SMSI - Earnings call transcript Q1 2024 | Smith Micro Software, Inc.

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Operator

[Audio Gap] ...and welcome to the Smith Micro First Quarter 2024 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 like to turn the conference over to Charles Messman, Vice President of Marketing. Please go ahead.

Charles Messman

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

and future and existing development migrations Smith, If please like the our product company's expectations, of deployments, website and Chairman uncertainties, and visit new information a call, to or customers, efforts, those today's section one, and and forward-looking Officer; at growth that and opportunities, involve Relations Kempton, plans of would new and reduction www.smithmicro.com.On you or will Investor we new by have which Chief do our operating Financial materially future the statements. not and/or could copy company today's product implied the Executive from expenses, cash have and note statements consists including trends profitability, actual those Board, expressed and the results revenue our President Officer.Please forward-looking some availability, of discussion our our Jim differ you during reserves.Forward-looking risks regarding hear cost statements, expanded Chief by of cause without Bill market limitations,

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

William Smith

that today quarter by me XXXX interest Charlie. for remarks the that the presentation afternoon, returning several us start to Micro in company Smith Software.Let in touch to Good We are saying which first today. today for realize thank your and call. on the we my conference target, will joining have growth Thanks, our you and appreciate underway near-term I focused on initiatives throughout

quite to we're we stage have in made back to We'll growth cost return are to that a half in working profitability basis.In non-GAAP are bring our our reductions progress set growth areas several lot the conjunction yet, to a of on structure not achieve profitability projected also cost touch While little return our for Along plan our on year. initiatives, of a later flow. with we growth, to cash positive there non-GAAP revenue that in to the we down the and with this presentation.

some delivery to further and pay activities SafePath user we is improve also that specifically, those particularly addressable T-Mobile, introduce half our powered our now our from This signing a months. leading take marketing underway this milestones and to we under a to our will in are takes repeatable the to that be We in growth.Most activities to us term.At voice component launch let will in with our X of productive wave is with customer wireless as availability strategy, be near teams AT&T can recent in also unique experience a SafePath and road discussions, today product of Global that launch region, in DISH few market. expected available platform expect and Global to year. value-added our the carrier reach. exciting the launch year its updates we our for forthcoming weeks which prepaid may second benefits, pleased SafePath launch further for seen key an AT&T X our win begin new is to is CommSuite a Tier will announcing premium strong that is a this for visual With yet towards goals several behind we typical Global. is that the contract in is, believe So platform. partners coming Europe, and is to safety which are by the the agreement. alignment, and DISH's very States, that of in mail allowing base, model services, which that some fast us, fact, deployment me SafePath the DISH launch this to yield is market.We significant include migration the are be interest family by revenue More long-term a signing more relationship approach difference a our we opportunities to have DISH foundation to press is matter United enormous expanded in product a from collaborative first only is as customer we throughout of advancements our significantly, we to customers, will expanding expected bonus Cricket other to our new We contract.As achieved at to in to product SafePath revenue and SafePath a tailored first energy around the both the fully success.Our DISH new market. our mutual referred we that the customer the laid sharing dividends made together believe be release discussing SafePath that as are European announce with believe completed launch drive earlier generated here carrier enjoying map. which on contract see solution release of the Tier aligned other particularly far have this key in will for migration of

believe growth these for stage on half is Program. revenue over are subscriber key we offerings our that in in in of sets of April We Safety back the focus the may the result growth discussions Affiliate Influencer cautiously optimistic XXXX.Another Family renewed result launch a that milestone expanding and

incentivize We very to that Safety these our with later a a at seamless awareness Program partners resellers shortly. both In and detail authorized opportunity help Retail will be carrier and SafePath-based easily retail the for I will as ambassador and program solutions.It corporate build call. Family both affiliate deployed is see addition, also our in staff education and to Store programs discuss more implemented. in launched us Ambassador the will tremendous programs

we've revenue half this of the believe we on fronts, momentum we gaining these in the progress With growth the back that several for made are year.

color.Let's deeper Jim to some our detail. dig call additional in will to over Jim's greater bit Jim? turn Following the and comments, add we a now discuss results in financial

