Q4 2023 Smith Micro Software Inc Earnings Call
Operator: Good day, and welcome to the Smith Micro Software fourth quarter 2023 earnings conference call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by Z. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on your TouchTone phone.
Good day and welcome to the Smith Micro software fourth quarter 'twenty twenty-three earnings conference call. All participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero after today's presentation.
There will be an opportunity to ask questions to ask a question you May Press Star then one on your Touchtone phone to withdraw your question. Please press Star then two please note. This event is being recorded I would like to turn the conference over to Charles Messman. Please go ahead.
Charles Messman: To withdraw your question, please press star then. Please note this event is being recorded. I would like to turn the conference over to Charles Messman. Please go ahead.
Charles Messman: Thank you, Operator, and good afternoon, everyone. We appreciate you joining us today to discuss Smith Micro's financial results for the fourth quarter and the fiscal year ended December 31, 2023. By now, you should have received a copy of our press release with the financial results. If you do not have a copy and would like one, please visit the investor relations section of our website at www.smithmicro.com.
Thank you operator, and good afternoon, everyone. We appreciate you joining us today to discuss Smith Micro's financial results for the fourth quarter and the fiscal year ended December 31 2023.
By now you Should've received a copy of our press release with the financial results.
You do not have a copy and would like one please visit the investor relations sections of our website at Www Dot Smith micro dot com.
Charles Messman: On today's call, we have Bill Smith, our Chairman of the Board, President, and Chief Executive Officer, and Jim Kempton, our Chief Financial Officer. Please note that some of the information you will hear during today's discussion consists of forward-looking statements, including without limitation those regarding the company's future revenue and profitability, our plans and expectations, new product development, new and expanded market opportunities, future product developments, migrations, and or growth by new and existing customers, operating expense, and the company's cash. Forward-looking statements involve risk and uncertainties, which could cause actual results or trends to differ materially from those For more information, please refer to our risk factors included in our most recently filed 10-K and our subsequent filings on Form 10-Q.
On today's call we have Bill Smith, our chairman of the Board, President and Chief Executive Officer, and Jim Kempton, Our Chief Financial Officer.
Please note that some of the information you'll hear during today's discussion consist of forward looking statements, including without limitation those regarding the company's future revenue and profitability, our plans and expectations new product development.
New and expanded market opportunities.
Future product developments migrations, and our growth by new and existing customers.
Operating expense and the company's cash reserves.
Forward looking statements involve risks and uncertainties, which could cause actual results or trends to differ materially from those expressed or implied by our forward looking statements.
For more information please refer to our risk factors included in our most recently filed 10-K.
And our subsequent filings on Form 10-Q.
Charles Messman: Smith Micro assumes no obligation to update any forward-looking statements, which speak of our managers' beliefs and assumptions only as of the date they are made. I want to point out that in our forthcoming prepared remarks, we will refer to specific non-GAAP financial measures; please refer to our press release disseminated earlier today for reconciliation of these non-GAAP financial measures. With that said, I'll turn the call over to Bill.
Smith micro assumes no obligation to update any forward looking statements, which speak of our management's beliefs and assumptions only as of the date they're made.
I want to point out that in our forthcoming prepared remarks, we will refer to specific non-GAAP financial measures.
Please refer to our press release disseminated earlier today for a reconciliation of these non-GAAP financial measures with that said I'll turn the call over to Bill Bill.
William W. Smith: Thanks, Charlie. Good afternoon, and thank you for joining us today for our 2023 fourth quarter and year-end conference call. We appreciate your interest. Reflecting on last year, we certainly faced some challenges, which initiated several decisive changes to build a new path forward for the company. And I believe we have found that path.
Thanks, Charlie Good afternoon, and thank you for joining us today for our 2023 fourth quarter and year end conference call. We appreciate your interest.
Reflecting on last year, we certainly face challenges, which initiated several decisive changes.
Until the new path forward for the company and I believe we have found that person.
William W. Smith: The termination of a large customer contract earlier in the year came as a surprise, causing us to quickly pivot and implement necessary changes to better align our resources. It was a large undertaking and difficult task, but I am proud how our team worked collectively to rise to the occasion and accomplish several critical objectives that we absolutely needed to achieve despite this challenge. The most impactful of those achievements was the successful launch of AT&T Secure Family on the SafePath platform. However, there were some challenges along the way.
The termination of a large customer contract earlier in the year came as a surprise, causing us to quickly pivot and implement necessary changes to better align our resources.
It was a large undertaking and difficult task, but I am proud of how our team worked collectively to rise to the occasion and accomplish several critical objectives.
We absolutely needed to achieve despite this challenge.
The most impactful of those she goes what's the successful launch of <unk>.
H M taste secure family on the SaaS Paas platform.
Well there were some challenges along the way.
William W. Smith: We got it across the finish line, and now we have a fantastic opportunity to... significantly expand subscriber growth in fiscal 2024. With the migration efforts finished, we now have the flexibility to further develop and expand our roadmap, delivering meaningful, innovative enhancements to the SafePath platform that will launch this year, which I expect to broaden our market reach and enable us to add new revenue streams. I will cover several of these enhancements in more detail later in the call, but one innovation where I do want to add a bit of color now is SafePath OS.
We got it across the finish line and now have a fantastic opportunity to.
To significantly expand our subscriber growth in fiscal 2024.
Whereas the migration efforts fish, we now have the flexibility to further develop and expand our roadmap delivering meaningful innovative enhancements to the state's test platform that will launch this year, which way, which I expect to broaden our market reach and enable us to do.
Revenue streams.
I'll cover several of these enhancements in more detail later in the call, but one innovation, where I do want to add a bit of color now it was safe to ask O S.
William W. Smith: As you may have seen in our earlier press release announcing SafePathOS, it will bring yet another new market opportunity to Smith Micro by delivering a unique solution to our M&O partners that builds on their strong relationships with handset manufacturers. Safe Path OS is a pure software solution that will allow our partners to promote a safe and secure child's phone or tablet.
As you may have seen in our earlier press release announcing safe that's O S. It won't bring yet another new market opportunity to Smith micro by delivering a unique solution to our MRO Parker's.
Build on their strong relationships with handset manufacturers.
<unk> Oh S. It's a pure software solution that will allow our partners to promote a safe secure child or tablet.
William W. Smith: This product will be fully functional and set up right out of the box with preloaded software pre-configured for Android devices to control the functionality of the phone itself to set digital parameters for safe use by the child. This new initiative for kids' devices will deliver substantial flexibility to our partners for new go-to-market strategies. In addition, SafePath OS will provide enhanced capability for parents and guardians to address features and functionality as their children enter new age groups, allowing them to grow through their digital journey. This is just one of the new initiatives underway for Smith Micro as we enter 2024 full speed ahead. Our core vision continues to be the creation of safe and healthy digital experiences 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 over time. Now, I'll turn the call over to Jim for more detail on the financial results. Jim.
This product will be fully functional and set up right out of the box with preloaded software reconfigured for Android devices to control the functionality of the phone itself.
