Q1 2024 Smith Micro Software Inc Earnings Call
Operator: Good day, and welcome to the Smith Micro First Quarter 2024 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Charles Messman, Vice President of Marketing. Please go ahead.
Good day and welcome to the Smith micro first quarter 'twenty 'twenty four earnings conference call. All participants will begin listen only mode should you need assistance. Please signal a conference specialist by pressing Star then zero on your telephone keypad.
Speaker Change: After todays presentation, there will be an opportunity to ask questions to ask a question you May Press Star then one on your telephone keypad to withdraw your question. Please press Star then two.
Operator: Please note. This event is being recorded I would now like to turn the conference over to Charles Messman, Vice President of marketing.
Charles Messman: Please go ahead.
Charles Messman: Thank you, operator, and good afternoon, everyone. We appreciate you joining us today to discuss Smith Micro Software's financial results for the first quarter ended March 31st, 2024. By now, you should have received a copy of the press release with the financial results. If you do not have a copy and would like one, please visit the investor releases section of our website at www.smithmicro.com. 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.
Charles Messman: Thank you operator, and good afternoon, everyone. We appreciate you joining us today to discuss Smith micro Software's financial results for the first quarter ended March 31 2024.
Charles Messman: By now you should have received a copy of the press release with the financial results.
Charles Messman: You did not have a copy would like one please visit the Investor Relations section 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.
Charles Messman: 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 and availability, new and expanded market opportunities, future product deployments, migrations, and or growth by new and existing customers. Operating expenses, cost reduction efforts, and the company's cash reserve. Forward-looking statements involve risk and uncertainties, which could cause actual results or trends to differ materially from those expressed or implied by our forward-looking statements.
Charles Messman: Please note that some of the information you'll hear during todays discussion consist of forward looking statements.
Charles Messman: Including without limitations those regarding the company's future revenue and profitability, our plans and expectations new product development and availability.
Charles Messman: You had expanded market opportunities.
Charles Messman: Future product deployment migration and or growth by new and existing customers.
Charles Messman: Operating expenses.
Charles Messman: Cost reduction efforts the company's cash reserves.
Charles Messman: 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.
Charles Messman: For more information, please refer to our risk factors included in our most recently filed Form 10-K. Smith Micro assumes no obligation to update any forward-looking statements, which speak to our management's beliefs and assumptions only as of the date they are made. I also want to point out that in the forthcoming prepared remarks, we will refer to non-GAAP financial measures; please refer to our press release disseminated earlier today for the reconciliation of these non-GAAP financial measures. With that said, I'll turn the ball over to Bill.
Charles Messman: For more information please refer to our risk factors included in our most recently filed Form 10-K.
Charles Messman: Microsoft seems no obligation to update any forward looking statements, which speak to our management's beliefs and assumptions only as of the date they are made.
Bill: I also want to point out that in our forthcoming prepared remarks, we will refer to non-GAAP financial measures.
Charles Messman: Please refer to our press release disseminated earlier today for the reconciliation of these non-GAAP financial measures, but 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 2024 first quarter conference call. We appreciate your interest in Smith Microsoft. Let me start my remarks today by saying that we are focused on returning the company to growth in the near term and have several initiatives underway to realize that target, which I will touch on throughout the presentation today. But we're not quite there yet.
Bill: Thanks, Charlie Good afternoon, and thank you for joining us today for our 2024 first quarter Conference call. We appreciate your interest in Smith micro software.
William W. Smith: Let me start my remarks today by saying that we are focused on returning the company to growth in the near term and have several initiatives underway to realize that target with.
William W. Smith: I will touch on throughout the presentation today.
William W. Smith: But we're not quite there yet.
William W. Smith: We have made a lot of progress in several areas that are projected to set the stage for growth in the back half of this year.
William W. Smith: We have made a lot of progress in several areas that are projected to set the stage for growth in the back half of this year. Along with our return to growth, we are also working to return to profitability on a non-gap basis. In conjunction with our revenue growth initiatives, we plan to bring down our cost structure to achieve that non-gap profitability and positive cash flow. We'll touch on the cost reductions a little later in our presentation.
William W. Smith: Along with a return to growth we are also working to.
William W. Smith: Return to profitability on a non-GAAP basis in conjunction with their revenue growth initiatives, we plan to bring down our cost structure to achieve that non-GAAP profitability and positive cash flow.
William W. Smith: Let's touch on the cost reductions a little later in our presentation.
William W. Smith: So let me begin by discussing some key milestones we achieved that have laid the foundation for revenue growth. Most significantly, we are pleased to announce today that DISH will be our first customer to launch SafePath Global. DISH is, in fact, the customer we referred to in our earlier press release announcing the signing of our first Safe Path Global Agreement. DISH's forthcoming launch is particularly exciting for us, as SafeAPP Global is a key component to our long-term strategy, allowing for a fast launch that only takes a matter of weeks from contract signing to availability in the market. We believe that this deployment model is very repeatable and is an enormous difference from a more typical launch that can take several months.
