Q2 2025 Smith Micro Software Inc Earnings Call

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I would now like to turn the conference over to Charles Messman, Vice President marketing. Please go ahead.

Thank you operator, and good afternoon to everyone.

Appreciate your interest in joining the Smith micro software financial results for the second quarter ended June 30 of 2025 conference call.

By now you Should've received a copy of our press release with financial results.

If you do not have a copy and would like one please visit the Investor Relations section of our website at Www Dot Smith micro Dot com.

Speaker #1: Good day and welcome to the SMITH MICRO SECOND QUARTER 2025 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.

On today's call we have Bill Smith, our chairman of the Board President and Chief Executive Officer.

And Tim Huff Mayer, our Chief operating officer, and Chief Financial Officer.

Please note that some of the information you'll hear during today's discussion consist of forward looking statements.

Speaker #1: 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.

Including without limitation, those regarding the company's future revenue and profitability.

Speaker #1: To withdraw your estion, 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, Marketing.

Our plans and expectations.

New product development and availability.

New and expanded market opportunities future product deployments.

Speaker #1: Please go ahead.

Speaker #2: Thank you, operator, and good afternoon to everyone. We appreciate your interest in joining the Smith Micro Software financial results for the second quarter ended June 30, 2025, conference call.

Both by new and existing customers.

Operating expenses 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.

Speaker #2: By now, you should have received a copy our press release with financial results. If you do not have a copy and like one, please visit the Investor Relations section of our website at www.smithmicro.com.

For more information please refer to the risk factors included in our most recently filed Form 10-K.

Smith micro assumes no obligation to update any forward looking statements.

Speaker #2: On today's call, we have Bill Smith, our Chairman of the Board, President, and Chief Executive Officer. And Tim Hofmeyer, our Chief Operating Officer and Chief Financial Officer.

Which speaks to management's beliefs and assumptions only as of the date they're made.

I'd like to point out that in forthcoming prepared remarks, we will refer to specific non-GAAP financial measures.

Speaker #2: 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, growth by new and existing customers, operating expenses, and the company's cash reserve.

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.

Thanks, Charlie Good afternoon, and thank you for joining us today for our second quarter 2025 Conference call. We appreciate your interest.

Before I update everyone on the progress made during the second quarter.

Speaker #2: 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.

Let's start by welcoming Tim Hoffmeyer back to Smith micro.

Previously CFO of Smith micro from June 2017 through September of 2021.

Speaker #2: For more information, please refer to risk factors included in our most recently filed Form 10-K. SMITH MICRO seems no obligation to update any forward-looking statements.

Tim Reinsurers in the dual role of Chief operating Officer, and Chief Financial Officer.

Speaker #2: Which speaks to the manager's beliefs and assumptions only as of the date they are made. I'd like to point out that in forthcoming prepared remarks, we will refer to specific non-GAAP financial measures.

I am along with the rest of the company very excited to have him back helping us build a growth story for Smith micro.

Speaker #2: Please refer to ur 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.

Sales activities are proceeding at a brisk pace.

We are actively in discussions on several fronts, both in North America and Europe.

Speaker #2: Bill?

Speaker #3: Thanks, Charlie. Good afternoon, and thank you for joining us today. For our second quarter of 2025 appreciate your interest. Before I update everyone on the progress made during the second quarter, let's start by welcoming Tim Hofmeyer back to SMITH MICRO.

The reception, we are getting to the safe task is bone and safe pass senior phone powered by <unk>.

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And now the AI enabled safe at eight <unk>.

<unk> brought in additional momentum to our carrier discussions.

Speaker #3: Previously, CFO at SMITH MICRO from June 2017 through September of 2021. Tim returns in the dual role of Chief Operating Officer and Chief Financial Officer.

Our solutions and go to market approach continue to align closely with our strategic priorities of our existing partners and new prospects.

Strengthening our position in the market.

Speaker #3: I am, along with the rest of the company, very excited to have him back helping us build a growth story for SMITH MICRO. Sales activities are proceeding at a brisk pace.

As we will discuss during the call I believe that our future is bright.

And we are on the cusp meaningful turnaround.

My wife, and I continue to be proud of.

Long term shareholders of the company.

Speaker #3: We are actively in discussions on several fronts both in North America and Europe. The reception we are getting to the safe path kids phone and safe path senior phone powered by safe path OS and now the AI-enabled safe path eight has brought an additional momentum to our carrier discussions.

We invested significantly last year is supported the company's vision.

And look forward to the opportunity to make further investments in the future.

As the company makes progress towards that turnaround.

Now, let's turn the call over to Tim for a deeper dive into our financials.

Speaker #3: Our solutions and go-to-market approach continue to align closely with the strategic priorities of our existing partners and new prospects. Strengthening our position in the market.

