Smith Micro Software, Inc. Aktie

Good day. And welcome to the Smith Micro second quarter of 2026 earnings conference call. [Operator Instructions] Also, please be aware that today's call is being recorded. I would now like to turn the call over to Charles Messman, Vice President. Please go ahead.

Thank you, operator. We appreciate you joining us today to discuss Smith Micro Software financial results for the second quarter of 2026. By now you should have received a copy of the press release with the financial results. If you do not have a copy and would like one, please visit the Investor Relations section of our website at smithmicro.com. On today's call, we have Bill Smith, Executive Chairman of the Board, [ Tim Huffmeyer ], our President and CEO, and [ Bethany Broad ], our Chief Financial Officer.

Note that some of the information you will hear during today's discussion consists of forward-looking statements, including without limitation, those regarding the company's future revenue and profitability, our plans and expectation, new products development and availability, new and expanded market opportunities, future product deployments, growth by new and existing customers, operating expenses, and the company's cash reserve. Forward-looking statements involve risk and uncertainty, which could cause actual results or trends to differ materially from those expressed or implied by our forward-looking statements.

For more information, please refer to the risk factors included in our most recently filed Form 10-K. Smith Micro assumes no obligation to update any forward-looking statements, which speak to the management's beliefs and assumptions only as of the date they are made. I want to point out that in our forthcoming prepared remarks, we will refer to specific non-GAAP financial measures. Please refer to our press release disseminated earlier today for reconciliation of these non-GAAP financial measures. With that said, I'll turn the call over to Tim. Tim?

Thanks, Charlie, and thank you for joining us today for our second quarter 2026 conference call. I see our second quarter performance as a significant step forward on our journey of returning Smith Micro to growth and future profitability. We delivered sequential revenue growth in the second quarter, consistent with the guidance provided on our last call. In fact, we have now delivered sequential revenue growth over two consecutive quarters for the first time in approximately five years. We expect to announce the launch of two new customers by the end of this month. Contracts with both customers are fully executed and launch plans and products are ready to go.

Additionally, we are within days of signing a significant multi-year contract extension with an existing Tier 1 customer. We believe this contract extension will generate significant revenue growth beginning in the third quarter. Both the new customer launches and the contract extension were planned to happen in the second quarter, and their delay has resulted in some of our forecasted second quarter revenue being pushed to the third quarter. We continue to execute on our strategic priorities and we are encouraged with all of the positive pipeline activity of the last few quarters, which is the strongest we've seen in years.

This roadmap pipeline, along with the new revenue opportunities, is driven by expanded interest from current and prospective new customers and aligns with our strategy to expand our SafePath platform. We are offering more flexibility to the market with our new deployment options, including our new SafePath SDKs and APIs, which are opening new channels, aligning Smith Micro with current market trends, and increasing the overall addressable market. We believe this activity will drive new revenue streams in the coming quarters as we are in meaningful deployment discussions with multiple parties, both current and new customers, and prospects.

As we look to the second half of the year, we do so with a high level of confidence. We believe we are building on significant upside potential for a new and exciting phase of financial growth. We will discuss more later in the call, but for now, let's hear from Bethany to review our second quarter financial performance. Bethany?

Thanks, Tim, and good afternoon, everyone. Initially, I'll note that all of my comments today regarding per share metrics reflect the impact of the 1-for-5 reverse stock split that was approved by our shareholders at our annual meeting in May and was effectuated in June 2026. I'd also like to cover the transaction we completed during the quarter. In June 2026, to help fund working capital requirements, we completed a warrant inducement transaction with certain holders of existing common stock purchase warrants whereby warrants for 487,349 shares were exercised at $3.35 per share, with proceeds to the company totaling $1.6 million. As part of that transaction, we issued new five-year warrants for the same number of shares.

As I stated on our last earnings call, we are continuing to see benefits from the strategic cost reductions we announced last October. We are still executing on these changes and will see their longer-term benefits as certain remaining costs will end after the third quarter. Our focus now is to ensure that we have the resources necessary to meet the revenue growth we are targeting. Now, let's cover the financial results of the second quarter of 2026. For this second quarter, we achieved our second consecutive quarter of sequential revenue growth. The last time that was achieved was back in 2021.

For the second quarter of 2026, we recognized revenue of $4.3 million compared to $4.4 million for the same quarter of 2025, a decrease of 2%. When compared to the first quarter of 2026, revenue increased by $120,000, or 3%. Year-to-date revenue through June 30, 2026, was $8.6 million versus $9.0 million through the second quarter of last year, a decrease of 5%. During the second quarter of 2026, family safety revenue was $3.5 million, which decreased by $111,000, or 3%, compared to the second quarter of last year. Family safety revenue increased by $94,000, or 3%, compared to the first quarter of 2026.

During the second quarter of 2026, CommSuite revenue was $826,000, which increased by $49,000 compared to the second quarter of 2025. Revenue from CommSuite grew by $26,000, or 3%, as compared to the first quarter of 2026. For the third quarter of 2026, we expect to build on our second quarter revenue, and given our near-term view of additional opportunities in progress, we expect total revenue of $5.0 million to $5.4 million for the third quarter. For the second quarter of 2026, gross profit was $3.5 million compared to $3.2 million during the same period of the prior year, an increase of $281,000, or 9%, due to the period-over-period increase in revenue and the decline in cost of revenues resulting from the strategic cost reduction efforts undertaken.

Further, gross margin was at 81.3% for the quarter, in line with prior quarter guidance, and at a significant improvement as compared to the 73.5% realized in the second quarter of 2025. We are pleased to see our gross margin back over 80% for the first time in five years. Our gross profit of $3.5 million in the second quarter of 2026 increased by $219,000 compared to the gross profit realized in the first quarter of 2026. In the third quarter of 2026, we expect gross margin to be in the range of 81% to 83%. We believe we are making our way toward our longer-term goal for gross margin at 85%.

For the year-to-date period ended June 30, 2026, gross profit was $6.8 million, compared to $6.6 million during the corresponding period last year. Gross margin was 80% for the June 30, 2026, year-to-date period. GAAP operating expenses for the second quarter of 2026 were $5.9 million, a decrease of $12.3 million, or a 68% decline as compared to the second quarter of 2025. Excluding the second quarter 2025 one-time events, including goodwill impairment of $11.1 million and the gain on sale of ViewSpot of $1.3 million, GAAP operating expenses quarter-over-quarter decreased by $2.5 million or 30%. This reduction was a result of our cost optimization activities that we have executed and continue to see the impacts thereof.

GAAP operating expenses for the year-to-date period ended June 30, 2026, were $12.6 million, compared to $26.8 million in the prior year-to-date period, a decrease of $14.2 million. Non-GAAP operating expenses for the second quarter of 2026 were $4.4 million compared to $5.9 million in the second quarter of 2025, a decrease of approximately $1.6 million, or 26%. Consequently, non-GAAP operating expenses declined by approximately $377,000, or 8%, compared to the first quarter of 2026. Non-GAAP operating expenses for the year-to-date period through June 30, 2026, were $9.1 million, compared to the $12.1 million for the year-to-date period ended June 30, 2025, a decrease of approximately $3 million, or 25%, compared to last year.

Although we anticipate a further decline in our core non-GAAP operating expenses, we are planning to add some additional resource capacity to support the pipeline, and therefore you can expect a non-GAAP operating expense increase of up to 6% in the third quarter of 2026 as compared to the second quarter of 2026. The GAAP net loss attributable to common stockholders for the second quarter of 2026 was $2.7 million or a 52-cent loss per share compared to the net loss attributable to common stockholders of $15.1 million or $3.88 loss per share in the first quarter of 2026. GAAP net loss attributable to common stockholders for the six months ended June 30, 2026, was $6.6 million, or $1.28 loss per share, compared to GAAP net loss attributable to common stockholders of $20.2 million, or $5.38 loss per share for the six months ended June 30, 2025.

The non-GAAP net loss attributable to common stockholders for the second quarter of 2026 was $989,000, or a 19-cent loss per share, compared to the non-GAAP net loss attributable to common stockholders of $2.8 million, or a 71-cent loss per share in the first quarter of 2026. Non-GAAP net loss attributable to common stockholders for the six months ended June 30, 2026, was $2.5 million, or a $0.48 loss per share, compared to non-GAAP net loss attributable to common stockholders of $5.6 million, or $1.49 loss per share for the six months ended June 30, 2025.

Within today's press release, we have provided a reconciliation of our non-GAAP metrics to the closest and most comparable GAAP metric. For the second quarter of 2026, the reconciliation primarily includes adjustments for intangible asset amortization of $1.2 million, stock compensation expense of $171,000, depreciation expense of $120,000, amortization of debt discount and financing issuance cost of $95,000, deemed dividend of $86,000, and cost of approximately $84,000 associated with the shareholder-approved reverse stock split. Due to our cumulative net losses over the past few years, our GAAP tax expense is primarily due to certain state and foreign income taxes. For non-GAAP purposes, we utilized a 0% tax rate for 2026 and 2025.

The resulting non-GAAP tax expense reflects the actual income taxes expensed during each period. On the balance sheet, we reported $2.8 million of cash and cash equivalents as of June 30, 2026. This concludes my financial review. Now I'll pass it back over to Tim.

Thanks, Bethany. As we have discussed on past calls, there are new activities and changes happening in the market today that are helping to drive new demand, which aligns well with the go-to-market strategy we have been implementing. This has resulted in several exciting planned deployments, all to take place in the third quarter and all included in our revenue guidance. First, we are in the final stages to increase our feature set with one of the existing family safety applications in the market today with one of our Tier 1 carriers. This new feature set will increase the overall product offering to all current subscribers and increase our realized revenue share to the entire family once deployed in the next month.