William W. Smith: So let me begin by discussing <unk>.
William W. Smith: Some key milestones we achieved that have laid the foundation for revenue growth.
William W. Smith: This will also include premium visual voicemail as part of its value-added services, which is powered by our CommSuite platform. We see a strong and collaborative relationship coming together as we are aligned with DISH on our goals for both products' success. Our other recent contract win is with our Tier 1 carrier in Europe, which is expected to launch in the second half of this year. This delivery will introduce a unique product approach to a family safety solution that is yet to be seen in the market.
William W. Smith: Most significantly we are pleased to announce today that dish will be our first customer to watch safe as well.
William W. Smith: Yes in fact, the customer we referred to.
William W. Smith: Earlier press release announcing the signing of our first safe past global agreement.
William W. Smith: This just forthcoming watch is particularly exciting for us as they used to have global is a key component to our long term strategy.
William W. Smith: Allowing for fast lunch it only takes a matter of weeks from contract signing to availability in the market.
William W. Smith: We believe that this deployment model is very repeatable.
William W. Smith: And is an enormous difference from a more typical watch that can take several months.
William W. Smith: Dish will also include premium visual voicemail to as value added services, which is powered by our comm suite platform.
William W. Smith: We see a strong and collaborative relationship coming together as we are aligned with dish on our goals for both products success.
William W. Smith: Our other recent contract win is with a tier one carrier in Europe.
William W. Smith: Which is expected to launch in the second half of this year.
William W. Smith: This delivery will introduce a unique product approach to our family's safety solution that is yet to be seen in the market.
William W. Smith: We believe that the launch will drive significant interest in SafeVal, tailored to the European customer base, leading to other opportunities in that region, which will be a bonus to the revenue expected to be generated under this contract. As far as our Tier 1 carrier partners here in the United States, we have fully completed the migration to SAFAT at AT&T and made a few release updates throughout this year to further improve the user experience and reach. More specifically, SafePath is now available to AT&T prepaid and Cricut wireless customers, also further expanding our addressable market.
William W. Smith: He believes that the launch will drive significant interest in safe bet.
William W. Smith: Tailored towards European customer base, leading to other opportunities in that region.
William W. Smith: Each will be a bonus to the revenue expected to be generated under this contract.
William W. Smith: As far as our tier one carrier partners here in the United States, We have fully completed the migration to states that at AT&T and made a few release updates throughout this year to further improve the user experience and reach.
William W. Smith: Or specifically say staff is now available to AT&T prepay and cricket wireless customers also further expanding our addressable market.
William W. Smith: With those migration activities behind us, a new wave of marketing activities is underway that we expect will pay dividends in the near term. At T-Mobile, we are enjoying productive discussions, and our teams are sharing new energy and alignment, which we believe may yield mutual benefits, particularly around some of our new advancements on the SafePath platform with our expanded product roadmap. We are cautiously optimistic that these discussions may result in a renewed focus on expanding family safety offerings and result in subscriber growth over the back half of 2024.
William W. Smith: With those migration activities behind us a new wave of marketing activities is underway that we expect will pay dividends in the near term.
William W. Smith: Yeah.
William W. Smith: At T mobile we are enjoying productive discussions and our teams are sharing new energy and alignment.
William W. Smith: Wish we believe me, you'll mutual benefits, particularly around some of our newest absence of the <unk> platform with our expanded product roadmap.
William W. Smith: We are cautiously optimistic that these discussions may result in a renewed focus on expanding family safety offerings and result in subscriber growth over the back half of 2024.
William W. Smith: Another key milestone that we believe sets the stage for revenue growth is the launch in April of our Affiliate Influencer Program. In addition, our Retail Store Ambassador Program will be launched very shortly. We see these programs as a tremendous opportunity to build awareness and education for our carrier partners about safe path-based family safety solutions. It will also help us to incentivize retail staff at both corporate and authorized resellers with a seamless program that is easily deployed and implemented.
William W. Smith: Another key milestone that we believe sets the stage for revenue growth.
William W. Smith: The launch in April of our affiliate Influencer program in.
William W. Smith: In addition.
William W. Smith: Our retail store Ambassador program will be launched very shortly.
William W. Smith: See these programs as a tremendous opportunity to build awareness and education for our carrier partners Safe task based family safety solutions.
William W. Smith: It will also help us to incentive ties retail staff.
William W. Smith: Both corporate and authorized resellers with a seamless program that is easily deployed and implemented.
