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, 2023.
“Looking back at 2023, we faced some challenges and implemented
decisive changes to build a new path forward for the Company,” said
William W. Smith, Jr., president, chief executive officer, and
chairman of the board of Smith Micro. “I believe we are well
positioned to capitalize on what is happening in the Family Safety
market today, as we see both governmental and societal pressures
creating significant momentum in the market and driving the need
for technology solutions aimed at providing for our loved ones’
digital and physical safety.”
“I am extremely excited with the further development and current
and future expansion of our product suite to deliver meaningful,
innovative enhancements in our SafePath® platform, including
SafePath Global™, SafePath OS™, and SafePath Premium™.” Smith
continued, “Our core vision continues to be the creation of a safe
digital experience for families, while allowing operators around
the world to add new lines to family accounts, enabling them to
build closer and more valuable relationships with their
subscribers.”
Fourth Quarter 2023 Financial Results
Smith Micro reported revenue of $8.6 million for the quarter
ended December 31, 2023, compared to $11.4 million reported in the
quarter ended December 31, 2022.
Gross profit for the quarter ended December 31, 2023 was $6.4
million, compared to $8.1 million for the quarter ended December
31, 2022.
Gross profit as a percentage of revenue was 74.9 percent for the
quarter ended December 31, 2023, compared to 70.8 percent for the
quarter ended December 31, 2022.
GAAP net loss for the quarter ended December 31, 2023 was $6.7
million, or $0.09 loss per share, compared to GAAP net loss of $8.0
million, or $0.14 loss per share, for the quarter ended December
31, 2022.
Non-GAAP net loss for the quarter ended December 31, 2023 was
$1.7 million, or $0.02 income per share, compared to non-GAAP net
loss of $4.0 million, or $0.07 loss per share, for the quarter
ended December 31, 2022. Non-GAAP net income and net loss excludes
the items noted below under "Non-GAAP Measures."
Fiscal Year 2023 Financial Results
Smith Micro reported revenue of $40.9 million for the twelve
months ended December 31, 2023, compared to $48.5 million reported
in the twelve months ended December 31, 2022.
Gross profit for the twelve months ended December 31, 2023 was
$30.3 million compared to $34.3 million reported for the same
period in 2022.
Gross profit as a percentage of revenue was 74.2 percent for the
twelve months ended December 31, 2023 compared to 70.7 percent for
the twelve months ended December 31, 2022.
GAAP net loss for the twelve months ended December 31, 2023 was
$24.4 million, or $0.38 loss per share, compared to GAAP net loss
of $29.3 million, or $0.53 loss per share, for the twelve months
ended December 31, 2022.
Non-GAAP net loss for the twelve months ended December 31, 2023
was $5.3 million, or $0.08 loss per share, compared to non-GAAP net
loss of $17.6 million, or $0.32 loss per share, for the twelve
months ended December 31, 2022. Non-GAAP net loss excludes the
items noted below under "Non-GAAP Measures."
Total cash and cash equivalents as of December 31, 2023 were
$7.1 million.
Non-GAAP Measures
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, and personnel 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 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.
Investor Conference Call
Smith Micro will hold an investor conference call today,
February 22, 2024, at 4:30 p.m. ET, to discuss the Company’s fourth
quarter and fiscal 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=CqKkUrce.
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, 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, 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 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 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 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, 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.
Smith Micro Software, Inc.
Consolidated Balance Sheets
(in thousands except share and par value
data)
December 31,
2023
December 31,
2022
(unaudited)
(audited)
Assets
Current assets:
Cash and cash equivalents
$
7,125
$
14,026
Accounts receivable, net of related
allowances of $3 and $3 at December 31, 2023 and 2022,
respectively
7,912
10,501
Prepaid expenses and other current
assets
1,843
1,983
Total current assets
16,880
26,510
Equipment and improvements, net
883
1,498
Right-of-use assets
2,759
3,722
Other assets
482
490
Intangible assets, net
29,532
36,320
Goodwill
35,041
35,041
Total assets
$
85,577
$
103,581
Liabilities and Stockholders'
Equity
Current liabilities:
Accounts payable
$
2,522
$
3,236
Accrued payroll and benefits
2,500
3,883
Current operating lease liabilities
1,483
1,441
Other current liabilities
1,137
1,589
Current portion of convertible notes
payable
—
9,007
Derivative liabilities
—
1,575
Total current liabilities
7,642
20,731
Non-current liabilities:
Warrant liabilities
597
3,317
Operating lease liabilities
1,780
2,976
Deferred tax liabilities, net
168
178
Total non-current liabilities
2,545
6,471
Commitments and contingencies
Stockholders' equity:
Common stock, par value $0.001 per share;
100,000,000 shares authorized; 74,783,834 and 56,197,910 shares
issued and outstanding (2023 and 2022, respectively)
75
56
Additional paid-in capital
381,263
357,875
Accumulated comprehensive deficit
(305,948
)
(281,552
)
Total stockholders’ equity
75,390
76,379
Total liabilities and stockholders'
equity
$
85,577
$
103,581
Smith Micro Software, Inc.
