Smith Micro Software(SMSI) - 2024 Q2 - Earnings Call Transcript

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]