William W. Smith: I will discuss both the affiliate and ambassador programs in more detail later in the call. With the progress that we've made on these several fronts, we believe we are gaining momentum for revenue growth in the back half of this year. After Jim's comments, we will dig in a bit deeper and add some additional color. Now, we turn the call over to Jim now to discuss our financial results in greater detail.
William W. Smith: I will discuss both the affiliates and ambassador programs in more detail later in the call.
Jim: With the progress that we've made on several fronts. We believe we are gaining momentum for the revenue growth in the back half of this year.
William W. Smith: Following Jim's comments, we will dig in a bit deeper and add some additional color.
William W. Smith: Let's turn the call over to Jim now to discuss our financial results in greater detail Jim.
James M. Kempton: Thanks, Bill, and good afternoon, everyone. I'll now be covering the financial details of the first quarter of 2024. Please note, all of my comments today regarding per share metrics reflect the retroactive impact of the 1 for 8 reverse stock split that was approved by our shareholders and effectuated in early April. For the first quarter, we posted revenue of $5.8 million, compared to $10.9 million for the same quarter of 2023, a decrease of approximately 47%.
Jim: Thanks, Bill and good afternoon, everyone.
James M. Kempton: When compared to the fourth quarter of 2023, revenue decreased by $2.8 million, or 33%. During the first quarter of 2024, family safety revenue decreased, as anticipated, by approximately 4.6 million, or 51 percent, compared to the first quarter of the prior year, primarily due to our having recognized no Verizon family safety revenues during the first quarter of 2024, as that contract concluded in the fourth quarter of 2023. Additionally, coupled with the continued decline in the legacy Sprint safe and found revenue, family safety revenues decreased by approximately $3 million, or 40%, compared During the first quarter of 2024, CommSuite's revenue was $700,000, which decreased by approximately $200,000 compared to the first quarter of 2023. Revenue from CalmSuite increased by approximately $100,000 compared to the fourth quarter of 2021.
James M. Kempton: I'll now be covering the financial details of the first quarter of 2024.
James M. Kempton: Please note all of my comments today regarding per share metrics reflect the retroactive impact of the one per a reverse stock split that was approved by our shareholders and effectuate in early April.
James M. Kempton: For the first quarter, we posted revenue of five 8 million compared to 10.9 million for the same quarter of 2023, a decrease of approximately 47%.
James M. Kempton: When compared to the fourth quarter of 2023 revenue decreased by $2 8 million or 33%.
James M. Kempton: During the first quarter of 2024 family safety revenue decreased as anticipated by approximately $4 6 million or 51% compared to the first quarter of the prior year, primarily due to our having recognized no Verizon family safety revenues during the first quarter of 2024.
James M. Kempton: Is that contract concluded in the fourth quarter of 2023.
James M. Kempton: Coupled with the continued decline in the legacy sprint safe <unk> found revenue.
James M. Kempton: Family safety revenues decreased by approximately 3 million or <unk> 40 per cent compared to the fourth quarter of 2023, driven by the conclusion of the horizon family safety contract.
James M. Kempton: During the first quarter of 2020 for Comm suite revenue was 700000, which decreased by approximately 200000 compared to the first quarter of 2023.
James M. Kempton: Revenue from comps, we increased by approximately 100000 compared to the fourth quarter of 2023.
James M. Kempton: ViewSpot revenue was approximately $700,000 for the first quarter of 2024, which declined by approximately $300,000 compared to the first quarter of the prior year and increased by approximately $100,000 compared to the fourth quarter of 2023. The decline in ViewSpot revenues compared to the first quarter of 2023 was primarily due to the previously announced termination of one of our ViewSpot contracts in the second half of 2023. In the second quarter of 2024, we are expecting consolidated revenues to be in the range of approximately $5 million to $5.5 million.
James M. Kempton: He's spot revenue was approximately 700000 for the first quarter of 2024, which declined by approximately 300000 compared to the first quarter of the prior year and increased by approximately 800000 compared to the fourth quarter of 2023.
James M. Kempton: The decline in view spot revenues compare to the first quarter of 2023 was primarily due to the previously announced termination of one of our abuse bulk contracts in the second half of 2023.
James M. Kempton: In the second quarter of 2024, we are expecting consolidated revenues to be in the range of approximately 5 million to $5 5 million.
James M. Kempton: This anticipated decline in revenue is driven in part by a projected decrease in viewspot revenues, primarily due to less variable revenue related to device launches and marketing-related activities in the second quarter of 2024 compared to the first quarter of 2000. For those of you who follow us closely, you know we only provide next quarter guidance, but as Bill stated earlier, we are focused on returning the company to growth in the near term.
James M. Kempton: This anticipated decline in revenue is driven in part by a projected decrease in abuse slot revenues, primarily due to less variable revenue related to device launches and marketing related activities in the second quarter of 2000.
