SMSI - Earnings call transcript Q4 2021 | Smith Micro Software, Inc.

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Operator

Good afternoon, and welcome to the Smith Micro Software Fourth Quarter and Fiscal Year 2021 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions]. After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions]. is event this note being recorded. Please now Charles Messman. would like to to over conference the turn I Please go ahead.

Charles Messman

Micro for operator, the release We end have us Smith received appreciate you, December financial you financial Thank and now, of joining results. today good XX, XXXX. a to you and copy fourth with quarter the afternoon, By everyone. Software year results should discuss press the

of customers, Board, by of you Kempton, statements, plans, market forward-looking our future that James the operating migration, the discussion our of a hear profitability, Chief and copy the without Avast's and site acquisition Please and of some President, and and regarding like Investor expanded new our Executive If will Smith Micro; Relations growth business today's and those including, note of Mobile Officer. do revenue visit deployment, Financial section Business forward. opportunities, On company's Officer positions and today future and information Bill the not during have Chief www.smithmicro.com. consist you have Smith, Web impact Safety of strategy, limitations, one, at would new we year's please call, new product development, expense, our product expected future and/or going reserves, existing and last Family financial of company cash operations, Chairman the

which uncertainties, or or results actual risks trends materially cause involve forward-looking by implied expressed could statements. from differ statements those and Forward-looking to

our offering only Smith financial With which our prepared date they included Bill. assumes XX-K to our the the with I'll to certain update beliefs that these and measures. non-GAAP speak to respect turn today the our reconciliation non-GAAP the For like financial I'd to filed of more out refer statements, we risk last and measures. call Please forthcoming point refer Micro management's forward-looking release recently for most are final a press information, please disseminated of year. over refer Form assumptions filed to in will obligation the remarks, to public as in no any to prospectus earlier factors that to made. said, Bill?

Bill Smith

afternoon well that quarter you our all very over on years earnings the the doing functionality faced past Smith progress To have Thanks, that on for a hope our as Safety us is accomplished platform, wireless afternoon. was initiatives Micro. Family much and conflict past year-end everyone that huge base a offering you unique conference accomplishment comprehensive today fourth having of start, us XXXX the was most for team by with, I'm SafePath Good successfully we to this that looking for and call our for and challenged I in us during resulted into for we of the enhanced call. joining well transformational to Charlie. and XXXX in integrating sincerely Smith and has thank by the strategic have at everyone our challenges success year, code given carriers. This discussing beyond. for We all now market XXXX, couple positioned Circle's truly We with year we've several the in forward Ukraine. exacerbated before, been accomplished stated this Despite today Micro

to highly more Safety X several in customers Family also base, did Mobile acquisition largest largest Tier than This was Family of our it it acquired we spring, business. our last competitor Safety Micro's space, history. Avast's the professionals acquisition with experienced our addition, Safety global Family carrier company. the to add in Not client In white Smith XXX label brought only the

advancing I our on of behind issues our have be are space, Family front historical with us. with experienced focused dedicated us. With strategies a concentration expect in platform. in Safety executing team label the white are SafePath and we and contracts customer couldn't clearly we the potential now with We multiple happier growth our leader place in carriers, growth the

back XXXX, having Micro's just should share for launch Play I at must at and of the Stores. T-Mobile, SafePath the for and I with proud am preparation App our submitted approved financial the weeks, teams' looking Apple next Google the Before X of apps results Smith in occur by the which how already few been

the the pricing on Europe. under from the model, As revenue we carrier completed the recognize of model the into The with all able set our in new contract the is more our at we have X market variable deployment last SaaS which for of now traditional mark line of stage T-Mobile of platform first customers will are and SafePath future migration, launch T-Mobile for will requirements deployments other I the the U.S. call. and the contract that X spoke in to with the Tier the under that

completed we related we've the T-Mobile are activities Now our platform, is to AT&T well that which of Verizon one initiatives the key launch, both migrate to XXXX. SafePath migration positioned over to and for

offering urgency fact, offer carrier accelerate to they customers in so an migration the seen from their bases. broader, lucrative respective we've can more to our Family a efforts customer In increase Safety

growth also with and efforts, the approach while revenue drive pronged our very timing building We on strongly believe closely I the XXXX partners strategy growth continue as progresses. behind to best these this on front. subscriber positions momentum dual migration us to work

financial Now quarter the let's results look of fourth at full take for the and year a XXXX. quick

