Core Insights - Smith Micro Software Inc (SMSI) reported a non-GAAP loss of 30 cents per share for Q3 2024, compared to earnings of 8 cents in the same quarter last year, which was slightly better than the Zacks Consensus Estimate of a loss of 31 cents [1][2] - Revenues for the quarter were $4.6 million, missing the Zacks Consensus Estimate by 3.2%, and reflecting a significant year-over-year decline of 58% due to downturns across various revenue segments [2][3] Revenue Segments - The Family Safety segment saw revenues decline by nearly $5.2 million or 57% to $3.9 million, primarily due to the end of the Verizon Family Safety contract and ongoing weakness in Sprint Safe & Found revenues [3] - CommSuite segment revenues decreased approximately 14.3% year over year to $0.6 million, although there was a sequential increase of $0.1 million due to strong subscriber engagement on the Boost CommSuite platform [4] - Revenues from the ViewSpot segment fell by $1 million year over year to $0.1 million, mainly due to the termination of ViewSpot deals [4] Financial Performance - Gross margin for the September quarter decreased to 71.6% from 77% in the prior-year quarter, attributed to top-line contraction [5] - Non-GAAP operating expenses for Q3 were $6.8 million, down nearly 12% year over year, while total operating expenses were $9.8 million, down 8% year over year [5][6] Balance Sheet and Cash Flow - As of September 30, 2024, SMSI had total cash and cash equivalents of $1.5 million, a decrease from $5.6 million as of June 30, 2024 [7] - For the nine months ended September 30, 2024, SMSI used $9.4 million in cash from operating activities, compared to $6 million in the same period last year [8] Q4 Outlook - SMSI estimates Q4 revenues to be in the range of $5-$5.2 million, with gross margin expected between 72-75% [9] - Management anticipates achieving cost savings of at least $2.4 million to $2.8 million by Q4 2024, with non-GAAP operating expenses forecasted to decrease by 7% to 12% compared to Q3 2024 [9] Stock Performance - Following the earnings announcement, SMSI shares fell by 12.2% in premarket trading, and over the past year, shares have declined by 86.3%, contrasting with a 21.7% growth in the subindustry [5]

Financial Data and Key Metrics Changes - Revenue for Q3 2024 was $4.6 million, a decrease of approximately 58% compared to $11 million in Q3 2023, and a decrease of about $500,000 or 10% from Q2 2024 [15][16] - Year-to-date revenue through September 30, 2024, was $15.6 million, down from $32.3 million in the same period last year, reflecting a 52% decline [15][16] - GAAP net loss for Q3 2024 was $6.4 million, or a $0.54 loss per share, compared to a GAAP net loss of $5.1 million, or a $0.61 loss per share in Q3 2023 [30] - Non-GAAP net loss for Q3 2024 was $3.6 million, or a $0.30 loss per share, compared to a non-GAAP net income of approximately $600,000, or $0.08 earnings per share in Q3 2023 [31] Business Line Data and Key Metrics Changes - Family Safety revenue was $3.9 million in Q3 2024, a decrease of approximately 57% compared to Q3 2023, primarily due to the conclusion of the Verizon Family Safety contract [17] - CommSuite revenue was approximately $600,000, which decreased by about $100,000 compared to Q3 2023 but increased by $100,000 compared to Q2 2024 [18] - ViewSpot revenue was approximately $100,000, down by approximately $1 million compared to Q3 2023, primarily due to the termination of two contracts [19] Market Data and Key Metrics Changes - The company expects consolidated revenues in Q4 2024 to be in the range of approximately $5 million to $5.2 million, driven by a projected increase in Family Safety revenues [20] - The gross margin for Q3 2024 was 72%, down from 77% in Q3 2023, with gross profit of $3.3 million compared to $8.5 million in the same period last year [21][22] Company Strategy and Development Direction - The primary objective is to return to profitability and generate free cash flow, with a focus on cost reduction and expanding revenue opportunities [8][14] - The company is accelerating the deployment of its SafePath OS solution, expecting to sign its first contract with a U.S.