James M. Kempton: 24, compared to the first quarter of 2024.
James M. Kempton: For those of you who follow us closely.
James M. Kempton: You know, we only provide next quarter guidance, but as Bill stated earlier, we are focused on returning the company to growth in the near term.
James M. Kempton: For the first quarter of 2024, gross profit was $3.8 million compared to $7.6 million during the same period of the prior year, a decrease of approximately $3.8 million, primarily due to the period-over-period decline in revenue. Gross margin was at 65.7% for the quarter compared to the 70% realized in the first quarter of 2023. The gross profit of $3.8 million in the first quarter of 2024 decreased sequentially by $2.6 million compared to the gross profit produced in the fourth quarter of 2023, driven primarily by the sequential decline of revenues quarter over quarter. In the second quarter of 2024, we expect gross margin to be in the range of 66 to 70%.
James M. Kempton: For the first quarter of 2024 gross profit was $3 8 million compared to $7 6 million. During the same period of the prior year a decrease of approximately three 8 million primarily due to the period over period decline in revenues.
James M. Kempton: Gross margin was at 65, 7% for the quarter compared to the 70% realized in the first quarter of 2023.
James M. Kempton: The gross profit of $3 8 million in the first quarter of 2024 decreased sequentially by $2 6 million compared to the gross profit produced in the fourth quarter of 2023, driven primarily by the sequential decline in revenues quarter over quarter.
James M. Kempton: In the second quarter of 2024, we expect gross margin to be in the range of 66% to 70%.
James M. Kempton: During the first quarter of 2024, because of the sustained decrease in our stock price, we evaluated the carrying value of our goodwill and determined that a non-cash impairment charge of $24 million was required. As a result, GAAP operating expenses for the first quarter of 2024 were $35.3 million, an increase of $20.7 million, or 142% compared to the first quarter of 2023, due to that goodwill impairment charge of $24 million partially offset by the effect of cost reduction activities undertaken during 2023.
James M. Kempton: During the first quarter of 2024.
James M. Kempton: Is this the same decrease in our stock price, we evaluated the carrying value of our goodwill and determined that the noncash impairment charge of 24 million was required.
James M. Kempton: As a result, GAAP operating expenses for the first quarter of 2024 were $35 3 million, an increase of $20 7 million or 142% compared to the first quarter of 2023 due to that goodwill impairment charge of 24 million, partially offset by the effect of cost.
James M. Kempton: Reduction activities undertaken during 2023.
James M. Kempton: non-GAAP operating expenses for the first quarter of 2024 were $8 1 million compared to $11 3 million in the first quarter of 2023, a decrease of approximately $3 2 million or 28%.
James M. Kempton: Sequentially non-GAAP operating expenses increased by approximately 100000 or 1% from the fourth quarter of 2023.
James M. Kempton: Non-GAAP operating expenses for the first quarter of 2024 were $8.1 million compared to $11.3 million in the first quarter of 2023, a decrease of approximately $3.2 million, or 28%. Additionally, sequentially, non-GAAP operating expenses increased by approximately $100,000, or 1%, from the fourth quarter of 2023. As Bill outlined in his opening remarks, we are undertaking further cost reduction actions in the second quarter as we work to return the company to profitability. We expect second quarter 2024 non-GAAP operating expenses to decrease by six to 10% compared to the first quarter of 2024. Given the timing of the actions we are taking, a partial quarterly effect of these reductions will be realized in Q2, and the full quarterly effect of the reductions will be realized in the third quarter.
James M. Kempton: It's bill outlined in his opening remarks, we are undertaking further cost reduction actions in the second quarter.
James M. Kempton: We work to return the company to profitability.
James M. Kempton: We expect second quarter 2024, non-GAAP operating expenses to decrease by 6% to 10% compared to the first quarter of 2024.
James M. Kempton: Given the timing of the actions we are taking a partial quarter effect of these reductions will be realized in Q2 and the full quarterly effect of the reductions will be realized in the third quarter.
James M. Kempton: So we would anticipate a further decline in non-GAAP operating expenses in the third quarter of 2024 compared to the second quarter of 2020. The gap net loss for the first quarter of 2024 was $31 million, or $3.28 loss per share, compared to a gap net loss of $6.9 million, or a $0.97 loss per share, in the first quarter of 2023. The non-GAAP net loss for the first quarter of 2024 was $4.2 million, or a $0.45 loss per share, compared to a non-GAAP net loss of approximately $3.6 million, or a $0.51 loss per share, in the first quarter of 2023.
James M. Kempton: So we would anticipate a further decline in non-GAAP operating expenses in the third quarter of 2024 compared to the second quarter of 2024.