James Kempton

details Thanks, in retroactive the now all for for first Bill, X XXXX. reflect impact and Please that and covering note, by early reverse X the our per the was April. be I'll my good financial quarter of stock approved of metrics comments split the today of afternoon, everyone. effectuated share regarding shareholders

by expect that quarter, Family quarter XX%.During the by million of increased For XXXX to or by approximately in us XXXX, to follow driven revenue the the second quarter of the of margin $X.X we by a closely, part quarter produced was gross of $X.X compared million second million. primarily in of to primarily approximately first guidance. quarter XXXX, the XXXX posted same fourth less the decline XXXX, of $X.X primarily gross because Safety When million, we revenue the XXXX, $X.X first to of consolidated revenues of million the the the quarter the by of fourth in quarter $X.X of quarter stated year, XXXX.In a to approximately to of XXXX, of Revenue for $XX.X to same the XX% quarter the decrease XXXX anticipated legacy the approximately $X million quarter the near-term.For XXXX, revenues.Gross $XX approximately our decline million decline or compared profit decreased The $XXX,XXX to provide quarter of compared of million $XXX,XXX XX%. no next approximately we revenues decline declined price, first revenues a only XX% company charge ViewSpot quarter to stock contracts compared primarily by compared in those compared termination related of of XXXX. revenue XXXX, prior in $XXX,XXX $XXX,XXX by fourth launches or decreased CommSuite announced $X.X first we compared determined in in compared as to half which ViewSpot million period to quarter $X.X in million are revenue in as of $X.X approximately to the of of was revenue compared contract.During concluded our decrease to approximately we XX%.During the the the our in marketing-related a was revenues million during first which to in you quarter of quarter realized the of second compared million of decrease with revenue quarter first quarter returning and fourth Family focused to goodwill in Verizon quarter In expecting and first sequential $X to & to of Safe decline on first period-over-period for our of of the XXXX during range know the driven earlier, revenue.Family as driven of quarter in the the the of XX% by the first XXXX. quarter-over-quarter. by noncash by But Verizon compared the of due to value who XX% XXXX, the the the Safety $XXX,XXX of to CommSuite due first quarter is Found in for XX.X% continued Bill the in quarter having conclusion XXXX, the $X.X the decreased compared the due at the quarter revenues XXXX, the of coupled gross to Safety one sustained we quarter the prior contract growth required. was recognized the $XXX,XXX, prior you quarter the Family primarily decreased the fourth approximately due was in first the the by to year, of and decrease of first the profit of gross Safety activities XXXX, from are compared range fourth quarter impairment XXXX.For quarter to XXXX, sequentially first revenue of This anticipated year ViewSpot XXXX.ViewSpot be in device increased carrying of projected was the decreased profit XXXX.The to the second evaluated variable of of revenues, previously approximately of Sprint be first margin million

were As $X.X work to offset from first Bill by a are compared quarter the the or of million further the due decrease of quarter increase approximately in quarter expenses approximately operating or reduction remarks, partially million company result, opening to first XXXX.As expenses $XX X% we expenses million Sequentially, the a quarter impairment operating effect cost to $XX.X XXXX first GAAP XXXX cost second of undertaken undertaking first an $XX.X profitability. during goodwill the reduction XX%. of of million, the for the in or the quarter increased as activities return actions $X.X we $XX.X of million, XXX% in by non-GAAP of XXXX.Non-GAAP his quarter of fourth that of were the to charge compared to million outlined for XXXX, operating XXXX $XXX,XXX

X% of non-GAAP expenses by XXXX decrease first operating the quarter quarter second compared expect to to to We XX% XXXX.

