Crexendo Inc
For the period ended Sep 30, 2024. Filed Nov 6, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 6, 2024
CXDO$5.07+2.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-06.
0001654954-24-010039
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-06.
0001654954-24-013839
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 148 previous paragraphs and 148 current paragraphs.
76 unchanged; 64 reworded; 8 added; 8 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 49 previous and 49 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
Nine months ended September 30, 2024 compared to nine months ended September 30, 2023
Current report
The decrease in research and development expenses is primarily related to the allocation of engineering resources to the Software Solutions segment of $191 as we finalize the migration of our classic customers to our VIP platform, offset by an increase in other research and development expenses of $8.
Current report
The change in other income/(expense) is primarily from the gain on sale of our corporate office building during the three months ended September 30, 2023 of $1,459, offset by an increase in interest income of $69 and a decrease in interest expense of $29.
Current report
Nine months ended****September 30, 2024 compared to nine months ended September 30, 2023
Current report
The change in other income/(expense) is primarily from the gain on sale of our corporate office building during the nine months ended September 30, 2023 of $1,459 and a decrease in other income of $4, offset by an increase in interest income of $80 and a decrease in interest expense of $29.
Current report
The change in other income/(expense) is primarily related to an increase in other income of $5 and an increase in foreign exchange gains of $42.
Current report
Nine months ended****September 30, 2024 compared to nine months ended September 30, 2023
Current report
Net cash provided by investing activities in the nine months ended September 30, 2023, primarily relates to the sale of our corporate office building located in Tempe, Arizona, which generated $3,792 in proceeds from the sale.
Removed paragraphs (8)
Previous report
Six months ended June 30, 2024 compared to six months ended June 30, 2023
Previous report
The decrease in research and development expenses is primarily related to a decrease in salaries, benefits, bonuses, and share-based compensation of $32 and a decrease in other research and development costs of $1.
Previous report
The change in other income/(expense) is primarily related to an increase in interest income of $53, a decrease in interest expense of $22, and a decrease in other income of $4.
Previous report
Six months ended****June 30, 2024 compared to six months ended June 30, 2023
Previous report
The change in other income/(expense) is primarily related to an increase in interest income of $53, a decrease in interest expense of $51, and an increase in other income of $1.
Previous report
The change in other income/(expense) is primarily related to a decrease in other income of $33 and a decrease in foreign exchange losses of $1.
Previous report
Six months ended****June 30, 2024 compared to six months ended June 30, 2023
Previous report
Net cash used in investing activities in the six months ended June 30, 2023, primarily relates to the purchase of property and equipment.
Reworded paragraphs (64)
Previous wording
Crexendo, Inc. is an award-winning premier provider of cloud communication platform and services, video collaboration and managed IT services designed to provide enterprise-class cloud solutions to any size business. By providing a variety of comprehensive and scalable solutions, we are able to cater to businesses of all sizes on a monthly subscription basis without the need for expensive capital investments, regardless of where their business is in its lifecycle. Our products and services can be categorized in the following offerings:
Current wording
Crexendo, Inc. is an award-winning software technology company that is a premier provider of cloud communication platform and services, video collaboration and managed IT services tailored to businesses of all sizes. By providing a variety of comprehensive and scalable solutions, we are able to cater to businesses of all sizes on a monthly subscription basis without the need for expensive capital investments, regardless of where their business is in its lifecycle. Our products and services can be categorized in the following offerings:
Previous wording
We generate recurring revenue from our cloud telecommunications services, broadband Internet services, managed IT services, software license sales, and infrastructure as a service. Our cloud telecommunications contracts typically have a thirty-six to sixty-month term. We may also charge activation and flash fees and the Company generally allocates a portion of the activation fees to the desktop devices, which is recognized at the time of the installation or customer acceptance, and a portion to the service, which is recognized over the contract term using the straight-line method. We also charge other various contracted and non-contracted fees.
Current wording
We generate recurring revenue from our cloud telecommunications services, broadband Internet services, managed IT services, software license sales, and infrastructure as a service. Our cloud telecommunications contracts typically have a thirty-nine to ninety-month term. We may also charge activation and flash fees and the Company generally allocates a portion of the activation fees to the desktop devices, which is recognized at the time of the installation or customer acceptance, and a portion to the service, which is recognized over the contract term using the straight-line method. We also charge other various contracted and non-contracted fees.
Previous wording
The increase in total revenue is due to an increase in software solutions revenue of $2,433 and an increase in service revenue of $1,446, offset by a decrease in product revenue of $69.