Next, as I mentioned earlier, we are in the final contract phase to expand our SafePath platform capabilities with a Tier 1 carrier, including the introduction of new deployment options, which we believe will result in the delivery over time of our solutions to a significantly larger segment of their overall customer base. Last, we are in the advanced development stages of producing an application with additional functionality to be deployed in the European market with an existing customer. This will enable a larger reach into their addressable market, specifically by allowing kids to use iOS phones in addition to the Android phones currently offered. Once deployed, we believe this will significantly accelerate our revenue growth with this European customer.

This same momentum is building with other current partners, and we believe reinforcing Smith Micro as the go-to strategic partner for family safety features and devices, leveraging our new deployment capabilities, and resulting in new initiatives that we expect will drive new revenue opportunities. During our last conference call, we discussed the signing of a new agreement for SafePath OS with a U.S. carrier. That launch is ready to go and is one of the two new customers I mentioned earlier. This will be our first SafePath OS deployment, and we believe the use case is so powerful it will attract and accelerate additional customer activity for SafePath OS.

We are also making solid progress on our strategic effort to expand our reach beyond the carrier market. We are engaging with organizations in other markets that serve large customer bases and want to differentiate themselves by delivering family safety solutions for their customers. Our conversations with prospective new partners have reinforced our belief that the market for family safety services is growing and extends beyond the traditional carrier market. We expect this new initiative to contribute to the company's revenue growth in the coming quarters.

Another new growth driver for Smith Micro is the launch of SafePath Connect, announced earlier today, which represents an important expansion of our family safety strategy. For many years, our family safety solutions have been delivered as white-label solutions through wireless carriers. This distribution model takes months of effort to launch and typically requires meaningful investment by the carrier. As we've discussed previously, organizations worldwide are looking for trusted digital experiences that strengthen customer engagement and create long-term value. SafePath Connect extends the same trusted family safety capabilities to carrier audiences in a fraction of the time when compared to the white-label approach.

SafePath Connect is distributed as a Smith Micro branded product, promoted and paid for by the carrier or other partners. By leveraging Smith Micro App Store distribution, a broader range of partners can have the flexibility to quickly and easily offer a family safety solution to their customers. Since our last conference call, we have signed a new agreement with the second new customer I mentioned earlier to provide SafePath Connect to their customer base, which is located in Europe. Before month-end, we will be releasing more information about this relationship, all in coordination with our customers' marketing activity.

We are encouraged by the level of interest we're seeing from our new partner. More importantly, SafePath Connect reflects the strategic market expansion underway at Smith Micro. We are evolving from serving a defined carrier market to participating in a much larger family safety opportunity across multiple channels, customer segments, and business models. We believe this positions us to drive sustainable growth while creating additional value for both our partners and shareholders. We look forward to launching SafePath Connect in the U.S. in the coming months.

We see significant potential across the business and our objective is clear. Execute efficiently, support customer successes, and position Smith Micro to capitalize on the opportunities we've worked hard to create. As I look ahead, I believe we are better positioned than we have been in quite some time. We have expanded our platform capabilities, strengthened relationships with existing customers, opened new channels to market, and built a pipeline that continues to grow. The opportunity in front of us is substantial. Our focus now is on execution, delivering for our customers, bringing new opportunities to market, and converting the momentum we are seeing today into sustained revenue growth.

We are committed to accelerate deliveries to meet customer timelines so we can maximize our revenue opportunities going forward. We believe the foundation we've built over the past several quarters positions us well for a strong second half of 2026 and will carry us well into 2027 and beyond. We have a lot of work ahead of us, and we are excited about where we are, confident in our direction, and optimistic about what Smith Micro can achieve as we continue to execute on our strategy. With all that, operator, let's open the call for questions.

[Operator Instructions] And our first question here will come from Scott Searle with Roth Capital. Please go ahead.

Nice job on starting to see sequential growth following through into the second half of this year. Maybe to start on that front, I just want to clarify, with the two new customers, I'm wondering if you could re-articulate again the timing of those two new customers and the specific applications that they're going to be deploying. Is this kid phones or is this elder phones? And then with the, when do we start to see the impact of that from a pricing or other standpoint start to kick in?

Yes. Hey, Scott, thanks for the questions. First off, the two new customers, both of them are expected to launch in the coming month or so. One of them is a SafePath OS device, and we're refraining from disclosing if it's senior or kids-related. We're waiting for the marketing activity to kick in from our customer. But once that launches, we'll put a release out with that, and you'll see that in the market. Secondly, the other one is the SafePath Connect platform in Europe, and we're also aligning up marketing activities with that, and that's also scheduled to go within the next month or so. So very near-term launch, one SafePath OS, one is the new product, the SafePath Connect.

Really excited about both of those and getting those products in market. And we think both of those products in market is going to drive some nice positive activity from a customer perspective and drive our pipeline even larger. The second part of the second question, Scott, was around the Tier 1 that we're working with, we are expanding our product offering, trying to leverage the broader categories of features and functionalities that we provide. And we do expect the revenue from that to start in the third quarter, Scott. So pretty near-term type activity.

Got you. Very helpful. And if I could, just to follow up on that, you know, you've given guidance for the third quarter with OPEX up kicking a little bit. You know, it looks like your break-even is $5.5 million to $6.0 million. Should we expect to see continued sequential growth then into the fourth quarter, given the timing of these launches? And are you looking for break-even results by the end of the year? And then just to follow up as well, the SDK seems like a very intriguing opportunity. I'm wondering if you could address that in a little bit more detail in terms of opportunity magnitude, what kind of interest you're seeing, or SDK downloads, or otherwise give us some idea of where that's going. Thanks.

Yes, so from a P&L perspective, we've been consistently calling out sequential revenue growth, and we would expect that to continue here in the third quarter and even into the fourth quarter. So, you know, very positive pipeline buildup. We believe we have deliveries scheduled, tied down from a date standpoint, and we believe that our new deliveries will drive and our new launches will drive that sequential growth. So we're real pleased about that, and the team is doing an excellent job around that. From a cost perspective, we are looking at increasing those non-GAAP operating expenses, just adding some headcount there, shoring up after our strategic changes last October. We're just making some changes with that, all positive and all related to supporting that pipeline at the end of the day.

The SDKs and the API activity. Yes, we're seeing great traction with that in the marketplace, so that opens up outside of the carrier market greatly. So anybody that has a membership organization that wants to provide additional value-added services to them, that they are interested in retention around those customers, providing a family safety-type feature and functionality, we're seeing great traction in the marketplace around that. That started a couple months ago, us starting to market that, and the pipeline buildup is exciting. Something that we haven't seen in a number of years, we believe.

Tim, maybe I can add to what you just said. You know, when we think about the SDK opportunity, we're really looking at the super apps that are being built by the large Tier 1s, and now even larger MVNOs are also expressing interest in building their own app. What's really important here is that this is their app. And instead of having a multitude of different offerings, they're collecting all their service within their core marketed offering. They are willing to spend enormous amounts of money to market these super apps and they are reaching tens of millions of subscribers. This is an opportunity that we could have only wished for on the direct, you know, over-the-top offerings that we have historically done.

This is an opportunity that is, you know, really has a multiplier effect. And the number of opportunities we're currently focused on is really impressive. And so you have this one contract that's next, you know, near to signing and there's plenty more right behind it with extreme interest and excitement around them. So we think this opportunity with the SDKs is a future growth driver that really we've not been able to talk about for a number of years. It's very exciting.

Hey, Bill, just to follow up on that, from a pricing standpoint, you know, in the past, you know, it was a rev share with the carriers. Is this a similar type model where you'd be paid per subscriber, given that they've got more control over it? So, I mean, how are you thinking about, you know, on a pricing per sub, one-time fixed fee? How does that work? Thanks.

Yes, that's a great question. It's still a SaaS model. Obviously, because the volumes are higher, the carriers have the ability to earn better pricing as they reach the multi-millions of sub-levels. But because the number of subscribers is so huge, the number of subscribers is so high. The net effect is it just generates enormous revenue with very high margins. It's just, I think, the most exciting thing we've seen in a number of years. You add to what we're doing there with the phones, we even now have an offering for smaller carriers and operators that is branded to us, but it still gives them a strong answer for their customer base in the area of family safety.

After all, carriers are really interested in attracting the family sub. Family subs are the highest quality sub a carrier can sign up, and offering family safety is one of the best ways to get them over to their side. It's a great time.

Great. Thanks so much. I'll get back in the queue.

[Operator Instructions] Our next question will come from Matthew Harrigan with StoneX. Please go ahead.

You already addressed a number of the points I was going to query about. But when you look at the, excuse me, the super app domain, if you will, it feels like there's just a clear default now to your new SDK and APIs. I know you had one large carrier that tried to do everything or is doing everything in-house. Are you seeing any new competition or do you, it feels like everyone's pretty much, you talked about the pipeline, so it sounds like most of the MNOs and even other logical customers are pretty much rallying to use your kit that you have in place or about to have in place. And I have one follow-up.

Hi, Matthew. Thanks for the question. From a competition standpoint, there's definitely competition out there, but for years we have been the premier provider of these services. And the SDK and API type activity allows access to those services in a lightweight type way. And so we believe that we're still a premier provider of that. So that's how we're competitively separating ourselves from our competition. We may not be the cheapest out there. We don't expect to be the cheapest.