Consolidated Statement of
Operations
(in thousands except share data)
For the Three Months Ended
December 31,
For the Year Ended
December 31,
2023
2022
2023
2022
(unaudited)
(unaudited)
(unaudited)
(audited)
Revenues
$
8,593
$
11,405
$
40,862
$
48,513
Cost of revenues (including depreciation
of $11, $20, $50, and $105 in the three and twelve months ended
December 31, 2023 and 2022, respectively)
2,159
3,328
10,559
14,210
Gross profit
6,434
8,077
30,303
34,303
Operating expenses:
Selling and marketing
2,458
3,196
11,089
12,883
Research and development
3,868
6,632
17,145
29,388
General and administrative
3,331
3,623
12,779
15,507
Depreciation and amortization
2,473
1,786
7,345
7,452
Total operating expenses
12,130
15,237
48,358
65,230
Operating loss
(5,696
)
(7,160
)
(18,055
)
(30,927
)
Other income (expense):
Change in fair value of warrant and
derivative liabilities
728
1,212
4,214
4,669
Loss on derecognition of debt
(1,006
)
—
(3,991
)
—
Interest expense, net
(614
)
(1,782
)
(6,354
)
(2,680
)
Other expense, net
10
(93
)
(52
)
(115
)
Loss before provision for income taxes
(6,578
)
(7,823
)
(24,238
)
(29,053
)
Provision for income tax expense
133
149
158
226
Net loss
$
(6,711
)
$
(7,972
)
$
(24,396
)
$
(29,279
)
Loss per share:
Basic and diluted
$
(0.09
)
$
(0.14
)
$
(0.38
)
$
(0.53
)
Weighted average shares outstanding:
Basic and diluted
72,689
56,228
64,916
55,422
Smith Micro Software, Inc.
Consolidated Statements of Cash
Flows
(in thousands)
For the Three Months Ended
December 31,
For the Year Ended
December 31,
2023
2022
2023
2022
(unaudited)
(unaudited)
(unaudited)
(audited)
Operating activities:
Net loss
$
(6,711
)
$
(7,972
)
$
(24,396
)
$
(29,279
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
2,483
1,805
7,395
7,556
Non-cash lease expense
(31
)
68
(191
)
(306
)
Non-cash transaction costs including
amortization of debt discount and issuance costs
595
1,902
5,993
3,324
Change in fair value of warrant and
derivative liabilities
(728
)
(1,212
)
(4,214
)
(4,669
)
Loss on derecognition of debt
1,006
—
3,991
—
Stock based compensation
1,519
1,099
4,835
4,948
Deferred income taxes
(10
)
61
(10
)
61
Loss on disposal of assets
—
(27
)
12
4
Changes in operating accounts:
Accounts receivable
2,381
(1,023
)
2,589
85
Prepaid expenses and other assets
(208
)
(211
)
12
(25
)
Accounts payable and accrued
liabilities
(604
)
406
(2,825
)
(1,120
)
Other liabilities
(717
)
321
(164
)
160
Net cash used in operating activities
(1,025
)
(4,783
)
(6,973
)
(19,261
)
Investing activities:
Capital expenditures, net
1
36
(4
)
(49
)
Other investing activities
66
70
136
164
Net cash provided by investing
activities
67
106
132
115
Financing activities:
Proceeds from notes and warrants
offering
—
—
—
15,000
Proceeds from stock and warrants
offering
—
—
—
3,000
Stock, notes, and warrants offering
costs
—
—
—
(1,227
)
Proceeds from financing arrangements
—
—
981
1,541
Repayments of financing arrangements
120
(300
)
(1,036
)
(1,278
)
Other financing activities
(19
)
2
(5
)
58
Net cash provided by (used in) financing
activities
101
(298
)
(60
)
17,094
Net decrease in cash and cash
equivalents
(857
)
(4,975
)
(6,901
)
(2,052
)
Cash and cash equivalents, beginning of
period
$
7,982
$
19,001
$
14,026
$
16,078
Cash and cash equivalents, end of
period
$
7,125
$
14,026
$
7,125
$
14,026
Smith Micro Software, Inc.
