Smith Micro Software, Inc.

Good day and welcome to the Smith Micro Third Quarter 2021 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Charles Messman, Vice President of Investor Relations and Corporate Development. Please go ahead.

Thank you, Operator, and good afternoon, everyone. We appreciate you joining us today as we discuss Smith Micro's financial results for the third quarter of 2021, ended September 30th, 2021. By now, you should have received a copy of the press release with the financial results. If you do not have a copy and would like one, please visit the investor relations section of our website at www.smithmicro.com. On today's call, we have Bill Smith, Chairman of the Board, President and Chief Executive Officer of Smith Micro, Michael Fox, Interim Vice President of Finance, and Jim Kempton, our new CFO, who joined November 3rd, 2021. Please note that some of the information you will hear during our discussion today consists of forward-looking statements, including, without limitations, Those regarding the company's future revenue and profitability are future plans, new product development, new and expanded market opportunities, future product deployments, migration, and or growth by new existing customers, operating expenses, company cash reserves, and the expected impact of our recently completed acquisition on our business strategy, operation, and financial position going forward. Forward-looking statements involve risk and uncertainties, which could cause actual results or trends that differ materially from those expressed or implied by our forward-looking statements. For more information, please refer to the risk factors included in our recently filed Form 10-K and the final perspectives filed with respect to our recent public offering. Smith Micro assumes no obligation to update any forward-looking statements, which speak to our managers' belief and assumption only as a date they are made. I'd like to point out that in our forthcoming prepared remarks, we'll refer to certain non-GAAP financial measures, please refer to our press release disseminated earlier today for the reconciliation of these non-GAAP financial measures. That said, I'll now turn the call over to Bill. Bill?

Thanks, Charlie, and good afternoon, everyone. Thank you for joining us today for our third quarter 2021 earnings call. Our third quarter was very busy for us on several fronts. I am pleased with the overall progress and the significant milestones we achieved since our last earnings call. First, I am excited to announce that we have come to an agreement with T-Mobile US on commercial terms for Family Mode 3, which is powered by our Safe Path platform. As we are all aware, coming to this agreement took much longer than we originally expected due to multiple delays outside of our control. Unfortunately, these things tend to happen when two giant corporations like T-Mobile and Sprint merge. I am very pleased with the team for getting the agreement done. We are now looking forward to the launch of Family Mode 3, which will soon start driving revenue for Smith Micro. There are several other T-Mobile related activities that I will discuss later in the call. On the AT&T front, I am delighted with the progress we've made working closely with their team to build a plan to fuel new subscriber growth for their secure family app. We are developing a plan to launch AT&T on our SafePath platform before the end of 2022. During his remarks, Mike will provide more specifics on the earn-out related to the AT&T contract. I expect to see great opportunity ahead with AT&T in the coming quarters. We also advanced on several fronts with Verizon, which became the first Tier 1 carrier in the U.S. to launch driver monitoring functionality as part of a family safety offering. Working with Verizon and our technology partner, CMT, we were able to launch the first major new family safety feature since our acquisition of the Avast family safety business. We also launched new marketing efforts to promote Verizon Smart Family during the quarter as we continue to drive new subscriber growth for the app. This was all accomplished while we continue to plan to merge the existing Smart Family user base onto the Safe Path platform. Our vision goes far beyond offering just a white label family safety application. we strive to provide a comprehensive solution for the family's entire digital lifestyle, including the smart home and the consumer internet of things, two markets that are in the infancy stage of their life cycles. We're particularly focused on the digital lifestyle strategy because it would increase the total addressable market for our carriers and would generate more revenue opportunities. Now, let's take a look at the financial results for the third quarter. Revenue came in at $16.4 million, compared to $12.6 million for the same quarter last year, a 30% increase. Revenue, when viewed on a quarter-over-quarter basis, increased approximately $524,000. Non-GAAP net loss for the quarter was $258,000, which equates to zero cents per share or break-even. Our cash balance at the end of the quarter was $32.4 million. The subsequent earn-out paid to a boss for the AT&T contract occurred after the end of the quarter. Okay, let's now turn the call over to Mike, who served as our interim CFO during the third quarter, for a more in-depth analysis of the third quarter financials.

