Smith Micro Software (NASDAQ:SMSI) executives used the company’s first-quarter 2026 earnings call to highlight a leadership transition, a new carrier contract, and expectations for revenue growth and improving profitability in the second quarter and beyond.
Leadership transition and new customer activity
Executive Chairman of the Board Bill Smith said the company signed “a contract with the first of the two new carrier customers” discussed on the prior call. Smith also said the company completed its executive succession plan, with Tim Huffmyer now serving as President and CEO and Bethany Braund as Chief Financial Officer, while Smith moved to Executive Chairman.
Q1 results: revenue down year-over-year, up sequentially
In prepared remarks, CFO Bethany Braund reported first-quarter revenue of $4.2 million, down from $4.6 million in the same quarter last year, but up $247,000, or 6%, from the fourth quarter of 2025.
- Family safety revenue: $3.4 million, down 10% year-over-year, up 8% sequentially.
- CommSuite revenue: $800,000, up $66,000 year-over-year and up $3,000 sequentially.
Braund noted that the company sold its ViewSpot product for $1.3 million in June 2025 and “will no longer have any future revenue from this product.” ViewSpot generated $99,000 of revenue in the first quarter of 2025.
Gross profit for the quarter was $3.3 million compared with $3.4 million a year earlier. Gross margin was 78.4%, up from 72.8% in the first quarter of 2025. Braund also said gross profit rose $275,000 from the fourth quarter of 2025.
On expenses, Braund said GAAP operating expenses were $6.7 million, down 22% year-over-year, reflecting cost optimization efforts that included personnel and organizational changes as well as lower stock-based compensation. Non-GAAP operating expenses were $4.7 million, down 23% year-over-year and essentially flat sequentially.
Net losses narrowed year-over-year: GAAP net loss was $3.9 million, or $0.15 per share, compared with a GAAP net loss of $5.2 million, or $0.28 per share, in the prior-year quarter. Non-GAAP net loss was $1.5 million, or $0.06 per share, versus a non-GAAP net loss of $2.9 million, or $0.16 per share, a year earlier.
Braund said cash and cash equivalents totaled $1.7 million as of March 31, 2026.
Financing and cost actions
Braund also reviewed financing activity since year-end. She said Bill and Dieva Smith, through their trust, entered into note transactions in March that provided the company with $4 million of new funding. She added that “most of our other outstanding notes,” previously due to mature at the end of March, were rolled into new convertible notes with three-year terms.
Management continued to point to cost reductions announced in October 2025. Braund said the company is still executing on those changes and expects longer-term benefits “as we remove certain costs,” with a focus on achieving “maintainable profitability” through revenue growth and cost optimization.
Second-quarter outlook: contracted base of $4.2 million, with upside to $5.2 million
For the second quarter, Braund said Smith Micro expects “historically contracted revenues of approximately $4.2 million,” but that total revenue “is expected to increase and could reach approximately $5.2 million,” which she described as 24% growth compared to the first quarter. She said the outlook reflects a recently executed new contract, additional contracts being pursued, and projects scheduled for delivery during the quarter.
Braund said the Q2 outlook includes some non-recurring engineering (NRE) revenue tied to launch activities, but added that following launches, “the underlying revenue streams will drive sustained upward momentum” and support continued contract execution. She also said the company expects second-quarter gross margin to be in the range of 81% to 83% as it works toward a longer-term goal of 85%.
On spending, Braund said management anticipates a further decline in non-GAAP operating expenses of 8% to 11% in the second quarter compared with the first quarter as reorganization efforts continue to flow through results.
Product and market commentary: SafePath OS, “super apps,” and MVNO interest
CEO Tim Huffmyer said organizational changes made during 2025 and into 2026 are “beginning to show results” as the company focuses on revenue growth, operational leverage, and profitability. He cited customer discussions and market trends supporting the company’s SafePath portfolio, including SafePath OS, which he described as software enabling carriers to offer standard devices tailored “to kids and seniors right out of the box.”
Huffmyer pointed to mobile operators developing “super apps” as a trend he believes aligns with Smith Micro’s SafePath solutions and “long-standing expertise on delivering carrier-grade solutions.” He also said much of the SafePath 8 development supporting multiple deployment models has been completed, which he believes should help the company “deliver solutions and produce revenue more rapidly,” while also enabling upsell opportunities.
During the question-and-answer session, Roth Capital Partners analyst Scott Searle asked about the second-quarter framework. Huffmyer said the “upper end of the range is the $5.2” million figure, which would represent “hitting on all cylinders,” and agreed that the core business appeared stable. He also provided a broad view of NRE activity, saying that for any one project, NRE could represent “25%–75%” of the activity, and that a portion of second-quarter growth could come from NRE that then converts into recurring revenue.
Asked about near-term demand between kids and senior-focused solutions, Huffmyer said the company was not at liberty to specify what would be launched with the new carrier customer, but added that, more broadly, “we are seeing the senior market be maybe more attractive to our carrier conversations,” describing it as a bigger market and a larger portion of carriers’ subscriber bases.
Huffmyer also said most of the opportunities under discussion are U.S.-based, with “a little bit of…Europe opportunities sprinkled in.” Bill Smith added that the company is talking with some carriers about launching both kids and senior versions, noting they can run “with the same servers in the background.”
Benchmark analyst Matthew Harrigan asked about monetization and the revenue potential of current opportunities versus prior periods. Huffmyer said the opportunities are “the same, if not greater,” adding that faster deployment is aided by the core product being completed and requiring only customization for launch. Harrigan also asked if the company would need to restore R&D spending after cost reductions; Huffmyer said any cost increases as the company grows “shouldn’t be significant,” and that management believes it can “hold that line for a while.”
On competition, Huffmyer said one of the biggest competitive threats is a carrier deciding to build a solution internally, while emphasizing Smith Micro’s confidence in its product and ability to deliver “quality product at the carrier grade status.”
About Smith Micro Software (NASDAQ:SMSI)
Smith Micro Software, Inc, headquartered in Aliso Viejo, California, is a global provider of enterprise software solutions specializing in mobility management, device security and digital content distribution. Since its founding in 1982, Smith Micro has focused on delivering tools that enable wireless network operators, enterprises and software publishers to optimize performance, secure assets and manage licensing and distribution of digital media and applications.
Within its mobility and security segment, Smith Micro offers platforms for network offload, application acceleration, secure Wi-Fi connectivity and device management.
