# EDGAR Filing Document

**Accession Number:** 0001075736
**File Stem:** 0001654954-26-004361
**Filing Date:** 2026-5
**Character Count:** 29153
**Document Hash:** ec34e7ff3f69221498ca213c2871665a
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001654954-26-004361.hdr.sgml**: 20260505

**ACCESSION NUMBER**: 0001654954-26-004361

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 15

**CONFORMED PERIOD OF REPORT**: 20260505

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20260505

**DATE AS OF CHANGE**: 20260505

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Crexendo, Inc.
- **CENTRAL INDEX KEY:** 0001075736
- **STANDARD INDUSTRIAL CLASSIFICATION:** TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813]
- **ORGANIZATION NAME:** 06 Technology
- **EIN:** 870591719
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-32277
- **FILM NUMBER:** 26942824

**BUSINESS ADDRESS:**
- **STREET 1:** 1225 W. WASHINGTON ST.
- **STREET 2:** SUITE 213
- **CITY:** TEMPE
- **STATE:** AZ
- **ZIP:** 85288
- **BUSINESS PHONE:** 8012270004

**MAIL ADDRESS:**
- **STREET 1:** 1225 W. WASHINGTON ST.
- **STREET 2:** SUITE 213
- **CITY:** TEMPE
- **STATE:** AZ
- **ZIP:** 85288

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** IMERGENT INC
- **DATE OF NAME CHANGE:** 20020710

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** NETGATEWAY INC
- **DATE OF NAME CHANGE:** 19990527

?xml version='1.0' encoding='ASCII'? cxdo_8k.htm

**UNITED STATES** 

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**_______________**

**FORM 8-K**

**_______________**

**CURRENT REPORT**

**Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934**

Date of report (Date of earliest event reported): **May 5, 2026**

**_______________**

---

| |
|:---|
| **Crexendo, Inc.** |
| *(Exact Name of Registrant as Specified in Its Charter)* |

---

**_______________**

---

| | | |
|:---|:---|:---|
| **Nevada** | **001-32277** | **87-0591719** |
| *(State or Other Jurisdiction of Incorporation)* | *(Commission File Number)* | *(IRS Employer Identification No.)* |

---

**1225 West Washington Street, Suite 213, Tempe, AZ 85288**

*(Address of Principal Executive Offices) (Zip Code)*

**(602) 714-8500**

*(Registrant's Telephone Number, Including Area Code)*

**Not applicable.**

*(Former Name or Former Address, if Changed Since Last Report)*

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (<u>see</u> General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2)

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

**Item 2.02 Results of Operations and Financial Condition.**

On May 5, 2026, Crexendo, Inc. issued a press release, a copy of which is being furnished as Exhibit 99.1 hereto and is incorporated herein by reference. Pursuant to the rules and regulations of the Securities and Exchange Commission, such exhibit and the information set forth therein and herein shall be deemed "furnished" and not "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

**Item 9.01 Financial Statements and Exhibits.**

(d) Exhibits

The following exhibit is furnished with this Current Report on Form 8-K:

---

| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| [99.1](cxdo_ex991.htm) | [Press release dated May 5, 2026 by Registrant, reporting its results of operations for quarter ended March 31, 2026.](cxdo_ex991.htm) |

---

2<br>

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

---

| | | |
|:---|:---|:---|
| Dated: May 5, 2026 | **Crexendo, Inc.** | **Crexendo, Inc.** |
|  | By: | /s/ Ronald Vincent |
|  |  | Ronald Vincent<br>Chief Financial Officer |

---

3<br>

## Ex-99

**EXHIBIT 99.1**

![](cxdo_ex991img1.jpg)

**Crexendo Announces First Quarter 2026 Results**

PHOENIX, AZ / ACCESSWIRE / May 5, 2026 / Crexendo, Inc. (NASDAQ: CXDO), an award-winning software technology company that is a premier provider of cloud communication platform software and unified communications as a service (UCaaS) offerings, including voice, video, contact center, and managed IT services tailored to businesses of all sizes, today announced financial results for the first quarter ended March 31, 2026.

