Crexendo, Inc.
For the period ended Sep 30, 2025. Filed Nov 4, 2025.
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, 2025 · Filed Nov 4, 2025
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 2025-06-30; filed 2025-08-05.
0001654954-25-009071
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-04.
0001654954-25-012585
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 161 previous paragraphs and 163 current paragraphs.
86 unchanged; 64 reworded; 12 added; 7 removed; 4 previous and 1 current paragraphs rearranged.
Tables are not compared: 52 previous and 52 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 (12)
Current report
The decrease in income tax provision is due to the quarterly impact of the tax provision adjustment.
Current report
Nine months ended September 30, 2025 compared to nine months ended September 30, 2024
Current report
Reconciliation of U.S. GAAP Net Income/(Loss) to Non-GAAP Net Income
Current report
(Unaudited, in thousands, except for per share and share data)
Current report
Reconciliation of U.S. GAAP Net Income/(Loss) to EBITDA to Adjusted EBITDA
Current report
The change in other income/(expense) is primarily related to an increase in interest income of $130 and a decrease in interest expense of $4, offset by a decrease in other income of $4.
Current report
Nine months ended****September 30, 2025 compared to nine months ended September 30, 2024
Current report
The change in other income/(expense) is primarily related to an increase in interest income of $281 and a decrease in interest expense of $13.
Current report
The increase in general and administrative expenses is primarily related to an increase in legal expenses of $204, an increase in salaries, benefits, bonuses, share-based compensation, and headcount of $128, an increase in the amortization of the capitalized software development costs intangible asset of $33, an increase in professional service fees of $17, and an increase in other general and administrative expenses of $53.
Current report
The decrease in research and development expenses is primarily related to a decrease in salaries, benefits, bonuses, share-based compensation, and headcount of $90, offset by an increase in outsourced engineering services expenses of $40 and an increase in other research and development expenses of $3.
Current report
The change in other income/(expense) is primarily related to a decrease in foreign exchange gains of $8 offset by an increase in other income of $7.
Current report
Nine months ended****September 30, 2025 compared to nine months ended September 30, 2024
Removed paragraphs (7)
Previous report
Six months ended June 30, 2025 compared to six months ended June 30, 2024
Previous report
The change in other income/(expense) is primarily related to an increase in interest income of $73 and a decrease in interest expense of $5.
Previous report
Six months ended****June 30, 2025 compared to six months ended June 30, 2024
Previous report
The change in other income/(expense) is primarily related to an increase in interest income of $152, an increase in other income of $3, and a decrease in interest expense of $9.
Previous report
The increase in general and administrative expenses is primarily related to an increase in salaries, benefits, bonuses, share-based compensation, and headcount of $376 due to allocation of resources from the Cloud Telecommunications Services Segment, and an increase in the amortization of the capitalized software development costs intangible asset of $51.
Previous report
The change in other income/(expense) is primarily related to a increase in other income of $13 and an increase in foreign exchange gains/(losses) of $51.
Previous report
Six months ended****June 30, 2025 compared to six months ended June 30, 2024
Reworded paragraphs (64)
Previous wording
We believe that our Annualized Exit Monthly Recurring Subscriptions (“AERR”) is a leading indicator of our anticipated subscriptions revenues. We believe that trends in revenue are important to understanding the overall health of our business, and we use these trends to formulate financial projections and make strategic business decisions. Our AERR equals our Monthly Recurring Subscriptions multiplied by 12. Our Monthly Recurring Subscriptions equals the monthly value of all customer recurring charges at the end of a given month. For example, our Monthly Recurring Subscriptions at June 30, 2025 were $4,489. As such, our AERR at June 30, 2025 was $53,874 compared to $47,314 at June 30, 2024.
Current wording
We believe that our Annualized Exit Monthly Recurring Subscriptions (“AERR”) is a leading indicator of our anticipated subscriptions revenues. We believe that trends in revenue are important to understanding the overall health of our business, and we use these trends to formulate financial projections and make strategic business decisions. Our AERR equals our Monthly Recurring Subscriptions multiplied by 12. Our Monthly Recurring Subscriptions equals the monthly value of all customer recurring charges at the end of a given month. For example, our Monthly Recurring Subscriptions at September 30, 2025 were $4,675. As such, our AERR at September 30, 2025 was $56,100 compared to $49,039 at September 30, 2024.
