Smith Micro Software, Inc.

And welcome to the Smith Micro second quarter 2023 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 Marketing. Please go ahead.

Thank you, Operator, and good afternoon, everybody. We appreciate you joining us today to discuss Smith Micro's financial results for the second quarter ended June 30, 2023. By now, you should have received a copy of our 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 discussion consists of forward-looking statements, including, without limitations, those regarding the company's future revenue and profitability, our plans and expectations, new product development, new and expanded market opportunities, future product deployment, migrations, and or growth by new and existing customers, operating expense, and company cash reserves. Forward-looking statements involve risk and uncertainties, which could cause actual results or trends to differ materially from those expressed or implied by our forward-looking statements. For more information, please refer to risk factors included in our most recently filed Form 10-K and our subsequent filings on Form 10Q. Smith-Micro seems no obligation to update any forward-looking statements, but speak of our management's beliefs, assumptions, only as the date they are made. I want to point out that in our forthcoming prepared remarks, we'll refer to specific non-GAAP financial measures. Please refer to our press release disseminated earlier today for reconciliation of these non-GAAP financial measures. That said, I'll now turn the call over to Bill. Bill?

Thanks, Charlie. Good afternoon, and thank you for joining us today for our 2023 second quarter conference call. I am excited today to provide an update on our progress on several fronts, all of which have trended very positively since our last earnings call. First and foremost, I am tremendously pleased to finally report that our development activities to add features from the acquired family safety platforms, and prepare for migration to Safe Path are complete. I recognize that this has been a lengthy effort covering approximately three years and required a significant number of resources. So I am happy that this effort is now behind us. Associated with the completion of these development activities, we anticipate AT&T to launch the new secure family in the near term and have been partnering with them on marketing activities aligned with the launch. I will cover more on this subject later in the call. Another positive is our progress toward the return of Smith Micro to profitability through the rigorous methodical execution of our operating plans. In addition to our quick and decisive responses to the unexpected headwinds described back in Q1, we have moved aggressively to strengthen our business, both through expense reduction as well as through accelerated execution on sales and customer deliveries. We are making great progress, and I want to thank Smith Micro employees for their focus, commitment, and tenacity. We have a clear path in which our confidence remains high and we are meeting and exceeding many of our interim targets along the way. While Jim will be discussing the quarterly financial results in detail shortly, I do want to highlight some key updates on our efforts to return Smith Micro to profitability. During Q2, we outperformed the targeted $4 million per quarter reduction in our non-GAAP expenses that we announced earlier this year. At the same time, we are forecasting revenue growth for Q3 over Q2. We are also continuing to see progress on several fronts for our sales team. which I'll touch on in more detail later in the presentation today. We're improving our gross margins, driving them to 75% during the second quarter of this year versus 71.5% for the same quarter of 2022. And we expect an additional improvement for gross margins in the third quarter. Overall, and most importantly, Each of these factors contributes to our confidence that we will return the company to cash flow positive operations and profitability on a non-GAAP basis in this current quarter, Q3 of 2023. I will pause here and let Jim run through the numbers for the quarter in more detail. And then I will share some information about some of our most important opportunities and relationships. Jim?