We don't necessarily want to be the cheapest. We want to provide a high-quality service. Carrier-grade is something that's embedded in the company for decades, and we're going to continue down that path and help to separate ourselves from our competition in doing that.

And you've maintained on earlier calls with the senior opportunities commensurate or larger with the youth opportunity. Are you still seeing that and is that still partly a part of the function of why you're seeing so much interest coming in almost over the transom, even from non-MNOs?

Oh, yes. Yes, the senior side of things is very active. We're absolutely seeing a lot of interest in that. And when you start thinking about the capabilities that we can provide in our different deployment, including our OS platform, we do continue to see a strong pipeline related to seniors. I'd say it's stronger than the kids OS side of things right now.

Matthew, maybe I can add something on top of that. You know, when you think about our SDK offering, it's built on the same code base as all SafePath products. And that code base has been built over a number of years through internal development as well as external acquisitions, where we acquired some of our major competitors in the past. As a result, the feature set and breadth of offering that is provided by SafePath is fairly unparalleled. Even when you look at some of the major players that market direct-to-consumer, our feature set is broader.

So when you start talking about an SDK offering, we're providing a vehicle for a carrier to build family safety into their branded app that they are going to invest heavily in as far as from a marketing standpoint to attract a large percentage of their possible user base. So, yes, there may be competition, but when you're way out in front, it's really hard for the competition to catch up on a feature-by-feature basis.

Right. And I think you mentioned a fairly nominal sequential up to 6% increase in operating expenses, is that really pretty much entirely on the sales side or are you wiggling around a few technical things as well, given all the enhancements that you've introduced? I know you've got a really nice bedrock, but, I mean, the market's moving so fast that I felt like you might want to do some new things on the engineering side as well.

Yes, it's mostly focused on the engineering side, Matthew. Between people and maybe AI at the end of the day, that's what's going to take care of those we have identified for those costs. So just trying to enhance the team and making sure we're prepared to handle the pipeline ahead of us.

Great, thank you.

And this concludes our question and answer session. I would like to turn the conference back over to Charles Messman for any closing remarks.

I want to thank everyone for joining us today. As always, please feel free to reach out to us directly, and we look forward to talking to you on our next call. Thanks and have a great day.

The conference has now concluded. Thank you again for attending today's presentation. You may now disconnect your lines.

Good day, and welcome to the Smith Micro First Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded.

I would now like to hand the conference over to Charles Messman. Please go ahead.

Thank you, operator. And we appreciate you joining us today to discuss Smith Micro Software's financial results for the first quarter of 2026. By now, you should have received a copy of the press release, with the financial results. If you do not have a copy and would like one, please visit the Investor Relations section of our website at www.smithmicro.com.

On today's call, we have Bill Smith, our Executive Chairman of the Board; Tim Huffmyer, our President and CEO; and Bethany Braund, our Chief Financial Officer. Please note that some of the information you'll hear during today's discussion consist of forward-looking statements, including without limitations, those regarding the company's future revenue and profitability, our plans and expectations, development and availability, new and expanded market opportunities, future product deployments, growth by new and existing customers, operating expenses and company cash reserves.

Forward-looking statements involve risks and uncertainties, which could cause actual results or trends to differ materially from those expressed or implied by our forward-looking statements. For more information, please refer to the risk factors included in our most recently filed Form 10-K. Smith Micro assumes no obligation to update any forward-looking statements, which speak of management's beliefs and assumptions only as of the date they are made.

I want to point out in our forthcoming prepared remarks, we will refer to specific non-GAAP financial measures. Please refer to our press release disseminated earlier today for a reconciliation of these non-GAAP financial measures.

With that said, I'll turn the call over to Bill. Bill?

Thanks, Charlie, and thank you for joining us today for our first quarter 2026 conference call. We accomplished several key initiatives during the first quarter, positioning us for a solid fiscal 2026.

First, we signed a contract with the first of the 2 new carrier customers I mentioned on our last call. Second, we completed the implementation of our executive succession plan with Tim now serving as CEO, Bethany as CFO and me as Executive Chairman. This transition has been seamless, and we are optimistic as ever about the company's future with a great team leading the charge.

And third, we made great progress on the sales front as our pipeline now shows exponential growth with both new carrier customers that are yet to be announced as well as expansion with current customers.

I truly believe we have now turned the corner and are set for a return to growth and profitability. As such, I want to reiterate our Q2 outlook from our last call. We believe that we are looking for strong top line growth in Q2, which will in turn result in a non-GAAP black number on the bottom line.

Furthermore, we believe we will continue to deliver strong revenue growth and growing profitability for the remainder of fiscal 2026. This revenue growth in 2026 should lead to renewed cash generation. Success in 2026 should lead to a very strong 2027.

In addition to growing revenues, we have continued to reduce both our cost of goods sold, as well as our overall operating expenses, and we believe this trend will continue throughout 2026. We have been able to achieve these reductions through enhanced operational efficiency, streamlined operations and better aligned resources to accelerate innovation and bring our solutions to market more quickly.

Overall, I am extremely excited about the changes we have made across the organization and now have positioned Smith Micro for success. Our strategic shift to focus beyond traditional value-added services is working. Across our customer base, the family market has become a much higher priority from the top down, creating what we believe to be significant expanded opportunities for Smith Micro around the world.

With that said, and before Tim provides the business update, let's turn the call over to Bethany for the financial update. Bethany?

Thanks, Bill, and good afternoon, everyone. It is an honor to be speaking with you today as CFO amongst the incredible team that we have here at Smith Micro.

Initially, I want to cover a few transactions since last year-end. As was mentioned in our last earnings call, in March, Bill and Dieva Smith entered into notes transactions through their trust, which provided the company with $4 million of new funding. Additionally, alongside the Smiths' investments in the March convertible note transaction, most of our other outstanding notes, which were due to mature at the end of March were also rolled into new convertible notes with 3-year terms.

We are also continuing to see benefits from the strategic cost reductions we announced in October 2025. We are still executing on these changes and will continue to see their longer-term benefits as we remove certain costs. Our focus remains on achieving maintainable profitability through a thoughtful and systematic approach to both revenue growth and cost optimization.

Now, let's cover the financial results of the first quarter of 2026. For the first quarter, we recognized revenue of $4.2 million compared to $4.6 million for the same quarter of 2025, a decrease of 9%. When compared to the fourth quarter of 2025, revenue increased by $247,000 or 6%.

During the first quarter of 2026, Family Safety revenue was $3.4 million, which decreased by $367,000 or 10% compared to the first quarter of last year. Family Safety revenues increased by $244,000 or 8% compared to the fourth quarter of 2025.

During the first quarter of 2026, CommSuite revenue was $800,000, which increased by $66,000 compared to the first quarter of 2025. Revenue from CommSuite also grew by $3,000 as compared to the fourth quarter of 2025.

As previously indicated, we sold our ViewSpot product for $1.3 million in June 2025, and we will no longer have any future revenue from this product. ViewSpot revenue was $99,000 in the first quarter of 2025.

For the second quarter of 2026, we expect historically contracted revenues of approximately $4.2 million. Based on the new contract that Bill mentioned, additional contracts that we are actively working on and projects scheduled for delivery during the quarter, total revenue recognized for 2026 second quarter is expected to increase and could reach approximately $5.2 million or a 24% growth as compared to the first quarter of 2026.

Our development teams are already fully engaged on these projects and execution is well underway. As I noted, this outlook includes revenue associated with the launch of the solution under the recently executed new contract that Bill mentioned, which we believe marks the beginning of a new trajectory of meaningful continued revenue growth in 2026.

While our expectation for the quarter includes some non-recurring engineering revenue from this and other projects, we anticipate that following these launch activities, the underlying revenue streams will drive sustained upward momentum and support the continued execution of additional contracts.

For the first quarter of 2026, gross profit was $3.3 million compared to $3.4 million during the same period of the prior year, a decrease of $53,000, primarily due to the period-over-period decline in revenues. However, gross margin was at 78.4% for the quarter, quite an improvement as compared to the 72.8% realized in the first quarter of 2025. The gross profit of $3.3 million in the first quarter of 2026 increased by $275,000 compared to the gross profit realized in the fourth quarter of 2025.

In the second quarter of 2026, we expect continued improvements and for gross margin to be in the range of 81% to 83%. We believe we are making our way toward what Tim has previously indicated is our longer-term goal for gross margin at 85%.

GAAP operating expenses for the first quarter of 2026 were $6.7 million, a decrease of $1.9 million or a 22% decline as compared to the first quarter of 2025. The reduction was a result of our cost optimization activities that we have executed, inclusive of personnel and organizational cost reduction activities as well as lower stock compensation costs.

Non-GAAP operating expenses for the first quarter of 2026 were $4.7 million compared to $6.1 million in the first quarter of 2025, a decrease of approximately $1.4 million or 23%. Sequentially, non-GAAP operating expenses were essentially flat compared to the fourth quarter of 2025. We anticipate a further decline in non-GAAP operating expenses of 8% to 11% in the second quarter of 2026 as compared to the first quarter of 2026 as we continue to realize the further positive impact of our reorganization efforts.

The GAAP net loss for the first quarter of 2026 was $3.9 million or a $0.15 loss per share compared to the loss of $5.2 million or a $0.28 loss per share in the first quarter of 2025. The non-GAAP net loss for the first quarter of 2026 was $1.5 million or a $0.06 loss per share compared to the non-GAAP net loss of $2.9 million or a $0.16 loss per share in the first quarter of 2025.

