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Smith Micro Software Inc. (



Q4 2010 Earnings Conference Call

February 24, 2011, 4:30 pm ET


Charles Messman – IR

Bill Smith – Chairman, President and CEO

Andy Schmidt – CFO

Tom Matthews – SVP and Chief Strategy Office


Richard Valera – Needham & Company

Larry Harris – CL King & Associates

Charles John – Canaccord Genuity

Chad Bennett – Northland Capital Markets

Lauren Choi – J.P. Morgan

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Scott Searle – Merriman Capital

Kevin Dede – Brigantine Advisors



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» Smith Micro Software Inc. Q4 2009 Earnings Call Transcript

Good afternoon, ladies and gentlemen. Thank you for standing-by. Welcome to the Smith Micro Fourth Quarter and Year End 2010 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, Thursday, February 24 of 2011 and I would now like to turn the conference over to Charles Messman. Please go ahead, sir.

Charles Messman

Good afternoon and thank you for joining us today to discuss Smith Micro Software Financial Results for our fourth quarter in December 2010 and full year 2010 financial results. By now, you should have received a copy of the press release discussing our quarterly year-end 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 e-mail one to you immediately.

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 this call, the company may make forward-looking statements that involve risks and uncertainties including without limitation forward-looking statements related to the company’s quarterly revenue guidance. Financial prospects and other projections of its performance, the company's ability to increase its business, and the anticipated timing and

financial performance of new products and potential acquisitions.

Among the important factors that could cause actual results to differ materially from those expressed or implied in forward-looking statements are changes in demand for our company's products from its customers and their end users, new and changing technologies, customer acceptance of those technologies, new and continuing 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 Form 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 released [ph] 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.

With that said, I would now like to turn the call over to Bill Smith, Chairman, President and CEO. Bill?

Bill Smith

Thank you, Charles. Good afternoon, everyone and welcome to our fourth quarter ending December 31, 2010 and full year 2010 earnings conference call. We are pleased to report another great quarter with solid financial results and outstanding fiscal year performance. They ousted our seventh consecutive quarter of revenue growth generating the highest quarterly revenue results in our company's history of $35.3 million.

This represents an improvement of $5.6 million over Q4 2009 or an 18.8% increase in the revenue over the same period last year. In addition to our strong revenue growth in the quarter, our bottom line was very solid with GAAP net income of 5.8 million or $0.16 per diluted share, up 375% over net income of $1.2 million or $0.04 per diluted share in Q4 2009.

Pro forma earnings per diluted share totaled $0.37 for the fourth quarter, up from $0.26 in 2009. Full year revenues for 2010 totaled $130.5 million, up 21.6% over the $107.3 million in 2009. Our non-GAAP net income for the full year was $33.9 million or $0.98 per share versus $25.1 million or $0.76 per share for the full year 2009.

All in all, we are delighted with a fourth quarter and full year 2010 financial results. We are pleased with our continuous progress in building our business while demonstrating steady growth for the past seven quarters. We accomplished many great things in Q4 and throughout 2010 from both a financial and business operations perspective.

We see the road ahead holding great possibilities for further growth as many exciting transitions taking place in the mobile and wireless industry unfold. We have embarked on a new era of broadband mobile internet service with 4G and LTE coming to life at the end of the year.

We see new products and form factors poised to drive adoption of mobile internet services at a level never before seen. Each day seems to bring new developments and Smith Micro is in a great position to capitalize on many of the emerging opportunities. But before I get into our perspective of some of these developments in the future, I will turn the call over to Andy Schmidt, our CFO to discuss our fourth quarter and full year 2010 financial results in more detail. Andy?

Andy Schmidt

Thank you, Bill. Okay. First, I will go over our customary introductory items. As we have in past quarters, we provided non-GAAP results and reconciliation of non-GAAP and GAAP results. Non-GAAP results discussed in this call net out amortization of intangibles associated with acquisitions, stock compensation-related expenses and non-cash tax expense to provide comparable operating results.

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