-based MVNO soon, with deployments anticipated in Q1 2025 [10] - A marketing agreement with the Competitive Carrier Association (CCA) aims to expand the SafePath Global Family Safety Solution to more families across the U.S. [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the upcoming launch of a European carrier and the potential for growth in both North America and Europe [55][63] - The company believes that the actions taken to rationalize costs and expand revenue opportunities position it for a return to profitability and free cash flow during 2025 [14][52] Other Important Information - The company reported $1.5 million in cash and cash equivalents as of September 30, 2024, and completed a capital raise in October, grossing approximately $6.9 million [35][36] - The company achieved $1.9 million in cost reductions in Q3 2024 and expects to realize quarterly savings of $2.4 million to $2.8 million in Q4 2024 [13][27] Q&A Session Summary Question: Expectations for the European operator launch - Management expects the European carrier to launch before the end of the year and is optimistic about growth opportunities [55] Question: Details on revenue guidance for December - Revenue growth is expected from a combination of activities with current and new customers, alongside continued expense reductions [56] Question: SafePath OS model details - SafePath OS operates on a subscription model, providing recurring revenue as long as the device is active [59] Question: Cash runway and operating cost savings - The company finished Q3 with $1.5 million in cash, plus an additional $6.4 million from the capital raise, indicating a solid cash runway [67] Question: Competitive landscape and market opportunities - Management noted that while competitors may attempt in-house solutions, their product ratings and acceptance are significantly lower than SafePath offerings [74]

Company Performance - Smith Micro Software, Inc. reported a quarterly loss of $0.30 per share, slightly better than the Zacks Consensus Estimate of a loss of $0.31, compared to earnings of $0.08 per share a year ago, indicating an earnings surprise of 3.23% [1] - The company posted revenues of $4.65 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 3.17%, and down from $11 million in the same quarter last year [2] - Over the last four quarters, the company has only surpassed consensus EPS estimates once and has not beaten consensus revenue estimates during this period [2] Stock Performance - Smith Micro Software shares have declined approximately 86.4% since the beginning of the year, contrasting with the S&P 500's gain of 25.5% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.14 on revenues of $5.6 million, and for the current fiscal year, it is -$1.28 on revenues of $21.3 million [7] Industry Outlook - The Computer - Software industry, to which Smith Micro Software belongs, is currently ranked in the top 19% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - Revenues for Q3 2024 were $4.6 million, a decrease of 58% compared to $11.0 million in Q3 2023, primarily due to a $5.2 million decline in the Family Safety product line [73]. - Gross profit for Q3 2024 was $3.3 million, representing 71.6% of revenues, down from $8.5 million or 77.0% in Q3 2023, reflecting a decrease of approximately $5.1 million [79]. - The net loss for Q3 2024 was $6.4 million, resulting in a net loss of $0.54 per basic and diluted share [73]. - Revenues decreased by $16.7 million, or 52%, to $15.6 million for the nine months ended September 30, 2024, compared to $32.3 million in 2023, primarily due to the loss of a Family Safety contract [81]. - Gross profit was $10.7 million, or 68.5% of revenues, for the nine months ended September 30, 2024, down from $23.9 million, or 74.0% of revenues, in 2023, reflecting a decrease of $13.2 million [81]. - Net cash used in operating activities was $9.4 million for the nine months ended September 30, 2024, compared to $6.0 million in 2023, driven by a net loss of $44.3 million [87]. Operating Expenses - Operating expenses decreased by approximately $0.8 million in Q3 2024 compared to Q3 2023, primarily due to reductions in sales and marketing expenses and general administrative costs [73]. - Selling and marketing expenses were $2.1 million in Q3 2024, down from $2.4 million in Q3 2023, primarily due to decreases in personnel-related costs [79]. - Research and development expenses were $3.6 million in Q3 2024, slightly down from $3.7 million in Q3 2023, with personnel-related costs decreasing [79]. - Selling and marketing expenses decreased by $1.4 million to $7.2 million for the nine months ended September 30, 2024, primarily due to reductions in personnel-related costs and marketing expenses [82]. - Research and development expenses decreased by approximately $1.9 million to $11.3 million for the nine months ended September 30, 2024, mainly due to a decline in personnel-related costs [82]. Cash Flow and Financing - Net cash provided by financing activities was $3.6 million for the nine months ended September 30, 2024, primarily from a registered direct offering and private placement [89]. - As of September 30, 2024, the company's cash and cash equivalents were approximately $1.5 million, with an additional $6.5 million raised post-period through stock offerings [84]. - The company has retired all outstanding debt as of December 31, 2023, which alleviates covenant violations but raises concerns about future liquidity and operational funding [86]. Strategic Initiatives - The company executed new multi-year Family Safety agreements with a Tier 1 carrier in Europe and a U.S.