Smith Micro Software Inc. (NASDAQ:SMSI) Q3 2019 Earnings Conference Call Transcript

Oct 24, 2019 • 04:30 pm ET

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Smith Micro Software Inc. (NASDAQ:SMSI) Q3 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day, everyone. And welcome to the Smith Micro Third Quarter 2019 Earnings Conference Call. [Operator Instructions] Please also note today's event is being recorded. And at this time, I'd like to turn the conference call over to Charles Messman, Vice President of Investor Relations and Corporate Development. Sir, please go ahead.

Executive
Charles Messman

Thank you, operator. Good afternoon, everyone. We appreciate you joining us today for Smith Micro's financial results for the third quarter of our fiscal year of 2019 ended September 30. 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; and Tim Huffmyer, our Chief Financial Officer.

Please note that some of the information you will hear during our discussion today will consist forward-looking statements, including without limitation those regarding company's future revenue and profitability, new product development and new market opportunities, operating expenses and company cash reserves. Forward-looking statements involve risks 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 the risk factors included in our most recently filed 10-K. Smith Micro assumes no obligation to update any forward-looking statement, which speak to our management's beliefs and assumptions only as of the date they are made. I want to point out that in the forthcoming prepared remarks, we'll refer to certain non-GAAP financial measures. Please refer back to our press release disseminated earlier today for a reconciliation of the non-GAAP financial measures.

With that said, I'll now turn the call over to Bill. Bill?

Executive
William Smith

Thanks, Charlie. Good afternoon everyone. And thank you for joining us today for our 2019 third quarter earnings conference call.

I am very happy with the overall results for the third quarter, building on the momentum we achieved in the first half of this fiscal year. I am pleased to report we delivered solid revenue growth, profitability and free cash flow. Looking at the results, total revenues from operations increased 81% over last year and 9% sequentially to $11.8 million for the quarter. Non-GAAP net income from operations was up significantly for the quarter to $3.2 million or $0.08 per share that compared to non-GAAP net income of $241,000 or $0.01 per share for the third quarter of 2018. Gross profit for the third quarter was $10.8 million compared to $5.5 million in the third quarter of last year. Gross margins remained strong at 91% showing the leverage we have in place with our current business case.

During the quarter, we delivered strong free cash flow of $5.9 million and ended the quarter with a strong cash balance of approximately $24 million or nearly double compared to last year. The top line revenue growth was driven by our SafePath