**First Quarter Financial highlights:**

· Total revenue increased 29% year-over-year to $20.7 million

· GAAP net income of $0.6 million, or $0.02 per basic and diluted common share.

· Non-GAAP net income of $3.3 million, or $0.10 per basic and diluted common share.

**Financial Results for the First Quarter of 2026**

**Total Revenue:** Consolidated total revenue for the first quarter of 2026 increased 29%, or $4.7 million, to $20.7 million compared to $16.1 million for the first quarter of 2025.

**Service Revenue:** Consolidated service revenue for the first quarter of 2026 increased 29%, or $2.4 million, to $10.6 million compared to $8.2 million for the first quarter of 2025.

**Software Solutions Revenue:** Consolidated software solutions revenue for the first quarter of 2026 increased 12%, or $0.9 million, to $7.7 million compared to $6.9 million for the first quarter of 2025.

**Product Revenue:** Consolidated product revenue for the first quarter of 2026 increased 141%, or $1.4 million, to $2.4 million compared to $1.0 million for the first quarter of 2025.

**Operating Expenses:** Consolidated operating expenses for the first quarter of 2026 increased 36%, or $5.4 million, to $20.3 million compared to $14.9 million for the first quarter of 2025.

**Net Income/(Loss):** The Company reported net income of $0.6 million for the first quarter of 2026, or $0.02 per basic and diluted common share, compared to net income of $1.2 million, or $0.04 per basic and diluted common share for the first quarter of 2025.

**Non-GAAP:** Non-GAAP net income of $3.3 million for the first quarter of 2026, or $0.10 per basic and diluted common share, compared to non-GAAP net income of $2.7 million or $0.10 per basic common share and $0.09 per diluted common share for the first quarter of 2025.

**EBITDA and Adjusted EBITDA:** EBITDA for the first quarter of 2026 of $1.6 million compared to $1.9 million for the first quarter of 2025. Adjusted EBITDA for the first quarter of 2026 of $3.2 million compared to $2.7 million for the first quarter of 2025.

**Cash and Cash Equivalents:** Total cash and cash equivalents at March 31, 2026 was $7.2 million compared to $31.4 million at December 31, 2025.

**Cash Flow:** Cash provided by operating activities for the first quarter of 2026 was $2.0 million compared to cash provided by operating activities of $1.2 million for the first quarter of 2025. Cash used in investing activities for the first quarter of 2026 was ($26.2) million compared to nill for the first quarter of 2025. Cash provided by financing activities for the first quarter of 2026 was $0.1 million compared to cash provided by financing activities of $1.8 million for the first quarter of 2025.

**Management Commentary**

"Our first quarter results reflect continued strong execution and further validate the scalability of our operating model. Total revenue increased 29% year over year to $20.7 million, and we delivered GAAP net income of $0.6 million alongside non-GAAP net income of $3.3 million. Importantly, we extended our streak of GAAP profitability to 10 consecutive quarters, despite absorbing acquisition related expenses and additional amortization expenses related to the intangible assets recorded in connection with the Estech Systems ("ESI") acquisition, which are fully reflected in our GAAP results." Said Jeff Korn, CEO and Chairman. "The ESI acquisition is performing ahead of our expectations and is already contributing meaningfully to both revenue and operational momentum. Integration is progressing well, with strong alignment across sales, operations, and engineering, and we are beginning to see early synergies that we expect to build on overtime. Our Q1 results only included 1 month of ESI contributions and I am excited about the impact we will see going forward from this significant acquisition."

