Smith Micro Reports Second Quarter and Year-to-Date 2023 Financial Results
PITTSBURGH, PA, August 9, 2023 – Smith Micro Software, Inc. (NASDAQ: SMSI) (“Smith Micro” or the “Company”) today reported financial results for its second quarter ended June 30, 2023.
“The Company achieved a number of significant targets across multiple fronts during the second quarter of 2023,” said William W. Smith, Jr., president, chief executive officer, and chairman of the board of Smith Micro. “Notably, we have now completed our development efforts to merge the code from our various acquisitions into our flagship SafePath® platform after a very complex and lengthy process, which represents a significant milestone for the Company.”
Smith continued, “From a financial perspective, I am pleased that we exceeded our quarterly cost reduction goal of $4 million in savings compared to the fourth quarter of 2022, which has created momentum in optimizing our organizational footprint and positioning the Company to see a return to growth, improved gross margins, and profitability on a non-GAAP basis during the third quarter.”
Smith Micro reported revenue of $10.3 million for the quarter ended June 30, 2023, compared to $12.7 million reported in the quarter ended June 30, 2022.
Gross profit for the quarter ended June 30, 2023 was $7.7 million, compared to $9.1 million for the quarter ended June 30, 2022. Non-GAAP gross profit for the quarter ended June 30, 2023 was $7.8 million compared to $9.1 million for the quarter ended June 30, 2022.
Gross profit as a percentage of revenue was 75 percent for the quarter ended June 30, 2023, compared to 71 percent for the quarter ended June 30, 2022. Non-GAAP gross profit as a percentage of revenue was 75 percent for the quarter ended June 30, 2023 and 72 percent for the quarter ended June 30, 2022.
GAAP net loss for the quarter ended June 30, 2023 was $5.7 million, or $0.09 loss per share, compared to GAAP net loss of $8.5 million, or $0.15 loss per share, for the quarter ended June 30, 2022.
Non-GAAP net loss for the quarter ended June 30, 2023 was $0.6 million, or $0.01 loss per share, compared to non-GAAP net loss of $4.8 million, or $0.09 loss per share, for the quarter ended June 30, 2022. Non-GAAP net loss excludes the items noted below under “Non-GAAP Measures.”
Second Quarter Year to Date 2023 Financial Results
Smith Micro reported revenue of $21.3 million for the six months ended June 30, 2023, compared to $25.4 million reported in the six months ended June 30, 2022.
Gross profit for the six months ended June 30, 2023 was $15.4 million compared to $18.2 million reported for the same period in 2022.
Gross profit as a percentage of revenue was 72 percent for the six months ended June 30, 2023 compared to 71 percent for the six months ended June 30, 2022.
GAAP net loss for the six months ended June 30, 2023 was $12.6 million, or $0.21 loss per share, compared to GAAP net loss of $15.5 million, or $0.28 loss per share, for the six months ended June 30, 2022.
Non-GAAP net loss for the six months ended June 30, 2023 was $4.2 million, or $0.07 loss per share, compared to non-GAAP net loss of $8.7 million, or $0.16 loss per share, for the six months ended June 30, 2022. Non-GAAP net loss excludes the items noted below under “Non-GAAP Measures”.
Total cash and cash equivalents as of June 30, 2023 were $6.4 million.
To supplement our financial information presented in accordance with GAAP, the Company considers, and has included in this press release, the following non-GAAP financial measures and a non-GAAP reconciliation from the equivalent GAAP metric: non-GAAP net loss, non-GAAP gross profit, non-GAAP gross profit as a percentage of revenue 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 compensation, intangibles amortization, depreciation, fair value adjustments, amortization of debt issuance costs and discount, andpersonnel severance and reorganization activities. 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 and net loss 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, August 9, 2023, at 4:30 p.m. ET, to discuss the Company’s second quarter 2023 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=3Ib7tsp6. 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 reduction in revenue from a customer transition services agreement earlier than expected, delays in our ability to fully execute on any remaining expense reduction plans, 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 and the loss of any of them could materially and negatively affect our business, 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, our reliance on third party application stores for the distribution of our software applications to users and any barriers to such distribution, including any delay or failure of such third party to approve new versions of our applications or their implementation of policies that may be harmful to our business, 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.