Company: CXDO
Filing Date: 2025-11-04
Form Type: 10-Q
Source: 0001654954-25-012585
Chunk: 94

Company: Crexendo, Inc.
Filing Date: 2025-11-04
Form: 10-Q
Item: Part I, Item 2
Chunk 94
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Three Months Ended September 30,   2025  2024  Dollar Change  Percent Change Product revenue $1,369  $1,814  $(445)  -25%

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. 

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Remaining Performance Obligations

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):

Cloud Telecommunications RPO's as of July 1, 2025 $56,392 Cloud Telecommunications RPO's as of September 30, 2025 $58,993      Cloud Telecommunications RPO's as of July 1, 2024 $51,684 Cloud Telecommunications RPO's as of September 30, 2024 $52,963 

Cost of Service Revenue

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 three months ended September 30, 2025, compared to the three months ended September 30, 2024:

  Three Months Ended September 30,   2025  2024  Dollar Change  Percent Change Cost of service revenue $3,664  $3,336  $328   10%

The increase