SMSI

Image source: The Motley Fool. Thursday, Aug. 13, 2026 at 4:30 p.m. ET Executive Chairman of the Board - Bill Smith President and Chief Executive Officer - Timothy Huffmyer Chief Financial Officer - Bethany Braund Vice President - Charles Messman Operator: Good day, and welcome to the Smith Micro Second Quarter of 2026 Earnings Conference Call. [Operator Instructions] Also, please be aware that today's call is being recorded. I would now like to turn the call over to Charles Messman, Vice President. Please go ahead. Charles Messman: Thank you, operator. We appreciate you joining us today to discuss Smith Micro Software financial results for the second quarter of 2026. 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 Relations section of our website at www.smithmicro.com. On today's call, we have Bill Smith, Executive Chairman of the Board; Tim Huffmyer, our President and CEO; and Bethany Braund, our Chief Financial Officer. Please note that some of the information you will hear during today's discussion consists of forward-looking statements, including without limitation those regarding the company's future revenue and profitability; our plans and expectation; new products, 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. Forward-looking statements involve risk and uncertainty, which could cause actual results or trends to differ materially from those expressed or implied by our forward-looking statements. For more information, please refer to the 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 the management's beliefs and assumptions only as of the date they are made. I want to point out that in our forthcoming prepared remarks, we will refer to specific non-GAAP financial measures. Please refer to our press release disseminated earlier today for a reconciliation of these non-GAAP financial measures. With that said, I'll turn the call over to Tim. Tim? Timothy Huffmyer: Thanks, Charlie, and thank you for joining us today for our second quarter 2026 conference call. I see our second quarter performance as a significant step forward on our journey of returning Smith Micro to growth and future profitability. We delivered sequential revenue growth in the second quarter, consistent with the guidance provided on our last call. In fact, we have now delivered sequential revenue growth over 2 consecutive quarters for the first time in approximately 5 years. We expect to announce the launch of 2 new customers by the end of this month. Contracts with both customers are fully executed, and launch plans and products are ready to go. Additionally, we are within days of signing a significant multi-year contract extension with an existing Tier 1 customer. We believe this contract extension will generate significant revenue growth beginning in the third quarter. Both the new customer launches and the contract extension were planned to happen in the second quarter, and their delay has resulted in some of our forecasted second quarter revenue being pushed to the third quarter. We continue to execute on our strategic priorities, and we are encouraged with all of the positive pipeline activity of the last few quarters, which is the strongest we've seen in years. This robust pipeline, along with the new revenue opportunities, is driven by expanded interest from current and prospective new customers and aligns with our strategy to expand our SafePath platform. We are offering more flexibility to the market with our new deployment options, including our new SafePath SDKs and APIs, which are opening new channels, aligning Smith Micro with current market trends and increasing the overall addressable market. We believe this activity will drive new revenue streams in the coming quarters as we are in meaningful deployment discussions with multiple parties, both current and new customers and prospects. As we look to the second half of the year, we do so with a high level of confidence. We believe we are building on significant upside potential for a new and exciting phase of financial growth. We will discuss more later in the call, but for now, let's hear from Bethany to review our second quarter financial performance. Bethany? Bethany Braund: Thanks, Tim, and good afternoon, everyone. Initially, I'll note that all of my comments today regarding per share metrics reflect the impact of the 1-for-5 reverse stock split that was approved by our shareholders at our annual meeting in May and was effectuated in June 2026. I'd also like to cover the transaction we completed during the quarter. In June 2026, to help fund working capital requirements, we completed a warrant inducement transaction with certain holders of existing common stock purchase warrants whereby warrants for 487,349 shares were exercised at $3.35 per share, with proceeds to the company totaling $1.6 million. As part of that transaction, we issued new 5-year warrants for the same number of shares. As I stated on our last earnings call, we are continuing to see benefits from the strategic cost reductions we announced last October. We are still executing on these changes and will see their longer-term benefits as certain remaining costs will end after the third quarter. Our focus now is to ensure that we have the resources necessary to meet the revenue growth we are targeting. Now let's cover the financial results of the second quarter of 2026. For this second quarter, we achieved our second consecutive quarter of sequential revenue growth. The last time that was achieved was back in 2021. For the second quarter of 2026, we recognized revenue of $4.3 million compared to $4.4 million for the same quarter of 2025, a decrease of 2%. When compared to the first quarter of 2026, revenue increased by $120,000 or 3%. Year-to-date revenue through June 30, 2026, was $8.6 million versus $9.0 million through the second quarter of last year, a decrease of 5%. During the second quarter of 2026, family safety revenue was $3.5 million, which decreased by $111,000 or 3% compared to the second quarter of last year. Family safety revenue increased by $94,000 or 3% compared to the first quarter of 2026. During the second quarter of 2026, CommSuite revenue was $826,000, which increased by $49,000 compared to the second quarter of 2025. Revenue from CommSuite grew by $26,000 or 3% as compared to the first quarter of 2026. For the third quarter of 2026, we expect to build on our second quarter revenue, and given our near-term view of additional opportunities in progress, we expect total revenue of $5.0 million to $5.4 million for the third quarter. For the second quarter of 2026, gross profit was $3.5 million compared to $3.2 million during the same period of the prior year, an increase of $281,000 or 9% due to the period-over-period increase in revenue and the decline in cost of revenues resulting from the strategic cost reduction efforts undertaken. Further, gross margin was at 81.3% for the quarter, in line with prior quarter guidance and at a significant improvement as compared to the 73.5% realized in the second quarter of 2025. We are pleased to see our gross margin back over 80% for the first time in 5 years. Our gross profit of $3.5 million in the second quarter of 2026 increased by $219,000 compared to the gross profit realized in the first quarter of 2026. In the third quarter of 2026, we expect gross margin to be in the range of 81% to 83%. We believe we are making our way toward our longer-term goal for gross margin at 85%. For the year-to-date period ended June 30, 2026, gross profit was $6.8 million compared to $6.6 million during the corresponding period last year. Gross margin was 80% for the June 30, 2026, year-to-date period. GAAP operating expenses for the second quarter of 2026 were $5.9 million, a decrease of $12.3 million or a 68% decline as compared to the second quarter of 2025. Excluding the second quarter 2025 onetime events, including goodwill impairment of $11.1 million and the gain on sale of ViewSpot of $1.3 million, GAAP operating expenses quarter-over-quarter decreased by $2.5 million or 30%. This reduction was a result of our cost optimization activities that we have executed and continue to see the impacts thereof. GAAP operating expenses for the year-to-date period ended June 30, 2026, were $12.6 million compared to $26.8 million in the prior year-to-date period, a