James M. Kempton: The GAAP net loss for the first quarter of 2024 was $31 million.
James M. Kempton: Or $3.28 loss per share compared to a GAAP net loss of $6 9 million or <unk> 97 loss per share in the first quarter of 2023.
James M. Kempton: The non-GAAP net loss for the first quarter of 2024 was $4 2 million or <unk> 45 loss per share compared to a non-GAAP net loss of approximately $3 6 million or <unk> 51 loss per share in the first quarter of 2023.
James M. Kempton: Within today's press release, we have provided a reconciliation of our non-GAAP metrics to the most comparable GAAP for the first quarter of 2024. The reconciliation includes the goodwill impairment of $24 million, adjustments for intangible asset amortization of 1.8 million, Stock Compensation Expense of $1.1 million, and depreciation expense of $100,000, partially offset by changes to the fair value of warrants of $200,000 and non-recurring other income net of 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.
James M. Kempton: Within today's press release, we have provided a reconciliation of our non-GAAP metrics to the most comparable GAAP metric.
James M. Kempton: For the first quarter of 2024. The reconciliation includes the goodwill impairment.
James M. Kempton: 24 million.
James M. Kempton: Adjustments for intangible asset amortization of $1 8 million stock.
James M. Kempton: Stock compensation expense of $1 1 million.
James M. Kempton: And depreciation expense of 100000, partially offset by changes to the fair value of warrants of 200000 and nonrecurring other income net of 100000.
James M. Kempton: 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.
James M. Kempton: For non-GAAP purposes, we utilized a 0% tax rate for the first quarter of 2024 and 2023. The resulting non-GAAP tax expense reflects the actual income tax expense during each period. From a balance sheet perspective, we were able to effectively manage our working capital and decrease our receivables by $3.6 million during the first quarter of 2024, and as a result, we reported $6.2 billion of cash and cash equivalents as of March 31, 2024. This concludes my financial review. Now back to Bill.
James M. Kempton: For non-GAAP purposes, we utilized a zero percent tax rate for the first quarter of 2024 and 2023.
James M. Kempton: The resulting non-GAAP.
James M. Kempton: Tax expense reflects the actual income taxes expense during each period.
James M. Kempton: From a balance sheet perspective, we were able to effectively manage our working capital and decrease our receivables by $3 6 million during the first quarter of 2024 and as a result reported $6 2 billion of cash and cash equivalents as of March 31 2024.
James M. Kempton: This concludes my financial review now back to Bill.
Bill: Thanks, Jim.
William W. Smith: Okay, let's start out with the Cost Reduction Act that Jim mentioned in his prepared remarks. We plan to cut overall expenses within a range of $1 million to $1.3 million by Q3 2024.
Bill: Okay, let's start out with the cost reduction actions that Jim mentioned in his prepared remarks.
Bill: We plan to cut overall expense within a range of 1 million to $1 3 million by Q3, 'twenty 'twenty four.
William W. Smith: Our unwavering commitment to profitability and efficiency drives these cost reductions, and will be achieved by right-sizing resources and optimizing our operational process. By doing so, we will streamline our workflows and maximize resource utilization across all facets of our business. SafePath Global is evolving as a preferred launch option that does not require extensive resources and time to launch, as is now being proven with DISH.
Bill: Our unwavering commitment to profitability and efficiency drives these cost reductions and will be achieved by right sizing resources and optimizing our operational processes.
William W. Smith: By doing so we will streamline our workflows and maximize resource utilization across all facets of our business.
William W. Smith: This task Wobble is evolving as a preferred launch option that does not require extensive resources and time to watch as is now being proven with dish.
William W. Smith: These concerted efforts will enable us to achieve our targeted savings while maintaining the highest quality and service delivery standards. Moving forward, we remain dedicated to fostering a culture of continuous improvement and sustainability, driving value for our shareholders and other stakeholders. As we all know, these types of activities can be challenging.
William W. Smith: These concerted efforts will enable us to achieve our targeted savings, while maintaining the highest quality and service delivery standards.
William W. Smith: Moving forward, we remain dedicated to fostering a culture of continuous improvement.
William W. Smith: And sustainability is driving value for our shareholders.
William W. Smith: And other stakeholders.
William W. Smith: As we all know these types of activities can be challenging.
William W. Smith: But we understand the need to build a stronger business case to get us to profitability as quickly as possible. We are balancing. These cost-reduction actions, combined with maintaining the resources we need to ensure we can continue to provide premium service to our customers and deliver on our roadmap and other contracted initiatives underway. The other component of the equation in achieving profitability and cash generation is a return to revenue growth. Key elements of our plan to drive revenue growth are several new marketing initiatives that we will be rolling out this year.
William W. Smith: But we understand the need to build a stronger business case to get us to profitability as quickly as possible.