Mike? Thanks, Bill, and good afternoon, everyone. As you know, we acquired the Avast Family Safety mobile business in the second quarter, which impacts the period over period comparisons that I'll be covering today. As such, I'll also be highlighting the sequential changes to provide some additional context on our quarterly results. Now let's cover the financial details of the third quarter. For the quarter, we posted revenue of $16.4 million compared to 12.6 million for the same quarter last year, an increase of 30%. When compared to the second quarter of 2021, revenue was up 3%. For the third quarter year to date, revenue was 43.7 million compared to 38.9 million last year, an increase of 13%. During the third quarter of 2021, our family safety revenue, inclusive of SafePath and the Avost family safety mobile business, increased 77% to $12 million compared to the third quarter of last year and increased 8% sequentially compared to the second quarter of 2021. This increase was slightly lower than our expectations communicated last quarter as the T-Mobile agreement that Bill touched on at the start of our call was not executed until this month, which was later than we had anticipated. That being said, we are very excited to have reached a commercial agreement with T-Mobile and look forward to the new version of Family Mode launching on our Safe Path platform. The increase in family safety revenue was primarily related to the Avast Family Safety Mobile business acquisition that was completed in Q2 of this year. This increase was offset by the continued reduction of SafePath platform revenue related to declining legacy Sprint subscribers. As a reminder, all current marketing initiatives are only focused on T-Mobile branded products and not the Sprint branded products. In the upcoming quarter, based on the current subscriber trends through October, which include our newly acquired family safety products, we expect family safety revenue to be flat to 5% up compared to the third quarter. During the third quarter of 2021, CompSuite platform revenue was 3.5 million, which was down 24% from the third quarter of last year. Compared to the second quarter of 2021, CompSuite revenue decreased 12% and was lower than expected due to a greater number of Legacy Sprint VVM subscribers leaving the platform during the quarter. This was partially offset by better-than-expected advertising revenue for the comm suite platform. Regarding the continuing wind-down of our Legacy comm suite-based service at Sprint, we now have more clarity and are beginning to see subscriber loss accelerate which will impact fourth quarter ComSuite revenue. This acceleration is driven by subscribers having the option to move from Sprint to the T-Mobile network for voice services. As more and more subscribers transition off of the Sprint network, ComSuite-related revenues will continue to decline. We anticipate this revenue decline to continue to accelerate during the fourth quarter of 2021. As a result, we currently expect Comp Suite revenue to be down 30 to 35% compared to the third quarter of 2021. We currently expect this deployment to reach end of life sometime the middle of next year. Boost Mobile, formerly owned by Sprint and now part of DISH, comprises approximately 35% of the Comp Suite platform revenue. We are working towards expanding our strategic relationship with DISH in the future and will aim to grow the number of subscribers, both at Boost and at DISH, using our CompSuite platform for premium visual voicemail services. As a reminder, DISH is currently in the process of rolling out its Greenfield 5G network with the goal of covering 70% of the U.S. population by June 2023. Viewspot revenue was approximately $971,000 for the third quarter of 2021, up 19% when compared to the second quarter of 2021. This increase was higher than our expectations communicated last quarter and was primarily related to a higher volume of variable revenue with our Tier 1 U.S. customer. Based on our current outlook, we expect view spot revenues in the fourth quarter to be lower by 20 to 25% compared to the third quarter. This decrease is primarily related to lower variable revenue activity expected in the fourth quarter due to seasonality associated with this revenue stream. For the fourth quarter of 2021, we expect overall consolidated revenue to be lower by approximately 5% to 10% compared to the third quarter of 2021. For the third quarter, gross profit was $12.8 million compared to $11.3 million during the same period last year. Gross margin was 78% for the third quarter compared to 90% last year. Our longer-term goal for gross margin continues to be 90%. To achieve this goal, we will continue to work through the newly acquired Avast Family Safety mobile business as we merge third-party application and service contracts and