Smith Micro Software (SMSI) Q2 2026 earnings summary

Executive summary

• Achieved second consecutive quarter of sequential revenue growth, driven by strong demand, new product launches, and imminent customer launches and contract extensions.

• Revenues for Q2 2026 were $4.3M, down 2% year-over-year, mainly due to a decline in Family Safety product sales, partially offset by CommSuite growth.

• Gross profit rose to $3.5M (81.3% margin), up from $3.2M (73.5%) in Q2 2025, driven by cost reductions.

• Operating expenses fell by $12.3M year-over-year, reflecting cost optimization and the absence of a prior-year goodwill impairment.

• Net loss attributable to common stockholders was $2.7M ($0.52/share), a significant improvement from $15.1M ($3.88/share) in Q2 2025.

Financial highlights

• Q2 2026 revenue was $4.3M, down 2% year-over-year but up 3% sequentially; six-month revenue was $8.6M, down from $9.0M year-over-year.

• Gross profit for Q2 was $3.5M (81.3% margin), up 9% year-over-year; six-month gross profit was $6.8M (79.9% margin).

• GAAP net loss for Q2 was $2.7M ($0.52/share); non-GAAP net loss was $989K ($0.19/share), both improved sequentially and year-over-year.

• Operating loss for Q2 2026 was $2.4M, a significant improvement from $15.0M in Q2 2025.

• Cash and cash equivalents at June 30, 2026 were $2.8M.

Outlook and guidance

• Q3 2026 revenue guidance is $5.0M–$5.4M, reflecting expected launches and contract expansion.

• Gross margin for Q3 expected in the 81%–83% range, with a long-term target of 85%.

• Non-GAAP operating expenses expected to increase up to 6% in Q3 to support pipeline growth.

• Management expects continued sequential revenue growth into Q4 and aims for break-even at $5.5M–$6M quarterly revenue.

• Substantial doubt remains about the ability to continue as a going concern within one year, pending revenue growth or additional capital.