Smith Micro Software(US:SMSI)2025-11-05 21:08Revenue Performance - Revenues for Q3 2025 decreased by 6% to $4.3 million compared to Q3 2024, primarily due to a $0.4 million decline in the Family Safety product line [121]. - Revenues decreased to $13.4 million for the nine months ended September 30, 2025, down 14% from $15.6 million in 2024, primarily due to declines in the Family Safety product line [139]. Gross Profit and Cost of Revenues - Gross profit for Q3 2025 was $3.2 million, representing 73.9% of revenues, a slight increase from 71.6% in Q3 2024 [131]. - Cost of revenues decreased to $1.1 million in Q3 2025 from $1.3 million in Q3 2024, reflecting cost reduction efforts [130]. - Cost of revenues reduced to $3.6 million in 2025 from $4.9 million in 2024, a decrease of $1.3 million attributed to lower revenue and cost reduction efforts [140]. - Gross profit was $9.8 million, representing 73.4% of revenues for the nine months ended September 30, 2025, compared to $10.7 million or 68.5% in 2024 [141]. Operating Expenses - Operating expenses decreased by approximately $2.1 million in Q3 2025 compared to Q3 2024, driven by reductions in sales and marketing and research and development expenses [121]. - Selling and marketing expenses were reduced to $1.5 million in Q3 2025 from $2.1 million in Q3 2024, due to personnel cost reductions [132]. - Research and development expenses decreased to $2.6 million in Q3 2025 from $3.6 million in Q3 2024, also attributed to cost reduction initiatives [133]. - Selling and marketing expenses decreased to $4.8 million in 2025 from $7.2 million in 2024, a reduction of approximately $2.4 million due to decreased personnel costs [142]. - Research and development expenses were $8.2 million for the nine months ended September 30, 2025, down from $11.3 million in 2024, a decrease of approximately $3.1 million [144]. - General and administrative expenses decreased to $7.7 million in 2025 from $8.2 million in 2024, a reduction of approximately $0.6 million [145]. Net Loss and Cash Flow - The net loss attributable to common stockholders for Q3 2025 was $5.2 million, resulting in a net loss of $0.25 per share [121]. - A goodwill impairment charge of $11.1 million was recorded for the nine months ended September 30, 2025, compared to $24.0 million in 2024 [148]. - Net cash used in operating activities was $5.0 million for the nine months ended September 30, 2025, compared to $9.4 million in 2024 [158][159]. - The company generated net cash provided by investing activities of $1.2 million in 2025, primarily from the sale of ViewSpot [160]. - Net cash provided by financing activities was $2.4 million for the nine months ended September 30, 2025, compared to $3.6 million in 2024 [161][162]. Strategic Initiatives - The company expects strategic cost reductions to result in savings of approximately $1.8 million per quarter, totaling about $7.2 million for 2026 [124]. - The company completed the development of SafePath 8 and plans to launch new features, aiming to grow Family Safety revenues with Tier 1 carriers [122]. - The sale of the ViewSpot product generated total consideration of $1.3 million, with $1.0 million received at closing [121].