William W. Smith: We are a balancing.
William W. Smith: These cost reduction actions with maintaining the resources, we need to ensure we can continue to provide premium service to our customers and deliver on our roadmap and other contracted initiatives underway.
William W. Smith: The other component of the equation and achieving profitability and cash generation is a return to revenue growth.
William W. Smith: Key elements of our plan to drive revenue growth.
William W. Smith: Our several new marketing initiatives that we will be rolling out through this year.
William W. Smith: I am pleased with the recent launch of our Affiliate Influencer Program and with the upcoming launch of our Retail Store Ambassador Program. These turnkey programs are maintained by Smith Micro for our partners and offer additional ways to build awareness of and drive subscriber growth for our customers' branded offerings of safe path-based solutions. Through the Affiliate Influencer Program, participating influencers will promote the solutions through their online and social media networks.
William W. Smith: I am pleased with the recent launch of our affiliate inflows your program.
William W. Smith: And with the upcoming launch of our retail store Ambassador program.
William W. Smith: These turnkey programs are maintained by Smith micro for our partners and offer additional ways to build awareness of and drive subscriber growth for our customers branded offerings, a safe path based solutions.
William W. Smith: With the affiliate Influencer program.
William W. Smith: Painting, Influencers will promote the solutions to their online and social media networks.
William W. Smith: This is a new marketing tactic for our partners' promotion of their SafePath-based solution, and we believe it will be a fruitful marketing channel as many consumers begin their product journeys online, finding reputable recommendations that inspire a level of trust and motivation to purchase products. This program will also generate PR activity that will create a path for our carrier-branded solutions to compete more directly with the direct-to-consumer apps in the market today, with the power of well-known carrier brands backing our family safety solution.
William W. Smith: This is a new marketing tactics for our partners promotion of their safe path. They solutions and we believe it will be a fruitful marketing channel as many consumers begin their product journeys online finding reputable recommendations that inspire a level of trust.
William W. Smith: And motivation to purchase products.
William W. Smith: This program will also generate PR activity that will create a path for our carrier branded solutions.
William W. Smith: Compete more directly with the direct to consumer apps in the market today, but the power of well known carrier brands backing our family's safety solutions.
William W. Smith: We have recently launched one of our Tier 1 carrier partners in the Influencer Program and are seeing tremendous demand among influencers to participate. We are also beginning to see the effect of this initiative in terms of new subscriber trials, which lead to subscriber growth. I am also pleased with the creation of our Retail Ambassador Program as an avenue to bring product promotion directly to consumers in-store. This program is available for our carrier customers, authorized retailers, and corporate-owned stores, allowing retail employees to become in-store ambassadors for our carrier-branded family safety offerings and incentivizing them to promote and sell the products by compensating them for successful app sign-ups.
William W. Smith: We have recently launched.
William W. Smith: One of our tier one carrier partners on the Influencer program and are seeing tremendous demand among influencers to participate.
William W. Smith: We are also beginning to see the effect of this initiatives in terms of new subscribers trials, which lead to subscriber growth.
William W. Smith: I am also pleased with the creation of our retail Ambassador program as an avenue to bring product promotion directly to consumers in stores.
William W. Smith: This program is available for our carrier customers authorized retailers and corporate owned stores, allowing retail employees.
William W. Smith: In store ambassadors for our carrier branded family safety offerings, and incentivizing them to promote and sell their products like compensate them for successful app sign ups.
William W. Smith: This is a full-service, adaptable program that can be modified to meet each partner's goals. We will also provide marketing collateral, training, and support as we roll out this program. We expect our first launch of the Ambassador Program with a U.S. partner shortly.
William W. Smith: This is a full service adaptable program they could be modified to meet each partner schools.
William W. Smith: He will also provide the marketing collateral training and support as we roll out this program.
William W. Smith: We expect our first launch of the Ambassador program with a U S partner shortly.
William W. Smith: We see great potential for the Ambassador Program, as it brings a unique twist to incentivizing retail employees and will be a very visible avenue of promotion for our partners' family safety brand. Driving Subscriber Growth Key Accounts, and the successful launch of new accounts, remains key to our revenue growth objectives. We are optimistic about the opportunity for subscriber growth at AT&T, including at Cricut, where our partnership remains very strong. The migration to SafePath was fully completed during the first quarter, along with expanding our support to Cricut wireless families.
William W. Smith: We see great potential for the ambassador program as it brings a unique twist to our sanitizing retail employees and will be a very dismal.
William W. Smith: Yes.
William W. Smith: Motion for our partners family safety brands.
William W. Smith: Driving subscriber growth and key accounts and the successful launch of new accounts remains key to our revenue growth objectives.
William W. Smith: We are optimistic about the opportunities for subscriber growth at AT&T, including cricket.
