SMSI - Earnings call transcript Q2 2022 | Smith Micro Software, Inc.

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Operator

Good day and welcome to the Smith Micro Second Quarter 2020 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Charles Messman Vice President of Investor Relations and Corporate Development. ahead. go Please

Charles Messman

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

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

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

beliefs refer XX-K financial press please prepared risk and managers update the our to Bill? That assumes to refer said, on turn factors Bill. point which are forward-looking financial to specific the call disseminated a these speak information, today we'll the I'll they remarks Micro for to our earlier our and XX-Q. measures. non-GAAP to of to as only Please reconciliation I out over in measures. non-GAAP want in forthcoming refer to any release Form more subsequent recent obligation made. For date no included Smith filing assumptions Form in most out statements, filings

Bill Smith

Over Good ago XXXX Charlie. February you the to delivery on XXXX thank solutions industry the us of for two mission carriers and leadership years afternoon joining today embarked our for around Digital wireless Lifestyle call. for in world. Family a Micro absolute takeover and Thanks, conference quarter second of Smith

of step A acquisition through year with which carrier first a this the April journey The Circle little in T-Mobile, Media’s over UK. the of gained of and was we Sky later, business, US in contracts property US. acquired securing XXXX, we Verizon, concluded AT&T we the as contracts Italy, business with additional in T-Mobile business Hutchison well additional acquisition. second Avast Safety and with time This as a Tre, Family Wind

additional the the us to be expanded provided also contracts leapfrog afforded the the available. While significantly to which significant our business product opportunity space, intellectual best properties offering our absolute acquisitions

out the the investor exciting of As we to the approaching Circle the of the launch of of our code to features technology release year, set that, the this are when news SafePath the of discussed of we Digital The which best we X. significantly have into on completed our completion engineering March we acquired best mission. our calls, is in integration we goal. to Lifestyle of culminated base quickly first In meet our platform had teams that grow SafePath conference prior consolidate Family

for This allow and the operating significantly the the The will completion are massive base into We now complete forward. X undertaking beginning as Avast same achievement of SafePath of about a also the to our migrate our code it has expenses in to been profound teams the engineering customers integration well. going all of the SafePath best us as third successful to reduce allows platform of another will result quarter. business, in to effect on migration current the our our us

optimization cost will expect the We the that quarter by XXXX. be effect the start second of realized full of the of

we've earnings and of None are consistently range. are of a mid XX% margins all since As is also new should stated time fall since realized. acquisition What from in our The to resulting XX% in synergies mission from point Avast, is this a anticipate the range. fully the gross migrated. acquisition can is the Avast. margin new we acquisition After that previous stated virtually as into our this customers is we be start calls, the the profit at we when during rebound have XX% complete to the

result release and support of which reduction on build that year to customers these time SafePath million with by the of iOS we versus Avast end this have no customers releases means platform. be the we life operating latest XXXX. And in QX the of There platform to be will last no officially the XXXX, on in expect the operating Circle Overall, quarterly releases. the of This a end over would will We XXXX, QX midyear will new remaining all Android by in expense we Apple are the that platform. QX updates synergies the required of $X legacy Avast Ring will platform anticipating of platform. legacy

came revenues the families. quarterly a and compared Sprint to CommSuite revenue of engineering Revenue guidance This The SafePath. continued the both XXXX. of recap from contract represents migrations CommSuite decline in softness legacy complete than to & to to due QX quick of relatively higher flat were the end XXXX. essentially QX Found $XX.X Now, product million QX Safe our was deployed being loss additional results. quarter Spread for the slightly revenues non-GAAP in when

As very case. results phase company's that and strong bring a company, next been should excited we as focused and recovery, you a the we've are for growth operating begin period the quite to exciting can tell, business

to turn Jim? our Now, to let me call quarter detail second the Jim over results.