I'll follow up with more updates later in the call.

Jim.

Thanks, a lot bill and good afternoon, everyone I'm excited to have returned and be working again with the Smith micro team. We have many exciting work streams and I can't wait to see what we accomplish over the next few quarters.

Speaker #3: As we will discuss during the call, I believe that our future is bright, and we are on the cusp of a meaningful turnaround. My wife and I continue to be proud long-term shareholders of the company.

Let me start by covering a few transactions since our last earnings conference call.

First on June 3rd we sold the view spot product line for $1 3 million. This sale allows us to further focus our management and technical resources on the safe path platform and monetize the asset one final time.

Speaker #3: We invested significantly last year in support of the company's vision. And look forward to the opportunity to make further investments in the future. As the company makes progress towards that turnaround.

We did retain a limited royalty free license to this product for our internal use.

Next on July 18th we closed a follow on offering of approximately $1 6 million shares at a price of 93 cents per share, resulting in proceeds of approximately $1 5 million prior to fees and expenses.

Speaker #3: Now let's turn the call over to Tim for a deeper dive into our financials. I'll follow up with more updates later in the call.

Speaker #3: Tim?

Speaker #4: Thanks a lot, Bill, and good afternoon, everyone. I'm excited to have returned and be working again with the SMITH MICRO team. We have many exciting work streams, and I can't wait to see what we accomplish over the next few quarters.

Now, let's cover the financial results of the second quarter of 2025.

For the second quarter, we posted revenue of $4 4 million compared to $5 1 million for the same quarter of 2024, a decrease of 14%.

Speaker #4: Let me start by covering a few transactions since our last earnings conference call. First, on June 3rd, we sold the ViewSpot product line for $1.3 million.

When compared to the first quarter of 2025 revenue decreased by 201000 or 4%.

Speaker #4: This sale allows us to further focus our management and technical resources on the SafePath platform and monetize the asset one final time. We did retain a limited royalty-free license to this product for our internal use.

Year to date revenue through June 30 of 2025 were 9 million versus $10 9 million through the second quarter of last year, a decrease of 17%.

During the second quarter of 2025 family safety revenue was $3 6 million, which decreased by 595000 or 14% compared to the second quarter of the prior year.

Speaker #4: Next, on July 18th, we closed a follow-on offering of approximately $1.6 million shares at a price of $93.00 per share. Resulting in proceeds of approximately $1.5 million, prior to fees and expenses.

Family safety revenues decreased by 162000, or 4% compared to the first quarter of 2025, primarily driven by the decline in the legacy sprint safe <unk> found revenue.

Speaker #4: Now let's cover the financial results of the second quarter of 2025. For the second quarter, we posted revenue of $4.4 million compared to $5.1 million for the same quarter 2024, a decrease of 14%.

During the second quarter of 2025 comp suite revenue was 777000, which increased by 246000 compared to the second quarter of 2024.

Speaker #4: When compared to the first quarter 2025, revenue decreased by $201,000.04%. Year-to-date revenue through June 30th, 2025, were $9,000,000 versus $10.9 million through the second quarter of last year, a decrease of 17%.

Revenue from Comm suite increased by 43000 compared to the first quarter of 2025.

You're spot revenue was nominal for the second quarter of 2025, which declined by 371000 compared to the second quarter of the prior year. These.

Speaker #4: During the second quarter of 2025, family safety revenue was $3.6 million, which decreased by $585,000.14% compared the second quarter of the prior year. Family safety revenues decreased by $162,000.04% compared to the first quarter of 2025, primarily driven by the decline in the legacy sprint safe and found revenue.

Can you spot revenue decreased by 82000 compared to the first quarter of 2025.

As previously mentioned, we sold our view spot product for 1.3 million on June 3rd and as such other than transition services fees, we will have no future revenue from this product.

In the third quarter of 2025, we are expecting consolidated revenues to be in the range of approximately $4 5 million to $4 8 million.

Speaker #4: During the second quarter 2025, CommSuite revenue was $767,000, which increased by $246,000 compared to the second quarter of 2024. Revenue from CommSuite increased by $43,000 compared to the first quarter of 2025.

This guidance includes revenue related to the launch of a new feature at an existing carrier customer.

Although a modest increase over the second quarter.

We do expect this launch to result in sequential quarterly revenue growth in the fourth quarter too.

Speaker #4: ViewSpot revenue was nominal for the second quarter of 2025, which declined by $371,000 compared to the second quarter the prior year. ViewSpot revenue decreased by $82,000 compared to first quarter of 2025.

For the second quarter of 2025 gross profit was $3 2 million compared to $3 5 million. During the same period of the prior year a decrease of 284000, primarily due to the period over period revenue decline.

