Smith Micro Software, Inc. (NASDAQ: SMSI) (“Smith Micro” or the
“Company”) today reported financial results for its second quarter
ended June 30, 2022.
“During the second quarter, we made significant progress on
several key milestones related to the integration of our prior
acquisitions of our two largest competitors. The consolidation of
the best features and functionality of each solution into our
Digital Family Lifestyle™ Platform has required a substantial
investment since their respective acquisitions. I am very pleased
that we are quickly approaching the completion of this mission,”
said William W. Smith, Jr., President, CEO and Chairman of the
Board of Smith Micro.
“With these efforts nearing completion, we expect to move
forward with significant reductions in our operating expenses,
starting in the third quarter, and accelerating through the
remainder of the fiscal year, as we streamline our expenses to
return back to more historical levels.”
“We see the enormous opportunity in front of us, not only with
the Big 3 Tier 1 mobile operators in the US, but other Tier 1
operators in Europe, and elsewhere around the world, as we move to
our next phase of growth on a single platform,” concluded Mr.
Smith.
Second Quarter 2022 Financial
Results
Smith Micro reported revenue of $12.7 million for the quarter
ended June 30, 2022, compared to $15.9 million reported in the
quarter ended June 30, 2021.
Gross profit for the quarter ended June 30, 2022 was $9.1
million, compared to $12.6 million for the quarter ended June 30,
2021.
Gross profit as a percentage of revenue was 71 percent for the
quarter ended June 30, 2022, compared to 79 percent for the quarter
ended June 30, 2021.
GAAP net loss for the quarter ended June 30, 2022 was $8.5
million, or $0.15 loss per share, compared to GAAP net loss of $5.2
million, or $0.10 loss per share, for the same period in 2021.
Non-GAAP net loss for the quarter ended June 30, 2022 was $5.1
million, or $0.09 loss per share, compared to non-GAAP net loss of
$0.3 million, or $0.01 loss per share, for the quarter ended June
30, 2021. Non-GAAP net loss excludes stock-based compensation,
amortization of intangible assets, personnel severance and
reorganization activities, and acquisition costs.
Second Quarter Year-to-Date 2022 Financial
Results
Smith Micro reported revenue of $25.4 million for the six months
ended June 30, 2022, compared to $27.3 million reported in the six
months ended June 30, 2021.
Gross profit for the six months ended June 30, 2022 was $18.2
million compared to $22.4 million reported for the same period in
2021.
Gross profit as a percentage of revenue was 71 percent for the
six months ended June 30, 2022 compared to 82 percent for the six
months ended June 30, 2021.
GAAP net loss for the six months ended June 30, 2022 was $15.5
million, or $0.28 loss per share, compared to GAAP net loss of $8.4
million, or $0.17 loss per share, for the same period in 2021.
Non-GAAP net loss (which excludes stock-based compensation,
amortization of intangible assets, personnel severance and
reorganization activities, and acquisition costs) for the six
months ended June 30, 2022 was $9.4 million, or $0.17 diluted loss
per share, compared to non-GAAP net income of $0.4 million, or
$0.01 earnings per share, for the six months ended June 30,
2021.
Total cash and cash equivalents as of June 30, 2022 were $5.4
million and available borrowing capacity under the Company’s
revolving credit facility was $7.0 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 earnings (loss)
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,
personnel severance and reorganization activities, and acquisition
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.
Investor Conference Call
Smith Micro will hold an investor conference call today, August
11, 2022, at 4:30 p.m. ET, to discuss the Company’s second quarter
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=Gxhhaskc.
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 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.
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 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 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.
Smith Micro Software, Inc.
Consolidated Balance Sheets
(in thousands except share and par value
data)
June 30, 2022
December 31,
2021
(unaudited)
(audited)
Assets
Current assets:
Cash and cash equivalents
$
5,357
$
16,078
Accounts receivable, net of allowance for
doubtful accounts and other adjustments of $3 and $2 (2022 and
2021, respectively)
11,562
10,590
Prepaid expenses and other current
assets
2,514
1,988
Total current assets
19,433
28,656
Equipment and improvements, net
2,129
2,698
Right-of-use assets
4,291
4,866
Other assets
541
620
Intangible assets, net
39,410
42,631
Goodwill
35,041
35,041
Total assets
$
100,845
$
114,512
Liabilities and Stockholders'
Equity
Current liabilities:
Accounts payable
$
3,774
$
3,301
Accrued payroll and benefits
3,759
4,055
Current operating lease liabilities
1,400
1,400
Other accrued liabilities
1,227
612
Total current liabilities
10,160
9,368
Non-current liabilities:
Operating lease liabilities
3,640
4,467
Deferred tax liabilities, net
117
117
Total non-current liabilities
3,757
4,584
Commitments and contingencies
Stockholders' equity:
Common stock, par value $0.001 per share;
100,000,000 shares authorized; 55,121,767 and 54,259,390 shares
issued and outstanding (2022 and 2021, respectively)
55
54
Additional paid-in capital
354,641
352,779
Accumulated comprehensive deficit
(267,768
)
(252,273
)
Total stockholders’ equity
86,928
100,560
Total liabilities and stockholders'
equity
$
100,845
$
114,512
Smith Micro Software Inc.