Within today's press release, we have provided a reconciliation of our non-GAAP metrics to the most comparable GAAP metric. For the first quarter of 2026, the reconciliation primarily includes adjustments for intangible asset amortization of $1.2 million, stock compensation expense of $586,000, depreciation expense of $69,000, amortization of debt discount and financing issuance costs of $431,000 and personnel and reorganization costs of $126,000.

Due to our cumulative net losses over the past few years, our GAAP tax expense is primarily due to certain state and foreign income taxes. For non-GAAP purposes, we utilized a 0% tax rate for 2026 and 2025. The resulting non-GAAP tax expense reflects the actual income taxes expensed during each period. On the balance sheet, we reported $1.7 million of cash and cash equivalents as of March 31, 2026. This concludes my financial review.

Now I'll pass it over to Tim.

Thanks, Bethany. Thank you, Bill, for leading us off on the call. We appreciate everyone joining us for the call today. It's been a very busy quarter as we've continued building on the realignment and organizational changes made throughout last year and into the current year. Those efforts are beginning to show results as we look ahead to fiscal 2026, with a clear focus on growing revenue, increasing operational leverage and delivering profitability.

During the first quarter, I had the opportunity to dive deeper into the business, working across teams to further optimize our output, while enhancing our internal technology capabilities to drive productivity and execution.

Overall, I'm pleased with the progress we're making while also recognizing that we're still early in the process and committed to continuous improvements as we move forward. I also enjoyed engaging with existing and prospective customers during the quarter. These conversations have strengthened our relationships and given us a clear understanding of customer priorities, allowing us to evolve and focus our go-to-market strategies, while looking to maximize the value of offerings we have in the market today. We have strong partners and strong relationships, and I see meaningful opportunity to build on that foundation.

Now I want to spend a few minutes talking about some market trends we're seeing and how they directly align with the expansion of our portfolio to serve a broader addressable market. Our SafePath OS solution for phones tailored to kids and seniors continues to resonate with carriers among both current customers and new prospects. You'll recall from our previous calls that SafePath OS is our software solution that enables carriers to offer an otherwise standard phone as the device specifically tailored to kids and seniors right out of the box.

SafePath OS provides carriers with a tool to grow their subscriber base with the highest quality subscribers available in the market, The Family Sub. One of the most notable trends is the focus on super apps being developed by mobile operators around the world. These initiatives are becoming a higher priority across large M&O organizations as they look to deepen customer engagement and deliver more value through a single integrated experience.

We believe this creates a very strong opportunity for Smith Micro as it aligns well with both the flexibility of our SafePath solutions and our long-standing expertise on delivering carrier-grade solutions. This is core to who we are and what we do best.

This unique strength positions us well as we expand the way we deliver our solutions, whether as an out-of-the-box solution for senior and child-tailored phones through SDK and APIs or as an over-the-top application. Much of the SafePath 8 development supporting these solutions has been completed, which we believe positions us to deliver solutions and produce revenue more rapidly.

These deployment models also support meaningful upselling and add-on opportunities, like IoT and other capabilities that can be configured to meet the specific needs of our partners and significantly expand the overall market we can address. Taken together, I believe this approach is opening new windows of opportunities for Smith Micro as we look ahead.

In addition, we are seeing momentum within the MVNO market as these operators look to differentiate themselves and attract new subscribers. Enhanced family solutions are increasingly becoming a priority within their offering. We view this as a growing opportunity and one that plays directly to our strength.

In parallel, we are also taking a broader view of how and where we bring our solutions to market. While mobile operators remain central to our core strategy, this year, we are exploring new ways to extend our technology beyond the traditional carrier ecosystem and unlock potential new revenue opportunities while leveraging the same core capability, domain expertise and carrier-grade standards that have long differentiated Smith Micro. While these initiatives are still exploratory and evolving, we are encouraged by early activity and engagement, and we believe this approach positions us well as we look ahead. I look forward to providing updates on this initiative in the coming quarters.

Now let's focus on the short term, the second quarter. During Q2, we expect our current contracts to perform consistent with the first quarter. However, we have also guided on revenue growth related to the deployment and launch of multiple solutions. First, as Bill mentioned in his opening comments, we have signed a new contract with a new carrier customer and expect to deliver our solution by the end of Q2.

This solution is based on our existing SafePath OS solution. And although, it contains some customization, the additional development time can be measured in months and not quarters. Second, we are pursuing multiple other opportunities with new carrier customers, including the second expected new customer mentioned on our last call, all of which we anticipate will result in new solution deployments late in the second quarter and beyond in 2026.

Lastly, we are in active discussions with existing customers to expand their current offerings. This expansion is centered around SafePath 8 functionality, allowing us to deploy sooner and with less development requirements than historically realized. The team is extremely motivated and focused on this inflection point, which will further support margin growth and non-GAAP profitability within the quarter.

In closing, our organizational changes have allowed our teams to be more focused than ever on the near-term delivery schedule and providing the operational leverage needed to produce profitable revenue growth.

At the same time, we are driving to secure other carrier customer opportunities to help us achieve sustainable revenue growth. And lastly, we are investing in further development of our solution that can meet the demands of the market we now serve and can be applied to adjacent markets outside of our normal carrier footprint.

This is an exciting time. We expect top line growth in the second quarter. We believe we will see consistent revenue growth, resulting in sustainable non-GAAP profitability and free cash flow. We are confident that we are at a turning point for the company and are excited for the opportunities that lie ahead.

Operator, please open the line for questions.

[Operator Instructions] The first question comes from Scott Searle with Roth Capital.

Congrats on moving back into growth mode. Bill, Tim and Bethany, also congrats on your new roles. Maybe just to start off, Tim, I want to clarify the guidance. You're basically saying the core business is flat, so it's nice to see stabilization on that front. But is the formal guidance then $5.2 million with the expectation that you're going to have definitely these 2 additional carriers and opportunities going live? And as part of that, it sounds like there's some customization and development. Is that onetime NRE that we would expect it should be transitioning into recurring revenues as we go forward into future quarters?

Yes. Great question. So the guidance on the upper end of the range is the $5.2 million, Scott. That would be hitting on all cylinders as we see it today. So we offered that range just to provide the full scope of what we're staring at as we think about the second quarter. So you'll have to -- you can kind of set the guidance from there. But that is the range that we're providing, and there is stability in the core business. So you picked up on all that correctly.

As far as engineering and nonrecurring engineering type activities, there is a certain percentage that would flow into this quarter. Generally speaking, Scott, you could look at any one project might have 25% to 75% type NRE type activity. So a good portion of that growth could come from that non-engineering activity. And as you stated, then convert into recurring revenue. So you're thinking about our revenue correctly, and I just wanted to reiterate that.

And then just a follow-up. In terms of looking forward then into the second half of this year, it sounds like you're expecting sequential growth, notwithstanding some of that possible NRE as you have carriers converting into commercial deployments and full quarter of contribution. Is that correct as well? And maybe if you could provide a little bit more color in terms of the application where you're winning, you've referenced SafePath OS, but that supports both kids as well as elder care opportunities. I'm wondering where you're seeing more of the movement and the near-term adoption as we think about 2026?

Yes. So timing is important here, right? So we have delivery schedules. We're working towards deadlines here in the quarter. Some things may slip into next quarter, right? But within that range, we expect to be on top of first quarter numbers. And then we do expect to be on top of those numbers as well. So some of it's timing, Scott, and there's a little bit of art to how that might play out. But we are looking for revenue growth here consistently through the rest of the year based on how we're viewing our opportunities and pipeline. Related to your second part of your question, could you repeat the second part of the question?

Yes, Tim, just in terms of the breakdown of the application, focus more on kids and Family Safety or more elder care opportunities.

Yes, yes. So, we're not at liberty to say what we're going to launch just because we want to keep that confidential for our new carrier customers. So we did purposely call it the OS system and didn't focus on kids or seniors. But I will say just generally, not necessarily related to the launch, we are seeing the senior market be maybe more attractive to our carrier conversations. And as I think we've mentioned on other calls, it's a bigger market, we believe, or a bigger portion of the carriers' subscribers. So that's where a lot of the focus is, but we do have conversations on both kids and seniors at this point, but there's probably a heavier focus on the senior side.

Tim, one last clarification and then one follow-up, and I'll get and I'll move on. Just in terms of the 2 potential deployments this quarter, are both of them new customers? I think you definitely referenced that one was. Just want to clarify that. And then just in terms of the opportunity pipeline today, is there some color that you could provide around it in terms of end market applications, geographies, existing carriers versus new carriers?

Related to the new activity this quarter, one is the new contract that we've highlighted several times. And the rest would be most likely with -- the revenue growth will most likely come from existing opportunities. We have several customer activities in process with existing. There could be another new one slip in there, just depends on how things fall there. But the good news is we have multiple irons in the fire right now, and it could play out a number of different ways. So there's a little bit of color on that.

From a geography standpoint, most of this is U.S. activity and maybe with a little bit of Europe opportunities sprinkled in there. But the majority of what we're discussing right now, Scott, is coming from the U.S. Bill, did you want to add anything? Thanks, Scott. Bill, did you want to add anything to either of those questions?

Yes. I guess one thing is that we have a number of opportunities where carriers want to launch both. And so we're talking to them about Kids OS as well as Senior OS. And that's very doable. It runs with the same servers in the background. I'm sorry?

Sorry, no, there's just some interference on my line.

So did you hear my answer?

Yes, I did. I did.

Okay. Good deal. Yes. So look, I think there's a lot of growth on both types of OS as well as the rest of our product offerings. I think you're going to see a number of new customers throughout 2026, whether they start in Q2 or Q3 or Q4, you're going to see a number of them, and I think it's going to be at a very exciting time.