Digital parameters for safe use by the child.
This new initiative for kids devices will deliver substantial flexibility to our partners for new go to market strategies.
In addition, safe TACE O S will provide enhanced capability for parents and guardians to adjust features and functionality as their children at her new age groups.
All of them to grow through their digital journey.
This is just one of the new initiatives underway for Smith micro as we enter 2024 full speed ahead.
Our core vision continues to be the creation of safe and healthy digital experiences for families well, allowing operators around the world.
I do want to family accounts, enabling them to build closer and more valuable relationships with their subscribers overtime.
Now, let's turn the call over to Jim.
More detail on the financial results Jim.
Jim Kempton: Thanks, Bill. Good afternoon, I'll now be covering the financial details of the fourth quarter and full year 2023. For the fourth quarter, we posted revenue of $8.6 million compared to $11.4 million for the same quarter of 2022, a decrease of approximately 25%, primarily attributable to a decline in family safety revenues period over period. As anticipated, when compared to the third quarter of 2023, revenue decreased by $2.4 million, or 22%, primarily as a result of the conclusion of the Verizon Family Safety post-termination transition period, with no revenue recognized in December 2023 related to this contract. Revenues for 2023 were approximately $40.9 million versus $48.5 million produced last year. The approximate $7.6 million decrease was primarily due to a decline in legacy safe and found family safety revenue related to the continued attrition of legacy Sprint subscribers driven by T-Mobile's acquisition of Sprint and the conclusion of the Verizon contract, coupled with the decline in CommSuite. During the fourth quarter of 2023, family safety revenue decreased by approximately 2.1 million, or 22%, compared to the fourth quarter of the prior year, primarily due to Family safety revenues decreased by approximately 1.7 million, or 18%, compared to the third quarter of 2023.
Thanks, Bill and good afternoon, everyone.
I'll now be covering the financial details of the fourth quarter and full year 2023.
For the fourth quarter, we posted revenue of $8 6 million compared to $11 4 million for the same quarter of 2022.
A decrease of approximately 25% primarily attributable to a decline in family safety revenues period over period.
As anticipated when compared to the third quarter of 2023 revenue decreased by $2 4 million or 22%, primarily as a result of the conclusion of the Verizon family safety post termination transition period.
With no revenue recognized in December 2023 related to this contract.
Revenues for 2023 were approximately $40 9 million versus 48.5 million produced last year.
The approximate $7.6 million decrease was primarily due to a decline in legacy safe <unk> found family safety revenue related to the continued attrition of legacy sprint subscribers driven by T. Mobile's acquisition of sprint and the conclusion of the Verizon contract coupled with the decline in comps.
Revenues.
During the fourth quarter of 2023 family safety revenue decreased by approximately $2 1 million or 22% compared to the fourth quarter of prior year, primarily due to the decline in Verizon family safety revenues in the fourth quarter of 2023, and the post termination transition.
Period for that contract concluded and the continued decline in legacy sprint safe <unk> found revenues.
Family safety revenues decreased by approximately $1 7 million or 18% compared to the third quarter of 2023.
Jim Kempton: During the fourth quarter of 2023, CommSuite revenue was $500,000, which decreased by approximately $400,000 compared to the fourth quarter of 2022. This decrease is attributable to a decline in DISH revenue, coupled with a period-over-period decline in revenue generated from the Legacy Sprint deployment, which generated no CalmSuite revenue in the fourth quarter of 2020. Revenue from CommSuite decreased by approximately $200,000 compared to the third quarter of 2020.
During the fourth quarter of 2023 call suite revenue was 500000, which decreased by approximately 400000 compared to the fourth quarter of 2022.
This decrease is attributable to a decline in dish revenue coupled with a period over period decline in revenue generated from legacy sprint.
From the legacy sprint deployment, which generated no comp suite revenue in the fourth quarter of 2023.
Revenue from comps, we decreased by approximately 200000 compared to the third quarter of 2023.
I would note that in December we were able to expand our premium visual voicemail offering more broadly across the dish network and did see an increase in subscribers in that offering post expansion.
Jim Kempton: I would note that in December, we were able to expand our premium visual voicemail offering more broadly across the DISH network and did see an increase in subscribers in that offering post-expansion. We are expecting a further expansion of the PVVM offering across the DISH Network in the first half of 2024, which we anticipate will yield additional growth in subscribers. ViewSpot revenue was approximately $600,000 for the fourth quarter of 2023, which declined by approximately $300,000 compared to the fourth quarter of the prior year and decreased by approximately a half a million compared to the third quarter of 2023. The decline in ViewSpot revenues was in line with our expectations.
We are expecting a further expansion of the P V B M offering across the dish network in the first half of 2020 for which we will in pits, which we anticipate will yield additional growth in subscribers.
You're spot revenue was approximately 600000 for the fourth quarter of 2023, which declined by approximately 300000 compared to the fourth quarter of prior year and decreased by approximately half a million compare to the third quarter of 2023.
The decline in reuse bought revenues was in line with our expectations.
Jim Kempton: In the first quarter of 2024, we are expecting consolidated revenues to decrease by 32 to 36%, or $2.7 million to $3.1 million, compared to the fourth quarter of 2023, driven primarily by no further Verizon Family Safety revenues being recognized in the first quarter, as the post-termination transition period for that contract concluded in the fourth quarter of 2023. For the fourth quarter of 2023, gross profit was $6.4 million compared to $8.1 million during the same period of the prior year, a decrease of approximately $1.7 million. While gross profit declined for the fourth quarter of 2023 versus the same period of 2022, gross margin was higher at 74.9% for the fourth quarter of 2023, compared to 70.8% realized in the fourth quarter of 2022.
In the first quarter of 2024, we are expecting consolidated revenues decreased by 32% to 36% or 2.7 million to $3 1 million compared to the fourth quarter of 2023.
Driven primarily by no further Verizon family safety revenues being recognized in the first quarter.
Those termination and transition period for that contract concluded in the fourth quarter of 2023.
For the fourth quarter of 2023 gross profit was $6 4 million compared to $8 1 million. During the same period of the prior year, a decrease of approximately $1 7 million.
While gross profit declined for the fourth quarter of <unk> 23 versus the same period of 2022 gross margin was higher at 74, 9% for the fourth quarter of 2023 compared to 78% realized in the fourth quarter of 2022.
The gross profit of $6 4 million in the fourth quarter of 2023 decreased sequentially by approximately $2 million compared to the gross profit produced in the third quarter of 2023, driven primarily by this sequential decline in revenues quarter over quarter.