Current wording
The increase in total revenue is due to an increase in software solutions revenue of $1,169, an increase in service revenue of $436, and an increase in product revenue of $148.
Previous wording
The increase in income before income tax is primarily related to an increase in revenue of $3,810 and a net increase in other income/(expense) of $1, offset by an increase in operating expenses of $656. The increase in revenue is related to organic growth from new and existing customers. The increase in operating expenses is primarily related to an increase in commission expenses of $626, an increase in contract labor and outsourced engineering services of $336, an increase in hosting service fees of $125, and an increase in accounting software costs of $54, offset by a decrease in salaries, benefits, bonuses and share-based compensation of $480 due to a decrease in share-based compensation offset by company-wide salary increases. The increase in other income/(expenses) is primarily related to an increase in interest income of $58, a decrease in interest expense of $51 resulting from the sale of our corporate office building during the third quarter of 2023, and a decrease in other income of $108.
Current wording
The decrease in income/(loss) before income tax is primarily related to a decrease in other income/(expense) of $(1,256) and an increase in operating expenses of $1,982, offset by an increase in revenue of $1,753. The decrease in other income/(expense) is primarily related to the gain on the sale of our corporate office recognized during the three months ended September 30, 2023 of $(1,459) offset by an increase in interest income of $69 and a decrease in interest expense of $29. The increase in operating expenses is primarily related to an increase in commission expense of $485, an increase in salaries, benefits, bonuses and share-based compensation of $474, an increase in hosting service fees of $137, an increase in contract labor and outsourced engineering services of $128, and an increase in accounting software costs of $59. The increase in revenue is related to organic growth from new and existing customers.
Previous wording
We had an income tax provision of $(54) for the six months ended June 30, 2024 compared to an income tax provision of $(48) for the six months ended June 30, 2023. We had income before income taxes of $1,076 for the six months ended June 30, 2024, compared to a loss before income taxes of $(2,079) for the three months ended June 30, 2023. The income tax provision for the six months ended June 30, 2024 and 2023, is related to minimum state tax payments.
Current wording
We had an income tax provision of $(46) and $(33) for the three months ended September 30, 2024 and 2023, respectively. We had income before income taxes of $194 and $1,737 for the three months ended September 30, 2024 and 2023, respectively. The income tax provision for the three months ended September 30, 2024 and 2023, is related to minimum state tax payments.
Previous wording
Total revenue consists of service revenue, software solutions revenue and product revenue. The following table reflects our service revenue for the six months ended June 30, 2024, compared to the six months ended June 30, 2023:
Current wording
Total revenue consists of service revenue, software solutions revenue and product revenue. The following table reflects our service revenue for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023:
Previous wording
The increase in total revenue is due to an increase in software solutions revenue of $1,395, an increase in service revenue of $759, offset by a decrease in product revenue of $139.
Current wording
The increase in total revenue is due to an increase in software solutions revenue of $3,602, an increase in service revenue of $1,882, and an increase in product revenue of $79.
Previous wording
The following table reflects our income/(loss) before income tax for the six months ended June 30, 2024, compared to the six months ended June 30, 2023:
Current wording
The following table reflects our income/(loss) before income tax for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023:
Previous wording
The increase in income/(loss) before income tax is primarily related to an increase in revenue of $2,015 and an increase in other income/(expense) of $39, offset by an increase in operating expenses of $918. The increase in revenue is related to organic growth from new and existing customers. The increase in operating expenses is primarily related to an increase in commission expense of $342, an increase in contract labor and outsourced engineering services of $209, an increase in hosting service fees of $125, and an increase in accounting software costs of $54. The increase in other income/(expense) is primarily related to an increase in interest income and a decrease in interest expense.
Current wording
The increase in income/(loss) before income tax is primarily related to an increase in revenue of $5,563, offset by an increase in operating expenses of $2,638 and a decrease in other income/(expense) of $(1,314). The increase in revenue is related to organic growth from new and existing customers. The increase in operating expenses is primarily related to an increase in commission expense of $1,111, an increase in hosting service fees of $262, an increase in contract labor and outsourced engineering services of $443, and an increase in accounting software costs of $113. The decrease in other income/(expense) is primarily related to sale of our corporate office recognized during the nine months ended September 30, 2023 of $(1,459) offset by an increase in interest income of $66 and a decrease in interest expense of $80.