James Kempton

good and everyone. Bill Thanks, afternoon

covering the today. which be we I'll in business impacts mobile a the of comparisons Safety Avast reminder, period over As Family that April period acquired XXXX,

of for cover the financial XXXX. quarter I'll Now the second details

flat. compared of a XX, compared June with in revenues last a For second decrease the year, quarter million acquisition the posted The XXXX, from a quarter same million XXXX. revenues $XX.X million through million offset $XX.X first result in decline the XXXX in the CommSuite to Family in essentially revenue in for CommSuite $XX.X last the during XX% quarter of of revenues. approximately from to of $XX.X Safety When decrease of were year. Year-to-date Avast decline second coupled resulting quarter, $X.X revenues April versus million increase as revenues was due we decrease the the to the by Family Safety is revenue

by subscribers Sprint revenues about Found & second quarter of related Safe of Family the X% platform year, compared Family Safety continued T-Mobile's the the attrition of Sprint. of X% quarter of second decreased $X of primarily acquisition the to to or During decreased of quarter sequentially XXXX Safety XXXX. million a reduction result compared revenue last legacy driven legacy as first the to by revenue the

During XXXX was to approximately the CommSuite the compared to decreased $X.X produced second million, compared million essentially second quarter the quarter. revenue Revenue quarter of in in $X.X flat of million revenue $X.X from CommSuite was sequentially prior year. which last

on subscribers to network the As for we've services. the prior Sprint calls, by voice from T-Mobile to having decline option discussed those platform legacy CommSuite driven subscribers the Sprint in is move on the

have more to continued transition CommSuite more to decline. subscribers As and off network, revenues Sprint

DISH. are Sprint of of from by the Given for revenue which stream subscriber is expecting legacy we now After the the would quarter. the anticipate in Sprint very modest amounts part revenue we Boost this base, current be owned essentially subscribers would exhausted. revenue trends third formerly

XX% DISH that on the $XXX,XXX the revenue ViewSpot generally ViewSpot device of the less revenue With quarter revenue. DISH the related of both and the fixed portion the contract comprised which volume recurring predictable. and are of fixed we portion by associated portion goal component is compared CommSuite revenue during up to the is relationship the variable XXXX. promotional with of is million and and platform quarter revenue second the components. XXXX, we The first revenue was of increased $X.X And CommSuite is to of of and variable over increase to The the related our license year fees first to campaigns. last execute quarter, quarter this with the approximately of subscribers second approximately compared with expanding the for the time. with timing stream to is approximately

the quarters. platform opportunity we US have X as of With quarter bases wireless SafePath one migration in X expected the year the first subscriber carrier believe to coming carrier Tier another Tier our X to customers we US the carriers in Tier X significant in launch that later this a of at the and the grow US this

given quarter expecting not we are the carriers, increase seeing in date. subscribers of certain to are while the at marketing in third However, efforts a significant activity pockets we

marketing customers later will initiatives, carrier to timing year. continue aligned anticipate with growth our the several which We will we be will be expect that initiated of by this

As for quarter be such, we XX% by the the XXXX. expect consolidated third quarter second revenue X% of to to compared lower to

revenue. during million For the gross due from XX.X% quarter the of the last run $X.X year. to margin to for second $XX.X second in year. by the anticipated second same was In the last profit to $X.X quarter to of quarter, gross decline flat down million first gross was quarter be compared compared the we second X% million margin in with to profit gross in expect produced XXXX. the The current XX.X% the profit third period quarter of in rate Gross was X% quarter the the

the this to gross towards applications longer-term all carrier the single onto our platform, gross our of targeted party be help onto XX% margin. upon achieve synergies To we the fully can of platform. Safety safety platform back optimize migration us goal business realize margin Avast Family Once carriers expect drive a margins goal to Ring to service contracts the able range for the customers XX%. we will we used be by off SafePath Our that our third in transition combined gross and is will our family to

that of Given the the realized his Bill be of half we migrations be of in second expect XXXX. will one commentary, until will that likely synergies not discussing timeline revised fully the these