Jim Kempton: The gross profit of $6.4 million in the fourth quarter of 2023 decreased sequentially by approximately $2 million compared to the gross profit produced in the third quarter of 2023, driven primarily by the sequential decline in revenues quarter over quarter. In the first quarter of 2024, we expect gross margins to be in the range of 64 to 68 percent. For the year-to-date period ended December 31, 2023, gross profit was $30.3 million compared to $34.3 million during 2022. Gross margin was 74.2% for the year ended December 31, 2023 versus a gross margin of 70.7% achieved in 2022, an improvement of approximately 350 basis points. Gap operating expenses for the fourth quarter of 2023 were $12.1 million, a decrease of $3.1 million or 20% compared to the fourth quarter of 2022. Gap operating expenses for the year ended December 31, 2023 were $48.4 million, a decrease of $16.9 million or 26% compared to the prior year.
In the first quarter of 2024, we expect gross margins to be in the range of 64% to 68%.
For the year to date period ended December 31, 2023, gross profit was $30 3 million compared to $34 3 million during 2022.
Gross margin was 74, 2% for the year ended December 31, 2023 versus a gross margin of 77 produced in 2022, an improvement of approximately 350 basis points.
GAAP operating expenses for the fourth quarter of 2023 were $12 1 million, a decrease of $3 1 million or 20% compared to the fourth quarter of 2022.
GAAP operating expenses for the year ended December 31, 2023 were $48 4 million, a decrease of $16 9 million or 26% compared to the prior year.
non-GAAP operating expenses for the fourth quarter of 2023 8 million compared to $11 7 million in the fourth quarter of 2022, a decrease of approximately $3 8 million or 32%.
Sequentially non-GAAP operating expenses increased by approximately 200000 or 3% from the third quarter of 2023.
We expect first quarter 2024, non-GAAP operating expenses to increase by 1% to 4% compared to the fourth quarter of 2023.
Jim Kempton: Non-GAAP operating expenses for the fourth quarter of 2023 were $8 million, compared to $11.7 million in the fourth quarter of 2022, a decrease of approximately $3.8 million, or 32%. However, sequentially, non-GAAP operating expenses increased by approximately 200,000, or 3%, from the third quarter of 2020. We expect first quarter 2024 non-GAAP operating expenses to increase by 1% to 4% compared to the fourth quarter of 2023, partially attributable to an increase in marketing and event activities, including Mobile World Congress, our largest trade show event of the year. Non-GAAP operating expenses for the year ended December 31st, 2023, were $35.3 million, a decrease of $16.2 million, or 31 percent, compared to last year. The gap net loss for the fourth quarter of 2023 was $6.7 million, or $0.09 loss per share, compared to a gap net loss of $8 million, or $0.14 loss per share, in the fourth quarter of 2022. The gap net loss for 2023 was $24.4 million, or a $0.38 loss per share, compared to a gap net loss of $29.3 million, or a $0.53 loss per share, in 2022.
Partially attributable to an increase in marketing and in a band activities, including mobile World Congress.
Our largest trade show event of the year.
Yeah.
non-GAAP operating expenses for the year ended December 31, 2023 was $35 3 million, a decrease of $16 2 million or 31% compared to last year.
The GAAP net loss for the fourth quarter of 2023 was $6 7 million or nine cents loss per share compared to a GAAP net loss of $8 million or 14th net loss per share in the fourth quarter of 2022.
The GAAP net loss for 2023 was $24 4 million or <unk> 38 cents loss per share compared to a GAAP net loss of $29 3 million or <unk> 53 loss per share in 2022.
The non-GAAP net loss for the fourth quarter of 2023 was $1 7 million or two cents loss per share compared to a non-GAAP net loss of approximately $4 million or seven cents loss per share in the fourth quarter of 2022.
The non-GAAP net loss for 2023 was $5 3 million or eight cent loss per share compared to a non-GAAP net loss of approximately $17 6 million or 32 cents loss per share in 2022.
Within today's press release, we have provided a reconciliation of our non-GAAP metrics to the most comparable GAAP metric.
For the fourth quarter of 2023. The reconciliation includes adjustments for intangible asset amortization of $2 4 million.
Stock compensation expense of 1.5 million noticed stock offering amortization of 600000.
Jim Kempton: The non-GAAP net loss for the fourth quarter of 2023 was $1.7 million, or a two-cent loss per share, compared to the non-GAAP net loss of approximately $4 million, or $0.07 loss per share, in the fourth quarter of 2022. The non-GAAP net loss for 2023 was $5.3 million, or an $0.08 loss per share, compared to a non-GAAP net loss of approximately $17.6 million Within today's press release, we have provided a reconciliation of our non-GAP metrics to the most comparable GAP. For the fourth quarter of 2023, the reconciliation includes adjustments for N-tangible acid amortization of 2.4 million. Stock Compensation Expense of $1.5 Million, Notice stock offering amortization of 600,000, changes to derivatives and warrants of 300,000, costs related to severance and reorganization activities of approximately $100,000, and depreciation of approximately $100,000 for the year-to-date period, the non-GAAP measure.
Changes to the derivatives and warrants of 300000 cost related to severance and reorganization activities of approximately 100000 and depreciation of approximately 100000.
For the year to date period.
non-GAAP.
The non-GAAP reconciliation includes adjustments for intangible asset amortization of $6 8 million.
Stock compensation expense of $4 8 million.
And stock offering amortization of $6 million.
Ranges took derivatives and warrants.
Approximately 200000.
Depreciation of approximately 600000.
Costs related to severance and reorganization activities of approximately $1 1 million.
Due to our 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 2023 and 2022.
The resulting non-GAAP tax expense reflects the actual income taxes expense during each period.
From a balance sheet perspective, we reported $7 1 million of cash and cash equivalents as of December 31 2023.
During the fourth quarter use of cash in operating activities amounted to $1 million.
I would also note that at the end of 2023, our senior secured convertible notes were retired at maturity.
This concludes my financial review now back to Bill.
Thanks, Jim.
Hey, I wanted to get back to the first quarter guidance that Jim provided but first let me start out by addressing the preliminary proxy statement filed earlier today.
Jim Kempton: The non-GAAP reconciliation includes adjustments for intangible asset amortization of $6.8 million, stock compensation expenses of $4.8 million, and note in stock offering amortization of $6 million. Changes to derivatives and warrants, approximately $200,000, depreciation of approximately $600,000, and costs related to severance and reorganization activities of approximately $1.1 million. Due to our cumulative net losses over the past few years, our gap tax expense is primarily due to certain state and foreign income taxes. For non-GAAP purposes, we utilized a 0% tax rate for 2023 and 2022. The resulting non-GAAP tax expense reflects the actual income tax expense during each period.
It relates to a special shareholder meeting to give our board the discretion to effectuate a reverse stock split.
As we described in the preliminary proxy statement. There are several reasons why we feel that this is the prudent approach for the company at this point.
But our primary goal with a reverse stock split is to increase the per share market price of our common stock to meet nasdaq's minimum bid price requirement.
Given the current price of the stock as we had been trading under $1.
Last earnings call. We expect this action would sufficiently increased our share price to help us regain compliance.
Additionally, we believe it will create increased flexibility, especially believe positions the company to be opportunistic.
