Smith Micro Software, Inc. Q4 FY2025 earnings call

• Bill Smith mentioned the company continues to make strides on the return path to growth and profitability, strengthened product lineup with SafePath OS for kids and seniors, rationalized cost structure, plans to bring two new carrier customers to market by midyear 2026, existing customer base showing growth, strong sales pipeline. • Announced his transition to Executive Chairman and Tim Huffmyer taking over as President and CEO. • Tim Huffmyer thanked Bill for leadership, announced Bethany Braund as new CFO, provided financial overview including funding transactions, financial results of fourth quarter and fiscal 2025, gross margin details. • Bill Smith discussed customer status, including AT&T as a strong contributor, collaboration with Boost, positive results with Visual Voicemail, alignment with T-Mobile, work with Orange and other European carriers, and upcoming meetings at Mobile World Congress.

For the fourth quarter of 2025, revenue was $4 million compared to $5 million in the same quarter of 2024, a 20% decrease. Family Safety revenue was $3.2 million, down 16% from the fourth quarter of the prior year and 11% from the third quarter of 2025. CommSuite revenue was $800,000, down ~$300,000 from the fourth quarter of 2024 and flat from the third quarter of 2025. Gross profit in the fourth quarter of 2025 was $3 million, down $800,000 from the prior year. GAAP operating expenses in the fourth quarter of 2025 were $7.4 million, down $800,000 from the same quarter in 2024. Non-GAAP operating expenses in the fourth quarter of 2025 were $4.7 million, down ~$1.1 million from the same quarter in 2024. Fiscal 2025 revenue was $17.4 million, down $3.2 million from 2024. Gross profit for fiscal 2025 was $12.9 million, down $1.5 million from 2024. GAAP operating expenses for fiscal 2025 were $41.9 million, down $21.9 million from 2024. Non-GAAP operating expenses for fiscal 2025 were $22.5 million, down $5.8 million from 2024. GAAP net loss attributable to common stockholders in the fourth quarter of 2025 was $4.7 million, and for fiscal 2025 was $30 million. Non-GAAP net loss attributable to common stockholders in the fourth quarter of 2025 was $2.1 million, and for fiscal 2025 was $10.9 million.

• Expect consolidated revenues in the first quarter of 2026 to be in the range of approximately $4.2 million to $4.5 million. • Expect gross margin in the first quarter of 2026 to be in the range of 76% to 78%. • Anticipate further decline in non-GAAP operating expenses of 5% in the first quarter of 2026 compared to the fourth quarter of 2025. • Plan to bring two new carrier customers to the market by midyear 2026. • Once realizing a full quarter of previously announced cost benefits in 2026, expect margin percentage to be between 78% to 80%.

Q: Do you have any thoughts on what kind of the annual revenues, and the value of a normalized revenues with a major mobile carrier in the U.S., and the prospective revenue opportunity with European carriers?

A: Timothy Huffmyer said they've guided investors to think about number of family subs available at the carrier, revenue per unit as couple of dollars per family unit, and for European carriers, Europe is a greenfield opportunity with phone now making decision process easier for carriers.

Q: Given family safety needs, do you see competition and people doing ad-hoc to satisfy the situation?

A: William Smith said SafePath OS is powerful, selling phones is something carriers know well and an easy way to bring users to family safety solutions, and carriers that went in-house now have to figure out bringing phones to market.

Q: Are you seeing actual pull demand from new guys who've heard about the solution at MWC?

A: William Smith said they are looking forward to launching two new carrier customers midyear driven by SafePath OS, phones have simple onboarding process opening up the market, and Europe is a greenfield opportunity with phone making decision process easier for carriers.