were million, X% year-to-date the million X% XXXX. $XXX,XXX year. from expense quarter the of quarter compared the to $XX.X $XX.X of in the was to of offset quarter million for XX%. year. year. in and with $XX.X second the in ended migration was $XX.X approximately of or costs or in of acquisition increase and decrease operating as increased severance June quarter the was June Sequentially, ended XX, million, by in of a XXXX X% $XX.X quarter costs profit XXXX period expenses non-GAAP the million by compared by XXXX period in approximately second the XX.X% to June the operating XX, for increase Safety Family SafePath related cost, XX, XXXX, to the Avast compared XXXX, expenses The costs the the operating compared or $XX.X $X.X quarter the million million in second an GAAP million the for contractor year-to-date to acquisition partially last contractor driven to due the decrease associated quarter migrations. expenses last the business increase was $X.X profit increase of the For was mobile GAAP an first Gross second the Non-GAAP second increase decline $XX.X of in amortization a period. SafePath during for year-to-date XXXX of second period were completed expenses corresponding gross operating last million

associated frame the the a reference, million second migrations costs was approximately during the with $X.X As contractor of quarter.

the this Bill quarter anticipate completing mentioned, X% the expect second the expenses our non-GAAP had quarter X% quarter. SafePath decrease operating to this eliminating all as We to of because, of resources quarter development by contractor development anticipate and we to substantially related by the from XXXX third migrations end

begun have and the in and We resources July. the ramping resources associated of migrations released down with June portion these a already

non-GAAP $X.XX second GAAP or to million, per period. compared net last year-to-date loss XX, income of XX, per We compared business our last to million per development $X.X approximately million of operating net $X.XX the GAAP $X.X the XXXX period loss $X.XX year-to-date diluted share year. share $X.X The net of quarter for addition in period year, net or June earnings of or an loss of year. in million ended for per XXXX result or XXXX. today's loss net year-to-date the of or or share $X.XX net share second for was of loss through Within decline compared share the GAAP expenses share year. the compared of million, XX% the loss The loss a loss also primarily prior per per $XX.X the April was the second per fourth year-to-date a a was in of these The per in million quarter last the net $XX.X quarter quarter most the $X.XX loss GAAP for GAAP or Avast reconciliation loss of for anticipate $X.X million a non-GAAP much last loss increase loss the significant metric. $X.XX operating $XXX,XXX or Non-GAAP release have June we as in completion period $X.XX of loss $X.XX a $X.X non-GAAP to non-GAAP activities. loss compared driven to by to expenses was second the a The a $XXX,XXX million share a share comparative quarter more approximately press was of metrics, provided for non-GAAP the $X.X

For adjustments for expense. $X.X million, reconciliation the stock of approximately the additional million of $X.X second compensation intangible including $XXX,XXX and based approximately quarter severance-related amortization of $XXX,XXX, expense stock costs includes asset compensation of

of income net adjustments For costs out certain intangible stock losses severance-related tax approximately past million, the cumulative amortization to the expense asset $X.X to Due foreign expense GAAP the $XXX,XXX. over of and for due reconciliation the primarily million year-to-date few includes of our and is years, state taxes. compensation period, $X.X