execute on other cost synergy opportunities. In the short term, we expect gross margin to be near this current run rate. For the year-to-date period ended September 30th, 2021, gross profit was 35.1 million, which was consistent with the 35.1 million during the corresponding period last year. Gross margin was 80% for the September 30th, 2021 year-to-date period. GAAP operating expense for the third quarter was 31.2 million, an increase of 20.1 million or 181% compared to last year. When compared to the second quarter of 2021, gap operating expense during the third quarter increased sequentially by 76%. Gap operating expense for the year-to-date period ended September 30th, 2021 was 62.1 million, an increase of 30.5 million or 97% compared to last year. The increase in the GAAP operating expense for the year-to-date period ended September 30th, 2021 compared to last year is primarily related to a charge of 12.9 million due to the change in fair value of contingent consideration related to the Avast acquisition, an increase of 1.4 million for compensation and employee-related expenses, primarily related to the acquisition, has headcount increased 47% year-over-year, resulting in 377 employees at the end of the third quarter, compared to 257 at the end of the third quarter in 2020. An increase in amortization of 5.7 million, primarily driven by the Avast acquisition, an increase in acquisition costs of $700,000, CFO transition costs of $143,000, and costs related to the acquisition of certain non-development intellectual property of $1 million. Non-GAAP operating expense for the third quarter was $12.9 million, an increase of $3.4 million, or 36%, compared to last year, driven primarily by the acquisitions. On a sequential basis, the third quarter non-GAAP operating expenses were $12,000 or 1% lower than the second quarter of 2021. Non-GAAP operating expense for the third quarter year to date was $34.9 million, an increase of $8.7 million or 33% compared to last year, also primarily driven by the addition of the Avast business. For the fourth quarter of 2021, we expect consolidated non-GAAP operating expenses to be approximately 2% to 4% higher than the third quarter. The increase is mostly related to additional sales and marketing expenses as we support family safety revenue and overall preparation for new expected product launches. The non-GAAP net loss for the third quarter was $258,000, or break even from an EPS perspective compared to a non-GAAP net income of $1.8 million or $0.04 diluted earnings per share last year. The non-GAAP net income for the year to date was $139,000 or break even from an EPS perspective compared to a non-GAAP net income of $9 million or $0.21 diluted earnings per share last year. Within the recently issued press release, we have provided a reconciliation of our non-GAAP metrics to the most comparable GAAP metric. For the third quarter, the reconciliation includes the following adjustments, some of which are non-cash items. Stock compensation expense of $1.3 million. Intangibles amortization of $3 million. CFO transition costs of $143,000. The change in the fair value of contingent consideration of $12.9 million for the Avast acquisition resulting from the AT&T contract renewal and costs related to the acquisition of certain non-development intellectual property of $1 million. For the year-to-date period ended September 30, 2021, the reconciliation includes the following adjustments, some of which are non-cash items. Stock compensation expense of $3.6 million, intangibles amortization of $8 million, CFO transition costs of $143,000, acquisition-related costs of $14.5 million, which includes the previously discussed $12.9 million change in fair value of contention consideration and costs related to the acquisition of certain non-development intellectual property of $1 million. The company is currently working on the formal Avast Family Safety Mobile business purchase price allocation. During the second and third quarters, we made estimates to allocate the purchase price among intangible assets, goodwill, and estimated amortization expense. In the fourth quarter of 2021, these amounts will be adjusted to match the final purchase price allocation. The GAAP tax expense is due to certain state and foreign income taxes. For non-GAAP purposes, we utilized a 0% tax rate for 2021 and 2020. Any resulting non-GAAP tax expense reflects the actual income taxes expensed during each period. From a balance sheet perspective, we reported $32.4 million of cash and cash equivalents as of September 30th, 2021. As Bill mentioned earlier, we have subsequently paid the remaining portion of the earn out to Avast in the amount of $12.9 million, which positions us to grow our family safety solutions with this major carrier. This concludes my financial review. Now back to Bill.