William W. Smith: From a balance sheet perspective, we reported $7.1 million of cash and cash equivalents as of December 31, 2023. During the fourth quarter, use of cash and operating activities amounted to $1 million. I would also note that, at the end of 2023, our Senior Secure Convertible Notes were retired and matured. This concludes my financial review. Now, back to Bill.
Any strategic opportunities that we identified including M&A.
We feel strongly that this approach.
This is the appropriate go forward strategy for the company and our shareholders to ensure the long term success of the company.
Now, let me circle back to our guidance for the first quarter.
We've indicated for some time now that the first quarter would be challenging as the horizons family safety revenue will no longer be contributing to our revenue during 2024.
William W. Smith: Thanks, Jim. Okay, I want to get back to the first quarter guidance that Jim provided. But first, let me start out by addressing the preliminary proxy statement that we filed earlier today. It relates to a special shareholder meeting that would give our board the discretion to effectuate a reverse stock split.
We reacted quickly to the termination of the contract last year and significantly adjusted our cost structure in anticipation of this decline in revenues.
He had been focused on efforts to grow our revenues to fill the gap, including through the expansion of our product portfolio to drive growth.
William W. Smith: As we described in the preliminary proxy statement, there are several reasons why we feel that this is the prudent approach for the company at this point. But our primary goal with the reverse stock split is to increase the per share market price of our common stock to meet NASDAQ's minimum bid price requirement. Given the current price of the stock, as we have been trading under a dollar since our last earnings call, we expect this action would sufficiently increase our share price to help us regain compliance. Additionally, we believe it will create increased flexibility, which we believe positions the company to be opportunistic on any strategic opportunities that we identify, including M&A. We feel strongly that this approach is the appropriate go-forward strategy for the company and our shareholders to ensure the long-term success of the company.
Selling our solutions to additional Msos and M D N o's and working to grow subscriber bases.
Existing customers.
I'll cover the expansion of both our customer and <unk>.
Product portfolio shortly.
By adding a bit more color on our contract win with a major tier one carrier in Europe.
We announced in December, but first I wanted to address our efforts by their current customers and a little bit more detail.
With regard to AT&T as we previously announced we have successfully watched at&t's cure family on the safe test platform and are winding down the legacy of Eos platform.
Since launch we released new updates to continue to improve the product and have expanded our addressable market with the launch of At&t's secure family to subscribers of cricket.
William W. Smith: Now, let me circle back to our guidance for the first quarter. We've indicated for some time now that the first quarter would be challenging as the Verizon family safety revenue will no longer be contributing to our revenue in 2024. We reacted quickly to the termination of the contract last year and significantly adjusted our cost structure in anticipation of this decline in revenue.
But AT&T.
We are currently partnering with.
With AT&T for the next phase of marketing activities, including the launch of.
New initiatives that build on awareness programs digital campaigns and maximizing the unique sales channels.
William W. Smith: We have been focused on efforts to grow our revenues to fill the gap, including through the expansion of our Safe Pass product portfolio to drive growth, selling our solutions to additional MNOs and MDNOs, and working to grow subscriber bases with our existing customers. I'll cover the expansion of both our customer and product portfolio shortly, providing a bit more color on our contract with a major tier one carrier in Europe that we announced in December. But first, I wanted to address our efforts with our current customers in a little bit more detail. With regard to AT&T, as we previously announced, we have successfully launched AT&T Secure Family on the SafePath platform and are winding down the Legacy of Us platform. Since launch, we have released new updates to continue to improve the product and have expanded our addressable market with the launch of AT&T Secure Family to subscribers of Cricut, owned by AT&T.
TNT has today.
Experience has showed us that it sometimes takes longer to get things rolling with large carrier customers, but we do easily turned the corner on the marketing front, a big step in the progress progress, but the continued rollout of AT&T secure family.
When you see the excitement building at AT&T and believe there is a significant opportunity to drive new subscriber growth.
We look to the remainder of the year.
On the T mobile front since the last call. We've released updates to families are to continue to enhance subscriber satisfaction.
In addition, we're collaborating with the T mobile team exploring new ways to expand our overall reach.
I would characterize our relationship is solid and we continue working towards identifying areas, where we can expand the subscriber base.
William W. Smith: We are currently partnering with AT&T for the next phase of marketing activities, including the launch of new initiatives that build on awareness programs, digital campaigns, and maximizing the unique sales channels that AT&T has today. Experience has shown us that it sometimes takes longer to get things rolling with large carrier customers, but we believe we've turned the corner on the marketing front, a big step in the progress of the continued rollout of AT&T Secure Family. We see excitement building at AT&T and believe there is a significant opportunity to drive new subscriber growth as we look to the remainder of the year. On the T-Mobile front, since the last call, we've released updates to Family Mode to continue to enhance subscriber satisfaction.
At dish, we have continued to enhance constantly to meet the needs for Android based visual voicemail service.
We enjoy a very strong relationship with dish and believe that our business case with dish wireless will continue to expand throughout 2024 and as they grow their business and we expand our reach.
Turning to the European market.
Pleased to announce the new contract in Europe in the fourth quarter in line with the expectations that we had outlined on prior calls.
Activity under the new contract is well underway and we are very excited about the upcoming launch of safe fast with this tier one carrier, which is slated to be in the early second half of the year.
Our development efforts related to this project remain on track, which brings a truly unique and interesting go to market approach that I will be excited to share more about after the launch.
William W. Smith: In addition, we're collaborating with the T-Mobile team, exploring new ways to expand our overall reach. I would characterize our relationship as solid, and we continue working to identify areas where we can expand the subscriber base. At DISH, we have continued to enhance comSuite to meet the needs of the Android-based visual voicemail service.
As you can tell from my comments, our customer relationships are very positive, but Dallas focus on something that really gets me excited.
I'm very energized by the growth of our sales pipeline and the impact of this activity on the forward bookings success of our business in 2024.
William W. Smith: We enjoy a very strong relationship with DISH and believe that our business case with DISH Wireless will continue to expand throughout 2024 as they grow their business and we expand our reach. Turning to the European market, we were pleased to announce the new contract in Europe in the fourth quarter, in line with the expectations that we had outlined on prior calls. Activity under the new contract is well underway, and we are very excited about the upcoming launch of SafeNAS with this Tier 1 carrier, which is slated to be in the early second half of the year. Our development efforts related to this project remain on track, which brings a truly unique and interesting go-to-market approach that I will be excited to share more about after the launch.
Let me see great momentum in the pipeline in both of our targeted geographies of North America and Europe.
As a result, I believe we will deliver new business from both current and new carrier customers in 2024.
And then there will be multiple announcements to be made.
Our efforts over the last three years to establish Smith micro as the Premier provider of family safety software appears to have positioned us well.
With all the turmoil around the world today, we see both governmental and societal pressures coming to bear to provide for both digital and physical safety or loved ones.
And as a result, we are seeing strong interest in our safe test platform.
We will be attending the upcoming 2024 at mobile World Congress in Barcelona, one of the largest wireless trade shows in the world and has lined up a great schedule meetings.
