Q3 2022 Smith Micro Software Inc Earnings Call
While the additional contracts significantly expanded our business space. The acquisitions also provided significant intellectual properties, which afforded us the opportunity to leapfrog, our product offering to be the absolute best available.
As we have discussed on prior Investor Conference calls when we set out to consolidate the best features of the acquired technology into our safe task visual family lifestyle platform.
We had to significantly grow our engineering teams to meet that goal.
The exciting news is that we are quickly approaching the completion of our mission.
In March of this year, we can we've completed the integration of the best of the Circle code base, which culminated in our launch of the first release of <unk> seven.
We are now about to complete the integration of the best of the Avast code base into St past seven as well.
This has been a massive undertaking for our engineering teams and the successful completion will allow us to migrate all of our customers to the same safe have platform going forward.
The achievement of the migration will also result in another profound effect on our business as it allows us to significantly reduce our operating expenses beginning in the current third quarter.
We expect that the full effect of the cost optimization will be realized by the start of the second quarter of 2023.
As we have stated during our previous earnings calls since the acquisition from our boss. We also anticipate a rebound of our gross margins into the 80% to 90% range. After all customers are fully migrated.
The result in profit margin should fall in the mid 20% range.
None of this is new as we stated this consistently since the acquisition from of Us.
What is new is that we are at a point in time, what the mission is virtually complete.
And the acquisition synergies can start to be realized.
We expect to release the last build of the legacy of Vos platform in Q4 of this year.
Required updates to support the latest Android and Apple iOS releases.
There will be no new releases of the legacy.
Circle platform.
And we will officially end of life via Vos platform in midyear 2023 by which time, we will have no remaining customers on the platform.
This means that all customers will be operating on the same platform.
Overall, we are anticipating that these synergies, but resulted in a core quarterly operating expense reduction of over $3 million.
Versus Q2 2022 by the end of Q1 2023.
Now a quick recap of our Q2 quarterly results.
Revenue of $12 7 million for the quarter came in relatively flat when compared to Q1 2022.
This revenue softness represents the continued decline of legacy sprint revenues from both the comp suite in season product families.
Spread constantly revenues will essentially and in Q3 2022.
The non-GAAP loss was slightly higher than guidance due to additional contract engineering being deployed to complete the mic.
Migrations to St.
As you can tell where you've been quite focused and we are very excited to begin the next phase as a company.
Ah period, this should bring strong recovery of operating results.
And exciting growth for the company's business case.
Now, let me turn the call over to Jim to detail, our second quarter results Jim.
Thanks, Bill and good afternoon, everyone.
As a reminder, we acquired Neovasc family safety mobile business in April of 2021, which impacts the period over period comparisons there'll be covering to that now.
Now I'll cover the financial details for the second quarter of 2022.
For the second quarter, we posted revenue of $12 7 million compared to $15 9 million for the same quarter last year, a decrease of approximately 20% as a result of the decline in comp suite revenues, coupled with a decrease in family safety revenues.
When compared to the first quarter of 2022 revenue was essentially flat.
Year to date revenues through June 32022 were $25 4 million versus $27 3 million during the second quarter of last year.
The $1 $9 million decrease is due to the decline in comp suite revenues offset by the increase in family safety revenues, resulting from the acquisition from our Baas and <unk>.
April 2021.
During the second quarter of 2022 family safety revenue decreased by about $1 million or 9% compared to the second quarter of last year, primarily as a result of the reduction of the legacy safe <unk> found platform revenue related to the continued attrition of legacy sprint subscribers.
Driven by T Mobile's acquisition of spread.
Family safety revenues decreased 2% sequentially compared to the first quarter of 2022.
During the second quarter of 2022 comp fleet revenue was $1 4 million, which decreased approximately $2 5 million compared to $3 9 million in revenue produced in the second quarter of last year.
Revenue from comp suite was essentially flat sequentially.
Compared to the prior quarter.
As we've discussed on prior calls the decline in legacy sprint subscribers on the comp suite platform is driven by those subscribers, having the option to move from sprint to the T Mobile network for voice services.
As more and more subscribers transition off the sprint network comp suite revenues have continued to decline.
Given the current revenue trends for this subscriber base, we are expecting very modest amounts of revenue from the legacy sprint subscribers in the third quarter after which we would anticipate this revenue stream would be essentially exhausted.