Thanks, Mike. As I stated earlier, I'm happy to report that we have finally reached a commercial agreement with T-Mobile U.S. regarding the future of family mode. The new agreement is in line with what we expected, and I want to thank everyone on this call and all Smith Micro investors for their patience as we work through this process with one of our largest customers. When we started negotiations last year, we expected T-Mobile's merger with Sprint to cause some delays. It goes without saying that I'm incredibly glad to have the contract negotiations behind us. I look forward to shifting our focus to the launch of Family Mode 3. As a reminder, the current legacy version of Family Mode is powered by the Circle codebase and provides parental control functionality such as screen time limits, digital rewards, and scheduled screen-free time. Location controls do not exist in a legacy product. Family Mode 3 will be based on SafePath 7 and will provide T-Mobile subscribers with extended family safety functionality, such as real-time location tracking and breadcrumbs, configurable safety areas, and location-based alerts, in addition to strong parental controls. While we are still in discussions with our customer regarding launch timing, we expect that T-Mobile will launch and begin marketing Family Mode 3 as early as possible in Q1 2022. Through our extensive discussions with the carrier, we have also begun to get more clarity regarding the subscriber migration and end-of-life timing of some of the other legacy family safety apps that we continue to support. During the third quarter, we had four different family safety apps with T-Mobile and Sprint. Last month, at T-Mobile's request, we discontinued the older Sprint Family Locator app that was one of the legacy AVAS products we acquired. As you may recall, when we acquired AVAS, we gave no value to the legacy products, so this should not come as a surprise. The shutdown of the Sprint family locator will have a short-term revenue impact in the fourth quarter and the first quarter of 2022. But as overall family safety revenues grow, the impact of this event will be minimal. With the three remaining apps, our shared goal with T-Mobile is to migrate their user bases, which are larger and integrated, into the carrier's billing system. over to the SafePath-based Family Mode 3 product. As we roll out Family Mode 3, supported by strong integrated marketing efforts, I'm confident that we will start to see a return to real growth in 2022. We have an aggressive plan in place and are quite eager to get going. This has been in the works for such a long time, but we're finally here. Now let's talk about our second major family safety customer, Verizon Wireless. In Q3, we worked with Verizon to successfully launch the latest version of their Smart Family app. This app update was notable in that it included driver safety monitoring functionality, making Verizon the first Tier 1 carrier to include this feature set as a carrier branded family safety app. The driving safety features now included in all Smart Family Premium subscriptions include driver behavior monitoring, collision detection, automatic alerts, as well as personalized driver scores for each member of the family. Our marketing team, in collaboration with Verizon, launched new digital marketing initiatives during the third quarter to raise awareness of this new feature set with Verizon subscribers. In addition to digital efforts, we are working closely with the carrier on some retail-based campaigns to promote Smart Family and most of Verizon's corporate-owned retail stores. These initiatives are in the final planning stages, and I expect them to come to fruition sometime this quarter or early Q1 2022. To close out my Verizon updates, I'm happy to report that we have aligned with the carrier on how and when smart family users will migrate over to our SafePath code base. While we're still working out the details, we believe that this effort will begin shortly with completion slated well before the end of 2022. As I shared during our last investor call, we were able to retain AT&T as a family safety customer after an initial expectation that the business would be winding down. While Mike already discussed the short-term financial ramifications of the earn-out, allow me to provide a bit more perspective of what I see as a very positive long-term growth opportunity for Smith Micro. Put simply, I wouldn't have allowed the earn out without confidence from AT&T executives that they are committed to investing in and growing the subscriber base of their secure family app. Over the past few months, I've had several very productive discussions with the highest level of leadership at AT&T. regarding growth strategies for Secure Family, particularly around how our platform expands the total addressable market and delivers a full digital lifestyle experience to the subscriber base. Our team is also working on a detailed migration plan to transition the current Secure Family user base to the Safe Path platform. I believe the growth potential here is immense. Like several of the other family safety deployments we have acquired in the past two years, Secure Family has suffered from a lack of marketing support. Now that AT&T appears committed to investing in the growth of the Secure Family subscriber base going forward, I expect and I am confident that we can drive significant new user acquisition once we get the marketing engine going next year. Moving on to our voice messaging platform, ComSuite, we continue to engage in the contract discussions with America's newest Tier 1 operator, DISH Wireless. While we understand that the approval process involves multiple factors, some of which are out of our control, we remain optimistic that we will have an opportunity to launch ComSuite-powered premium visual voicemail and voice-to-text services at DISH sometime in 2022. Regarding the legacy visual voicemail service still used by some Sprint subscribers, we have more clarity on timing and now expect this legacy service to continue to accelerate to an end of life. Right now, our best guess is that sometime in the third quarter of 2022, most of the subscribers will have migrated to T-Mobile's network and off of our CommSuite platform. This accelerated migration began in the beginning of September, so there was a revenue impact to our Q3 numbers, and Q4 will be the first quarter to reflect a full quarter impact. As we have seen historically, end of life migrations can take a very long time at wireless carriers, but this timing reflects our best estimate based on what we know today. Nevertheless, I'm excited with the DISH opportunity ahead and still believe the product has legs for Smith Micro. DISH continues to build out its Greenfield 5G network on a national scale. While this unenviable task will certainly take time, the carrier should start growing post-based subscribers soon, which would increase the total addressable market for constantly powered premium visual voicemail services. Now let's talk a bit about our smart family platform, ViewSpot. We made some great development progress on the product during the first three quarters of 2021, especially in terms of enhancing the utility and usability of ViewSpot Studio, the platform's backend management dashboard. Features such as predefined device profiles, bulk management of device and plan pricing information, as well as the ability to test and preview new promo experiences prior to deployment, provides carriers with powerful capabilities to streamline their retail operations. The curated, digitally rich experiences that ViewSpot enables provides wireless carriers with a competitive advantage by making it easier and faster to create, deploy, and remotely manage These digital retail experiences, ViewSpot Studio enables carriers to take these experiences to the next level. There are several new activities underway around our ViewSpot platform, and as these evolve, we look forward to sharing our progress. As you can see, we have been extremely focused and hardworking over the past few months. And I'm both proud and excited about the progress we've made. The next chapter of the Smith Micro growth story is just beginning. With Smith Micro now having the three largest tier one carriers in the US among our customers, selling the best family safety platform to their large subscriber bases is an exciting opportunity. Our goal, a goal supported by our customers, is to build a subscriber base in the millions at each of these important Tier 1 carriers. Remember that family subs are viewed as the highest quality subs by carriers, as historically they churn far less and are willing to grow our food much faster than other demographic groups. With that said, I'll open the call for questions. Operator?

