Smith Micro Software 2025 Q2 Earnings Widened Losses Amid Revenue Decline

Smith Micro Software (SMSI) reported its fiscal 2025 Q2 earnings on August 7, 2025. The company posted a weaker-than-expected performance, with both revenue and net income declining year-over-year. It did not raise its guidance, and the earnings results fell short of positive expectations, highlighting continued financial challenges.

Revenue

The company’s total revenue declined by 14.0% to $4.42 million in Q2 2025, compared to $5.14 million in the same period of the previous year. The decline was primarily driven by a reduction in license and service fees. Wireless revenue remained steady at $4.42 million, while hosted environment usage fees totaled $777,000. Cloud-based usage fees contributed $2.83 million, accounting for nearly two-thirds of the total revenue. License and service fees dropped to $795,000, and consulting services and other revenue amounted to just $13,000. Despite a strong cloud segment, the overall revenue contraction reflects ongoing pressure on key revenue streams.

Earnings/Net Income

Smith Micro Software’s earnings deteriorated sharply in Q2 2025. The company reported a loss of $0.78 per share, an increase in losses from $0.66 per share in the prior year period, representing an 18.2% rise in per-share losses. Net loss widened to $15.06 million, compared to $6.93 million in Q2 2024, a 117.4% increase. The steep rise in losses signals significant financial strain.

Price Action

Smith Micro Software’s stock price declined sharply across multiple timeframes following the earnings report. The stock plummeted 18.17% on the latest trading day, edged down 2.03% during the most recent full trading week, and dropped 27.85% month-to-date, reflecting strong investor pessimism.

Post Earnings Price Action Review

A strategy of buying SMSI when earnings beat expectations and selling after 30 days resulted in a 6.60% return, significantly underperforming the 48.90% return of the benchmark index. The strategy showed a maximum drawdown of 0.00%, a Sharpe ratio of 0.05, and high volatility of 31.09%, underscoring the stock’s risk profile.

CEO Commentary

William W. Smith Jr., President, CEO, and Chairman of the Board, emphasized positive momentum in the second quarter, including the upcoming launch of SafePath® 8, which features AI-driven capabilities and expands market reach through carrier partnerships. He also highlighted the strengthening of a digital family lifestyle ecosystem and strong customer relationships. Smith noted an upcoming feature launch with a current customer that is expected to drive sequential quarterly revenue growth in the second half of 2025.

Guidance

The company expects sequential quarterly revenue growth in the second half of 2025, driven by the new feature set with an existing customer and broader adoption of SafePath® 8. However, it did not provide specific revenue guidance or EPS projections for the upcoming period.

Additional News

Nigeria’s federal government expanded its ₦25,000 monthly cash transfer scheme to 15 million beneficiaries, aiming to provide relief to low-income citizens. In politics, the Kaduna State Governor declared that the APC’s victory in by-elections is non-negotiable, reflecting strong party confidence. Additionally, the Nigerian Centre for Disease Control (NCDC) issued a health advisory on Chikungunya amid a global outbreak, urging heightened vigilance and preventive measures. These developments highlight key economic and public health updates within Nigeria over the past three weeks.