Our next presenter of the day is Doug Gaylor, the President and COO of Crexendo. Take it away.
Thanks for putting that out there. I'll learn a little bit more about Crexendo, so let's dive right in. Save the first few minutes. I'm sure you'll see me about three times today. Who is Crexendo? What do we do? Crexendo is a unified communications as a service company. We're really having a tremendous amount of success in that area right now.
When we think about unified communications, we're kind of unique in the fact that we offer our unified communications in two different flavors: a wholesale flavor and a retail flavor. There are a couple of catalyst events that are happening in our industry right now, and we'll talk about that as we go through the presentation. On the go-to-market strategy, again, wholesale and retail. On the wholesale side, we actually offer.
In that respect, we are the third largest telecom platform provider in the country behind Cisco, who owns BroadSoft. Cisco bought BroadSoft about six years ago. Behind Microsoft, now Alianza, that has the Metaswitch platform. When I talk about the catalyst events out there, pretty interesting because as the third largest platform provider in the country, number one and two are having some challenges out there. Number one, Cisco with BroadSoft.
Cisco bought BroadSoft six years ago, as I mentioned. About 1,200 BroadSoft licensees out there. Cisco has not done a great job of keeping that product up. Cisco also owns Webex, and there have been some challenges there. A lot of BroadSoft licensees are looking for alternatives. Price platform provider.
Microsoft, at the beginning of 2024, announced that they were going to end the life of that platform, and they laid off about half of the Metaswitch staff. At the end of the year, they did a 180 and decided to just divest of that group completely and sold that division off to a company called Alianza out of Utah. That is a big catalyst event in our industry because the second largest platform provider, Microsoft Metaswitch, was just sold to a company called Alianza.
Alianza already has their own platforms. Now they have two competing platforms. We see that as a tremendous opportunity. So much so, in fact, that in 2024, we brought on 17 new licensees onto the Crexendo platform. Of those 17 new licensees, seven of them came over to us from Microsoft Metaswitch.
Three of them came over to us from Cisco and Microsoft. If you look at the number one and two players, dominating the industry, Cisco and Microsoft, but also ignoring those customers, we need to take advantage of that big time by bringing on 10 of our 17 new logos last year from a combination of Cisco and Microsoft. We see a tremendous opportunity there because there are about 800 Microsoft licensees on the Metaswitch platform out there.
Just because the platform is sold, it has not been supported. It has not been developed over the course of the last year and a half. Most of these Microsoft Metaswitch licensees are still pretty discouraged and looking for an alternative. Our funnel right now of opportunities is completely full with Microsoft Metaswitch opportunities as well as Cisco BroadSoft opportunities.
We see a lot of opportunity over the course of the next multiple years from Cisco and Microsoft licensees looking for an alternative. When they look for that alternative, the third largest and the fastest growing platform provider, Crexendo, is going to be in the capital seat to take advantage of that. That is the wholesale side of the house. On the retail side of the house, Crexendo sells our solutions. The same platform that we sell to other resellers, we brand as our VIP platform.
We sell that on a retail basis to small and mid-sized businesses. In that respect, on the retail side, you'll see us competing against companies that you've probably heard of: the RingCentral, the 8x8s, and the Vonages of the world. If you look at the traditional telecom carriers out there, another catalyst event there.
If you look at the traditional telecom carriers out there, Avaya and Mitel are the number one and number two largest premises-based telecom companies out there. Avaya just came out of their second bankruptcy in five years, and Mitel last month just entered into bankruptcy. If you look at the other catalyst event, Microsoft leaving the sector on the wholesale side created a huge opportunity for us.
Now on the retail side, the two largest premise providers, Avaya and Mitel, one just coming out of their second bankruptcy, one just going into bankruptcy, has created a lot of uncertainty and a lot of doubt with their resellers and their suppliers out there and their customers out there. On the retail side, we're seeing a tremendous opportunity created by the weakness of Avaya and Mitel drumming up opportunities for us on the retail side.
We're unique in the fact that out of all of the competitors in the sector, we're really unique in the fact that we're one of the few companies out there, if not the only, that offers both a retail and a wholesale offering on the UC side. How do those two divisions break up within our organization? On the wholesale side of the house, that's what we call our software solution segment.
About 40% of our revenue comes from the wholesale side of the house. Last year, we finished just shy of $61 million in revenue. About 40% of that revenue comes from the wholesale side of the house. That's where we're selling our platforms to other licensees out there. About 225-plus licensees currently use Crexendo as a powered-by-type solution. These licensees will buy the Crexendo platform. They can host it in their own environment.