The next question comes from Matthew Harrigan with Benchmark.

Two questions. I guess I'll do them individually to give you some scope on the answers. You obviously have a really active queue now. You probably have some pull demand without a tremendous amount of marketing given the compelling need on family safety and especially, including seniors now. But how is the monetization for like given opportunities looking compared to what you would have anticipated 12 or 18 months ago when you're mostly dealing with the large U.S. guys. It sounds like you're still dealing with a large -- obviously, you're still dealing with some of the large U.S. guys and just the simplified, faster process with SafePath OS. Is that maybe not quite as meaningful revenue opportunity for carriers as you might have liked a few years ago? Or do you think that the customer value is probably roughly comparable to what you would have aspired to a few years ago?

Yes. Thanks for the question. Generally, speaking the opportunities are the same, if not greater, is what we're staring at. So we're pretty happy with the traction that OS is getting and what we see from a revenue potential there in our new opportunities and our pipeline opportunities. So we're very pleased with that.

Part of the faster concept, too, is the fact that our development teams have sort of finished the core product, and then it's just a matter of some customization to get launched, which is a little bit simpler than maybe we've seen in the past.

So we're pretty pleased with that. And that's what's driving this, which links back to some of our org changes that we did in late 2025. So that's how we're seeing that. The RPUs in Europe can be a little bit lower than the U.S. here. So maybe a little bit lower unit cost in Europe than we see in the U.S. But generally speaking, we're pretty pleased with the opportunities compared to the past, and then we see upside opportunities as we think about the future.

And then you kind of segued into answering my second question already, so you're pretty agile, but I was going to ask, I mean, you've ripped out a tremendous amount of the cost on the R&D side. I mean, clearly, some of that is having the primary template done, and then the customization. But you alluded to new opportunities. I mean, do you feel like you're going to have to restore some of the R&D spending over a period of time? Or you're getting more -- I don't know whether you're using AI to do programming. I think you're probably doing things on a modest scale, but it feels like you're pretty confident on sustaining that really trim cost structure and still having some incremental growth avenues.

Yes. We're pretty pleased with the structure and the capacity that our teams can give. They're working hard, no doubt, and we're very happy with that. Depending on the pace, there may be a need to add costs, but I don't think it would be significant. As we grow, we'll have some costs drifting up, but it shouldn't be significant at the end of the day on the R&D side of things. So we're pretty pleased with that capacity level. And for the foreseeable future, we think we can hold that line for a while. Again, the teams are extremely focused and working very, very hard right now. But our investments, right, we're looking for our investments to pay off that they've done over the last couple of years, too. So capitalizing on that is super important for us.

I guess, I'll sneak in another question. Are you seeing and this is kind of my default question, I apologize for being boring. But are you seeing anything new in terms of competition? You've got a large U.S. carrier that I guess, is bumbling around with doing things internally. Are they making any progress with their alternative? Or do you think that if they were smart, they would have just stayed with you?

Well, we're biased. We stand behind our product. We think we produce a quality product. And given the economics of the situation, we think we can drive the most value for our carriers, customers and their subscribers. So we're definitely biased when we think about that. From a competition standpoint, that is probably one of the most competitive threats that we have out there is just if the carrier decides to do something themselves. And then every day, there is new technology popping up. But we feel that we have a great reputation. We have been doing this for a number of years. We've got a very talented team that can deliver quality product at the carrier-grade status, and we're confident in that.

Great. Thanks, Tim. Congratulations everybody. Bill.

[Operator Instructions] This concludes our question- and-answer session. I would like to turn the conference back over to Charlie Messman for any closing remarks.

Thanks, everybody. We do truly appreciate you joining us today. It's fun to have Tim, Bethany and Bill all on. So if you guys have any further questions, please feel free to reach out to us directly, and have an awesome day. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect. Thank you.

Good day, and welcome to the Smith Micro Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] Please note, today's event is being recorded.

I would now like to turn the conference over to Charles Messman, Vice President of Marketing. Please go ahead.

Thank you, operator. We appreciate you joining us today to discuss Smith Micro Software's financial results for the fourth quarter and year ended December 31, 2025. By now, you should have received a copy of our press release with the financial results. If you do not have a copy and would like one, please visit the Investor Relations section of our website at www.smithmicro.com. On today's call, we have Bill Smith, our Chairman of the Board, President and Chief Executive Officer; and Tim Huffmyer, our Chief Operating Officer and Chief Financial Officer.

Please note that some of the information you will hear during today's discussion consist of forward-looking statements, including, without limitations, those regarding the company's future revenue and profitability, our plans and expectations, new products, development and availability, new and expanded market opportunities, future product deployments, growth by new and existing customers, operating expenses and company cash reserves. Forward-looking statements involve risks and uncertainties, which could cause actual results or trends to differ materially from those expressed or implied by our forward-looking statements.

For more information, please refer to the risk factors included in our most recently filed Form 10-K. Smith Micro assumes no obligation to update any forward-looking statements, which speak to the management's beliefs and assumptions only as of the date they are made.

I want to point out that in our forthcoming prepared remarks, we will refer to specific non-GAAP financial measures. Please refer to our press release disseminated earlier today for a reconciliation of these non-GAAP financial measures.

With that said, I'll turn the call over to Bill. Bill?

Thanks, Charlie. Thank you for joining us today for our fourth quarter and year-end 2025 conference call. As we move 2025 to the history books, I believe the company continues to make great strides on our return path to growth and profitability. Much of the work completed in 2025 has contributed to our progress.

We have strengthened our product lineup with a strategic focus on phones in our SafePath OS solutions for kids and seniors. The senior-focused solution alone more than doubles our total addressable market. SafePath OS provides carriers with a tool to grow the subscriber base with the highest quality subscribers available in the market, the family subs.

While we redirected our product strategy, we also continue to rationalize our cost structure. As we said during our last call, we are building a culture of continuous improvement and operational efficiency. We will continue to assess and optimize our spending while we continue to invest in strategic areas that support innovation. Our substantially reduced cost structure results in a reduced loss in the fourth quarter of 2025. And we believe it will support an even further reduced loss in Q1 of 2026 and most importantly, non-GAAP profit in Q2 and beyond.

To reinforce this outlook, we plan to bring two new carrier customers to the market by midyear 2026. Both customer wins are the result of our SafePath OS product offerings. Our new product strategy is working and will drive the growth that we believe is ahead for Smith Micro. Our existing customer base is also showing signs of growth as recruiting new family subs has become an important topic of discussion. Beyond all of this positivity, we are seeing a strong sales pipeline that should provide even more new opportunities in the back half of 2026.

In other exciting news, I am sure many of you have seen our press release issued earlier today that announced the implementation of our executive succession plan for Smith Micro. After 44 years at the helm, I will step down from the CEO role and will move to a new role as Executive Chairman for Smith Micro Software. This transition has been in the works for some time, and I believe that the timing is ideal.

I am also pleased to announce that Tim Huffmyer, will be taking over as our new President and CEO at the close of the quarter on March 31. Tim is a proven leader with the experience and judgment to guide the company forward, and I am confident in his ability to lead the company through the exciting return to profitability and growth ahead. I look forward to working alongside Tim to ensure a seamless transition and continued momentum as Smith Micro returns to a role of leadership in providing cutting-edge software for wireless carriers.

As you can see, I am very bullish about the future of this company that I cofounded so many years ago. And as a result, my wife, Dieva, and I have decided to provide an additional $4 million in funding. This will provide Smith Micro the time needed to return to profitability and the organic creation of cash to fund and grow the business going forward. Later in the call, I will provide more details around the status of our customer base and additional thoughts about our path forward in 2026.

Let me turn the call over to Tim to discuss further the results of the fourth quarter and fiscal 2025. Tim?

Thank you, Bill. Good afternoon, everyone. First, I'd like to thank you, Bill, for your leadership over the last 4 decades as President and CEO of Smith Micro. We all know how much you've sacrificed over this time during all the peaks and valleys of Smith Micro's success. I look forward to our continued strong partnership as we continue the transition and both of us settle into our new roles.

Next, I'd like to thank Bill and the Board for the trust that they have instilled in me during the succession discussions. I'm honored and truly excited to lead the dedicated Smith Micro team as we continue our turnaround to profitability.

Our employees are just amazing and extremely dedicated to building the best family safety application for our customers. Last quarter, I had an opportunity to travel to our offices and spend time with most of our employees. This dedication is unique and provides me with significant motivation to lead with purpose and intention.

As Bill and I continue to work on the transition activity over this month, I'd like to also announce my plan for the Chief Financial Officer role. Coinciding with the changes to the Chief Executive role at the end of this month, I'm pleased to share with great confidence that Bethany Braund will serve as our new Chief Financial Officer.

Bethany has been with Smith Micro for over 4 years as our Senior Director of Financial Reporting, where she has spearheaded all company SEC reporting obligations, all advanced technical accounting matters in support of numerous financing transactions, all financial audit and internal control activities plus many other visible projects. She has provided steady support and leadership to the Chief Financial Officer role and the executive team over her tenure here.

Prior to joining Smith Micro, she spent 11 years at EY, serving in advancing roles within the Assurance team. She is a CPA and very well qualified for this role. I'm excited to partner with Bethany as we lead Smith Micro on the next phase. I look forward to sharing more information around our vision and strategy as we complete these transitions.