Consolidated Statement of
Operations
(in thousands except share data)
For the Three Months Ended
June 30,
For the Six Months Ended
June 30,
2022
2021
2022
2021
Revenues
$
12,674
$
15,919
$
25,409
$
27,300
Cost of revenues
3,617
3,358
7,253
4,903
Gross profit
9,057
12,561
18,156
22,397
Operating expenses:
Selling and marketing
3,720
3,117
6,706
5,361
Research and development
8,213
7,063
15,615
11,936
General and administrative
4,026
4,946
8,073
8,604
Amortization of intangible assets
1,577
2,645
3,221
4,943
Total operating expenses
17,536
17,771
33,615
30,844
Operating loss
(8,479
)
(5,210
)
(15,459
)
(8,447
)
Other income (expense):
Interest income (expense), net
2
16
(2
)
24
Other income, net
15
5
15
9
Loss before provision for income taxes
(8,462
)
(5,189
)
(15,446
)
(8,414
)
Provision for income tax expense
31
14.00
50
14
Net loss
$
(8,493
)
$
(5,203
)
$
(15,496
)
$
(8,428
)
Loss per share:
Basic and diluted
$
(0.15
)
$
(0.10
)
$
(0.28
)
$
(0.17
)
Weighted average shares outstanding:
Basic and diluted
55,183
53,017
55,844
48,219
Smith Micro Software, Inc.
Consolidated Statements of Cash
Flows
(in thousands)
For the Three Months Ended
June 30,
For the Six Months Ended
June 30,
2022
2021
2022
2021
(unaudited)
(unaudited)
(unaudited)
(unaudited)
Operating activities:
Net loss
$
(8,493
)
$
(5,203
)
$
(15,496
)
$
(8,428
)
Adjustments to reconcile net loss to net
cash (used in) provided by operating activities:
Depreciation and amortization
1,904
2,984
3,902
5,481
Non-cash lease expense
335
311
673
618
Provision for doubtful accounts
(5
)
—
—
(3
)
Provision for excess and obsolete
inventory
—
—
—
(97
)
Stock based compensation
1,688
1,279
2,754
2,295
Changes in operating accounts:
Accounts receivable
497
(378
)
(975
)
3,640
Prepaid expenses and other assets
(309
)
(606
)
(527
)
(225
)
Accounts payable and accrued
liabilities
(640
)
(428
)
(1,812
)
(1,077
)
Deferred revenue
(15
)
(163
)
(146
)
(708
)
Net cash (used in) provided by operating
activities
(5,038
)
(2,204
)
(11,627
)
1,496
Investing activities:
Acquisitions, net
—
(56,865
)
—
(56,865
)
Capital expenditures
(49
)
(146
)
(112
)
(336
)
Other investing activities
71
58
83
69
Net cash provided by (used in) investing
activities
22
(56,953
)
(29
)
(57,132
)
Financing activities:
Proceeds from common stock offering, net
of offering expenses
—
(187
)
—
59,711
Proceeds from exercise of common stock
warrants
—
—
—
40
Proceeds from financing arrangements
750
—
1,291
—
Repayments of financing arrangements
(210
)
—
(391
)
—
Other financing activities
2
33
35
67
Net cash provided by (used in) financing
activities
542
(154
)
935
59,818
Net (decrease) increase in cash and cash
equivalents
(4,474
)
(59,311
)
(10,721
)
4,182
Cash and cash equivalents, beginning of
period
$
9,831
$
89,247
$
16,078
$
25,754
Cash and cash equivalents, end of
period
$
5,357
$
29,936
$
5,357
$
29,936
Smith Micro Software, Inc.