the which paid stock issued and longtime expected anticipating supplement tax X% of of to coverage X, we capacity XXXX. $X.XX closing migrations the shelf transaction Micro. provide in as the complete this to of and facility. XXXX. entering cash, agreement via transaction liquidity five or is a [indiscernible] the will we average shareholder expense price through paid subject These in funding the resulting $X.XX with five with an In capital period. million amortization the terminated election, the million Fargo perspective, notes. cash [indiscernible] either each is XX. notes is cash the paid the $X have with a notes, borrowings repayment from terms entered of equivalents a discount beginning conversion company the to fourth the a with ramp on the to XXX% which a the equity be cash a the in $XX represents credit, If We've sheet August as at transaction XXXX revolving liquidity, June key year premium no and conjunction The the the installments. per paid SafePath quarter price a XXXX can also key period. as company From in April XX% note to term Amortization management, taxes into note we're XX, per X% price our and rate The the company's utilized strike market the Earlier These revenues share, at our additional if order of maximum XX, the for note million equity $X and income at actual non-GAAP XXXX closing feature we equity, had of a the we of bear December during quarterly, XXXX. purposes, our reflects a balance credit expense reported Warrants non-GAAP For today $X.X and under million. year amortization during maturity enbridged The that to with line transactions amortization a off announced the primarily a the of in we include participant. interest a into of in coupled convertible in the of last that complete share. convertible also offering of Smith to payments the with were equity again conjunction tax represent XX% warrants at Wells convertible

the conditions. customary to the close closing Regarding transaction we're expecting transaction, subject to tomorrow, equity

number price the capital with stock the warrants general For sell transaction raise $X of of per to per aggregate together expect use Similar capital billion strike agreement, and we will to proceeds working for offering of purposes. the notes a from an of share. with at equivalent the the corporate equity share, in $X.XX of $X.XX common we

filed refer today For the concludes additional information, This review. related X-K please earlier to these to transactions. my financial

Bill. back to Now

Bill Smith

Thanks, Jim.

SafePath I best of overall and on to So reduce how acquired by our started consolidate our the to technologies plans expenses. out resultant into about talking of operating progressing streamlining very we are the our platform our operations

customer requires growth. profitability as to drive both revenue cost containment, as well Our

revenues we and Industry million that Now plan let's all plan three the in carriers can multi-line in million $XX how our on between indicates focus family subscribers. Tier forward. had data X grow to going $XX US

have safe We Smith feeds strong campaigns marketing to develop that customers by as a our service To meet our It marketing to at customer's other are While in engine to subscribers path. efforts, that XXXX. Based this customer X works to ambitious users to this on in of subscriber at likely are very provide of we seems represents are with for out for we also of the for Since in source this Micro on goal SafePath solution, universe built customers interested enabling the discovery that coordinated range thousands each the SafePath team believe design goals. believe important multi-faceted each let's three see there carrier's focus attainable grow subscribers. user each our be base. that our first. family SafePath million a million customers. our most digital subscribers group Tier by promoting we achieve the multi-line to This best to develop carrier X we X population team just practices

of features roadmap new innovative deliver strong the platform Drive SafePath developed product SafePath Home, revenue an forward. Additionally, turnkey The growth. Much and going extending into a platform the offerings to deployed we deliver designed already solution. new impressive supplies a future deliver properly capabilities have today SafePath when that best to like class new of family and group services SafePath these platform to can will

updated a customer. status by take let's look Now at project

our we on product legacy of T-Mobile version launched As a which was at last call, successful from March our first discussed late SafePath onto the effort platform. migration in we the of this year, SafePath X Circle

closely phase, we partner to product growth which subscribers. enhance more the to we customer during continue fuel next and of will the We with counterparts for with prepare our this as features functionality

While this quickly phase help we the that anticipated, launch drive we product enhancements has not as as growth forward the moved should subscriber of envision. had these

We the the it reduce the platform, SafePath will Found and few churn we onto past bring stabilize also which additional offering. work associated product this completed Safe with help experiencing revenue the years around have streams & expect the up we some legacy to product X over been

focused early look code Verizon, feature push solution launch our an to our have call, we base, the we last to add is remain QX which been late we QX, the additional at to XXXX. on As efforts to or of requested the not SafePath Since to the customer for the SafePath on by to platform. Verizon migration migrate going required

client in SafePath my development I noted allow core completion, related to nearing the us to However, opening reduce remarks. our resources are as will in investment efforts which this

am the were able year, product I not this with that process. disappointed market launch in satisfied where the the we the we are end into by I'm to of While

