Company: CXDO
Filing Date: 2025-03-04
Form Type: 10-K
Source: 0001654954-25-002287
Chunk: 14

Company: Crexendo, Inc.
Filing Date: 2025-03-04
Form: 10-K
Item: Item 1
Chunk 14
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 or global economic conditions, including corporate and consumer spending, and liquidity of capital markets.

 8Table of Contents

Unfavorable economic conditions could increase our operating costs and because our typical contracts with customers lock in our price for multiple years, our profitability could be negatively affected. Geopolitical destabilization could impact global currency exchange rates, supply chains, trade and movement of resources as well as the price of commodities. 

The United States may very likely impose trade restrictions and tariffs on equipment we use, particularly from China and Canada. An increase in costs or limitation on our ability to source equipment including telephones and ancillary equipment may affect our results from operations as well as results and our stock price.

Some of our international agreements provide for payment denominated in local currencies, and the majority of our local costs are denominated in local currencies. Fluctuations in the value of the U.S. dollar versus foreign currencies may impact our operating results. 

Chinese Yuan, and other international currencies may be adversely affected in the future due to changes in foreign currency exchange rates.

Regulatory Risks in International Expansion.

Crexendo’s expansion into international markets may expose the company to different telecommunications laws, tax regulations, and political risks, such as trade restrictions or economic sanctions. Missteps in compliance could result in significant fines or restrictions on operations.

We cannot be certain that we will be able to achieve or maintain operating profitability in the future.

We have in the past sustained operating losses and may have losses again in the future. We expect to invest in sales and marketing, engineering, design, and research and development, among other areas of our business. We are incurring duplicative costs in running data centers which will be migrated to the Oracle Cloud Infrastructure (OCI) which we expect will enable us to more successfully compete for the business of companies that are transitioning to cloud communications and otherwise position ourselves to take advantage of long-term revenue-generating opportunities.

The investments we have made and will continue to make may not generate the returns that we anticipate, which could adversely impact our financial condition and make it more difficult for us to grow revenue and/or maintain GAAP profitability. In order to achieve or maintain profitability, we will need to manage our cost structure more efficiently, not incur significant liabilities, while continuing to grow our revenues. Despite these efforts, our revenue growth may slow, revenues may decline, or we may incur significant losses in the future due to economic and world conditions, downturn in general economic conditions, increasing competition (including competitive pricing pressures), decrease in the adoption or sustained use