decrease of $14.2 million. Non-GAAP operating expenses for the second quarter of 2026 were $4.4 million compared to $5.9 million in the second quarter of 2025, a decrease of approximately $1.6 million or 26%. Sequentially, non-GAAP operating expenses declined by approximately $377,000 or 8% compared to the first quarter of 2026. Non-GAAP operating expenses for the year-to-date period through June 30, 2026, were $9.1 million compared to the $12.1 million for the year-to-date period ended June 30, 2025, a decrease of approximately $3 million, or 25% compared to last year. Although we anticipate a further decline in our core non-GAAP operating expenses, we are planning to add some additional resource capacity to support the pipeline, and therefore you can expect a non-GAAP operating expense increase of up to 6% in the third quarter of 2026 as compared to the second quarter of 2026. The GAAP net loss attributable to common stockholders for the second quarter of 2026 was $2.7 million or $0.52 loss per share compared to the net loss attributable to common stockholders of $15.1 million or $3.88 loss per share in the first quarter of 2026. GAAP net loss attributable to common stockholders for the 6 months ended June 30, 2026, was $6.6 million or $1.28 loss per share compared to GAAP net loss attributable to common stockholders of $20.2 million or $5.38 loss per share for the 6 months ended June 30, 2025. The non-GAAP net loss attributable to common stockholders for the second quarter of 2026 was $989,000 or a $0.19 loss per share compared to the non-GAAP net loss attributable to common stockholders of $2.8 million or a $0.71 loss per share in the first quarter of 2026. Non-GAAP net loss attributable to common stockholders for the 6 months ended June 30, 2026, was $2.5 million or a $0.48 loss per share compared to non-GAAP net loss attributable to common stockholders of $5.6 million or $1.49 loss per share for the 6 months ended June 30, 2025. Within today's press release, we have provided a reconciliation of our non-GAAP metrics to the closest and most comparable GAAP metric. For the second quarter of 2026, the reconciliation primarily includes adjustments for intangible asset amortization of $1.2 million, stock compensation expense of $171,000, depreciation expense of $120,000, amortization of debt discount and financing issuance cost of $95,000, deemed dividend of $86,000, and cost of approximately $84,000 associated with the shareholder-approved reverse stock split. Due to our cumulative net losses over the past few years, our GAAP tax expense is primarily due to certain state and foreign income taxes. For non-GAAP purposes, we utilized a 0% tax rate for 2026 and 2025. The resulting non-GAAP tax expense reflects the actual income taxes expensed during each period. On the balance sheet, we reported $2.8 million of cash and cash equivalents as of June 30, 2026. This concludes my financial review. Now I'll pass it back over to Tim. Timothy Huffmyer: Thanks, Bethany. As we have discussed on past calls, there are new activities and changes happening in the market today that are helping to drive new demand, which aligns well with the go-to-market strategy we have been implementing. This has resulted in several exciting, planned deployments, all to take place in the third quarter and all included in our revenue guidance. First, we are in the final stages to increase our feature set with one of the existing family safety applications in the market today with one of our Tier 1 carriers. This new feature set will increase the overall product offering to all current subscribers and increase our realized revenue share once deployed in the next month. Next, as I mentioned earlier, we are in the final contract phase to expand our SafePath platform capabilities with a Tier 1 carrier, including the introduction of new deployment options, which we believe will result in the delivery over time of our solutions to a significantly larger segment of their overall customer base. Last, we are in the advanced development stages of producing an application with additional functionality to be deployed in the European market with an existing customer. This will enable a larger reach into their addressable market, specifically by allowing kids to use iOS phones in addition to the Android phones currently offered. Once deployed, we believe this will significantly accelerate our revenue growth with this European customer. This same momentum is building with other current partners, and we believe reinforcing Smith Micro as the go-to strategic partner for family safety features and devices, leveraging our new deployment capabilities and resulting in new initiatives that we expect will drive new revenue opportunities. During our last conference call, we discussed the signing of a new agreement for SafePath OS with a U.S. carrier. That launch is ready to go and is one of the 2 new customers I mentioned earlier. This will be our first SafePath OS deployment, and we believe the use case is so powerful it will attract and accelerate additional customer activity for SafePath OS. We are also making solid progress on our strategic effort to expand our reach beyond the carrier market. We're engaging with organizations in other markets that serve large customer bases and want to differentiate themselves by delivering family safety solutions for their customers. Our conversations with prospective new partners have reinforced our belief that the market for family safety services is growing and extends beyond the traditional carrier market. We expect this new initiative to contribute to the company's revenue growth in the coming quarters. Another new growth driver for Smith Micro is the launch of SafePath Connect, announced earlier today, which represents an important expansion of our family safety strategy. For many years, our family safety solutions have been delivered as white-label solutions through wireless carriers. This distribution model takes months of effort to launch and typically requires meaningful investment by the carrier. As we've discussed previously, organizations worldwide are looking for trusted digital experiences that strengthen customer engagement and create long-term value. SafePath Connect extends the same trusted family safety capabilities to carrier audiences in a fraction of the time when compared to the white-label approach. SafePath Connect is distributed as a Smith Micro-branded product promoted and paid for by the carrier or other partners. By leveraging Smith Micro App Store distribution, a broader range of partners can have the flexibility to quickly and easily offer a family safety solution to their customers. Since our last conference call, we have signed a new agreement with the second new customer I mentioned earlier to provide SafePath Connect to their customer base, which is located in Europe. Before month end, we will be releasing more information about this relationship, all in coordination with our customers' marketing activity. We are encouraged by the level of interest we're seeing from our new partner. More importantly, SafePath Connect reflects the strategic market expansion underway at Smith Micro. We are evolving from serving a defined carrier market to participating in a much larger family safety opportunity across multiple channels, customer segments and business models. We believe this positions us to drive sustainable growth while creating additional value for both our partners and shareholders. We look forward to launching SafePath Connect in the U.S. in the coming months. We see significant potential across the business, and our objective is clear: execute efficiently, support customer successes and position Smith Micro to capitalize on the opportunities we've worked hard to create. As I look ahead, I believe we are better positioned than we have been in quite some time. We have expanded our platform capabilities, strengthened relationships with existing customers, opened new channels to market and built a pipeline that continues to grow. The opportunity in front of us is substantial. Our focus now is on execution, delivering for our customers, bringing new opportunities to market and converting the momentum we are seeing today into sustained revenue growth. We are committed to accelerate deliveries to meet customer timelines, so we