Previous wording
The following table reflects our income tax (provision)/benefit for the six months ended June 30, 2024, compared to the six months ended June 30, 2023:
Current wording
The following table reflects our income tax (provision)/benefit for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023:
Previous wording
We had an income tax provision of $(27) for the three months ended June 30, 2024 compared to an income tax provision of $(24) for the three months ended June 30, 2023. We had income before income taxes of $615 for the three months ended June 30, 2024, compared to a loss before income taxes of $(521) for the three months ended June 30, 2023. The income tax provision for the three months ended June 30, 2024 and 2023, is related to minimum state tax payments.
Current wording
We had an income tax provision of $(100) and $(81) for the nine months ended September 30, 2024 and 2023, respectively. We had income before income taxes of $1,270 for the nine months ended September 30, 2024, compared to a loss before income taxes of $(342) for the nine months ended September 30, 2023. The income tax provision for the nine months ended September 30, 2024 and 2023, is related to minimum state tax payments.
Previous wording
The increase in service revenue is due to an increase in telecommunications services fees of $1,088, an increase in one-time fees, commissions and other of $161, an increase in fees, commissions, and other, recognized over time of $106, and an increase in sales-type lease interest of $91.
Current wording
The increase in service revenue is due to an increase in telecommunications services fees of $453, an increase in fees, commissions, and other, recognized over time of $99, and an increase in sales-type lease interest of $40, offset by a decrease in one-time fees, commissions and other of $156.
Previous wording
Backlog represents the total contract value of all contracts signed, less revenue recognized from those contracts as of June 30, 2024 and 2023. Backlog increased 45%, or $15,932 to $51,684 as of June 30, 2024 as compared to $35,752 as of June 30, 2023. Below is a table which displays the Cloud Telecommunications segment revenue backlog as of April 1, 2024 and 2023, and June 30, 2024 and 2023, which we expect to recognize as revenue within the next five years (in thousands):
Current wording
Backlog represents the total contract value of all contracts signed, less revenue recognized from those contracts as of September 30, 2024 and 2023. Backlog increased 23%, or $9,849 to $52,963 as of September 30, 2024 as compared to $43,114 as of September 30, 2023. Below is a table which displays the Cloud Telecommunications segment revenue backlog as of July 1, 2024 and 2023, and September 30, 2024 and 2023, which we expect to recognize as revenue within the next five years (in thousands):
Previous wording
The increase in cost of service revenue was primarily related to an increase in contract labor costs to assist with the migration of our customers to our new VIP platform of $81, an increase in salaries, benefits, bonuses, and share-based compensation of $35, an increase in third-party telecommunication charges of $23, and an increase in other cost of service revenue of $12.
Current wording
The increase in cost of service revenue was primarily related to an increase in third-party telecommunication charges of $47, an increase in salaries, benefits, bonuses, and share-based compensation of $45, an increase in contract labor costs to assist with the migration of our customers to our new VIP platform of $43, and an increase in other cost of service revenue of $28.
Previous wording
The decrease in cost of product revenue is primarily related to the decrease in product revenue due to eliminating the sale of low margin products.
Current wording
The increase in cost of product revenue is primarily related to the increase in product revenue due to our organic product revenue growth.
Previous wording
The increase in selling and marketing expense is primarily related to an increase in commission expense of $309 directly related to the increase in revenue and an increase in other sales and marketing expense of $7, offset by a decrease in salaries, benefits, bonuses, and share-based compensation of $12.
Current wording
The increase in selling and marketing expense is primarily related to an increase in commission expense of $342 directly related to the increase in revenue, an increase in salaries, benefits, bonuses, and share-based compensation of $100, an increase in marketing costs of $42, and an increase in other sales and marketing expense of $25.
Previous wording
The decrease in general and administrative expenses is primarily related to a decrease in executive and administrative salaries, benefits, bonuses, and share-based compensation of $682 and a decrease in other general and administrative expenses of $51, offset by an increase of rent expense of $81 due to the leaseback of our previously sold corporate headquarters land and building, an increase in legal fees of $56 related to the filing of our Form S-3, and an increase in accounting software costs of $27 associated with service contract fees for our new accounting system.
Current wording
The increase in general and administrative expenses is primarily related to an increase of $77 in telecommunication fees, an increase in accounting software costs of $27 associated with service contract fees for our new accounting system, and an increase in other general and administrative expenses of $6, offset by a decrease in executive and administrative salaries, benefits, bonuses, and share-based compensation of $62.
