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Smith Micro Software (SMSI)
NASDAQ:SMSI
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Smith Micro Software
(NASDAQ:SMSI)
Rating:47Neutral
Price Target:
$1.00
▲( 26.58% Upside)
Smith Micro Software (SMSI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$15.34M
Dividend YieldN/A
Average Volume (3M)139.98K
Price to Earnings (P/E)―
Beta (1Y)1.07
Revenue Growth-45.77%
EPS Growth67.69%
CountryUS
Employees164
SectorTechnology
Sector Strength77
IndustrySoftware - Application
Share Statistics
EPS (TTM)-0.28
Shares Outstanding19,413,820
10 Day Avg. Volume134,236
30 Day Avg. Volume139,977
Financial Highlights & Ratios
PEG Ratio-0.03
Price to Book (P/B)0.42
Price to Sales (P/S)0.00
P/FCF Ratio-1.32
Enterprise Value/Market Cap1.21
Enterprise Value/Revenue0.17
Enterprise Value/Gross Profit1.48
Enterprise Value/Ebitda-0.27
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
Smith Micro Software Business Overview & Revenue Model
Company DescriptionSmith Micro Software, Inc. is a software solutions company that specializes in developing and marketing wireless and mobility software products and services. The company primarily operates in the telecommunications sector, providing solutions that empower wireless network operators, original equipment manufacturers (OEMs), and enterprises to optimize and manage their wireless networks. Its core products include platforms for network connectivity, device management, and location-based services, which are designed to enhance the user experience and improve operational efficiency.
How the Company Makes MoneySmith Micro Software makes money through the sale of its software solutions and services to wireless carriers, device manufacturers, and enterprises. The company's revenue model is primarily based on licensing its software platforms, offering subscription-based services, and providing professional services such as software customization and integration. Key revenue streams include recurring revenue from software licenses, maintenance and support contracts, and additional services related to their software products. Significant partnerships with major wireless carriers and technology companies also contribute to its earnings by expanding its market reach and customer base.
Smith Micro Software Financial Statement Overview
Summary
Smith Micro Software is facing significant financial challenges, with declining revenues, negative profitability, and weak cash flow generation. The company struggles with operational inefficiencies and increased leverage, raising concerns about its ability to sustain operations without strategic changes.Income Statement
Smith Micro Software has experienced a significant decline in revenue and profitability over recent years. The Gross Profit Margin has decreased from 89.9% in 2019 to 70.2% in 2024, indicating a reduction in operational efficiency. Net Income has turned negative since 2021, leading to a negative Net Profit Margin of -236.8% for 2024. Revenue has been on a declining trend, with a Revenue Growth Rate of -49.7% from 2023 to 2024. The EBIT and EBITDA Margins have also been negative, reflecting operational challenges.25
Negative
Balance Sheet
The company's balance sheet shows a concerning trend with declining equity and increasing dependence on debt. The Debt-to-Equity Ratio has worsened from 0.12 in 2019 to 0.06 in 2024, indicating rising leverage. The Equity Ratio has decreased from 79.5% in 2019 to 84.8% in 2024, showing a decrease in equity financing. Return on Equity has been negative since 2021, highlighting profitability challenges. Despite a decrease in total assets, the company maintains a low level of net debt.35
Negative
Cash Flow
Cash flow analysis reveals significant weaknesses, with Operating Cash Flow turning negative since 2021. Free Cash Flow has also been negative, indicating inadequate cash generation to cover capital expenditures and finance operations. The Operating Cash Flow to Net Income Ratio and Free Cash Flow to Net Income Ratio are unfavorable, highlighting cash flow difficulties relative to earnings.20
Very Negative
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 20.55M | 40.86M | 48.51M | 58.42M | 51.30M | Gross Profit |
| 14.43M | 30.30M | 34.30M | 45.72M | 46.11M | EBIT |
| -43.26M | -18.05M | -30.93M | -5.21M | 3.52M | EBITDA |
| -42.31M | -10.49M | -17.67M | -7.24M | 3.52M | Net Income Common Stockholders |
| -48.70M | -24.40M | -29.28M | -31.04M | 4.17M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 2.81M | 7.13M | 14.03M | 16.08M | 25.75M | Total Assets |
| 48.05M | 85.58M | 103.58M | 115.36M | 72.90M | Total Debt |
| 2.57M | 3.26M | 13.42M | 5.87M | 6.24M | Net Debt |
| -242.00K | -3.86M | -602.00K | -10.21M | -19.52M | Total Liabilities |
| 7.29M | 10.19M | 27.20M | 14.80M | 14.19M | Stockholders Equity |
| 40.76M | 75.39M | 76.38M | 100.56M | 58.72M |
| Cash Flow | Free Cash Flow | |||
| -14.31M | -6.98M | -19.31M | -13.75M | 6.60M | Operating Cash Flow |
| -14.29M | -6.97M | -19.26M | -12.92M | 7.92M | Investing Cash Flow |
| 178.00K | 132.00K | 115.00K | -57.50M | -14.68M | Financing Cash Flow |
| 9.80M | -60.00K | 17.09M | 60.74M | 4.24M |
Smith Micro Software Technical Analysis
Negative
0.79
Price Trends
0.88
Negative
1.09
Negative
0.98
Negative
Market Momentum
-0.04
Positive
38.29
Neutral
11.30
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SMSI, the sentiment is Negative. The current price of 0.79 is below the 20-day moving average (MA) of 0.94, below the 50-day MA of 0.88, and below the 200-day MA of 0.98, indicating a bearish trend. The MACD of -0.04 indicates Positive momentum. The RSI at 38.29 is Neutral, neither overbought nor oversold. The STOCH value of 11.30 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SMSI.
