Smith Micro — Third Quarter 2026 Earnings Summary

Financial Performance:

• Q3 2026 revenue was $5.0 million, a 16% sequential increase compared to $4.3 million in Q3 2025.
• Q3 2026 gross profit was $4.1 million, up from $3.2 million in Q3 2025; gross margin rose to 81.6%, a five-year high, compared to 73.9% in the prior year period.
• Year-to-date (nine months) 2026 revenue was $13.6 million, compared to $13.4 million in the same period of 2025.
• Year-to-date 2026 gross profit was $10.9 million, compared to $9.8 million in 2025; gross margin was 80.5% versus 73.4% in 2025.
• GAAP net loss for Q3 2026 was $1.7 million ($0.30 per share), improved from $5.2 million ($1.23 per share) in Q3 2025.
• Non-GAAP net loss for Q3 2026 was $0.3 million ($0.05 per share), improved from $2.6 million ($0.61 per share) in Q3 2025.
• GAAP net loss for the nine months ended September 30, 2026, was $8.3 million ($1.57 per share), compared to $25.4 million ($6.50 per share) in 2025.
• Non-GAAP net loss for the nine months ended September 30, 2026, was $2.8 million ($0.52 per share), compared to $8.2 million ($2.10 per share) in 2025.
• Total cash and cash equivalents as of September 30, 2026, were $2.4 million.
• Deferred revenue was $300,000 as of September 30, 2026, compared to $0 in December 31, 2025.
• Notes payable were $0 as of September 30, 2026, down from $1,007,000 in December 2025; convertible notes payable were $2,108,000 as of September 30, 2026.
• Operating cash flow for the nine months ended September 30, 2026, was a use of $4.8 million, compared to $5.0 million in 2025.

Business Segments and Product Lines:

• The SafePath® platform is being expanded into a comprehensive family safety ecosystem deployable as a standalone app, on a dedicated phone, or embedded within carrier applications.
• The company secured and expanded contracts with new and existing customers.
• The pipeline of opportunities continues to grow.

Management Commentary and Tone:

• CEO William W. Smith Jr. stated the third quarter marked the third consecutive quarter of sequential revenue growth.
• Management expressed confidence in translating current momentum into long-term growth.
• The tone reflects optimism regarding the growth of the opportunity pipeline and the expansion of the SafePath ecosystem.

Other Key Points:

• A one-for-five reverse stock split of common stock became effective June 4, 2026; all share and per share amounts have been retroactively adjusted.
• Non-GAAP measures exclude stock compensation, intangibles amortization, depreciation, fair value adjustments, and other items including amortization of debt discount, financing issuance costs, executive transition costs, corporate action costs, deemed dividends, and reverse stock split costs.
• The company holds federal and state net operating loss carryforwards that can be utilized to reduce future cash payments for income taxes.
• Financing activities for the nine months ended September 30, 2026, included $1,546,000 from common stock and warrant offerings, $4,000,000 from convertible notes and warrant offerings, and $800,000 from financing arrangements.
• Supplemental non-cash financing activities included the issuance of convertible notes in settlement and prepayment of notes payable totaling $1,889,000.
• A deemed dividend of $86,000 was recorded for the nine months ended September 30, 2026.