of drive to retail step Verizon These subscriber approach subscribers, only potential of entire of new and a Verizon raise employee types campaigns side, CRM new rolled gain campaigns are out On push in already infrastructure visibility our quarter, build organization, the we to to organization, look initiatives we across the more we critical with particularly digital. to marketing but also to as we stores, Throughout forward new Smart the Family, growth. to long-term out different care not advantage multi-channel have continue a place, in plan awareness as several marketing take such base. to as Horizon the

throughout us growth. teams, processes through a we remain campaign presently different This be is different example, back-to-school and progress the within on the done, very channels promoted to are is execute but work to AT&T internal platform across an still good identified being simultaneously making know Verizon their groups There From which expect Verizon different bullish will Verizon. Smart For get we several the as initiatives. to ahead. organization, opportunities we the subscriber prioritize perspective, help help entire Family drive we

on a the progress the the we remains XXXX. before of as of efforts end First, successful toward work launch migration target

which our reduce nearing development core allow coming us expenses completion, SafePath should to operating Our are over efforts the significantly quarters.

within delivering training awareness continuing activities support organizations marketing assist efforts, also assist our We AT&T. They throughout budgeting are can in and different organization. promotional the

Okay.

about talk ViewSpot. briefly me Let

revenues for phase ViewSpot development new retail customers set studio rolling new with carrier current the we real-time features well platform, This upgraded a focus shift retail more growing wealth feature a new of we've set. that experience fluid out forward and analytical onto our a can for reporting to feature is the campaigns, going operations. Now as user delivers of our ViewSpot of complete new as

to the partially As Jim in in is decline CommSuite as remarks, anticipated. complete. our his continues Sprint legacy The revenue decline prepared business had from we mentioned solution

continue push out as new for and we network their future roll to DISH product in the front, see XXXX upside forward as they which the On beyond. potential we offerings,

terminated resume to a Fargo Before free shareholder [indiscernible] flow. capital of Jim my been as same This creation we we of capital is that which raise. the me opportunity million funding the funding has Wells when the that about earlier management with speak replaced raise, million raise At cash million into credit I established to and line time this of $X the XXXX of expect revolving briefly our meaningful company had of many $X the of connection the capital Bank, bridge resources in capital $XX we with and comments, comprised for Smith has equity conclude provides convertible let debt today. we Micro announced said, years.

the us for breakout our [indiscernible] capital are support an Smith massive believe for time raise as project consolidation we for exciting is complete and XXXX. front only as Lifestyle Europe of three and wireless In once not Digital now conclusion, thankful Family the the as US, X positions carriers elsewhere employees forward capital shareholders of a market enormous other in world. leader again is move we customers, the carriers with us, this growth There We in in servicing world. an the Micro, and in big in the but opportunity with Tier in around the the

Now that we flow move to the the questions, revenue operator? XXXX. the and said, should call profitability of efforts free open growth With phase cost that drive generation coupled the reduction strong today for in discussed with we cash let's that

Operator

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

Josh Nichols

for fourth the specifically elaborating to T-Mobile status your the going different could quarter, pretty nice the thanks in that optimistic to of in what's the bump you you all is what any taking confidence to that company gives a at marketing did year? for mention In my into back that campaigns, end that flip provide terms on this growth back visibility Yes, you going before question and were on the carriers. growth of going to comments, and see you you're

Bill Smith

AT&T. both combination a it's T-Mobile at efforts and of going Actually the on

believe will they would I carriers, there successful. single some closely be with and carrier So we say strong both working are are we event. it's plans in that driven a place not

also on as those we efforts said going marketing and to my expect Verizon, the result ongoing underway at prepared I in forward As bear remarks, well. already fruit

So that's [indiscernible]. how basically

Josh Nichols

And question. then last

kind there. hit So the I of topline and the opportunities think on

now done. OpEx you a something bit expense like, the the side, the is by $X the that run or On timing? to a million elaborate XX like quarter or mid of is you're the from operating can think into on come said I next expecting rate next reduce over most how reduction XQ million down months? that the of years, $X going so is much kind just work is OpEx company Could that you little mode, development cost

Bill Smith

have effect QX, prepared Yeah. by fully off Again be XXXX. excess in we of And believe in $X that my would rate OpEx for of is comments, end everything in it of run we the QX. the million

Josh Nichols

Got then release. it. press in you. And Thank as was it question, the last mentioned just

you I US on well, any lot, Europe talked the carriers on operators X you've in that three but also Tier did updates of think a about hit kind as front?