Previous wording
The increase in total revenue is due to an increase in software solutions revenue of $3,372 and an increase in service revenue of $644, offset by a decrease in product revenue of $378.
Current wording
The increase in total revenue is due to an increase in software solutions revenue of $1,661, an increase in service revenue of $616, offset by a decrease in product revenue of $407.
Previous wording
The increase in income before income tax is primarily related to an increase in revenue of $3,638 and a net increase in other income/(expense) of $229, offset by an increase in operating expenses of $2,448. 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 salaries, benefits, bonuses, and share-based compensation of $1,220, an increase in commission expenses of $643, an increase in contract labor and outsourced engineering services of $269, an increase in software costs of $184, an increase in accounting software costs of $113, and an increase in other operating expenses of $19. The increase in other income/(expense) is primarily related to an increase in interest income of $152, an increase in other income of $68, and a decrease in interest expense of $9.
Current wording
The increase in income/(loss) before income tax is primarily related to an increase in revenue of $1,870 and an increase in other income/(expense) of $129, offset by an increase in operating expenses of $700. The increase in revenue is related to organic growth from new and existing customers. The increase in operating expenses is primarily related to increase in contract labor and outsourced engineering services of $298, an increase in commission expenses of $250, and an increase in third-party telecommunication charges of $163, offset by a decrease in other operating expenses of $11. The increase in other income/(expense) is primarily related to an increase in interest income of $130, offset by a decrease in other income/(expense) of $1.
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, 2025, compared to the six months ended June 30, 2024:
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, 2025, compared to the nine months ended September 30, 2024:
Previous wording
The increase in total revenue is due to an increase in software solutions revenue of $1,650 and an increase in service revenue of $307, offset by a decrease in product revenue of $90.
Current wording
The increase in total revenue is due to an increase in software solutions revenue of $5,033 and an increase in service revenue of $1,260, offset by a decrease in product revenue of $785.
Previous wording
The following table reflects our income/(loss) before income tax for the six months ended June 30, 2025, compared to the six months ended June 30, 2024:
Current wording
The following table reflects our income/(loss) before income tax for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024:
Previous wording
The increase in income/(loss) before income tax is primarily related to an increase in revenue of $1,867 and an increase in other income/(expense) of $142, offset by an increase in operating expenses of $1,344. 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 salaries, benefits, bonuses, and share-based compensation of $679, an increase in commission expenses of $306, an increase in contract labor and outsourced engineering services of $172, an increase in software costs of $141, and an increase in other operating expenses of $46. The increase in other income/(expense) is primarily related to an increase in interest income of $73, an increase in other income of $64, and a decrease in interest expense of $5.
Current wording
The increase in income/(loss) before income tax is primarily related to an increase in revenue of $5,508 and an increase in other income/(expense) of $358, offset by an increase in operating expenses of $3,148. 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 salaries, benefits, bonuses, share-based compensation, and headcount of $1,077, an increase in commission expense of $893, an increase in contract labor and outsourced engineering services of $652, an increase in third-party telecommunication charges of $417, and an increase in other expenses of $109. The increase in other income/(expense) is primarily related to an increase in interest income of $282, an increase in other income of $63, and a decrease in interest expense of $13.
Previous wording
The following table reflects our income tax benefit/(provision) for the six months ended June 30, 2025, compared to the six months ended June 30, 2024:
Current wording
The following table reflects our income tax benefit/(provision) for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024:
Previous wording
To evaluate our business, we consider and use non-generally accepted accounting principles (“Non-GAAP”) net income and Adjusted EBITDA as a supplemental measure of operating performance. These measures include the same adjustments that management takes into account when it reviews and assesses operating performance on a period-to-period basis. We consider Non-GAAP net income to be an important indicator of overall business performance because it allows us to evaluate results without the effects of share-based compensation and related taxes, acquisition related expenses, changes in fair value of contingent consideration, amortization of intangibles, and goodwill and long-lived asset impairment. We define EBITDA as U.S. GAAP net income/(loss) before interest expense, interest income and other expense/(income), the gain/(loss) on the sale of property and equipment, goodwill and long-lived asset impairments, provision/(benefit) for income taxes, and depreciation and amortization. We believe EBITDA provides a useful metric to investors to compare us with other companies within our industry and across industries. We define Adjusted EBITDA as EBITDA adjusted for acquisition related expenses, changes in fair value of contingent consideration and share-based compensation and related taxes. We use Adjusted EBITDA as a supplemental measure to review and assess operating performance. We also believe use of Adjusted EBITDA facilitates investors’ use of operating performance comparisons from period to period, as well as across companies.
