Smith Micro Software (NASDAQ:SMSI) Announces Quarterly Earnings Results

Smith Micro Software (NASDAQ:SMSI) issued its quarterly earnings results on Thursday. The software maker reported ($0.05) EPS for the quarter, beating analysts’ consensus estimates of ($0.46) by $0.41, FiscalAI reports. Smith Micro Software had a negative net margin of 92.60% and a negative return on equity of 44.59%. The business had revenue of $5.02 million for the quarter, compared to analysts’ expectations of $5.10 million.

Here are the key takeaways from Smith Micro Software’s conference call:

• Revenue growth continued: Q3 revenue rose 16% sequentially to $5.0 million, led by 18% growth in family safety revenue. Management forecast Q4 revenue of $5.4 million to $5.6 million, which would represent another sequential increase.
• Margins and operating performance improved: Gross margin reached 81.6%, a five-year high, while operating expenses declined year over year. The non-GAAP net loss narrowed to $281,000, though the company remained loss-making under GAAP.
• New and expanded customer agreements are contributing to growth: Smith Micro expanded a multi-year agreement with a Tier 1 customer and launched SafePath OS for Senior Phone with a U.S. carrier and SafePath Connect with Orange Belgium. A Tier 1 partner also launched SafePath Drive, which management said is already generating revenue.
• Management sees further growth opportunities in 2027: The company said its pipeline is growing, including signed SDK/API work that it expects to launch in the first half of 2027. These opportunities are prospective, and management did not quantify their expected contribution.
• Losses and limited cash remain concerns: The company reported a $1.7 million GAAP net loss for Q3 and had $2.4 million in cash and cash equivalents at quarter-end.

Smith Micro Software Trading Up 3.4%

Shares of NASDAQ:SMSI traded up $0.08 during trading on Thursday, reaching $2.40. 26,910 shares of the company traded hands, compared to its average volume of 72,406. The company has a current ratio of 1.45, a quick ratio of 1.45 and a debt-to-equity ratio of 0.12. Smith Micro Software has a 52-week low of $2.05 and a 52-week high of $4.64. The firm has a market capitalization of $13.42 million, a price-to-earnings ratio of -0.68 and a beta of 0.68. The business’s fifty day moving average is $2.56 and its 200-day moving average is $3.06.

Wall Street Analysts Forecast Growth

Several research analysts have commented on the stock. Weiss Ratings downgraded shares of Smith Micro Software from a “sell (d-)” rating to a “sell (e+)” rating in a research note on Thursday, October 29th. Roth Capital reaffirmed a “buy” rating on shares of Smith Micro Software in a research note on Thursday, September 10th. Two equities research analysts have rated the stock with a Buy rating and one has assigned a Sell rating to the company. According to data from MarketBeat.com, the company has an average rating of “Hold” and an average target price of $12.50.

About Smith Micro Software

Smith Micro Software, Inc. develops software solutions for wireless service providers and other communications companies. Its products are designed to help carriers offer value-added services to consumers, including family safety, mobile security, location sharing and communications management. The company’s principal product portfolio has included the SafePath platform, which provides tools such as parental controls, family location services, digital safety features and related mobile security capabilities.