William W. Smith: As you can tell from my comments, our customer relationships are very positive, but now let's focus on something that really gets me excited. I'm very energized by the growth of our sales pipeline and the impact of this activity on the forward-looking success of our business in 2024. We see great momentum in the pipeline in both of our targeted geographies of North America and Europe. As a result, I believe we will deliver new business from both current and new carrier customers in 2024, and that there will be multiple announcements. Our efforts over the last three years to establish Smith Micro as the premier provider of family safety software appear to have positioned us well. With all the turmoil around the world today, we see both governmental and societal pressures coming to bear on us to provide for both the digital and physical safety of our loved ones.
Our participation in mobile World Congress is aligned with our goal of growing awareness of Smith micro is a provider of solutions that are sorely needed and EMEA region.
I am pleased to share the announcement from earlier this week of Smith micro winning the Gold Award.
And the tech for good category for Telecom and wireless at mobile World Congress.
Our industry, leading safe TACE family safety platform.
This award further solidifies our position as the premier provider of family safety solutions.
From a product perspective.
We have expanded our portfolio to drive opportunities for revenue growth on.
On the last call we spoke about if you do offerings coming to the market this year.
William W. Smith: And as a result, we are seeing strong interest in our SafePath platform. We will be attending the upcoming 2024 Mobile World Congress in Barcelona, one of the largest wireless trade shows in the world, and have lined up a great schedule of meetings. Our participation in Mobile World Congress is aligned with our goal of growing the awareness of Smith Micro as a provider of solutions that are sorely needed in the EMEA region. I am pleased to share the announcement earlier this week of Smith Micro winning the Gold Barrett Award in the Tech for Good category for Telecom and Wireless at Mobile World Congress for our industry-leading Safe Path family safety platform. This award further solidifies her position as the premier provider of family safety solutions.
Let me touch on those products again briefly.
Safe tab, three premium broadens, our safe to ask portfolio, adding new unique functionality that we believe is responsive to current market demand.
It is well no debt significant risks are not just prevalent but are expanding and frequency and sophistication in both digital and physical worlds.
Safe TACE Trehan will bring AI driven experiences that will enable users to manage risks associated with cyber bullying and inappropriate content on existing social media platforms and other digital.
Any indications channels.
Additionally, this solution brings improved physical location intelligence safety features to the application.
William W. Smith: From a product perspective, we have expanded our portfolio to drive opportunities for revenue growth. On the last call, we spoke about a few new offerings coming to the market this year. Let me touch on those products again briefly.
We see great potential with this upgrade and expect this product to be available.
Well for launch in the second half.
The fiscal year.
We're already receiving great feedback from both existing customers and new prospects in the Seattle regarding safe TACE premium.
William W. Smith: SafePath Premium broadens our SafePath portfolio, adding new, unique functionality that we believe is responsible for meeting current market demand. It is well known that significant risks are not just prevalent but are expanding in frequency and sophistication in both the digital and physical world. SafePath Premium will bring AI-driven experiences that will enable users to manage risks associated with cyberbullying and inappropriate content on existing social media platforms and other digital communications channels.
It was just a very positive, creating a new value proposition, while expanding our market opportunity.
We also announced <unk> global a new streamlined deployment model, which we have targeted to be available for launch in the next few months.
Safe to have global delivers a two market safe test solution with very low dependency on I T resources and other integration efforts from our carrier partners.
William W. Smith: Additionally, this solution brings improved physical location intelligence and safety features to the application. We see great potential in this upgrade and expect this product to be available for launch in the second half of the fiscal year. We're already receiving great feedback from both existing customers and new prospects in the field regarding SafePath Premium, which has been very positive, creating a new value proposition while expanding our market opportunity. We also announced SAPATH Global, a new streamlined deployment model which we have targeted to be available for launch in the next few months. SafePath Global delivers a quick-to-market SafePath solution with very low dependency on IT resources and other integration efforts from our peer-to-peer partners.
This product provides an expedited path to revenues the Osage tests for both our customers and it's like well Bob quickly delivering a family safety solution to that operator subscribers.
Well. He believes this offering will expand our brand while providing significant flexibility lodging elasticity is a safe bet.
This state that deployment model will also reach a much larger untapped market, including not only tier one and their nose, but also tier two and tier three carriers as well as the ever expanding market.
At the end of around the world.
I'm pleased to say that we already have a good idea as to where the first deployment of both premium and global Whoopee.
William W. Smith: This product provides an expedited path to revenues via safety for both our customers and Smith Micro while quickly delivering a family safety solution to that operator's subscribers. We believe this offering will expand our brand while providing significant flexibility in launching new instances of SafePAT. This Safe Path to Planet model will also reach a much larger untapped market, including not only Tier 1 MNOs but also Tier 2 and Tier 3 carriers, as well as the ever-expanding market of MVNOs around the world. I'm pleased to say that we already have a good idea as to where the first deployments of both premium and global will be a great start in 2024 for Smith Micro. SafePath Global and SafePath Premium, coupled with our newly announced SafePathOS solution, will provide our company with a significant opportunity to expand our relationships with our existing customers and to develop new customers with this broader suite of digital family lifestyle offerings.
Great start in 'twenty 'twenty four for Smith micro.
Safety is well and safe that pregnant coupled with our newly announced say staff OIS solution will provide our company with a significant opportunity to expand our relationships with our existing customers and to develop new customers with this broader sweep additional family lifestyle.
All offense.
We will continue the expansion of our product portfolio with innovative functionality as we align with our M. O M. D N O partners, creating new distribution methods for a broader reach around the world all based on the safety platform.
In closing I'm as excited as ever with our path forward as we continue expanding our vision for family safety.
As we move into 'twenty 'twenty four I remain both excited and confident about the new chapter where a variety for our company.
Our partners and our shareholders.
With that operator.
It's open the call for questions.
William W. Smith: We will continue the expansion of our product portfolio with innovative functionality as we align with our M&O and MD&O partners, creating new distribution methods for a broader reach around the world, all based on the SafePath platform. In closing, I'm as excited as ever with our path forward as we continue expanding our vision for family safety. As we move into 2024, I remain both excited and confident about the new chapter we are writing for our company, our partners, and our shareholders. With that, operator, let's open the call to questions. We will now begin the question and answer session. To ask a question, you may press star, then 1 on your touchtone phone.
[noise] do before this launch in the second half or is that most of it on the carrier side at this point.
Okay Josh.
Josh Nichols: If you are using a speaker phone, please pick up your handset before. If at any time your question has been addressed and you would like to withdraw it, please press star then. At this time, we will pause momentarily to assemble our questions. Our first question comes from Josh Nichols of B. Reilly. Go ahead. Yeah, thanks for taking my question. I just wanted to touch on the new European customer. I realize you weren't able to put too much out, obviously, in the press release, but I was just curious. Anything you could say?
That's that's the purchase first by saying most opportunities in the European market are gonna be greenfield. They they typically will not have existing family safety bases built up. So you know we were.
We're gonna have to build them with with the launch I.
