Smith Micro Software Reports 20% Revenue Decline in Q1 2025

Smith Micro Software, Inc. reported a decline in financial performance for the first quarter of 2025, with revenues totaling $4.6 million, a decrease of 20% from $5.8 million in the same period of 2024. The decline was primarily attributed to a $0.7 million drop in revenue from the Family Safety product line and a $0.6 million decrease in ViewSpot revenues, largely due to the loss of a contract with a Tier 1 carrier and the migration of Sprint Safe & Found subscribers to the T-Mobile network. The company's gross profit also fell to $3.4 million, representing 72.8% of revenues, compared to $3.8 million or 65.7% of revenues in the prior year.

Operating expenses saw a significant reduction, decreasing by approximately $26.7 million year-over-year, primarily due to a goodwill impairment charge of $24 million recognized in the first quarter of 2024. The net loss for the first quarter of 2025 was $5.2 million, resulting in a loss per share of $0.28, a notable improvement from the $31 million loss reported in the same quarter of the previous year. The weighted average shares outstanding increased to 18.2 million from 9.5 million, reflecting the impact of a reverse stock split executed in April 2024.

In terms of operational developments, Smith Micro continues to focus on its Family Safety platform, which is currently offered to two Tier 1 wireless carriers in the U.S. The company also launched a new SafePath-based family safety solution in Europe during the fourth quarter of 2024, which is expected to enhance its market presence. The company reported a total of 19,413,821 shares of common stock outstanding as of May 6, 2025.

The company’s cash and cash equivalents stood at approximately $2.3 million as of March 31, 2025, down from $2.8 million at the end of 2024. Smith Micro indicated that its liquidity may be insufficient to fund operations at current levels over the next twelve months, raising concerns about its ability to continue as a going concern. The company is exploring various strategies to improve its financial position, including potential capital raises and cost reduction measures.

Looking ahead, Smith Micro aims to leverage its existing relationships with Tier 1 carriers to expand its subscriber base and increase revenues. The company remains focused on enhancing its product offerings and addressing market demands, particularly in the areas of digital lifestyle services and consumer IoT. However, management acknowledged the challenges posed by customer concentration and the need for strategic partnerships to drive future growth.