Company: CXDO
Filing Date: 2025-03-04
Form Type: 10-K
Source: 0001654954-25-002287
Chunk: 421

Company: Crexendo, Inc.
Filing Date: 2025-03-04
Form: 10-K
Item: Item 2
Chunk 421
---
 Services RPOs as of December 31, 2024 $55,369 Cloud Telecommunications Services RPOs as of December 31, 2023 $44,810 

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, credit card processing fees, customer support salaries, benefits, bonuses, and share-based compensation. The following table reflects our cost of service 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 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: