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Smith Micro (SMSI)
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Smith Micro Software (SMSI) AI Stock Analysis

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SMSI

Smith Micro Software

(NASDAQ:SMSI)

Rating:42Neutral
Price Target:
$0.50
▼(-31.51% Downside)
Smith Micro Software's overall stock score is primarily impacted by its poor financial performance, with significant losses and negative cash flow being major concerns. Technical analysis indicates a bearish trend, and valuation metrics are unfavorable. While there are some positive developments from the earnings call and corporate events, these are not sufficient to offset the broader financial and operational challenges facing the company.

Smith Micro Software (SMSI) vs. SPDR S&P 500 ETF (SPY)

Smith Micro Software Business Overview & Revenue Model

Company DescriptionSmith Micro Software (SMSI) is a technology company that specializes in developing software solutions for mobile devices and telecommunications. Founded in 1982, SMSI operates primarily in the wireless and broadband sectors, providing services that enhance the performance and security of mobile networks. The company's core products include mobile device management (MDM) solutions, family safety applications, and software for managing and optimizing broadband services. SMSI's offerings aim to improve user experience and operational efficiency for both consumers and service providers.
How the Company Makes MoneySmith Micro generates revenue through a combination of software licensing, subscription services, and professional services. The company primarily earns money from its mobile device management solutions, where it charges clients for software licenses and ongoing subscriptions to access its cloud-based services. Additionally, SMSI provides consulting and support services that help clients implement and optimize their software solutions. Strategic partnerships with major telecommunications companies and device manufacturers also contribute to its revenue streams, as these alliances often lead to bundled services and expanded market reach. Furthermore, as more businesses and consumers seek secure and efficient mobile solutions, SMSI benefits from the growing demand for its products, enhancing its overall earnings potential.

Smith Micro Software Earnings Call Summary

Earnings Call Date:Aug 06, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Nov 05, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a mixed picture with strategic advancements in new product launches and partnerships, but these are overshadowed by significant revenue declines and increased operating expenses resulting in a higher net loss.
Q2-2025 Updates
Positive Updates
New Product Launches and Upgrades
Introduction of SafePath Kids and SafePath Senior phones powered by SafePath OS, and AI-enabled SafePath 8 which are gaining traction in carrier discussions.
Strategic Asset Sale
Sold ViewSpot product line for $1.3 million to focus resources on SafePath platform, retaining a royalty-free license for internal use.
Improved Gross Margin
Gross margin increased to 74% in Q2 2025 from 69% in Q2 2024 despite a decrease in revenue.
Revenue Growth Prospects
Guidance for Q3 2025 indicates a revenue increase to $4.5 million to $4.8 million, with expectations of sequential quarterly revenue growth in Q4 as well.
Positive Customer Engagement
Ongoing discussions with Orange properties in Europe, and strengthened relationships with AT&T and T-Mobile for expanded SafePath solutions.
Negative Updates
Revenue Decline
Total revenue decreased by 14% from $5.1 million in Q2 2024 to $4.4 million in Q2 2025.
Significant GAAP Operating Expenses
GAAP operating expenses increased by 73% to $18.2 million in Q2 2025 due to an $11.1 million goodwill impairment charge.
Net Loss Increase
GAAP net loss for Q2 2025 was $15.1 million, significantly higher than the $6.9 million loss in Q2 2024.
Company Guidance
During the Smith Micro Second Quarter 2025 Earnings Conference Call, the company provided guidance for the upcoming quarters, expecting consolidated revenues in the range of $4.5 million to $4.8 million for the third quarter of 2025. This forecast includes revenue from the launch of a new feature with an existing carrier customer, indicating anticipated sequential quarterly revenue growth in the fourth quarter as well. The company revealed a gross margin target of 72% to 75% for the third quarter, slightly below the 74% gross margin achieved in the second quarter of 2025. Non-GAAP operating expenses are projected to modestly decline in the third quarter compared to the second quarter, reflecting ongoing evaluations of cost structures against expected revenues. The company emphasized its strategic focus on expanding the SafePath platform, particularly with the launch of SafePath 8, and highlighted its engagement in extensive discussions with mobile operator partners in both the North American and European markets.