Speaker #4: As previously mentioned, we sold our ViewSpot product for $1.3 million on June 3rd, and as such, other than transition services fees, we will have no future revenue from this product.

Gross margin was 74% for the quarter compared to 69% realized in the second quarter of 2024.

The gross profit of $3 2 million in the second quarter of 2025 decreased sequentially by 114000 compared to the gross profit produced in the first quarter of 2025, driven primarily by the sequential decline in revenue quarter over quarter.

Speaker #4: In the third quarter of 2025, we are expecting consolidated revenues to be in the range of approximately $4.5 million to $4.8 million. This guidance includes revenue related to the launch of a new feature at an existing carrier customer.

Speaker #4: Although a modest increase over the second quarter we do expect this launch to result in sequential quarterly revenue growth in the fourth quarter too.

In the third quarter of 2025, we expect gross margins to be in the range of 72% to 75%.

For the year to date period ended June 30th 2025, gross profit was $6 6 million compared to $7 3 million during the corresponding period last year.

Speaker #4: For the second quarter of 2025, gross profit $3.2 million, compared to $3.5 million during the same period of the prior year. A decrease of $284,000 primarily due to the period-over-period revenue decline.

Gross margin was 73% for the June 32025 year to date period.

Speaker #4: Gross margin was $74.0% for the quarter, compared to $69.0% realized in the second quarter 2024. The gross profit of $3.2 million in the second quarter of 2025 decreased sequentially by $114,000 compared to gross profit produced in the first quarter 2025, driven primarily by the sequential decline in revenue quarter over quarter.

GAAP operating expenses for the second quarter of 2025, or $18 2 million, an increase of $7 7 million or 73% compared to the second quarter of 2024.

This was primarily driven by an 11.1 million goodwill impairment charge offset by the gain on the sale of abuse spot for $1 3 million and the remainder of the difference was a result of the effect of cost reduction activities.

Speaker #4: In the third quarter of 2025, we expect gross margins to be in the range of $72.0% to $75.0%. For the year-to-date period ending June 30th, 2025, gross profit was $6.6 million, compared to $7.3 million during the corresponding period last year.

GAAP operating expenses for the year to date period ended June 30th 2025 were $26 8 million compared to $45 8 million in the prior year to date period.

A decrease of $19 million compared to last year.

This period over period decrease was primarily attributable to the goodwill impairment charge of 24 million recorded in the first quarter of 2024 as compared to the goodwill impairment charge of $11 1 million in the second quarter of 2025.

Speaker #4: Gross margin was 73% for the June 30th, 2025 year-to-date period. GAAP operating expenses for the second quarter 2025 were $18.2 million. An increase of $7.7 million, or $73%, compared to the second quarter of 2024.

Coupled with the gain on the sale of view spot for $1 3 million the cost reduction activities that we have executed along with a decrease in amortization costs associated with our intangible assets.

Speaker #4: This was primarily driven by an $11.1 million goodwill impairment charge offset by the gain on the sale of ViewSpot for $1.3 million, and the remainder of the difference was a result of the effect of cost reduction activities.

non-GAAP operating expenses for the second quarter of 2025, or $5 9 million compared to $7 5 million in the second quarter of 2024, a decrease of approximately $1 6 million or 22%.

Speaker #4: GAAP operating expenses for the year-to-date period ended June 30th, 2025, were $26.8 million, compared to $45.8 million in the prior year-to-date period. A decrease of $19 million compared to last year.

Sequentially non-GAAP operating expenses decreased by 222000 or 4% from the first quarter of 2025.

Speaker #4: This period-over-period decrease was primarily attributable to the goodwill impairment charge of $24 million recorded in the first quarter 2024, as compared to the goodwill impairment charge of $11.1 million in the second quarter of 2025.

We anticipate a modest decline in non-GAAP operating expenses in the third quarter of 2025 as compared to the second quarter of 2025, we will continue to evaluate our existing cost structure compared to the expected revenues in the next several quarters.

Speaker #4: Coupled with the gain on the sale ViewSpot for $1.3 million, the cost reduction activities that we have executed along with a decrease in amortization costs associated with our intangible assets non-GAAP operating expenses for the second quarter of 2025 were $5.9 million, compared to $7.5 million in the second quarter of 2024.

non-GAAP operating expenses for the year to date period through June 30th 2025 were $12 1 million compared to $15 6 million for the year to date period ended June 30th 2024, a decrease of approximately $3 6 million or 23% compared to last year.

The GAAP net loss for the second quarter of 2025 was $15 1 million or 78 cents loss per share compared to a GAAP net loss of $6 9 million or <unk> 66 cents loss per share in the second quarter of 2024.

Speaker #4: A decrease of approximately $1.6 million, or 22%. Sequentially, non-GAAP operating expenses decreased by $222,000, or 4%, from the first quarter 2025. We anticipate a modest decline in non-GAAP operating expenses in the third quarter 2025, as compared to the second quarter of 2025.

