Smith Micro Software(US:SMSI)2021-05-06 02:34Financial Data and Key Metrics Changes - Revenues for Q1 2021 were $11.4 million, a decrease of 15% compared to $13.3 million in Q1 2020 and down 8% from Q4 2020 [10][14] - Non-GAAP net income for Q1 2021 was $700,000, or $0.02 diluted earnings per share, compared to $4.1 million, or $0.10 diluted earnings per share in the same quarter last year [27] - Gross profit for Q1 2021 was $9.8 million with a gross margin of 86%, down from 91% in the previous year [24] Business Line Data and Key Metrics Changes - Family Safety revenue decreased 20% year-over-year to $6.3 million but increased 3% sequentially from Q4 2020 [15] - CommSuite platform revenue was $4.1 million, down 9% year-over-year and down 13% sequentially [19] - ViewSpot revenue was approximately $930,000, up 25% year-over-year but down 32% sequentially [22] Market Data and Key Metrics Changes - Family Safety revenue is expected to increase by 70% to 75% in Q2 2021 compared to Q1 2021, driven by current subscriber trends and the acquisition of Family Safety products [18] - CommSuite platform revenue is expected to decline by 5% to 10% in Q2 2021 compared to Q1 2021 [21] - ViewSpot revenue is expected to increase by 5% to 10% in Q2 2021 compared to Q1 2021 [23] Company Strategy and Development Direction - The company aims to integrate the newly acquired Family Safety business from Avast and focus on maximizing revenues through enhanced product offerings [8][12] - A strategic focus on expanding relationships with DISH and T-Mobile is emphasized, particularly in the context of the 5G rollout [31][41] - The company plans to develop a unified SafePath code base to streamline operations and improve margins [44] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery of retail activity post-COVID-19, which is expected to benefit ViewSpot revenues [35][45] - The integration of the Avast acquisition is seen as a significant growth opportunity, with expectations of a strong resurgence in revenues [46] - Management highlighted the importance of the Family Safety segment and the potential for growth through new marketing strategies with T-Mobile and Verizon [41][42] Other Important Information - The company closed a public offering, raising approximately $60 million, and completed the acquisition of the Avast Family Safety Mobile Software Business for $66 million [12][13] - Non-GAAP operating expenses for Q1 2021 were $9.1 million, an increase of 13% year-over-year, primarily due to increased compensation and employee-related expenses [24][25] Q&A Session Summary Question: Can you clarify the sequential outlook for ViewSpot? - The guidance for ViewSpot was 5% to 10% greater than the first quarter [50] Question: What is the expected growth for Family Safety revenue? - The guidance for Family Safety revenue is a 70% to 75% growth on top of the first quarter's revenues [51] Question: What is the timeline for the T-Mobile rollout? - A soft launch is expected initially, followed by a full rollout [54] Question: How does the Apple launch impact the market? - The Apple launch validates the market but is not seen as a direct competitor due to its limitations [57][58] Question: What is the cash position post-acquisition? - The company had approximately $30 million in cash with no debt [70]