Smith Micro Software Risk Analysis
Smith Micro Software disclosed 28 risk factors in its most recent earnings report. Smith Micro Software reported the most risks in the “Tech & Innovation” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 1 New Risks
1.
Our solutions are generally distributed by or on behalf of our customers under their respective brands, and in such instances our customers are responsible for maintaining the direct relationship with the end user, including by establishing the end user terms of use, privacy policies and other commercial terms for the use of our products. Failure by our customers to establish or any deficiency in such terms could expose us to liability. Q4, 2024
Smith Micro Software Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
61 Neutral | $11.29B | 10.07 | -7.05% | 2.96% | 7.47% | -10.75% | |
52 Neutral | $5.89M | ― | -21.35% | ― | -4.85% | 43.93% | |
49 Neutral | $16.92M | ― | -501.24% | ― | 141.65% | -28.86% | |
47 Neutral | $15.34M | ― | -55.77% | ― | -45.77% | 67.69% | |
43 Neutral | $40.61M | ― | 86.76% | ― | 9.71% | -1.97% | |
38 Underperform | $7.01M | ― | 163.42% | ― | -30.70% | 27.15% |
* Technology Sector Average
Performance Comparison
SMSI
Smith Micro Software
0.79
-1.47
-65.04%
DTSS
Datasea
2.21
-2.81
-55.98%
KPLT
Katapult Holdings
8.95
-10.04
-52.87%
MITQ
Moving iMage Technologies
0.59
0.11
22.92%
HUBC
Hub
2.30
-6.48
-73.80%
Smith Micro Software Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q1-2025)
| % Change Since: -24.04%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant advancements in product development, particularly with the upcoming launch of SafePath 8 and its AI features. The company also made strides in reducing operating expenses and improving gross margins. However, the overall sentiment is tempered by a notable decline in revenue across several segments and a continued net loss. Despite the challenges, the company's strategic initiatives and new engagements provide optimism for future growth.Q1-2025 Updates
Positive Updates
SafePath 8 Launch and AI Features
The company announced the upcoming release of SafePath 8, which will introduce AI-centric features like social media intelligence, dynamic age-aware settings, and family AI assistance aimed at enhancing family safety and digital wellness.
CommSuite Revenue Increase
CommSuite revenue increased by approximately $100,000 compared to the first quarter of 2024.
Reduction in GAAP Operating Expenses
GAAP operating expenses for the first quarter of 2025 were $8.6 million, a 76% decrease compared to the first quarter of 2024, primarily due to a $24 million goodwill impairment charge recorded in 2024 and cost reduction activities.
Non-GAAP Operating Expenses Reduction
Non-GAAP operating expenses decreased by approximately $2 million or 24% compared to the first quarter of 2024.
Gross Margin Improvement
The gross margin improved to 73% for the quarter compared to 66% in the first quarter of 2024.
New Carrier Engagements and Trials
Smith Micro is involved in new trials with mobile operators throughout Europe and maintains strong engagements with key U.S. partners like AT&T and T-Mobile, which have shown interest in their expanded SafePath solutions.
Negative Updates
Overall Revenue Decline
Revenue decreased to $4.6 million, a decrease of approximately 20% compared to the first quarter of 2024, and a 7% decrease from the fourth quarter of 2024.
Family Safety Revenue Decline
Family Safety revenues were $3.8 million, a decrease of approximately $700,000 or 15% compared to the first quarter of the prior year, driven by the decline in legacy Sprint Safe & Found revenue.
ViewSpot Revenue Decline
ViewSpot revenue was approximately $100,000 for the first quarter of 2025, declining by approximately $600,000 compared to the first quarter of the prior year, due to the end of a ViewSpot contract.
Net Loss
GAAP net loss for the first quarter of 2025 was $5.2 million or $0.28 loss per share, though this was an improvement from a $31 million loss in the first quarter of 2024.
Company Guidance
During Smith Micro's first quarter 2025 earnings call, several key financial metrics and strategic initiatives were discussed. The company reported a revenue of $4.6 million, marking a 20% decrease from the previous year. Family Safety revenues were $3.8 million, a 15% decline attributed to the continued drop in legacy Sprint Safe & Found revenue. CommSuite revenue increased by $100,000 year over year to $700,000, while ViewSpot revenue fell by $600,000 to $100,000 due to the end of a contract. Gross profit was $3.4 million, with a gross margin of 73%. Operating expenses decreased significantly due to a prior goodwill impairment charge, with GAAP operating expenses at $8.6 million and non-GAAP expenses at $6.1 million. The GAAP net loss was $5.2 million, or $0.28 per share, while the non-GAAP net loss was $2.9 million, or $0.16 per share. Looking ahead, the company anticipates second-quarter revenues between $4.4 million and $4.8 million, with a gross margin ranging from 72% to 75%. Smith Micro is also focused on launching SafePath 8, which will integrate AI to enhance family safety solutions, and is optimistic about future growth prospects with new product developments and market opportunities.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.