Smith Micro Earnings Blast Off

It was a busy and exciting night for members of our SMSI research group.  Smith Micro reported Q2 earnings and even though we all expected a nice quarter, the company surprised us all


with 10.8m in Revenues for a $2.4 million beat and a 56% increase from prior year on the top line and 8c non-GAAP EPS, a 700% beat.  To top it off gross margins improved to 91%! 


Here was the headline: 


What is going on?  Smith Micro has three main products and they are all performing nicely. 

  1. SafePath is growing at Sprint even faster than SMSI management expected.  In fact, Safe & Found revenues grew sequentially by 77% to 3.8m for the quarter!  Check out this quote from last night’s earnings call: 

“They’ve just done a phenomenal job in preparing the sales force and incentivizing the sales force to get behind the product. They continue to do that and they have new initiatives that we look for coming in the coming weeks and months. And so we think that will continue to drive the expansion of the user base. So, yes, it’s pretty exciting and we didn’t know this when we started this effort. We didn’t know that they could sell as effectively as they have at the retail stores.” – William Smith, CEO

  1. CommSuite at Sprint and Boost continues to grow subscribers nicely.  In fact, CommSuite revenues grew at approximately 16% sequentially to approximately 5.4 million. 
  2. Their newest product, ViewSpot, also had a nice bump up in growth at AT&T and Verizon from about 1.1 million last quarter to 1.4 million in revenues this quarter, a 27% increase. 


What was the reaction? 

So far 2 of the 3 firms with coverage on Smith Micro have already raised their price targets while maintaining their buy rating.  Also the stock traded up $1.16 in the after hours market last night to $4.61 from a closing price of $3.45.  Today the stock has traded as high as $4.95.  


Here is Chardan:


Here is B Riley:


Roth Capital is the third sell side analyst with coverage.  It would not surprise us if we see an upgrade from them very soon as well. 


What can we look forward to?

CFO Tim Huffmyer gave the following guidance for the remainder of this year: 

  • SafePath:  Current run rate suggests at least 30% sequential growth for Q3. 
  • CommSuite:  Continued sequential subscriber growth in the lower single digits. 
  • ViewSpot:  10% to 20% growth for this fiscal year. 

In addition, CEO Bill Smith made several comments about his positive outlook on discussions they continue to have with other carriers for new business across all three products. 


So, what do we have? 

We have a reoccurring subscription revenue software company that is now on a 40c per share annual run rate posting 50% top line growth and 90% margins with multiple discussions going on with new carriers about adding even more business and a stock that closed yesterday at $3.45 per share. 


What is our forecast? 

We have taken the information from yesterday’s earnings release and management discussion and forecast our expectations for the remainder of 2019 and 2020 at 40c per share growing to 91c per share.  Wow!  See below for details: 



How to get involved?

Thanks to the collaborative efforts in the SMSI research group at Story Trading we all knew results like this were on the way and SMSI delivered yesterday in a big way.  Join us as we continue to collaborate in our research rooms at

5 responses to “Smith Micro Earnings Blast Off”

  1. bsteveson1 bsteveson1 says:

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  2. bsteveson1 bsteveson1 says:

    Almost $1 per share next year before we sign another customer………

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