Boost formerly owned by Sprint is now part of dish.
With the contract that we executed with this during the first quarter, we are expanding our relationship with dish on the comps we platform with the goal to increase <unk> fleet subscribers over time.
These spot revenue was approximately $1 1 million for the second quarter of 2022, which.
Which increased by approximately 300000 compared to the second quarter of last year and up approximately 16% compared to the first quarter of 2022.
These spot revenue is comprised of both fixed and variable components.
Fixed portion of the revenue is related to license fees and is generally the recurring component of the revenue.
The variable portion of the revenue is related to device and promotional campaigns in the timing and volume associated with this portion of the revenue stream is less predictable.
With the launch of <unk> seven in the first quarter at one of the tier one U S wireless carriers and the expected migration of another tier one U S carrier to this platform. Later this year, we believe that we have a significant opportunity to grow the subscriber basis at our U S tier one carrier customers in the coming.
Orders.
However, while we are seeing pockets of marketing efforts at certain carriers, we are not expecting a significant increase in subscribers in the third quarter given the activity to date.
We continue to expect that growth will be aligned with the timing of several marketing initiatives, which we will anticipate will be initiated by our carrier customers later this year.
As such we expect consolidated revenue for the third quarter to be lower by 5% to 10% compared to the second quarter of 2022.
For the second quarter gross profit was $9 1 million compared to $12 6 million during the same period last year.
Gross margin was 71, 5% for the second quarter compared to 78, 9% in the second quarter of last year.
The gross profit of $9 1 million in the second quarter was flat with the gross profit produced in the first quarter of 2022.
In the third quarter, we expect gross margin to be down by 1% to 2% from the current run rate.
Due to the anticipated decline in revenue.
Our longer term goal for gross margin is to be back in the range of 80% to 90%.
To achieve this goal, we will optimize third party applications and service contracts used by the combined business upon the migration of our family safety carrier customers onto a seeing single family safety platform.
Once we can fully transition all the carriers off the avast ring platform onto our <unk> platform.
<unk>, we expect to be able to realize synergies that will help us drive our gross margins towards our targeted gross margin.
Given the revised timeline one of the migrations that bill will be discussing in his commentary we expect that these synergies will likely not be fully realized until the second half of 2023.
For the year to date period ended June 32022, gross profit was $18 2 million compared to $22 4 million during the corresponding period last year.
Gross profit was 71, 5%.
For the June 32022 year to date period.
GAAP operating expenses for the second quarter were $17 5 million.
A decrease of approximately $200000.
Or 1% compared to the second quarter of last year.
The decrease was driven by a decline in amortization expense and the acquisition cost.
The acquisition of the <unk> family Safety Mobile business was completed in the second quarter of 2021.
Partially offset by the increase in contractor costs associated with the same path migration.
And the increase in severance costs in the second quarter of 2022.
GAAP operating expenses for the year to date period ended June 32022 was $33 6 million, an increase of $2 8 million or 9% compared to last year.
non-GAAP operating expenses for the second quarter were $14 1 million compared to $12 9 million in the second quarter of 2021.
An increase of approximately $1 3 million or 10%.
Sequentially non-GAAP operating expenses increased by 6% from $13 4 million in the first quarter of 2022 due to the increase in contractor costs related to the same path migrations.
As a frame of reference the contractor costs associated with the migrations was approximately $1 4 million during the second quarter.
We expect third quarter 2022, non-GAAP operating expenses to decrease from the second quarter by 4% to 6% because as Bill had mentioned, we anticipate completing the development rated related to our safe path migrations this quarter and.
And anticipate eliminating substantially all of the development contractor resources by the end of this quarter.
We have already begun ramping down the resources associated with the migrations and released a portion of these resources in June and July we.
We also anticipate a much more significant decline in operating expenses in the fourth quarter as a result of the completion of these development activities.
non-GAAP operating expenses for the year to date period through June 32022 was $27 5 million, an increase of $5 5 million or 25% compared to last year.
Primarily driven by the addition of the <unk> business in April 2021.
The GAAP net loss for the second quarter was $8 5 million or <unk> 15 loss per share.
Compared to a GAAP net loss of $5 2 million or <unk> 10 loss per share in the second quarter of last year.
The non-GAAP net loss for the second quarter was $5 1 million or <unk> <unk> loss per share compared to a non-GAAP loss of approximately $300000 or <unk> <unk> loss per share in the second quarter of last year.