Korn added "From a profitability standpoint, our strong non-GAAP results better reflect the underlying performance of the business by excluding items such as share based compensation, acquisition related expenses, and depreciation and amortization including Acquisition related costs of $839,000 and amortization expense of $1.1 Million. These results highlight the strength of our core operations and our ability to scale efficiently while continuing to invest in growth initiatives. We also continued to enhance our platform during the quarter, improving functionality, user experience, and overall competitiveness. We released our Crexendo AI Receptionist/Orchestrator (CAIRO) during the quarter and are very pleased with the early response in the market, and we will be introducing further AI enhancements. We continue to see increasing traction in our marketplace and broader ecosystem, and we are strengthening our position as a long-term platform provider and expanding our opportunity set. While we remain disciplined given the broader macro environment, our combination of sustained double-digit growth, consistent profitability, and successful integration of acquisitions positions us well as we continue to scale. We believe these dynamics, together with improving operating leverage over time, create a compelling framework for long term value creation. We are clearly on a trajectory toward $100 million in annual revenue and remain confident in our ability to execute against that path while continuing to enhance the quality and durability of our earnings."

**Conference Call**

Crexendo management will hold a conference call today, May 5, 2026, at 4:30 PM Eastern time to discuss these results. Company CEO Jeff Korn, CFO Ron Vincent, and President and COO Doug Gaylor will host the call, followed by a question-and-answer period.

**Dial-in Numbers:**

Domestic Participants: 877-545-0320

International Participants: 973-528-0002

Participant Access Code: 805100

Please dial in five minutes prior to the beginning of the call at 4:30 PM Eastern time and reference participant access code 805100 and the Crexendo earnings call. A replay of the call will be available until May 19, 2026, by dialing toll-free at 877-481-4010 or 919-882-2331 for international callers. The replay passcode is 53939.

**About Crexendo**

Crexendo, Inc. is an award-winning software technology company that is a premier provider of cloud communication platform and services, video collaboration and managed IT services tailored to businesses of all sizes. Our solutions currently support over seven million end users globally, through our extensive global network of over 245 cloud communication platform software subscribers and our direct retail offering.

**Safe Harbor Statement**

This press release contains forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for such forward-looking statements. The words "believe," "expect," "anticipate," "estimate," "will" and other similar statements of expectation identify forward-looking statements. Specific forward-looking statements in this press release include Crexendo (i) believing that the first quarter results reflect continued strong execution and further validate the scalability of the operating model; (ii) believing that it is a positive development that the Company extended the streak of GAAP profitability despite absorbing acquisition related expenses and additional amortization expenses related to the intangible assets recorded in connection with the Estech Systems ("ESI") acquisition; (iii) believing the ESI acquisition is performing ahead of our expectations and is already contributing meaningfully to both revenue and operational momentum and that integration is progressing well, with strong alignment across sales, operations, and engineering; (iv) the Company beginning to see early synergies that it expects to build on overtime; (v) being excited about the impact it will see going forward from this significant acquisition; (vi) believing that from a profitability standpoint, the strong non-GAAP results better reflect the underlying performance of the business by excluding items such as share based compensation, acquisition related expenses, and depreciation and amortization; (vii) being very pleased with the early response in the market of Crexendo AI Receptionist/Orchestrator (CAIRO), with expecting to be introducing further AI enhancements; (viii) believing the results highlight the strength of the core operations and the ability to scale efficiently while continuing to invest in growth initiatives; (ix) having continued to enhance the platform during the quarter, improving functionality, user experience, and overall competitiveness which combined with increasing traction in its marketplace and broader ecosystem strengthening the position as a long-term platform provider and expanding the opportunity set; (x) believing the combination of sustained double-digit growth, consistent profitability, and successful integration of acquisitions positions the Company well as it continues to scale; (xi) believing these dynamics, together with improving operating leverage over time, create a compelling framework for long term value creation; and (xii) clearly being on a trajectory toward $100 million in annual revenue while remaining confident in the ability to execute against that path while continuing to enhance the quality and durability of our earnings.

For a more detailed discussion of risk factors that may affect Crexendo's operations and results, please refer to the company's Form 10-K for the year ended December 31, 2025, quarterly Form 10-Qs as filed with the SEC. These forward-looking statements speak only as of the date on which such statements are made, and the company undertakes no obligation to update such forward-looking statements, except as required by law.