We can host it in their environment. They deploy it as their own solution. Those 235 licensees that we have, they're growing exponentially. As I mentioned, we added 17 new logos just in 2024. Those 235 licensees build their whole business around our platform. We're seeing tremendous growth there. In fact, we just announced last month 6 million users on our platform.
That is up from the announcement of 5 million users, that we grew from 5 million people using our platform to 6 million users on our platform. Pretty significant number. Those 235 licensees, we'll talk about that a little bit more in depth here in a moment. Those 235 licensees that sell our platform, we estimate that the combined revenue of those 235 licensees is north of $100 million. We call that our stock fishing pond.
When we talk about future growth opportunities, inorganic growth, and acquisitions, our licensees are part of what we call our ecosystem, our community. We look at our licensees as potential acquisition targets over time. We will talk about some of that as we talk about our future growth plans.
On the retail side of the house, about 60% of our revenue comes from our telecom services segment. That is our retail side of the house. We bring in that revenue through a combination of direct sales and reseller agents out there. We have over 200 reseller agents out there selling the Crexendo solution on a revenue share basis. Again, strong growth there.
If you look at organically how these two segments of the business performed last year, we had 30% organic growth on the wholesale side of the house last year, 7% organic growth on the retail side of the house last year, for a combined 14% organic growth rate for the company as a whole. That is $61 million, 14% organic growth.
Again, extremely, extremely strong growth on the wholesale side, primarily fueled by the challenges that we see with the number one and two providers out there, Cisco and Microsoft, that we just highlighted. How does all that relate to financial performance? Financial performance, I think you have been very pleased to see that the company is growing, but we are growing profitably, and we are growing with a focus on the fundamentals. If you look at 2024 revenue, that was $60.8 million. That was up 14% organically from 2023.
We're one of the few telecom companies out there that continues to show GAAP profitability. Six quarters in a row, GAAP profitability for the year. $2 million GAAP income for the year. That was up tremendously, 577% over the prior year. If you look at non-GAAP net income, $7.7 million. That was up 115% over 2023. If you look at the EBITDA, the adjusted EBITDA margins, again, there's great traction there. $8.2 million adjusted EBITDA, 141% increase over the prior year.
That's about 13% of total revenue. Adjusted EBITDA margins there. Really, really strong growth. If you look at the growth of the revenue side, a 217% revenue increase over the course of the last three years. We're doing a lot of things right. We're focused on the fundamentals. When I talk about that profitability, strong free cash flow.
We finished the year at $18.2 million in cash on balance sheet, virtually no debt. We are managing the business with the fundamentals and growing and growing profitably. When we talk about financials, I always like to highlight the fact that not only are we growing the top line, but we have a very, very solid remaining performance obligation to repurchase our backlog.
Our remaining performance obligation is our long-term contractual agreement. When we sign a customer, whether it is on the retail side as an end user business or whether it is on the wholesale side as a licensee reseller, those customers sign either a three or a five-year agreement with us. They are locked in. It is a very, very sticky customer base out there. That locked-in revenue stream that we are bringing performance obligation at the end of last year was $85.6 million.
That number was up 34% over the prior year. That's a huge number. You can see that scales here from $28 million just about four years ago to the $85 million at the end of 2024. If you look at that number and how that number flows out over the course of the next five years, really strong numbers there. In 2025, almost $39 million of that total revenue backlog number will be recognized in 2025.
You can see how that number flows out over the course of the next five years. As that number continues to grow, that's because we're bringing in new customers. We're bringing in those new customers. That's a very, very sticky, very locked-in customer revenue stream.
I always like to highlight the key performance indicators on the two segments of the business because this is really where the revenues have grown. If you look at the wholesale side of the house, the wholesale side of the house, again, grew at 30% organically last year. It's also our most profitable division because the gross margins there are extremely strong on the wholesale side, 72% gross margins.
Those 235-plus licensees that we have out there, they pay us on average $6,200 a month to use our platform. That's a very, very strong monthly recurring revenue stream. About 70% of the revenue out of that segment of the business comes on a monthly recurring basis. Very, very strong, consistent recurring revenue stream there. And virtually no churn at all. No churn in here last year.
Last year, we had a % average month-to-monthly churn that equates to literally a little bit more than 1%. That 1% churn last year was one of our licensees that got acquired by another licensee. We really didn't even lose that revenue stream. They just got us acquired or sent by another licensee. The retail side of the house, that's where we're selling direct to end user businesses, all of the retail side businesses.
Our average size customer there is about 18 stations on the retail side of the house. If you look at that, our average revenue per user is about $20 per user at 18 stations on an average size account. That makes our average revenue per account about $356 in revenue per month. Again, very, very sticky customer base there. About 80% of our revenue on the telecom services side is recurring revenue.
