Company: CXDO
Filing Date: 2025-03-04
Form Type: 10-K
Source: 0001654954-25-002287
Chunk: 538

Company: Crexendo, Inc.
Filing Date: 2025-03-04
Form: 10-K
Item: Item 3
Chunk 538
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4  2023  Dollar Change  Percent Change Cost of service revenue $13,087  $12,606  $481   4%

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 $201, an increase in salaries, benefits, bonuses, and share-based compensation of $94, an increase in third-party telecommunications charges of $71, an increase in credit card processing fees of $68, and an increase in other cost of service revenue of $47.

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 year ended December 31, 2024, compared to the year ended December 31, 2023:

  Year Ended December 31,   2024  2023  Dollar Change  Percent Change Cost of product revenue $3,215  $3,331  $(116)  -3%

The decrease is primarily related to a higher margin product mix by eliminating the sale of low margin products.

 39Table 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 year ended December 31, 2024, compared to the year ended December 31, 2023:

  Year Ended December 31,   2024  2023  Dollar Change  Percent Change Selling and marketing $11,564  $10,251  $1,313   13%

The increase in selling and marketing expense is primarily related to an increase in commission expense of $1,185 directly related to the increase in revenue, an increase in marketing costs of $92, and an increase in other sales and marketing expense of $36.

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,