Previous wording
Research and development expenses primarily consist of salaries, benefits, bonuses, and share-based compensation, outsourced engineering services related to the development of new cloud telecommunications features and products. The following table reflects our research and development expenses for the three months ended June 30, 2024, compared to the three months ended June 30, 2023:
Current wording
Research and development expenses primarily consist of salaries, benefits, bonuses, and share-based compensation, and outsourced engineering services related to the development of new cloud telecommunications features and products. The following table reflects our research and development expenses for the three months ended September 30, 2024, compared to the three months ended September 30, 2023:
Previous wording
Other income/(expense) primarily relates to interest income, interest expense, net foreign exchange gains or losses, and credit card cash back rewards. The following table reflects our other income/(expense) for the three months ended June 30, 2024, compared to the three months ended June 30, 2023:
Current wording
Other income/(expense) primarily relates to interest income, interest expense, net foreign exchange gains or losses, gain on the sale of property and equipment, and credit card cash back rewards. The following table reflects our other income/(expense) for the three months ended September 30, 2024, compared to the three months ended September 30, 2023:
Previous wording
Cloud telecommunications service revenue consists primarily of fees collected for cloud telecommunications services, professional services, interest from sales-type leases, reselling broadband Internet services, managed IT service, and administrative fees. The following table reflects our service revenue for the six months ended June 30, 2024, compared to the six months ended June 30, 2023:
Current wording
Cloud telecommunications service revenue consists primarily of fees collected for cloud telecommunications services, professional services, interest from sales-type leases, reselling broadband Internet services, managed IT service, and administrative fees. The following table reflects our service revenue for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023:
Previous wording
The increase in service revenue is due to an increase in telecommunications services fees of $517, an increase in one-time fees, commissions and other of $156, an increase in sales-type lease interest of $44, and an increase in fees, commissions, and other, recognized over time of $42.
Current wording
The increase in service revenue is due to an increase in telecommunications services fees of $1,541, an increase in fees, commissions, and other, recognized over time of $205, an increase in sales-type lease interest of $131, and an increase in one-time fees, commissions and other of $5.
Previous wording
Product revenue consists primarily of fees collected from the sale of desktop phone devices, third-party equipment, and device as a service. The following table reflects our product revenue for the six months ended June 30, 2024, compared to the six months ended June 30, 2023:
Current wording
Product revenue consists primarily of fees collected from the sale of desktop phone devices, third-party equipment, and device as a service. The following table reflects our product revenue for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023:
Previous wording
Backlog represents the total contract value of all contracts signed, less revenue recognized from those contracts as of June 30, 2024 and 2023. Backlog increased 45%, or $15,932 to $51,684 as of June 30, 2024 as compared to $35,752 as of June 30, 2023. Below is a table which displays the Cloud Telecommunications segment revenue backlog as of January 1, 2024 and 2023, and June 30, 2024 and 2023, which we expect to recognize as revenue within the next thirty-six to sixty months (in thousands):
Current wording
Backlog represents the total contract value of all contracts signed, less revenue recognized from those contracts as of September 30, 2024 and 2023. Backlog increased 23%, or $9,849 to $52,963 as of September 30, 2024 as compared to $43,114 as of September 30, 2023. Below is a table which displays the Cloud Telecommunications segment revenue backlog as of January 1, 2024 and 2023, and September 30, 2024 and 2023, which we expect to recognize as revenue within the next thirty-nine to ninety months (in thousands):
Previous wording
Cost of service revenue consists primarily of fees we pay to third-party telecommunications carriers, broadband Internet providers, software providers, costs related to installations, contract labor costs, customer support salaries, benefits, bonuses, and share-based compensation. The following table reflects our cost of service revenue for the six months ended June 30, 2024, compared to the six months ended June 30, 2023:
Current wording
Cost of service revenue consists primarily of fees we pay to third-party telecommunications carriers, broadband Internet providers, software providers, costs related to installations, contract labor costs, customer support salaries, benefits, bonuses, and share-based compensation. The following table reflects our cost of service revenue for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023:
Previous wording
The increase in cost of service revenue is primarily related to an increase in contract labor costs to assist with the migration of our customers to our new VIP platform of $132, an increase in salaries, benefits, bonuses, and share-based compensation of $65, and an increase in other cost of service revenue of $19.
Current wording
The increase in cost of service revenue is primarily related to an increase in contract labor costs to assist with the migration of our customers to our new VIP platform of $175, an increase in salaries, benefits, bonuses, and share-based compensation of $110, an increase in third-party telecommunications charges of $47, and an increase in other cost of service revenue of $47.