GAAP net loss for the six months ended June 30th 2025 was $20 2 million or $1.08 loss per share compared to GAAP net loss of $37 9 million or $3.79 loss per share for the six months ended June.

Speaker #4: We will continue to evaluate our existing cost structure compared to the expected revenues, in the next several quarters. Non-GAAP operating expenses for the year-to-date period through June 30th, 2025, were $12.1 million, compared to $15.6 million for the year-to-date period ended June 30th, 2024.

32024.

The non-GAAP net loss for the second quarter of 2025 was $2 8 million or 14 cents loss per share compared to a non-GAAP net loss of approximately $4 million or a 38 cents loss per share in the second quarter of 2024.

Speaker #4: A decrease of approximately $3.6 million, or 23%, compared to last year. The GAAP net loss for the second quarter 2025 was $15.1 million, or $78.00 lost per share.

non-GAAP net loss for the six months ended June 30th 2025 was $5 6 million.

Speaker #4: Compared to a GAAP net loss of $6.9 million, or $66.00 lost per share in the second quarter of 2024. GAAP net loss for the six-month ended June 30th, 2025, was $20.2 million, or $1.08 lost per share.

Or 30 cents loss per share compared to non-GAAP net loss of $8 2 million or <unk> 82 cents loss per share for the six months ended June 30th 2024.

Within today's press release, we have provided a reconciliation of our non-GAAP metrics to the most comparable GAAP metric.

Speaker #4: Compared to GAAP net loss of $37.9 million, or $3.79 lost per share for the six-month ended June 30th, 2024. The non-GAAP net loss for the second quarter of 2025 was $2.8 million, or $14.00 lost per share.

For the second quarter of 2025. The reconciliation includes adjustments for intangible asset amortization of $1 3 million stock compensation expense of $1 1 million.

A goodwill impairment of $11 1 million executive transition costs of 78000 depreciation expense of 73000.

Speaker #4: Compared to a non-GAAP net loss of approximately $4 million, or a $38.00 lost per share in the second quarter of 2024. Non-GAAP net loss for the six-month ended June 30th, 2025, was $5.6 million, or $0.30 lost per share.

Nominal changes to fair value of warrants, partially offset by the view spot sale of $1 3 million.

For the year to date period. The non-GAAP reconciliation includes adjustments for intangible asset amortization of $2 6 million stock compensation expense of 2.2 million.

Speaker #4: Compared to non-GAAP net loss of $8.2 million, or $82.00 lost per share for the six months ended June 30th, 2024. Within today's press release, we have provided a reconciliation of our non-GAAP metrics to the most comparable GAAP metric.

Goodwill impairment of $11 1 million executive transition costs of 78000, and depreciation of 146000 changes to fair value of warrants of 103000, partially offset by the view spot sale of $1 3 million.

Speaker #4: For the second quarter of 2025, the reconciliation includes adjustments for intangible asset amortization of $1.3 million, stock compensation expense of $1.1 million, a goodwill impairment of $11.1 million, executive transition costs of $78,000, depreciation expense of $73,000, nominal changes to the fair value of warrants, partially offset by the ViewSpot sale of $1.3 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 utilize a zero percent tax rate for the second quarter of 2025 and 2024.

The resulting non-GAAP tax expense reflects the actual income taxes expense during each period.

From a balance sheet perspective, we reported $1.4 million of cash and cash equivalents as of June 32025, and as previously mentioned, we completed the follow on transaction, resulting in proceeds of approximately $1 5 million before fees and expenses.

Speaker #4: For the year-to-date period, the non-GAAP reconciliation includes adjustments for intangible asset amortization of $2.6 million, stock compensation expense of $2.2 million, goodwill impairment of $11.1 million, executive transition costs of $78,000, depreciation of $146,000, changes to fair value of warrants of $103,000, partially offset by the ViewSpot sale of $1.3 million.

This concludes my financial review.

Now back to you Bill.

Thanks, Chip and again welcome back.

We remain focused on the expansion of our portfolio with significant upgrades and features for the <unk>.

Speaker #4: 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.

Safe test platform, especially delivering the next generation AI enabled safe at eight.

Speaker #4: For non-GAAP purposes, we utilize a 0% tax rate for the second quarter of 2025 and 2024. The resulting non-GAAP tax expense reflects the actual income tax expense during each period.

This has been a major undertaking and I am very pleased with our progress.

We also continue to push forward with extensive discussions across the board with our mobile operator partners as well as with new prospects with a keen focus on a safe path OS for kids and senior folks.

Speaker #4: From a balance sheet perspective, we reported $1.4 million of cash and cash equivalents as of June 30th, 2025, and as previously mentioned, we completed the follow-on transaction resulting in proceeds of approximately $1.5 million before fees and expenses.

