Smith Micro Software(US:SMSI)2023-05-11 22:10Financial Data and Key Metrics Changes - Revenue for the first quarter of 2023 was $10.9 million, down from $12.7 million in the same quarter of 2022, representing a decrease of approximately 14% [73] - GAAP net loss for the first quarter of 2023 was $6.9 million or $0.11 loss per share, compared to a GAAP net loss of $7 million or $0.13 loss per share in the first quarter of 2022 [8] - Non-GAAP gross margin for the first quarter of 2023 was 71.8%, compared to 71.4% in the first quarter of 2022 [101] Business Line Data and Key Metrics Changes - Family Safety revenue decreased by $1.3 million or 12% compared to the first quarter of the prior year, primarily due to the attrition of legacy Sprint subscribers [30] - CommSuite revenues were approximately $800,000, down from $1.4 million in the first quarter of 2022 [66] - ViewSpot revenue was approximately $1 million for the first quarter of 2023, which increased by $100,000 compared to the first quarter of the prior year [100] Market Data and Key Metrics Changes - The company anticipates consolidated revenue for the second quarter of 2023 to be flat to lower by 4% compared to the first quarter of 2023 [31] - The company expects second quarter 2023 non-GAAP operating expenses to decrease by 25% to 30% from the first quarter of 2023 [32] Company Strategy and Development Direction - The company is focused on completing the migration of the AT&T Secure Family application to the SafePath platform, with a public launch expected in the third quarter [64] - The company aims to achieve $4 million in savings from total non-GAAP expenses reported in the fourth quarter of 2022 [12] - The company is optimistic about expanding its ViewSpot business and anticipates additional customers in both North America and EMEA regions [79] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to profitability by the third quarter, with a focus on cost reduction and operational efficiency [42] - The management noted that the challenges faced are largely within their control and are being addressed proactively [107] - Management highlighted positive feedback from sales prospects in both the U.S. and high ARPU markets across Europe [106] Other Important Information - The company has implemented a global reduction in workforce, eliminating approximately 26% of its global workforce to achieve cost reduction goals [3] - The company reported $8.7 million in cash and cash equivalents as of March 31, 2023 [103] Q&A Session Summary Question: Has the expectation for a return to profitability changed? - Management confirmed that they are still committed to achieving profitability in the third quarter [42] Question: Can you elaborate on margins in the back half of the year? - Management indicated that they expect adjusted gross margins to improve by 150 to 250 basis points as the year progresses [43] Question: What additional growth initiatives are being worked on with AT&T? - Management mentioned ongoing discussions and activities to support AT&T's growth initiatives, but did not provide specific quantifiable opportunities at this time [19]