Current wording
To evaluate our business, we consider and use non-generally accepted accounting principles (“Non-GAAP”) net income and Adjusted EBITDA as a supplemental measure of operating performance. These measures include the same adjustments that management takes into account when it reviews and assesses operating performance on a period-to-period basis. We consider Non-GAAP net income to be an important indicator of overall business performance because it allows us to evaluate results without the effects of share-based compensation and related taxes, acquisition related expenses, changes in fair value of contingent consideration, amortization of intangibles, and goodwill and long-lived asset impairment. We define EBITDA as U.S. GAAP net income/(loss) before interest expense, interest income and other expense/(income), the gain/(loss) on the sale of property and equipment, goodwill and long-lived asset impairments, benefit/(provision) for income tax, and depreciation and amortization. We believe EBITDA provides a useful metric to investors to compare us with other companies within our industry and across industries. We define Adjusted EBITDA as EBITDA adjusted for acquisition related expenses, changes in fair value of contingent consideration and share-based compensation and related taxes. We use Adjusted EBITDA as a supplemental measure to review and assess operating performance. We also believe use of Adjusted EBITDA facilitates investors’ use of operating performance comparisons from period to period, as well as across companies.
Previous wording
The increase in service revenue is due to an increase in telecommunications services fees of $332, an increase in fees, commissions, and other, recognized over time of $132, and an increase in sales-type lease interest of $44, offset by a decrease in one-time fees, commissions and other of $201. A substantial portion of Cloud Telecommunications service revenue is generated through thirty-six to sixty month service contracts.
Current wording
The increase in service revenue is due to an increase in telecommunications services fees of $560, an increase in fees, commissions, and other, recognized over time of $50, an increase in sales-type lease interest of $40, and an increase in one-time fees, commissions and other of $4.
Previous wording
Product revenue fluctuates from one period to the next based on sales bookings, the allocation of discounts or sales promotions across the performance obligations, and the timing of installations. Our typical customer installation is complete within 30-60 days. However, larger enterprise customers can take multiple months, depending on size and the number of locations. The decrease in product revenue is primarily related to a decrease in managed IT services and infrastructure as a service product revenue of $131, offset by an increase in product revenue related to our cloud telecommunications services of $41.
Current wording
Product revenue fluctuates from one period to the next based on timing of installations. Our typical customer installation is complete within 30-60 days. However, larger enterprise customers can take multiple months, depending on size and the number of locations. Product revenue is recognized when products have been installed and services commence. Additionally, product revenue can fluctuate due to the allocation of discounts or sales promotions across the performance obligations.
Previous wording
Remaining Performance Obligations (RPOs) represents the total contract value of all contracts signed, less revenue recognized from those contracts as of June 30, 2025 and 2024. RPO’s increased 9%, or $4,708 to $56,392 as of June 30, 2025 as compared to $51,684 as of June 30, 2024. Below is a table which displays the Cloud Telecommunications segment revenue remaining performance obligations as of April 1, 2025 and 2024, and June 30, 2025 and 2024, which we expect to recognize as revenue within the next thirty-six to sixty months (in thousands):
Current wording
Remaining Performance Obligations (RPOs) represents the total contract value of all contracts signed, less revenue recognized from those contracts as of September 30, 2025 and 2024. RPO’s increased 11%, or $6,030 to $58,993 as of September 30, 2025 as compared to $52,963 as of September 30, 2024. Below is a table which displays the Cloud Telecommunications segment revenue remaining performance obligations as of July 1, 2025 and 2024, and September 30, 2025 and 2024, which we expect to recognize as revenue within the next thirty-six to sixty months (in thousands):
Previous wording
The increase in cost of service revenue was primarily related to an increase in third-party telecommunications charges of $118, an increase in salaries, benefits, bonuses, share-based compensation, and headcount of $85, an increase in data center hosting costs of $43, an increase in software costs of $13, an increase in contract labor costs to assist with the migration of our customers to our new VIP platform of $10, and an increase in other cost of service revenue of $41.