fiscal million million compared For our XX.X to reported total fiscal year, XXXX XX.X% revenues increased in year XXXX. $XX.X to

quarter XXXX, $XX.X or communicated last revenue for $XX.X for $X.X quarter call. in non-GAAP the $X.X diluted the our Non-GAAP million. XXXX. in $X.XX generated came increased of the cash the million quarter fourth below $XX.X million was We XX.X% loss our for ended For expectations a quarter, net share. the year or the And of to to earnings year per fiscal share. million diluted net loss compared fourth slightly $X.XX was revenue when with per fourth XXXX balance of million Overall, on

quarter. revenues decline primarily at the the which expected this more associated in Sprint deployment its onto than will during in We've network. shortly, Jim Sprint, deployment to legacy visual quite known detail quickly of fourth T-Mobile is revenues As the customers CommSuite accelerated acquired that subscribers decline with the voicemail legacy time of for once would more review the related some in reduction completed migration own

deploy in line, the for can contract now attention We our a for healthy our with premium While represents are messaging that is sight, supporting on growth focused for signed the Wireless potential areas. other revenue a Smith a the network. recently CommSuite of and we Dish. customer generates growth end We turn stream teams CommSuite of voice as new CommSuite our to product sustainable that they Micro revenue both their work recurring to deploying and solution Dish

call Now XXXX in-depth Jim a for of let's more results. over the financial Jim? turn analysis to the

James Kempton

Thanks, Bill, everyone. afternoon, good and

the of the As comparisons a which reminder, we be period-over-period that acquired today. impacts business covering I'll the second Avast's Mobile quarter Family XXXX, in Safety

financial some As I'll quarter quarterly XXXX. such, that, fiscal With fourth be as context cover provide changes me sequential let results. well and year of the the details additional highlighting our on the to

Avast's for approximately last we quarter, third product million to driven fourth the down our Family For as in acquisition. an quarter with XX.X was decreases increase XX.X same the year, compared by year, compared revenues posted Safety CommSuite revenue million quarter to of revenue XX% associated a the of When of this line. XX% the result primarily

in The Safety year, For increase increase the to by million XX.X the the revenues year, from as compared year partially of related was Family revenue. million growth the last was fiscal of business an a XX.X acquired revenue CommSuite Avast, in XX%. we last compared to to offset decline result

XX% XX.X acquisition of quarter quarter decreased Family Safe of revenue Locator legacy of platform additional related compared X% customers legacy being Sprint million through compared of Safety year in this to revenue to from the Sprint related Found The Avast. Safety the subscribers. quarter was continued reduction for fourth Safety to decrease a last October, Avast the fourth this year. the in to result Family Safety acquired third reasons the & sequentially Family Family discontinued declining our Family of and product primary revenue increased sequential During to XXXX, as revenues the the

partners. our XXXX, in all of bases to in in will coming growth remain carrier customers million XX X in from We aligned XX fiscal be of the carrier quarters, XXXX several grow the Safety U.S. timing that expect year undertaken Tier XXXX. the million XX% subscriber Family but to by three the revenue the increased marketing initiatives excited with For about opportunities we

fee in in subscribers, upcoming We anticipated offering in variable encouraged the revenue conversion of this contract on marketing We should believe recent and SafePath of the drive quarters. on a to the T-Mobile are add under new model. with pricing conjunction FamilyMode pricing the this efforts increases the coming that platform change to by the the launch structure,

During the of quarter revenues Revenue year. the were legacy million subscribers XXXX, move having year services. the the decline CommSuite declined X.X XX% X.X X.X produced compared sequentially the compared fourth in of million to last revenue which fourth quarter of to from in million, quarter the CommSuite decreased this third to due by platform network to to The is leaving voice those in quarter. the T-Mobile continued for during the visual Sprint Sprint legacy attrition of voicemail the the subscribers from subscribers driven option

Sprint subscribers CommSuite network, will more to the As more and revenues transition decline. off continue

CommSuite XXXX, XX.X XX% decreased million revenues to million from year XX.X XXXX XXXX. For in fiscal in

to network We Sprint merger to continue T-Mobile-Sprint have from subscribes an now to services. for option navigate as move voice the T-Mobile

transition natural subscribers continue. we network, subscribers these in from a expect As Sprint-CommSuite the to Sprint decrease

decline visibility in SIM T-Mobile switches a we the to stated the when in to over customer a do have difficult we As predict have not revenues very the us on past, network. as new is to for