The GAAP net loss for the year to date period was $15 5 million or 28.
Loss per share compared to a GAAP net loss of $8 4 million or <unk> 17 loss per share for the prior year to date period.
The non-GAAP net loss for the year to date period ended June 32022 was $9 4 million or <unk> 17 loss loss per share compared to a non-GAAP net income of approximately 400000 or one of diluted earnings per share last year.
I think today's press release, we have provided a reconciliation of our non-GAAP metrics. The most comparative GAAP metric.
For the second quarter. The reconciliation includes adjustments for intangible asset amortization of $1 6 million.
Stock compensation expense of $1 1 million.
700 severance related costs of approximately 700000, including approximately 600000 of additional stock based compensation expense.
For the year to date period. The reconciliation includes adjustments for intangible asset amortization of $3 2 million stock compensation expense of $2 2 million in the severance related costs of approximately 700000.
Due to our cumulated cumulative net losses over the past few years, our GAAP tax expense is primarily due to certain state and foreign income taxes.
For non-GAAP purposes, we utilized a zero percent tax rate for 2022 and 2021 the.
The resulting non-GAAP tax expense reflects the actual income taxes expense during each period.
From a balance sheet perspective, we reported $5 4 million of cash and cash equivalents as of June 32022, and no borrowing under our line of credit, which had a maximum funding capacity of $7 million.
Earlier today in order to supplement our liquidity, we announced the closing of a $15 million convertible note transaction, primarily with <unk> capital management, a longtime shareholder Smith micro.
We've also entered into an agreement to complete a $3 million equity offering off the shelf with Iroquois again as a key participant these transactions will provide additional liquidity to the company as we complete the migrations to safeguard embraced the company two the expected ramp in revenues that were anticipating in the fall.
Quarter of this year and in 2023.
In conjunction with entering into the convertible note transaction, we terminated the wells Fargo revolving credit facility.
The key terms of the convertible note transaction to include a December 31, 2023 maturity, coupled with amortization payments beginning April one 2023.
Amortization that can be paid either be a cash or equity at the companys election.
If paid in cash the repayment is at 103% of the amortization installment.
Paid in equity the equity is subject to a discount from the market price during the amortization period.
The notes bear interest at 6% and our paid quarterly.
The conversion feature is the $3 35 per share, which represents a 12% premium to the average of the last five closing prices of the stock.
Talk through August 10th.
Warrants were issued in conjunction with the nodes with a strike price also of $3 35 per share.
These warrants have a five year term and represent 50% coverage on the notes.
Regarding the equity transaction, we're expecting the transaction to close tomorrow subject to customary closing conditions.
Per the agreement, we will sell an aggregate of $3 million of common stock at $2 65 per share together with an equivalent number of warrants with a strike price of $2 65 per share.
Similar to the capital raised from the notes transaction, we expect to use the proceeds of the equity offering for general corporate and working capital purposes.
For additional information please refer to the 8-K filed earlier today related to these transactions.
This concludes my financial review now back to Bill.
Thanks, Jim.
So I started out by talking about how we are progressing on our plans to consolidate the very best of our acquired technologies into our safe Paas platform.
And the resultant streamlining of operations to reduce our overall operating expenses.
Our drive to profitability requires both cost containment as well as customer revenue growth.
Now, let's focus in on how we plan to grow our revenues going forward.
Yeah.
Industry data indicates that all three tier one carriers in the U S had between 15 and $20 million Multiline family plan subscribers.
While there are thousands of other subscribers each carrier's universe that are interested in digital family solution.
Just focusing on the multi line users first Simpson, who believes this group represents the most likely source for <unk>.
Didn't pass subscribers.
Based on our customer discovery efforts, we believe that a safe TACE subscriber population in the range of three to 5 million subscribers seems to be attainable.
Each of our three tier one customers by 2025.
To achieve this ambitious goal.
We have built out a strong marketing team at Smith micro to develop best practices for promoting safe tab.
This team works with our carrier customers to develop coordinated marketing campaigns that are multi faceted by design to grow each customers safe path user base.
We see this as a very important service that we provide to our customers.
It also feeds the enabling engine to meet our goals.
Additionally, we have developed a strong product roadmap designed to deliver new innovative capabilities to the same staff platform going forward.
Much like say staff drive and safe TACE home. These new features will deliver new platform services to an already best of class solution.