Now let's turn to the financial overview. We have recently completed several funding transactions. During the fourth quarter, the company received approximately $2.7 million of cash from a registered direct offering and private placement transaction. As Bill indicated, we have signed an agreement for a convertible note transaction with Bill and Dieva Smith and other investors. In this new transaction, the Smiths will invest approximately $4 million and will also roll $585,000 of their previously outstanding notes originally due on March 31, 2026, into this same convertible note.

Additionally, we had an additional $485,000 of short-term notes due on March 31, 2026. Of that amount, approximately half will be repaid on the due date and the other half will roll into this new convertible note transaction along the Smiths. The new convertible note issued in this transaction will be due in March of 2029. We expect to close this transaction in the next few days.

As a reminder and to provide an update, in October of last year, we announced strategic cost reductions, primarily comprised of workforce reorganization, which resulted in cost savings of approximately $1.8 million per quarter as compared to the second quarter of 2025, or a $7.2 million reduction in the cost run rate, excluding employee separation costs of approximately $600,000. We are generally on track to achieve these savings in 2026. These efforts are part of our broader initiative to realign the company's cost structure with long-term business goals, strengthen the company's financial foundation and accelerate our path to profitability.

Now let's cover the financial results of the fourth quarter of 2025. For the fourth quarter, we posted revenue of $4 million compared to $5 million for the same quarter of 2024, a decrease of 20%. When compared to the third quarter of 2025, revenue decreased by $300,000 or 7%.

We were just short of our expectations for the quarter as a result of a couple of assumptions that did not materialize. First, a new feature launch did not occur as we expected. And second, we experienced a one-time event with one of our existing deployments that resulted in an unanticipated decrease in Q4 revenue from that customer. All revenue associated with this event has resumed to normal levels during the first quarter of 2026, and I am proud of the way that our team worked together to support our customer during this time.

Fiscal 2025 revenue was $17.4 million compared to $20.6 million for 2024, a decrease of $3.2 million or 16%.

During the fourth quarter of 2025, Family Safety revenue was $3.2 million, which decreased by $600,000 or 16% compared to the fourth quarter of the prior year. Family Safety revenue decreased by approximately $400,000 or 11% compared to the third quarter of 2025. This revenue reduction was primarily due to the one-time event I just described.

During the fourth quarter of 2025, CommSuite revenue was $800,000, which decreased by approximately $300,000 compared to the fourth quarter of 2024. Revenue from CommSuite was flat compared to the third quarter of 2025.

As previously mentioned, we sold our ViewSpot product for $1.3 million on June 3, and we will no longer have any future revenue from this product. ViewSpot revenue was nominal for the fourth quarter of 2024.

In the first quarter of 2026, we are expecting consolidated revenues to be in the range of approximately $4.2 million to $4.5 million.

For the fourth quarter of 2025, gross profit was $3 million compared to $3.8 million during the same period of the prior year, a decrease of $800,000, primarily due to the period-over-period decline in revenue, combined with our emphasis on continued cost optimization. Gross margin was 76.4% for the quarter, which was within the guidance range previously provided, compared to 75.6% realized in the fourth quarter of 2024. The gross profit of $3 million in the fourth quarter of 2025 declined by $200,000 compared to the gross profit realized in the third quarter of 2025.

In the first quarter of 2026, we expect gross margin to be in the range of 76% to 78%. Once we realize a full quarter of the previously announced cost benefits in 2026, we expect our margin percentage to be between 78% to 80%. Our long-term gross margin target is 85%, which we will continue to work towards.

For the year ended December 31, 2025, gross profit was $12.9 million compared to $14.4 million for the year ended December 31, 2024. Gross margin was 74.1% for fiscal 2025 as compared to the 70.2% for 2024.

GAAP operating expenses for the fourth quarter of 2025 were $7.4 million, a decrease of $800,000 or 10% compared to the fourth quarter of 2024. The difference was a result of changes in personnel, stock compensation costs and other cost reduction activities. GAAP operating expenses for the full year of 2025 were $41.9 million compared to $63.8 million in 2024, a decrease of $21.9 million or 34%. This period-over-period decrease was primarily attributable to the goodwill impairment charge of $24 million recorded in 2024 as compared to the goodwill impairment charge of $11.1 million in 2025, coupled with the cost reduction activities, which have exceeded $10 million annually.

Non-GAAP operating expense for the fourth quarter of 2025 were $4.7 million compared to $5.8 million in the fourth quarter of 2024, a decrease of approximately $1.1 million or 19%. Sequentially, non-GAAP operating expenses decreased by approximately $1 million or 17% from the third quarter of 2025, which exceeded the guidance previously provided.

We anticipate a further decline in non-GAAP operating expenses of 5% in the first quarter of 2026 as compared to the fourth quarter of 2025 as we continue to realize the impact of our most recent workforce reorganization and cost rationalization, which Bill has mentioned, is based on our focus of continuous improvement and operational efficiency.

Non-GAAP operating expenses for fiscal 2025 were $22.5 million compared to $28.3 million in 2024, a decrease of $5.8 million or 20% compared to last year.

The GAAP net loss attributable to common stockholders for the fourth quarter of 2025 was $4.7 million or $0.20 loss per share, compared to the loss of $4.4 million or $0.25 loss per share in the fourth quarter of 2024. GAAP net loss attributable to common stockholders for the year ended December 31, 2025, was $30 million or $1.46 loss per share, compared to a loss of $48.7 million or $3.94 loss per share for 2024.

The non-GAAP net loss attributable to common stockholders for the fourth quarter of 2025 was $2.1 million or $0.09 loss per share, compared to the non-GAAP net loss of $1.9 million or $0.11 loss per share in the fourth quarter of 2024. Non-GAAP net loss attributable to common stockholders for the year ended December 31, 2025, was $10.9 million or $0.53 loss per share, compared to the non-GAAP net loss of $13.7 million or $1.11 loss per share for the prior year.

Within today's press release, we have provided a reconciliation of our non-GAAP metrics to the most comparable GAAP metric. For the fourth quarter of 2025, the reconciliation includes adjustments for intangible asset amortization of $1.3 million, stock compensation expense of $800,000, restructuring costs of $500,000, depreciation expense of $77,000, changes to fair value of warrants of $43,000 and deemed dividends of $133,000.

For the full year of 2025, the non-GAAP reconciliation includes adjustments for intangible asset amortization of $5.1 million, stock compensation expense of $3.6 million, goodwill impairment of $11.1 million, restructuring costs of $600,000, depreciation expense of $300,000, changes to fair value of warrants of $200,000, deemed dividends of $800,000, partially offset by the ViewSpot sale of $1.3 million.

Due to our accumulated net losses over the past few years, our GAAP tax expense is primarily due to certain state and foreign income taxes. For non-GAAP purposes, we utilize a 0% tax rate for 2025 and 2024. The resulting non-GAAP tax expense reflects the actual income tax expense during each period. From a balance sheet perspective, we reported $1.5 million of cash and cash equivalents as of December 31, 2025.

This now concludes my financial review. Back to you, Bill.

Thanks, Tim. As you can see from my introduction and Tim's report, we have been fully engaged in a strategic redesign to maximize our talent and resources. Our strategy to focus on phones with SafePath OS for kids and seniors is working as evidenced by new customer wins and a strong growing pipeline.

With that, let's look at where we are with our customers. AT&T was a strong contributor this quarter and continues to be an important strategic partner for Smith Micro. The fourth quarter 2025 marked the first full quarter in which AT&T expanded the addressable market for Secure Family, enabling AT&T to deliver a more compelling marketing message for the holiday season and setting the stage to strengthen their overall security offering. To help drive visibility, stronger alignment and improved engagement during the key selling period, we took advantage of cross-promotion opportunities across their broader security portfolio, further reinforcing Secure Family as part of an integrated digital safety experience for families.

Looking ahead to 2026, we are encouraged by emerging strategic opportunities that extend beyond the Secure Family over-the-top application. AT&T's increased focus on the family space is creating innovative opportunities to further enhance and deliver our core solutions to reach a significantly larger audience.

Boost continues to be a solid and collaborative partner for us. We are working closely with them to expand our SafePath solution, including progress on new platform capabilities. These initiatives are aimed at strengthening SafePath's role within Boost's broader value proposition and positioning the platform to support future growth and innovation in the family safety space. In addition, our Visual Voicemail solution delivered encouraging results with a positive trend in new subscriber additions during the quarter.

Looking ahead, we are aligned with Boost on opportunities to enhance the product through future upgrades and refresh customer messaging, which we believe can further improve engagement and growth. I am encouraged by our ongoing collaboration as we look to build on this momentum in future quarters.

Looking ahead, we see more opportunity with T-Mobile. We are aligned on plans for enhanced product features and are exploring new revenue opportunities as these capabilities come to market. I believe this momentum positions our T-Mobile partnership well and creates a strong foundation for growth as T-Mobile continues to invest in serving the family segment.

We continue to work closely with Orange, both at the group level as well as in Spain to deepen our partnership and to maximize our joint potential in the family safety market. Our most recent engagement confirms our belief that we are on the cusp of meaningful growth with their customer base.

Elsewhere in Europe, we remain in talks with several carriers, and we anticipate deeper dive in-person meetings with a number of prospects in Europe later this month. Additionally, we have a full calendar of meetings at Mobile World Congress as we continue to seek viable opportunities to expand our presence through other carriers around the globe.

In conclusion, I am more than excited and extremely confident as I look ahead to 2026 and beyond. Everyone at Smith Micro is embracing transformative change and ready to conquer new horizons. I am as bullish as I have ever been about our future.