can maximize our revenue opportunities going forward. We believe the foundation we've built over the past several quarters positions us well for a strong second half of 2026 and will carry us well into 2027 and beyond. We have a lot of work ahead of us, and we are excited about where we are, confident in our direction and optimistic about what Smith Micro can achieve as we continue to execute on our strategy. With all that, operator, let's open the call for questions. Operator: [Operator Instructions] And our first question here will come from Scott Searle with ROTH Capital. Scott Searle: Nice job on starting to see sequential growth following through into the second half of this year. Tim, maybe to start on that front, I just want to clarify, with the 2 new customers, I'm wondering if you could rearticulate again the timing of those 2 new customers and the specific applications that they're going to be deploying. Is this kid phones? Or is this elder phones? And then with the existing Tier 1, the expansion of that relationship, when do we start to see the impact of that from a pricing or other standpoint start to kick in? Timothy Huffmyer: Yes. Hey, Scott, thanks for the questions. First off, the 2 new customers, one, both of them are expected to launch in the coming month or so. One of them is a SafePath OS device, and we're refraining from disclosing if it's senior or kids related. We're waiting for the marketing activity to kick in from our customer. But once that launches, we'll put a release out with that, and you'll see that in the market. Secondly, the other one is the SafePath Connect platform in Europe, and we're also aligning up marketing activities with that, and that's also scheduled to go within the next month or so. So very near-term launch, one, SafePath OS. One is the new product, the SafePath Connect. Really excited about both of those and getting those products in market. And we think both of those products in market is going to drive some nice positive activity from a customer perspective and drive our pipeline even larger. The second part -- or the second question, Scott, was around the Tier 1. So the Tier 1 that we're working with, we are expanding our product offering, trying to leverage the broader categories of features and functionalities that we provide. And we do expect the revenue from that to start in the third quarter, Scott, so pretty near-term type activity. Scott Searle: Got you. Very helpful. And if I could, just to follow up on that, you've given guidance for the third quarter with OPEX up kicking a little bit. It looks like your breakeven is $5.5 million to $6 million. Should we expect to see continued sequential growth then into the fourth quarter given the timing of these launches? And are you looking for break-even results by the end of the year? And then just to follow up as well, the SDK seems like a very intriguing opportunity. I'm wondering if you could address that in a little bit more detail in terms of opportunity, magnitude, what kind of interest you're seeing, or SDK downloads or otherwise. Give us some idea of where that's going. Timothy Huffmyer: Yes, so from a P&L perspective, we've been consistently calling out sequential revenue growth, and we would expect that to continue here into the third quarter and even into the fourth quarter. So very positive pipeline buildup. We believe we have deliveries tied down from a date standpoint, and we believe that our new deliveries will drive and our new launches will drive that sequential growth. So we're real pleased about that, and the team is doing an excellent job around that. From a cost perspective, we are looking at increasing those non-GAAP operating expenses, just adding some headcount there, shoring up after our strategic changes last October. We're just making some changes with that, all positive and all related to supporting that pipeline at the end of the day. The SDKs and the API activity, yes, we're seeing great traction with that in the marketplace, so that opens up outside of the carrier market greatly. So anybody that has a membership organization that wants to provide additional value-added services to them, that they are interested in retention around those customers, providing a family safety-type feature and functionality, we're seeing great traction in the marketplace around that. That started a couple months ago, us starting to market that, and the pipeline buildup is exciting. It's something that we haven't seen in a number of years, we believe. William Smith: Tim, maybe I can add to what you just said. When we think about the SDK opportunity, we're really looking at the super apps that are being built by the large Tier 1s, and now even larger MVNOs are also expressing interest in building their own app. What's really important here is that this is their app. And instead of having a multitude of different offerings, they're collecting all their service within their core marketed offering. They are willing to spend enormous amounts of money to market these super apps, and they are reaching tens of millions of subscribers. This is an opportunity that we could have only wished for on the direct -- on the over-the-top offerings that we have historically done. This is an opportunity that is -- really has a multiplier effect. And the number of opportunities we're currently focused on is really impressive. And so you have this one contract that's next -- near to signing, and there's plenty more right behind it with extreme interest and excitement around them. So we think this opportunity with the SDKs is a future growth driver that really we've not been able to talk about for a number of years. It's very exciting. Scott Searle: Hey, Bill, just to follow up on that, from a pricing standpoint, in the past, it was rev share with the carriers. Is this a similar type model where you'd be paid per subscriber given that they've got more control over it? So I mean, how are you thinking about on a pricing per sub, onetime fixed fee? How does that work? William Smith: Yes, that's a great question. It's still a SaaS model. Obviously, because the volumes are higher, the carriers have the ability to earn better pricing as they reach the multimillions of sub-levels. But because the number of subscribers is so huge, the net effect is it just generates enormous revenue with very high margin. It's just, I think, the most exciting thing we've seen in a number of years. You add to what we're doing there with the phones. We even now have an offering for smaller carriers and operators that is branded to us, but it still gives them a strong answer for their customer base in the area of family safety. After all, carriers are really interested in attracting the family sub. Family subs are the highest quality sub a carrier can sign up, and offering family safety is one of the best ways to get them over to their side. It's a great time. Operator: [Operator Instructions] Our next question will come from Matthew Harrigan with StoneX. Matthew Harrigan: You already addressed a number of the points I was going to query about. But when you look at the super app domain, if you will, it feels like there's just a clear default now to your new SDK and APIs. I know you had one large carrier that tried to do everything or is doing everything in-house. Are you seeing any new competition? Or do you -- it feels like everyone's pretty much -- you talked about the pipeline, so it sounds like most of the MNOs and even other logical customers are pretty much rallying to use your kit that you have in place or about to have in place. And I have one follow-up. Timothy Huffmyer: Thanks for the question. From a competition standpoint, there's definitely competition out there, but for years, we have been the premier provider of these services. And the SDK and API type activity allows access to those services in a lightweight type way. And so we believe that we're still a premier provider of that. So that's how we're competitively separating ourselves from our competition. We may not be the cheapest out there. We don't expect to be the cheapest. We don't necessarily want to be the cheapest. We want to provide a high-quality service. Carrier grade is something that's embedded in the company for decades, and we're going to continue down that path and help to separate ourselves