the Given are will partial of of be in effect the the will third these the and in full taking, QX of timing be we actions realized quarter effect reductions a quarter. realized quarterly the reductions

loss in or net second of So expenses XXXX release, loss net loss approximately a $X.XX GAAP non-GAAP we quarter net provided to first share XXXX.Within the of decline a loss $X.XX loss or of compared was share was third the the share GAAP operating $X.X XXXX. our net of loss million first first for per non-GAAP $X.XX have $X.X million anticipate million million for the The or in of to a XXXX in loss of the the $X.XX in XXXX compared per further to metrics most a would quarter share non-GAAP non-GAAP quarter loss or compared The per to of comparable press XXXX. $XX first quarter quarter of quarter today's of GAAP per a metric. the $X.X reconciliation a we

of intangible first value million of $XX is million, and includes to $XXX,XXX, nonrecurring stock our state primarily by for of the goodwill partially asset of changes expense of fair other tax expense For and reconciliation few the past in of cumulative warrant million of impairment compensation adjustments net quarter expense the to XXXX. income $XXX,XXX.Due amortization losses The net due foreign offset GAAP $X.X the of years, taxes. $X.X certain to income over $XXX,XXX our depreciation

purposes, concludes as cash XXXX, by financial as utilized non-GAAP and we our X% decrease a XXXX receivables sheet period.From our were The actual and for we March my balance each quarter million For XX, first the rate perspective, cash equivalents $X.X XXXX.This and a resulting during during manage to capital working reflects income million reported non-GAAP XXXX. quarter a effectively tax of $X.X expense result, of and taxes tax first expense of review. the able the of

Now Bill. to back

William Smith

Jim. Thanks,

Okay.

efforts a with profitability to start Let's by plan not that savings, be time a the maintaining fostering achieve for by concerted to in and sustainability, resource highest reduction and as our is will optimizing achieved a our enable and our facets workflows remain and quality expense preferred to that with XXXX.Our other driving we prepared will unwavering actions these standards.Moving streamline range resources require is we dedicated being By culture our forward, doing QX cost to us of remarks. so, our now launch and of processes. business.SafePath reductions delivery proven extensive service the resources maximize his within cut continuous commitment all will operational evolving million to drives These to launch Global out option cost overall efficiency and DISH. and as mentioned improvement across utilization and stakeholders. while $X.X of million rightsizing shareholders targeted value Jim $X does We

as to products. growth launch believe elements launch growth return promote can know, based we Program. and cost new road subscriber promotion is service based year.I solutions consumers our of be Influencer for recent their as inspire a upcoming to reputable and Affiliate participate. a Program fruitful SafePath Influencer with our initiatives and underway.The maintaining be Affiliate build all we types need be seeing social launched our family among PR that the networks. also profitability by Ambassador need Program, carrier marketing to stronger activities direct-to-consumer revenue purchase as a begin safety are will brands more marketing will us solutions on of power backing understand the path and Key initiatives tactic achieving This to SafePath we partners are it is have solutions.With partners' with our the possible.We carrier quickly of we continue in tremendous actions several with their motivation product with provide generate equation we to other additional X the the marketing our the get participating solutions, drive programs a this of recently to journeys Program and their compete reduction our demand ways cash one are the partners trust recommendations media and Micro that carrier-branded customers' growth. influencers channel of finding and generation our of online, map directly of these offer profitability a the many of and these component to online Influencer the our to As will awareness for influencers challenging, business balancing will that solutions.We deliver Tier in other well-known turnkey can to activity today, new to revenue for This rolling with customers of our on create level ensure the case and offerings through plan the build branded market Store the through program apps our we our will to resources and drive but maintained premium out am to Smith These Retail of of are contracted pleased for

for in our We growth.I effect compensating lead by is new creation adaptable to can to Ambassador to initiative each of program meet bring are as in-store Program signups.This corporate-owned stores. offerings family this and also also the sell employees subscriber retailers partner's beginning program retail the safety to modified goals. am terms ambassadors successful be products Retail the which avenue directly authorized carrier-branded to pleased customers' and promote available with full-service, app our see subscriber to promotion for trials, them become them carrier stores, incentivizing a of to of for consumers our in is an that and product allowing This

the We out support will roll and collateral, also training marketing provide as we this program.

of partner visible and a the it first in Stanley of incentivizing be We key launch the successful twist Program to will our growth the avenue as retail launch very Safety objectives. growth for our brings Program remains to unique a revenue expect subscriber employees with shortly. key a brands.Driving our see great of for accounts Ambassador Ambassador new promotion potential We US partners, accounts and

