Smith Micro Software(SMSI) - 2025 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - For Q2 2025, the company reported revenue of $4.4 million, a decrease of 14% compared to $5.1 million in Q2 2024 [9] - Year-to-date revenue through June 30, 2025, was $9 million, down 17% from $10.9 million in the same period last year [10] - GAAP net loss for Q2 2025 was $15.1 million, or $0.78 loss per share, compared to a GAAP net loss of $6.9 million, or $0.66 loss per share in Q2 2024 [15] - Non-GAAP net loss for Q2 2025 was $2.8 million, or $0.14 loss per share, compared to a non-GAAP net loss of approximately $4 million, or $0.38 loss per share in Q2 2024 [16] Business Line Data and Key Metrics Changes - Family Safety revenue for Q2 2025 was $3.6 million, a decrease of 14% compared to the same quarter last year [10] - CommSuite revenue increased to $777,000 in Q2 2025, up $246,000 from Q2 2024 [10] - ViewSpot revenue was nominal for Q2 2025, declining by $371,000 compared to Q2 2024, with the product line sold for $1.3 million [11] Market Data and Key Metrics Changes - The company is actively engaged in discussions with mobile operators in North America and Europe, focusing on the SafePath platform [5] - The SafePath OS for kids and seniors is positioned to capture significant market opportunities, aligning with carrier partners' long-term strategies [20][27] Company Strategy and Development Direction - The company is focused on expanding its portfolio with significant upgrades to the SafePath platform, including the AI-enabled SafePath 8 [19] - The launch of SafePath OS for seniors is expected by the end of the quarter, targeting an underserved market [26] - The company aims to leverage AI solutions to enhance family safety offerings, including social media intelligence and AI blocking functionalities [24][25] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about a meaningful turnaround, with expectations for sequential quarterly revenue growth in Q4 2025 [32] - The family safety market is seen as entering a new phase of relevance, with opportunities for growth as carriers seek to attract family subscribers [38] - Management believes the senior market could be larger than the kids' market, indicating a significant untapped opportunity [39] Other Important Information - The company completed a follow-on offering of approximately 1.6 million shares, resulting in proceeds of about $1.5 million before fees [9][18] - GAAP operating expenses for Q2 2025 were $18.2 million, an increase of 73% compared to Q2 2024, primarily due to a goodwill impairment charge [13] Q&A Session Summary Question: Can you comment on any change in the size of the family safety market? - Management noted that the family safety market is entering a new time of relevance, with growth opportunities as carriers seek to attract family subscribers [38] Question: What are you seeing in terms of in-house development at the MNOs? - Management observed that MNOs are focused on expanding their subscriber base, particularly targeting family subscribers, which tend to churn less and spend more [38]