**Company Contact**

Crexendo, Inc.

Doug Gaylor

President and Chief Operating Officer

602-732-7990

dgaylor@crexendo.com

**CREXENDO, INC. AND SUBSIDIARIES**<br> **Condensed Consolidated Balance Sheets**<br> (Unaudited, in thousands, except par value and share data) <br>

---

| | | |
|:---|:---|:---|
|  | **March 31, 2026** | **December 31, 2025** |
| **Assets** |  |  |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp; Cash and cash equivalents | $7249 | $31378 |
| &nbsp;&nbsp;&nbsp; Trade receivables, net of allowance of $156 and $124, respectively | 6374 | 4913 |
| &nbsp;&nbsp;&nbsp; Contract assets, net of allowance of $2 and $0, respectively | 122 |  |
| &nbsp;&nbsp;&nbsp; Inventories | 1170 | 454 |
| &nbsp;&nbsp;&nbsp; Equipment financing receivables, net of allowance of $74 and $50, respectively | 2645 | 1416 |
| &nbsp;&nbsp;&nbsp; Contract costs | 3894 | 2318 |
| &nbsp;&nbsp;&nbsp; Prepaid expenses | 1332 | 892 |
| &nbsp;&nbsp;&nbsp; Income tax receivable | 204 | 234 |
| &nbsp;&nbsp;&nbsp; Other current assets | 36 | 292 |
| &nbsp;&nbsp;&nbsp;&nbsp; Total current assets | 23026 | 41897 |
| Contract assets, net of current position, net of allowance of $122 and $145, respectively | 665 | 402 |
| Long-term equipment financing receivables, net of allowance of $151 and $107, respectively | 5517 | 3223 |
| Property and equipment, net | 439 | 195 |
| Operating lease right-of-use assets | 865 | 1006 |
| Intangible assets, net | 40136 | 17860 |
| Goodwill | 14215 | 9454 |
| Contract costs, net of current portion | 6075 | 3319 |
| Other long-term assets | 343 | 330 |
| &nbsp;&nbsp;&nbsp;&nbsp; Total Assets | $91281 | $77686 |
| **Liabilities and Stockholders' Equity** |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp; Accounts payable | $2644 | $649 |
| &nbsp;&nbsp;&nbsp; Accrued expenses | 9891 | 8391 |
| &nbsp;&nbsp;&nbsp; Finance leases | 2 | 2 |
| &nbsp;&nbsp;&nbsp; Notes payable |  | 114 |
| &nbsp;&nbsp;&nbsp; Operating lease liabilities | 503 | 493 |
| &nbsp;&nbsp;&nbsp; Income tax payable | 147 | 151 |
| &nbsp;&nbsp;&nbsp; Contract liabilities | 3601 | 2528 |
| &nbsp;&nbsp;&nbsp;&nbsp; Total current liabilities | 16788 | 12328 |
| &nbsp;&nbsp;&nbsp; Contract liabilities, net of current portion | 1382 | 1008 |
| &nbsp;&nbsp;&nbsp; Operating lease liabilities, net of current portion | 400 | 529 |
| &nbsp;&nbsp;&nbsp;&nbsp; Total liabilities | 18570 | 13865 |
| Stockholders' equity: |  |  |
| &nbsp;&nbsp;&nbsp; Preferred stock, par value $0.001 per share - authorized 5,000,000 shares; none issued |  |  |
| &nbsp;&nbsp;&nbsp; Common stock, par value $0.001 per share - authorized 50,000,000 shares, 32,392,643 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; shares issued and outstanding as of March 31, 2025 and 31,004,327 shares issued |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; and outstanding as of December 31, 2025 | 32 | 31 |
| &nbsp;&nbsp;&nbsp; Additional paid-in capital | 153653 | 145325 |
| &nbsp;&nbsp;&nbsp; Accumulated deficit | (81141) | (81719) |
| &nbsp;&nbsp;&nbsp; Accumulated other comprehensive income | 167 | 184 |
| &nbsp;&nbsp;&nbsp;&nbsp; Total stockholders' equity | 72711 | 63821 |
| &nbsp;&nbsp;&nbsp;&nbsp; Total Liabilities and Stockholders' Equity | $91281 | $77686 |