William W. Smith: Our our partnership remains very strong.
William W. Smith: The migration to a safe path was fully completed during the first quarter, along with expanding our support to cricket wireless families.
William W. Smith: While we can't get into specifics, we expect to see several new marketing initiatives launched throughout the remainder of this year. We will continue our shared efforts to expand awareness of AT&T Secure Family as we also pursue new avenues of growth with the platform. We believe that AT&T has a tremendous opportunity to grow subscribers to AT&T Secure Family, and we are actively partnering with them to create additional paths to drive consumer awareness of this app in the near term.
William W. Smith: Well, we can't get into specifics, but we expect to see several new marketing initiatives launched throughout the remainder of this year.
William W. Smith: We will continue our shared efforts to expand awareness of AT&T secure family as we also pursue new avenues of growth with the platform.
William W. Smith: We believe that AT&T has a tremendous opportunity to grow subscribers on AT&T secure family.
William W. Smith: And we are actively partnering with them to create additional paths to drive consumer awareness of this app in the near term.
William W. Smith: As I mentioned earlier regarding T-Mobile, we are seeing some signs of increasing momentum and renewed interest in our expanded roadmap, which we believe could help springboard new marketing activities to drive subscriber growth. Our sales and marketing teams are working collaboratively to further our progress with this key customer. In Europe, as I mentioned earlier, we expect to launch our Tier 1 carrier partner there in the back half of this year. This family safety solution will be a unique go-to-market approach for SafePath, which we think will drive demand, opening the door for new contracts with other carriers throughout the world. I look forward to providing you with additional insight on this contract later this year.
William W. Smith: As I mentioned earlier regarding T. Mobile we are seeing some signs of increasing momentum every new interest in our expanded roadmap.
William W. Smith: Which we believe could help springboard new marketing activities to drive subscriber growth.
William W. Smith: Our sales and marketing teams are working collaboratively.
William W. Smith: Further our progress with this key customer.
William W. Smith: In Europe as I mentioned earlier, we expect to launch our tier one carrier partner there in the back half of this year.
William W. Smith: This family safety solution.
William W. Smith: It will be a unique go to market approach for safe path.
William W. Smith: We think will drive demand.
William W. Smith: The door for new contracts with other carriers throughout the world.
William W. Smith: I look forward to providing you with additional insight on this contract later this year.
William W. Smith: There's much more to come regarding this carrier and the approach that they're taking digital family safety.
William W. Smith: There's much more to come regarding this courier and the approach that they're taking to digital family safety. Finally, as I discussed in my opening remarks, we are thrilled to be partnering with DISH for our first delivery of SafePath Global. We believe that the robust go-to-market strategies for this product will position us to see meaningful revenue growth in the near term. There is excellent alignment with DISH on all the different channels available to promote the solution.
William W. Smith: Finally.
William W. Smith: I discussed in my opening remarks, we are thrilled to be partnering with dish for our first delivery of states have global.
William W. Smith: What do you believe that the robust go to market strategies for this product will position us to see meaningful revenue growth in the near term.
William W. Smith: There is excellent alignment with dish.
William W. Smith: On all the different channels available to promote the solution.
William W. Smith: We also have enormous flexibility to conduct multiple marketing and feature enrichment activities, which is part of the design of Safe Path Global. This gives us the latitude to move rapidly on numerous fronts, some examples being the ability to test new pricing models, accelerate updates to the app, new A-B testing initiatives, and the ability to deliver a fast app store roadmap as we add new features and functionality. We also believe that there is a strong demand for this type of deployment of family safety solutions via SafePath Global throughout the world, particularly as we see more and more global demand for children's online safety.
William W. Smith: We also have enormous flexibility to conduct multiple marketing and feature enrichment activities, which is part of the design of safety as well.
William W. Smith: This gives us the latitude to move rapidly on numerous fronts.
William W. Smith: Some examples being the ability to test new pricing models accelerating updates to the apps, new 80 testing initiatives and the ability to deliver a fast app store roadmap as we add new features and functionality.
William W. Smith: We also believe.
William W. Smith: That there is a strong demand for this type of deployment a family safety solutions Dsa's task global throughout the world.
William W. Smith: Particularly as we see more and more global demand for children's online safety.
William W. Smith: Our pipeline remains robust, not just for safe path global opportunities but across the entire product suite. We have already announced two new carrier wins for SafePath, and we believe more will follow throughout 2024. We have trial programs currently underway as well as in the planning stages at multiple carriers, with new innovative product development initiatives we are planning to deploy this year. We will bring new technological advancements to the SafePath platform, from SafePath Premium, an AI-driven tool that will add cyberbullying and social media monitoring to our SafePath family functionality, while also providing physical location intelligence that opens a new market for us, to Safe Path OS, which will offer another unique, go-to-market strategy, building from our strong relationships with OEM partners and device teams at carriers around the world.
