Smith Micro Software(SMSI) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - For Q1 2025, the company recognized revenue of $4.6 million, a decrease of approximately 20% compared to $5.8 million in Q1 2024 [9] - Family Safety revenues were $3.8 million, down approximately 15% year-over-year, primarily due to the decline in legacy Sprint safe and found revenue [9] - Gross profit for Q1 2025 was approximately $3.4 million, down from $3.8 million in the same period of the prior year, with a gross margin of 73% compared to 66% in Q1 2024 [11] - GAAP net loss for Q1 2025 was $5.2 million or $0.28 loss per share, significantly improved from a GAAP net loss of $31 million or $3.28 loss per share in Q1 2024 [12][13] Business Line Data and Key Metrics Changes - CommSuite revenue was approximately $700,000, an increase of $100,000 compared to Q1 2024, but decreased by $400,000 compared to Q4 2024 [10] - ViewSpot revenue was approximately $100,000, down $600,000 year-over-year, primarily due to the end of a contract [10] Market Data and Key Metrics Changes - The company expects consolidated revenues for Q2 2025 to be in the range of approximately $4.4 million to $4.8 million [11] - The company reported $2.3 million in cash and cash equivalents as of March 31, 2025, and filed a new shelf registration with $75 million capacity [15] Company Strategy and Development Direction - The company is focusing on SafePath OS for kids and senior phones, aiming to align with mobile operators' core business strengths [5] - SafePath eight, the next generation of the SafePath platform, will introduce AI-centric features to enhance family safety solutions [8][16] - The company is optimistic about closing new customer deals and expanding agreements with current customers [5][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong global demand for digital family safety solutions, viewing it as an immense opportunity for growth [7] - The company is seeing positive shifts in conversations with current and prospective customers regarding their latest solutions [24] - Management remains optimistic about the company's prospects for a return to growth and profitability [28] Other Important Information - The company has engaged in extensive discussions with mobile operator partners regarding new initiatives [5] - The new SafePath eight platform will include features such as social media intelligence and a family AI assistant [18][21] Q&A Session Summary Question: Metrics on SafePath 2.0 performance - Management indicated that SafePath 2.0 is off to a strong start with good adoption expected to improve during the summer and back-to-school period [31] Question: Engagements and pilots for SafePath Kids - Management confirmed expectations for meaningful launches in Q3, aligning with back-to-school opportunities [34] Question: Visibility on SafePath Seniors pilots and pricing thoughts on SafePath eight - Management noted that the first trial for SafePath Seniors has already occurred, with a potential launch in Q4 [38] Question: Relevance of tablets and potential impacts from global disruptions - Management stated that the SafePath OS solution will run on tablets and is compatible with existing carrier offerings [51]