Throughout these past 44 years at Smith Micro, we have experienced many different technology cycles as well as ongoing changes in the market, where timing is extremely important and having the right solutions at the right time is paramount. I believe that is exactly where we are right now, and we plan to capitalize on that fact.

With that said, operator, we can open the call for questions.

[Operator Instructions] And today's first question comes from Matthew Harrigan with Benchmark.

Do you have any thoughts on what -- kind of the annual revenues, I mean you can kind of figure out where your margin is going to lay out, but the value of a normalized revenues with a major mobile carrier in the U.S., I mean, if you perform optimally. And I know with Orange and the European carriers, it's very different because you've got a central organization, you've got different countries and all that. But what do you think the prospective revenue opportunity is, kind of brushing it with kind of a VC painting brush, if you will?

Matthew, thanks for the question. We've often guided investors on this question to think about the number of subs that are available or family subs that are available at the carrier, so depending on how large the carrier is. And then we've often guided on a fee or our revenue per unit as a couple of dollars per family unit.

So for instance, at a $10 million family opportunity, if we were to get 50% or 30% of those, you would take that and multiply it by a couple of dollars per month, and you could kind of run out that from a modeling standpoint. I hope that's helpful in thinking about how we believe the addressable market is at the carriers.

And then given all you have to do is turn on CNN and you can see all the issues with family safety, both for children and for seniors right now. But you don't talk too much about competition. Clearly, a former customer of yours, a large carrier, tried to do it in-house maybe with mixed success. But I mean, given that this is a crying need, I mean, people must be doing something to -- even on a [ password ] basis to try to satisfy the situation.

I mean, do you see things kind of added ad-hoc to other software solutions? Or what are people doing who aren't using you because it's hard to believe that this void on the need continues to persist as much as it does.

Yes, Matthew, I think that's really the power of SafePath OS. And why we became so active around the phones. We think that selling phones is something carriers know how to do very well. We also think it's a very easy way to bring users on to family safety solutions.

From a kids point of view, one of the largest issues with family safety software are kids deleting the app. When it's on the phone like this, it's part of the OS, that can't be deleted. So I think in general, I think we have put ourselves in an excellent spot where we can really bring added value. I mean you mentioned a carrier that went out and developed their own software. Well, the market moves pretty fast. So they are -- they now have their software up and they've got a lot of the kinks out of it. And guess what, now they've got to figure out how they got to bring phones to the market, not just phones for kids standpoint, but phones for the senior standpoint as well.

So this is the real advantage we have. We pushed the envelope. We're in a leadership role, and that means everybody else has to run like crazy to catch up. And that's what it's all about. I think that's why I think we're going to be very, very successful going forward. And I think that the phones are going to be the major differentiator.

And clearly, at MWC, I mean, you've got a lot of people there other than just the fairly concentrated U.S. market. Are you seeing actual pull demand from new guys who've heard about the solution? Or is it kind of checking in annually with some familiar faces. Hopefully, they finally come over. But are you seeing any better awareness of your product?

Yes. I think that, as I said, we are looking forward to launching two new carrier customers midyear. Both are being driven by SafePath OS. They will be selling phones as part of that overall offering.

Part of the reason that carriers are excited about the phone is the onboarding process is so simple. And it's just a totally different animal than what we have done traditionally in the past with over-the-top applications. And I think that's opening up this market.

When we look at Europe, Europe is more of a greenfield opportunity for us. There isn't a lot of history there with carriers offering family safety offerings. And with the phone now, this makes the decision process by those carriers that much easier.

So I'm very, very bullish on where we're headed. I think we are in the driver's seat. And only time will tell, but I look forward to -- if I'm not on these calls, I look forward to listening to Tim talk about all the wins coming up in the future.

Congratulations to both of you, and I hope you have an enjoyable and productive MWC coming up shortly.

[Operator Instructions] And that does conclude our question-and-answer session. I'd like to turn the conference back over to Charles Messman for any closing remarks.

I just want to thank everybody for joining. Thank you, Bill. And Tim, we're really excited about having you on board. For those that are going to happen to be in town, we're going to be at the ROTH Conference in a few weeks. So please stop by and say hello, and have a great day. Thanks, everybody.

Thank you. That concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines, and have a wonderful day.

Good day, and welcome to Smith Micro Software's Financial Results for the Third Quarter ended September 30, 2025. [Operator Instructions] Please note that today's event is being recorded.

I would now like to turn the conference over to Charles Messman, Vice President of Marketing. Please go ahead, sir.

Thank you, operator. We appreciate you joining us today to discuss Smith Micro Software financial results for the third quarter ended September 30, 2025. By now, you should have received a copy of our press release with the financial results. If you do not have a copy and would like one, please visit the Investor Relations section of our website at www.smithmicro.com. On today's call, we have Bill Smith, our Chairman of the Board, President and Chief Executive Officer; and Tim Huffmyer, our Chief Operating Officer and Chief Financial Officer.

Please note that some of the information you will hear during today's discussion consist of forward-looking statements, including, without limitations, those regarding the company's future revenue and profitability, our plans and expectations, new product development and availability, new and expanded market opportunities, future product deployments, growth by new and existing customers, operating expenses and the company's cash reserves.

Forward-looking statements involve risks and uncertainties, which could cause actual results or trends to differ materially from those expressed or implied by our forward-looking statements. For more information, please refer to the risk factors included in our most recently filed Form 10-K. Smith Micro assumes no obligation to update any forward-looking statements, which speaks to the management's beliefs and assumptions only as of the date they are made. I'd want to point out that in our forthcoming prepared remarks, we will refer to specific non-GAAP financial measures. Please refer to our press release disseminated earlier today for a reconciliation of these non-GAAP financial measures.

With that said, I'll turn the call over to Bill. Bill?

Thanks, Charlie, and thank you for joining us today for our third quarter 2025 conference call. I am pleased with the progress we have made overall as we continue to advance our discussions around key customer initiatives and identify new opportunities aimed at broadening the reach of our products, setting the stage for future growth. More recently, we implemented some strategic changes across our organization as part of a broader effort to realign our cost structure in line with our long-term business goals, strengthen our financial foundation and accelerate our path to profitability. These cost reduction measures will save the company approximately $7.2 million in annualized costs.

The strategic organizational changes we've made affected approximately 30% of the overall workforce and were in part enabled by the completion of certain key development efforts. While difficult, these changes were a necessary and meaningful step forward toward enhancing organizational efficiencies and accelerating the company's path to profitability. We are building a culture of continuous improvement and operational efficiency, and we'll continue to assess and optimize our spending in the coming quarters, while we continue to invest in strategic areas that support innovation and to deliver exceptional value to our customers and stakeholders.

We have also made several structural changes to streamline operations and enhance agility, which will enable us to accelerate the delivery of our solutions to market. The timing of these adjustments has been carefully planned and aligns with the completion of our core SafePath 8 platform development efforts. With these initial changes complete, we believe we will be very close to breakeven and expect to be profitable in mid-2026. Additionally, to further support our financial position and business objectives, we also announced a strategic round of financing, which Tim will cover in greater detail a little later in the call.

With the opportunities that are in front of us and the efficiencies we have achieved, I truly believe we are entering a new phase of our journey as we progress to return the company back to growth and profitability. Regarding these opportunities, I am pleased to report that our pipeline remains strong and continues to grow. We are engaged in ongoing activities and customer trials in both North America and Europe. We are witnessing a meaningful shift in the carrier market that includes a renewed focus on family subscribers. As 5G growth begins to plateau, carriers are actively seeking new avenues for expansion, and families represent a high-value opportunity. They consistently demonstrate lower churn rates, higher lifetime value and increased spending across devices, data plans and services.

Our expanded SafePath platform now offers a more comprehensive ecosystem of tools and flexible delivery mechanisms tailored to family needs. This not only opens new revenue streams, but more closely aligns with carriers' core business strategies, such as selling devices and rate plans rather than relying on traditional secondary sales of value-added services, which have become less of a priority. I believe we are very well positioned to capitalize on these changes.

Now let's turn the call over to Tim for a deeper dive into our financials. I'll follow up with more updates later in the call. Tim?

Thanks, Bill. Let me start by covering a few recent transactions. As previously announced, in July, we closed a follow-on offering of approximately $1.5 million prior to fees and expenses. In September, we closed on a few notes purchase agreements, which provided approximately $1.2 million of cash to the company in exchange for short-term notes and warrants. In October, we announced a strategic cost reduction in our organization, as Bill indicated. This was primarily comprised of our workforce reorganization. It will result in a cost savings of $1.8 million per quarter as compared to the second quarter of 2025 or $7.2 million reduction in costs for 2026. This excludes payment of employee separation costs.

As Bill indicated, these efforts are part of our broader initiative to realign the company's cost structure with long-term business goals, strengthen the financial foundation and accelerate our path to profitability. And finally, yesterday, we announced the completion of a private placement and follow-on offering. Both offerings have been priced based on the market value of the offered securities as of the time of signing the purchase agreement, and the company will issue approximately 4 million shares and an equivalent amount of warrants exercisable for 1 share of the company's common stock at an exercise price of $0.67 per share.

The aggregate gross proceeds of the two offerings are expected to be approximately $2.7 million, which includes a committed investment of $1.5 million from Bill and the other Smith. We are excited about this additional funding round as the company pushes to expect -- to breakeven in 2026.