This phase task platform today, and extending into the future supplies. He grew up with turnkey family offerings that when deployed properly can deliver impressive revenue growth.
Now, let's take a look and an updated project status by customer.
As we discussed on our last call. We launched the first version of safe past seven at T. Mobile in late March of this year.
Which was a successful migration effort from the legacy circle product on <unk> platform.
We continue to partner closely with our counterparts. This customer as we prepare for the next phase during which we will enhance the product with more features and functionality to fuel growth.
Of subscribers.
While this phase has not moved forward as quickly as we had anticipated to launch these product enhancements should help drive the subscriber growth that we envision.
We also completed some additional work around the legacy safe <unk> found product to bring it up onto the safe past seven platform.
Which we expect will help reduce the churn we have been experiencing over the past few years and stabilize the revenue streams associated with this product offering.
As we look at Verizon.
We remain focused on our efforts to migrate the solution to the <unk> platform.
Since our last call we have been requested by the customer to add an additional feature to the code base not required for migration, which is going to push the launch of Verizon unsafe path to late Q1 or early Q2 2023.
However, the core safe path development efforts related to this client.
Are nearing completion.
It will allow us to reduce our investment in resources as I noted in my opening remarks.
While I'm disappointed that we were not able to launch this product into the market by the end of the year I am satisfied with where we are in the process.
On the marketing side, we continue to push forward with new initiatives to build out a long term multichannel approach to drive new subscriber growth.
Throughout the quarter.
Have rolled out several different types of campaigns to raise awareness of smart family not only to potential new subscribers, but also to the horizon employee base.
These campaigns are a critical step in our marketing plan as we gain more visibility across the entire.
Horizon organization, particularly as we look to take advantage of Verizon infrastructure already in place such as retail stores care organization CRM and digital.
For example at back to school campaign is presently being promoted across several channels simultaneously through different groups within Verizon.
There is still work to be done, but we're making good progress as we identify the different Verizon teams get to know their internal processes and execute different initiatives.
This will help us prioritize the smart family platform throughout the entire Verizon organization.
We expect to help drive subscriber growth.
Yeah.
From an AT&T perspective, we.
We remain very bullish on the opportunities ahead.
First the progress of the migration efforts remains on target as we work towards a successful launched before the end of 2022.
Our core safe path development efforts are nearing completion.
Which should allow us to significantly.
Reduce our operating expenses over the coming quarters.
We also are continuing our awareness activities.
Throughout different organizations within AT&T.
It can assist marketing efforts delivering promotional budgeting and assist in training the support organizations.
Okay, Let me briefly talk about few spots.
Now the development phase of abuse by studio is complete and we've upgraded our current customers onto the platform. We can shift our focus to growing view spot revenues going forward with a new feature set.
This new feature set delivers a more fluid user experience for rolling out new retail campaigns as well as in wealth.
New analytical features real time reporting of carrier retail operations.
As Jim mentioned in his prepared remarks are constantly solution as sprint continues to decline as we had anticipated.
Revenue decline from the legacy business is virtually complete.
On the dish front, we continue to push forward as they roll out their new network offerings, which we see as future upside potential for the product in 2023 and beyond.
Before I conclude my comments, let me speak briefly about the capital raise that we announced earlier today.
Iroquois capital management has been a meaningful shareholder of Smith micro for many years.
This rise as Jim said is comprised of $3 million of equity funding and $15 million of convertible debt and provides the company the opportunity to bridge our capital resources into 2023, when we expect to resume the creation of free cash flow.
At the same time.
This funding has replaced 7 million.
Revolving line of credit that we have established with Wells Fargo Bank, which we terminated in connection with the capital raise.
We are thankful once again, the support of Iroquois capital as we believe the capital raise positions us for breakout growth.
1023.
In conclusion. This is an exciting time for Smith micro and our customers employees and shareholders as we complete a massive consolidation project and now move forward as the leader in the family digital lifestyle market servicing wireless carriers around the world.
There is an enormous opportunity in front of us not only with the big three in the U S, but with other tier one carriers in Europe and elsewhere in the world.
Now we move to the revenue growth phase that coupled with the cost reduction efforts that we discussed today should drive profitability and the generation of strong free cash flow in 2023.
Yeah.
With that said lets open the call for questions operator.
We will now begin the question and answer session.
Ask a question you May press Star then one on your telephone keypad.