That consistent revenue stream month after month after month. We're getting the majority of those sales through our reseller agents out there, over 200 reseller agents selling our solutions out there. A little bit lower gross margins on there. That lower gross margin is primarily attributed to the fact that we acquired one of our licensees two years ago.
They have a managed services division in their group. That managed services division actually has a little bit of lower gross margins because they're selling data services and data support out there. If I strip out that acquisition, our gross margins historically on the retail side of the house have been in the 67-69% range. Really, really strong metrics there. You've seen the numbers. You've seen how we're growing. How do we compete against our competition out there?
A lot bigger names with the Vonages and the RingCentrals and the 8x8s, a lot bigger names with the Ciscos and the Microsofts out there. Our biggest claim to fame is the fact that we excel in the customer service and support world. When you're on the cloud, that's critical. You've got to have great customer success. You've got to have great customer support.
We consistently rank number one in all of the voice over IT-type categories on G2.com. G2.com is the industry standard for third-party authenticated and verified surveys. We consistently rank high amongst our peers, way higher than most of our peers in that area. Our overall star rating is 4.9. You can see compared to a RingCentral or 8x 8, about 4 or 4.2, big, big difference there.
When we go out to a customer, we're highlighting the fact that, hey, not only are we going to take care of your needs today and say, "I'm going to make you more productive and more efficient with our solutions," but at the end of the day, you're going to be a lot happier with our solutions because of our customer care and our white glove approach.
That's the rear view mirror. What does the future look like? Let's take a look at how we continue that growth. I'm really confident that we'll be at a $100 million run rate by the end of 2026. How do we get to a $100 million run rate? We finished last year just as high as $61 million. We expect double-digit organic growth again in 2025. On top of that, we look at inorganic opportunities.
Inorganic acquisitions that I highlighted earlier, those 235 licensees that are part of our ecosystem, that's part of our licensee group. That's really my go-to market. One of our acquisitions at the end of 2022, one of our licensees in Kansas City, was a $10 million revenue stream when we acquired that company. These are very creative acquisitions. Again, they're part of our community.
They already know us. We know them. Many of these cases, they've been licensees of ours for years and years and years. In this case, when we acquired the group in Kansas City, $10 million run rate, we bought them for less than one times revenue. It was a very creative acquisition. We cut out the lifestyle costs out of that business. We cut out some of the overhead and executive responsibilities for customer service and accounting.
That becomes very creative and took me one to two quarters. That combination of organic growth and inorganic acquisitions easily gets us to that $100 million run rate by the end of next year. Our average licensee out there is in that $5 million-$15 million range. If I can pick off one or two of our licensees over the course of the next year or two, that easily puts us at that $100 million run rate.
Global markets are not material for us at this point, but we continue to see great, great growth there. Last year, we finished just a little bit shy of 5% of our total revenue stream. Our global markets are growing very substantially. 39% organic growth year over year in the international markets.
If we look at the international markets, we're seeing great traction right now in the European market. We're seeing great traction in the Pacific arena. We just brought on our first licensee in Africa. What makes the global market really, really attractive to us is that we're seeing tremendous opportunity because of our infrastructure.
We host our platform on OCI, which is Oracle Cloud Infrastructure. That allows us to turn up instance anywhere in the world within a matter of days. For example, the account that we sold in Africa, that was an account that was sold on the wholesale side and licensing in Africa. We're able to turn that up on OCI within a week and have a presence going there. We couldn't have done that in our old infrastructure world.
Partnering with Oracle and OCI allows us to turn up an instance on Oracle's cloud infrastructure virtually anywhere and literally within a week. Again, that growth, future opportunities, new software subscribers, 17 new logos that came in on the wholesale side last year. Very, very strong growth there. We do not see that slowing down at all, especially with the disruption being created by Cisco and Microsoft out there. Again, see tremendous opportunity there.
On the retail side, we continue to add new agents and resellers on the retail side, 24 new agents and partners on the retail side. Great opportunity for future growth there. The next catalyst is where the industry is growing and how we see growth. Right now, about 60% of the businesses in the US are currently on the cloud.
About 40% are still using the older legacy premise-based equipment. That 40% over the course of the next three years will be down into the single digits. When you look at that growth opportunity, tremendous growth taking, again, market share away from Avaya and Mitel, the old laggards out there that had the premise-based equipment. It's not a matter of if those businesses move off the premise-based system into land.