As previously discussed say Seth S for kids.

Opens a significant new market opportunity.

Speaker #4: This concludes my financial review. Now back to you, Bill.

Really aligned with their carrier partners long term strategies and family safety.

Speaker #3: Thanks, Tim. And again, welcome back. We remain focused on the expansion of our portfolio with significant upgrades and features for the safe path platform, especially delivering the next-generation AI-enabled safe path eight.

This solution expands our competitive reach beyond today's subscription model positioning us for far greater growth.

The design through extensive research are safe that OS.

As families peace of mind with online protection and delivers flexible options to meet each family's unique needs and preferences.

Speaker #3: This has been a major undertaking, and I'm very pleased with our progress. We also continue to push forward with extensive discussions across the board with our mobile operator partners as well as with new prospects.

As we announced earlier today, we have further enhanced our safe pathway list for.

Speaker #3: With a keen focus on our safe path OS for kids and senior phones. As previously discussed, safe path OS for kids' phones opens a significant new market opportunity.

For our kids offering based on feedback and made to our key updates.

First we have enhanced our doe inventory required capability.

After the point of sale integration, we can configure the device was safe pass OS automatically.

Speaker #3: Fully aligned with our carrier partners' long-term strategies, and family safety. This solution expands our competitive reach beyond today's subscription app model, positioning us for far greater growth.

This helps carrier partners as they do not have to carry and manage inventory.

Second safe pass OS powered phones can now work with the default configuration right out of the box eliminating the need for parents to do any configuration.

Speaker #3: Designed through extensive research, our safe path OS gives families peace of mind with online protection and delivers flexible options to meet each family's unique needs and preferences.

Parents can change default settings at any time, if they want but it is optional and not a requirement.

We know families all share the same goal keeping it safe.

Speaker #3: As we announced earlier today, we have further enhanced our safe path OS for kids' phone offering based on feedback and made two marquee updates.

But our experience as well as our research validates that all parents approach parental control, let's say.

<unk> is designed to meet these varied needs with a flexible AI driven platform.

Speaker #3: First, we have enhanced our no inventory required capability. After the point-of-sale integration, we can configure the device with SafePath OS automatically. This helps carrier partners as they do not have to carry and manage separate inventory.

Parents, who want a more hands on customized experience are three parent app on Android and iOS provides complete control and customization.

Speaker #3: Second, safe path OS powered phones can now work with the default configuration right out of the box. Eliminating the need for parents to do any configuration.

Drug safety zones, and alerts to managing screen time.

With the flexibility to adapt as children grow.

Those parents, who want to benefit from a simple setup.

Speaker #3: Parents can change default settings at any time if they want. But it is optional and not a requirement. We know families all share the same goal: keeping kids safe.

With expert guided age base settings for their kids.

We will find our AI powered dynamic H awareness engine.

Big setup easy.

Speaker #3: But our experience as well as our research validates that not all parents approach parental control, the same. Safe path is designed to meet these very needs with a flexible AI-driven platform.

Simply answer the child's age and safe path automatically applies expert recommended protections.

Kidney adjusted at any time.

And for parents, who prefer.

Set it and forget it approach safe that works right out of the box.

Speaker #3: For parents who want a more hands-on, customized experience, our free parent app on Android and iOS provides complete control and customization. From safety zones and alerts to managing screen time, all with the flexibility to adapt as children grow.

Really handling safety and monitoring in the background.

What's more there's no need for these parents to ads at parent app to their phone.

NAMIC age awareness engine will automatically add expanded privileges as the child ages.

With each of these three tailored experiences.

Speaker #3: Those parents who want to benefit from a simple setup with expert-guided age-based settings for their kids will find our AI-powered dynamic age awareness engine makes setup easy.

Ensures every parent can confidently protect their child.

In a way that fits their lifestyle.

This journey is only be good. However, we continue to challenge ourselves to adapt and grow with families throughout a longer lifecycle.

Speaker #3: They simply enter the child's age, and safe path automatically applies expert-recommended protections. Which can be adjusted at any time. And for parents who prefer a set-it-and-forget-it approach, safe path works right out of the box.

Our mission continues with safe path.

Launching later this month, which will introduce a wave of powerful AI solutions empowering Paris with smarter more intuitive tools designed to bring intelligence safety every family.

Speaker #3: Quietly handling safety and monitoring in the background. What's more, there is no need for these parents to add the parent app to their phone.

These new upgrades will include social media intelligence, a feature that will help parents monitor and manage their child's activity on social platforms.

Speaker #3: The dynamic age awareness engine will automatically add expanded privileges as the child ages. With each of these three tailored experiences, safe path ensures every parent can confidently protect their child in a way that fits their lifestyle.