Boost, of our comprised a the in Dish formerly half and now is over As reminder, fourth by part slightly CommSuite quarter. of Sprint, revenue owned

quarter platform the last year. executed with XXX,XXX increase fourth that end, we to approximately mentioned, Dish our with the with contract ViewSpot compared had to expanding compared relationship Bill of XXX,XXX for on year Dish down we of CommSuite and the decline year quarter goal to As to Boost-CommSuite are fourth subsequent the was approximately revenue subscribers. the XX% a of this XXXX, third the quarter with

For ViewSpot million X.X million in fiscal year X.X XXXX. was XXXX, versus revenue

the and of revenue to reminder, to ViewSpot in bursts fixed portion are of of separate revenue fees volume two is continued is expected is of CommSuite is variable is and decline the into portion activity, the revenue to The the total, quarter off generally by the recurring fixed promotional less related XXXX Family expect and revenue fourth license Safety from the to compared the we the & XX% the variable. driven XXXX. device a which approximately Safe component XX% and be resulting be first campaigns, This of platforms. In lower Found the categories, revenue. The to for to consolidated we short of predictable. As of Sprint's quarter related attrition and subscribers revenue primarily

gross profit last For XX% to the the during was last XX.X in fourth fourth year. XX% fourth of to million period compared quarter, was Gross year. margin the same quarter XX compared quarter for the million

transition margin customers until third Our to goal carrier will for In longer our gross able targeted realize we of Family and Safety cost the At to we XX% expect to this gross Safety gross the XX%. the used rate SafePath is of the contracts margins will optimize the help run point, we term our carriers this towards our other To opportunities platform. drive the and gross Ring our a in Family all term, that margin. migration off execute service range party platform Avast combined to synergies platform. expect achieve short business on to onto be margin are of single applications by we that to be be able onto near synergy upon legacy to goal, current

of the of not these expect the synergies migrations, will timeline until that be the we first fully realized likely XXXX. Given quarter

million operating fourth the year, Gross X.X XXXX during XX% quarter expenses increase operating year. or our to XX% an acquisition million GAAP or December for million XX.X last compared margin operating to compared million, a business. XXXX of XX% value of XX% last primarily The to an million expenses XX.X year. Avast's million the year-over-year, same or the due last compared for for of For of compensation from Avast, at increase of fiscal our fourth XXXX. related ended to XX.X were year million expenses compared gross is Safety million increase Family resulting last inclusive increase the XX.X charge XX were increased in the was period for XXX operating compared of for million to to X.X related XX% as contingent XX.X XX, million, GAAP the last last increase primarily fair and quarter of an of headcount of expenses an Mobile XX.X expense fiscal XXXX, at compared profit employees compensation XX.X to compared to versus primarily to This the the to to X.X in end the driven XXXX The change by increase was end X.X expenses an the compensation GAAP for compared to XX.X increase year. related million is to year. the XX% employee-related due million in of in acquisition and employee-related year stock-based was were million. Non-GAAP year. of consideration increase year acquisition XXX at expenses

amortization We of our to approximately property $X CFO Safety from were attributable costs the acquisition to And of primarily in million in fiscal our Mobile had XXX,XXX million compared acquisition increase in the certain and expenses, of acquisition the by XX.X million. XX.X versus principally non-development driven X.X intellectual last Avast. and to Non-GAAP business. XXXX, of costs also an had compensation XX.X also the related costs an by had million in operating employee-related Family primarily for approximately Avast's of Also increase increase of year, XXX,XXX. year we acquisition driven expenses increase transition an of million

Non-GAAP a expenses for non-GAAP consistent the XXXX quarter or invest XXXX to in be we loss of per our per with quarter net or per migrate carrier relatively to year. last the SafePath to of non-GAAP customers share to fourth development non-GAAP last operating diluted year. to platform. continue compared year first was resources loss quarter net a fourth to $X.XX $X.XX million $X.XX earnings Safety loss share expect compared the million net million We Family as for loss earnings X.X was X.X share our diluted X.X fiscal income income XX.X the million of share net non-GAAP The $X.XX or or per

most a we provided reconciliation issued Within non-GAAP GAAP comparable release, recently the metric. our press have the of metrics,

and CFO cost the the For cost fourth of million, of the transition compensation X.X XX,XXX. quarter, following of of adjustments. expense includes Stock reconciliation amortization XXX,XXX XXX,XXX, intangible acquisition-related