---

**CREXENDO, INC. AND SUBSIDIARIES**

**Condensed Consolidated Statements of Operations**

(Unaudited, in thousands, except per share and share data)

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
|  | **2026** | **2025** |
| Service revenue | $10561 | $8182 |
| Software solutions revenue | 7723 | 6868 |
| Product revenue | 2426 | 1007 |
| &nbsp;&nbsp;&nbsp; Total revenue | 20710 | 16057 |
| Operating expenses: |  |  |
| &nbsp;&nbsp;&nbsp; Cost of service revenue | 3884 | 3487 |
| &nbsp;&nbsp;&nbsp; Cost of software solutions revenue | 2436 | 1490 |
| &nbsp;&nbsp;&nbsp; Cost of product revenue | 1673 | 599 |
| &nbsp;&nbsp;&nbsp; Selling and marketing | 5654 | 4289 |
| &nbsp;&nbsp;&nbsp; General and administrative | 5056 | 3519 |
| &nbsp;&nbsp;&nbsp; Research and development | 1567 | 1523 |
| &nbsp;&nbsp;&nbsp;&nbsp; Total operating expenses | 20270 | 14907 |
| Income/(loss) from operations | 440 | 1150 |
| Other income/(expense): |  |  |
| &nbsp;&nbsp;&nbsp; Interest income | 159 | 84 |
| &nbsp;&nbsp;&nbsp; Interest expense |  | (9) |
| &nbsp;&nbsp;&nbsp; Other income/(expense), net | 8 | (10) |
| &nbsp;&nbsp;&nbsp;&nbsp; Total other income/(expense), net | 167 | 65 |
| Income/(loss) before income tax | 607 | 1215 |
| Income tax (provision)/benefit | (29) | (44) |
| Net income/(loss) | $578 | $1171 |
| Earnings per common share: |  |  |
| &nbsp;&nbsp;&nbsp; Basic | $0.02 | $0.04 |
| &nbsp;&nbsp;&nbsp; Diluted | $0.02 | $0.04 |
| Weighted-average common shares outstanding: |  |  |
| &nbsp;&nbsp;&nbsp; Basic | 31533566 | 28024280 |
| &nbsp;&nbsp;&nbsp; Diluted | 32683949 | 31092775 |

---

**CREXENDO, INC. AND SUBSIDIARIES**

**Condensed Consolidated Statements of Cash Flows**

(Unaudited, in thousands)

