Company: CXDO
Filing Date: 2025-08-05
Form Type: 10-Q
Source: 0001654954-25-009071
Chunk: 104

Company: Crexendo, Inc.
Filing Date: 2025-08-05
Form: 10-Q
Item: Part I, Item 1
Chunk 104
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 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.

 40Table of Contents

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

  2025  2024  Dollar Change  Percent Change Cost of product revenue $687  $696  $(9)  -1%

The decrease in cost of product revenue is primarily related to the decrease in product revenue for the three months ended June 30, 2025.

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

  Three Months Ended June 30,   2025  2024  Dollar Change  Percent Change Selling and marketing $3,081  $2,808  $273   10%

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.

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, investor relations, rent expense, consulting fees, depreciation, amortization of intangible assets, 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:

  Three Months Ended June 30,   2025