William W. Smith: Our pipeline remains robust.
William W. Smith: Jesper safe task global opportunities, but across the entire product suite.
William W. Smith: We have already announced two new carrier wins for safe path and we believe more will follow throughout 'twenty 'twenty four.
William W. Smith: We have trial programs currently underway as well as in the planning stages at multiple carriers.
William W. Smith: With new innovative product development initiatives, we are planning to deploy this year, we will bring new technological advancements to the safe past platform.
William W. Smith: Well, it's safe to have premium and AI driven tools that will add cyber bullying and social media monitoring two our safe TACE family functionality, while also providing physical location intelligence that opens a new market for us.
William W. Smith: It's safe path O S, which will offer another unique.
William W. Smith: Go to market strategy building from our strong relationships with OEM partners and device teams at carriers around the world.
William W. Smith: These enhancements to the SafePath platform reflect a new era of innovation and ingenuity at Smith Micro, which will build a great foundation for 2024 and beyond by offering a path to higher ARPUs for our partners, and we'll provide access to exciting new features to our existing customer base. Additionally, these pioneering products will provide our sales team with a broader portfolio to sell to new and existing customers with a modular deployment strategy to better fit the specific needs of these carriers.
William W. Smith: These enhancements to the safe path platform.
William W. Smith: Plus a new era of innovation and ingenuity at Smith micro.
William W. Smith: Which will build a great foundation for 'twenty 'twenty four and beyond.
William W. Smith: Well offering a path to higher ARPA is for our partners and will provide access to exciting new features to our existing customer base.
William W. Smith: Additionally, these pioneering products.
William W. Smith: Provide our sales team with a broader portfolio to sell into new and existing customers with a modular deployment strategy to better fit the specific needs of these carriers.
William W. Smith: We believe we are driving toward meaningful subscriber growth across multiple carrier customers in the back half of the year, and success should lead to profitability and cash generation in Q4. We realize there has been a lot packed into our remarks today, including additional color on our recent customer wins, such as the DISH SafePak Global Deployment, in addition to the abundance of sales and marketing activities underway, including the recently launched Affiliate Influencer Program to align the company on a growth trajectory and to return to profitability. The team at Smith Micro is extremely dedicated and motivated to the mission to bring new innovative solutions to the market and deliver the technology necessary to keep With that, Operator, we can open the call for questions.
William W. Smith: We believe we are driving toward a meaningful subscriber growth across multiple carrier customers in the back half of the year.
William W. Smith: Success should lead to profitability and cash generation in Q4.
William W. Smith: We realize.
William W. Smith: There has been a lot packed into our remarks today.
William W. Smith: Including the additional color on our recent customer wins, such as the dish safe that global deployment.
William W. Smith: In addition to the abundance of sales and marketing activities underway, including recently launched.
William W. Smith: And plus your program to align the company on a growth trajectory and to return to profitability.
William W. Smith: The team is Smith micro is extremely dedicated and motivated to the mission to bring new innovative solutions to the market.
William W. Smith: And delivery in the technology necessary to keep families safe in the world We live in today.
William W. Smith: We have a plan in place and we will continue to drive forward to achieve these goals.
William W. Smith: With that operator, we can open up the call for questions.
Operator: We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys.
Speaker Change: We will now begin the question and answer session.
Operator: If at any time your question has been answered and you would like to withdraw your question, please press star then 2. Once again, it is star then one to ask a question. At this time, we will pause momentarily to assemble our roster. Once again, it is better than one to ask a question. This concludes our question and answer session. I would like to turn the conference back over to Charles Messman for any closing remarks.
Operator: To ask a question you May press Star then one on.
Charles Messman: On your telephone keypad.
Operator: If youre using a speakerphone please pick up your handset before pressing the keys.
Operator: If at any time. Your question has been addressed and you would like to withdraw your question.
Operator: Please press Star then two.
Charles Messman: Once again it is star then one.
Charles Messman: To ask a question.
Charles Messman: At this time, we will pause momentarily to assemble our roster.
Operator: Okay.
Operator: Once again it is star then one to ask a question.
Operator:
Operator: This concludes our question and answer session I would like to turn the conference back over to Charles Messman for any closing remarks.
Charles Messman: Thanks, everybody, for joining us. Should you have further questions, please feel free to reach out to us here, and we'll look forward to speaking to you on another call.
Charles Messman: Thanks, everybody for joining and should you have further questions. Please feel free to reach out to us here and we'll look forward to speaking to you on another call. Thanks, everybody.
Operator: Thanks, everybody. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
Charles Messman: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Operator: Yeah.
Operator: [music].
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