Smith Micro Reports Fourth Quarter and Fiscal Year 2022 Financial Results
PITTSBURGH, PA, March 9, 2023 – Smith Micro Software, Inc. (NASDAQ: SMSI) (“Smith Micro” or the “Company”) today reported financial results for its fourth quarter and fiscal year ended December 31, 2022.
“We made significant progress during 2022 toward the unification of our Digital Family Lifestyle business onto a single platform, resulting in a far superior, best-in-class solution,” said William W. Smith, Jr., President, CEO and Chairman of the Board of Smith Micro. “As we near completion of migration activities, we are focusing on partnering with our customers in growing revenues and returning the Company to profitability.”
Mr. Smith concluded, “We are currently taking steps to significantly reallocate resources and will be taking further actions in the very near term to streamline our costs. As such, we expect to reduce our expenses by a further $4 million per quarter from our fourth quarter 2022, with our goal to have it completed by the end of the second quarter, but no later than the end of the third quarter of this year, and as a result to reach profitability in the same timeframe.”
Smith Micro reported revenue of $11.4 million for the quarter ended December 31, 2022, compared to $14.7 million reported in the quarter ended December 31, 2021.
Gross profit for the quarter ended December 31, 2022 was $8.1 million, compared to $10.6 million for the quarter ended December 31, 2021.
Gross profit as a percentage of revenue was 71 percent for the quarter ended December 31, 2022, compared to 72 percent for the quarter ended December 31, 2021.
GAAP net loss for the quarter ended December 31, 2022 was $8.0 million, or $0.14 loss per share, compared to GAAP net loss of $4.0 million, or $0.07 loss per share, for the same period in 2021.
Non-GAAP net loss for the quarter ended December 31, 2022 was $4.3 million, or $0.08 loss per share, compared to non-GAAP net loss of $2.4 million, or $0.04 loss per share, for the quarter ended December 31, 2021. Non-GAAP net loss excludes the items noted below under “Non-GAAP Measures”.
Smith Micro reported revenue of $48.5 million for the year ended December 31, 2022, compared to $58.4 million reported in the year ended December 31, 2021.
Gross profit for the year ended December 31, 2022 was $34.3 million compared to $45.7 million reported for the same period in 2021.
Gross profit as a percentage of revenue was 71 percent for the year ended December 31, 2022 compared to 78 percent for the year ended December 31, 2021.
GAAP net loss for the year ended December 31, 2022 was $29.3 million, or $0.53 loss per share, compared to GAAP net loss of $31.0 million, or $0.61 loss per share, for the same period in 2021.
Non-GAAP net loss for the year ended December 31, 2022 was $18.8 million, or $0.34 loss per share, compared to non-GAAP net loss of $2.2 million, or $0.04 loss per share, for the year ended December 31, 2021. Non-GAAP net loss excludes the items noted below under “Non-GAAP Measures”.
Total cash and cash equivalents as of December 31, 2022 were $14.0 million.
To supplement our financial information presented in accordance with GAAP, the Company considers, and has included in this press release, certain non-GAAP financial measures and a non-GAAP reconciliation from GAAP gross profit, net (loss) income before taxes, and net (loss) income to the following non-GAAP metrics: non-GAAP net (loss) income, and non-GAAP diluted (loss) earnings per share in the presentation of financial results in this press release. Management believes this non-GAAP presentation may be more meaningful in analyzing our income generation and has therefore excluded the following items from GAAP earnings calculations: stock-based compensation, amortization of intangible assets, fair value adjustments, note and stock offering fees and amortization, personnel severance and reorganization activities, CFO transition costs, acquisition costs, and non-development intellectual property costs. Additionally, since the Company currently has federal and state net operating loss carryforwards that can be utilized to reduce future cash payments for income taxes, these non-GAAP adjustments have not been tax effected, and the resulting income tax expense reflects actual taxes paid or accrued during each period. This presentation may be considered more indicative of our ongoing operational performance. The table below presents the differences between non-GAAP net (loss) income and net (loss) income on an absolute and per-share basis. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and the non-GAAP financial measures as reported by Smith Micro may not be comparable to similarly titled amounts reported by other companies.
Smith Micro will hold an investor conference call today, March 9, 2023, at 4:30 p.m. ET, to discuss the Company’s fourth quarter and fiscal year 2022 financial results. To access the call, dial 1-844-701-1164; international participants can call 1-412-317-5492. A passcode is not required to join the call; ask the operator to be placed into the Smith Micro conference. Participants are asked to call the assigned number approximately 10 minutes before the conference call begins. An internet webcast is available at https://event.choruscall.com/mediaframe/webcast.html?webcastid=TaNVvJpd. In addition, the conference call will be available on the Smith Micro website in the Investor Relations section.
Smith Micro develops software to simplify and enhance the mobile experience, providing solutions to some of the leading wireless service providers and cable MSOs around the world. From enabling the family digital lifestyle to providing powerful voice messaging capabilities, our solutions enrich today’s connected lifestyles while creating new opportunities to engage consumers via smartphones and consumer IoT devices. The Smith Micro portfolio also includes a wide range of products for creating, sharing, and monetizing rich content, such as visual voice messaging, optimizing retail content display and performing analytics on any product set. For more information, visit www.smithmicro.com.
Smith Micro, the Smith Micro logo and SafePath are registered trademarks or trademarks of Smith Micro Software, Inc. All other trademarks and product names are the property of their respective owners.
Certain statements in this press release are, and certain statements on the related conference call may be, forward-looking statements regarding future events or results within the meaning of the Private Securities Litigation Reform Act, including statements related to our financial prospects, goals and other projections of our outlook or performance and our future business plans, and statements using such words as “expect,” “anticipate,” “believe,” “plan,” “intend,” “could,” “will” and other similar expressions. Forward-looking statements involve risks and uncertainties, which could cause actual results to differ materially from those expressed or implied in the forward-looking statements. Among the important factors that could cause or contribute to such differences are delays in our ability to fully execute on our expense reduction plans due to statutory and other requirements, reduction in revenue from a terminating customer agreement earlier or at a more rapid rate than expected, the risk of harm to our business resulting from our cost reduction efforts, customer concentration, given that the majority of our sales depend on a few large customer relationships, delay or failure of our customers to accept and deploy our products and services or new or upgraded versions thereof, delay or failure of our customers’ end users to adopt our products and services or new or upgraded versions thereof, the impact of the COVID-19 pandemic on our business and financial results, changes in demand for our products from our customers and their end users, changes in requirements for our products imposed by our customers or by the third party providers of software and/or platforms that we use, our ability to effectively integrate, market and sell acquired product lines, new and changing technologies and customer acceptance and timing of deployment of those technologies, our ability to compete effectively with other software and technology companies, and the existence and terms of our convertible notes and related agreements, including that they may restrict our ability to obtain additional financing, and adversely affect our business, financial condition and cash flows from operations in the future. These and other factors discussed in our filings with the Securities and Exchange Commission, including our filings on Forms 10-K and 10-Q, could cause actual results to differ materially from those expressed or implied in any forward-looking statements. The forward-looking statements contained in this release are made on the basis of the views and assumptions of management, and we do not undertake any obligation to update these statements to reflect events or circumstances occurring after the date of this release.