-based carrier, with the U.S. solution launched on the SafePath Global platform in Q2 2024 [73]. - Family Safety applications are currently provided to two Tier 1 wireless carriers in the U.S., with expectations to grow subscriber bases and associated revenues [73]. - The company anticipates launching the Family Safety solution for the Tier 1 European carrier in the near term, expecting robust marketing activities [73]. - The company anticipates revenue growth from marketing efforts with existing Tier 1 carrier customers and new launches in the U.S. and Europe, although immediate impacts from contract losses may affect liquidity [86]. Impairment and Valuation - The impairment charge for goodwill was $24.0 million for the nine months ended September 30, 2024, indicating a significant decline in the fair value of the reporting unit [82].

Financial Performance - For the three months ended June 30, 2024, revenues were $5.14 million, a decrease of 50.3% compared to $10.34 million for the same period in 2023[8]. - Gross profit for the three months ended June 30, 2024, was $3.53 million, down 54.5% from $7.75 million in the prior year[8]. - Operating loss for the three months ended June 30, 2024, was $(6.98) million, compared to $(3.24) million for the same period in 2023, reflecting a 115.4% increase in losses[8]. - Net loss for the six months ended June 30, 2024, was $(37.94) million, significantly higher than $(12.55) million for the same period in 2023[8]. - Total revenues for the three months ended June 30, 2024, were $5.14 million, a decrease of 50.3% compared to $10.34 million for the same period in 2023[55]. - For the six months ended June 30, 2024, total revenues were $10.94 million, down 48.6% from $21.27 million for the same period in 2023[55]. - The net loss for Q2 2024 was $6.9 million, resulting in a net loss of $0.66 per basic and diluted share[71]. - Revenues decreased by $10.3 million, or 49%, to $10.9 million for the six months ended June 30, 2024, compared to $21.3 million in 2023, primarily due to the loss of a Family Safety contract[76]. Assets and Equity - Total assets as of June 30, 2024, were $52.99 million, a decrease of 38.1% from $85.58 million at the end of 2023[5]. - Cash and cash equivalents decreased to $5.63 million as of June 30, 2024, down from $7.13 million at the end of 2023[5]. - Total stockholders' equity as of June 30, 2024, was $42.90 million, down from $75.39 million at the end of 2023, indicating a decline of 43.3%[5]. - As of June 30, 2024, the total stockholders' equity was $42,902,000, with a common stock balance of 10,625 shares[11]. - The company had approximately 9,000 stock options outstanding with a weighted average exercise price of $26.89 per share as of June 30, 2024[50]. Cash Flow and Financing - Cash and cash equivalents at the end of the period were $5,628,000, down from $7,125,000 at the beginning of the period[16]. - The company raised $3.4 million in net cash proceeds from a registered direct offering of 1,065,000 shares at $2.15 per share and pre-funded warrants for 845,000 shares[28][29]. - Net cash used in operating activities was $5.6 million for the six months ended June 30, 2024, compared to $7.5 million in 2023, with a net loss of $37.9 million[81]. - Net cash provided by financing activities was $3.9 million for the six months ended June 30, 2024, primarily from a Registered Direct Offering and Private Placement[83]. Stock and Shareholder Information - The company had 11,035,130 shares of common stock outstanding as of August 2, 2024[2]. - The company executed a one-for-eight reverse stock split effective April 10, 2024, reducing outstanding shares from approximately 76.8 million to 9.6 million[18]. - The Company received a notice from Nasdaq regarding non-compliance with the $1.00 minimum bid price requirement, leading to a Reverse Stock Split effective April 10, 2024, which allowed the Company to regain compliance by April 29, 