We will now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster. The first question comes from Scott Cyril with Roth Capital. Please go ahead.

Hey, good afternoon. Thanks for taking my questions, and congratulations on getting T-Mobile across the finish line. Hey, maybe to start, just, Bill, if you could calibrate us in terms of what's the magnitude of the Family Locator app that goes away? And then in terms of Family Mode 3 launching, you start with that circle base. So is that going to be a quick switchover we should expect in the first quarter? And what's the timing then? that we should expect with phase two. We're starting to convert over to the larger Sprint Safe Path base.

Okay, let's take those in a couple different steps then. So the Family Locator app was the legacy app at Sprint. Its base has continued to dwindle. The impact will be felt in the fourth quarter. We will get approximately a full month of revenue. We'll lose two months. And so we'll be looking at about a half million dollar drop in revenue driven off of that. As far as with the launch of Family Mode 3, I think you'll see that it'll be a very smooth transition from the circle code base over to Safe Pass 7. And as I said, I think it'll happen as soon as possible in the first quarter of 22. As far as for the Sprint Safe and Found, we will also be transitioning Sprint Safe and Found to SafePath 7 as a second instance of SafePath, and that will happen mid-part of the first quarter of 22. The remaining legacy product from Avast at T-Mobile, we are in the planning stages. We don't have a date or timing set for that as yet.

Hey, Bill, but just to clarify, so the majority of the existing SafePath subscriber base at Sprint will convert over or will be turned on at some point in the first quarter. Is that what you just said?

Yeah, the Sprint Safe and Found base will then move over to SafePath 7 as well. It will be a second instance of SafePath 7. And our goal will be to just smoothly transition all those folks over. We will also work to make it possible that those people can stay on the Sprint billing system or transition to the T-Mobile billing system. That will stop the melting ice cube syndrome that we've dealt with since the merger.

Great. Perfect. And one more question, if I could. Verizon, it sounds like you're starting to have some pretty good level of engagement with them, both within the organization and some marketing dollars. I'm wondering if you could provide a little bit of color in terms of how you expect that growth and that rollout to happen over the course of 2022. And maybe if you could as well address if there are any pricing issues there, you know, how you're feeling about the opportunity with Verizon in general going into 2022. Thanks.