Smith Micro Software Financial Statement Overview

Summary
Smith Micro Software is facing considerable financial challenges across all verticals. The income statement shows declining revenue and significant losses, while the balance sheet reflects low leverage but poor returns on equity. Cash flow analysis highlights negative cash generation, exacerbating the company's financial difficulties. The company needs to address these issues to improve its financial health and sustainability.
Income Statement
30
Negative
Smith Micro Software's income statement reveals significant challenges. The company has experienced declining revenue over the past few years, with a TTM revenue growth rate of -3.72%. Profitability metrics are concerning, with a TTM net profit margin of -166.15% and an EBIT margin of -113.68%, indicating substantial losses. The gross profit margin remains relatively strong at 73.42%, but overall, the company is struggling to convert revenue into profit.
Balance Sheet
45
Neutral
The balance sheet shows a relatively low debt-to-equity ratio of 0.09, suggesting limited leverage, which is a positive aspect. However, the return on equity is negative at -90.20%, reflecting the company's inability to generate returns for shareholders. The equity ratio stands at 75.76%, indicating a strong equity position relative to total assets, but the negative ROE highlights profitability issues.
Cash Flow
35
Negative
Cash flow analysis indicates significant challenges, with negative operating cash flow and free cash flow. The TTM free cash flow growth rate is -14.35%, showing a decline in cash generation. The operating cash flow to net income ratio is -1.85, and the free cash flow to net income ratio is 1.00, suggesting that cash flows are not supporting profitability. Overall, cash flow management remains a critical concern.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue18.66M20.55M40.86M48.51M58.42M51.30M
Gross Profit13.70M14.43M30.30M34.30M45.72M46.11M
EBITDA-15.66M-19.10M-10.49M-17.67M-7.24M3.52M
Net Income-31.00M-48.70M-24.40M-29.28M-31.04M4.17M
Balance Sheet
Total Assets29.58M48.05M85.58M103.58M115.36M72.90M
Cash, Cash Equivalents and Short-Term Investments1.40M2.81M7.13M14.03M16.08M25.75M
Total Debt2.06M2.57M3.26M13.42M5.87M6.24M
Total Liabilities7.17M7.29M10.19M27.20M14.80M14.19M
Stockholders Equity22.41M40.76M75.39M76.38M100.56M58.72M
Cash Flow
Free Cash Flow-11.63M-14.31M-6.98M-19.31M-13.75M6.60M
Operating Cash Flow-11.61M-14.29M-6.97M-19.26M-12.92M7.92M
Investing Cash Flow947.00K178.00K132.00K115.00K-57.50M-14.68M
Financing Cash Flow6.44M9.80M-60.00K17.09M60.74M4.24M

Smith Micro Software Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price0.73
Price Trends
50DMA
0.80
Negative
100DMA
0.86
Negative
200DMA
0.97
Negative
Market Momentum
MACD
-0.01
Negative
RSI
49.38
Neutral
STOCH
64.72
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SMSI, the sentiment is Neutral. The current price of 0.73 is above the 20-day moving average (MA) of 0.70, below the 50-day MA of 0.80, and below the 200-day MA of 0.97, indicating a neutral trend. The MACD of -0.01 indicates Negative momentum. The RSI at 49.38 is Neutral, neither overbought nor oversold. The STOCH value of 64.72 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 0 New Risks

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
$35.51B8.11-11.05%1.89%8.55%-8.72%
42
Neutral
$15.32M-94.92%-38.89%64.99%
$7.11M-79.06%
$12.25M-107.30%
$7.91M-62.70%
46
Neutral
$20.51M
$14.86M
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SMSI
Smith Micro Software
0.73
0.18
32.73%
FTFT
Future FinTech Group
2.06
-1.04
-33.55%
AMST
Amesite
2.65
0.41
18.30%
MYSE
Myseum
1.91
0.76
66.09%
NVNI
Nvni Group
0.54
-0.46
-46.00%
SPPL
Simpple Ltd.
3.14
0.33
11.74%

Smith Micro Software Corporate Events

Private Placements and FinancingRegulatory Filings and Compliance
Smith Micro Software Announces Securities Purchase Agreement
Neutral
Jul 18, 2025

On July 17, 2025, Smith Micro Software, Inc. announced a securities purchase agreement with institutional and accredited investors for a registered direct offering and concurrent private placement, resulting in gross proceeds of approximately $1.5 million. The offering included 1,612,903 shares of common stock and unregistered warrants to purchase an equal number of shares, with the proceeds intended for working capital and general corporate purposes. The transaction, which closed on July 18, 2025, is expected to impact the company’s operations by providing additional financial resources, while also adhering to Nasdaq listing standards by seeking stockholder approval for certain issuance limitations.

Delistings and Listing ChangesRegulatory Filings and Compliance
Smith Micro Software Faces Nasdaq Non-Compliance Notice
Negative
Jun 24, 2025

On June 23, 2025, Smith Micro Software received a notice from Nasdaq indicating non-compliance with the minimum bid price requirement, as its stock price had been below $1.00 for 30 consecutive business days. The company has until December 22, 2025, to regain compliance, with the possibility of an additional 180-day period if certain conditions are met. Smith Micro intends to monitor its stock price and explore options to meet the listing requirements, although there is no assurance of compliance.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Aug 19, 2025