Smith Micro Software, Inc. Q2 FY2025 earnings call

• Tim Huffmyer returned as Chief Operating Officer and Chief Financial Officer. - On June 3, sold the ViewSpot product line for $1.3 million. - On July 18, closed a follow-on offering of approximately 1.6 million shares. - Second quarter 2025 revenue was $4.4 million, down 14% y-o-y and 4% q-o-q. - Family Safety, CommSuite, and ViewSpot had respective revenue performances. - Discussed progress on SafePath platform, including AI-enabled SafePath 8, enhancements to SafePath OS for kids, plans for SafePath OS for seniors. - Updates on customer relationships: Orange Spain, AT&T, Boost, T-Mobile.

For the second quarter of 2025, revenue was $4.4 million. Family Safety revenue was $3.6 million, a decrease of $595,000 or 14% compared to the second quarter of the prior year and a decrease of $162,000 or 4% compared to the first quarter of 2025. CommSuite revenue was $777,000, an increase of $246,000 compared to the second quarter of 2024 and an increase of $43,000 compared to the first quarter of 2025. ViewSpot revenue was nominal for the second quarter of 2025, declining by $371,000 compared to the second quarter of the prior year and $82,000 compared to the first quarter of 2025. On June 3, the ViewSpot product line was sold for $1.3 million.

• Third quarter 2025 consolidated revenues expected to be in the range of approximately $4.5 million to $4.8 million. - Anticipate sequential quarterly revenue growth in the fourth quarter. - Third quarter 2025 gross margins expected to be in the range of 72% to 75%. - Anticipate a modest decline in non-GAAP operating expenses in the third quarter of 2025.

• Forward-looking statements involve risks and uncertainties which could cause actual results or trends to differ materially from those expressed or implied. - Refer to risk factors included in the most recently filed Form 10-K.

Q: Given the considerable TAM for the family safety market, literally even for the individual MNOs in the context of your market cap, both in U.S. and Europe, can you comment on any change in the size of that market you sense? And given the size of the opportunity, what are you seeing in terms of in-house development at the MNOs, Verizon and smaller competitors because, I mean, clearly, you've got a great opportunity, but it feels like the competition isn't as visible maybe as one would expect it to be.

A: Matt, that's a great question. So let me start it this way by saying that -- we have watched the MNOs all launched their 5G offerings, and they have been very focused on that. They followed with satellite offerings, and now they're looking for other opportunities to expand the size of their sub base. One of the best subs that a carrier can attract is a family sub. And that has been proven over and over the years. They churn less and typically are willing to spend added funds. That said, we think the family safety market is entering a new time of relevance where we can see the opportunity for growth for Family Safety as carriers want to reach out to this family market in general. That said, we think we've pushed the envelope. We are leading now with new offerings in the AI side of the business. We are, without a doubt, leading the way for how carriers can launch both kids' phones and now by the end of the quarter, we'll be able to start talking about launching senior phones. We think that is a huge untapped market. Many carriers have told us they actually believe the senior market could be even larger than the kids market. And that's not demeaning to the kids market. That's just saying how big they think the senior market could be. All that said says that we think we are entering a period of renewed growth. We've had some difficult years, but I think we have a clear vision as to how to lead ourselves back to the relevance that we have always enjoyed over our history. So that said, hopefully, that answered your question, come back if it didn't.