Previous wording
Cost of product revenue consists of the costs associated with desktop phone devices and third-party equipment. The following table reflects our cost of product revenue for the six months ended June 30, 2024, compared to the six months ended June 30, 2023:
Current wording
Cost of product revenue consists of the costs associated with desktop phone devices and third-party equipment. The following table reflects our cost of product revenue for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023:
Previous wording
Selling and marketing expenses consist primarily of direct and channel sales representative salaries, benefits, bonuses, and share-based compensation, partner channel commissions, amortization of costs to acquire contracts, travel expenses, lead generation services, trade shows, internal and third-party marketing costs, amortization of customer relationship intangible assets, the production of marketing materials, and sales support software. The following table reflects our selling and marketing expenses for the six months ended June 30, 2024, compared to the six months ended June 30, 2023:
Current wording
Selling and marketing expenses consist primarily of direct and channel sales representative salaries, benefits, bonuses, and share-based compensation, partner channel commissions, amortization of costs to acquire contracts, travel expenses, lead generation services, trade shows, internal and third-party marketing costs, amortization of customer relationship intangible assets, the production of marketing materials, and sales support software. The following table reflects our selling and marketing expenses for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023:
Previous wording
The increase in selling and marketing expense is primarily related to an increase in commission expense of $566 directly related to the increase in revenue and an increase in other sales and marketing expense of $17, offset by a decrease in salaries, benefits, bonuses, and share-based compensation of $79.
Current wording
The increase in selling and marketing expense is primarily related to an increase in commission expense of $908 directly related to the increase in revenue, an increase in marketing costs of $42, an increase in salaries, benefits, bonuses, and share-based compensation of $21, and an increase in other sales and marketing expense of $42.
Previous wording
General and administrative expenses consist of salaries, benefits, bonuses and share-based compensation for executives, administrative personnel, legal, rent, equipment, accounting and other professional services, investor relations, depreciation, amortization of intangible assets, and other administrative corporate expenses. The following table reflects our general and administrative expenses for the six months ended June 30, 2024, compared to the six months ended June 30, 2023:
Current wording
General and administrative expenses consist of salaries, benefits, bonuses and share-based compensation for executives, administrative personnel, legal, rent, equipment, accounting and other professional services, investor relations, depreciation, amortization of intangible assets, and other administrative corporate expenses. The following table reflects our general and administrative expenses for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023:
Previous wording
The increase in general and administrative expenses is primarily related to an increase in rent expense of $81 due to the leaseback of our previously sold corporate headquarters land and building, an increase in legal fees of $56 related to the filing of our Form S-3 and an increase in accounting software costs of $27 associated with service contract fees for our new accounting system, offset by a decrease in executive and administrative salaries, benefits, bonuses, and share-based compensation of $99 and an decrease in other general and administrative expenses of $8.
Current wording
The decrease in general and administrative expenses is primarily related to a decrease in executive and administrative salaries, benefits, bonuses, and share-based compensation of $744, offset by an increase of rent expense of $81 due to the leaseback of our previously sold corporate headquarters land and building, an increase in legal fees of $56 related to the filing of our Form S-3, an increase in accounting software costs of $54 associated with service contract fees for our new accounting system, and an increase in other general and administrative expenses of $32.
Previous wording
Research and development expenses primarily consist of salaries, benefits, bonuses, and share-based compensation, outsourced engineering services related to the development of new cloud telecommunications features and products. The following table reflects our research and development expenses for the six months ended June 30, 2024, compared to the six months ended June 30, 2023:
Current wording
Research and development expenses primarily consist of salaries, benefits, bonuses, and share-based compensation, and outsourced engineering services related to the development of new cloud telecommunications features and products. The following table reflects our research and development expenses for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023:
Previous wording
The decrease in research and development expenses is primarily related to a decrease in salaries, benefits, bonuses, and share-based compensation of $70 offset by an increase in other research and development costs of $7.
Current wording
The decrease in research and development expenses is primarily related to the allocation of engineering resources to the Software Solutions segment of $191 as we finalize the migration of our classic customers to our VIP platform and a decrease in salaries, benefits, bonuses, and share-based compensation of $70 offset by an increase in other research and development expenses of $15.