Current 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 $258, an increase in third-party telecommunication charges of $163, an increase in data center hosting costs of $28, and an increase in other cost of service revenue of $45, offset by a decrease in salaries, benefits, bonuses, and share-based compensation of $166.
Previous wording
The decrease in cost of product revenue is primarily related to the decrease in product revenue for the three months ended June 30, 2025.
Current wording
The decrease in cost of product revenue is directly related to the decrease in product revenue for the three months ended September 30, 2025.
Previous wording
The increase in selling and marketing expense is primarily related to an increase in commission expense of $179 directly related to the increase in revenue, an increase in salaries, benefits, bonuses, share-based compensation, and headcount of $71, and an increase in other sales and marketing expense of $23.
Current wording
The increase in selling and marketing expense is primarily related to an increase in commission expense of $144 directly related to the increase in revenue, an increase in salaries, benefits, bonuses, share-based compensation, and headcount of $83, and an increase in other sales and marketing expense of $12.
Previous wording
The decrease in general and administrative expenses is primarily related to a decrease in administrative salaries, benefits, bonuses, and share-based compensation of $159 from the allocation of costs to our Software Solutions Segment, offset by an increase related to company-wide salary increases, a decrease in legal fees of $56 related to the filing of our Form S-3 in 2024, a decrease in telecommunication annual taxes and fees of $27, a decrease in consulting fees of $21, a decrease in rent expense of $17, and a decrease in other general and administrative expenses of $45, offset by an increase in the amortization of the capitalized software development costs intangible asset of $51.
Current wording
The decrease in general and administrative expenses is primarily related to a decrease in administrative salaries, benefits, bonuses, share-based compensation, and headcount of $163, a decrease in telecommunication annual taxes and fees of $76, a decrease in utility expense of $53, and a decrease in other general and administrative expenses of $58.
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, 2025, compared to the three months ended June 30, 2024:
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, 2025, compared to the three months ended September 30, 2024:
Previous wording
The decrease in research and development expenses is primarily related to the allocation of engineering resources to our Software Solutions segment of $279 as we finalize the migration of our customers to our VIP platform and a decrease in other research and development expenses of $1.
Current wording
The decrease in research and development expenses is primarily related to the allocation of engineering resources to the Software Solutions segment of $23 as we finalize the migration of our classic customers to our VIP platform, offset by an increase in other research and development expenses of $11.
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, 2025, compared to the three months ended June 30, 2024:
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, 2025, compared to the three months ended September 30, 2024:
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, 2025, compared to the six months ended June 30, 2024:
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, 2025, compared to the nine months ended September 30, 2024:
Previous wording
The increase in service revenue is due to an increase in telecommunications services fees of $638, an increase in fees, commissions, and other, recognized over time of $230, and an increase in sales-type lease interest of $90, offset by a decrease in one-time fees, commissions and other of $314.
Current wording
The increase in service revenue is due to an increase in telecommunications services fees of $1,198, an increase in fees, commissions, and other, recognized over time of $280, and an increase in sales-type lease interest of $130, offset by a decrease in one-time fees, commissions and other of $310.
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, 2025, compared to the six months ended June 30, 2024:
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, 2025, compared to the nine months ended September 30, 2024:
Previous wording
Product revenue fluctuates from one period to the next based on sales bookings, the allocation of discounts or sales promotions across the performance obligations, and the timing of installations. Our typical customer installation is completed within 30-60 days. However, larger enterprise customers can take multiple months, depending on size and the number of locations. The decrease in product revenue is primarily related to a decrease in managed IT services and infrastructure as a service product revenue of $400, offset by an increase in product revenue related to our cloud telecommunications services of $22.
Current wording
Product revenue fluctuates from one period to the next based on timing of installations. Our typical customer installation is complete within 30-60 days. However, larger enterprise customers can take multiple months, depending on size and the number of locations. Product revenue is recognized when products have been installed and services commence. Additionally, product revenue can fluctuate due to the allocation of discounts or sales promotions across the performance obligations.