This feature is powered by advanced AI, which both identify potential concerns and notify the parent of the activity.

So they can react quickly with the goal of keeping their kids safe.

Speaker #3: This journey has only begun. However, we continue to challenge ourselves to adapt and grow with families throughout a longer life cycle. Our mission continues with safe path eight, launching later this month.

Beyond this month upcoming launch a roadmap includes additional intelligent features for example, we will also roll out our new AI blocking functionality.

We will restrict your ability to use chat bots and other AI capabilities on the child's device.

Speaker #3: Which will introduce a wave of powerful AI solutions empowering parents with smarter, more intuitive tools designed to bring intelligent safety to every family. These new upgrades will include social media intelligence, a feature that will help parents monitor and manage their child's activity on social platforms.

With the explosive growth of AI around the world. We believe this will be an important tool for parents as they manage the safety.

Their kits.

Lastly, we expect to introduce an AI assistant that Leverages large language models as safe as data.

Speaker #3: This feature is powered by advanced AI, which both identify potential concerns and notify the parent of the activity. So they can react quickly with the goal of keeping their kids safe.

<unk> parents query all line activity and location and receive activity summaries.

This tool can expand and several different datasets.

The next big milestone for the company will be the launch of a safe path for seniors using the same base technology, but with a different feature set that better fits the senior market.

Speaker #3: Beyond this month's upcoming launch, our roadmap includes additional intelligent features. For example, we will also roll out our new AI blocking functionality, that will restrict the ability to use chatbots and other AI capabilities on the child's device.

We see this as a great opportunity for our carrier partners.

What we see is an underserved.

Speaker #3: With the explosive growth of AI around the world, we believe this will be an important tool for parents as they manage the safety of their kids.

Market today.

We are working to support the launch of this first shippable version a safe path O S.

For seniors by the end of this quarter.

Speaker #3: Lastly, we expect to introduce an AI assistant that leverages large language models and safe path data to let parents query online activity and location and receive activity summaries.

We see a lot of different opportunities ahead within a broad ecosystem of solutions.

The family safety market.

Now let me provide a quick update on our current customers.

We're excited about the continued rollout of our safe that kids solution.

Speaker #3: This tool can expand in several different data sets. The next big milestone for the company will be the launch of safe path OS for seniors.

With Orange, Spain, which supports the to your rate plan.

We've been working closely with the Orange, Spain team on the next wave of working these initiatives, which are strategically aligned with the upcoming back to school season.

Speaker #3: Using the same base technology, but with a different feature set that better fits the senior market. We see this as a great opportunity for our carrier partners in what we see as an underserved market today.

In parallel we are developing the next phase of the product set.

Lush later this year.

Which will introduce enhanced functionality.

Speaker #3: We are working to support the launch of this first shippable version of safe path OS for seniors by the end of this quarter. We see a lot of different opportunities ahead within a broad ecosystem of solutions, for the family safety market.

We believe these enhancements will be well received by the market.

As I mentioned on our last call. We're also actively engaged in several promising conversations across other orange properties throughout Europe.

Orange, Spain has been helpful in facilitating introductions and promoting both Smith micro and the two you offering.

Speaker #3: Now let me provide a quick update on our current customers. We're excited about the continued rollout of our safe path kids solution with Orange Spain.

Hoping us to expand our footprint within the Orange family of operators, which is also caught the attention of orange as competitors and is creating more opportunity for our products.

Speaker #3: Which supports the Tuyo rate plan. We've been working closely with the Orange Spain team on the next wave of marketing initiatives which are strategically aligned with the upcoming back-to-school season in parallel.

With AT&T, we're continuing to work on several new marketing initiatives, many of which are tied to new product updates, which will expand secure families market reach.

Speaker #3: We are developing the next phase of the product set to launch later this year. Which will introduce enhanced functionality. We believe these enhancements will be well-received by the market.

Enable larger scale marketing activities and drive greater awareness of the application.

AT&T has increased its marketing efforts through new cross promotion activities with other value added services across AT&T, which is very promising.

Speaker #3: As I mentioned at our last call, we're also actively engaged in several promising conversations across other Orange properties throughout Europe. Orange Spain has been helpful in facilitating introductions and promoting both Smith Micro and the Tuyo offering.

We will of course keep you up to date as we anticipate positive results coming to fruition soon.

Our relationship with AT&T teams has never been stronger.

Speaker #3: Helping us to expand our footprint within the Orange family of operators. Which is also caught the attention of Orange's competitors and is creating more opportunity for our products.

And we are engaged with various parts of the organization.

Looking at boost overall I am pleased with the progress we are making our new opportunities with our expanded test solutions.

Speaker #3: With AT&T, we're continuing to work on several new marketing initiatives many of which are tied to new product updates which will expand secure families' market reach.