Previous wording
Other income/(expense) primarily relates to interest expense and net foreign exchange gains or losses, offset by credit card cash back rewards. The following table reflects our other income/(expense) for the six months ended June 30, 2024, compared to the six months ended June 30, 2023:
Current wording
Other income/(expense) primarily relates to interest income, interest expense, net foreign exchange gains or losses, gain on the sale of property and equipment, and credit card cash back rewards. The following table reflects our other income/(expense) for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023:
Previous wording
The increase in software solutions revenue is primarily related to an increase in recurring software license and maintenance and support subscriptions of $877, an increase in in perpetual software license revenue of $488, and an increase in professional services and other revenue of $30.
Current wording
The increase in software solutions revenue is primarily related to an increase in recurring software license and maintenance and support subscriptions of $536, an increase in in perpetual software license revenue of $493, and an increase in professional services and other revenue of $140.
Previous wording
Backlog represents the total contract value of all contracts signed, less revenue recognized from those contracts as of June 30, 2024 and 2023. Backlog increased 26%, or $4,009 to $19,478 as of June 30, 2024 as compared to $15,469 as of June 30, 2023. Below is a table which displays the software solutions segment revenue backlog as of April 1, 2024 and 2023, and June 30, 2024 and 2023, which we expect to recognize as revenue within the next thirty-six to sixty months (in thousands):
Current wording
Backlog represents the total contract value of all contracts signed, less revenue recognized from those contracts as of September 30, 2024 and 2023. Backlog increased 20%, or $4,089 to $24,408 as of September 30, 2024 as compared to $20,319 as of September 30, 2023. Below is a table which displays the software solutions segment revenue backlog as of July 1, 2024 and 2023, and September 30, 2024 and 2023, which we expect to recognize as revenue within the next thirty-nine to ninety months (in thousands):
Previous wording
The increase in cost of software solutions revenue is primarily related to an increase in salaries, benefits, bonuses, and share-based compensation of $131, an increase in third-party hosting service costs of $125, an increase in software costs of $91, and an increase in other cost of software solutions revenue of $12.
Current wording
The increase in cost of software solutions revenue is primarily related to an increase in third-party hosting service costs of $137, an increase in software costs of $125, an increase in salaries, benefits, bonuses, and share-based compensation of $89, and an increase in other cost of software solutions revenue of $8.
Previous wording
The increase in selling and marketing expense is primarily related to an increase in marketing materials and trade shows of $60, an increase in commission expense of $60 directly related to the increase in revenue, and an increase in other selling and marketing costs of $7, offset by a decrease in salaries, benefits, bonuses, and share-based compensation of $68.
Current wording
The increase in selling and marketing expense is primarily related to an increase in commission expense of $143 directly related to the increase in revenue, an increase in marketing materials and trade shows of $103, and an increase in other selling and marketing costs of $16, offset by a decrease in salaries, benefits, bonuses, and share-based compensation of $52 due to the allocation of marketing resources to the Cloud Telecommunications segment.
Previous wording
General and administrative expenses consist of salaries and benefits for executives, administrative personnel, amortization of trademark and trade name intangible assets, legal, rent, equipment, accounting and other professional services, and other administrative corporate expenses. The following table reflects our general and administrative expenses for the three months ended June 30, 2024, compared to the three months ended June 30, 2023:
Current wording
General and administrative expenses consist of salaries and benefits for executives, administrative personnel, amortization of trademark and trade name intangible assets, legal, rent, equipment, accounting and other professional services, consulting fees and other administrative corporate expenses. The following table reflects our general and administrative expenses for the three months ended September 30, 2024, compared to the three months ended September 30, 2023:
Previous wording
The increase in general and administrative expenses is primarily related to an increase in salaries, benefits, bonuses, and share-based compensation of $115, an increase in professional service fees of $54, an increase in accounting software costs of $27 associated with service contract fees for our new accounting system, and an increase in other general and administrative expenses of $12.
Current wording
The increase in general and administrative expenses is primarily related to an increase in salaries, benefits, bonuses, and share-based compensation of $230, an increase in accounting software costs of $32 associated with service contract fees for our new accounting system, an increase in consulting fees of $21, an increase in professional service fees of $14, and an increase in other general and administrative expenses of $41.
Previous wording
The increase in research and development expenses is primarily related to an increase in outsourced engineering services expenses of $128, an increase in salaries, benefits, bonuses, and share-based compensation of $92, and an increase in other research and development expenses of $3.
Current wording
The increase in research and development expenses is primarily related to an increase in salaries, benefits, bonuses, and share-based compensation of $315 due to the allocation of resources from the Cloud Telecommunications segment as we finalize the migration of our classic customers to the VIP platform, an increase in outsourced engineering services expenses of $64, and an increase in other research and development expenses of $1.
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