2024[27]. - The company repurchased a total of 41,115 shares during the three months ended June 30, 2024, at an average price of $2.41 per share[93]. Impairment and Goodwill - The company recognized a goodwill impairment charge of $23,989,000 during the six months ended June 30, 2024[16]. - The company recorded a goodwill impairment charge of $24.0 million for the three months ended March 31, 2024, due to a decrease in its common stock share price[38]. - The impairment charge for goodwill was $24.0 million for the six months ended June 30, 2024, due to a sustained decrease in the company's stock price[77]. Operational Challenges and Future Outlook - The Company is facing substantial doubt about its ability to continue as a going concern within one year due to recurring operating losses and negative cash flows, despite having no outstanding debt[24][26]. - The Company plans to implement dynamic marketing campaigns to expand subscriber growth and generate increased revenues, while also considering additional restructuring and cost reductions[24][26]. - The company anticipates revenue growth from marketing efforts with existing Tier 1 carrier customers and new launches in the U.S. and Europe, despite the loss of the Family Safety contract[79]. - The company may need to take additional actions to meet future cash needs, as uncertainties remain regarding its ability to continue as a going concern[80]. Expenses and Cost Management - Operating expenses decreased by approximately $0.5 million in Q2 2024 compared to Q2 2023, primarily due to reductions in general and administrative costs[71]. - Selling and marketing expenses were $2.5 million in Q2 2024, slightly down from $2.6 million in Q2 2023[75]. - Research and development expenses remained flat at $3.7 million for both Q2 2024 and Q2 2023[75]. - General and administrative expenses decreased to $2.7 million in Q2 2024 from $3.0 million in Q2 2023[75]. - Selling and marketing expenses decreased by approximately $1.0 million to $5.1 million for the six months ended June 30, 2024, primarily due to reductions in personnel-related costs and marketing expenses[77]. - Research and development expenses decreased by approximately $1.9 million to $7.7 million for the six months ended June 30, 2024, driven by declines in personnel-related costs and contractor costs[77]. Revenue Sources and Customer Concentration - Cloud-based usage fees for the three months ended June 30, 2024, were $3.65 million, a decline of 57.0% from $8.51 million in the same period of 2023[55]. - The company generated 59% and 20% of its revenues from two customers for the three months ended June 30, 2024[58]. - Revenues from the Americas for the three months ended June 30, 2024, were $4.94 million, compared to $10.08 million for the same period in 2023, reflecting a decrease of 51.0%[59].

Financial Data and Key Metrics Changes - For Q2 2024, the company reported revenue of $5.1 million, a decrease of approximately 50% compared to $10.3 million in Q2 2023, and a decline of about $700,000 or 11% from Q1 2024 [8][12] - Year-to-date revenues through June 30, 2024, were $10.9 million, down from $21.3 million in the same period last year, reflecting a 48% decline [8] - The GAAP net loss for Q2 2024 was $6.9 million or a $0.66 loss per share, compared to a net loss of $5.7 million or a $0.73 loss per share in Q2 2023 [16] Business Line Data and Key Metrics Changes - Family Safety revenue was $4.2 million in Q2 2024, a decrease of approximately 52% compared to the same quarter last year, primarily due to the conclusion of the Verizon Family Safety contract [9] - CommSuite revenue was approximately $500,000, down by about $200,000 from Q2 2023, but there is an expectation of modest revenue growth in Q3 due to subscriber growth [10] - ViewSpot revenue was approximately $400,000, declining by about $500,000 compared to Q2 2023, with expectations of further decline in Q3 [11] Market Data and Key Metrics Changes - The company is experiencing subscriber growth on the Boost CommSuite premium visual voicemail platform, which is expected to contribute to revenue growth in Q3 [10] - The anticipated consolidated revenues for Q3 2024 are projected to be in the range of approximately $4.5 million to $5 million, driven in part by a decrease in ViewSpot revenues [11] Company Strategy and Development Direction - The company is focused on returning to profitability and has implemented cost reductions of approximately $1 million to $1.3 million per quarter, with plans for additional reductions [6][15] - The launch of SafePath Global with DISH is