Reconciliation of GAAP to Non-GAAP
Results
(in thousands, except per share data) -
unaudited
GAAP
Stock Compensation
Intangibles
Amortization
Depreciation
Fair Value Adjustments
Amortization of Debt Issuance
Costs and Discount
Personnel Severance and
Reorganization Activities
Non- GAAP
Three Months Ended December 31,
2023
Gross profit
$
6,434
$
—
$
—
$
11
$
—
$
—
$
—
$
6,445
Selling and marketing
2,458
(302
)
—
—
—
—
—
2,156
Research and development
3,868
(302
)
—
—
—
—
—
3,566
General and administrative
3,331
(915
)
—
—
—
—
(155
)
2,261
Depreciation and amortization
2,473
—
(2,369
)
(104
)
—
—
—
—
Total operating expenses
12,130
(1,519
)
(2,369
)
(104
)
—
—
(155
)
7,983
(Loss) income before provision for income
taxes
(6,578
)
1,519
2,369
115
278
595
155
(1,547
)
Net (loss) income
(6,711
)
1,519
2,369
115
278
595
155
(1,680
)
(Loss) earnings per share: diluted
(0.09
)
0.02
0.03
—
—
0.01
—
(0.02
)
Three Months Ended
December 31, 2022
Gross profit
$
8,077
$
—
$
—
$
20
$
—
$
—
$
—
$
8,097
Selling and marketing
3,196
(186
)
—
—
—
—
(68
)
2,942
Research and development
6,632
(274
)
—
—
—
—
(364
)
5,994
General and administrative
3,623
(639
)
—
—
—
—
(184
)
2,800
Depreciation and amortization
1,786
—
(1,545
)
(241
)
—
—
—
—
Total operating expenses
15,237
(1,099
)
(1,545
)
(241
)
—
—
(616
)
11,736
(Loss) income before provision for income
taxes
(7,823
)
1,099
1,545
261
(1,212
)
1,661
616
(3,853
)
Net (loss) income
(7,972
)
1,099
1,545
261
(1,212
)
1,661
616
(4,002
)
(Loss) earnings per share: basic and
diluted
(0.14
)
0.02
0.03
—
(0.02
)
0.03
0.01
(0.07
)
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
Depreciation
Fair Value Adjustments
Amortization of Debt Issuance
Costs and Discount
Personnel Severance and
Reorganization Activities
Non- GAAP
Year Ended
December 31, 2023
Gross profit
$
30,303
$
—
$
—
$
50
$
—
$
—
$
183
$
30,536
Selling and marketing
11,089
(955
)
—
—
—
—
(93
)
10,041
Research and development
17,145
(1,056
)
—
—
—
—
(471
)
15,618
General and administrative
12,779
(2,823
)
—
—
—
—
(363
)
9,593
Depreciation and amortization
7,345
—
(6,789
)
(556
)
—
—
—
—
Total operating expenses
48,358
(4,834
)
(6,789
)
(556
)
—
—
(927
)
35,252
(Loss) income before provision for income
taxes
(24,238
)
4,834
6,789
606
(223
)
5,993
1,110
(5,129
)
Net (loss) income
(24,396
)
4,834
6,789
606
(223
)
5,993
1,110
(5,287
)
(Loss) earnings per share: basic and
diluted
(0.38
)
0.07
0.10
0.01
—
0.09
0.02
(0.08
)
Year Ended
December 31, 2022
Gross profit
$
34,303
$
2
$
—
$
105
$
—
$
—
$
—
$
34,410
Selling and marketing
12,883
(522
)
—
—
—
—
(837
)
11,524
Research and development
29,388
(1,082
)
—
—
—
—
(364
)
27,942
General and administrative
15,507
(2,764
)
—
—
—
(630
)
(183
)
11,930
Depreciation and amortization
7,452
—
(6,312
)
(1,140
)
—
—
—
—
Total operating expenses
65,230
(4,368
)
(6,312
)
(1,140
)
—
(630
)
(1,384
)
$
51,396
(Loss) income before provision for income
taxes
(29,053
)
4,370
6,312
1,245
(4,669
)
3,083
1,384
(17,328
)
Net (loss) income
(29,279
)
4,370
6,312
1,245
(4,669
)
3,083
1,384
(17,554
)
(Loss) earnings per share: basic and
diluted
(0.53
)
0.08
0.11
0.02
(0.08
)
0.06
0.02
(0.32
)
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/20240222621939/en/
IR INQUIRIES: Charles Messman Investor Relations
949-362-5800 IR@smithmicro.com
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