Smith Micro Reports Third Quarter 2024 Financial Results
PITTSBURGH, PA, November 13, 2024 – Smith Micro Software, Inc. (Nasdaq: SMSI) (“Smith Micro” or the “Company”) today reported financial results for its third quarter ended September 30, 2024.
“We believe that the actions that we’ve taken to rationalize our costs over the past several months, coupled with the expansion of our revenue opportunities, have positioned us for a return to profitability on a non-GAAP basis and free cash flow during 2025,” said William W. Smith Jr., president, chief executive officer, and chairman of the board of Smith Micro. “With the pending launch of our Tier One carrier in Europe, new product innovations that align with our customers’ strengths, and new prospects on the horizon, we are confident that the Company is positioned for growth over the coming quarters.”
“We had targeted eliminating at least $2 million in quarterly expenses from our cost structure by the fourth quarter of this year. As compared with the first quarter of this year, we have already achieved $1.9 million in cost reductions during the third quarter and we have yet to see the full benefit of the actions that we have taken,” Smith continued. “I’m very confident in our outlook for 2025, as evidenced by the recent $3 million investment I made into the Company last month as part of our combined $6.9 million capital raise.”
Third Quarter 2024 Financial Results
Smith Micro reported revenue of $4.6 million for the quarter ended September 30, 2024, compared to $11.0 million reported in the quarter ended September 30, 2023.
Gross profit for the quarter ended September 30, 2024 was $3.3 million, compared to $8.5 million for the quarter ended September 30, 2023.
Gross profit as a percentage of revenue was 71.6 percent for the quarter ended September 30, 2024, compared to 77.0 percent for the quarter ended September 30, 2023.
GAAP net loss for the quarter ended September 30, 2024 was $6.4 million, or $0.54 loss per share, compared to GAAP net loss of $5.1 million, or $0.61 loss per share, for the quarter ended September 30, 2023.
Non-GAAP net loss for the quarter ended September 30, 2024 was $3.6 million, or $0.30 loss per share, compared to non-GAAP net gain of $0.6 million, or $0.08 earnings per share, for the quarter ended September 30, 2023. Non-GAAP net loss excludes the items noted below under “Non-GAAP Measures.”
All share and per share amounts for common stock herein have been retroactively adjusted for all periods presented to give effect to the one-for-eight reverse stock split of our common stock, which became effective April 10, 2024 at 11:59 pm Eastern time.
Third Quarter Year-to-Date 2024 Financial Results
Smith Micro reported revenue of $15.6 million for the nine months ended September 30, 2024, compared to $32.3 million reported in the nine months ended September 30, 2023.
Gross profit for the nine months ended September 30, 2024 was $10.7 million compared to $23.9 million reported for the same period in 2023.
Gross profit as a percentage of revenue was 68.5 percent for the nine months ended September 30, 2024 compared to 74.0 percent for the nine months ended September 30, 2023.
GAAP net loss for the nine months ended September 30, 2024 was $44.3 million, or $4.17 loss per share, compared to GAAP net loss of $17.7 million, or $2.27 loss per share, for the nine months ended September 30, 2023.
Non-GAAP net loss for the nine months ended September 30, 2024 was $11.8 million, or $1.11 loss per share, compared to non-GAAP net loss of $3.6 million, or $0.46 loss per share, for the nine months ended September 30, 2023. Non-GAAP net loss excludes the items noted below under “Non-GAAP Measures.”
Total cash and cash equivalents as of September 30, 2024 were $1.5 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) income, non-GAAP gross profit, and non-GAAP basic and 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 the Company’s 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, goodwill impairment, personnel severance and reorganization activities, and adjustment for non-recurring items. 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 the Company’s 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, November 13, 2024, at 4:30 p.m. ET, to discuss the Company’s third quarter 2024 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=wslPnih5. In addition, the conference call will be available on the Smith Micro website in the Investor Relations section.
About Smith Micro Software, Inc.
Smith Micro develops software to simplify and enhance the mobile experience, providing solutions to some of the leading wireless service providers 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 and the Smith Micro logo are registered trademarks or trademarks of Smith Micro Software, Inc. All other trademarks and product names are the property of their respective owners.
Forward-Looking Statements
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 our cost reduction plans and other 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 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 operating systems and other technology for the proper operation and delivery of our solutions and any barriers to our use of such third party technology, 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 and/or application of policies that may be harmful to our business, unanticipated delays or obstacles in our development and release cycles, the degree to which competing business needs may affect our allocation of resources to planned projects, the risk of harm to our business resulting from our recent and any future cost reduction efforts, our ability to attract and retain key technical personnel that are essential to our product development and support efforts, 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, hardware and/or platforms that we use or operate with, 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, and our ability to compete effectively with other software and technology companies. 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.
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