Now let's cover the financial results for the third quarter of 2025. For the third quarter, we posted revenue of $4.3 million compared to $4.6 million for the same quarter of 2024, a decrease of approximately 6%. When compared to the second quarter of 2025, revenue decreased by $73,000 or 2%. Last quarter, we had guided to a revenue range of $4.4 million to $4.8 million, and we slightly missed that guidance. The reason for the lower-than-expected revenue is directly related to the company's expectation of launching an additional SafePath feature with an existing carrier customer. The contract for that feature did not get finalized as expected. Therefore, the revenue was not recognized. The company has completed the development effort related to this feature, and we will wait on prioritization from the carrier customer.

Year-to-date revenues through September 30, 2025, were $13.4 million versus $15.6 million through the third quarter of last year, a decrease of approximately 14%. During the third quarter of 2025, Family Safety revenue was $3.5 million, which decreased by approximately $410,000 or 10% compared to the third quarter of the prior year. Family Safety revenues decreased by approximately $97,000 or 3% compared to the second quarter of 2025, primarily driven by the decline in the legacy Sprint Safe & Found revenue.

During the third quarter of 2025, CommSuite revenue was $792,000, which increased by approximately $148,000 compared to the third quarter of 2024. Revenue from CommSuite increased by approximately $15,000 compared to the second quarter of 2025. As previously mentioned, we sold our ViewSpot product for $1.3 million on June 3. And as such, other than transition services fees, we will no longer have any future revenue from this product. ViewSpot revenue was $26,000 and $65,000 for the third quarter of 2025 and 2024, respectively.

In the fourth quarter of 2025, we are expecting consolidated revenues to be in the range of approximately $4.2 million to $4.5 million. The upper end of this guidance range includes some initial revenue related to the launch of the previously referenced new feature at the existing carrier customer, which we previously anticipated would have occurred in the third quarter.

For the third quarter of 2025, gross profit was $3.2 million compared to $3.3 million during the same period of the prior year, a decrease of $116,000, primarily due to the period-over-period decline in revenues. Gross margin was at 74% for the quarter compared to 72% realized in the third quarter of 2024. The gross profit of $3.2 million in the third quarter of 2025 matched sequentially the $3.2 million of gross profit realized in the second quarter of 2025.

In the fourth quarter of 2025, we expect gross margin to be in the range of 74% to 76%. The increased margin percentage is directly related to lower costs from the cost reductions completed in October. For the year-to-date period ended September 30, 2025, gross profit was $9.8 million compared to $10.7 million during the corresponding period last year. Gross margin was 73% for the September 30, 2025 year-to-date period as compared to the 68% in the same period last year. Once we realize a full quarter of the cost benefits in 2026, we expect our margin percentages to be between 78% to 80%. Our longer-term gross margin target is 85%, which we will continue to work towards.

GAAP operating expenses for the third quarter of 2025 were $7.7 million, a decrease of $2.1 million or 22% compared to the third quarter of 2024. The difference was a result of changes in personnel, stock compensation costs and other cost reduction activities. GAAP operating expenses for the year-to-date period ended September 30, 2025, were $34.5 million compared to $55.6 million in the prior year-to-date period, a decrease of $21.1 million or 38% compared to last year. This period-over-period decrease was primarily attributable to the goodwill impairment charge of $24 million recorded in the first quarter of 2024 as compared to the goodwill impairment charge of $11.1 million in the second quarter of 2025, coupled with the cost reduction activities that we have executed along with a decrease in amortization expense associated with our intangible assets.

Non-GAAP operating expenses for the third quarter of 2025 were $5.7 million compared to $6.8 million in the third quarter of 2024, a decrease of approximately $1.1 million or 16%. Sequentially, non-GAAP operating expenses decreased by approximately $200,000 or 3% from the second quarter of 2025. We expect an approximate 15% decline in non-GAAP operating expenses in the fourth quarter of 2025 as compared to the third quarter of 2025 as we begin to see some of the impact of our most recent reorganization.

Non-GAAP operating expenses for the year-to-date period through September 30, 2025, were $17.8 million compared to $22.4 million for the year-to-date period ended September 30, 2024, a decrease of $4.7 million or 21% compared to last year. As previously mentioned, we expect our 2026 non-GAAP operating expenses to be reduced by approximately $7.2 million as we realize the full benefit of the recent reorganization.

The GAAP net loss attributable to common stockholders for the third quarter of 2025 was $5.2 million or $0.25 loss per share compared to a GAAP net loss of $6.4 million or $0.54 loss per share in the third quarter of 2024. GAAP net loss attributable to common stockholders for the 9 months ended September 30, 2025, was $25.4 million or $1.30 loss per share compared to GAAP net loss attributable to common stockholders of $44.3 million or $4.17 loss per share for the 9 months ended September 30, 2024. The non-GAAP net loss attributable to common stockholders for the third quarter of 2025 was $2.6 million or $0.12 loss per share compared to a non-GAAP net loss attributable to common stockholders of approximately $3.6 million or a $0.30 loss per share in the third quarter of 2024.

Non-GAAP net loss attributable to common stockholders for the 9 months ended September 30, 2025, was $8.2 million or $0.42 loss per share compared to non-GAAP net loss attributable to common stockholders of $11.8 million or $1.11 loss per share for the 9 months ended September 30, 2024.

Within today's press release, we have provided a reconciliation of our non-GAAP metrics to the most comparable GAAP metric. For the third quarter of 2025, the reconciliation includes adjustments for intangible asset amortization of $1.3 million, stock compensation expense of $600,000, depreciation expense of $71,000, changes to the fair value of warrants of $34,000 and a deemed dividend of $635,000. For the year-to-date period, the non-GAAP reconciliation includes adjustments for intangible asset amortization of $3.8 million, stock compensation expense of $2.8 million, goodwill impairment charge of $11.1 million, executive transition costs of $78,000, depreciation of $217,000, changes to the fair value of warrants of $137,000, a deemed dividend of $635,000, partially offset by the ViewSpot sale of $1.3 million.

Due to our cumulative net losses over the past few years, our GAAP tax expense is primarily due to certain state and foreign income taxes. For non-GAAP purposes, we utilized a 0% tax rate for the third quarter of 2025 and 2024. The resulting non-GAAP tax expense reflects the actual income tax expense during the period. From a balance sheet perspective, we reported $1.4 million of cash and cash equivalents as of September 30, 2025.

This concludes my financial review. Now back to you, Bill.

Thanks, Tim. As I mentioned at the beginning of the call, our SafePath platform is tailored for families and includes SafePath OS for Kids Phones and SafePath OS for Senior Phones. Carriers can deploy our SafePath OS software solution to offer devices from existing inventory that are tailored to meet the needs of kids and seniors and their families. This expansion has generated meaningful interest and opened several new conversations with our current and prospective carrier partners, and we have trials currently underway with mobile operators around the world. We remain focused on delivery and expect to get them to the finish line in the next few quarters.

Now let me provide a quick update on our current customers. We remain enthusiastic with the continued rollout of our SafePath Kids solution with Orange Spain, which supports the 2-year rate plan for kids. We've maintained a strong partnership with the Orange Spain team, collaborating closely on new go-to-market opportunities. Concurrently, we are advancing the next phase of the product road map with a planned launch later this year that introduces new functionality designed to broaden our market reach. These enhancements have been strategically developed to meet evolving customer needs and are expected to be well received, strengthening our position in the region.

We're also making solid progress with the expansion of our footprint beyond Spain with ongoing conversations across other Orange entities. These discussions are gaining traction and reflect growing interest in our solutions. More broadly, we have active trials and engagements across Europe, and I remain highly encouraged by the momentum of our current pipeline.

With AT&T, we're actively collaborating our new marketing initiatives as we gear up for the upcoming holiday season. Many of these efforts are tied to a recent product update that significantly expands our market potential. Secure Family is now available to any family regardless of their mobile carrier that they use. It's no longer limited to AT&T wireless customers. This expansion not only broadens our addressable market, but also unlocks new cross-promotion opportunities. I am optimistic about the road ahead as we continue to build on our strong and trusted partnership with AT&T.

I remain optimistic about our progress with Boost, especially as we explore new opportunities following the announcement of our expanded SafePath platform capabilities. These expanded offerings have sparked fresh conversations and opened the door to broader engagement. Additionally, we are seeing continued momentum through targeted holiday marketing campaigns and ongoing monthly messages, most notably around visual voice mail. These messages are set to run through the end of the year and further support our growth efforts.

With T-Mobile, we remain energized by our continued discussion around the expansion of the SafePath platform and the new opportunities that it can deliver. As I discussed on our last call, T-Mobile has added additional team members to our working group who are very interested and engaged in our current solution as well as our portfolio expansion. With relationships continuing to strengthen across the organization, I believe there remains substantial growth potential ahead with T-Mobile.

In conclusion, we believe we have taken key steps to strengthen the company's financial position, establishing a firm foundation from which we can grow. I truly believe the renewed family focus occurring in the carrier market worldwide opens an enormous new opportunity for Smith Micro Software. With the core development of our SafePath 8 platform complete, coupled with a new, faster and more agile delivery organization going forward, we are aligned well with the market today.

Our Connected Life vision brings what I believe is the most expansive and powerful offering in the market today. Our family digital lifestyle ecosystem spans the entire family digital safety journey for families from kids to seniors and every family member in between. We are confident we are on a path to profitability. Our mission is not yet complete, but we have implemented the necessary steps to get us there. I am extremely confident in our plan and our team's ability to execute.

With that, let me turn the call back to the operator for questions. Operator?

[Operator Instructions] And at this time, we are showing no questions in the queue. So I would like to turn the conference call back over to Charles Messman for any closing remarks.

I want to thank everybody for joining today. Should you have further questions, please feel free to call us. Thank you, guys, and have an awesome day.