I think that Verizon offers us a great growth opportunity. We see the opportunity to substantially grow the overall installed base in discussions with executives at Verizon. We are talking about this. We are developing a joint goal that we will all march to. And we are looking for very large growth over the 22 and into 23 and beyond. So we see this as being an extreme growth opportunity. So we're very bullish on what's happening at Verizon. And your primary takeaway is we're very bullish at the growth opportunities at all three of these U.S. Tier 1 carriers. Clearly, we will continue to sell and focus on growing the family safety business outside of the U.S., but while we're focused today on just getting these three carriers up and running on Safe Pass 7, and it's very clear that there's great growth potential going forward.

Great. Thank you.

The next question comes from Eric Martinuzzi with Lake Street. Please go ahead.

My congratulations on the T-Mobile contract as well. I wanted to dive in a little bit deeper. I know one of the reasons that the Sprint program was so successful was the retail buy-in. Just curious to know, you know, one of the reasons that the T-Mobile agreement had been delayed I think was in part due to some personnel changes. at T-Mobile as far as the folks that were in charge of the program. Has that stabilized? And then can you talk to the level of aggression or how aggressive they are going to be marketing this as far as digital, in-store? What are the early leading indicators? So people first and then marketing.

Yeah, I guess I would look at it this way. I think we have a very strong team on the T-Mobile side today. I'm very, very happy with the people that have come on board, and I think they are very much committed to growing this business. So all that, I think, is very, very positive. Look, the T-Mobile folks also have a number of former Sprint people. They know how Sprint was you know, grew their base and grew it very successfully. And clearly, I don't think any of the, you know, the positive things that Sprint did are lost. So I would look forward to seeing that kind of momentum and growth build up over time at T-Mobile post-launch of Family Mode 3. I feel very, very, very positive about that. I also mentioned, you know, in my pre pre prepared comments that, you know, we're making some strong progress at, uh, Verizon wireless also on bringing the, uh, the safe safe path offering into their re retail stores. Cause we know that, uh, the retail stores offer a really strong opportunity to grow. the size of the user base. So I think you're seeing a lot of the things that we've learned over the years being applied now evenly to all three of these large tier one carriers.

Okay. And then for those of us modeling at home, you know, I had, you know, in the absence of an outlook from you guys, I had sort of modeled in family safety at troughing, you know, sort of the legacy business, I guess, sort of troughing here in Q1, and then kind of flattish in Q2, and then really kind of a back half step up. So I know things, it's not like flicking a light switch with T-Mobile. You hammer out the contract in, what was it, November of 2021. You've lean into the marketing efforts in January of 2022, but does a back half of 22 step up make sense to you, Q3 up from Q2, or is that still potentially too aggressive given some of the other puts and takes in the revenue?

Hey, Eric, you know, I think that's fair. That's kind of how I would love to see how it rolls out over time, but I think that's kind of a good way to look at it as an over high overview.

Okay. All right, thanks for taking my question.

The next question comes from Josh Nichols with B. Riley. Please go ahead.

Yeah, thanks for taking my question, and congratulations on getting that commercial agreement with T-Mobile. I know the team has worked exceptionally hard on that for a long time now. You mentioned that the agreement was in line with what you kind of had expected. Is that to assume at a high level that this is kind of similar to the to the Sprint model where it's like a monthly ARPU that you guys receive or some revenue share with T-Mobile without diving too much into specifics?

Yeah, I think that's the way you should think about it. It looks very, very, very strong for us.

And then I was curious. So you're doing a lot of business with Verizon. It's good to see the additional traction there. Is that sub-based kind of like, growing as it is today, or what's the expectations for that as we look out over the next couple quarters and your enhanced engagement now with SafeHat Drive?