Previous wording
Remaining Performance Obligations (RPOs) represents the total contract value of all contracts signed, less revenue recognized from those contracts as of June 30, 2025 and 2024. RPO’s increased 9%, or $4,708 to $56,392 as of June 30, 2025 as compared to $51,684 as of June 30, 2024. Below is a table which displays the Cloud Telecommunications segment revenue remaining performance obligations as of January 1, 2025 and 2024, and June 30, 2025 and 2024, which we expect to recognize as revenue within the next thirty-six to sixty months (in thousands):
Current wording
Remaining Performance Obligations (RPO’s) represents the total contract value of all contracts signed, less revenue recognized from those contracts as of September 30, 2025 and 2024. RPO’s increased 11%, or $6,030 to $58,993 as of September 30, 2025 as compared to $52,963 as of September 30, 2024. Below is a table which displays the Cloud Telecommunications segment revenue remaining performance obligations as of January 1, 2025 and 2024, and September 30, 2025 and 2024, which we expect to recognize as revenue within the next thirty-six to sixty 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, third-party software, 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, 2025, compared to the six months ended June 30, 2024:
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, 2025, compared to the nine months ended September 30, 2024:
Previous wording
The increase in cost of service revenue was primarily related to an increase in third-party telecommunications charges of $254, an increase in salaries, benefits, bonuses, share-based compensation, and headcount of $156, an increase in data center hosting costs of $83, an increase in contract labor costs to assist with the migration of our customers to our new VIP platform of $64, an increase in software costs of $56, an increase in bank and merchant processing fees of $19, and an increase in other cost of service revenue of $56.
Current wording
The increase in cost of service revenue was primarily related to an increase in third-party telecommunication charges of $417, an increase in contract labor costs to assist with the migration of our customers to our new VIP platform of $412, an increase in data center hosting costs of $111, an increase in software costs of $73, and an increase in other cost of service revenue of $3.
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, 2025, compared to the six months ended June 30, 2024:
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, 2025, compared to the nine months ended September 30, 2024:
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, 2025, compared to the six months ended June 30, 2024:
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, 2025, compared to the nine months ended September 30, 2024:
Previous wording
The increase in selling and marketing expense is primarily related to an increase in commission expense of $340 directly related to the increase in revenue, an increase in salaries, benefits, bonuses, share-based compensation, and headcount of $95, and an increase in other sales and marketing expense of $10, offset by a decrease in bad debt related to a decrease in our credit loss reserve of $116.
Current wording
The increase in selling and marketing expense is primarily related to an increase in commission expense of $484 directly related to the increase in revenue, an increase in salaries, benefits, bonuses, share-based compensation, and headcount of $178, and an increase in other sales and marketing expense of $31, offset by a decrease in bad debt related to a decrease in our credit loss reserve of $125.
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, 2025, compared to the six months ended June 30, 2024:
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, 2025, compared to the nine months ended September 30, 2024:
Previous wording
The decrease in general and administrative expenses is primarily related to a decrease in administrative salaries, benefits, bonuses, and share-based compensation of $360 from the allocation of costs to our Software Solutions Segment offset by increases in salaries, a decrease in telecommunication annual taxes and fees of $71, a decrease in legal fees of $56 related to the filing of our Form S-3 in 2024, a decrease in consulting fees of $28, and a decrease in other general and administrative expenses of $30, offset by an increase in the amortization of the capitalized software development costs intangible asset of $51.
Current wording
The decrease in general and administrative expenses is primarily related to a decrease in administrative salaries, benefits, bonuses, share-based compensation, and headcount of $563, a decrease in telecommunication annual taxes and fees of $147, a decrease in legal fees of $56 related to the filing of our Form S-3 in 2024, a decrease in consulting fees of $28, and a decrease in other general and administrative expenses of $50.
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, 2025, compared to the six months ended June 30, 2024:
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, 2025, compared to the nine months ended September 30, 2024:
Previous wording
The decrease in research and development expenses is primarily related to the allocation of engineering resources to our Software Solutions segment of $149 as we finalize the migration of our customers to our VIP platform, offset by an increase in other research and development expenses of $6.