from that -- from our competition in doing that. Matthew Harrigan: And you've maintained on earlier calls that the senior opportunity's commensurate or larger with the youth opportunity. Are you still seeing that? And is that partly a -- part of the function of why you're seeing so much interest coming in almost over the transom even from non-MNOs? Timothy Huffmyer: Yes. Yes, the senior side of things is very active. We're absolutely seeing a lot of interest in that. And when you start thinking about the capabilities that we can provide in our different deployment, including our OS platform, we do continue to see a strong pipeline related to seniors. I'd say it's stronger than the kids OS side of things right now. Matthew Harrigan: So after that massive deployment, no more... William Smith: Matthew, maybe I can add something on top of that. When you think about our SDK offering, it's built on the same code base as all SafePath products. And that code base has been built over a number of years through internal development as well as external acquisitions, where we acquired some of our major competitors in the past. As a result, the feature set and breadth of offering that is provided by SafePath is fairly unparalleled. Even when you look at some of the major players that market direct to consumer, our feature set is broader. So when you start talking about an SDK offering, we're providing a vehicle for a carrier to build family safety into their branded app that they are going to invest heavily in as far as from a marketing standpoint to attract a large percentage of their possible user base. So yes, there may be competition, but when you're way out in front, it's really hard for the competition to catch up on a feature-by-feature basis. Matthew Harrigan: And I think you mentioned a fairly nominal sequential up to 6% increase in operating expenses. Is that really pretty much entirely on the sales side? Or are you wiggling around a few technical things as well given all the enhancements that you've introduced? I know you've got a really nice bedrock, but I mean, the market's moving so fast that I felt like you might want to do some new things on the engineering side as well. Timothy Huffmyer: Yes, it's mostly focused on the engineering side, Matthew. Between people and maybe AI, at the end of the day, that's what's going to take care of those -- that's what we have identified for those costs, so just trying to enhance the team and making sure we're prepared to handle the pipeline ahead of us. Operator: And 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: I want to thank everyone for joining us today. As always, please feel free to reach out to us directly, and we look forward to talking to you on our next call. Thanks and have a great day. Operator: The conference has now concluded. Thank you again for attending today's presentation. You may now disconnect your lines. Before you buy stock in Smith Micro Software, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Smith Micro Software wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Achieved sequential revenue growth for two consecutive quarters for the first time in approximately five years, signaling a stabilization of the core business. Attributed the 3% sequential revenue increase to the continued execution of strategic priorities and the initial benefits of a robust, multi-year pipeline buildup. Reported a significant gross margin recovery to 81.3%, driven by the successful implementation of strategic cost reductions initiated in October 2025. Shifted the go-to-market strategy toward SafePath SDKs and APIs to offer deployment flexibility, allowing partners to integrate family safety features directly into their own 'super apps'. Expanded the addressable market beyond traditional Tier 1 carriers to include MVNOs and membership organizations seeking to differentiate through value-added digital services. Evolved the distribution model with the launch of SafePath Connect, a branded solution that reduces deployment timelines from months to weeks compared to traditional white-label approaches. Projected Q3 revenue between $5.0 million and $5.4 million, assuming the successful launch of two new customers and a significant Tier 1 contract extension. Anticipated a 6% increase in non-GAAP operating expenses for Q3 to add engineering capacity and AI resources necessary to support the accelerating sales pipeline. Targeted long-term gross margins of 85% as the company scales its SaaS-based SDK and SafePath Connect offerings. Expected a significant revenue acceleration from a European customer following the Q3 deployment of iOS functionality, expanding the reach beyond their current Android-only user base. Planned the U.S. launch of SafePath Connect in the coming months to capitalize on interest from smaller carriers and non-traditional partners. Effectuated a 1-for-5 reverse stock split in June 2026 to adjust the capital structure following shareholder approval. Completed a warrant inducement transaction in June 2026, generating $1.6 million in proceeds to fund working capital requirements. Acknowledged that delays in signing a Tier 1 contract extension and two new customer launches pushed some forecasted Q2 revenue into the Q3 period. Noted that while core operating expenses are declining, the company is strategically reinvesting in headcount to avoid bottlenecks in the deployment pipeline. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management confirmed the SDK model remains a SaaS-based revenue share, though higher volumes in carrier 'super apps' may lead to tiered pricing. The strategy prioritizes high-volume subscriber acquisition over premium per-sub pricing to maximize net revenue and maintain high margins. Management observed that the pipeline for senior-focused safety solutions is currently stronger than the kids' OS segment. The senior market is driving significant interest from non-MNO partners looking for specialized safety features for aging populations. Management argued that their unified code base, built through years of R&D and acquisitions, provides a feature breadth that is difficult for competitors or in-house teams to replicate. The SDK approach targets Tier 1 carriers and MVNOs building 'super apps' that integrate family safety features into their own branded offerings, providing a carrier-grade solution that is difficult for competitors to match on a feature-by-feature basis.

This article first appeared on GuruFocus. Revenue: $4.3 million in Q2 2026, down 2% year-over-year but up 3% sequentially. Family Safety Revenue: $3.5 million, down 3% year-over-year but up 3% sequentially. ComSuite Revenue: $826,000, up $49,000 year-over-year and up 3% sequentially. Gross Profit: $3.5 million, up 9% year-over-year. Gross Margin: 81.3%, up from 73.5% in Q2 2025. GAAP Operating Expenses: $5.9 million, down 68% year-over-year. Non-GAAP Operating Expenses: $4.4 million, down 26% year-over-year. GAAP Net Loss: $2.7 million, or $0.52 loss per share. Non-GAAP Net Loss: $989,000, or $0.19 loss per share. Cash and Cash Equivalents: $2.8 million as of June 30, 2026. Q3 2026 Revenue Guidance: Expected to be between $5.0 million and $5.4 million. Q3 2026 Gross Margin Guidance: Expected to be in the range of 81% to 83%. Warning! GuruFocus has detected 4 Warning Signs with SMSI. Is SMSI fairly valued? Test your thesis with our free DCF calculator. Release Date: August 13, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Smith Micro Software Inc (NASDAQ:SMSI) achieved its second consecutive quarter of sequential revenue growth, a milestone not seen in approximately five years. The company expects to launch two new customers by the end of the month, with fully executed contracts and ready-to-go launch plans. A significant multi-year contract extension with an existing Tier 1 customer is expected to generate substantial revenue growth starting in the third quarter. Gross margin improved to 81.3% in Q2 2026, up from 73.5% in the same period last year, and is on track toward the long-term goal of 85%. The new SafePath Connect product and SDK/API deployment options are expanding the company's addressable market beyond traditional carriers, with strong pipeline interest. Revenue for Q2 2026 decreased by 2% year-over-year, from $4.4 million to $4.3 million. The company still reported