of X.X cost following change consideration Stock of For the adjustments. our taxes. year, the certain recognizing reconciliation cost years, cost over the the non-development few past amortization the XX.X intangible includes income of property the including intellectual expense GAAP XX.X XXX,XXX. to and quarter, acquisition X.X of in compensation is million and due million million, CFO state tax expense million, Due contingent foreign of losses our million to fair primarily net transition third X cumulative value

sheet tax of each a million as XXXX. tax of balance cash December we perspective, resulting For expense cash and From actual non-GAAP rate non-GAAP The reflects XX.X utilized and purposes, XX, we during equivalents X% the taxes income the for period. XXXX. expense XXXX reported

of fourth Family the during the the call, the As Avast the last changing note recognized Avast's estimates. paid an remaining earnings that a contingent goodwill quarter. price allocation of resulting to million, approximately amortization increase in operating preliminary of the be XX.X in financial resulted also quarterly. my on the as quarter The expense which to for during to resulted we balance the million are allocation the we in concludes purchase purchase an completed in intangible the quarter, the adjustment for XX.X the recognized earn-out charge assets business in in compared company and includes the anticipating In finalization have amount which we in price the portions quarter, million This expense expense XXX,XXX. net of review. I Mobile X.X amortization also XXXX, fourth to would Safety in expenses amortization the consideration decrease third noted

Bill. to back Now

Bill Smith

Jim. Thanks,

for upcoming blueprint provide be launch deployments AT&T. the I the will for T-Mobile mentioned, Verizon experience achievement customer. key we revenue other major ahead for at at previously two X T-Mobile hard also SafePath high I at successful stage have at company growth carrier. carriers, well [ph] a for the accelerate this will year. during The which very driving set and X migration the the both platform project It help us SafePath gained efforts excited that at the of plan As our this exciting is a believe a we of for will won in will us truly this increased am growth SafePath priority the I as as we have about T-Mobile opportunities place

We FamilyMode on work all while apps with are of looking unify strategy we single base, a onto platform. T-Mobile Safety to growing the Family the forward to subscriber its

T-Mobile will Micro We I have execute that revenue team strategic which a on result initiatives, T-Mobile. Smith place growth these driving and collaboratively with in is working fantastic confident both for to am in

to our we the We've only on relationship with November, last efforts spoke Turning not the great but since attention migration front. progress in some made Verizon. also building

continue the of goal new ways to a We the with within branch carrier. collaborate Verizon out with ecosystem to finding

in across In Verizon corporate the across its This to not to for utilizing Family fact, worked collaboration with provided this base to out carrier the also campaign Family retail Micro quite Verizon subscriber our organization. footprint builds closely Family first growing the I proven for to this Family, campaign. extensive be to leveraging promote marketing just platform of develop assets Verizon. Smart of is product approach also carrier efforts, recently, strategic Smart just only awareness the have content it also is ViewSpot first initiative multi-product critical marketing stores. as our is services. the retail country. in Safety carrier's the overall throughout this stores believe marketing our is Increasingly, its promotional Smith at reach Verizon Smart internal We owned train this rolled strategy profitability growth the Verizon believe associates in expands I effective new helps the and and step which retail deliver already of retail

As part user-based through to Verizon, subsets of our targeting Verizon advertising segmentation. of ad optimize marketing digital specific enables This with creative Smart the multi-channel efforts serve and campaigns different messaging to us increased to and continue Family base. subscriber we

premium service using channels illustrates location to that Family family and as example, the at disposal and will we platform. the safety SafePath of while includes to all the For Smart monitoring. targeting be we're promote services features, successfully Verizon-related to several service revenue Verizon. premium Smart marketing Overall, basic and our priorities such revenues to additional This tier during grow Smart are tactics subscribers driver our strategy Family digital carrier at XXXX the migrating grow our as Family main

will We as result are confident current our very a both well on I laser in and plan ROI as am for this cornerstone successful focused increased initiatives, that account. migration