Current wording
The decrease in research and development expenses is primarily related to the allocation of engineering resources to our Software Solutions segment of $302 as we finalize the migration of our customers to our VIP platform, offset by an increase in other research and development expenses of $10.
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, 2025, compared to the six months ended June 30, 2024:
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, 2025, compared to the nine months ended September 30, 2024:
Previous wording
The increase in software solutions revenue is primarily related to an increase in in perpetual software license revenue of $1,880, an increase in recurring software license and maintenance and support subscriptions of $1,571, offset by a decrease in professional services and other revenue of $79.
Current wording
The increase in software solutions revenue is primarily related to an increase in recurring software license and maintenance and support subscriptions of $1,040, an increase in perpetual software license revenue of $605, and an increase in professional services and other revenue of $16.
Previous wording
Remaining Performance Obligations (RPOs) represents the total contract value of all contracts signed, less revenue recognized from those contracts as of June 30, 2025 and 2024. RPO’s increased 39%, or $7,599 to $27,077 as of June 30, 2025 as compared to $19,478 as of June 30, 2024. Below is a table which displays the software solutions segment revenue remaining performance obligations as of April 1, 2025 and 2024, and June 30, 2025 and 2024, which we expect to recognize as revenue within the next thirty-six to sixty months (in thousands):
Current wording
Remaining Performance Obligations (RPOs) represents the total contract value of all contracts signed, less revenue recognized from those contracts as of September 30, 2025 and 2024. RPO’s increased 18%, or $4,480 to $28,888 as of September 30, 2025 as compared to $24,408 as of September 30, 2024. Below is a table which displays the software solutions segment revenue remaining performance obligations as of July 1, 2025 and 2024, and September 30, 2025 and 2024, which we expect to recognize as revenue within the next thirty-six to sixty months (in thousands):
Previous wording
The increase in cost of software solutions revenue is primarily related to an increase in salaries, benefits, bonuses, share-based compensation, and headcount of $286, an increase in software costs of $156, an increase in outsourced services of $102, and an increase in other cost of software solutions revenue of $25, offset by a decrease in third-party hosting service costs of $103 related to the renegotiation of our third-party hosting service contract.
Current wording
The increase in cost of software solutions revenue is primarily related to an increase in salaries, benefits, bonuses, share-based compensation, and headcount of $175 and an increase in third-party hosting service costs of $63.
Previous wording
The increase in selling and marketing expense is primarily related to an increase in commission expense of $127 directly related to the increase in revenue, an increase in marketing materials and trade shows of $20, and an increase in other selling and marketing costs of $5, offset by a decrease in sales support software of $12.
Current wording
The increase in selling and marketing expense is primarily related to an increase in commission expense of $106 directly related to the increase in revenue, offset by a decrease in salaries, benefits, bonuses, share-based compensation, and headcount of $42 primarily from an allocation of resources to the Cloud Telecommunications services segment, and a decrease in other selling and marketing costs of $2.
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, 2025, compared to the three months ended June 30, 2024:
Current wording
General and administrative expenses consist of salaries and benefits for executives, administrative personnel, amortization of 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 September 30, 2025, compared to the three months ended September 30, 2024:
Previous wording
Other income/(expense) primarily relates to interest expense, net foreign exchange gains or losses, and other income and expenses. The following table reflects our other expense for the three months ended June 30, 2025, compared to the three months ended June 30, 2024:
Current wording
Other income/(expense) primarily relates to net foreign exchange gains or losses and other income and expenses. The following table reflects our other expense for the three months ended September 30, 2025, compared to the three months ended September 30, 2024:
Showing the first 40 of 64 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
The decrease in cost of product revenue is primarily related to the decrease in product revenue for the nine months ended September 30, 2025.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Previous report — wording carried elsewhere
The increase in income tax provision is due to minimum state tax increases as a result of increased revenue.
Previous report — wording carried elsewhere
The decrease in cost of product revenue is directly related to a decrease in product revenue for the six months ended June 30, 2025.
Previous report — wording carried elsewhere
The increase in research and development expenses is primarily related to an increase in salaries, benefits, bonuses, share-based compensation, and headcount of $251 due to the allocation of resources from the Cloud Telecommunications Services segment as we finalize the migration of our customers to the VIP platform and an increase in other research and development costs of $1.