Reconciliation of GAAP to Non-GAAP
Results
(in thousands, except per share data) -
unaudited
GAAP
Stock Compensation
Intangibles
Amortization
Personnel Severance and
Reorganization Activities
Acquisition Costs
Non-GAAP
Three Months Ended June 30,
2022
Gross profit
$
9,057
$
(1
)
$
—
$
—
$
—
$
9,057
Selling and marketing expenses
3,720
(73
)
—
(721
)
—
2,926
Research and development expenses
8,213
(268
)
—
—
—
7,945
General and administrative expenses
4,026
(767
)
—
—
—
3,259
Amortization of intangible assets
1,577
—
(1,577
)
—
—
—
Total operating expenses
17,536
(1,108
)
(1,577
)
(721
)
—
14,130
(Loss) income before provision for income
taxes
(8,462
)
1,109
1,577
721
—
(5,055
)
Net (loss) income
(8,493
)
1,109
1,577
721
—
(5,086
)
(Loss) earnings per share: basic and
diluted
(0.15
)
0.02
0.03
0.01
—
(0.09
)
Three Months Ended June 30,
2021
Gross profit
$
12,561
$
—
$
—
$
—
$
—
$
12,561
Selling and marketing expenses
3,117
(236
)
—
—
—
2,881
Research and development expenses
7,063
(241
)
—
—
—
6,822
General and administrative expenses
4,946
(802
)
—
—
(972
)
3,172
Amortization of intangible assets
2,645
—
(2,645
)
—
—
—
Total operating expenses
17,771
(1,279
)
(2,645
)
—
(972
)
12,875
—
(Loss) income before provision for income
taxes
(5,189
)
1,279
2,645
—
972
(293
)
Net (loss) income
(5,203
)
1,279
2,645
—
972
(307
)
(Loss) earnings per share: basic and
diluted
(0.10
)
0.02
0.05
—
0.02
(0.01
)
Note: (Loss) earnings per share: basic and
diluted - may be impacted by rounding to allow rows to
calculate.
Smith Micro Software, Inc.
Reconciliation of GAAP to Non-GAAP
Results
(in thousands, except per share data) -
unaudited
GAAP
Stock Compensation
Intangibles
Amortization
Personnel Severance and
Reorganization Activities
Acquisition Costs
Non-GAAP
Six Months Ended June 30, 2022
Gross profit
$
18,156
$
(1
)
$
—
$
—
$
—
$
18,155
Selling and marketing expenses
6,706
(157
)
—
(721
)
—
5,828
Research and development expenses
15,615
(529
)
—
—
—
15,086
General and administrative expenses
8,073
(1,488
)
—
—
—
6,585
Amortization of intangible assets
3,221
—
(3,221
)
—
—
—
Total operating expenses
33,615
(2,174
)
(3,221
)
(721
)
—
27,499
(Loss) income before provision for income
taxes
(15,446
)
2,175
3,221
721
—
(9,329
)
Net (loss) income
(15,496
)
2,175
3,221
721
—
(9,329
)
(Loss) earnings per share: basic and
diluted
(0.28
)
0.04
0.06
0.01
—
(0.17
)
Six Months Ended June 30, 2021
Gross profit
$
22,397
$
—
$
—
$
—
$
—
$
22,397
Selling and marketing expenses
5,361
(426
)
—
—
—
4,935
Research and development expenses
11,936
(434
)
—
—
—
11,502
General and administrative expenses
8,604
(1,435
)
—
—
(1,583
)
5,586
Amortization of intangible assets
4,943
—
(4,943
)
—
—
—
Total operating expenses
30,844
(2,295
)
(4,943
)
—
(1,583
)
22,023
—
(Loss) income before provision for income
taxes
(8,414
)
2,295
4,943
—
1,583
407
Net (loss) income
(8,428
)
2,295
4,943
—
1,583
393
(Loss) earnings per share: basic and
diluted
(0.17
)
0.04
0.09
—
0.03
0.01
Note: (Loss) earnings per share: basic and
diluted - may be impacted by rounding to allow rows to
calculate.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220811005118/en/
IR INQUIRIES: Charles Messman Investor Relations
949-362-5800 IR@smithmicro.com
Smith Micro Software (NASDAQ:SMSI)
Historical Stock Chart
From Aug 2024 to Sep 2024
Smith Micro Software (NASDAQ:SMSI)
Historical Stock Chart
From Sep 2023 to Sep 2024