If youre using a speakerphone please pick up your handset before pressing the keys.
If at any time your question has been addressed and you'd like to withdraw. Your question. Please press Star then two.
At this time, we will pause momentarily to assemble our roster.
Our first question comes from Josh Nichols with B Riley. Please go ahead.
Yes, Thanks for taking my question and elaborating on the status for all the different carriers.
In your comments you did mentioned that you were pretty optimistic that you're going to see a nice bump back to growth in the fourth quarter.
Any visibility you can provide into what's going on in terms of marketing campaigns, specifically at T mobile and what gives you confidence that the company is going to flip back to growth by before the end of this year.
Okay.
But actually it's a combination of b.
Both T mobile and.
The efforts going on at AT&T. So.
It's not a single carrier driven.
You bet.
I would say that.
We're working closely with both carriers.
They are awesome.
Strong plans in place.
We believe they will be successful as I said in my.
In my prepared remarks, there was already on ongoing marketing efforts underway at horizon, and we also expect those to air freight going forward as well so.
Basically I would answer that.
And then last question so.
I think you've kind of hit on the top line and the opportunities there on the Opex side. So the company is going into cost reduction mode. Now that most of the development work is done.
Could you kind of just elaborate a little bit on the timing I think you said like 3 million or something by by mid next year is like is that $3 million a quarter that you're expecting to reduce operating expense from the <unk> run rate or how much is opex can come down over the next 12 months.
Yeah again.
In my prepared comments.
Everything is in excess of $33 million offer.
Opex run rate.
We have for Q2.
And it would be fully.
Bye bye.
<unk> Q1 2023.
Got it. Thank you and then last question just as it was mentioned in the press release I think you've talked about the <unk>.
<unk> U S carriers a lot.
But you did also kind of hit on.
The tier one operators in Europe , as well any updates on that front.
There's a lot of that activity as soon as we have something done we will be we will raise to the market.
But it does seem like you can talk about today.
Great. Thanks.
Thanks, Josh next question.
The next question comes from Eric Martin Mucci with Lake Street Capital markets. Please go ahead.
Hey, this is Kevin for Eric Thanks for taking my question kind of piggybacking off of Josh has a question.
I know the tier one guys. So a big marketing push in the second half could you help us to better understand the timing around that is that kind of a maybe a black Friday, saying and then overall maybe just generally what are you hearing from the carriers in terms of the health of the consumer and the appetite for family plan, given inflation and what.
Where else they are battling right now.
It's a great question, but im not sure how I can answer it really.
As it is.
He has a question you should be asking the carrier but.
Let me try to give some color I would say that.
No.
Our approach to marketing for safe path going forward is a multifaceted approach in other words, we wanted to see activity.
In the stores and the care organizations online digital et cetera, So it's a multi pronged overall approach.
This is really based on history. We've seen this in the past it was a technique that we saw developed during this very successful growth.
Of the sprint business.
A few years ago, and we believe it will work very very well going forward as far as the overall.
State of the industry.
All the carriers have reported their earnings.
And all I pretty much talk to that so I don't know that I can add anything changed to your question.
Okay.
Sounds good.
I guess I'll leave it at that thanks.
Yeah.
The next question comes from Jim Mcelroy with.
Awesome James Please go ahead.
Thank you and good afternoon.
In times past, you've talked about the carriers in Q4 focusing on <unk>.
Subscriber additions rather than signing customers up for new services.
Just wondering if you could talk about that dynamic relative to.
The AT&T launch as well as getting more.
Aggressive with T mobile in Q4.
So that's a good that's a good question Jim.
I would say this that.
The primary focus of the carriers, especially at the retail point.
Is focused on customer acquisition.
And the selling of new plants.
Plans of new handsets.
That said, we still believe that Theres a lot of work that can be done now.
Selling and value added service like.
What what we're talking about with safe tab.
We now talk about.
And I've given you some numbers for the first time, where we're looking at a installed base of $3 5 million subs.
Per carrier for the big three here in the U S. You are now reaching a very meaningful number if you look at the street price for the same path offering.
It's about 10 $10 per month.
<unk> you.
You add in.
Other add on services like <unk> and drive that that goes on top as well as Iot.
So we're not talking about a small amount of money you can run that run the numbers yourself.
If you are sitting with 5 million subs times, Ted Ted but tax 12 U S.
