Smith Micro Software, Inc. (
Q2 2011 Earnings Call
August 2, 2011 4:30 pm ET
Charles Messman – Investor Relations, MKR Group
William W. Smith, Jr. – Chairman, President and Chief Executive Officer
Andrew C. Schmidt – Vice President and Chief Financial Officer
Tom Matthews – Senior Vice President and Chief Strategy Officer
Michael Walkley – Canaccord Genuity
Chad Bennett – Northland Capital Markets
Scott Sutherland – Wedbush Securities Inc.
Lauren Choi – JPMorgan
Jason North – Jefferies & Co.
Charlie Anderson – Dougherty & Company LLC
Kevin Dede – Brigantine Advisors
Previous Statements by SMSI
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» Smith Micro Software, Inc. Q2 2010 Earnings Call Transcript
Ladies and gentlemen, thank you for standing by, and welcome to the Smith Micro Second Quarter 2011 Financial Results Conference Call. During today’s presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be opened for questions. (Operator Instructions) This conference is being recorded today Tuesday, August 2, 2011.
I would now like to turn the conference over to Charles Messman with MKR Group. Please go ahead, sir.
Good afternoon, and thank you for joining us today to discuss Smith Micro Software’s second quarter ended June 20, 2011 financial results. By now you should have received a copy of the press release discussing our quarterly results. If you do not have a copy and would like one, please visit
or call us at 949-362-5800 and we will immediately email one to you.
With me on today’s call are Bill Smith, Chairman, President and Chief Executive Officer; Andy Schmidt, Vice President and Chief Financial Officer; and Tom Matthews, Senior Vice President and Chief Strategy Officer.
Before we begin the call, I want to caution that on the call the company may make forward-looking statements that involve risk and uncertainties, including without limitations forward-looking statements related to the company’s quarterly revenue guidance, its financial prospects and other projections of its performance, the company’s ability to increase its business and the anticipated timing and financial performance of its new products and potential acquisitions.
Among the important factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements are changes in demand for the company’s products from its customers and their end users, new and changing technologies, customers’ acceptance of those technologies, new and continued adverse economic conditions, and the company’s ability to compete effectively with other software companies. These and other factors discussed in the company’s filings with the Securities and Exchange Commission, including its filings on Forms 10-K, 10-Q, and 8-K, could cause actual results to differ materially from those expressed or implied in any forward-looking statements.
The forward-looking statements contained in this conference call are made on the basis of the views and assumptions of management regarding future events and business performance as of the date of this call, and the company does not undertake any obligation to update these statements to reflect events or circumstances occurring after the date of this release and call.
Before I turn the call over to Bill Smith, Chairman, President, and CEO of Smith Micro, I want to point that in our forth coming prepared statements, we will refer to certain non-GAAP financial measures, please refer back to our press release disseminated earlier today for reconciliation of the non-GAAP financial measures.
With that then, I’ll now turn the call over to Bill Smith. Bill?
William W. Smith, Jr.
Thanks Charles. Good afternoon everyone and welcome to our second quarter ending June 30, 2011 earnings conference call. Revenues for the quarter were $16.1 million inline with management guidance provided on the May 4, 2011 first quarter conference call.
Non-GAAP gross margins remained strong at 86%, while profitability played out as we expected with a non-GAAP net loss of $5.2 million or $0.15 per share, as we continued our investments and innovation and adaption of our technology and product line to address the emerging marketplace demands.
Combined results from our top three carrier customers, Verizon, AT&T and Sprint, in Q2 were up approximately 25% sequentially from Q1, 2011, but remained well below the pace of sales for Q2, 2010. Each of these customers represented 10% or more of our quarterly revenues on an individual basis. We saw very nice gains from Sprint, who came in as our largest customer for this quarter.
At Verizon, our revenue recovery remained in the state of cost, as sales of our core connectivity product continued to trail well behind 2010 quarterly levels. They’ve made great progress on their network build out and transitioned LTE and were anxious to see how the launch of new geographic markets and corresponding marketing campaigns impact our sales ahead. We continue to maintain a strong relationship with Verizon and we’re excited about the collaboration that’s taking place to support future device rollouts.
In the phase of what has proven to be a very challenging times for our company, we were encouraged by the interest from a number of customers for our innovative new products that helped them optimize the mobile experience for their end users. We continue to invest in R&D to aggressively prioritize our technologies that will position our company for further participation in the opportunities emerging with new expansion of 4G services on a global basis.
We’ve made great progress in the development of SODA and we are pleased to see carriers such as Sprint, Comcast and Reliance along with other industry leaders such as Alcatel-Lucent, Huawei and ZTE joined as early members of the SODA Innovators Program.