Smith Micro Software, Inc. Q3 FY2025 earnings call

• The company implemented strategic changes across the organization to realign cost structure, affecting approximately 30% of the workforce and saving approximately $7.2 million in annualized costs. - Completed follow-on offerings and note purchase agreements, with recent private placement and follow-on offering expected to raise approximately $2.7 million. - SafePath platform is tailored for families, with ongoing activities and customer trials in North America and Europe, and renewed focus on family subscribers in the carrier market. - Strong pipeline with engagements with carriers like Orange Spain, AT&T, Boost, and T-Mobile, and expansion of Secure Family to any family regardless of mobile carrier.

For the third quarter of 2025, revenue was $4.3 million, down 6% from $4.6 million in the same quarter of 2024. Compared to the second quarter of 2025, revenue decreased by $73,000 or 2%. Family Safety revenue was $3.5 million in the third quarter of 2025, a decrease of approximately $410,000 or 10% compared to the third quarter of the prior year, and a decrease of approximately $97,000 or 3% compared to the second quarter of 2025. CommSuite revenue was $792,000 in the third quarter of 2025, an increase of approximately $148,000 compared to the third quarter of 2024, and an increase of approximately $15,000 compared to the second quarter of 2025. ViewSpot revenue was $26,000 in the third quarter of 2025. For the fourth quarter of 2025, consolidated revenues are expected to be in the range of approximately $4.2 million to $4.5 million. Gross profit in the third quarter of 2025 was $3.2 million, down $116,000 from the same period of the prior year, with a gross margin of 74%. For the year-to-date period ended September 30, 2025, gross profit was $9.8 million, with a gross margin of 73%. In the fourth quarter of 2025, gross margin is expected to be in the range of 74% to 76%, and once full year 2026 cost benefits are realized, margin percentages are expected to be between 78% to 80%, with a longer-term target of 85%.

• Fourth quarter 2025 consolidated revenues expected to be in the range of approximately $4.2 million to $4.5 million. - Expect to be very close to breakeven and profitable in mid-2026. - 2026 non-GAAP operating expenses expected to be reduced by approximately $7.2 million. - Expected approximately 15% decline in non-GAAP operating expenses in the fourth quarter of 2025 compared to 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.

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