Company: CXDO
Filing Date: 2025-05-06
Form Type: 10-Q
Source: 0001654954-25-005149
Chunk: 50

Company: Crexendo, Inc.
Filing Date: 2025-05-06
Form: 10-Q
Item: Part I, Item 1
Chunk 50
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  PercentChange Cost of service revenue $3,487  $3,109  $378   12%

The increase in cost of service revenue was primarily related to an increase in third-party telecommunications charges of $135, an increase in salaries, benefits, bonuses, and share-based compensation of $71, an increase in contract labor costs to assist with the migration of our customers to our new VIP platform of $55, an increase in software costs of $43, an increase in data center hosting costs of $41, and an increase in other cost of service revenue of $33.

Cost of Product Revenue

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 three months ended March 31, 2025, compared to the three months ended March 31, 2024:

  Three Months Ended March 31,   2025  2024  DollarChange  PercentChange Cost of product revenue $599  $730  $(131)  (18)%

The decrease is directly related to a decrease in product revenue for the quarter.

 35Table of Contents

Selling and Marketing

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 three months ended March 31, 2025, compared to the three months ended March 31, 2024:

  Three Months Ended March 31,   2025  2024  DollarChange  PercentChange Selling and marketing $2,852  $2,796  $56   2%

The increase in selling and marketing expense is primarily related to an increase in commission expense of $161 directly related to the increase in revenue and an increase in other sales and marketing expense of $22, offset by a decrease in bad debt related to a decrease in our credit loss reserve of $127.

General and Administrative

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,