am not aware of any other telecom company that did that. Our growth has remained well and consistent and above industry and standards. As to specific competitors, I don't know their numbers off the top of my head, but I do know our growth is substantially better than most.

Speaker #1: So our growth has remained well and consistent, and above industry standards. As to specific competitors, I don't know their numbers off the top of my head.

Speaker #1: But I do know our growth is substantially better than most.

Speaker #4: Yeah, and I would just add to that, Josh, that we still see tremendous demand on the retail side of the equation. Q1 was a very strong quarter because we had some very large deals that helped contribute to that 18% organic growth.

Doug Gaylor: Yeah, I would just add to that, Josh, that we still see tremendous demand on the retail side of the equation. You know, Q1 was a very strong quarter 'cause we had some very large deals that helped contribute to that 18% organic growth. Historically, you know, the services side of telecom services has been in the 6% to 9% range for the last 3 or 4 quarters. Getting into the double digit at 18% is a great quarter for us. You know, we still see great demand there and strong demand there. You know, I'm hopeful that we can keep those percentages in the double digits for the telecom services segment.

Speaker #4: But historically, the services side of telecom services has been in the 6 to 9 percent range for the last three or four quarters. And so getting into the double-digited 18%, it was a great quarter for us.

Speaker #4: We still see great demand there and strong demand there. So I'm hopeful that we can keep those percentages in the double digits for the telecom services segment.

Speaker #6: Got it. And then just on the second point, I know you've had some nice innovations particularly on the UI. With the NetSapiens platform, what are you seeing?

Joshua Reilly: Got it. Then just on the second point, I know you've had some nice innovations, particularly on the UI with the NetSapiens platform. What are you seeing? Is that helping you competitively relative to that, to the software solutions piece? What are you seeing since you've updated some of these new products, features, and functionality? Are you seeing that awareness with customers or what's the dynamic there? Thank you.

Speaker #6: Is that helping you competitively relative to that software solutions piece? What are you seeing since you’ve updated some of these new products, features, and functionality?

Speaker #6: Are you seeing that awareness with customers? Or what's the dynamic there? Thank you.

Speaker #1: Well, Josh, we're working on parallel paths. What I talked about was a whole new UI that we will be rolling out next year. And the licensees who we demonstrated to that too were absolutely wowed.

Jeff Korn: Well, Josh, we're working on parallel paths. What I talked about was a whole new UI that we will be rolling out next year. The licensees who we demonstrated to that too, were absolutely wowed and love it. Do I think that will help drive additional sales to our platform? Absolutely. That's one of the reasons we're spending the money. We continue to make improvements in the operation of the platform. We continue to make improvements in security, and we continue to make intermittent improvements in the UI, all of which is driving business as we speak. I think you're gonna see an acceleration of the business next year when we roll out the whole new UI and make it prettier and easier to use.

Speaker #1: And love it. Do I think that will help drive additional sales to our platform? Absolutely. That's one of the reasons we're spending the money.

Speaker #1: But we continue to make improvements in the operation of the platform. We continue to make improvements in security. And we continue to make intermittent improvements in the UI, all of which is driving business as we speak.

Speaker #1: And I think you're going to see an acceleration of the business next year when we roll out the whole new UI and make it prettier and easier to use.

Speaker #3: Awesome. Thank you so much, guys.

Joshua Reilly: Awesome. Thank you so much, guys.

Doug Gaylor: Thank you, Josh.

Jeff Korn: Thank you, Josh.

Speaker #4: Thanks, Josh.

Speaker #3: We have reached the end of the question and answer session. And I will now turn the call over to Jeff Korn for a closing remarks.

Operator: We have reached the end of the question and answer session, and I will now turn the call over to Jeff Korn for closing remarks.

Speaker #1: Thank you very much, John. And thank you very much, everybody, for your attention. As you've probably could tell from the call, everyone in this room is really palpably excited because we believe we're building something special here and we're growing.

Jeff Korn: Thank you very much, Jon, and thank you very much everybody for your attention. As you probably could tell from the call, everyone in this room is really palpably excited 'cause we believe we're building something special here and we are growing. We can't wait to share our next quarter results with you or speak with you at investment analysts, investment conferences or tell our story 'cause we love this story. We love what we're doing and we think we'll continue to make you proud. Until we're back for Q2, thank you very much for your attention.

Speaker #1: And we can't wait to share our next quarter results with you or speak with you at investment analysts. Investment conferences or tell our story because we love this story.

Speaker #1: We love what we're doing. And we think we'll continue to make you proud. So until we're back for Q2, thank you very much for your attention.

Operator: Thank you. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.