a GAAP net loss of $2.7 million for Q2 2026, though improved from the prior quarter. Cash and cash equivalents were only $2.8 million as of June 30, 2026, indicating tight liquidity. The company had to complete a warrant inducement transaction in June 2026 to raise $1.6 million for working capital, which may dilute shareholders. Non-GAAP operating expenses are expected to increase by up to 6% in Q3 2026 to support the pipeline, potentially delaying profitability. Q: Can you clarify the timing and specific applications for the two new customer launches, and when will the impact from the existing Tier 1 contract expansion begin?A: Tim Huffmyer (President and CEO) confirmed both new customers are expected to launch within the next month. One is a SafePath OS device deployment, and the other is the new SafePath Connect platform in Europe. Marketing activities are being coordinated with both customers. Regarding the Tier 1 expansion, revenue from the expanded product offering is expected to begin in the third quarter of 2026. Q: Given the Q3 guidance with increased OpEx, should we expect continued sequential growth into Q4, and are you targeting breakeven by year-end? Can you also provide more detail on the SDK opportunity?A: Tim Huffmyer stated the company expects sequential revenue growth to continue into Q3 and Q4, driven by new launches and deliveries. The increase in non-GAAP operating expenses is primarily for adding headcount to support the growing pipeline. Regarding SDKs, the company is seeing great traction outside the carrier market, with interest from membership organizations looking to offer family safety features. William Smith (Executive Chairman) added that the SDK opportunity is focused on "super apps" being built by large Tier 1 carriers and MVNOs, which represents a significant multiplier effect and a major future growth driver. Q: From a pricing standpoint, is the SDK model similar to the historical rev-share model with carriers, or is it structured differently?A: William Smith explained that the SDK model remains a SaaS model. While carriers can earn better pricing at higher subscriber volumes, the sheer scale of potential subscribers (in the millions) generates enormous revenue with very high margins. He also noted the company now offers a branded solution for smaller carriers, providing them with a strong family safety answer to attract high-quality family subscribers. Q: Are you seeing any new competition in the super app domain, and how are you differentiating yourselves?A: Tim Huffmyer acknowledged there is competition but emphasized Smith Micro's position as a premier provider of carrier-grade services. The company differentiates itself by offering high-quality, reliable services rather than being the cheapest option. William Smith added that the SafePath code base, built through years of internal development and acquisitions of major competitors, provides an unparalleled feature set that is difficult for competitors to match on a feature-by-feature basis. Q: Is the senior opportunity still as significant as the youth opportunity, and is this driving interest from non-MNOs?A: Tim Huffmyer confirmed that the senior side of the business is very active, with a stronger pipeline currently than the kids' OS side. The company's capabilities, including its OS platform, are attracting significant interest in the senior market. This is contributing to the overall interest from both MNOs and non-MNOs. Q: Is the up to 6% sequential increase in operating expenses primarily on the sales side, or are there also engineering investments?A: Tim Huffmyer clarified that the increase is mostly focused on the engineering side, including investments in personnel and potentially AI. The goal is to enhance the team and ensure the company is prepared to handle the growing pipeline ahead. Q: Can you provide more details on the financial performance for Q2 2026 and the outlook for Q3?A: Bethany Braund (CFO) reported Q2 2026 revenue of $4.3 million, a 3% sequential increase, marking the second consecutive quarter of sequential growth. Gross margin improved to 81.3%, the first time above 80% in five years. Non-GAAP operating expenses decreased 26% year-over-year to $4.4 million. For Q3 2026, the company expects revenue of $5.0 million to $5.4 million and gross margin in the range of 81% to 83%. Q: What are the key strategic initiatives and new product launches driving the company's growth?A: Tim Huffmyer highlighted several key initiatives: the launch of SafePath Connect, a new product that extends family safety capabilities to carrier audiences in a fraction of the time of traditional white-label approaches; the expansion of the SafePath platform with a Tier 1 carrier; and the development of an application for the European market that will allow iOS phones for kids, significantly accelerating revenue growth with that customer. The company is also expanding beyond the carrier market to organizations serving large customer bases. Q: How is the company's cash position and what was the impact of the warrant inducement transaction?A: Bethany Braund reported $2.8 million in cash and cash equivalents as of June 30, 2026. In June 2026, the company completed a warrant inducement transaction where warrants for 487,349 shares were exercised at $3.35 per share, generating $1.6 million in proceeds. New five-year warrants were issued for the same number of shares as part of the transaction. Q: What is the company's confidence level for the second half of 2026 and beyond?A: Tim Huffmyer expressed high confidence in the second half of 2026, citing the strongest pipeline in years, expanded platform capabilities, strengthened customer relationships, and new channels to market. The company believes the foundation built over the past several quarters positions it well for strong growth in 2026 and into 2027, with a focus on execution and converting momentum into sustained revenue growth. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

PITTSBURGH, August 13, 2026--(BUSINESS WIRE)--Smith Micro Software, Inc. (Nasdaq: SMSI) ("Smith Micro" or the "Company") today reported financial results for its second quarter ended June 30, 2026. "I am pleased with our second quarter, which marked an important step forward for Smith Micro as we continued to execute on our strategy and delivered our second consecutive quarter of sequential revenue growth," said Tim Huffmyer, President and Chief Executive Officer of Smith Micro. "We are continuing to see strong demand for our solutions and are encouraged by the momentum we are seeing across the business. We have two new customers ready to launch in the near term and multiple contracts under negotiation that we expect will drive additional revenue. We also continue to broaden the capabilities of our SafePath® platform, creating new opportunities for growth with both current and prospective customers. "As we enter the second half of 2026, we believe we are better positioned than we have been in years. The introduction of SafePath Connect™ and our new SDK and API deployment options has increased the overall addressable market, opening new channels for growth and enabling us to reach customers beyond traditional carrier deployments. Combined with the strongest pipeline activity we have seen in years, we are confident in our direction and excited about the opportunities ahead." Second Quarter 2026 Financial Results Smith Micro reported revenue of $4.3 million for the quarter ended June 30, 2026, compared to $4.4 million reported in the quarter ended June 30, 2025. Gross profit for the quarter ended June 30, 2026 was $3.5 million, compared to $3.2 million for the quarter ended June 30, 2025. Gross profit as a percentage of revenue was 81.3% for the quarter ended June 30, 2026, compared to 73.5% for the quarter ended June 30, 2025. GAAP net loss attributable to common stockholders for the quarter ended June 30, 2026 was $2.7 million, or $0.52 loss per share, compared to GAAP net loss attributable to common stockholders of $15.1 million, or $3.88 loss per share, for the quarter ended June 30, 2025. Non-GAAP net loss attributable to common stockholders for the quarter ended June 30, 2026 was $1.0 million, or $0.19 loss per share, compared to non-GAAP net loss attributable to common stockholders of $2.8 million, or $0.71 loss per