as earlier, vision, of Family I AT&T. major Tier functionality follow the new am successes prior based advertising extremely of number acquisition our account the are focus is on notification is we about the Retaining as point migration customer. the just support digital truly last X carrier small would term, has one Because however, with a Family word to point, grow the the awareness was campaign exponential the in-app As short up developing that The Family's AT&T. business. Family I now Safety a programs Avast's upside to strategy have representatives, mentioned large pleased Family. company's well base. of will Secure a this to SafePath a Verizon a Safety receptive blueprint of support our us and potential carrier targeted of progress and up campaigns, SafePath unlock. SafePath the carrier winding the subscriptions Smith of subscriber Safety service subscribers made with coupled Family to both down grow we Secure help of of within consist as committed AT&T to selling every from the efforts customer base, growth Micro. the this tremendous multi-channel relatively eager in the for year, The of feature stiff T-Mobile's well very digital Secure the as AT&T as Safety is significant as the ideas our team is with immense at retail enhanced we've to and The been X and intention for the incentive renewed a out had employee received AT&T to roll Secure in at iceberg to potential tip provides Family service this of launch for is the with Family for on AT&T. migration carrier spread set the To this because of this

our Okay, retail ViewSpot. let's smart move on to platform

continued to within platform key dynamic the of ViewSpot the utility the total We have of a with market goal addressable improve broadening and space. retail

the As our in decrease enhancing our ViewSpot. devices. and for feature during contracts our to on this focused features digital and comprise our assets functionality operating able promotions also Since include ViewSpot on extend we This management customers, in-store costs Studio provides last I should call, new play call, product contracts that key our with the demo were last ViewSpot's Cricket. discussed our these creating, that decreased two allowing expenses for with managing earnings over ViewSpot content to are associated relating content enhanced of customers. which capability feature, Both Verizon time, deploying

partnerships for which successful to last technology trials have completed strategic retail spoke, bodes footprint are ViewSpot Since established with we in continuing well Europe, explore future line We ViewSpot's and to also growth. more extend product functionality. vendors been two

voicemail the to value CommSuite Smith Even winding is carrier's our continues carrier visual were successful America's bit Tier premium Now CommSuite, the legacy leveraging with launch and product and build we to Boost prepaid visual life though Micro. deployment to voice-detect forward X of and services We let's down, at well bring profitable Sprint brand, associated with success to voicemail revenue a partnership talk Dish later extend messaging at voice a experience Wireless positioned newest a with to the platform powered that the to and CommSuite our Mobile, this about platform. look year.

partners Looking believe will get success our in particularly and remember migrated to transitional XXXX XX-year the Smith foundation believe take the that a their to It position history our the these SafePath with in to soon year, deployments to customers while get our the of to X respective build Safety the priority I Family our done to we of and to be our ahead, as benefits migrations platform. truly first that excites I eliminate we I concurrent extra have is advantage platforms which on as costs Tier running SafePath strongest possible carrier that Micro, future offer. carrier other can half, has work to me.

streams and I extends for about us for Getting SafePath of these comprise Family connected Internet Based confident SafePath and times, finish to digital solutions of vision on that simultaneously. and with of networks new lifestyles, SafePath devices. Home for for address both path revenue carrier Safety over IoT this including soon. in-home a conditions, both to running demand devices the deployments Smart that connected market provide spoken moving in trend we of the this vision to Growing on IoT plans fresh based clear market apps a carrier paired many glass Home and far adoption migration SafePath beyond consumer all AT&T the with place us on I pane IoT the home up provided I've and Micro. Verizon customers to at lifestyle the and for both on creating single our consumer challenges activate our As our XG mobile unlocks look am line family is connectivity devices multiple that Smith towards year. have digital technologies carriers

the in flow. and we will cash build revenues range the gross return be free margins significant generating to result to in strive This momentum the grow XX% will of as to XX%. business continue We to

will to in achieve short team excited We have Operator? these I the about to said, place that goals, profile. open call and Smith right very and questions. With the I am long-term Micro's

Operator

Thank you.

And question-and-answer We Josh [Operator B. come will the will Nichols Instructions]. now the ahead. question with Please from session. go begin first Riley.

Josh Nichols

anticipated or Yes. else questions. hear done apps for like the can elaborate And a on Google with Apple. long subs? on you for place and It that to it T-Mobile? business marketing an timing. my for Thanks of material has little type start major plans taking already needs and update items before the specific seems will to have this then anything bit been any take Is company Glad approved how customer there be to generating the launch in that

Bill Smith

Yes, Josh. time, the think well Look, I at set for ready and everything's up the present launch.