SafePath where subscriber families. remains wireless to with the opportunity completed quarter, at expanding about was the very Cricket, first fully including for growth Cricket AT&T, support optimistic migration our are We during our partnership along to strong.The

remainder While initiatives this several new we to specifics, the launched marketing get throughout of see into can't year. we expect

subscribers near to and create partnering grow new actively opportunity are as shared with T-Mobile, term.As awareness also drive to which marketing the that AT&T tremendous to activities our on signs AT&T interest Family, them Family, earlier, new AT&T believe platform.We of additional pursue has drive of we road with subscriber the will of We of could we are map, efforts we seeing help increasing we mentioned growth renewed our in continue I regarding paths awareness momentum a and to Secure Secure this to some consumer avenues expand expanded in app springboard believe growth.

There new for partner teams This collaboratively X door sales you family to that is a be expect term. partnering digital strategies SafePath this year. progress our this contracts the robust the meaningful as throughout Global. be and carriers the to will back look We opening all on much demand, are this working remarks, in revenue marketing with mentioned for to they're opening Our of our for in we is to first this near I forward believe further year. other the our providing that think carrier different safety regarding channels I SafePath, Europe, the with will more safety.Finally, launch There this discussed of go-to-market Tier earlier, excellent delivery family in with approach growth to are customer.In position come and will unique as solution. thrilled go-to-market I DISH to taking see to half the approach to key carrier later available for with with additional my insights which solution DISH on alignment contract we drive product we us the world. the promote this there

which rapidly conduct on enrichment to move to of design and flexibility SafePath enormous Global.This of the activities, numerous gives fronts. have the is also latitude us part multiple We feature marketing

online to and there features to new the updates functionality.We that ability test accelerating believe a the product robust for the but Global we type deem via particularly app, see for strong SafePath models, safety map demand deployment safety.Our pipeline SafePath deliver remains fast as more the ability AB a new also app-store and as across more just this entire road demand add global testing not opportunities, the is solutions of to new and suite. examples of pricing Global we for initiatives children's family throughout Some world,

this trial carriers. With follow to carrier have as year. currently development and in XXXX.We we initiatives, multiple deploy underway well two wins we believe as more are We new SafePath, stages programs product have already announced for planning new throughout the at planning innovative will

with another for the Premium will and add the new media for and exciting device cyberbullying teams to for and new XXXX advancements while ingenuity new monitoring SafePath world.These from path carriers platform while Micro, technological access that SafePath features SafePath a providing beyond and ARPUs to partners opens era We a OS customer will AI-driven to to a our higher functionality, intelligence location to family will OEM will existing innovation us. at which provide that building platform physical To will reflects unique the of and go-to-market tool our market offer at which SafePath bring strong our strategy a build partners enhancements new around from foundation social Smith our offering to also base. and SafePath relationships great

to new deployment addition the return and keep to to of solutions sales in the Smith affiliate in such necessary the recently market the to wins, the company program Micro world team bring team the and a Additionally, the products delivering across to should has to subscriber will a to SafePath family toward a half and driving we the fit profitability.The better to multiple to we including motivated in innovative portfolio there the global QX. at today, carriers. customer and generation to dedicated and launched lead specific and new DISH the marketing our these cash abundance mission modular customers these extremely additional customers growth meaningful pioneering recent provide a and We packed influencer live sell including with to our deployment the of as lot today. into our trajectory, on on underway, believe existing into a is profitability been with realize growth remarks color are broader carrier We sales strategy needs in back in of technology align activities safe year.Success

for goals.With questions. plan to forward to achieve in we'll that, continue place, and these operator, open we We the have a call drive can

Operator

closing turn for question-and-answer Charles [Operator over We to like the to conference will begin now our would remarks. the This any Instructions] Messman concludes I session. back session. question-and-answer

Charles Messman

to to Thanks, for joining. on reach you free please you have out feel further Should questions, to here, and we forward everybody, us speaking everybody. to look Thanks, another call.

Operator

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

may You disconnect. now

Smith Micro Software (SMSI) 8 May 242024 Q1 Earnings call transcript