I really can't say a whole lot about this you know exactly how this is gonna work. It is a unique and is it a very innovative approach that.
Josh Nichols: Does this customer have an existing solution? Or is this going to be their first family safety solution? And are there many deliverables on the company's part that Smith Micro has to do before this launch in the second half? Or is most of it on the carrier side?
We are jointly taking with this carrier.
It's gotta be excited and I really am looking forward to being able to talk about it in more detail once the launch has actually happened but.
Yeah, we are building.
William W. Smith: Okay, Josh, let's approach this first by saying most opportunities in the European market are going to be greenfield. They typically will not have existing family safety, you know, bases built up. So, you know, we're going to have to build them with a lot, uh, I really can't say a whole lot about exactly how this is going to work. It is a unique and very innovative approach that we are jointly taking with this carrier. I think it's going to be exciting.
Some additional capabilities on say fast for this.
And they will all be part of the of the launched it did I spoke about.
Thanks, Bill then greatly here you mentioned that you think that you kind of turned the corner in terms of marketing efforts at a T. T just to dive into that a little bit like what gives you the confidence that you expect those efforts to kind of.
<unk> in the near term is it the upcoming implementation of like Smith.
Charles Messman: I really am looking forward to being able to talk about it in more detail once the launch has actually happened. We are building some additional capabilities on SafePath for this, and they will all be part of the launch that I spoke about. Thanks, Bill, and then, Great to hear. You mentioned that you think that you've kind of turned the corner in terms of marketing efforts at AT&T. Just to dive into that a little bit, what gives you the confidence that you expect those efforts to kind of ramp up in the near term? Is it the upcoming implementation of SPIFs to in-store salespeople or other marketing efforts that give you confidence that that business is likely to see a more material increase this year? Hey Josh, it's Charlie.
In store salespeople or other marketing efforts. They give you confidence that business is likely to see a more material ramp this year.
Hey, Josh it's Charlie Yeah, I think that now that the migration efforts are done there's been an enormous amount of things that we've had to.
Get in place prior to really starting to turn the channels on.
And yes, it is going to be a multifaceted approach and I think we're we're doing some unique things with AT&T as well and that I think will be quite visible which is something that we're very excited about and I think that you can sense the excitement around it now that the launches behind us and we're all.
Safe to.
Charles Messman: Yeah, I think that now that the migration efforts are done, there's been an enormous amount of things that we've had to get in place prior to really starting to turn the channels on. And yes, it is going to be a multifaceted approach. I think we're doing some unique things with AT&T as well that I think will be quite visible, which is something that we're very excited about. And I think that you can sense the excitement around it now that the launch is behind us, and we're all a secure family going forward. I think that gives me a lot of confidence in AT&T and us because I can see it happening. I appreciate the detail. Thanks. Josh.
Take your family going forward so.
I think that that that gives me a lot of confidence in AT&T and us because I can see it happening.
I appreciate the detail thanks.
It's just.
Our next question comes from Jim Mcelderry, a dolphin James Please go ahead.
Yeah. Thanks, just not follow up on Josh Joshua question about the European customer.
When.
When when you say that Ah launch is going to be early second half.
Obviously, the the carriers have a habit of pushing things to the right but.
James McIlree: Our next question comes from Jim McIlree of Dawson, James. Please go ahead. Yeah, thanks. Just a follow up on Josh's question about the European customer. When you say that a launch is going to be early, second half, obviously, the carriers have a habit of pushing things to the right, but are there, are there significant technological issues that need to be addressed at this point, or is it more of a, it's just, you just need time to get things done?
Is is are there are there are significant technological.
Shoes that need to be addressed at this point or is it more of a it's just you just need time to to get things done.
Okay I think the.
The best way to answer this is the.
William W. Smith: Okay, I think the best way to answer this is by beginning the launch at a new tier one carrier in Europe that has never had a family safety app before. So there are a number of steps that have to be completed in order to set this up for a very successful business opportunity. In addition, they have created a concept that is new. It's a little different approach than what has traditionally been done here in North America. And so that does require some technology to be developed, tested, and implemented. And, you know, so it's a mixed bag. It's really a little bit of both.
A beginning launch add a new tier tier one carrier in Europe that has never had a family safety App before.
So there are a number of steps it has to be completed in order to set this up for a very successful.
<unk> opportunity.
In addition, they have created a concept that is new it's a little different approach than what has traditionally been done here in North America.
So that does require some technology to be developed and tested and implement it and so it's it's a mixed bag, it's it's really a little bit of both but the.
William W. Smith: But. The carrier is very energized, they are really putting a lot of effort into this, and I think they have high expectations. We like that; that's something that we always look for.
The carrier is very energized they are really put in a lot of effort into this and I think they have high expectations and we liked that there's something that that we always look look for so.
William W. Smith: So you're just going to have to stand by, it's not that much longer anyway, and we'll be able to talk about it. Okay, thank you for that. And can you characterize the attrition of the Legacy Sprint customers, its impact on your revenue, is it kind of a steady quarter-to-quarter decline, or is it accelerating or diminishing in its decline?
You're just gonna have to have stamps, thereby it's not that much longer anyway, and we'll be able to talk about it.
Okay. Thank you for that and can you characterize the Ah.
Patrician of the legacy sprint customers its impact on your your on your revenue is it.
Nevada steady quarter to quarter decline or is it.
Accelerating or or diminishing and it's and it's decline.
William W. Smith: Yeah, okay. I think we talked about this some time ago on earlier conference calls. You can no longer sign up for the old Sprint Safe and Found service.
Yeah, Okay, I think we talked about this some time ago on an.
Earlier conference calls yeah.
You can no longer sign up for the the old sprint safe and sound surface is capped out product offering so it just slowly declines quarter over quarter and that's what you should.
William W. Smith: It's a capped out product offering, so it just slowly declines quarter over quarter, and that's what you should expect. There will be a point in time where it just ceases, but that's part of the process. All the interest and all the efforts at T-Mobile will be focused on the family mode product. And, you know, we're starting to see some really strong interest there. So, I feel positive. I don't know, Jim.
They expect it will be a point in time, where Jesse but that's that's part of the process. All the interest in all the efforts at at T. T mobile will be focused on the family both product and we're starting to see some really a strong.
Interest there so I I feel past.
<unk> G M.
Jim Kempton: Just real quick, Jim, to also note the CommSuite revenues that had been affecting some of that; they're completely gone at this point. So this is really just about family safety with what Bill talked about. The CommSuite is now fully out of the numbers, and you won't hear... that in terms of the comparisons going forward. Thank you. And just to make sure I understand your answer, Bill. The quarter to quarter decline of those legacy customers is stable right now, but at some point, it won't be.
Just real quick and it also note the commsuite revenues that had been affecting some of that.
They're completely go on at this point. So this is really just on the family safety with what Bill talked about the Commsuite is now pulling out of the numbers and you know you won't here.
That in terms of the comparisons going forward.