share, for the quarter ended June 30, 2025. Non-GAAP net loss attributable to common stockholders excludes the items noted below under "Non-GAAP Measures." All share and per share amounts for common stock herein have been retroactively adjusted for all periods presented to give effect to the one-for-five reverse stock split of our common stock, which became effective June 4, 2026 at 11:59 pm Eastern time. Second Quarter Year-to-Date 2026 Financial Results Smith Micro reported revenue of $8.6 million for the six months ended June 30, 2026, compared to $9.0 million reported in the six months ended June 30, 2025. Gross profit for the six months ended June 30, 2026 was $6.8 million compared to $6.6 million reported for the same period in 2025. Gross profit as a percentage of revenue was 79.9% for the six months ended June 30, 2026 compared to 73.1% for the six months ended June 30, 2025. GAAP net loss attributable to common stockholders for the six months ended June 30, 2026 was $6.6 million, or $1.28 loss per share, compared to GAAP net loss attributable to common stockholders of $20.2 million, or $5.38 loss per share, for the six months ended June 30, 2025. Non-GAAP net loss attributable to common stockholders for the six months ended June 30, 2026 was $2.5 million, or $0.48 loss per share, compared to non-GAAP net loss attributable to common stockholders of $5.6 million, or $1.49 loss per share for the six months ended June 30, 2025. Non-GAAP net loss attributable to common stockholders excludes the items noted below under "Non-GAAP Measures." Total cash and cash equivalents as of June 30, 2026 were $2.8 million. Non-GAAP Measures To supplement our financial information presented in accordance with GAAP, the Company considers, and has included in this press release, the following non-GAAP financial measures and a non-GAAP reconciliation from the equivalent GAAP metric: non-GAAP net loss, non-GAAP gross profit, and non-GAAP basic and diluted loss per share in the presentation of financial results in this press release. Management believes these non-GAAP presentations may be more meaningful in analyzing the Company's income generation and has therefore excluded the following items from GAAP earnings calculations: stock compensation, intangibles amortization, depreciation, fair value adjustments, and other items, which includes amortization of debt discount and financing issuance costs, executive transition costs, costs associated with corporate actions, deemed dividends, and costs associated with shareholder-approved reverse stock split. Additionally, since the Company currently has federal and state net operating loss carryforwards that can be utilized to reduce future cash payments for income taxes, these non-GAAP adjustments have not been tax effected, and the resulting income tax expense reflects actual taxes paid or accrued during each period. This presentation may be considered more indicative of the Company's ongoing operational performance. The tables below labeled "Reconciliation of GAAP to Non-GAAP Results" present the differences between non-GAAP net loss and net loss on an absolute and per-share basis. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and the non-GAAP financial measures as reported by Smith Micro may not be comparable to similarly titled amounts reported by other companies. Investor Conference Call Smith Micro will hold an investor conference call today, August 13, 2026, at 4:30 p.m. ET, to discuss the Company’s second quarter 2026 financial results. To access the call, dial 1-844-701-1164; international participants can call 1-412-317-5492. A passcode is not required to join the call; ask the operator to be placed into the Smith Micro conference. Participants are asked to call the assigned number approximately 10 minutes before the conference call begins. An internet webcast is available at https://event.choruscall.com/mediaframe/webcast.html?webcastid=5GDGfTWs. In addition, the conference call will be available on the Smith Micro website in the Investor Relations section. About Smith Micro Software, Inc. Smith Micro develops software to simplify and enhance the mobile experience, providing solutions to some of the leading wireless service providers around the world. From enabling the family digital lifestyle to providing powerful voice messaging capabilities, our solutions enrich today’s connected lifestyles while creating new opportunities to engage consumers via smartphones and consumer IoT devices. For more information, visit www.smithmicro.com. Smith Micro and the Smith Micro logo are registered trademarks or trademarks of Smith Micro Software, Inc. All other trademarks and product names are the property of their respective owners. Forward-Looking Statements Certain statements in this press release are, and certain statements on the related conference call may be, forward-looking statements regarding future events or results within the meaning of the Private Securities Litigation Reform Act, including statements related to our financial prospects, goals and other projections of our outlook or performance our cost reduction plans and other future business plans, and statements using such words as "expect," "anticipate," "believe," "plan," "intend," "could," "will" and other similar expressions. Forward-looking statements involve risks and uncertainties, which could cause actual results to differ materially from those expressed or implied in the forward-looking statements. Among the important factors that could cause or contribute to such differences are customer concentration, given that the majority of our sales currently depend on a few large customer relationships; our ability to establish and maintain strategic relationships with our customers and mobile device manufacturers, their ability to attract customers, and their willingness to promote our products; our ability and/or customers’ ability to distribute our mobile software applications to their end users through third party mobile software application stores, which we do not control; our dependency upon effective operation with operating systems, devices, networks and standards that we do not control and on our continued relationships with mobile operating system providers, device manufacturers and mobile software application stores; our ability to hire and retain key personnel; the possibility of security and privacy breaches in our systems and in the third-party software and/or systems that we use, damaging client relations and inhibiting our ability to grow; interruptions or delays in the services we provide from our data center and cloud hosting facilities; the existence of undetected software defects in our products and our failure to resolve detected defects in a timely manner; our ability to remain a going concern; our ability to raise additional capital and the risk of such capital not being available to us at commercially reasonable terms or at all; our ability to be profitable; current and potential future negative impacts from cost reduction efforts we have taken and may in the future undertake; unanticipated delays or obstacles in our development and release cycles; the degree to which competing business needs or resource constraints may affect our allocation of resources to planned projects; changes in our operating income due to shifts in our sales mix and variability in our operating expenses; adverse impact to our results of operations if we fail to realize the full value of our intangible assets; our current client concentration within the vertical wireless carrier market, and the potential impact to our business resulting from changes within this vertical market, or failure to penetrate new markets; rapid technological evolution and resulting changes in demand for our products from our key customers and their end users; intense competition in our industry and the core vertical markets in which we operate, and our ability to successfully compete; the risks inherent with international operations; the impact of evolving information security and data privacy laws on our business and industry; the impact of governmental regulations on our business and industry; our ability to protect our intellectual property and our ability to operate our business without infringing on the rights of others; and the risk of being delisted from Nasdaq if we continue to fail to meet any of its applicable listing requirements. These and other factors discussed in our filings with the Securities and Exchange Commission, including our filings on Forms 10-K and 10-Q, could cause actual results to differ materially from those expressed or implied in any forward-looking statements. The forward-looking statements contained in this release are made on the basis of the views and assumptions of management, and we do not undertake any obligation to update these statements to reflect events or circumstances occurring after the date of this release. View source version on businesswire.com: https://www.businesswire.com/news/home/20260813971525/en/ Contacts IR INQUIRIES: Charles MessmanInvestor [email protected]