other So I issues. don't anticipate any

think how As marketing go rather that I T-Mobile of programs really more market. far they to want to use, leave will as to the talk I'd that them to about, because that's

of kind question. to duck have to going I'm that So

Josh Nichols

you And be talked little AT&T, back so enough. it coming leaving the right, platform bit, on. a that customer was the because then to just about now and a Fair thought

pretty model your on to kind AT&T so bases of discussions, are I based know going built is that carrier what's paid this opportunity the off earn-outs, to doing. you -- grow is into for And the for have You high must today? low that relatively what be that What you assuming what's now? the business expectations

Bill Smith

about bring number very believe relationship similar Family we And Yes. Safety that Verizon could subs like are very AT&T there. what time, a an excited excellent that we over can that them. believe have T-Mobile they have of and and We

think tend talked attract. be get less. such, see as subs is the as most number They to we'll They much bases of subs. past, of user said the that -- at far the As subs family carriers three churn I all more treasured done, we've are that catch as and in some loyal. when similar all And a and can carrier

Josh Nichols

just Thanks. a for in last can be if on little color for Understand that Safety And driven Is looking bit the thinking be drilling legacy for by provide the guidance you're business? first business? customers the me, quarter. question assume expectation Sprint Family or going you the can Family for X% from just then migrate but I CommSuite's sequentially. to Safety of some the what's that XX% that's churn as down over to down,

Bill Smith

Family the those to related be expect attrition the down. Safety the off. of that. expecting are We we platform One, legacy Sprint subscribers Safe Found transition business as do reasons A to couple continued & for

thing go last that would one-time we mention QX and there and other to this but into the a we would the QX. of pickup that I on The T-Mobile be related was execution was amendment in touched as a non-recurring quarter,

Josh Nichols

Thanks. Got it.

Operator

you. the And from next ROTH Please come Searle go Thank with Scott question will ahead. Capital.

Scott Searle

looking Hi. questions. Good just the for quick a taking clarification guidance first quarter. Thanks for the into my Guys, afternoon.

of million, range that in CommSuite? out T-Mobile assuming of And is XX.X for contribution there from of all terms of time? T-Mobile point is the is that that In at numbers no SafePath that almost basically

Bill Smith

modest There's that. into into a baked some variability it's revenue modest, Obviously, have very modest amount to of we very amount there's that, again T-Mobile-CommSuite but QX baked estimate. the

Scott Searle

platform? around to in the the new still Family, the to are commentary X.X or additions adding legacy Location around Okay, And helpful. follow Labs marketing up, campaign SafePath Smart terms that those of in just Verizon built is

Charles Messman

legacy. Charlie. It's is Scott. That actually for Hi, the

transition. the Our to through intent is grow

answer we'll it question. So the put out to

Scott Searle

relationship XXXX? would expect this the Dish chunk revenue basis a sequential stronger course on the of also starting Boost. year? you CommSuite Will I big growing think a with of throughout like it transition with And to to be on But Dish you're develop existing sounds their, front, over that Okay. the how a

Charles Messman

the modest leave Dish side We of a very at it amount of built Boost I the have CommSuite. into that. would growth

Scott Searle

Okay.

Bill Smith

They've on got you -- of the have, MVNO network. they've they that's of look MVNO announced Boost Yes, also AT&T. business their T-Mobile. own that they they with at running And, I will have on course, relationship would the business have when say XG their rollout Dish,

of that, All this major whole moving many of on. is help a us for what a it's you they're And parts to of lot to because working give so kind there's undertaking. hard on

Scott Searle

their lot talk to And T-Mobile lastly, Verizon fixed I if Okay. out initiatives. a been could, it and as both relates there's XG wireless access of of

you opportunities for that into of be router to as for guys. of or guys past home extension terms I opportunity in in think the you integrated had You referenced some the an other

front? latest the up you on well? some as kind could what And wondering of IoT I'm comments Thanks. are that around maybe if thoughts So that wrap

Bill Smith

all Yes, launched very on they're SafePath, Home of say be lot I SafePath. step opportunity on getting SafePath with. for the I these putting yes, this. the think XG on carriers I there. we're is kick they're lot of there's to things that And a firmware them a Once in think goes And that a in that would around an SafePath. interest IoT I the talking say first launched focused of routers. see standpoint, on again, once the of would you'll interest From number

everybody legacy to main everybody that's This about. that's off the very offering. over, year. get of all it's what Ring And is driver a to So execution the get Avast service focused

Scott Searle

Great. Thanks.