This is a meaningful number for any one of our three tier tier one carrier. So this is this is something to stay focused on.
Okay, Thank you and and secondly on.
You talked a lot about the migrating the technology.
All to one platform.
You still have separate marketing and revenue contracts with the carriers do those need to be renegotiated.
As well.
As part of that technology migration or is that a completely separate discussion.
These are conversations that are on ongoing with all of our customers.
As we start to move forward and as we have now expanded out some of our service offerings like all the added marketing service for best practices and things like that.
There is an opportunity.
For additional revenue growth there as well.
This is a process that will be on ongoing.
I don't think that anything that I've talked about as far as the growth of revenue in Q4 or in the.
Beginning parts of 2023 are really dependent upon that.
Revenue.
Our revenue growth.
In these earlier periods are going to be driven off the fact that we now have all the customers on a much better product offering was phased out seven that gives them a lot more to sell to their customers and we've already seen.
Response from customers.
T mobile they love the new product. So it's just a matter now of getting the marketing efforts.
Go along with it.
All the positives.
Okay.
And my last one Jim can you clarify what you said about comp suite revenues.
I thought you said that they go to zero in Q4, but.
Don't you still have boost revenues from comp suite.
No I was speaking specifically about the legacy sprint T mobile revenue stream.
Based on where we saw the run rates, especially coming out of June and we're expecting that to <unk>.
<unk> down in Q3 and be very nominal if anything in Q4, just with that specific too.
The T mobile sprint revenue stream the dish.
Syed we feel.
That's going to continue at its current rate and we anticipate that in future periods, we will have an opportunity to actually grow grow that revenue stream.
Got it great. Thank you I appreciate it that's it for me.
Certainly thanks, Jim.
The next question comes from Scott Searle with Roth Capital. Please go ahead.
Hey, good afternoon, thanks for taking my questions.
Maybe Jim just to quickly follow up on Jim's question.
It relates to comp suite, so T mobile and sprint coming out of the equation, but how big was that in the second quarter just to help us calibrate what that baseline numbers I thought we were kind of getting close to it in the past couple of quarters as it was and then bill clarification on the $3 million to $5 million number or figure that you gave per carrier was that account.
Is that subscribers that you thought were addressable I just want to clarify that it was accounts for subscribers, who are addressable with each carrier.
Hey, why don't you go first.
Paul.
Alright, I would I'm going to answer it this way Scott in terms of.
What we saw is the exit run rate in June .
For four.
Sure This legacy Sprint T mobile.
<unk> was under $100000.
So that gives you a pretty good sense of the decline that we were seeing coming out of the quarter.
And again, we expect that to be.
Down to nothing.
Nothing or next to nothing by the fourth quarter.
Gotcha.
Okay Scott.
Go back.
State your questions Oh, I'm, sorry, I just wanted to clarify bill when you were talking about the opportunity of $3 million to $5 million per carrier. That's accounts or is that subscribers I was assuming it was accounts, but I wasn't sure yes.
Yes.
The way, we look at it as a family as a subscription so when we're talking about $3 million to $5 million.
We're looking at.
Family coverage.
On a go on a go forward basis.
Quickly I may add as I stated, we think is attainable by 2025, so we're going to go into a growth growth spurt.
As we go through 'twenty, three 'twenty four to get to that so it doesn't happen all at once gotcha, perfect and if I could I'm not sure. If I missed this but in terms of a little bit of a pickup into the fourth quarter did you give any idea as to the magnitude of how you expect that to pick up in terms of safe path revenues as we go in from <unk>.
Temperatures in December .
And we will try to talk about that more as we get closer to the fourth quarter got you and then lastly, if I could Jim in terms of the Opex coming down thats $3 million per quarter.
What are you expecting gross margins to respond too I just want to make sure I'm thinking about this correctly that you breakeven and then from an operating basis is in the $13 million to $14 million range and youre expecting them to generate positive free cash flow in 2023, So we're ramping above and beyond that as we get into the second half of next year is that the right way to be thinking about this.
Yes.
<unk>, Okay, perfect all right. Thanks, guys.
Thank you.
This concludes our question and answer session I would like to turn the conference back over to Charles Messman for any closing remarks.
Thank you operator, and thanks, everybody for joining today.
We look forward to speaking to you on our next call do you have any questions. Please feel free to reach out to us at Smith micro.
Everyone have a great day, thanks again.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.