Smith Micro Software, Inc. Q1 FY2026 earnings call

First, signed a contract with the first of two new carrier customers. Second, completed the executive succession plan with Tim as CEO, Bethany as CFO, and Bill as executive chairman. Third, sales pipeline shows exponential growth with new and existing customers. Strategic shift to focus on family market, benefits from strategic cost reductions, development teams engaged in projects for Q2 execution.

For the first quarter of 2026, Smith Micro recognized revenue of $4.2 million, a decrease of 9% compared to the same quarter of 2025, but an increase of 6% compared to the fourth quarter of 2025. Family safety revenue was $3.4 million in the first quarter of 2026, a decrease of $367,000 or 10% compared to the first quarter of last year, and an increase of $244,000 or 8% compared to the fourth quarter of 2025. ComSuite revenue was $800,000 in the first quarter of 2026, an increase of $66,000 compared to the first quarter of 2025 and $3,000 compared to the fourth quarter of 2025. ViewSpot revenue was $99,000 in the first quarter of 2025 as it was sold in June 2025. For the second quarter of 2026, total revenue recognized is expected to increase to approximately $5.2 million or a 24% growth compared to the first quarter of 2026. Gross margin was 78.4% in the first quarter of 2026, expected to be in the range of 81% - 83% in the second quarter with a long-term goal of 85%. GAAP operating expenses in the first quarter of 2026 were $6.7 million, a decrease of $1.9 million or 22% compared to the first quarter of 2025. Non-GAAP operating expenses were $4.7 million in the first quarter of 2026, a decrease of approximately $1.4 million or 23% compared to the first quarter of 2025.

Believe to have strong top line growth in Q2 leading to non-GAAP black number on bottom line. Expect continued strong revenue growth and growing profitability for the remainder of fiscal 2026. Second quarter 2026 revenue recognized is expected to increase to approximately $5.2 million or a 24% growth compared to the first quarter of 2026. Anticipate further decline in non-GAAP operating expenses in the second quarter of 2026 as compared to the first quarter of 2026.

No specific detailed risks discussed in the provided transcript

Q: Scott Searle with Roth Capital asked about guidance, application focus, new deployments, etc.

A: Tim responded on guidance range, application timing, geography of activities.

Q: Matthew Harington with Benchmark asked about monetization, R&D spending, competition.

A: Tim answered on monetization being as expected or greater, R&D spending structure, competition from carriers doing things internally and new technology