seen as a significant milestone, with expectations for more deployments in the near term [4] - The company plans to introduce SafePath Live, which will enhance family location controls and expand market opportunities [30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the upcoming launch with a Tier 1 carrier in Europe, which is expected to drive new demand and open opportunities for expansion [27] - The management believes that the family safety market is expanding, particularly in light of new initiatives and legislation focused on online safety [30] - There is confidence that the company is on a path to growth and profitability, with a strong sales pipeline and collaborative relationships with carriers [28][29] Other Important Information - The company conducted a capital raise during Q2, grossing approximately $4.1 million in cash before transaction-related fees, resulting in $5.6 million of cash and cash equivalents as of June 30, 2024 [18] - The company has streamlined its operations and reduced costs associated with the Ring platform, which is expected to contribute to improved financial performance [39] Q&A Session Summary Question: Expectations for SafePath in Q3 and Q4 - Management expects to see growth in SafePath revenues in Q4 following the launch in Europe and increased activity with DISH [32] Question: Success metrics for SafePath Global and pipeline size - The pipeline for SafePath Global includes multiple carriers, with expectations for rapid deployment and significant subscriber growth [33][36] Question: Cost reduction initiatives and future opportunities - Management indicated that they are always looking for ways to optimize costs, with current initiatives targeting $2 million to $2.5 million in total savings [45][47] Question: ViewSpot revenue expectations - Management expects ViewSpot revenues to decline further but does not anticipate it going to zero, with new opportunities being explored [49][50] Question: Subscriber growth strategies at T-Mobile and AT&T - Management highlighted the importance of marketing efforts and training programs to drive subscriber growth, particularly with DISH and Boost Family Guard [52]

分组1 - Smith Micro Software, Inc. reported a quarterly loss of $0.38 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.35, and a significant decline from a loss of $0.08 per share a year ago, indicating a negative earnings surprise of -8.57% [1] - The company generated revenues of $5.14 million for the quarter ended June 2024, missing the Zacks Consensus Estimate by 4.82% and down from $10.34 million in the same quarter last year, with only one instance of surpassing consensus revenue estimates in the last four quarters [2] - Smith Micro Software shares have decreased by approximately 62.9% since the beginning of the year, contrasting with the S&P 500's gain of 15.8%, highlighting significant underperformance in the market [3] 分组2 - The earnings outlook for Smith Micro Software is mixed, with the current consensus EPS estimate for the upcoming quarter at -$0.22 on revenues of $5.9 million, and for the current fiscal year at -$1.15 on revenues of $24.7 million [7] - The Computer - Software industry, to which Smith Micro Software belongs, is currently ranked in the bottom 39% of over 250 Zacks industries, suggesting that the overall industry outlook may negatively impact the stock's performance [8]

Smith Micro Software, Inc. (NASDAQ:SMSI) Q1 2024 Earnings Conference Call May 8, 2024 4:30 PM ET Company Participants Charles Messman - Vice President of Marketing Bill Smith - Chairman of the Board, President & Chief Executive Officer Jim Kempton - Chief Financial Officer Conference Call Participants Operator Good day, and welcome to the Smith Micro First Quarter 2024 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _____________________________ FORM 10-Q _____________________________ (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 001-35525 _____________________________ SMITH MICRO SOFTWARE, INC. (Exact name of registrant as specified in its charter) ____________ ...

Exhibit 99.1 First Quarter 2024 Financial Results Smith Micro reported revenue of $5.8 million for the quarter ended March 31, 2024, compared to $10.9 million reported in the quarter ended March 31, 2023. Gross profit for the quarter ended March 31, 2024 was $3.8 million, compared to $7.6 million for the quarter ended March 31, 2023. Gross profit as a percentage of revenue was 65.7 percent for the quarter ended March 31, 2024, compared to 70.0 percent for the quarter ended March 31, 2023. GAAP net loss for ...