Also several new marketing activities underway with visual voicemail as.

Speaker #3: Enable larger scale marketing activities and drive greater awareness of the application. AT&T has increased its marketing efforts through new cross-promotion activities with other value-added services across AT&T.

As well as some new functionality in the App that we believe will help bring new subscribers to the platform.

I remain excited with T mobile and the continued discussion around the expansion of the safe Paas platform.

We have recently seen some new additions to our working group, who are very interested and engaged in a full solution.

Speaker #3: Which is very promising. We will, of course, keep you up to date as we anticipate positive results coming to fruition soon. Our relationship with the AT&T teams has never been stronger.

As our relationships broaden across the organization, we see strong interest, particularly with safe at eight and its new functionality.

Speaker #3: And we are engaged various parts of the organization. Looking at boost overall, I am pleased with the progress we are making on new opportunities with our expanded safe path solutions.

As well as with the expanded safe path, Yes, designed for kids and senior firm solutions I remain bullish and excited about the opportunities ahead with T mobile.

Speaker #3: There are also several new marketing activities underway with visual voicemail, as well as some new functionality in the app that we believe will help bring new subscribers to the platform.

I am very pleased with the momentum building in the market.

The next generation of our solution and safe that eight is opening many channels for us to tackle as we broaden our reach across carrier partners as well as our prospects.

Speaker #3: I remain excited with T-Mobile and the continued discussion around the expansion of the safe path platform. We have recently seen some new additions to our working group who are very interested and engaged in our full solution.

Our connected life vision of the family digital lifestyle is stronger than ever.

Offering customers a full safe path ecosystem.

It spans all of the digital family safety solutions and this is only available for one company.

Speaker #3: As our relationships broaden across the organization, we see strong interest particularly with safe path eight and its new functionality. As well as with the expanded safe path OS designed for kids and senior phone solutions.

Smith micro.

I believe it is the most unique and powerful offering in the world today.

I remain as confident as ever in the opportunity ahead.

Speaker #3: I remain bullish and excited about the opportunities ahead with T-Mobile. I am very pleased with the momentum building in the market. The next generation of our solution and safe path eight is opening many channels for us to tackle as we broaden our reach across carrier partners as well as our prospects.

Additionally, we are excited about launching a new feature as Tim mentioned with a current customer.

[noise] resulted in our increased confidence to achieve sequential quarterly revenue growth not only this quarter, but in the fourth quarter as well.

We believe we are embarking on a reversal of the prior trend.

Speaker #3: Our connected life vision of the family digital lifestyle is stronger than ever. Offering customers a full safe path ecosystem that spans all the digital family safety solutions.

Flying to a new trend of consistent growth and expansion.

With that let me turn it back over to the operator for any questions operator.

We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone.

Speaker #3: And this is only available from one company. SMITH MICRO. I believe it is the most unique and powerful offering in the world today. And remain as confident as ever in the opportunity ahead.

We're using a speakerphone please pick up your handset before pressing the keys to withdraw your question. Please press Star then two at this time, we will pause momentarily to assemble our roster.

Speaker #3: Additionally, we are excited about launching a new feature as Tim mentioned with the current customer. Resulting in our increased confidence to achieve sequential quarterly revenue growth not only this quarter, but in the fourth quarter as well.

Thanks, Mike while Mike assemble the queue for questions Al I wanted to take a moment to provide an overview of some filings were going to be making over the next couple of days.

First we'll be filing two routine form S. Eight filings for the shares that our stockholders approved to be added to our equity and employee stock purchase plans.

Speaker #3: We believe we are embarking on a reversal of the prior trend of decline, to a new trend of consistent growth and expansion. With that, let me turn it back over to the operator for any questions.

At this year's annual meeting that happened in June.

Also file a form S. One registration statement for the warrant shares associated with the following follow on offering that we completed and announced in July.

Speaker #3: Operator?

Our Form 10-Q for the quarter will then follow after these are these filings.

Speaker #4: We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys.

Hope this explanation helps to provide contacts as these filings are made over the next couple of days.

Speaker #4: To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster.

I will now take the call back over to Mike to start the Q&A process. Thank you.

Certainly your first question comes from Matthew Harrigan with benchmark. Please go ahead.

Speaker #5: Thanks, Mike. while Mike assembles the queue for questions, I'll wanted to take a moment to provide an overview of some filings. We're going to be making over the next couple of days.

Oh, Thank you given the considerable Tam for the.

Family safety market literally even for individual msos in the context of your market cap both in the U S and Europe can you comment on any change in the size of that market.

Speaker #5: first, we'll be filing two routine form S8 filings for the shares that our stockholders approved to be added to our equity and employee stock purchase plans.

