EBITDA for the third quarter came in at $1.2 million compared to $79,000 for the third quarter of the prior year. And adjusted EBITDA increased to $2.1 million compared to $938,000 for the third quarter of the prior year. A few highlights on the nine months ended September 30. Year-to-date, total revenue increased 49% to $12.9 million, or from $12.9 million to $39 million compared to $26.1 million. Service revenue increased 64% to $21.9 million compared to $13.4 million. Software Solutions revenue increased 19% to $12.7 million compared to $10.7 million, and product revenue increased 122% to $4.3 million compared to $1.9 million. Operating expenses for the nine-month period increased 42% to $40.8 million compared to $28.9 million in the prior year.
Year-to-date, the company reported a net loss of only $423,000 for the nine-month period, or $0.02 loss per basic and diluted common share, compared to a net loss of $2.8 million or $0.13 loss per basic and diluted common share for the same period of the prior year. Year-to-date, non-GAAP net income was $5.1 million. That’s $0.20 per basic and $0.18 per diluted common share, compared to non-GAAP net income of $1.6 million or $0.07 per basic and $0.06 cents per diluted common share for the same period of the prior year, Year-to-date, EBITDA of $968,000 compared to a loss of $927,000 for the same period of the prior year. And adjusted EBITDA for the nine-month period of $4.1 million compared to $1.9 million for the same period of the prior year.
Our cash balance at September 30 was $7.7 million compared to $5.5 million at December 31, 2022. Our cash provided by operating activities for the nine-month period was $887,000 compared to $2.7 million used for the same period of the prior year. The third quarter had positive operating cash flows of $1,560,000 compared to negative cash flows of $673,000 for the first two quarters of 2023. Cash provided by investing activities for the nine-month period of $3.7 million compared to $192,000 used for the same period the prior year. As we mentioned on the last earnings call, we sold our building in August of this year, and we received $3,792,000 in proceeds from the sale of the building, net of commissions. That’s compared to $92,000 used for the purchase of property and equipment for the first two quarters.
So, that’s how we get to the $3.7 million for the nine-month period. Cash used for financing activities for the nine-month period of $2.3 million compared to cash used of $36,000 for the same period of the prior year. During the quarter, we utilized $1,838,000 for financing activities. $1,000,872 of that was for the repayment of the no payable on our building. I’ve used up my voice, so I’m going to turn it over to Doug for some highlights on business and sales.
Doug Gaylor: Thanks, Ron. It was a great quarter for Crexendo. As both Jeff and Ron have discussed, our 52% revenue increased to $13.87 million for the quarter was driven by impressive performances throughout several segments of the business, all of which I will discuss in further detail. First, I’d like to start by highlighting the organic growth of our Telecom Services segment, which saw an impressive 11% increase year-over-year, and that growth was fueled by a record number of installations generated by our partner and direct channels. Similarly, our Software Solutions segment for platform sales demonstrated exceptional results, with organic growth of 21%, driven by new logos, as well as upgrades from our growing licensee community.
Our Software Solutions segment also witnessed nice improvements in gross margins, as Ron highlighted, which increased from 67% to 72% quarter-over-quarter, as we continue to manage cost and optimize our offerings. Gross margins on the combined Telecom Services segment for service remained relatively flat at 58%, and includes our Allegiant acquisition. And taking out the Allegiant revenue contribution, our classic Crexendo Telecom Services gross margin was 68% for the quarter. We also saw a nice improvement on the Telecom Services product gross margin increasing from 38% in Q2 to 45% in Q3, as we put more focus on the product offering margins for our Allegiant group and our product offerings. Our Allegiant acquisition just celebrated its one-year anniversary last week, and we continue to see nice growth from that group as we saw organic growth in that division of 17% over their standalone third quarter last year.
Echoing Jeff’s commentary, we have successfully integrated Allegiant into our legacy business, creating synergies that have opened up a wide range of exciting cross utilization and cross-selling opportunities. Our backlog number, which to remind you, is the sum of the remaining contract values of our Telecom Services and our Software Solutions customers that will be recognized on a sliding scale over the next 60 months, increased by a whopping 46% to $63.4 million year-over-year, and that’s a 24% increase from just last quarter. The backlog number includes the Allegiant customer contracts as well. Our backlog number provides a locked in robust future revenue stream and solidifies our confidence and reliable future growth. As it relates to sales updates for the quarter, we continue to receive outstanding contributions from our resellers and witnessed impressive growth through our master agent channels, which saw 25% increase in sales orders from last quarter.