Manhattan Associates (MANH) came out with quarterly earnings of $1.39 per share, beating the Zacks Consensus Estimate of $1.31 per share. This compares to earnings of $1.31 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +6.11%. A quarter ago, it was expected that this business software company would post earnings of $1.1 per share when it actually produced earnings of $1.24, delivering a surprise of +12.73%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Manhattan Associates, which belongs to the Zacks Computer - Software industry, posted revenues of $297.79 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 3.60%. This compares to year-ago revenues of $272.42 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Manhattan Associates shares have lost about 8.1% since the beginning of the year versus the S&P 500's gain of 8.3%. While Manhattan Associates has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Manhattan Associates was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.43 on $295.76 million in revenues for the coming quarter and $5.33 on $1.15 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Computer - Software is currently in the bottom 40% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Smith Micro Software, Inc. (SMSI), another stock in the same industry, has yet to report results for the quarter ended June 2026. This company is expected to post quarterly loss of $0.10 per share in its upcoming report, which represents a year-over-year change of +85.7%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Smith Micro Software, Inc.'s revenues are expected to be $4.8 million, up 8.6% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Manhattan Associates, Inc. (MANH) : Free Stock Analysis Report Smith Micro Software, Inc. (SMSI) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Cadence Design Systems (CDNS) came out with quarterly earnings of $2.11 per share, beating the Zacks Consensus Estimate of $2.05 per share. This compares to earnings of $1.65 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +2.93%. A quarter ago, it was expected that this maker of hardware and software products for validating chip designs would post earnings of $1.88 per share when it actually produced earnings of $1.96, delivering a surprise of +4.26%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Cadence, which belongs to the Zacks Computer - Software industry, posted revenues of $1.58 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 0.52%. This compares to year-ago revenues of $1.28 billion. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Cadence shares have added about 4.4% since the beginning of the year versus the S&P 500's gain of 8.3%. While Cadence has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Cadence was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.92 on $1.55 billion in revenues for the coming quarter and $7.94 on $6.2 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Computer - Software is currently in the bottom 38% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Smith Micro Software, Inc. (SMSI), another stock in the same industry, has yet to report results for the quarter ended June 2026. This company is expected to post quarterly loss of $0.10 per share in its upcoming report, which represents a year-over-year change of +85.7%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Smith Micro Software, Inc.'s revenues are expected to be $4.8 million, up 8.6% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cadence Design Systems, Inc. (CDNS) : Free Stock Analysis Report Smith Micro Software, Inc. (SMSI) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Release Date: April 29, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Smith Micro Software Inc (NASDAQ:SMSI) signed a contract with a new carrier customer, indicating potential for future revenue growth. The company completed a seamless executive succession plan, with new leadership roles filled by Tim Huffmeyer as CEO and Bethany Braun as CFO. Smith Micro Software Inc (NASDAQ:SMSI) reported a significant reduction in operating expenses, with a 22% decrease in GAAP operating expenses compared to the first quarter of 2025. The company anticipates strong revenue growth in the second quarter of 2026, with expectations of a 24% increase compared to the first quarter. Smith Micro Software Inc (NASDAQ:SMSI) achieved a higher gross margin of 78.4% in the first quarter of 2026, up from 72.8% in the same period of the previous year. Smith Micro Software Inc (NASDAQ:SMSI) experienced a 9% decrease in revenue for the first quarter of 2026 compared to the same quarter in 2025. Family safety revenue decreased by 10% compared to the first quarter of the previous year. The company reported a GAAP net loss of $3.9 million for the first quarter of 2026. Smith Micro Software Inc (NASDAQ:SMSI) has a low cash reserve, with $1.7 million in cash and cash equivalents as of March 31, 2026. There is uncertainty regarding the timing of new carrier customer deployments, which could impact revenue recognition in future quarters. Warning! GuruFocus has detected 6 Warning Signs with SMSI. Is SMSI fairly valued? Test your thesis with our free DCF calculator. Q: Tim, can you clarify the guidance for Q2? Is the formal guidance $5.2 million, and does this include the expectation of two additional carriers going live? Also, is there a transition from non-recurring engineering (NRE) to recurring revenues? A: Yes, the upper end of the guidance range is $5.2 million, which assumes everything goes as planned. The core business is stable, and the growth could include a significant portion of NRE activities, which are expected to transition into recurring revenue over time. (Tim Huffmeyer, President and CEO) Q: Looking forward to the second half of the year, are you expecting sequential growth despite some NRE? Can you provide more color on the applications where you're winning, particularly with SafePath OS? A: We expect consistent revenue growth throughout the year, although timing may affect quarterly results. The senior market is currently more attractive in our carrier conversations, but we are engaged in discussions for both kids and seniors. (Tim Huffmeyer, President and CEO) Q: Are both potential deployments this quarter with new customers? Can you provide some color on the opportunity pipeline, including end market applications and geographies? A: One deployment is with a new customer, while the rest of the growth will likely come from existing opportunities. Most activities are U.S.-based, with some potential in Europe. (Tim Huffmeyer, President and CEO) Q: How does the monetization of current opportunities compare to expectations from 12-18 months ago? Is the revenue opportunity per carrier still meaningful? A: The opportunities are as significant, if not greater, than before. The faster deployment process with SafePath OS is beneficial, and we are pleased with the revenue potential. European ARPUs may be lower, but overall, we see upside opportunities. (Tim Huffmeyer, President and CEO) Q: With significant cost reductions in R&D, do you anticipate needing to restore some R&D spending, or can you sustain the current cost structure while pursuing growth? A: We are satisfied with our current structure and capacity. While there may be some cost increases as we grow, they should not be significant. We aim to capitalize on past investments for future growth. (Tim Huffmeyer, President and CEO) For the complete transcript of the earnings call, please refer to the full earnings call transcript.