Well, okay, that's really two different questions. You know, the launch of the drive capabilities is a first, and, you know, I think it's being well received. We are doing a lot of work with the folks at Verizon to try to get that message out and get it out in a very clear and concise manner. And we do look for growth in their premium service offering as a result of the fact that they are offering DRY. So as far as the overall growth, if you look at the number of family subs at each of the three Tier 1 carriers here in the U.S., there are millions of subs there. And we are just getting to the point where we're starting to think about how we're going to get millions of subs onto the family safety. I think this is a very doable thing. I think this is the goal that all of us need to set for ourselves. And that's what we're operating towards. And obviously the revenues will, will follow.

Yeah, I think the other thing, too, is, like you said, we don't want to get specific on each individual customer. We have to watch that. So I think what you'll see as a whole of all of them, it's our goal to get all of them growing, Josh. Hopefully that helps.

Yeah, it does. And then just for clarification, I mean, for the comm suite business, so that's going to be running off through mid- next year but is it fair to assume that you're going to be keeping if boost was 35 of sales then effectively the the other 65 or so um of revenue it's it's going to be what's running off not all of it you're going to be keeping the boost portion which is actually growing right yeah we will keep the boost portion and then as the post-paid dish offering comes to the marketplace

that will provide yet another opportunity to grow the size of the comm suite user base. So that's where the upside opportunity exists.

Thanks. And then last question for me. I mean, you talked about some joint marketing initiatives. I guess is your understanding that this is something that T-Mobile is going to be investing heavily in, I think, I know Sprint did a very good job as far as training up their sales people and whatnot, and that was a big driver of the sales growth. The expectation that something like that will happen with T-Mobile as well, they're going to put their marketing weight behind it significantly.

Yeah, so I think that, Josh, yes, we're all very excited. We've been working this for quite some time, so I think it's fair to say that we have a very strong plan in place I think it's important to note that there are several people from the Sprint that are part of this team, and so we're actually quite excited about it.

Thanks, guys. I'll hop back into the queue.

The next question comes from Jill McElry with Dawson James. Please go ahead.

Yeah, thank you, and hello, everyone. Can you talk a little bit about what the expenses you're going to have to maintain in order to keep a Comp Suite going at a lower revenue level, how that, you know, how you're going to address expenses there?

Well, you know, the expense load for Comp Suite is very, very low right now. I think you'll see it just get pushed down slightly as we move forward and we'll rationalize it based on the business opportunity that's presented by the overall DISH offering.

Okay, that's helpful. Thank you. And then when will all of your all of your family safety business be on the Safe Path 7 platform? Is that something that is complete by the end of next year, or does it go into 2023?

As I said on the last quarterly conference call, our goal is to have all of our customers over to Safe Path 7 by the end of 2022. that remains the course that we're operating under. And, you know, clearly the big heavy lift is to get the three large U.S. Tier 1 carriers over first and then move to Europe and bring some of those additional customers over, you know, in the latter part of 22. But our goal is to be Unified on a single code base for family safety going into 2023.

Okay, great. And then looking at the rest of the world, it seems like you're busy through next year servicing the domestic carriers. Does that Does that push any customer wins in Europe or the rest of the world into late 2022 or early 2023? Or is that, do you still have, you know, do you still have to work at maintaining the U.S. customer base, working on the U.S. customer base before you start thinking about significant wins in the rest of the world?

Well, look, I think we're just following the cash. And the cash right now, the big opportunity are the three tier ones here in the U.S. But there are other significant customer opportunities, one at Vodafone that we talked about as a result of the Avast acquisition in the Czech Republic, as well as at Wintry in Italy, which is part of the Hutchinson Group, Both are using the Avast code base now. They will be migrated to Safe Path before the end of 22. We have other opportunities that we're working on. And as those become to a point where we can make some public disclosure, we will do so. We are continuing to sell and to grow our base. But clearly, as you're following where the big revenue opportunities are, You know, we're talking about millions of subs at each one of the large tier one carriers here in the U.S. That's where our focus is. And that's where the cash is right now. The others will follow and be added to.

All right. That's it for me. Thanks a lot.

This concludes our question and answer session. I would like to turn the conference back over to Charles Messman. for any closing remarks.

I want to thank everybody for joining us today. Should you have any further questions, please feel free to reach out to us directly. We're also participating in a Roth conference next week. So if you're there, we'll look forward to talking to you. And we'll look forward to talking on our next earnings call. Everybody have a great day. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.