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
|  | **2026** | **2025** |
| CASH FLOWS FROM OPERATING ACTIVITIES |  |  |
| Net income/(loss) | $578 | $1171 |
| Adjustments to reconcile net income/(loss) to net cash provided by/(used for) operating activities: |  |  |
| &nbsp;&nbsp;&nbsp; Depreciation and amortization | 1169 | 771 |
| &nbsp;&nbsp;&nbsp; Allowance for credit losses | (6) | (112) |
| &nbsp;&nbsp;&nbsp; Share-based compensation | 721 | 726 |
| &nbsp;&nbsp;&nbsp; Non-cash operating lease amortization | 22 | 24 |
| Changes in assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp; Trade receivables | (1195) | 273 |
| &nbsp;&nbsp;&nbsp; Contract assets | 155 | (8) |
| &nbsp;&nbsp;&nbsp; Equipment financing receivables | 156 | (115) |
| &nbsp;&nbsp;&nbsp; Inventories | 186 | (183) |
| &nbsp;&nbsp;&nbsp; Contract costs | (319) | (192) |
| &nbsp;&nbsp;&nbsp; Prepaid expenses | (180) | (117) |
| &nbsp;&nbsp;&nbsp; Income tax receivable | 30 | 33 |
| &nbsp;&nbsp;&nbsp; Other assets | 255 | (4) |
| &nbsp;&nbsp;&nbsp; Accounts payable and accrued expenses | 248 | (695) |
| &nbsp;&nbsp;&nbsp; Income tax payable | (4) |  |
| &nbsp;&nbsp;&nbsp; Contract liabilities | 221 | (334) |
| &nbsp;&nbsp;&nbsp;&nbsp; Net cash provided by/(used for) operating activities | 2037 | 1238 |
| CASH FLOWS FROM INVESTING ACTIVITIES |  |  |
| &nbsp;&nbsp;&nbsp; Acquisition of a business, net of cash acquired | (26210) | - |
| &nbsp;&nbsp;&nbsp;&nbsp; Net cash provided by/(used for) investing activities | (26210) | - |
| CASH FLOWS FROM FINANCING ACTIVITIES |  |  |
| &nbsp;&nbsp;&nbsp; Repayments made on finance leases |  | (19) |
| &nbsp;&nbsp;&nbsp; Repayments made on notes payable | (114) | (117) |
| &nbsp;&nbsp;&nbsp; Proceeds from exercise of options | 307 | 1979 |
| &nbsp;&nbsp;&nbsp; Taxes paid on the net settlement of stock options and RSUs | (132) | (80) |
| &nbsp;&nbsp;&nbsp;&nbsp; Net cash provided by/(used for) financing activities | 61 | 1763 |
| Effect of exchange rate changes on cash | (17) | 13 |
| NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS | (24129) | 3014 |
| CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR | 31378 | 18193 |
| CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR | $7249 | $21207 |
| Supplemental disclosure of cash flow information: |  |  |
| Cash used during the year for: |  |  |
| &nbsp;&nbsp;&nbsp; Income taxes, net | $- | $(10) |
| &nbsp;&nbsp;&nbsp; Interest expense | $(1) | $(8) |
| Supplemental disclosure of non-cash investing and financing information: |  |  |
| &nbsp;&nbsp;&nbsp; Stock issued for the acquisition of ESI | $7433 | $- |

---

**USE OF NON-GAAP FINANCIAL MEASURES**

To evaluate our business, we consider and use non-generally accepted accounting principles ("Non-GAAP") net income and Adjusted EBITDA as a supplemental measure of operating performance. These measures include the same adjustments that management takes into account when it reviews and assesses operating performance on a period-to-period basis. We consider Non-GAAP net income to be an important indicator of overall business performance because it allows us to evaluate results without the effects of share-based compensation and related taxes, acquisition related expenses, changes in fair value of contingent consideration, amortization of intangibles, and goodwill and long-lived asset impairment. We define EBITDA as U.S. GAAP net income/(loss) before interest expense, interest income and other expense/(income), the gain/(loss) on the sale of property and equipment, goodwill and long-lived asset impairments, provision/(benefit) for income taxes, and depreciation and amortization. We believe EBITDA provides a useful metric to investors to compare us with other companies within our industry and across industries. We define Adjusted EBITDA as EBITDA adjusted for acquisition related expenses, changes in fair value of contingent consideration and share-based compensation and related taxes. We use Adjusted EBITDA as a supplemental measure to review and assess operating performance. We also believe use of Adjusted EBITDA facilitates investors' use of operating performance comparisons from period to period, as well as across companies.

