Freedom: Crexendo targets $150 million in revenue by the end of 2028

Cloud communications solutions provider Crexendo (CXDO) expects to reach a $150 million annual revenue run rate by the end of 2028. The company’s management said this at an investor meeting organized by Freedom Broker. The goal is expected to be achieved through organic growth, acquisitions, and sales of artificial intelligence tools. Freedom Broker recommends buying Crexendo shares with a target price of $10.50: given the current price of $5.47, this implied upside of nearly about 92%. 

A new target after nearing $100 million

Crexendo provides businesses with cloud telephony and other communication tools. The company operates in two areas: it licenses its software platform to other operators and directly serves small and medium-sized businesses. These areas account for about 30% and 70% of revenue, respectively.

According to management, as of Q2 the annual revenue run rate approached $100 million—a level the company had previously planned to reach by the end of 2026. By the end of 2028, the company expects to reach a $150 million annual revenue run rate, a Crexendo representative said.

An annual revenue run rate shows the scale of the business if the current level of sales is maintained over a year. Therefore, the target should not be understood as a forecast of actual revenue for all of 2028. At the same time, management separately noted that it is not yet providing official guidance and is ориентируется on double-digit organic growth rates. 

Acquisitions complement core business growth

For the first half of the year, Crexendo’s revenue totaled $45.4 million and increased 39% year over year. Organic growth, excluding the impact of acquisitions, reached 11%. Adjusted net income rose 33% to $7.3 million. In Q2, the company remained profitable under GAAP for the 12th consecutive quarter. One source of further expansion is the acquisition of companies already using Crexendo’s platform. In total, it has about 250 such licensees. Management explains that long-standing relationships make it possible to better understand the business of potential acquisition targets.

In March, Crexendo acquired one of its licensees with which it had partnered for more than 14 years. Its annual revenue was about $26 million. The company paid 78% of the deal value in cash and 22% in shares. At the time of the presentation, Crexendo had $18.3 million in cash on its balance sheet and $5 million in debt. According to management, free cash flow helps fund acquisitions.

AI is expected to increase revenue per customer

The company considers AI services to be another source of growth. These include a virtual operator that answers calls, responds to standard questions, and helps schedule a customer for service. The package costs about $150 per month. By comparison, the average monthly revenue from a retail customer cited in the presentation is about $340. Selling additional AI tools makes it possible to increase revenue from the existing audience.

Crexendo also offers call recording analytics: the system produces a brief summary of calls, highlights key topics, and assesses customer sentiment. At the time of the meeting, sales of these solutions were at an early stage. Management expected AI to become a meaningful source of revenue over the next two to three quarters, but has not yet provided specific metrics for this segment. 

Contracts provide visibility into future revenue

The number of end users of the Crexendo platform exceeded 8 million. In the first half of the year, the company added 11 new licensees versus 14 for all of 2025.

The amount of remaining performance obligations under contracts—future revenue from already signed agreements—reached $139 million, up 64% year over year. According to management, this amount will be gradually recognized as revenue over the next five years. Long-term contracts and a high share of recurring payments create the foundation for executing the company’s business expansion plans. 

Not an individual investment recommendation.