Speaker #5: At this year's annual meeting, which happened in June, we'll also file a Form S-1 registration statement for the warrant shares associated with the following follow-on offering.

And given the <unk>.

So the opportunity what are you seeing in terms of in house development.

Speaker #5: That we completed and announced in July. Our, form 10Q, for the quarter will then follow after these, these filings. We hope this explanation helps to ide context, as these filings are made over the next, couple of days.

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And smaller competitors, because I mean, clearly you've got a great opportunity, but it feels like.

The competition isn't as visible maybe as long as one would expect it to be thank you.

Yeah. That's a great question. So let me let me start this way by saying that.

Speaker #5: I'll now kick the call back over to Mike to start the Q&A process. Thank you.

We have watched the ammo knows all launched their five five <unk> offerings and they have been very focused on that they followed with satellite offerings and now theyre looking for other opportunities to expand the size of their sub base.

Speaker #4: Certainly. Your first question comes from Matthew Harrigan with Benchmark. Please go head.

Speaker #6: thank you. given the considerable TAM for the, family safety market and literally even for the individual MNOs in context of your market cap, both in the US and Europe, can you comment on any change in the size of that market?

One of the best subs at a carrier can attract is a family sub.

And that has been proven over and over over the years, they churn less and typically are willing.

Speaker #6: You sense and given the size of the opportunity, what are you seeing in terms of the in-house development at the MNOs, you know, Verizon, and and smaller?

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Added added funds.

That said, we think family safety market is entering a new time of relevance, where we can see the opportunity for growth for family safety as carriers want to reach out to this family market in general.

Speaker #6: You know, competitors because, I an, clearly you've got a great opportunity. But it feels like, you know, the competition isn't as visible maybe as as one would expect it to be.

Speaker #6: Thank you.

Speaker #2: Matt, that's a great question. So let me let me start this way by saying that, you know, we have watched the MNOs all launch their 5G offerings and they have been very focused on that.

That said.

We think we've pushed the envelope.

We are leading now and that's with new offerings in the AI.

<unk> of the business, we are without a doubt leading the way for how carriers can launch both kids' phones and now and by the end of the quarter, we'll be able to start talking about launching senior phones, we think there's a huge untapped market.

Speaker #2: They've followed with satellite offerings and now they're looking for other opportunities to expand the size of their sub-base. One of the best subs that a carrier can attract is a family sub.

Speaker #2: And that has been proven over and over over the years. They churn less than typically are willing to spend at added funds. That said, we think family safety market is entering a new time of relevance.

Many carriers have told us they actually believe the senior market could be even larger than the kids market and that's not the meaning to the kids market. That's just saying how big they think the senior market could could be.

All that said says that we think we are entering a period.

Speaker #2: Where we can see some the opportunity for growth for family safety as carriers want to reach family market in general. that said, we think we've pushed the envelope.

Our renewed growth we've had some difficult years, but I think we have a clear vision as to how the lead herself back to the relevance that we have always enjoyed over our history.

Speaker #2: we are leading now in the with, you know, new offerings in the AI, side of the business. We are, without a doubt, leading the way for how carriers can launch both kids' phones and now, and by the end of the quarter, we'll be able to start talking about launching senior phones.

So that said hopefully that answered your question come back if it did.

Thanks Bill.

Again, if you have a question. Please press Star then one.

Speaker #2: We think that is a huge untapped market. many carriers have told us they actually believe the senior market could be even larger than the kids' market.

Seeing no further questions. This concludes our question and answer session I would like to turn the conference back over to Charles Messman for any closing remarks.

Speaker #2: And that's not demeaning to the kids' market. That's just saying how big they think the senior market could could be. All that said, says that we think we are entering a period of renewed growth.

Thanks, everybody for joining us today I know today is a very busy day with conference calls and we appreciate you taking the time out of a day.

If you have any further questions. Please feel free to reach out to us directly and we look forward to speaking to you on our third quarter call. Thanks, everybody.

Speaker #2: We've had some difficult years. But I think we have a clear vision as to how to lead ourselves back to, you know, the relevance that we have always enjoyed over our history.

The conference.

<unk> has now concluded. Thank you for attending today's presentation you may now disconnect.

Speaker #2: So that said, hopefully that answered your question. Come if it didn't.

Speaker #4: Great. Thanks, Bill. Again, if you have a question, please press star then one. Seeing no further questions, this concludes our question and answer session.

Speaker #4: I would like to turn the conference back over to Charles Messman for any closing remarks.

Speaker #2: Thanks, everybody, joining us today. I ow today's a very busy day with conference calls and we appreciate ou taking the time out of the day.

Speaker #2: for us, if you any further questions, please feel free to reach out to us directly and look forward to speaking to you on our third quarter call.

Speaker #2: Thanks, everybody.