Understood. Thank you and just to just to be just to make sure I understand your answer bill the.
The quarter to quarter decline of those legacy customers is stable right now at some point it won't be at some point they'll just you know just drop zero, but well.
William W. Smith: At some point, it'll just be, it'll just drop to zero, but right now, it's at a steady decline. It is a quarter-over-quarter decline as users, you know, get new T-Mobile phones and move them off of Safe and Sound. They have the opportunity to move to FamilyVote, and that's part of the process.
<unk> steady decline.
It is a quarter over quarter decline as as users.
Get new T mobile phones, and move then off of safe and sound. They have the operate opportunity to move the family boat and that's that's part of the process.
William W. Smith: Got it. And then on gross margin in Q, excuse me, gross margin in Q1. Is the quarter-to-quarter decline... Solely a function of scale, or are there costs that you're going to incur in Q1 that will be eliminated in subsequent quarters, costs associated with the Verizon termination and or the via BASC platform? Well, I guess the best way to answer that is, first up, you always want to look at the quarter that has the marketing costs from Mobile World Congress, and that is, you know, something that happens each year.
Got it.
And then on on gross margin and <unk> excuse me gross margin in Q1.
Is the quarter to quarter decline solely a function of scale or are there costs that you're going to incur incurred in Q1 that will.
Be eliminated in subsequent quarters costs associated with the Verizon termination and or the.
B a vast platform.
Well I guess the best way he has his first up.
You want to always has the quarter that has the marketing costs from mobile World Congress and that is eight.
Something that happens each year so.
William W. Smith: So, you know, that cost is in there, but, Yeah, I'll kick it to Jim. You might want to take it from there. Yeah, from a gross margin perspective, Jim, it's really driven by scale in terms of revenues coming down to where we have certain fixed costs embedded in the cost of sales that are impacting that.
That that cost is in there but.
I'll take it to Jim you might want to take it from there yeah from from a gross margin perspective gym, it's really driven by scale in terms of like the revenues coming down to where we have certain fixed cost embedded in the cost of sales that are impacting that now the second part of your <unk>.
Jim Kempton: Now, the second part of your question, in terms of like costs coming out related to the platform, that is correct. In future periods, we are driving out some of those legacy ring costs, and they will not fully be out in Q1. That'll be coming out over the course of Q1, and some will even tail into Q2, and then we would expect to have them completely out of the cost structure by the end of the second quarter. That's it for me right now.
Question in terms of like cause coming out <unk>. The platform that is correct and you to your periods. We are we are driving out some of those legacy ring cost and they will not only be out in Q1 that'll that'll be coming out over over the course of Q1 and someone will even tailwind acute.
You too and then we would expect to have them completely out of the cost structure by the end of our second quarter.
Okay.
That's it for me right now thanks a lot.
James McIlree: Thanks a lot. Thanks, Jim. As a reminder, if you have a question, please press star. Then. Our next question comes from Scott Searle of Roth MKM. Please go ahead. Hey, good afternoon.
Thank you.
As a reminder, if you have a question. Please press Star then one our next question comes from Scott <unk> of Wrath M. K M. Please go ahead.
Hey, good afternoon. Thanks for taking my questions, maybe a dark in in Europe I just wanted a quick clarification in terms of the two one customer that has already been one is S. C staff global or is that more of a traditional chief half solution and then I was wondering if you could elaborate a little bit more in the pipeline bill it sounds like you're up to.
Scott Searle: Thanks for taking my questions. Maybe to dive in on Europe, I just wanted a quick clarification in terms of the Tier 1 customer that has already been won. Is that SafePath Global?
Scott Searle: Or is that more of a traditional SafePath solution? And then, I was wondering if you could elaborate a little bit more on the pipeline, Bill. It sounds like you're optimistic about some of the opportunities there. I was wondering if you could give us an idea about where you're seeing the strength.
Mystic about some of the opportunities here I was wondering if you could give us an idea about where you're seeing the strike because it'll be tier ones you you've called out the cheapest globals really targeted two tier choose two threes as escort seemed to shrink and do you expect to have announced deals and or other launches into 2024.
Scott Searle: Is it other Tier 1s? You've called out that SafePath Global's really targeted at Tier 2s, Tier 3s. Is that where you're seeing the strength?
William W. Smith: And do you expect to have announceable deals and or other launches in the 2024 timeframe? Okay, let's start with your last question. Absolutely, yes. I expect that we will be making additional announcements to existing and new carrier customers about many of the products that we've talked about on this call. As far as the SafePath Global part is concerned, the European customer is not launching SafePath Global. As I said in my comments, we pretty much know who the first customer will be for SafePath Global, and we also believe we have a really good idea who the first customer will be for SafePath Premium. That will give you some idea that there are other players.
<unk>.
Okay, let's start.
Start with your last question, absolutely, yes, I expect that we will be making additional announcements.
And existing and is <unk>, new carrier <unk> customers about many of the products that we've talked about on on this call.
As far as the safe task global part, though the European customer is not the is that laci and safe that global and as I said in in my.
My comments, we pretty much know who the first customer will be for safe that global and we also believe we have a really good I idea, who the first customer will be for safe to have premium.
That'll give you some idea that yeah. There are other players from a standpoint of the tightest carriers is it covers a broad swath, we you know.
William W. Smith: From a standpoint of the type of carriers, it covers a broad swath. We continue to focus heavily on Tier 1 carriers in North America as well as in the European marketplace, but we're also seeing activity from Tier 2s, Tier 3s, and from some really impactful MVNOs. I think what is happening in this world, I've talked about it on previous calls, we are just in the right spot at the right time with all the turmoil and all the chaos that you see around the world today. The need to keep our loved ones safe is becoming really a major driver. And a product like SafeVats, which is designed to help do that, really tends to benefit from it.
We continue to focus heavily on the tier tier one cares in North America as well as in the <unk> the European marketplace, but we're also seeing activity from tier two tier threes and from some really impactful M. M V N O C.
So you look I think what is happening in this world I've talked about it in a previous calls.
We are just in the right spot at the right time with all the turmoil in all the chaos that you see around the world to today.
Need to keep our Loveland safe is becoming really a major driver and you know a product like safe that which is designed to help do that.
Really tends to benefit from it.
William W. Smith: It's so, you know, there's a lot to be excited about. There are some really, you know, quite innovative product ideas. And, you know, with the SafePath OS, carriers will be able to launch kids' phones and kids' tablets, which will not require anybody to buy a different brand phone. It can be a phone that the carrier already sells, but it will come preloaded with SafePath OS, which will then just out of the box make everything work. There's nothing that has to be done to get the thing up and running.
It's so yeah.
There's a lot to be excited about there's a you know some.
Some of the new product ideas are really you know quite an innovative and.
With a safe path O S.
Carriers will be able to lodge kids phones, and kids tablets, you know get which will not require anybody to buy a different brand phone. It can be a brand phone that the carrier already sells but it will come pre loaded with a safe path.
L O S, which will then just out of the box make everything worse, there's nothing that has to be done to get the thing up and up and running.
