Company: CXDO
Filing Date: 2025-03-04
Form Type: 10-K
Source: 0001654954-25-002287
Chunk: 550

Company: Crexendo, Inc.
Filing Date: 2025-03-04
Form: 10-K
Item: Item 3
Chunk 550
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 transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The Company offers customers the ability to acquire multiple licenses of products and services.

Significant judgment is exercised by the Company in determining revenue recognition for certain customer agreements, and includes the following:

 ·Determination of whether products and services are considered distinct performance obligations that should be accounted for separately versus together, such as hard goods and related services that are sold with contracts. ·Determination of stand-alone selling prices for each distinct performance obligation and for products and services that are not sold separately. ·The pattern of delivery (i.e., timing of when revenue is recognized) for each distinct performance obligation.

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Given these factors, the related audit effort in evaluating management’s judgments in determining revenue recognition for these customer agreements required a high degree of auditor judgment.

How the Critical Audit Matter Was Addressed in the Audit

Our principal audit procedures related to the Company’s revenue recognition for these customer agreements included the following:

 ·We gained an understanding of internal controls related to the identification of distinct performance obligations, the determination of the timing of revenue recognition, and the relative selling value. ·We evaluated management’s significant accounting policies related to these customer agreements for reasonableness. ·We selected a sample of customer agreements and performed the following procedures:

 oObtained and read contract source documents for each selection and other documents that were part of the agreement, if applicable. oTested management’s identification of significant terms for completeness, including the identification of distinct performance obligations and relative selling prices. oAssessed the terms in the customer agreement and evaluated the appropriateness of management’s application of their accounting policies, along with their use of estimates, in the determination of revenue recognition conclusions. oWe evaluated the reasonableness of management’s estimate of stand-alone selling prices for products and services that are not sold separately. oWe tested the mathematical accuracy of management’s calculations of revenue and the associated timing of revenue recognized in the consolidated financial statements.

/s/ Urish Popeck & Co., LLC

We have served as the Company's auditor since 2016.

Pittsburgh, Pennsylvania

March 4, 2025

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Crexendo, Inc. AND SUBSIDIARIES

Consolidated Balance Sheets

(In thousands, except par value and share data)

  December 31,  202