In our May 5, 2026 earnings press release, as furnished on Form 8-K, we included Non-GAAP net income, EBITDA and Adjusted EBITDA. The terms Non-GAAP net income, EBITDA, and Adjusted EBITDA are not defined under U.S. GAAP, and are not measures of operating income, operating performance or liquidity presented in analytical tools, and when assessing our operating performance, Non-GAAP net income, EBITDA, and Adjusted EBITDA should not be considered in isolation, or as a substitute for net income/(loss) or other consolidated income statement data prepared in accordance with U.S. GAAP. Some of these limitations include, but are not limited to:

· EBITDA and Adjusted EBITDA do not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;

· they do not reflect changes in, or cash requirements for, our working capital needs;

· they do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our debt that we may incur;

· they do not reflect income taxes or the cash requirements for any tax payments;

· although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will be replaced sometime in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements;

· while share-based compensation is a component of operating expense, the impact on our financial statements compared to other companies can vary significantly due to such factors as the assumed life of the options and the assumed volatility of our common stock; and

· other companies may calculate EBITDA and Adjusted EBITDA differently than we do, limiting their usefulness as comparative measures.

We compensate for these limitations by relying primarily on our U.S. GAAP results and using Non-GAAP net income, EBITDA, and Adjusted EBITDA only as supplemental support for management's analysis of business performance. Non-GAAP net income, EBITDA and Adjusted EBITDA are calculated as follows for the periods presented.

7<br>

**RECONCILIATION OF NON-GAAP FINANCIAL MEASURES**

In accordance with the requirements of Regulation G issued by the SEC, we are presenting the most directly comparable U.S. GAAP financial measures and reconciling the unaudited Non-GAAP financial metrics to the comparable U.S. GAAP measures.

---

| | | |
|:---|:---|:---|
| **Reconciliation of U.S. GAAP Net Income/(Loss) to Non-GAAP Net Income** | **Reconciliation of U.S. GAAP Net Income/(Loss) to Non-GAAP Net Income** | **Reconciliation of U.S. GAAP Net Income/(Loss) to Non-GAAP Net Income** |
| (Unaudited, in thousands, except for per share and share data) | (Unaudited, in thousands, except for per share and share data) | (Unaudited, in thousands, except for per share and share data) |
|  | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
|  | **2026** | **2025** |
| U.S. GAAP net income/(loss) | $578 | $1171 |
| &nbsp;&nbsp;&nbsp; Share-based compensation and related taxes (1) | 727 | 798 |
| &nbsp;&nbsp;&nbsp; Acquisition related expenses | 839 |  |
| &nbsp;&nbsp;&nbsp; Amortization of intangible assets | 1124 | 706 |
| Non-GAAP net income | $3268 | $2675 |
| Non-GAAP earnings per common share: |  |  |
| Basic | $0.10 | $0.10 |
| Diluted | $0.10 | $0.09 |
| Weighted-average common shares outstanding: |  |  |
| Basic | 31533566 | 28024280 |
| Diluted | 32392643 | 31092775 |

---

---

| | | |
|:---|:---|:---|
| **Reconciliation of U.S. GAAP Net Income/(Loss) to EBITDA to Adjusted EBITDA** | **Reconciliation of U.S. GAAP Net Income/(Loss) to EBITDA to Adjusted EBITDA** | **Reconciliation of U.S. GAAP Net Income/(Loss) to EBITDA to Adjusted EBITDA** |
| (Unaudited, in thousands) | (Unaudited, in thousands) | (Unaudited, in thousands) |
|  | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
|  | **2026** | **2025** |
| U.S. GAAP net income/(loss) | $578 | $1171 |
| &nbsp;&nbsp;&nbsp; Depreciation and amortization | 1169 | 771 |
| &nbsp;&nbsp;&nbsp; Interest expense |  | 9 |
| &nbsp;&nbsp;&nbsp; Other, net | (167) | (74) |
| &nbsp;&nbsp;&nbsp; Income tax provision | 29 | 44 |
| EBITDA | 1609 | 1921 |
| &nbsp;&nbsp;&nbsp; Share-based compensation and related taxes (1) | 727 | 798 |
| &nbsp;&nbsp;&nbsp; Acquisition related expenses | 839 | - |
| Adjusted EBITDA | $3175 | $2719 |

---

_______________

(1) For the three months ended March 31, 2026 and 2025, employer payroll tax expense related to share-based compensation was $6 and $72, respectively.

8<br>