PITTSBURGH, April 29, 2026--(BUSINESS WIRE)--Smith Micro Software, Inc. (Nasdaq: SMSI) ("Smith Micro" or the "Company") today reported financial results for its first quarter ended March 31, 2026. "During the first quarter, we continued to build on the organizational and operational changes implemented over the past year, and those efforts are beginning to show tangible results," said Tim Huffmyer, President and Chief Executive Officer of Smith Micro. "Q1 reflected meaningful improvement across the business, as we increased focus, enhanced execution, and drove better operating discipline which resulted in increased revenue, increased gross margin, and decreased operating expenses as compared to the fourth quarter of 2025." "With strong customer engagement, expanding opportunities with both existing and prospective customers, and increased operating focus, we believe we are at an important inflection point," Huffmyer continued. "As we move forward, our priority remains driving revenue growth, increasing operational leverage, and delivering sustainable profitability, supported by a growing pipeline and continued momentum throughout the remainder of 2026. With the new business under contract and expected to close in the near term, we anticipate topline growth in the second quarter." First Quarter 2026 Financial Results Smith Micro reported revenue of $4.2 million for the quarter ended March 31, 2026, compared to $4.6 million reported in the quarter ended March 31, 2025. Gross profit for the quarter ended March 31, 2026 was $3.3 million, compared to $3.4 million for the quarter ended March 31, 2025. Gross profit as a percentage of revenue was 78.4% for the quarter ended March 31, 2026, compared to 72.8% for the quarter ended March 31, 2025. GAAP net loss for the quarter ended March 31, 2026 was $3.9 million, or $0.15 loss per share, compared to GAAP net loss of $5.2 million, or $0.28 loss per share, for the quarter ended March 31, 2025. Non-GAAP net loss for the quarter ended March 31, 2026 was $1.5 million, or $0.06 loss per share, compared to non-GAAP net loss of $2.9 million, or $0.16 loss per share, for the quarter ended March 31, 2025. Non-GAAP net loss excludes the items noted below under "Non-GAAP Measures." Total cash and cash equivalents as of March 31, 2026 were $1.7 million. Non-GAAP Measures To supplement our financial information presented in accordance with GAAP, the Company considers, and has included in this press release, the following non-GAAP financial measures and a non-GAAP reconciliation from the equivalent GAAP metric: non-GAAP net loss, non-GAAP gross profit, and non-GAAP basic and diluted loss per share in the presentation of financial results in this press release. Management believes these non-GAAP presentations may be more meaningful in analyzing the Company's income generation and has therefore excluded the following items from GAAP earnings calculations: stock compensation, intangibles amortization, depreciation, fair value adjustments, and other items, which includes amortization of debt discount and financing issuance costs, executive transition costs, and costs associated with corporate actions. Additionally, since the Company currently has federal and state net operating loss carryforwards that can be utilized to reduce future cash payments for income taxes, these non-GAAP adjustments have not been tax effected, and the resulting income tax expense reflects actual taxes paid or accrued during each period. This presentation may be considered more indicative of the Company's ongoing operational performance. The tables below labeled "Reconciliation of GAAP to Non-GAAP Results" present the differences between non-GAAP net loss and net loss on an absolute and per-share basis. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and the non-GAAP financial measures as reported by Smith Micro may not be comparable to similarly titled amounts reported by other companies. Investor Conference Call Smith Micro will hold an investor conference call today, April 29, 2026, at 4:30 p.m. ET, to discuss the Company’s first quarter 2026 financial results. To access the call, dial 1-844-701-1164; international participants can call 1-412-317-5492. A passcode is not required to join the call; ask the operator to be placed into the Smith Micro conference. Participants are asked to call the assigned number approximately 10 minutes before the conference call begins. An internet webcast is available at https://event.choruscall.com/mediaframe/webcast.html?webcastid=hhEqlYkv. In addition, the conference call will be available on the Smith Micro website in the Investor Relations section. About Smith Micro Software, Inc. Smith Micro develops software to simplify and enhance the mobile experience, providing solutions to some of the leading wireless service providers around the world. From enabling the family digital lifestyle to providing powerful voice messaging capabilities, our solutions enrich today’s connected lifestyles while creating new opportunities to engage consumers via smartphones and consumer IoT devices. For more information, visit www.smithmicro.com. Smith Micro and the Smith Micro logo are registered trademarks or trademarks of Smith Micro Software, Inc. All other trademarks and product names are the property of their respective owners. Forward-Looking Statements Certain statements in this press release are, and certain statements on the related conference call may be, forward-looking statements regarding future events or results within the meaning of the Private Securities Litigation Reform Act, including statements related to our financial prospects, goals and other projections of our outlook or performance our cost reduction plans and other future business plans, and statements using such words as "expect," "anticipate," "believe," "plan," "intend," "could," "will" and other similar expressions. Forward-looking statements involve risks and uncertainties, which could cause actual results to differ materially from those expressed or implied in the forward-looking statements. Among the important factors that could cause or contribute to such differences are customer concentration, given that the majority of our sales currently depend on a few large customer relationships; our ability to establish and maintain strategic relationships with our customers and mobile device manufacturers, their ability to attract customers, and their willingness to promote our products; our ability and/or customers’ ability to distribute our mobile software applications to their end users through third party mobile software application stores, which we do not control; our dependency upon effective operation with operating systems, devices, networks and standards that we do not control and on our continued relationships with mobile operating system providers, device manufacturers and mobile software application stores; our ability to hire and retain key personnel; the possibility of security and privacy breaches in our systems and in the third-party software and/or systems that we use, damaging client relations and inhibiting our ability to grow; interruptions or delays in the services we provide from our data center and cloud hosting facilities; the existence of undetected software defects in our products and our failure to resolve detected defects in a timely manner; our ability to remain a going concern; our ability to raise additional capital and the risk of such capital not being available to us at commercially reasonable terms or at all; our ability to be profitable; current and potential future negative impacts from cost reduction efforts we have taken and may in the future undertake; unanticipated delays or obstacles in our development and release cycles; the degree to which competing business needs or resource constraints may affect our allocation of resources to planned projects; changes in our operating income due to shifts in our sales mix and variability in our operating expenses; adverse impact to our results of operations if we fail to realize the full value of our intangible assets; our current client concentration within the vertical wireless carrier market, and the potential impact to our business resulting from changes within this vertical market, or failure to penetrate new markets; rapid technological evolution and resulting changes in demand for our products from our key customers and their end users; intense competition in our industry and the core vertical markets in which we operate, and our ability to successfully compete; the risks inherent with international operations; the impact of evolving information security and data privacy laws on our business and industry; the impact of governmental regulations on our business and industry; our ability to protect our intellectual property and our ability to operate our business without infringing on the rights of others; and the risk of being delisted from Nasdaq if we continue to fail to meet any of its applicable listing requirements. These and other factors discussed in our filings with the Securities and Exchange Commission, including our filings on Forms 10-K and 10-Q, could cause actual results to differ materially from those expressed or implied in any forward-looking statements. The forward-looking statements contained in this release are made on the basis of the views and assumptions of management, and we do not undertake any obligation to update these statements to reflect events or circumstances occurring after the date of this release. View source version on businesswire.com: https://www.businesswire.com/news/home/20260429357736/en/ Contacts IR INQUIRIES: Charles Messman Investor Relations 412-837-5300 [email protected]