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Crexendo CEO Discusses Q2 2011 Results - Earnings Call Transcript

I’d like to provide detail of our revenue and cost by channel and provide guidance on what remains after the suspension of the seminar channel and what no longer exists. But what you will see is that we are eliminating approximately $11.5 million in revenues based upon actual Q2 results and approximately $15.3 million in expenses. Here are the details.

From a revenue perspective, we had approximately $17.5 million in revenue for Q2 which is broken down as follows. Crexendo Web Services revenue was $550,000 which grew at a quarter-over-quarter rate of 15% from $479,000 and a year-over-year rate of 51% from $365,000. This revenue remains and is expected to grow in the future, our rate of growth will be dependent upon our ability to hire sufficient qualified sales reps and increase the productivity of our current sales reps.

Today we have 15 sales reps and hope to hire an additional three to four reps per month.

StoresOnline revenue was $16,928,000 which grew at a quarter-over-quarter rate of 20% from $14,89,000 in Q1. The increase from Q1 is primarily due to the seasonal nature of the StoresOnline business and that we don’t conduct seminar events in January. We also had a slight decrease year-over-year in StoresOnline revenue of 1% from $17,83,000 last year.

StoresOnline revenues broken down as follows; cash sales at our seminar events were $9,558,000. As a result of the suspension of our seminar sales channel this revenue will cease. During the second quarter we saw an improvement in our cash as a percentage of sales from the first quarter to 39% in Q2 from 29% in Q1. Historically, we found that we really need to be at about 50% cash percentage in order to have sustainable profitability.

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