Bill Smith

activity soon be as the as market we of know, lot a talk something but we done, we as have today. nothing -- raise will will that can There's to you about we

Josh Nichols

thanks. Great,

Bill Smith

Thanks, Josh.

Operator

just Could now? from my Kind generally, a appetite next Martinuzzi family around in with of ahead. Kevin comes And they're half. is then Thanks piggybacking consumer Eric. the Lake of know whatever the thing. maybe in Participant Hey, else from - question you Markets. The for Please Josh's Tier guys for I on hearing for X us Q these plan Capital have go Eric what the marketing and help to this Unidentified Street these inflation maybe taking second Black and kind question. better health of you are off a big of question. right push of understand the timing overall, that as the that terms Friday carriers given kind battling

Bill Smith

In multifaceted our care approach. see online, say digital, going words, marketing cetera. to organizations, wanted a I'm in is But really a the in the I how give to question. you we great forward question not asking a answer approach it. activity sure It's stores, color. It for et is let can to would should I me other carrier, be some but SafePath try to that

a developed a a this well we Sprint work the this and it's history, saw during will techniques very forward. based approach. going we on few very overall seen And that business successful we've it multi-pronged is this it was So really growth years very, ago of in believe past, the

all as carriers I’ve and all the to that. industry, the have state earnings talk As much to overall far reported – of their the pretty

So don't add know I to I anything your can that question there.

Unidentified Participant

Okay.

guess I Thanks. good. Sounds I'll leave at it that.

Operator

comes next ahead. go Please with McIlree question The Dawson Jim James. from

Jim McIlree

customers signing QX the for Thank talked you've times up past subscriber you. on In carriers Good about than in rather focusing services. afternoon. new additions

dynamic wondering with as just more could to T-Mobile AT&T well talk the that if launch, aggressive about as in getting QX? you So relative

Bill Smith

time, question, on base now per primary about good carriers, numbers That where focused a the of talk That's for work believe at like plants especially new X in still there given -- that the we said, new that When carrier selling subs Jim. three that say of some retail done first the looking will I've we're is talking and the And point focus what can this, with here selling of services the of the I to a and handsets. acquisition X US. we lot a million million customer is be about SafePath. installed and for value-added the you at big now we're on

now a as very like services per other the month meaningful home at for as SafePath about it's add reaching recurring, add-on you well the price and if You're look top drive offering, Street goes that number, $XX on you in IoT.

So about talking numbers we're of yourself. run not a you the money, can amount small

times our with is $XX, for number sitting X Tier three any carriers. $XX of you're bucks, this million meaningful times If X a subs one

focused So on. this is something to stay

Jim McIlree

to discussion? and part you migrating one on you. do still or technology the talked -- migration, is separate technology renegotiated carriers, contracts all have to thank completely marketing And need revenue platform. with as as about secondly that separate the those lot Okay, But that a you well of be

Bill Smith

of customers. These with are ongoing our that on are conversations all

from far SafePath QX like beginning forward about upon best more offering offerings, of better the a on to revenue that, are process like X with gives at already service that I've driven for look are out now as the be and in in to all the practices sell love move much lot response additional now don't all opportunity products. a we've on as growth customers the a the things to new as there to that I talked that revenue seen some their customers The growth T-Mobile, of going anything they there or is an have we product and of the as well. ongoing. them is we have XXXX that service parts added marketing our the growth really these think earlier revenue periods in for As we be start to dependent This expanded will fact customers that. that and off

now of So a to matter with efforts the the it's all along getting marketing just positives. go