Over the course of the next two to three years, you'll see most of those clients moving from premise to the cloud. That's a huge opportunity for us. We continue to see great opportunity for growth. I don't want to hear of it domestically. We're going to the cloud implementation adoption now is even lower internationally, much bigger opportunity for us there.
The next big catalyst is also what's driving all of this UCaaS growth. When we talk about what's driving UCaaS growth, it's really productivity and efficiency. That leads into AI. The next slide here really highlights where AI is having a catalyst effect on our industry now. When we talk about AI, you're going to hear a lot about AI from other companies today.
We're talking about AI as far as deliverables today and not, "Here's what the future could hold or could present. Here's what we're selling today." We're selling AI solutions today to small and mid-sized licensees. We're selling AI solutions today to our licensees. We're selling them in a deliverable fashion today and very affordable to where we use AI today that's already being delivered and already being sold within the organization. We sell AI on a video solution.
If you use Zoom and you've done call summations on Zoom, we do the same thing with our video solution and our video collaboration on our tool. If you do a video conference using our Crexendo Video AI Studio, at the end of your video call, they can do a call summary of how the call went, give you a summation of everything that happened, give you a sentiment analysis on how that call went and any inconsistencies on the call.
That allows you to use AI to fast forward through a full hour-long meeting and get all of the topics, all the discussion points, and all the summation points on our platform. A small or mid-sized customer that puts in our system can use AI for auto attendant creation, use AI for marketing on hold creation.
As soon as you put your system in on Crexendo, the system goes out and, using an AI bot, scrubs your website, comes up with all the solutions and says, "Hey, here would be a great marketing on hold script for your business. I'll give you a great auto attendant option for your business. How would you scrub off your website?" Using AI tools like that helps the customer deploy their system faster and it saves them money.
If you look at most businesses out there today that have a marketing on hold solution, that we do. That costs money typically. Some businesses spend $200-$300 a month. We include that as part of our AI solution for every customer out there. Those AI solutions are built into the platform. Crexendo AI Call Reporting solution.
Just like on the video call, we can report all of the conversations on the voice side of the equation. From a call center, from a business that I just want to record all the conversations, our Crexendo AI Call Reporting not only allows us to record calls. That's been a standard functionality for a long time. Using AI now, we can record those calls.
We can transcribe those calls. We can do call summation of those calls. We can do AI-triggered actionable commands on those calls. What does that mean? That means if I'm on a call and the system's recording it, and all of a sudden the system AI bot hears profanity or hears that, "I don't like you guys. I'm going to leave your service." Those three key trigger words can actually do a triggerable command.
Instead of, "Hey, this customer is not happy," bring in a supervisor onto this call. Using an AI bot listening to the call and doing a call summation, during the call, I can actually hear a word or hear a trigger word and bring in another person onto that call, the supervisor or the expert, the accelerator and their expert on that call. Really, really key component there.
Again, very affordable for our small and mid-sized businesses. We've got an air conditioning company for our agents. It's got about 15 employees. They use the next feature, Crexendo Customer Experience . The Phoenix know that starting in about another month, for four months, it's like living in an oven. For the Phoenix companies, that's their busiest time of year. Fifteen of them are in companies, seven of which are technicians out on the street.
They can only handle three or four calls at a time and schedule appointments. Now using our contact center and conversational AI, I can answer calls, schedule appointments without any human intervention. Now their business has tripled in size because now they can handle 8 or 10 more appointments every single day because that using the conversational AI is scheduling appointments for them. Great tool there.
Last couple of slides that we can open up for some questions and answers. Again, AI and final catalyst. Four catalysts are in the future right now. There's a lot of catalysts that are really propelling Crexendo to the top. We're continuing to recognize that. You as a caller, you can add something. One of the callers that she said, "Maybe she can help you." Reporting the Deloitte Technology Fast 500 award .
It's one of the fastest five-year growing technology companies out there. We're really, really proud of Crexendo. We need people to be running there. The last slide is going to be more of a long-term potential growth. Again, focusing on networking and organic competitors. We're growing at a 200 million companies. We've got a great working market growth developed into organic growth. Improving our gross margin.
We talked about OCI. We talked about our mid-term conversion. We've got a lot of gross margin improvement opportunities in the year ahead with some of the consolidations that we're doing. Not only do we have strong gross margins and profitability as a model today, but we see great opportunity there in the future to improve those gross margins. Cash flow, again, great positive cash flow. Good cash flow last year of over $8 million. We're looking at the opportunity.
Great opportunity for cash flow and acquisitions. Like Crexendo, great numbers out there. We're just continuing to execute on our game plan. Really excited about the opportunity for us to talk further. With that, we can open up to questions now.
Any further questions can be taken outside. Thank you so much.