Smith Micro Software (SS90) Q2 2026 Earnings Report

The call highlights clear operational progress: sequential revenue growth for two consecutive quarters, a strong improvement in gross margin (over 80%), meaningful operating cost reductions, near-term product launches and a growing pipeline driven by SafePath SDKs/APIs and the new SafePath Connect offering. Offsetting these positives are modest year-over-year revenue declines, a low cash balance ($2.8M), timing-driven revenue push from Q2 to Q3, continued GAAP/non-GAAP losses, and planned near-term OpEx increases to support growth. Management provided constructive guidance for Q3 ($5.0M–$5.4M) and signaled confidence in conversion of pipeline, but execution and liquidity remain key risks in the near term.

Guidance summary: Management expects Q3 2026 revenue of $5.0–$5.4 million (building on Q2 revenue of $4.3M, +3% sequential, -2% YoY; YTD $8.6M, -5% YoY) with Q3 gross margin targeted at 81%–83% (Q2 gross profit $3.5M; Q2 gross margin 81.3%; long‑term target ~85%); management expects continued sequential revenue growth into Q3 and Q4 driven by two near‑term customer launches and a Tier‑1 contract extension that should begin contributing in Q3; to support the pipeline they anticipate adding resources such that non‑GAAP operating expenses could rise up to ~6% in Q3 vs Q2 (Q2 non‑GAAP OpEx $4.4M; GAAP OpEx $5.9M, down 68% YoY); Q2 GAAP net loss was $2.7M ($0.52/share) and Q2 non‑GAAP net loss was $0.989M ($0.19/share) (YTD GAAP net loss $6.6M / $1.28/share; YTD non‑GAAP net loss $2.5M / $0.48/share); cash was $2.8M as of June 30 and the company raised $1.6M in June via exercise of 487,349 warrants at $3.35 each.