William W. Smith: This becomes an exciting market as, you know, kids grow up and they get their first phone. And, you know, this is when parents really have to take a moment and they go, wow, now I'm exposing my kid to all sorts of things I'm really not sure I really like that are on the internet. So now I had better figure out a way to keep them safe. Well, in this case, with SafePath OS, they can get a tablet, which may be the first device, or a phone, and they can have it preloaded.
It comes and exciting market.
As you know you see kids growing and they get their first phone and they you know this is when parents really have to take a moment and they go Wow now I'm I'm exposing my Kid to all sorts of things I'm really not sure I really liked that are on the internet. So now I better figure out a way.
Way to keep them safe well in this case was safe F. O O S. They can get a tablet, which baby the first device or a phone and they can have it free free loaded and all the safety features are there from the minute you power up the the device for the first time.
William W. Smith: And all the safety features are there from the minute you power up the device, the first. Hey Bill, maybe to just follow up on that front, specifically in Europe, what does the competitive landscape look like, considering that there are additional security requirements and privacy requirements, particularly for young adults? Does that change the competitive landscape in the European theater, or are there no competitors on the front line? And then just a quick question on pricing. I assume premium pricing will have premium pricing, but SafePath Global, is that the expectation that's going to price in the same range of what you're seeing today, or how are you thinking about that? Okay, let me parse it apart and then come back if I missed one. First off, on the global product low price, exactly the same thing prices the current safe safe path to offer; the premium product will sell at a premium price.
Hey, Bill maybe to just follow up on that front, specifically in Europe. What is the competitive landscape look like considering that there are additional security requirements and privacy requirements, particularly around young adults does that change the competitive.
Landscaping European theater or are there no competitors on the card and then just a quick question on pricing.
<unk> premium pricing will have premium pricing, but safe path global is is that the expectation that's gonna price in the same range of what you're seeing today or how're you thinking about that.
Okay, Let me, let me parse it apart and they'd come back if I Miss one first off on the the global product will price exactly the same same price as the current safe safe that's off right <unk>.
The premium product will price at a premium price so that you'll give us both the carrier and Smith, that's micro a opportunity to it and enhance revenue.
Scott Searle: So that gives both the carrier and Smith Micro an opportunity to enhance revenue. You packaged up an awful lot of questions. So just the competitive landscape in Europe, given what you've had to do to stay past seven and kind of upgrade the security features, you've mentioned a couple of times about cyber bullying. I'm just kind of wondering what the competitive landscape in Europe is right now. Because it sounds like you check all the boxes. Is there anyone else who's able to do that?
Give me you you you packaged up an awful lot of questions.
Oh, just the competitive landscape in Europe, given what you had you just need to have any kind of upgrade the security features you've mentioned a couple of times about cyber bullying uhm I'm just kind of wondering what that what is the competitive landscape in Europe right now cause it sounds like you check all the boxes is there anyone else who's able to do that.
Well honestly from a carrier.
William W. Smith: Well, honestly, from a carrier marketing standpoint, we really are the only serious player that's marketing directly to carriers. The over-the-top players like Life360 and Bark, they also have presences in Europe just the same as they do here in the U.S. So I think from a competitive landscape point of view, it's pretty much the same in both geographies from a privacy point of view. We have as many growing privacy laws here in North America as they already have in Europe. And so this is something that we pay a lot of attention to. We are constantly making sure that our software meets the needs and the spirit of the law; whatever needs to be done is all built into the product before the product even launches. So, you know, the privacy issues are paramount and really pretty much around the world, but definitely in the geos that we're focused on.
Marketing stamped standpoint, we really are the only serious player this marketing diet directly to carriers the over the top players like life's 360 Embarq. They also have presence in in Europe, just the same as they do here in the U S. So I think for the.
The competitive landscape.
Point of view, it's pretty much the same.
In both Geography's from.
From a <unk>.
Privacy issue.
We have as many growing privacy laws here in North America as they already have in Europe and so this is something that we pay a lot of attention to we are constantly making sure that our software meets the needs and.
And the spirit of the law what else what ever needs to be done is is all built into the product before the product launches. So.
The privacy issues.
<unk> and it's really pretty much around the world, but definitely in the deals that were they were focused on so.
Scott Searle: So, you know, we're really on that. That's a big effort. And Leslie, if I could, and I apologize if you covered this earlier,
We're really on that that's it that's it that's a big effort.
Unless if I could and I apologize if you've covered this earlier I hope I'm gonna call a little bit late but the a T and T ramp if if we went back to history.
Scott Searle: I hopped on the call a little bit late. But the AT&T ramp, if we look back on history, and the Sprint ramp, you really started to gain some momentum about 18 months ago. You know, how are you thinking about AT&T a little bit longer? Does it really start to get that meaningful inflection when you think about where Sprint was 18 to 24 months into the ramp, or are there some headwinds that are going on in terms of marketing deployment or otherwise that it takes a little bit of a more muted trajectory?
<unk>, you really starting to regain some momentum about 18 months plus in.
How are you thinking about E T T a little bit longer does it does it really start to get that meaningful inflection. When you think about where splint was 18 to 24 months into the ramp or are there. Some headwinds that are going on in terms of marketing deployment or otherwise that it takes a little bit of a more muted trajectory. Thanks.
Charles Messman: Thanks. Yeah, so what we talked about on the call, this is that Charlie, Scott, and I talked about on the call was that now that the migration efforts are done, we see, we're starting to see this next wave beginning to start, and we're doing some very unique things at AT&T that I think are going to start to spark, and it builds upon itself once it gets going. These things like going and getting all the employees to use them.
Yeah. So I think what we talked about on the call. This is that Charlie and Scott we talked about on the call was that now that the migrations efforts are gone.
We see where we're starting to see this next week beginning to start doing.
There is some very unique things at a T and T that that I think is going to start to <unk>. It builds upon itself. Once it gets going you know these things like.
Going and getting all the employees, but there's lots of different activities are going on right now to to get the get the ball rolling and we start to see.
Charles Messman: There are lots of different activities that are going on right now to get the ball rolling. And we start to see now that, again, we're past migration. We think that we've turned the corner. That answers your question.
So now that again, we're past migration.
We think that we turn the corner.
Charles Messman: Yep, perfect. Thanks, Charles. This concludes our question and answer session. I would like to turn the conference back over to Charles Messman for any closing remarks. I want to thank everybody for joining us today. If you have any further questions, please reach out to us, and we'll look forward to talking to you pretty soon here in the first quarter. Thanks guys. The conference is now concluded. Thank you for attending today's presentation. You may now. BF-WATCH TV 2021, www.microsoft.com
Can I get your question.
Yeah perfect. Thanks for <unk>.
This concludes our question and answer session I would like to turn the conference back over to Charles Messman for any closing remarks.
I Wanna, Thank everybody for joining us they should do you have any further questions. Please reach out to us and I will look forward to talking to you pretty soon here on the first corner. Thanks.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
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