Smith Micro Software, Inc.

For the second quarter of 2026, revenue was $4.3 million, down 2% from $4.4 million a year ago, but up $120,000 or 3% sequentially. Gross profit was $3.5 million, up $281,000 or 9% year over year, and gross margin was 81.3% versus 73.5% in the second quarter of 2025. GAAP operating expenses were $5.9 million, down 68% year over year, and GAAP net loss attributable to common stockholders was $2.7 million, or $0.52 per share, versus a $15.1 million loss, or $3.88 per share, in the first quarter of 2026. On a non-GAAP basis, net loss was $989,000, or $0.19 per share. For the third quarter of 2026, management guided to revenue of $5.0 million to $5.4 million and gross margin of 81% to 83%. Non-GAAP operating expenses are expected to increase by up to 6% sequentially in Q3 as the company adds resources to support the pipeline.

Tim Huffmyer framed the quarter as an important step in Smith Micro’s turnaround, emphasizing sequential growth, stronger pipeline activity, and a shift toward more growth channels. He said the company expects two new customers to launch by the end of the month and is near signing a significant multi-year extension with an existing Tier 1 customer, which should drive revenue starting in Q3. He sounded confident about the second half, saying the company is better positioned than it has been in some time and is moving toward a new phase of growth.

Bethany Braund highlighted the financial progress from cost actions and margin expansion. She said gross profit was $3.5 million and gross margin was 81.3%, compared with 73.5% a year ago, and noted that gross margin returning above 80% is the first time in 5 years. She also said GAAP operating expenses fell to $5.9 million, non-GAAP operating expenses fell to $4.4 million, cash and cash equivalents were $2.8 million at June 30, 2026, and the company received $1.6 million from a warrant inducement transaction involving 487,349 shares exercised at $3.35 per share.

Analysts focused on the timing and mix of the two new customer launches, the expected revenue impact of the Tier 1 extension, and whether sequential growth could continue into Q4. Management said both new customers should launch in the next month or so, one being SafePath OS and the other SafePath Connect in Europe, and said revenue from the Tier 1 expansion should start in Q3. Questions also centered on the SDK/API opportunity, pricing, and competition; management said the model remains SaaS-based, that larger volumes can mean better pricing, and that the company believes its carrier-grade feature set and early lead keep it competitively differentiated.