Smith Micro Software, Inc.

Good day and welcome to the Smith Micro fourth quarter 2022 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal conference specialists by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Mr. Charles Messman. Please go ahead, sir.

Thank you, operator, and good afternoon, everyone. We appreciate the You joining us today to discuss Smith Micro Software's financial results for the fourth quarter and year ended December 31st, 2022. 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, our Chairman of the Board, President and Chief Executive Officer, and Jim Kempton, our Chief Financial Officer. Please note that some of the information you will hear during today's call consists of forward-looking statements, including, without limitation, those regarding the company's future revenue and profitability, our plans and expectations, new product development, new and expanded market opportunities, future product deployments, migrations, and or growth by new and existing customers, operating expense, and the company's cash deserts. Forward-looking statements involve risk and uncertainties, which could cause actual results or trends to differ materially from those expressed or implied by a forward-looking statement. For more information, please refer to the risk factors included in our most recent filed Form 10-K and our subsequent filings on Form 10-Q. MythMicro assumes no obligation to update any forward-looking statements, which speak of our managers' beliefs and assumptions only at the date they are made. I'd like to point out that in the forthcoming prepared remarks, we will refer to specific non-GAAP financial measures. Please refer to our press release disseminated earlier today for that reconciliation of these non-GAAP financial measures. With that said, I'll turn the ball over to Phil. Phil?

Thanks, Charlie. Good afternoon, and thank you for joining us today for our 2022 fourth quarter and year-end conference call. I'm excited to share with you some important progress we've made on several fronts throughout the fiscal year. But as many of you know, we also recently experienced a setback. As noted in our February 27th press release, we received notice from one of our Tier 1 carrier customers that it has decided to terminate the family safety portion of our relationship. That termination takes effect on June 30, after which we will provide support during the transition period for up to 180 days as specified by our contract. There are a few important points to note. While we no longer expect any growth from this partnership, we expect to continue to earn monthly revenue from this contract until the end of the transition period through the remainder of 2023. While we were taken by surprise and certainly disappointed by this turn of events, it's important to note that the commercial terms of this partnership were those that we inherited in our acquisition of the contract. And candidly, they were not very favorable. So although this news will have a negative impact on our top line revenue, it will yield an increase in our average revenue per subscriber. Additionally, as we eliminate the associated costs and reallocate others to more profitable relationships, we expect to see improvements to our gross margins as early as Q2 of 2023. With all of this said, we clearly understand the impact of what just happened, and our focus is on how we are going to deal with the challenge. The first step is to align our expenses with the new business reality. Effective immediately, we will implement actions to reduce our expenses by $4 million per quarter. we have been able to immediately cease all migration activities for this carrier, which will allow us to significantly reduce personnel, both in terms of the number of resources we need to support product development and delivery efforts for the customer, and in terms of back office resources. In addition, certain non-personnel related costs can be rationalized as a result of this action. Collectively, these factors give us confidence to achieve this level of cost savings in the near term. We believe the balance of our business is solid. I will discuss that viewpoint in more detail in the second part of my presentation after Jim has provided his financial overview. With the immediate expense reductions, our goal will be to post break-even or profitable results perhaps as soon as Q2 of this year and not later than Q3, and to grow our profits during the remainder of the year. On that note, I will turn the call over to Jim Kempton, our Chief Financial Officer, who will provide you with more specifics. on our financial results, after which I will discuss our business case going forward. Jim?