Jim McIlree

Jim, clarify about one. you CommSuite? revenues? in what said don’t they zero from go that you last can said my thought you to Boost And revenues have you but I still Okay. CommSuite QX,

James Kempton

speaking the was legacy about revenue I stream. specifically Sprint, T-Mobile No,

actually QX, just run that June. that's continue So revenue revenue Sprint to current side, periods that's We're at to be where of opportunity anticipate that DISH the will have in out ramp The we the specific especially down if based we we and anything expecting feel to we QX -- grow on in nominal its very future coming in T-Mobile, to an and rates, stream. going rate that streams. saw

Jim McIlree

Great. it. it. Thank Got I appreciate it you. That's me. for

Bill Smith

Jim. Thanks,

Operator

Scott next go comes Searle Please ahead. with from Roth Capital. question The

Scott Searle

question. quickly maybe up follow Hey, good on afternoon questions. just Jim's thanks and my for taking to Jim Hey,

to relates it comp As suite.

that equation, the So, of was quarter. the T-Mobile Sprint but and how coming big out second in

of close you gave Just want million the couple figure number was. each then past calibrate you to help clarify on the what were or it was carrier, with it I kind for us clarification And that we in of quarters getting account addressed. number it accounts is. I X thought to million carrier? were was Bill, baseline as that that adjustable was that subscribers or subscribers thought to per just X that that

Bill Smith

I'll you don’t why and first go Yeah, follow.

James Kempton

Sprint, we way, of in in under rate this $XXX,XXX. exit this answer for Scott, was Okay. it what legacy, saw I'm the going terms run T-Mobile to is June

gives of by the expect be nothing to of sense quarter. or that again, down to to the pretty And we next out seeing coming that So were good nothing the a we decline quarter. you that fourth

Scott Searle

Got you.

Bill Smith

Okay. Scott Then question – -- your restate

Scott Searle

I'm X the million sorry, to of it I X I or Bill, but accounts when subscribers. just was that's talking about per is to million that you're wanted I wasn't clarify, opportunity accounts, was sure. assuming carrier

Bill Smith

is is it a at way the a we subscription. look family Yeah,

on XXXX. we basis. quickly let talking a as this And when attainable is looking we So X think on me at add, we're I are by to million, a million family go X coverage stated, about go-forward

and we so through into get once. So gross going that, go growth at happen to ‘XX as spurt we're all doesn't ‘XX to go it a to

Scott Searle

the give the not expect but did pickup I'm sure into that December. this, go could, to to as as terms I of of you bit up if And little if we Perfect. of missed how from you. quarter, a a any Got fourth you September I in terms idea in magnitude to pick SafePath of revenues

Bill Smith

get as I will fourth quarter. more we try to closer to about the talk that

Scott Searle

if Jim, million to lastly then coming to. where I free per I'm to make $X could. then your expecting correctly in gross just sure you're to that is operating million you. cash $XX you're quarter terms the generate the breakeven Got an given $XX XXXX. positive about of to in respond expecting down, flow And I in want thinking range that's OpEx and basis margins this them from

this? second ramp half the as next into year, that thinking above right that be of a beyond So way is get we about and to the

James Kempton

Yes. [indiscernible]

Scott Searle

All perfect. Okay, right, thanks guys.

James Kempton

Thank you.

Operator

conference This to the Messman to would session. for over remarks. Charles any concludes question-and-answer like back I our closing turn

Charles Messman

Thank joining for We to on you you, speaking next and thanks our call. everybody forward to today. look operator

you questions, Smith any Hope great free a us Thanks day. Micro. has again. out to to at If have reach everyone feel please

Operator

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

disconnect. You may now

Smith Micro Software (SMSI) 11 Aug 222022 Q2 Earnings call transcript