Smith Micro Software, Inc. (NASDAQ:SMSI) Q3 2023 Earnings Call Transcript

Bill Smith: If we can get SafePath global completed, it would be perfect for some of these deployments in Europe. But on the other hand, the business is here now, so we can use the current code if that’s what is necessary. So nonetheless, we have targets in time as far as for when deployments will start, the dates are set and we are busy right now. Can I move on to AT&T? All right, so turning to AT&T then. Okay. We started the migration the end of August. As I said in my prepared comments, we’ve moved through this process. It is a big undertaking. We knew it going into it. We’d already done this once before when we migrated the Circle code at T-Mobile over to SafePath. This was more complex because the ring code base that we acquired from Avast was a much more complex product than the circle product was.

And as such, it takes a little bit of time we have worked our way through. The customer, I think, is very happy with the level of service in our execution, and we continue to work our way to the end of it. I would say the end of all migration activities will be done by the end of this year. After that, 100% of the focus will then move to growing in marketing and moving things forward. For 2024, we believe that we have a number of initiatives that we’ve defined with the customer. They are either approved or in the process of being final approvals and we are setting the dates for launches of each of these. So we would say that we’re very bullish about where we’re going, and I think 2024 will do very well for us. That answered your question, Scott?

Scott Searle: Perfect. Thanks, Bill. Hope you feel better.

Bill Smith: Thanks.

Operator: The next question will come from Josh Nichols with B. Riley FBR. Please go ahead.

Josh Nichols: Yes, thanks for taking my question. Really good to see the Family Safety business up $400,000 sequentially. I know you can’t dive into too many details on it, Bill, and I hope you feel better in the coming days. But if you were up $400,000 right in the first quarter, I’m just curious. Your expectations that at least for AT&T, that you would grow that business by more this quarter or if there’s anything you could kind of highlight on for seasonality for 4Q and what that means for carriers and promotions and what you guys may be doing on that front.

Bill Smith: Well, I guess I would say this first off, because we started the end of August, you’re fairly well into Q3. And so to see any significant growth in Q3 just probably wasn’t practical because all the emphasis was on migrating existing customers over. As I’ve already stated, that is a process that is a lot of work and we’re working our way through it and we see the end in sight. However, when we start talking about the growth, I’d love to say we could get a lot of growth in Q4, but right now we’re sitting in about mid November, and this is also holiday season, and carriers tend to focus 100% on selling mobile devices and bringing on new subs. I think the major focus for us will launch after the first of the year. So I think that’s where you should be looking for some growth to start to kick in.

Josh Nichols: Thanks. And then did you frame anything? Sorry if I missed it. In terms of the magnitude of like what you’re expecting, in terms of the revenue trajectory in 4Q. When you factor in where you are today with AT&T but with some revenue runoff from Verizon and ViewSpot.

Bill Smith: I’m not really following your question 100%. Can you ask it a different way?

Josh Nichols: Yes, I’m just wondering. You said that you thought revenues would be down in 4Q. Any color you could provide on how much revenue you think is going to be running off from Verizon and 4Q before it totally goes away in the beginning of next year, as you previously talked about, you’re mute.