Smith Micro Software Inc (SMSI) Q3 2024 Earnings Call Highlights: Navigating Revenue Declines ...

GuruFocus.com11-14 15:14

Revenue: $4.6 million for Q3 2024, a decrease of 58% from $11 million in Q3 2023. Year-to-Date Revenue: $15.6 million through September 30, 2024, down from $32.3 million in the same period of 2023. ...

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GuruFocus has detected 4 Warning Signs with SMSI.\n\nRelease Date: November 13, 2024\nFor the complete transcript of the earnings call, please refer to the full earnings call transcript.\n Positive Points \n\nSmith Micro Software Inc (NASDAQ:SMSI) is focused on returning to profitability and generating free cash flow, with plans to achieve this by 2025.\nThe company is making progress with its SafePath OS solution, expecting to sign its first contract with a US-based MVNO soon.\nSmith Micro Software Inc (NASDAQ:SMSI) has achieved significant cost reductions, with $1.9 million saved in Q3 and a target of $2.4 to $2.8 million in quarterly savings by Q4.\nThe company has a strong sales pipeline, including opportunities with the Competitive Carrier Association and European carriers.\nSmith Micro Software Inc (NASDAQ:SMSI) completed a capital raise, grossing approximately $6.9 million, which strengthens its financial position.\n\n Negative Points \n\nSmith Micro Software Inc (NASDAQ:SMSI) experienced a significant revenue decline, with Q3 2024 revenue at $4.6 million, down 58% from the same quarter in 2023.\nThe company reported a GAAP net loss of $6.4 million for Q3 2024, compared to a loss of $5.1 million in Q3 2023.\nThe decline in revenue is primarily due to the conclusion of the Verizon family safety contract and a decrease in legacy Sprint subscriber revenue.\nOperating expenses remain high, with $9.8 million reported for Q3 2024, despite cost reduction efforts.\nSmith Micro Software Inc (NASDAQ:SMSI) faces uncertainty in the timing and impact of new customer launches, particularly with the unnamed European carrier.\n\n Q & A Highlights \nQ: Can you provide an update on the expected launch of the European carrier and any developments with SafePath Global? A: William Smith, CEO: We fully expect the European carrier to launch before the end of the year. We are also seeing good traction with SafePath OS through the Competitive Carrier Association (CCA) and expect more member carriers to follow. Overall, we are optimistic about the growth of our sales and customer relationships.\nQ: What is contributing to the projected $500,000 sequential revenue increase for December? A: William Smith, CEO: The increase comes from a combination of activities with current and new customers. We are also focusing on reducing expenses, which will help narrow losses and lead us to profitability in 2025.\nQ: Could you elaborate on the SafePath OS business model and its potential in Europe? A: William Smith, CEO: SafePath OS operates on a subscription model, providing recurring monthly fees. It aligns with carriers' strengths in selling devices and rate plans. Europe presents a significant opportunity as it is largely a Greenfield market for family safety solutions.\nQ: How were the additional cost savings achieved, and is there potential for more reductions? A: James Kempton, CFO: We achieved more savings than initially targeted through our third-quarter activities. We do not currently plan additional reductions, but we will continue to manage costs effectively.\nQ: What is the cash runway following the recent capital raise? A: James Kempton, CFO: We ended the third quarter with $1.5 million in cash and raised an additional $6.4 million. This, combined with our efforts to reduce losses, provides a clearer path to profitability.\nFor the complete transcript of the earnings call, please refer to the full earnings call transcript.This article first appeared on \nGuruFocus.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.1","shortVersion":"4.29.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2483845871"}