Operator

ahead. And the from Street. question go comes next Martinuzzi Please Eric with Lake

Eric Martinuzzi

technology we Yes. bulletproof as far mid on got launch regarding to I as I fast as T-Mobile. your for QX. has guys contract tested. could, the comment like Obviously, quite you all versus in is hands was left in but And the didn't sounds migration It there do getting as that their is or going? scribbling signed I get program anything it the been

Bill Smith

thing button. only them they do is for hit to the The to fully support us as left launch

So yes, excited. We're ready. we're

James Kempton

Eric, I would add.

have new that to transition of to to, on make. call, done we pricing variable the needed As that the everything to the delivery we needed terms we in objectives we model noted

perspective. from the migration everything So with we've delivered associated we to, needed that

Eric Martinuzzi

I Okay. we million $X here. gross for of major on roughly operating of all? XX% a Is at getting kind first margin, carrier a about here, looking based And my with correct, these XX XX.X any just issue QX here million when little your have And a OpEx, then working do math we're then the guidance P&L on million, rushed through support capital margin tight three to rollouts? negative bit the of

James Kempton

correct. issues directionally these we from are is delivering math Your anticipating And not rollouts. any on

Eric Martinuzzi

burn QX, expect that the to the me reach XXXX, say it Is ask let you safe what quarter? be to Where here biggest question? we do would maximum in Okay. --

James Kempton

right be although would in projecting We're not uplift that expecting QX. substantial a now QX, we're

Eric Martinuzzi

XXXX. two are those Bill, of one you or that's an learned lessons example And lessons talked critical lastly, Okay, critical helpful. examples -- What about learned? in

Bill Smith

is got this road. the Because help. executive levels bumps lesson to the difficult lot forecast of at had Tier guess to able sometimes think where I with of just But on a I've to years and think reinforced. schedules just kind relationships a great very some it having then it's I you're smooth carriers. I out It's learn. set the now of X And

focused. stay we have just to So

have that. team heads to our And understands to I keep that's we are We really think And to view it. entire our down. have execute. way totally tied And They it. the to

Eric Martinuzzi

Okay. taking questions. for my Thanks

Bill Smith

Thanks, Eric.

Operator

come will question McIlree next the go Please Dawson And Jim from ahead. James. with

Jim McIlree

Thank you. afternoon. Good

SafePath their would by carriers, to of have end this of them you the on of expect For X domestic subscribers year? all the all

Bill Smith

That Jim. can't our in that's would guarantee hope. fond hands I that though, because you be their

over But have get of all subscribers and their they be the would I to three over So as moved definitely final them have moved vote. looking all well.

Jim McIlree

incentivize quicker, do And go in their is there at have accept to something would in going to you just to them discretion what or or you're decision -- it's do to and can their order is? their completely

Bill Smith

have able own with I that year. get dealing own before view helpful view don't they as to the hopefully their partner, be their as entities victim and we're corporate here. very a SafePath have make over to a us end lot work but the the rules large to to like we understand of we play to know them bases with decisions. how that a their game all of I and of and Look, We us will

Jim McIlree

have that the any technological that all issues issue? is would capacity human from over on day or exact And of you same prevent that not you moving or is an them there

Bill Smith

an not That's issue.

Jim McIlree

that then domestic or year initiatives. start then this that takes be you And focusing customer you can to is Is going Okay. international market? to internationally. something migration focused this mentioned this on year mostly as year, some happen place, the And then that likely announcements is

Bill Smith

when that a the the some XXXX. clearly from Family than coming about good revenue be talked that about We revenue is I as able was customers we new coming from ViewSpot we could during talking about added Safety. you recognize, there's will But And to smaller that see ViewSpot. talk likelihood

will it I So the Wind Vodafone Tre effect. impact move transaction quarter, to us say, that as be doesn't and well to Avast but might we to them of be same Check, through working the as year. came end work will or all have both be well. diligently both will we to however, the early customers the working that to by movement done with be get them That as SafePath first the SafePath moved will over that

Jim McIlree

thanks me. right, it All the very for That's good. answers. And Thank you. for

Bill Smith

Sure.

Operator

for and to ladies gentlemen, the Messman question-and-answer turn And I our you. concludes like would over closing conference remarks. session. Thank Charles to back this any

Charles Messman

I thank in look today. want for joining us everybody to We to the you future. forward updating

any please to directly. have free you questions, to If out us day. Have feel a Thanks. great reach

Operator

Thank The you. conference for presentation. Thank now you has attending today's concluded.

now may You disconnect.

Smith Micro Software (SMSI) 11 Mar 222021 Q4 Earnings call transcript